At the market close this Friday, Wall Street is cautiously in positive territory. The S&P 500 rose +0.18% to 4,697 pts. The Dow Jones advances by +0.07% to 37,466 pts. The Nasdaq climbed a small +0.09% to 14,524 pts. The American market is trying to recover at the end of a delicate first stock market week of 2024, marked by corrections in the stocks of the ‘Magnificent Seven’ and in particular Apple at an eight-week low following two broker downgrades… The latest robust US employment figures have also been differently appreciated, while operators consider that an overly resilient labor market limits the Fed’s capacity for action. The services ISM reflects a slowdown…
According to data published this Friday by the US Department of Labor, non-agricultural job creations for the month of December 2023 stood at 216,000, well above the consensus of 160,000. The unemployment rate stood at 3.7% (3.8% consensus). The average hourly wage increased by 0.4% compared to the previous month (0.3% consensus). The labor force participation rate was 62.5%. Job creations in the private sector totaled 164,000, compared to 130,000 consensus and 136,000 for the revised reading of the previous month. Total job creations for November were posted at 173,000 in revised reading against 199,000 previously estimated. “We are returning to a labor market very much in line with pre-pandemic hiring levels. Although wages were not the cause of the recent surge in inflation, now that wage growth has “reduced, any risk of a wage-price spiral has practically disappeared”, judges Nela Richardson, chief economist at ADP.
Job creation increased for the 4th consecutive month, thanks to strong growth in hiring in the leisure and hospitality sectors. Construction held up despite high interest rates, but the manufacturing industry continued to struggle, posting another month of losses. Small businesses with 1 to 49 employees created 74,000 jobs in December, while businesses with 50 to 249 employees created 58,000 positions. Companies with 500 people or more or generated 40,000 jobs.
The ISM American services index for December 2023 stood at 50.6, compared to the FactSet consensus of 52.6 and 52.7 a month before. The indicator therefore signals a clear slowdown in growth. The new orders index for December stood at 52.8 compared to 55.5 in November.
American industrial orders for the month of November 2023 increased by 2.6% compared to the previous month, compared to +1.8% market consensus and -3.4% a month earlier.
On the oil side, a barrel of WTI crude jumped +2.14% to $73.94. The barrel of Brent is calmer, with an increase of +1.43% to $78.85.
An ounce of gold is stable at $2,044.
The dollar is relatively stable against the euro, at 0.9139 euros.
Values
* Constellation Brands (+2.15% to $247.53). The American producer of wines, spirits and beers, known for the Corona brand, published disappointing revenues for its third fiscal quarter and a profit above expectations. The group lowers its annual revenue forecasts. For the closed quarter, adjusted earnings per share were $3.19 ($3 consensus). Quarterly revenues stood at $2.47 billion ($2.54 billion consensus). The group maintains guidance for annual adjusted earnings per share ranging from $12 to $12.2, but now only forecasts $9.15 to $9.35 billion in annual revenue, compared to $9.6 to $9.8 billion. $ previously.
* Costco Wholesale (+1.18% to $656.01). The American distribution giant posted revenues totaling $26.15 billion for the month of December, an increase of 9.9% year-on-year. Over the 17 weeks ending at the end of December 2023, the group posted total revenue of $82.9 billion, an increase of 5.9% compared to the previous year.
* ExxonMobil (+0.3% to $102.63). The oil group indicated that it would write down approximately $2.5 billion of Californian assets in the 4th quarter and also specified that the fall in energy prices would reduce its operating profit. Operating profit could fall to around $8.9 billion, down 30% year-on-year. ExxonMobil said oil and gas properties along the Southern California coast are expected to experience depreciation ranging from $2.4 billion to $2.6 billion. Energy startup Sable Offshore agreed more than a year ago to pay $643 million for the assets. Persistent challenges in the state’s regulatory environment have hampered progress in resuming operations, the group lamented. Oil majors are turning away from California due to mature oil fields and the state’s environmental policies…
Exxon also indicated its intention to write down approximately $250 million in its chemical business. The drop in oil prices affected profits by $600 million, but this was partially offset by the rise in natural gas markets. The $1.6 billion drop in refining profits was partly mitigated by a $1.2 billion gain on derivatives.
* Tesla (-0.18% to $237.49). The Austin firm has indicated that it is recalling 1.6 million cars in China due to the risk of an accident linked to Autopilot, Bloomberg reports. Tesla will actually use remote vehicle upgrade technology to provide newly developed functions to vehicles to reduce risks. Bloomberg observes that the “recall” applies to virtually every car Tesla has ever sold in the country. This decision echoes that concerning 2 million vehicles in the United States last month. The affected cars in China were produced between August 2014 and December 2023, including locally produced Model 3 and Y and imported premium models, according to the local administration.
Tesla drivers could abuse Autopilot functions, increasing the risk of collision and posing a safety risk, the Chinese regulator said. The “recall” therefore reflects the Texas automaker’s response last month to the US National Highway Traffic Safety Administration, determining that Elon Musk’s group was not doing enough to ensure that drivers were using Autopilot correctly. . NHTSA had said it would keep open a years-long defect investigation to monitor the effectiveness of Tesla’s fixes to 2 million cars.
* Apple (-0.4% to $181.18). The apple brand suffered two downgrades from brokers this week. Taiwanese electronics production subcontractor Foxconn, the main assembler of Apple’s iPhone, warned on Friday that it expected a decline in revenues in the first quarter, on a demanding comparison basis and in a context of weakness demand. However, the 1st quarter is traditionally weaker for the group, and revenues reached a record last year, at the same time, with the post-covid recovery. Foxconn also published revenues for its 4th quarter down 5.4% to $1.851 billion from Taiwan, narrowly beating the consensus. Taiwan’s revenues last month were $460 billion, or about $14.8 billion. Q4 revenue from the consumer electronics business including smartphones was flat, reflecting slowing demand.
* Microsoft (-0.05% to $367.75). OpenAI, the Microsoft-backed firm behind chatbot ChatGPT, is talking to dozens of publishers about licensing deals, Bloomberg reports. In an interview, an OpenAI official calls the discussions “active” and “positive” and says, “You’ve seen some deals announced, and there will be more in the future.” The article reminds readers that OpenAI has already signed agreements with Axel Springer and the Associated Press. The executive further claims that OpenAI was “in the midst of a very active and productive negotiation” with the New York Times until the newspaper filed a copyright infringement lawsuit last month. The OpenAI store will also soon open its doors. After a slight delay, the startup behind ChatGPT should launch its GPT online store next week, announced during the DevDay conference last November, as indicated in an email addressed to GPT Builder users, relayed by ‘ The Verge’. “Dear GPT Builder, we would like to inform you that we will launch the GPT Store next week,” OpenAI announced, inviting users who wish to share their GPT in the store to “review our updated usage policies and GPT brand guidelines to ensure (its) GPT is compliant.”
