Wall Street is expected to decline before market trading this Tuesday, with the S&P 500 losing 0.3%, the Dow Jones also 0.3% and the Nasdaq 0.4%. On the Nymex, a barrel of WTI crude dropped 0.7% to $77.9. An ounce of gold gained 0.8% to $2,041. The dollar index fell by 0.2% against a basket of reference currencies.
Wall Street, closed yesterday for the Presidents’ Day holiday, resumes activity today and for a short four-day week. In economic news first, operators will follow the Conference Board’s index of leading indicators this Tuesday (4 p.m., FactSet consensus -0.3% compared to the previous month), then tomorrow Wednesday the index of expectations of inflation from the Atlanta Fed (4 p.m.), the Minutes of the last monetary meeting of the Fed (8 p.m.), as well as several interventions by central bank officials – including those of Raphael Bostic and Michelle Bowman.
On Thursday, investors will be attentive to weekly jobless claims (2:30 p.m.), the Chicago Fed’s national activity index, as well as the US composite flash PMI index (3:45 p.m.) and housing resales existing (4 p.m.). Thursday will also be very active on the Fed side, with a slew of interventions from notably Philip Jefferson, Patrick Harker, Neel Kashkari, Lisa Cook and Christopher Waller…
In corporate news on Wall Street, Walmart, Home Depot, Medtronic, CenterPoint, KBR and Fluor, announce their pre-market accounts this Tuesday, while Palo Alto Networks, Public Storage, International Flavors & Fragrances, Celanese, Toll Brothers or Chesapeake, publish after closing.
Tomorrow Wednesday, Analog Devices, Exelon, Verisk and Garmin reveal their results before the opening. After the closing, THE most anticipated publication of the results season will be held, that of the “star” of artificial intelligence Nvidia. Synopsys, Suncor Energy, Rivian, Host Hotels and even Nordson are also publishing tomorrow evening.
Intuit, Booking Holdings, Copart, PG&E, Block, Newmont, Dominion Energy, Moderna, Archer-Daniels-Midland and Edison, announce their accounts on Thursday.
Values
Walmart reported adjusted earnings per share of $1.80 for the quarter ended, compared to a consensus of $1.65. Revenues totaled $173.4 billion, compared to the market consensus of $169 billion. For the just ended fourth quarter, consolidated revenues were $173.4 billion, an increase of 5.7% year-on-year and 4.9% at constant currencies. Consolidated operating profit increased by 30%, while adjusted operating profit increased by 13%. Global e-commerce sales grew 23%. Like-for-like US growth excluding gasoline exceeded expectations at +3.9%. Adjusted operating profit reached 7.25 billion against 6.8 billion consensus.
Over the financial year, revenues were $648 billion (+6%), for consolidated operating profit up 32%. Adjusted earnings per share reached $6.65. The group increases its annual dividend by 9% to 83 cents per share.
For its delayed 2025 fiscal year now underway, Walmart is forecasting adjusted earnings per share ranging from $6.70 to $7.12, compared to a consensus of $7.1. Sales are expected to increase by 3 to 4%. For the first quarter alone, adjusted earnings per share are anticipated between $1.48 and $1.56.
Walmart also confirmed today the acquisition of American smart television manufacturer Vizio for $11.50 per share in cash, a little over $2 billion.
Home Depot, the American leader in the distribution of home products, announced adjusted earnings per share of $2.82 for its fourth fiscal quarter versus a consensus of $2.77. Revenue was $34.8 billion, compared to the average analyst forecast of $34.6 billion. The group still deplored a drop in sales for the 2023 financial year. In the fourth quarter, turnover also fell, since it stood at 35.8 billion a year before. Like-for-like sales for the period ended declined by 3.5% in the USA. Management today speaks of “a year of moderation”, after three years of exceptional growth. For the quarter ended at the end of January 2024, the group generated net profit of $2.8 billion and $2.82 per share.
Home Depot anticipates, for fiscal 2024, slight sales growth of 1% (-1% on a comparable basis). Finally, the group increases its quarterly dividend by 8% to $2.25.
Medtronic, the American medical technology giant, published adjusted earnings per share of $1.30 for its fourth fiscal quarter, stable year-on-year, compared to a consensus of $1.26. Revenues were $8.09 billion versus the market consensus of $7.95 billion. Organic revenue growth reached 4.6%. The group is raising its annual forecasts once again, with strong demand for medical devices. Medtronic therefore expects adjusted earnings per share ranging from $5.19 to $5.21 for the 2024 financial year, compared to a previous range of $5.13 to $5.19. The organic revenue growth guidance is also revised upwards.
Fluor, an American engineering and construction group, published revenues of $15.5 billion for its 2023 fiscal year, as well as group share net profit of $139 million and 54 cents per share. The backlog grew more than 10% to $29.4 billion. Adjusted Ebitda was $613 million, for adjusted earnings per share of $2.73. In the fourth fiscal quarter, the group’s net loss was $21 million or 12 cents per share, compared to a profit of $9 million a year earlier. Quarterly revenues were $3.8 billion compared to $3.7 billion a year earlier. The 2024 adjusted Ebitda guidance ranges from $600 to $700 million, while adjusted EPS is anticipated between $2.50 and $3.
OpenAI, the artificial intelligence startup behind Microsoft-backed ChatGPT, has reportedly sealed a deal valuing it at $80 billion or more, the New York Times reported Friday, citing people with knowledge of the matter. OpenAI would thus sell existing shares as part of a public offering led by the venture capital company Thrive Capital. As part of this operation, employees could sell their shares in the company, an alternative solution to a traditional financing cycle which would have made it possible to raise funds. Earlier last year, Thrive, Sequoia Capital, Andreessen Horowitz and K2 Global agreed to buy shares of OpenAI in a similar offering, valuing the company at around $29 billion. .
Capital One Financial has agreed to acquire Discover Financial Services in a $35 billion all-stock deal, which would create the U.S. credit card leader by credit volume. Under the terms of the agreement, Capital One Financial will offer 1.0192 shares for each Discover share, a premium of nearly 27% over Friday’s closing prices on Wall Street. Completion of the transaction is expected at the end of 2024 or at the beginning of 2025, subject to customary conditions. At the end of the deal, the current shareholders of the McLean group, Capital One, would hold around 60% of the new group. Pre-tax synergies of $2.7 billion are expected.
The deal would position the combined company to compete with larger payments companies and deliver increased value to a franchise of more than 100 million customers, the two groups say. Such a deal would also allow Capital One to leverage its customer base, technology and data ecosystem “to generate more sales for merchants and good deals for consumers and small businesses.” An accretive effect greater than 15% is expected on adjusted earnings per share in 2027.
Nvidia. Specialists are wondering, on the eve of the highly anticipated quarterly financial publication of Nvidia, giant of graphics and AI chips, while the market capitalization stood at nearly 1,800 billion dollars on Friday evening, an increase of 47 % already this year. Some believe Nvidia’s February 21 results could mean more to the markets than January’s US inflation figures…
The market capitalization of Jensen Huang’s group is up by around $560 billion this year, practically the market value of Tesla… The rise of Nvidia on the stock market also represents… more than 35% of the total performance of the S&P 500 in 2024. Additionally, Nvidia’s market capitalization recently surpassed those of Amazon and Alphabet, making the chip designer the third most valuable company on Wall Street, behind Apple and Microsoft. However, some believe that this overwhelming enthusiasm could be excessive – especially as competition is heating up.
Masayoshi Son, founder and director of the SoftBank group, has made no secret of his intention to redouble his efforts in the AI sector. According to Bloomberg, the founder of SoftBank is seeking $100 billion to create a new company that would compete with Nvidia in the field of AI chips. Named Izanagi, the new company would collaborate with Arm, a chip design firm that SoftBank introduced to Wall Street last year. SoftBank still holds around 90% of Arm shares… Sam Altman, the boss of OpenAI, would also display major ambitions in the design of artificial intelligence chips.
