The American stock market appears very uncertain before market this Friday, amid growing concerns about inflation. After the consumer price index published earlier this week, today it is the turn of the producer price index to disappoint, which could prevent the Fed from quickly reducing its rates – currently at their highest of 23 years… The S&P 500 lost 0.2% in pre-session and the Dow Jones 0.4%, while the Nasdaq picked up a few points with Applied Materials. On the Nymex, a barrel of WTI crude rose 0.4% to $78.3. The ounce of gold is almost unchanged. The dollar index gained 0.2% against a basket of reference currencies.
The producer price index in the United States for the month of January 2024 increased by 0.3% compared to the previous month and by 0.9% year-on-year. This is an additional unpleasant surprise regarding prices in the USA, since the FactSet consensus was +0.1% increase month-on-month and +0.7% year-on-year. Excluding food and energy, the January producer price index increased by 0.5% against 0.1% consensus (+2% over one year against 1.7% consensus).
Note that housing starts and building permits in the United States for the month of January have also been announced. Housing starts stood at 1.331 million (-15%), compared to 1.47 million consensus and 1.562 million for the revised reading of the previous month. Permits are also lower than expected, at 1.47 million, compared to 1.51 million consensus and 1.493 million a month earlier.
Thomas Barkin, Michael Barr and Mary Daly of the Fed speak today. Barkin says today that January’s economic data wasn’t so good, even calling it “complicated.” The head of the Richmond Fed adds that the American central bank is getting closer to its inflation target (2%), but has not yet achieved it.
According to the CME Group’s FedWatch tool, the probability of a monetary status quo on March 20, following the next Fed meeting, stands at 94%, which would leave rates between 5.25 and 5 .50%. The probability that rates will still remain unchanged on May 1, after the next monetary meeting, is 74% according to the same tool.
Note that the preliminary index of American consumer sentiment from the University of Michigan for the month of February will be announced within an hour (FactSet consensus of 80).
Values
Applied Materials, the American giant of equipment intended for the production of semiconductors, soared by 12% last night after market trading on Wall Street. For the quarter ended January 2024, “Amat” posted revenues of $6.71 billion, down slightly by 0.5% year-on-year, while its adjusted earnings per share were $2.13 versus $2.03 a year ago. The consensus was for $6.47 billion in revenue and $1.90 in adjusted earnings per share. The group expects fiscal second-quarter revenue of around $6.5 billion, compared to a consensus of $6.3 billion. Adjusted earnings per share for the period are anticipated between $1.79 and $2.15, which is also better than expected. These forecasts could signal a faster-than-expected industry recovery.
Coinbase soared 14% last night after market trading on Wall Street. For its fourth fiscal quarter, the cryptocurrency exchange beat the consensus by posting revenues of $954 million, up 52% year-over-year, as well as adjusted earnings per share of $1.04 to compare to a loss a year before. The consensus was for $732 million in revenue and 9 cents in adjusted loss per share. Net profit was $273 million, compared to a loss of $557 million a year earlier. Stablecoin revenues were $172 million compared to $146 million a year before.
Dropbox stumbles in pre-session on Wall Street, despite accounts slightly higher than expectations. The Californian group specializing in the cloud announced fourth-quarter revenues of $635 million, an increase of 6% year-on-year, bringing annual revenues to $2.5 billion. Quarterly GAAP net income was $227 million, compared to $328 million a year earlier. Adjusted net income was $171 million, compared to $141 million for the comparable period last year. Adjusted earnings per share were 50 cents, compared to 48 cents consensus, while revenues also narrowly exceeded market expectations.
DoorDash falls before market on Wall Street, following fourth quarter results. Revenue for the period was $2.3 billion, slightly above expectations, while adjusted EBITDA was $363 million, also better than expected. The guidance provided for the fiscal first quarter and current fiscal year was broadly in line with analyst expectations.
Nike, the sports shoe giant, will reduce its workforce by around 2%, which represents more than 1,600 positions, in the face of weak demand. The workforce reductions would cost between $400 million and $450 million. The group had already announced in December a savings plan of $2 billion over three years, by reducing managerial layers and adjusting the offering of certain products. According to the Wall Street Journal, which initially reported the cuts, the workforce reductions would begin this Friday and a second phase would be finalized by the end of the quarter. The layoffs would not affect store employees or those in distribution centers or innovation teams.
You’re here. Elon Musk, CEO of Tesla, now owns 20.5% of the capital of the electric vehicle manufacturer, according to declarations to the SEC, the American financial markets authority. The stake is up sharply compared to the 13% held in May, but remains lower than the 22% held before Musk sold Tesla shares to finance the $44 billion takeover of Twitter. The billionaire owns more than 411 million shares of common Tesla stock and options to buy 304 million shares. Thus, Musk is getting closer to the 25% that he considered necessary to have sufficient influence on the group. Last month, the businessman indicated that he could explore certain projects outside of Tesla, particularly in artificial intelligence, if he did not obtain this level of participation.
