Wall Street was particularly well oriented this Tuesday… The markets finally reacted well to the publication of inflation data. The S&P 500 is firm with a gain of +1.12%, to 5,175 pts. The Dow Jones is in the movement and takes 0.61% to 39,005 pts. The Nasdaq rose +1.54% to 16,265 pts, notably supported by Oracle and Nvidia, which rebounded by +7.16% ($919.13).
The week is marked in the United States by the publication of consumer and producer price inflation figures. This Tuesday, the American consumer price index for February 2024 increased by +0.4% compared to the previous month, against a FactSet consensus of +0.4%. Excluding food and energy, volatile elements, the February CPI also increased by 0.4% compared to January, while the consensus was +0.3%. Over one year, the consumer price index increased by 3.2%, or 3.8% excluding food and energy, against consensus estimates of +3.1% and +3.7% respectively.
As for investment banks, Bank of America (+0.2% to $35.96) raised its 2024 earnings per share estimate on the S&P 500 to $250, ($235 previously). This earnings per share could even reach $275 in 2025, estimates BofA. For its part, Goldman Sachs (+0.52% to $388.18) considers that risk assets should continue to grow, driven by strong economic growth in the United States and a slowdown in inflation. The macroeconomic environment would therefore be sufficiently positive to mask the high level of valuations, while underlying inflation should resume its decline. On the other hand, Mike Wilson, director of equity strategy at Morgan Stanley (+0.13% to $87.05), sees no reason to raise the outlook given the lack of general growth in profits of American companies. In an interview with ‘Bloomberg Surveillance Radio’, the specialist confirmed that he was aiming for an S&P 500 at 4,500 points by the end of the year.
On the rates side, the boss of JP Morgan, Jamie Dimon, indicated during a summit in Australia that he does not think the Fed will start reducing its rates in June. On the contrary, it should wait for more clarity before acting. “If I were in their place, I would wait,” Dimon said.
Tomorrow, operators will follow at 3:30 p.m. the weekly report from the Department of Energy on domestic oil stocks, for the week ending March 8. Thursday, the program will be quite busy, with weekly unemployment registrations for the week ending March 9 (consensus 217,000, announcement at 1:30 p.m.), the producer price index for the month of February (same time, consensus +0 .3% compared to the previous month and +0.2% excluding food and energy; +1.1% and +1.9% year-on-year), as well as February retail sales (1:30 p.m., consensus +0, 8% compared to January, +0.5% excluding automobiles). Business inventories for the month of January will also be announced on Thursday.
Friday will be high tension with a day of the Four Witches, investors will follow the Empire State manufacturing index of the New York Fed for the month of March (consensus -10), the import and export prices of the month February industrial production figures for February (consensus stable), and the University of Michigan’s preliminary consumer sentiment index for March (consensus 77.4).
In Wall Street corporate news, Lennar, Dollar Tree, Williams-Sonoma, UiPath and SentinelOne report tomorrow, while Adobe, Dollar General, Ulta Beauty, Wheaton Precious Metals and Dick’s Sporting Goods report Thursday. Jabil finally publishes on Friday.
On the oil side, a barrel of WTI crude fell -0.44% to $77.74. North Sea Brent fell -0.27% to $82.23.
An ounce of gold fell -0.93% to $2,157.
The dollar is stable and is trading at 0.9151 euros.
Bitcoin suffered some profit taking after a new all-time high of $72,996.98 during the session. Everything went very quickly over the rolling week, with an increase of 11.7%. Bitcoin recorded a 42.7% rebound over the month, going from a low of $47,718 to $70,765 this evening.
Values
* Oracle (+11.75% to $127.54). The Texan business software giant pleasantly surprised the market with its quarterly financial publication and outlook propelling the value to the highest in its stock market history.
Total revenues for the third fiscal quarter increased 7.1% to $13.3 billion, in line with market expectations, while adjusted earnings per share were $1.41, up 16% year-on-year. year-over-year, compared to a consensus of $1.38. Cloud revenues increased 25% to $5.1 billion in the quarter ended February. Cloud infrastructure (IaaS) revenues alone soared 49% to $1.8 billion.
The Austin group also reported a sharp increase in orders, with cloud activity. Thus, the ‘backlog’ presented in the form of a “remaining performance obligation” reached $80 billion at the end of the quarter (+29%!), well above analysts’ expectations, signaling notable growth potential with “demand for our Gen2 AI infrastructure”. Safra Catz, CEO of the group, mentioned significant new cloud infrastructure contracts signed during the third quarter. She expects the group to continue to record such large contracts reserving cloud infrastructure capabilities. She adds that Oracle is opening new data centers very quickly to meet this demand. The group also specified that it would make an announcement with Nvidia, the AI chip giant.
* NY Commty Bancor (+5.85% to $3.44). The fragile American financial institution has completed a $1 billion fundraising round from a group of investors including former US Treasury Secretary Steven Mnuchin. NYCB is therefore raising $1 billion as expected from investors including Liberty Strategic Capital (a firm linked to Mnuchin), Hudson Bay Capital, Citadel Global Equities, Reverence Capital Partners, as well as other institutional investors and bank executives. The troubled regional bank also announced that former Comptroller of the Currency Joseph Otting would join the board and become its chief executive. Mnuchin, Milton Berlinski and Allen Puwalski were also named to the council, with the board reduced to 10 members. The group will also carry out a 3-to-1 share consolidation.
* Archer-Daniels M (+3.93% to $57.07). The grain and commodities trader adjusted its previous financial statements, following an investigation into its accounting practices covering the period from January 2018 to September 2023. ADM says it made a profit of $6.43 per share for the whole of the past year, after an investigation into the accounting practices of its nutrition division delayed the release of results. Archer-Daniels had cut its 2023 profit forecast in January and adjusted its outlook on the nutrition segment. The group also announced an internal investigation and placed its financial director Vikram Luthar on administrative leave. ADM finally says it is cooperating with the US Department of Justice, which has subpoenaed certain employees. For the 4th fiscal quarter of 2023, the group reports adjusted earnings per share of $1.06 and revenues of nearly $23 billion.
* Southwest Airlines (-14.86% to $28.76). The group corrects after lowering its forecasts for receiving aircraft from Boeing. As a result, Southwest plans to reduce capacity and reassess its 2024 financial outlook.
* Kohl’s (-6.73% to $25.36). The American mass distribution group revealed sales for the 4th fiscal quarter down 1.1% in consolidated data and 4.3% on a comparable basis. Total revenues thus stand at $5.7 billion. Net profit represented $186 million, or $1.67 per share (-$273 million over the corresponding period last year). The consensus was for $1.28 in adjusted earnings per share for $5.7 billion in revenue. For the 2024 financial year, the group anticipates sales down by up to -1% or up by up to +1%. Like-for-like sales are expected to be stable or increasing by up to 2%. Operating margin is expected between 3.6 and 4.1%, while adjusted earnings per share are expected between $2.10 and $2.70.
* American Airlines (-4.71% to $13.96). The air carrier is losing altitude… The group is now counting on an adjusted loss per share approaching 35 cents for its first fiscal quarter, at the bottom of the range of previous estimates. The increase in fuel costs explains this weakness. American Airlines now expects an average cost of $2.8 to $2.9 per gallon of jet fuel during the 1st quarter. Finally, the company maintains its annual estimates.
* Boeing (-4.29% to $184.245). The US Federal Aviation Administration’s audit of Boeing’s 737 MAX production process after a panel explosion on an Alaska Airlines plane in January showed failures in 33 of 89 tests. The New York Times reported Monday. 97 cases of non-compliance were recorded. Supplier Spirit AeroSystems, which makes the MAX fuselage, passed six of 13 audits and failed the others. Additionally, an audit at Spirit of the door stopper component revealed 5 issues and one regarding the installation of the component failed. The audit raised concerns about the technicians who carried out the work, and found that the company had “failed to determine the knowledge necessary to operate its processes”… Boeing also suffered on Monday on the stock market, following a WS Journal article according to which the US Department of Justice had opened a criminal investigation into the company. The Justice Department’s investigation will look into recent Boeing production and manufacturing incidents.
* Casey’s General Stores (-1.58% to $294.03). The American neighborhood grocery chain announced, for its third fiscal quarter, adjusted earnings per share of $2.33, compared to a consensus of $2.20 and a level of $2.36 a year earlier. . Revenues totaled $3.33 billion over the period ($3.49 billion analyst consensus). Quarterly net profit was $87 million ($100 million a year earlier). For the 2024 fiscal year, the group envisages growth in Ebitda “in line with the objective of the long-term strategic plan of 8 to 10%”. The group plans to repurchase at least $100 million worth of shares throughout the financial year. Internal same-store sales are expected to increase 3.5% to 5%.
* Tesla (-0.13% to $177.54). Power has been restored to the manufacturer’s factory near Berlin. In contrast, Tesla’s Autopilot and FSD (Full Self Driving) features, as well as other driver assistance systems from rival manufacturers, have received mediocre ratings from the Insurance Institute of America for Highway Safety.
