Wall Street is now weakening more significantly before market trading this Tuesday, following an already depressed session yesterday. The S&P 500 dropped 0.5%, the Dow Jones 0.6% and the Nasdaq 0.6% in pre-session. On the Nymex, a barrel of WTI crude gained 1.4% to $84.8. An ounce of gold advances 0.8% to $2,276. The dollar index lost 0.1% against a basket of currencies. On the bond markets, the yield on the 10-year T-Bond is 4.39%, while the ’30-year’ yield is 4.53%.
Yesterday Monday, the final American manufacturing PMI index for the month of March stood at 51.9 against 52.5 consensus, while the ISM manufacturing index was 50.3 against 48.5 for the average forecast of economists. Construction spending for the month of February declined by 0.3% compared to the previous month against +1% consensus.
Fed Governor Lisa Cook, speaking yesterday, did not comment on economic or monetary policy.
This Tuesday, operators will learn at 4 p.m. American industrial orders for the month of February, as well as the JOLTS report on job openings for the same month. Michelle Bowman, John Williams, Loretta Mester and Mary Daly from the Fed will speak today.
Note also that the final euro zone manufacturing PMI indices for the month of March announced this morning came out as expected in contraction territory (46.1 for the final euro zone index against 45.7 FactSet consensus; 41.9 in Germany against 41.6 consensus). The final UK manufacturing PMI for March was 50.3 versus the consensus 49.9.
Among the other major economic meetings of the week on Wall Street, investors will follow tomorrow Wednesday the ADP report on private employment for the month of March, as well as the final composite PMI index for March and therefore its component of services. The monthly report on the employment situation in the United States for the month of March will be known on Friday (consensus 3.8% unemployment, 205,000 non-agricultural job creations and 165,000 in the private sector).
On the Fed side, Michelle Bowman, Austan Goolsbee, Michael Barr and Adriana Kugler speak tomorrow Wednesday, Patrick Harker, Thomas Barkin, Goolsbee, Loretta Mester and Kathleen O’Neill Paese, Alberto Musalem and Adriana Kugler Thursday, then Susan Collins , Thomas Barkin, Lorie Logan and Michelle Bowman on Friday.
In the news of companies listed on Wall Street, PVH therefore delivered a warning on sales last night. Paychex and Cal-Maine Foods announce their quarterly financial results on Tuesday. Acuity Brands, Levi Strauss and BlackBerry release Wednesday. Lamb Weston, RPM International and ConAgra Brands announce Thursday.
Values
Paychex drops 7% in pre-session. The American group specializing in payroll management has published its accounts for the third fiscal quarter. Over the period, revenues rose 4% to $1.44 billion, while operating profit rose 6% to $650 million. Adjusted diluted earnings per share rose 7% to $1.38. The consensus was $1.37 in quarterly adjusted EPS for $1.46 billion in revenue. For the financial year, the group is now counting on revenues increasing by 5 to 6%.
Trump Media & Technology Group, a merged entity born from the merger of Digital World Acquisition and Trump Media, which therefore owns Donald Trump’s social network Truth Social, fell 21.5% last night on the American stock market, to $48.7 approximately, after its sharp rise following the first steps a week ago on the Nasdaq. Remember that its market valuation reached nearly $10 billion last week. The return to reality is quite brutal, however, and this capitalization is already back below 7 billion, following a declaration to regulators in which Trump Media revealed revenues of only… 4 million dollars over the last year for a net loss of nearly $60 million. In addition, the group anticipates further financial losses. The file therefore appears extremely overvalued on the stock market, compared to traditional financial ratios.
PVH, an American fashion group with brands Calvin Klein, Van Heusen and Tommy Hilfiger, plunged before the market on Wall Street following its warning. Thus, the group delivered last night an annual sales guidance lower than expectations, due in particular to the weakness in Europe. Annual revenues are expected to decline by 6 to 7%, after an increase of 2% in 2023. Part of the decline (2%) is attributable to the sale of Heritage Brands, but the group therefore also mentions the environment difficult economy, particularly in Europe. PVH is also suffering from the loss of momentum of its flagship brands Calvin Klein and Tommy Hilfiger, which fell behind in the fourth quarter. For the fiscal fourth quarter, revenues were $2.49 billion, flat year-over-year, while adjusted earnings per share were $3.72.
Over the current financial year, the group is also planning a stable operating margin compared to 10.1% in 2023. Annual earnings per share are expected between $10.75 and $11.
General Electric has finalized its split into three entities. The group’s aeronautical and energy activities will thus be able to begin their separate listings on the NYSE this Tuesday, a little over a year after the listing of the healthcare activity on the Nasdaq. The split of the conglomerate was initially announced at the end of 2021. Larry Culp, now CEO of GE Aerospace, will ring the opening bell on Wall Street today with Scott Strazik, CEO of Vernova, who represents the energy activities. The trading symbol for GE Aerospace will be ‘GE’, while that of GE Vernova will be ‘GEV’.
Tesla, the Texas manufacturer of electric vehicles, must announce its delivery figures for the first quarter. This will be a notable test, as the stock has lost nearly 30% of its value since the start of the year on Wall Street, with concerns linked to slowing EV demand and tough Chinese competition. In the meantime, the group has raised its prices on the Model Y in the United States, Europe and China… BYD, the largest Chinese manufacturer of electric vehicles, has just announced a fall in its first quarter of its EV sales of… 43% compared to the previous quarter, with 300,114 units sold (+13.4% over one year) compared to a record of 526,409 units in the fourth quarter.
BYD, which had overtaken Tesla in the fourth quarter, should therefore quickly lose its first place, with specialists anticipating sales of around 425,000 Tesla vehicles in Q1, compared to 484,507 in the previous quarter and 422,875 a year before.
Canoo, the small American automobile manufacturer of electric vehicles, has warned of substantial doubts about its ability to continue its activity, following 2024 revenue forecasts lower than expectations.
UnitedHealth, CVS Health and other US health insurers are suffering before the market, while the Centers for Medicare & Medicaid Services reported unchanged reimbursement levels on Medicare Advantage plans.
