Wall Street ends the session in disorganized order. The S&P 500 finally gained +0.38% to 4,567 pts. The Nasdaq dropped -0.23% to 14,226 pts, pulled down by Tesla (-1.66%) and Nvidia (-2.85%) in particular. However, the technology stock index gained a little more than 10% over the month. On the other hand, the Dow Jones is very firm, with an increase of +1.47% to 35,950 pts. The index gained +8.77% over the month, and returned to a high dating from January 2022.
The personal income of American households for the month of October 2023 was up 0.2% compared to the previous month, in line with the consensus, after a gain of 0.4% a month before. Household spending increased by 0.2% compared to the previous month, also in line with market expectations, after an increase of 0.7% in September. The ‘core PCE’ price index closely monitored by the Fed also revealed no surprises, growing by 0.2% from one month to the next, as expected, an increase of 3.5 % over one year.
Unemployment claims increased slightly last week in the United States. The US Department of Labor announced unemployment claims for the week ended November 25 at 218,000, up 7,000 from the previous week. The consensus was positioned at 220,000. The four-week average stands at 220,000, down 500. Finally, the number of unemployed workers receiving compensation for the week ended November 18 stands at 1.927 million, up 86,000 over seven days (1.872 million consensus).
The Chicago PMI for November 2023 stood at 55.8, much stronger than expected since the FactSet consensus stood at 45.2. A month earlier, this indicator was 44. Today’s index therefore signals a robust and very unexpected expansion of manufacturing activity in the region in question.
The index of promised home sales in the United States measured by the National Association of Realtors for the month of October 2023 was down 1.5% compared to the previous month, against a consensus of -2 % and an increase revised to +1% for the month of September. The October index thus stood at 71.4, compared to 72.5 a month earlier.
The Fed’s John Williams said rates are “at or near” the peak. The president of the New York Fed therefore fuels hopes of a peak in rates, but still considers a restrictive period “for a certain time” necessary. He still admits that monetary policy has never been so restrictive in 25 years…
Dell Technologies, Marvell Technology, Johnson Controls, Kroger and Ulta Beauty, release this Thursday.
Oil and currencies
At the end of a very volatile session, the barrel of WTI crude plunged -2.8% to $75.58.
Ultimately, the OPEC+ producing countries separated without reaching a common decision on an additional production cut, an option which would have been likely to raise crude prices. Each member of the group should separately announce any voluntary reductions in production. Several countries, including Saudi Arabia and Russia, have already indicated they want to maintain voluntary production cuts.
Saudi Arabia will maintain its voluntary production cut of 1 million barrels per day (bpd) in the first quarter of 2024. Russia would do the same. Kazakhstan would reduce its production by 82,000 bpd in the first quarter of 2024. Algeria will reduce its production by 51,000 bpd.
The dollar is very firm against the euro. It gained +0.76% to 0.918 euros. The moderation of consumer prices in Europe weighed on the single European currency, which was weakening slightly.
An ounce of gold stabilizes at $2,036 (1,866 euros). Bitcoin returns to $37,759.
Values
* ImmunoGen (+82.75% to $29.35). The action is adjusted to the acquisition offer made by AbbVie for $10.1 billion. The biopharmaceutical giant will thus acquire the biotechnology firm, which designs cancer treatments.
* Big Lots (+9.79% to $5.27). The American discount retailer posted a smaller-than-expected quarterly adjusted loss. The group nevertheless missed the revenue consensus for its 3rd quarter, revenues falling 15% to $1.03 billion. Quarterly net profit was $4.7 million or 16 cents per share.
* Salesforce (+9.36% to $251.9). Marc Benioff’s group pleasantly surprised Wednesday evening with its financial publication and its very solid forecasts. For the third fiscal quarter, the group achieved adjusted earnings per share of $2.11, compared to a consensus of $2.06. Quarterly revenues stood at $8.72 billion, slightly above expectations. For the 4th fiscal quarter this time, Salesforce anticipates adjusted earnings per share ranging from $2.25 to $2.26 ($2.17 consensus). The group’s cost reduction program therefore seems to be bearing fruit, with Salesforce having reduced its workforce to less than 71,000 people at the end of October, or 11% less than a year ago. The San Francisco group forecasts 4th quarter revenues ranging from $9.18 to $9.23 billion.
* Snowflake (+7.05% to $187.68). The cloud data hosting group is making progress on the stock market following its publication of the 3rd fiscal quarter of 2024. For the period, product revenues increased by 34% to $699 million, compared to a consensus of $675 million. Total quarterly revenue increased 32% to $734 million. Adjusted operating profit was $72 million. Adjusted free cash flow represented $111 million. Adjusted earnings per share were 25 cents (16 cents consensus). For the 4th fiscal quarter of 2024, the group anticipates product revenues ranging from $716 to $721 million, an increase of 29 to 30%, and a non-GAAP operating margin of around 4%. Thus, the forecasts provided exceed analysts’ expectations, with the consensus product revenue being $702 million.
* Kroger (+1.44% to $44.27). The group posted comparable sales excluding gasoline in the 3rd quarter, down 0.6%, operating profit of $912 million and earnings per share of 88 cents. It displays a mixed performance in an uncertain context. Adjusted earnings per share, of 95 cents, still exceeded expectations. Total sales reached $34 billion in the quarter. Kroger updates its annual guidance, anticipating like-for-like sales excluding gasoline up 0.6 to 1%.
* Microsoft (+0.02% to $378.91) has secured a non-voting seat on the board of directors of the AI startup OpenAI in which the Redmond giant had previously invested massively. At least that’s what Satya Nadella’s group announced yesterday Wednesday. Remember that the OpenAI file has been the subject of a series of twists and turns in recent days, Sam Altman having taken over the management of the startup on the condition that the board of directors be reshuffled.
* Pure Storage (-12.18% to $33.31). The data storage player has lowered its disappointing guidance for the current quarter and the 2024 financial year. However, the figures for the 3rd quarter exceeded market expectations.
* Okta (-5.26% to $67.05). The group exceeded profit expectations for the closed quarter, but warned of a large-scale security breach. Concerning its results, it envisages adjusted earnings per share ranging from 50 to 51 cents for the 4th fiscal quarter just started (36 cents consensus).
* Ford Motor (-3.12% to $10.26). The automotive group has adjusted its annual financial estimates downward to reflect an impact estimated at $1.7 billion from the recent UAW strike. After withdrawing its guidance due to the UAW strike, Ford now expects full-year adjusted EBIT of between $10.0 billion and $10.5 billion and adjusted free cash flow of between $5.0 and $5.5 billion. Although affected operations in the United States have resumed, the forecast reflects the effects of strike-related manufacturing disruptions on wholesale sales and revenue. Ford generated net profit of $4.9 billion and adjusted Ebit of $9.4 billion over the first three quarters of the financial year.
* Synopsys (-1.67% to $543.23). The American software group active in the design and verification of integrated circuits, unveiled yesterday evening accounts for the fourth fiscal quarter that were higher than expectations. For the quarter ended at the end of October 2023, Synopsys posted revenues of $1.60 billion, compared to a consensus of $1.59 billion. Adjusted earnings per share also beat consensus. For the current quarter, 1st fiscal quarter 2024, revenues are anticipated between $1.63 and $1.66 billion, a range higher than expectations (1.6 billion consensus), while adjusted EPS should be between 3.40 and $3.45 ($3.05 consensus). Fiscal 2024 revenues are expected between $6.57 billion and $6.63 billion.
