Wall Street ends the week in disorganized order, but not without posting a superb weekly performance. The S&P 500 clears the 5,000 pts mark and the Nasdaq, that of 16,000 pts. Thus, the S&P 500 is on a 4th consecutive session of increase with a gain of +0.57% to 5,026 pts, at a historic closing high with a weekly gain of +1.7% and a record of 5,030.06 pts affected this Friday. The Nasdaq surges further by +1.25% to 15,990 pts after reaching a high of 16,007 pts during the session. Over the week, the technology stock index climbed +2.52%. On the Dow Jones, participants are a little more cautious, since the industrial value index returns -0.14% to 38,671 pts. However, it gained +0.76% over the week.
Many members of the Fed have spoken out in recent days… Governor Adriana Kugler presented on Wednesday her optimistic vision regarding the continued decline in inflation, while emphasizing that there was no rush to reduce rates . Susan Collins, president of the Boston Fed, said it was necessary to have more evidence of easing inflation before easing monetary policy. Thomas Barkin, president of the Richmond Fed, said it made sense to be patient with rates. In the same spirit, Governor Michelle Bowman indicated that it was not yet time to cut rates, while recognizing the decline in inflation… Barkin spoke again Thursday on Bloomberg, now that monetary policymakers would have time to be patient regarding the timing of the rate cut, while disinflation is confirmed and the job market remains strong…
On the oil side, a barrel of WTI crude rose +0.18% to $76.61 (+5.25% week-on-week).
The dollar is stable against the euro, trading at 0.927 euros (-0.37% over the week).
An ounce of fine gold is $2,025. Bitcoin appreciated by 0.1% to $45,393.
Values
* Nvidia (+3.58% to $721.33). Sam Altman, the boss of OpenAI, an artificial intelligence startup supported by Microsoft (+1.56% to $420.55), displays his ambitions. According to the Wall Street Journal, the young boss would like to embark on a project worth up to $7,000 billion to reshape the chip and AI sector. The leader of OpenAI is therefore looking for investors with deep pockets, particularly from the United Arab Emirates, “for a project that could require up to 7,000 billion dollars”. It’s difficult to know whether this is a threat or an opportunity for the champion of AI chips, Nvidia, which nevertheless reached a new peak today around $714…
* Tesla (+2.12% to $193.57). Elon Musk’s group indicated that production at the Berlin gigafactory would resume on February 12, after being suspended due to disruptions in the Red Sea. The Texan manufacturer of electric cars therefore intends to restart production at the Gigafactory Berlin next week after having put it on pause due to supply problems. Tesla recently reached record production at the Berlin gigafactory, producing up to 6,000 Model Ys in a week.
* Motorola Solutions (+0.77% to $330.89). The group published profits and revenues above expectations for its 4th fiscal quarter. Adjusted earnings per share were $3.90, compared to a market consensus of around $2.81 and a level of $3.60 a year earlier. Revenues totaled $2.85 billion, up 5.3% and almost 1% above consensus. The group generated $1.2 billion in operating cash flow over the quarter and $2 billion over the financial year. The end-of-quarter backlog finally stands at the very high level of $14.3 billion.
* Newell Brands (-18.93% to $6.85). The American consumer products specialist published net and adjusted revenues down -9% for its 4th fiscal quarter. Sales totaled $2.1 billion, for a gross margin of 29.9% and a normalized gross margin of 32.3%. Adjusted earnings per share were 22 cents (16 cents a year earlier). The market consensus was 17 cents in adjusted earnings per share for $1.98 billion in revenue. Operating cash flow recovered significantly to $930 million over the financial year. Finally, Newell initiates very cautious 2024 forecasts, expecting a revenue decline of 5 to 8% and adjusted EPS ranging from 52 to 62 cents.
* Expedia (-17.78% to $131.11). The American online tour operator posted adjusted earnings per share of $1.72 for the quarter ended, compared to a consensus of $1.69. Revenues were in line with expectations at $2.89 billion (+10%), but gross bookings missed consensus at $21.7 billion versus $22 billion. In addition, the group announces the appointment of Ariane Gorin as Managing Director, replacing Peter Kern from May 13. Kern has served as CEO since 2020 and will continue as vice chairman of the board of directors. Gorin has been an Expedia executive since 2013.
* Pinterest (-9.45% to $36.87). The group published adjusted earnings per share of 53 cents for its 4th quarter, higher than the market consensus, but revenues too short at $981 million (+12%), compared to the consensus of $990 million. For its first fiscal quarter, which has just begun, the social media group anticipates a turnover ranging from $690 to $705 million ($700 million consensus). Furthermore, the group now boasts 498 million monthly users, a record and a performance superior to expectations.
* Take-Two Interactive Software (-8.66% to $154.91). The results of the American video game publisher, revealed for the 3rd fiscal quarter, were mixed. The group announced adjusted earnings per share of 71 cents, compared to a market consensus of 73 cents. The level of net bookings was $1.34 billion compared to $1.32 billion expected and $1.38 billion a year earlier. GAAP revenues were $1.37 billion, down 3%, while GAAP net loss was reduced to $91.6 million. The guidance for net bookings for the 4th quarter which has just begun, nevertheless appears lower than expectations. For the 2024 financial year, net bookings are expected between $5.25 and $5.3 billion. The group is finally implementing significant cost reductions in order to optimize its margins.
* Illumina (-3.83% to $137.84). The stock is losing ground on Wall Street, while the sequencing technology supplier only forecasts stable sales for the 2024 financial year in its core business, in the face of sluggish demand. For the 4th fiscal quarter, revenues were $1.12 billion ($1.09 billion consensus). On an adjusted basis, earnings per share were 14 cents (2 cents consensus). Moderate demand for genetic testing and diagnostic tools is confirmed. The designer of genetic sequencing machines is thus suffering from customers’ caution in terms of spending and the tense economic context in China.
* PepsiCo (-3.55% to $167.67). The manufacturer of soft drinks has just delivered slightly short revenues for the quarter ended. Its outlook is cautious for the current financial year. Over the past period, adjusted earnings per share represented $1.78, above consensus ($1.72), while revenues were $27.9 billion, compared to $28.4 billion consensus. and $28 billion a year before. Net income more than doubled to $1.3 billion and 94 cents per share. The group plans 2024 organic growth of at least 4%, while the consensus was more than 5%. Furthermore, the group is increasing its annual dividend by 7%, and is announcing a $1 billion share buyback plan.
* Interpublic (-3.21% to $30.78). The American advertising group exceeded expectations for its 4th fiscal quarter, but warned of reductions in client spending in the technology and telecoms sectors. Earlier this week, Omnicom (-2.35% to $84.59) revealed better than expected accounts. For the closed quarter, Interpublic generated adjusted earnings per share of $1.18 ($1.13 consensus). The McCann and Mediabrands agency group posted total revenues of $2.59 billion, slightly higher than market expectations.
* Zimmer Biomet (-0.2% to $122.8). The American medical device supplier announced adjusted earnings per share of $2.20 for its 4th quarter of 2023, up +17% year-on-year and exceeding the consensus by 2%. Quarterly revenues were $1.94 billion, an increase of 6.3% compared to last year and slightly above market expectations. Over the financial year, adjusted earnings per share amounted to $7.55 and revenues reached $7.39 billion, an increase of 6.5%. In terms of outlook, Zimmer Biomet sees growth of 4.5 to 5.5% in 2024 consolidated revenues, as well as adjusted diluted earnings per share ranging from $8 to $8.15.
