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Investing.com – U.S. stock futures moved below zero ahead of the final trading day of the week as investors digested new inflation data and kept an eye on the path ahead for Federal Reserve interest rates. OpenAI is reportedly planning to name new board members as the artificial intelligence group behind ChatGPT faces increased regulatory scrutiny. Elsewhere, manufacturing activity in China slowed for the fifth straight month in February.
1. Futures fall as Goldman Sachs removes Apple (NASDAQ:) from conviction list
U.S. stock futures fell on Friday after Wall Street posted gains in the previous session, fueled by inflation data that boosted hopes of a mid-year rate cut by the Federal Reserve.
As of 6:08 a.m. ET (11:08 GMT), the contract had slipped 9 points, or 0.2%, was down 17 points, or 0.1%, and had lost 76 points, or 0.2%.
Apple was the focus of premarket trading after analysts at Goldman Sachs removed the iPhone maker from their picks of top-buy stocks. Apple shares fell before the opening bell.
The major indexes all closed in the green on Thursday, with the benchmark and tech-heavy index closing at new record highs. Meanwhile, the blue chip rose slightly by 0.1%.
The Personal Consumption Expenditures (PCE) Price Index – an indicator of inflation closely monitored by the Fed – fell as expected in January. The reading raised hopes that inflation pressures will ease in the coming months, giving the Fed enough impetus to cut interest rates in June.
2. OpenAI appoints new board members – WaPo
OpenAI plans to name several new board members in March, The Washington Post reported Thursday, as regulatory scrutiny of the artificial intelligence darling increases.
The Washington Post report comes after other media reports suggested that the U.S. Securities and Exchange Commission was investigating whether the company was involved in a major leadership shakeup in November that included the sudden firing and reinstatement of CEO Sam Altman heard that he misled investors.
OpenAI completely reshuffled its board at the time, removing the group of directors who had tried to oust Altman. It also unveiled a new board consisting of former Twitter chairman Bret Taylor, former Treasury Secretary Larry Summers and Quora CEO Adam D'Angelo.
Microsoft (NASDAQ:), OpenAI's biggest backer, will also take a non-voting, observational seat on the board, Altman said.
3. JAB sells Keurig Dr. Pepper shares worth $3 billion
Keurig Dr. Pepper (NASDAQ:) (KDP) has announced that European investment group JAB Holdings will sell up to 100 million shares of the US beverage maker, according to a statement on Thursday.
A JAB subsidiary plans to sell nearly 87 million shares in a secondary offering, a move worth about $3 billion at KDP's last closing price. JAB has also granted Morgan Stanley, the underwriter of the subsequent stock sale, an option to purchase up to just over 13 million shares. It would be the largest secondary share sale by a US-listed company since 2022, the Financial Times reported.
JAB boss Joachim Creus said the proceeds from the sale would allow the company, backed by the billionaire Reimann family, to maintain its “leverage target in line with our financial policy.”
“KDP will continue to be one of our key investments and we expect to continue to be a long-term anchor shareholder of KDP, with an ownership interest of 20% or more,” Creus added.
4. Chinese factory activity slows in February
Factory activity in China contracted in line with expectations in February, receiving little support from stronger demand during the Lunar New Year holiday, as broader weakness continued in the world's second-largest economy.
The official manufacturing purchasing managers' index was 49.1 in February, data from the National Bureau of Statistics showed on Friday. The mark was in line with expectations and was below the 49.2 registered in January.
The reading is now in the sub-50 range, indicating a decline for five consecutive months.
China's manufacturing sector is among the country's biggest economic engines and is at the center of a sluggish recovery from the COVID crisis last year. Beijing has launched a series of monetary stimulus measures in recent months to boost growth. However, they have provided only limited support so far and investors are now demanding more targeted fiscal measures.
5. Oil prices subdued
Oil prices were subdued in European trading on Friday as the market's overall optimism that easing inflation could prompt the Fed to cut interest rates by mid-2024 was offset by signs of higher supply.
Prices broadly ranged after data showed record U.S. production and increased output from the Organization of the Petroleum Exporting Countries (OPEC), both of which suggested global oil markets may not be as tight as previously expected.
May expiry oil prices were mostly unchanged at $81.94 a barrel, down 0.2% to $78.14 a barrel by 3:34 a.m. ET.
Both contracts were on track for weekly gains after falling sharply the previous week. While oil prices saw some gains in February, they have largely remained between $75 and $85 per barrel so far in 2024.
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