Wall Street hesitated on Friday to end the week, up on the DJ (+0.32% to 39,512 pts) and the S&P (+0.16% to 5,222 pts), but down slightly on the Nasdaq by 0.03 % at 16,340 points, while investors remain more attentive than ever to the declarations of monetary officials who follow one another this weekend…
“The Fed will likely lower its rates this year, even if the start and extent of its monetary easing cycle remain uncertain, and provided that the disinflation process remains slow,” said the president of the Atlanta Fed , Raphael Bostic. “I still believe” that rates can be eased this year, while inflation in the first quarter seemed to be permanently above 2%, the central bank’s objective, he explained. in an interview with Reuters.
“Most employers expect to see wage growth return to its pre-pandemic trend,” notes Raphael Bostic. And “almost everyone tells us that pricing capacity has reached its limit,” with the possible exception of “tech” companies.
This should contribute to the decline in inflation in 2024, and encourage the Fed to lower its rates, summarizes the president…
However, the process could prove to be long: Raphael Bostic underlines that the growth in the number of jobs in April was lower than expected, at 175,000 new positions created, but that it is nevertheless a question of a good figure which suggests that it will still take time to return to a level consistent with the 2% inflation target… “I don’t think we will see such a figure for at least two months. I hope that we will observe a slowdown, because my forecasts indicate that a slowdown is really necessary to bring inflation back to its target”, warns Raphael Bostic, who insists that “employment growth remains robust”.
The leader expects a quarter of a percentage point of monetary easing in 2024, which would take place late in the year. “We will have to be patient and wait for indications that inflation is moving more decisively towards 2%. This will take time. For me, the question is not how many rate cuts will take place this year, but when the first will be decided,” Bostic continues.
The markets, for their part, are counting on a first rate cut in September, after having been optimistic for too long about the expected pace of monetary easing.
Bostic thus sees inflation falling to 2% at the end of 2025 or beginning of 2026, a slow erosion which will, according to him, make it possible to avoid a sharp increase in unemployment. Employment growth reaching “a hundred thousand” positions per month would allow the unemployment rate to remain stable. Raphael Bostic finally declares himself “confident” in the slowdown of inflation, even if the Fed’s key rate “will have to remain high for longer”.
The latest statements from the BoE going in a less restrictive direction have helped the stock market trend in recent hours… Investors have thus taken note of the more flexible monetary discourse of the Bank of England despite the renewal of its key rates. Its governor, Andrew Bailey, said he was “confident” in the trajectory followed by inflation, a confidence reflected in the new economic projections published by the central bank on this occasion… The main key rate of the BoE thus maintained at 5.25%, its highest level in 15 years.
New proof of the less dynamism of US statistics in recent weeks, the morale of American households deteriorated more than expected in May, according to the first results of the monthly survey from the University of Michigan published on Friday. The confidence index stood at 67.4, while economists polled by Reuters expected 76 and later 77.2 in April.
One-year inflation expectations stood at 3.5% compared to 3.2% in April, while those over a 5-year horizon increased slightly to 3.1% after 3% in April…
Oil prices are back below $83 per Brent. The euro stands at 1.0770/$. Bitcoin returns to $60,750.
Values
SoundHound climbs 7.1%. The little AI “nugget”, in which Nvidia has invested, weighs nearly 1.4 billion dollars on the American stock market. Its reported revenue was $11.6M in Q1, a 73% year-over-year increase. The GAAP gross margin is 60% and the non-GAAP gross margin is 66%. However, GAAP earnings per share remain at a loss of ($0.12).
The consolidated results include the operational and transactional impacts of the acquisition of SYNQ3, closed in the first quarter. The cumulative amount of subscriptions and pending reservations stands at $682 million, up approximately 80% year-over-year. The cash balance was $226 million at the end of the first quarter.
“We are pleased to start the year with a strong performance, in our strongest first quarter on record,” said Nitesh Sharan, Chief Financial Officer of SoundHound AI. “Our commercial momentum continues to accelerate with a growing pipeline across all businesses.”
Warner Bros Discovery (+1.3%) remains supported on the stock market, while the broker KeyBanc raised its recommendation to “outperformance” against “sector performance” after the latest announcements which could potentially change the market situation… The The group has just announced its intention to offer its Disney+, Hulu and Max streaming services as a bundle to its American customers, starting this summer. Starting this summer in the United States, the streaming services will be offered together, “offering subscribers the best value for money in entertainment and an unprecedented selection of content from the biggest and most popular entertainment brands popular, including ABC, CNN, DC, Discovery, Disney, Food Network, FX, HBO, HGTV, Hulu, Marvel, Pixar, Searchlight, Warner Bros. and many others.
The new plan will be available for purchase on one of the streaming platform’s three websites, offered as both an ad-supported and ad-free plan…
Additional details regarding the bundle will be shared in the coming months…
Moderna (-4.3%) The American drug authority postponed the announcement of its opinion on Moderna’s respiratory syncytial virus (RSV) vaccine until the end of May due to “administrative constraints”, the US drugmaker said… The FDA’s decision extends the wait time for Moderna’s second approved product, but the company said it was on track to have its vaccine reviewed by a panel of Centers advisors. Centers for Disease Control and Prevention (CDC) on June 26 and 27.
At the meeting, CDC advisers must vote on recommendations on the use of the vaccine and the target population, with prior approval required for marketing the product.
Analysts expect sales of $340.8 million this year for the RSV vaccine and more than $800 million in 2025, according to LSEG data.
Ford (-1.1%) is under surveillance on Wall Street, while the American automobile safety regulatory authority announced this Friday to open a preliminary investigation into 210,960 vehicles of the group following complaints alleging certain ” fuel leaks. The preliminary assessment is the first step in determining whether vehicles pose an “unreasonable” safety risk…
The stock has been buoyed on the stock market recently, as the Michigan automaker reported quarterly results that beat market expectations. For its first quarter, the US group actually achieved revenues of 42.8 billion dollars, compared to a market consensus of around 40 billion and growth of 3% year-on-year. Adjusted earnings per share came in at 49 cents, compared to a consensus of 42 cents.
Adjusted EBIT also exceeded expectations, reaching $2.8 billion. Better yet, the automaker says its annual adjusted Ebit is heading toward the high end of the previous estimate range of $10 billion to $12 billion. The adjusted free cash flow target was increased to between $6.5 billion and $7.5 billion. Capital expenditures are expected between 8 and 9 billion…
In addition, Jim Farley, the group’s general manager, indicated that the slower ramp-up of the all-new Ford F-150 “was taken into account in the forecast update.” Ford also announced a dividend of $0.15 for the quarter.
Finally, management spoke of the need for “extraordinary progress” in the Model e division, with the EV activity constituting the main factor weighing on results with a quarterly Ebit loss of $1.32 billion in the Model e segment. for only $100 million in revenue. Ford Blue, for its part, posted 21.8 billion in revenues and 905 million in Ebit, while Ford Pro posted 18 billion in sales and more than 3 billion dollars in Ebit over the period closed…
Akamai, the American IT services provider, is heckled on Wall Street, down 11%, after publishing revenues lower than market expectations. The group thus posted a turnover of $987 million in the 1st quarter, compared to nearly $990 million anticipated by market analysts.
The group forecasts Q2 revenue of between $967 million and $986 million, compared to an average estimate of $1 billion. The group also expects adjusted earnings per share for the second quarter to be between $1.51 and $1.56, compared to analysts’ estimates of higher than $1.60.
“The slowdown in demand for cloud security services should weigh on the first quarter,” management warned at the start of the year, while the group was forecasting revenues ranging from $980 million to $1 billion over the past period, for adjusted EPS between $1.59 and $1.64. “We are pleased to continue to execute on our long-term strategy to drive revenue growth in our security and compute solutions,” commented Dr. Tom Leighton, CEO of Akamai. “Both solutions had a strong start to 2024 and collectively grew more than 20% year-over-year, accounting for almost two-thirds of total revenue. We are particularly excited about our project acquisition of Noname Security, which will enhance Akamai’s existing API security solution and accelerate our ability to meet growing customer demand.”
