Wall Street progressed slightly this Tuesday, recovering quickly following its correction the day before under the weight of GAFA and Intel. The S&P 500 rose 0.21% to 5,229 pts, the Dow Jones 0.19% to 39,390 pts and the Nasdaq 0.23% to 16,422 pts. The week will be brief, Wall Street is closed on Friday, but will include numerous interventions from Fed officials, as well as some notable statistics. Jerome Powell, head of the Fed, intervenes again on Friday…
On the Nymex, a barrel of WTI crude consolidates by 0.1% to $81.9. An ounce of gold gained 0.3% to $2,184. The dollar index fell by 0.3% against a basket of currencies. Bitcoin gained around 2% over 24 hours to $70,226.
Yesterday, new home sales in the United States for the month of February came in at 662,000, compared to the FactSet consensus of 680,000 and the revised reading of 664,000 for the previous month. The Chicago Fed’s national activity index for the month of February came in at +0.05, compared to -0.4 in the FactSet consensus and -0.54 a month earlier, in a revised reading.
Raphael Bostic, the head of the Atlanta Fed, sticks to his very cautious positions and anticipates only one drop in fed funds rates this year, compared to three downward adjustments, on average, for his colleagues. Bostic warns of the risk of premature monetary easing. He added that the rate cut will likely begin later than he had previously anticipated. He predicts a gradual slowdown in the economy and inflation. He also asserts that “we still find ourselves in a pandemic economy.” Austan Goolsbee, the president of the Chicago Fed, quoted by Bloomberg, for his part foresees three rate cuts this year, but adds that it is still necessary to observe progress on the inflation front. Fed Governor Lisa Cook said in a speech at Harvard that cutting rates too early could risk entrenching inflation, while cutting too late could harm economy. She believes that a prudent approach to monetary policy could ensure the path towards a return of inflation to 2%…
This Tuesday, orders for durable goods in the United States for the month of February 2024 increased by 1.4% compared to the previous month, compared to +1% market consensus and -6.9% in revised reading. , a month before. Excluding transport, orders increased by 0.5% compared to the previous month, against +0.6% consensus and -0.4% for the revised reading for the month of January.
Operators are also monitoring the S&P Case-Shiller and FHFA home price indexes (+0.1% for the adjusted Case-Shiller ’20 City’ for January compared to the previous month and +6.6% year-over-year excluding adjustment ; +6.3% over one year for the FHFA index).
The Richmond Fed’s regional manufacturing index for the month of March 2024 stood at -11, compared to -5 a month before and -4 of the market consensus.
The American consumer confidence index measured by the Conference Board for the month of March stood at 104.7, against a FactSet consensus of 107 and a level of 104.8 a month earlier, in revised reading.
The weekly report on US domestic oil stocks for the week ending March 22 will be released on Wednesday. Christopher Waller of the Fed intervenes the same day.
On Thursday, the news will be busy, with revised US GDP figures for the fourth quarter, weekly jobless claims for the week ended March 23, the Chicago manufacturing PMI, the US consumer sentiment index from the University of Michigan’s Home Sales Promises Index, as well as the Kansas City Fed’s Manufacturing Index.
Finally, on Friday, investors will monitor the inflation index as part of the publication of the report on household income and spending. The balance of international trade in goods will also be revealed. Jerome Powell will also liven up the day… Wall Street will nevertheless be closed on Friday for Good Friday – but then open for Easter Monday.
In corporate news on Wall Street this week, McCormick and GameStop report this Tuesday. Cintas, Paychex, Carnival, Rumble and Jefferies announce Wednesday. Walgreens Boots Alliance releases Thursday.
While the S&P 500 has gained around 10% this year, some strategists, such as those at JP Morgan and Morgan Stanley, are more cautious and believe that high valuations will be difficult to justify if they are not accompanied by a significant improvement in prices. business profits. The first quarter financial publication season will begin in around two weeks and will therefore be of major importance, while euphoria in the artificial intelligence segment and expectations of rate cuts have supported the markets for the time being. .
Values
UPS (-4%). The delivery giant said it expected revenue of $108 billion to $114 billion in 2026, while the consensus was for $102 billion. In January, the group said it planned to cut costs by $1 billion. He added that he did not expect business conditions to improve before the second half of 2024. UPS said today that it expects total savings of $3 billion by the end of the year. 2028. Management hopes for a return to growth in the industry during the year.
Lucid Motors (-3%), the American electric vehicle maker, got a $1 billion cash injection from Ayar Third Investment Co., its main financial backer, a subsidiary of Saudi Arabia’s Public Investment Fund. This is an investment in the form of a private placement in convertible preferred securities. This is therefore relatively positive news for the group, while some were wondering about the continued support of the Saudi PIF for the American EV manufacturer.
Fisker (-57% OTC), the small American manufacturer of electric vehicles, fell by an additional 28% on Wall Street yesterday Monday before its price was suspended. The title has lost 95% of its value since the start of the year, and the New York Stock Exchange has just announced its decision to delist the file. The group said discussions with a “major car manufacturer” for a potential deal had not been successful. Fisker also won’t be able to satisfy a closing condition related to its attempt to raise up to $150 million through a convertible bond issue, after missing an interest payment. In short, Fisker has never been closer to bankruptcy, with its options now appearing extremely limited.
Microsoft (stable) is changing its management, while Satya Nadella’s group is accelerating its offensive in artificial intelligence. Mikhail Parakhin, head of Bing’s search engine and advertising business, will leave the role and seek a new position, a week after the software giant named Mustafa Suleyman to oversee work on consumer artificial intelligence, overseeing the Parakhin passage.
Parakhin, who was general manager of advertising and web services, will report to chief technology officer Kevin Scott while seeking his next role, Microsoft said, as cited by Bloomberg. Parakhin also oversaw parts of the Windows software business. This work will be entrusted to Pavan Davuluri, who oversaw the hardware and the rest of Windows. Davuluri will now manage all Windows and Surface hardware, reporting to executive vice president Rajesh Jha. Bloomberg cites in this regard an email sent by Jha yesterday Monday to staff. The message did not specify whether Parakhin would leave Microsoft or take a new role within the group.
Trump Media & Technology Group, merged entity born from the merger of Digital World Acquisition and Trump Media, which therefore owns Donald Trump’s social network Truth Social, soars by more than 40% for its first session on the Nasdaq today, on $72 for a valuation estimated at nearly $10 billion! The SPAC Digital World Acquisition had already soared by 35.2% yesterday evening. Operators had thus welcomed the merger of “DWAC” with Donald Trump’s social media firm, Trump Media & Technology, owner of the Truth Social platform.
The former President of the United States holds a stake of nearly 60% in the combined entity, which therefore begins trading this Tuesday on Nasdaq under the symbol “DJT”. The valuation base of the merged entity was of the order of 6 billion dollars, but is now closer to 10 billion. The merger, which has been in the works for several years, has encountered several obstacles along the way, including allegations of insider trading, but the deal is finally coming to fruition and could therefore bring the former president a huge windfall, just as his liquidity and net worth were being called into question.
DWAC shares reacted late to the announcement of the approval of the merger by shareholders, since they had initially plunged 14% on Friday. But that was without counting on the “meme stock” aspect of the file, which also quickly took off. From now on, it is the Trump Media title which seems to benefit from this rather irrational enthusiasm, at least unrelated to the group’s financial results. The combined entity will be led by Devin Nunes, who previously left Congress to take over as CEO of Trump Media. Eric Swider, CEO of Digital World Acquisition, will become a director of the new group…
McCormick (+10%), American seasoning and spice giant, jumps on Wall Street after the accounts. In the first fiscal quarter ended at the end of February, sales increased (+3%) with the rise in prices. Operating profit climbed to 234 million compared to 199 million a year before. Adjusted earnings per share were 63 cents compared to 59 cents in the corresponding period last year. For its 2024 financial year, the group confirms its estimates in terms of sales, operating profit and adjusted earnings per share.
Dell Technologies (+2%) has indicated its intention to reduce its workforce and expenses. At the beginning of February, the group had 120,000 employees compared to 126,000 a year before. External hiring will be limited and the current workforce reorganized, said the IT giant, which had already eliminated more than 6,000 positions last year.
Krispy Kreme, the donut giant, soars 26% on Wall Street following the announcement of the extension of its partnership agreement with fast food leader McDonald’s.
Ford Motor (stable) maintains its outlook today. Annual adjusted Ebit is expected between $10 and $12 billion, while free cash flow is expected between $6 and $7 billion. Capital expenditures are expected to be between $8 billion and $9.5 billion. The accounts for the first fiscal quarter are due on April 24.
