Premarket action on Friday had the three major U.S. indexes trading modestly lower. The Dow Jones industrials were down 0.01%, the S&P 500 down 0.06% and the Nasdaq 0.17% lower.
It did not take long for X Corp., the privately held company owned by X Holdings Corp. that now owns Twitter, to launch a foray against Meta Platforms Inc. (NASDAQ: META) and its new Threads app. X Corp. is the new name for Twitter Inc., announced last April in a filing related to a lawsuit against Twitter by Laura Loomer, a far-right conservative who was kicked off Twitter in 2018.
Elon Musk’s lawyer, Alex Spiro, fired a warning shot on behalf of X Corp. directed at Meta CEO and Chair Mark Zuckerberg, expressing X Corp.’s “serious concerns” that Meta “has engaged in systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.”
The two-page letter goes on to state that Meta hired “dozens” of former Twitter employees and that those employees have access to confidential information about Twitter and that “many have improperly retained Twitter documents and electronic devices.” Then Spiro accuses Meta of “deliberately” putting these former Twitter employees to work developing Meta’s “copycat” Threads app.
Musk tweeted his view of the matter Thursday afternoon:
Competition is fine, cheating is not
— Elon Musk (@elonmusk) July 6, 2023
That is rich, given Tesla Inc.’s (NASDAQ: TSLA) Thursday agreement to join a cartel of Chinese automakers that have pledged not to engage in any more price wars. How long can that last?
Chinese EV maker Xpeng Inc. (NYSE: XPEV) plans to begin ramping production of its new G6 SUV, a direct competitor to Tesla’s Model Y. The G6 is priced at around $29,000, 20% lower than the Model Y’s entry-level price of around $36,500. Xpeng has received 35,000 orders for the G6 since beginning to take orders in early June. Wanna bet the Model Y’s price goes down?
Elsewhere in China, Alibaba Group Holding Ltd. (NYSE: BABA) likely will be slapped with a fine of around $1.1 billion, bringing an end to an investigation ginned up by the government as part of a crackdown on China’s internet giants. It is a lot of money, but essentially peanuts to Alibaba, which raked in more than $30 billion in revenue in the March quarter and is expected to haul in $130 billion in fiscal 2024 revenue, generating EBIT of around $16 billion for the year.
Here is a look at how U.S. markets fared Thursday.
All 11 market sectors closed lower. Energy (−2.45%) and consumer cyclicals (−1.65%) posted the day’s worst losses. Technology (−0.16%) and consumer staples (−0.34%) put up the smallest losses. The Dow closed down 1.07%, the S&P 500 down 0.79% and the Nasdaq down 0.82% on Thursday.
Two-year Treasuries rose by five basis points to end Thursday at 4.99%, and 10-year notes rose by 10 basis points to 4.05%. In Friday’s premarket, two-year notes were trading at around 5.00% and 10-year notes at about 4.06%.
Before markets open on Friday, the U.S. Bureau of Labor Statistics will release its June report on nonfarm payrolls. Economists are expecting an increase of 220,000 new jobs for the month, down from a jump of 339,000 new jobs in May. The headline unemployment rate is forecast to tick down, from 3.7% to 3.6%.
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