U.S. Stocks Futures Trending Lower
U.S. stocks futures on Friday are trending lower indicating the market appears heading for a fall at the open. However, the main benchmarks were heading for a weekly win. Investors are hoping the next batch of earnings reports could lift the market.
For the week and as of Thursday, the Nasdaq Composite Index is ahead with a gain of nearly 2%, while the Dow Jones Industrial Average and S&P 500 are likely to rise 1.4% and 1.3%, respectively.
The corporate results this week have been somewhat mixed although investors are looking forward to the earnings reports of Honeywell International Inc. (HON) and General Electric Co. (GE) ahead of the bell.
Qualcomm to Trim Down Workforce
Qualcomm Inc.’s (QCOM) regulatory notice filed on April 18 stated that they are cutting 1,500 jobs across multiple divisions at its offices in California. The move is part of the U.S. chipmaker’s promise to investors to cut annual costs by $1 billion.
The company employs a total of 33,800 individuals but 1,231 and 269 jobs will be cut from its San Diego office and San Jose/Santa Clara offices respectively.
A Qualcomm spokesman said the company initially wanted to implement cost reductions without layoffs. However, it sees that job cuts are needed to support long-term growth and success. The layoffs were planned as early as January during Broadcom Inc.’s (AVGO) failed attempt at a hostile takeover.
ZTE Cries Foul over U.S. Sales Ban
On Friday, ZTE Corp. of China said that a U.S. ban on the sale of parts and software to the company was unfair and threatens its survival. The Chinese equipment maker vows to safeguard its interests through all legal means.
Because ZTE broke a settlement agreement, the United States imposed a ban this week. The ban prohibits American companies to sell products to ZTE for seven years. The move threatens to cut off its supply chain.
ZTE responded to the U.S. Commerce Department’s Bureau of Industry and Security saying, “It is unacceptable that BIS insists on unfairly imposing the most severe penalty on ZTE even before the completion of investigation of facts.” According to a senior U.S. Commerce Department, the U.S. is unlikely to lift the ban.
Lockheed Offers Japan New Hybrid Fighter Jet
Lockheed Martin Corp. has a new stealth fighter design based on its export-banned F-22 Raptor and advanced F-35 Lightning II aircraft which it plans to offer to Japan. Sources say the proposed aircraft “would combine the F-22 and F-35 and could come out superior to both of them.”
According to sources, the U.S. defense contractor has discussed the idea with the defense ministry officials of Japan. The Japanese officials will make a request for information (RFI) after the U.S. government grants permission to offer the sensitive military technology to them. Lockheed will submit a formal proposal once they receive the RFI.
Allergan Not Making a Bid for Biotech Shire
Allergan plc (AGN) said they do not intend to bid for a mega-takeover of Shire PLC (SHPG). Japanese drugmaker Takeda said on Thursday that it had proposed to pay about £42.4 billion ($60 billion) for the biotech firm.
According to a Reuters report, the Dublin-based Allergan issued a statement saying that it was “in the early stages of considering a possible offer for Shire.” The shares of Shire skyrocketed by as much as 12% in London exchange after the news broke out. AGN’s price sank as much as 8.5% in New York.
But Allergan later doused the speculation, saying in a statement that it “does not intend to make an offer for Shire.” The company said it will continue “evaluating a full range of potential strategic actions that will create value for shareholders, such as divestitures, combinations and acquisitions.”