All indices ended the week in positive territory on Wall Street, benefiting from the Meta locomotives and Amazon… The S&P 500 gained +1.07% to 4,958 pts. More sluggish, the Dow Jones gained +0.35% to 38,654 pts. The Nasdaq soars by +1.74% to 15,628 pts.
The equation is becoming more complicated for the Fed, however, as the latest US employment figures for January came out surprisingly strong, and wage inflation is visibly much higher than expected.
Today’s government report on the American employment situation for the month of January 2024 revealed 353,000 non-agricultural job creations, twice as many as expected! Creations in the private sector numbered 317,000, more than twice the consensus, while manufacturing job creations were 23,000. The unemployment rate remains at around 3.7%. The average hourly wage is growing twice as fast as expected, up 0.6% compared to the previous month (+4.5% over one year). The labor force participation rate reached 62.5%. The FactSet consensus was for 176,500 non-agricultural job creations and 148,000 in the private sector. The unemployment rate was expected at 3.8%. The average hourly wage was expected to increase by 0.3% month-on-month and 4.1% year-on-year.
Job gains in January were in professional and business services, health care, retail trade and social services. Employment declined in mining, quarrying, and oil and gas extraction.
The evolution of total non-agricultural salaried employment for November was also revised upwards by 9,000, from +173,000 to +182,000, and the evolution for December was revised upwards by 117,000, from + 216,000 to +333,000.
The final University of Michigan Consumer Sentiment Index for January 2024 came in at 79 (78.8 consensus and 78.8 for its preliminary reading). The measure of inflation expectations for the coming year comes out, as expected, at 2.9%.
American industrial orders for December 2023 show a slight increase of +0.2% compared to the previous month (0.4% consensus and +2.6% one month before).
On the oil side, a barrel of WTI crude fell by 2.7% to $72.39.
The greenback is exchanged for 0.9269 euros
An ounce of gold is $2,037. Bitcoin returns to $39,671.
Values
* Meta Platforms (+20.32% to $474.99). The stock is at the highest point in its stock market history. Mark Zuckerberg’s group largely exceeded the profit consensus for the closed quarter, announced a new share buyback program, and revealed a first dividend! For the just ended fiscal 4th quarter, adjusted earnings per share were $5.33, while revenues were $40.1 billion. The consensus was $4.94 EPS for $39 billion in revenue. A year earlier, during the same period, revenues stood at $32.2 billion. Advertising revenues for the closed quarter were $38.7 billion ($37.8 billion consensus).
Reality Labs, which notably houses the effort in the ‘metaverse’, lost $4.6 billion in the quarter ended against $4.3 billion a year before, but the division is starting to generate significant revenues at 1.07 Billion $.
Meta also increased its share buyback authorization by $50 billion and initiated its first dividend, at 50 cents per quarter or $2 over the year. Bloomberg measures that Zuckerberg alone will receive about $700 million in cash per year in dividends, since he owns about 350 million shares.
Meta is forecasting revenues of $34.6 to $37 billion for its just-started fiscal 1st quarter, which also quite clearly exceeds the consensus, around $34 billion. The social media giant now claims 2.11 billion daily active users on Facebook (2.07 billion consensus)… For 2024, the group plans expenses ranging from $94 to $99 billion.
* Amazon (+7.87% to $171.81). The American online commerce giant unveiled accounts above market expectations on Thursday evening, propelling the stock to Wall Street after market trading. For its 4th quarter, the group achieved revenues of $170 billion, an increase of +14% year-on-year, compared to a consensus of $166 billion. Adjusted earnings per share were $1, well above the consensus of around 80 cents. Net profit reached $10.6 billion. Andy Jassy, general manager of the group, who speaks of a record holiday season, is also continuing efforts to integrate generative AI into the various services. He believes this is starting to improve results. Concerning AWS, giant of cloud services, quarterly turnover reached $24.2 billion, very close to market expectations and up 13%.
For the current quarter, the group is forecasting revenues ranging from $138 to $143.5 billion ($142 billion consensus).
* Clorox (+5.62% to $156.36). The American cleaning products player is climbing on Wall Street. The group published accounts above expectations on Thursday evening and raised its forecasts. For the closed quarter, adjusted earnings per share were $2.16, significantly above consensus. The group forecasts annual adjusted earnings per share ranging from $5.30 to $5.50, compared to a previous range of $4.30 to $4.80. Revenue is expected to decline in the low single digits, compared to a previously expected mid- to high-single digit decline and a 5% decline according to consensus.
* Cigna (+5.38% to $323.84). The American health insurance group announced a net profit of $1.03 billion for its fourth fiscal quarter ($1.19 billion a year earlier). On an adjusted basis, EPS increased 35% to $6.79, well above expectations. Total revenues for fiscal 2023 were $195.3 billion, while net income was $5.2 billion and adjusted operating profit was $7.4 billion. Cigna now anticipates annual adjusted earnings per share of at least $28.25, compared to at least $28 previously and a market consensus of $28.3. Thus, the adjusted profit from operations for the 2024 financial year would be more than $8.025 billion.
* Nvidia (+4.97% to $661.6). The group reached a new historic high on Wall Street for a market capitalization of more than $1,600 billion now, while Meta is a very large client of the graphics and AI chip giant. Jensen Huang, the boss of Nvidia, indicated that demand for his group’s products would grow with demand from countries building AI infrastructure and systems.
* Chevron (+2.94% to $152.24). The oil group announced adjusted earnings per share of $3.45 for the past quarter, well above consensus, but revenues of $47.2 billion were too short. The oil group increases its dividend by 8% to $1.63 per quarter. Quarterly consolidated net profit was $2.3 billion, while adjusted profit was $6.5 billion. Annual global and American production is record high.
* AbbVie (+0.61% to $168.7). The group revealed adjusted earnings per share of $2.79 for the closed quarter, slightly above consensus, for revenues of $14.3 billion, also better than expected. The quarterly dividend is increased by 5%. The group anticipates adjusted earnings per share for the 2024 financial year ranging from $11.05 to $11.25.
* Intel (-1.75% to $42.6). The microprocessor giant has postponed a $20 billion chip manufacturing project in Ohio due to market challenges and the slow implementation of US subsidies, according to the Wall Street Journal. The initial schedule called for production to begin next year. Construction of the facility is not expected to be completed until the end of 2026, according to WSJ sources. The group says it is determined to complete the project and ensures that construction continues.
* Bristol-Myers Squibb (+0.08% to $48.71). The American pharmaceutical group exceeded profit and revenue expectations for the closed quarter, and revealed 2024 earnings per share guidance higher than expectations. In the 4th quarter, the group generated adjusted earnings per share of $1.70 ($1.53 consensus). Revenues totaled $11.5 billion, while analysts expected $11.2 billion on average. 2024 adjusted earnings per share are anticipated between $7.10 and $7.40.
* Microchip Technology (-1.59% to $84.29). The American chip designer exceeded market expectations in terms of profits for its fiscal 3rd quarter, posting adjusted earnings per share of $1.08 compared to a consensus of $1.06 and a level of $1.56 one year before. Revenues totaled $1.77 billion ($2.17 billion a year earlier) and were slightly below expectations. Thus, sales fell -22% sequentially and -19% year-on-year. For the 4th fiscal quarter, the group expects revenues ranging from $1.225 billion to $1.425 billion and adjusted EPS ranging from 46 cents to 68 cents.
* Regeneron (-1.32% to 945.18). The American biotechnology laboratory announced revenues for the 4th quarter that exceeded market expectations with its blockbuster Eylea, whose sales totaled $1.46 billion. Total quarterly revenues thus amount to $3.43 billion ($3.3 billion consensus). Earnings per share also beat consensus at $11.86, versus $10.7.
* Apple (-0.54% to $185.85). The Cupertino giant and 2nd world market capitalization behind Microsoft is losing ground on Wall Street. Tim Cook’s group was not completely convincing, despite its figures being higher than market forecasts. Operators are particularly concerned about the situation in China, where the group posted disappointing sales. In the quarter ended in December, a crucial period of the holiday season, the group achieved total sales of $119.6 billion, against a consensus of $117.9 billion. Quarterly earnings per share were $2.18 versus $2.10 consensus. iPhone sales increased 6% to $69.7 billion, while analysts on average expected $67.8 billion. Services revenues were $23.1 billion in the quarter, a new record and growth of 11%.
Nonetheless, markets view Apple as lagging behind in AI compared to other big tech names, and the recent launch of the Vision Pro mixed reality headset is unlikely to have a major impact on accounts in the near term. In addition, Apple faces tough competition with Huawei in China. The Apple group’s Chinese sales in the 4th quarter were only $20.8 billion, while the consensus was at $23.5 billion… Among the group’s other flagship products, Mac computers posted a slight increase in sales to $7.78 billion over the quarter, in line with expectations, while iPad sales fell by 25% to $7 billion.
* ExxonMobil (-0.41% to $101.97). The oil group posted its 2nd best annual profit. The American giant beat the consensus with an adjusted profit of $9.1 billion for the closed quarter ($38.6 billion for the year). The group returned more than $32 billion to shareholders last year through dividends and share buybacks. Over the past quarter, earnings per share reached $2.48 (around $2.2 consensus), while revenues totaled $84.3 billion ($86 billion market consensus).
