Here are the most important news items that investors need to start their trading day:
1. A packed week ahead
U.S. stock futures were up Monday ahead of this week’s congressional midterm elections and key inflation data.
Tuesday’s elections will determine which party will control Congress. Democrats currently control the House, and have a majority in the Senate. But a Republican sweep could signal greater support for oil and gas companies.
Corporate earnings season is winding down with a majority of companies in the S&P 500 having reported results. But several companies are slated to report this week, including Lyft, Palantir Technologies and Take-Two Interactive on Monday.
On Thursday, investors will get CPI data, and a hot inflation report could signal that a pivot from higher interest rates could be further away than expected. Last week, the major averages fell as the Dow Jones Industrial Average ended a four-week win streak on rate-hiking fears.
2. Meta layoffs
The first major head count reduction at Facebook parent company Meta is expected to begin as soon as Wednesday, according to a report from The Wall Street Journal.
Thousands of employees will be affected, the report said. At the end of September, the company had more than 87,000 workers.
A Meta spokesperson declined to comment and referred CNBC to CEO Mark Zuckerberg’s remarks on the company’s earnings call last month.
“In 2023, we’re going to focus our investments on a small number of high-priority growth areas,” Zuckerberg said at the time. “That means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”
3. Elon Musk’s Twitter rules
New Twitter owner Elon Musk said Sunday that the social media site will permanently suspend impersonators’ accounts without warning if they are not clearly labeled as parody.
Musk tweeted the decision after several celebrity and blue-check verified Twitter users changed their accounts to mimic him.
Previously, Twitter had required users engaging in parody distinguish themselves in both their account name and bio. But the site did not usually jump to a permanent ban of a user’s account for impersonation.
As of Sunday evening, Twitter had not yet updated its terms of service to reflect Musk’s direction.
Musk’s decision was immediately met with some backlash, in part because he bills himself as a free speech absolutist and has argued against lifetime bans.
4. Lidar consolidation
Lidar makers Ouster and Velodyne are joining forces to increase their competitiveness as investors grow disillusioned with autonomous vehicle technology.
Lidar, short for “light detection and ranging,” uses invisible lasers to create a 3D map of the sensor’s surroundings. Investor interest in the potential of self-driving vehicles led many lidar startups to go public in recent years, but valuations have plummeted as major automakers have trimmed their investments in autonomy in favor of more limited driver-assist systems.
Ouster’s CEO, Angus Pacala, will lead the combined company, which doesn’t yet have an official name. Velodyne CEO Ted Tewksbury, who joined the lidar maker last year, will chair the post-merger company’s board.
“We all knew that there is a need for consolidation in the market,” Pacala told CNBC’s John Rosevear. “This is us actually going out and doing it.”
5. Apple warns on iPhone production
Apple has temporarily reduced iPhone 14 production at an assembly plant in China because of Covid-19 restrictions.
The factory in Zhengzhou is operating at “significantly reduced capacity,” Apple said in a statement Sunday. It warned that it would ship fewer units and that customers would experience longer wait times when ordering devices.
The company’s warning brings up the possibility that it may sell fewer iPhones in the December quarter. Apple said it continues to see strong demand for the affected models, which are higher priced than other iPhone models and start at $999 and $1,099.
In the past week, China has ordered lockdowns in Zhengzhou, where Apple does the majority of its iPhone production. The factory in China has grappled with employees fleeing the facility because of its Covid policies and outbreaks, according to Reuters.
