At the close of the markets, Wall Street is marking time. The S&P 500 fell -1.20% to 5,061 pts. The Dow Jones lost -0.65%, slipping below 38,000 points to finish at 37,735 points. The Nasdaq fell by -1.79% to 15,885 pts. While persistent inflation could prevent the Federal Reserve from cutting interest rates this year, investors worry about the fallout from Iran’s attack on Israel and a possible response that could inflame the region. The chief of staff of the Israeli army, Herzi Halevi, has in fact promised a response to the Iranian attack, despite calls from the international community to avoid any escalation in the conflict with Tehran.
On the macro side, the New York Fed’s Empire State manufacturing index for the month of April stood at -14.3 (-5.2 consensus). The index remains anchored in the red, signaling a sharp contraction in manufacturing activity in the region this month.
Retail sales increased more than expected in March in the United States, a new sign of the resilience of the world’s largest economy. According to the US government report, retail sales for the month of March increased by +0.7% compared to the previous month (+0.4% consensus). The previous month’s reading was revised to +0.9%. Excluding automobiles, sales increased by 1.1% (+0.5% expected). Excluding cars and gasoline, sales showed a gain of 1% against +0.3% consensus.
“If you were waiting for an economic downturn, you’re not going to get it.” The strong tailwind from loose financial conditions continues to drive inflation and growth, including consumer spending in March,” said Torsten Slok of Apollo Global Management, adding: “Given the ongoing reacceleration of the economy, the Fed will not cut interest rates in 2024.
New York Federal Reserve Chairman John Williams noted the enduring strength of consumers and the economy as a whole, but reiterated that the Fed would likely begin lowering interest rates this year. if inflation continues to decline gradually.
The Bank of America and Deutsche Bank teams, who were counting on a first monetary easing at the beginning of the summer, now estimate that the Fed will only make one rate cut in 2024… in December .
On the black gold market, a barrel of WTI crude rose +0.22% to $85.65.
The dollar strengthened further by +0.47% against the European currency, to 0.9414 euros.
An ounce of gold climbs +1.58% to $2,381. Bitcoin lost -5.7% to $63,038.
Values
* Encore Wire (+11.59% to $291.23). Prysmian, the world’s largest cable manufacturer, will acquire the American company for an enterprise value of around 3.9 billion euros. The transalpine group is offering $290 per share to take over its target, a premium of around 11% over Encore Wire’s Friday closing price. The operation should be finalized during the second half of 2024. The Italian firm will finance the transaction with 1.1 billion euros in cash and €3.4 billion in credit facilities. The acquisition will allow Prysmian to expand its product offering and “increase its presence in North America, improving its portfolio and geographic distribution. Encore Wire produces copper and aluminum wire and cable for residential buildings , commercial and industrial.
*Goldman Sachs (+2.92% to $400.88). The American banking giant revealed accounts that exceeded analysts’ expectations. In the first quarter, the group saw its profits jump 28%, supported by a recovery in the debt market and transactions which stimulated its investment banking division. Net income increased to $4.13 billion, or $11.58 per share ($3.23 billion or $8.79 per share a year ago). The consensus was for an EPS of $8.73. Investment banking fees rose 32% to $2.08 billion. Revenues from bond, currency and commodities trading rose 10% to $4.32 billion, while revenues from equity trading jumped 10% to $3.31 billion. Asset and wealth management revenues grew 18% to $3.79 billion. Total revenues came to $14.21 billion (+16%), against a consensus of $12.94 billion.
“We continue to execute on our strategy, focusing on our core strengths to serve our customers and meet the expectations of our shareholders,” said CEO David Solomon. As a leading M&A advisor, Goldman advised on some of last year’s largest deals, including Exxon Mobil’s $60 billion purchase of Pioneer Natural Resources. As companies have regained some confidence in raising funds in capital markets, stock and bond underwriting activity has rebounded.
* Charles Schwab (+1.78% to $71.23). The Westlake, Texas-based company reported net sales of $4.74 billion for the three months ended March, down -7.3% year-on-year but above market expectations ( $4.71 billion). The brokerage’s net profit fell 15% to $1.36 billion, or 68 cents per stock. Adjusted EPS reached 74 cents (73 cents consensus). “In an improved macroeconomic context, clients entrusted us with $96 billion in net new core assets, including $45 billion in March alone,” said CEO Walt Bettinger. “At the same time, strong investor engagement contributed to the opening of more than 1 million new brokerage accounts during the quarter.” The company reported total deposits of $269.5 billion at the end of March, down -7% from the previous quarter.
* Warner Music Group (+0.06% to $33.46). Hollywood artists have reached a tentative agreement with major labels such as Warner Music Group and Sony Music Entertainment that includes minimum wage increases and protections against the use of artificial intelligence (AI). .
* Salesforce (-7.28% to $272.9). The group is reportedly in advanced talks to acquire data management software provider Informatica, the Wall Street Journal reported Friday, citing people familiar with the matter.
* Tesla (-5.59% to $161.48). The electric car manufacturer will significantly reduce its workforce. The automotive group will cut 10% of its teams. In an email addressed to his employees, seen by ‘Bloomberg’, Elon Musk cites the duplication of roles and the need to reduce costs as the main reasons to justify this cut. If the cuts applied to the entire company, the layoffs would affect more than 14,000 people. The technology publication ‘Electrek’ first reported this information. “As we prepare the company for our next phase of growth, it is extremely important to examine all aspects of the business to reduce costs and increase productivity,” E.Musk wrote to his teams. “As part of this effort, we conducted a thorough review of the organization and made the difficult decision to reduce our workforce by more than 10% globally. There is nothing I hate more, but it must be done.”
* Apple (-2.19% to $172.69). In an increasingly competitive market, particularly in China, the Apple firm saw its Smartphone deliveries fall by almost 10% in the first quarter. According to IDC data reported by ‘Bloomberg’, the Californian company shipped 50.1 million iPhones during the first three months of the year, compared to a consensus of 51.7 million units. The 9.6% year-on-year decline is the largest for Apple since 2022, a year marked by the blockage of supply chains following the post-pandemic recovery.
The Cupertino group has particularly suffered in China since the launch of its latest model in September. The resurgence of competitors from Huawei Technologies to Xiaomi and Beijing’s ban on foreign devices in the workplace have weighed heavily on sales. The drop in iPhone shipments is all the more significant over the period as the overall mobile market recorded its best growth in years. Smartphone manufacturers shipped 289.4 million devices in the quarter, an increase of 7.8% compared to last year’s low, when many manufacturers were struggling with an excess of devices. unsold. According to IDC data, Samsung Electronics regained its position as the leading mobile manufacturer during the quarter, while Xiaomi rebounded to narrow the gap with Apple.
“The smartphone market is emerging from the turbulence of the last two years both stronger and changed,” said Nabila Popal, research director at IDC. “Even though Apple has shown great resilience and experienced strong growth in shipments and market share over the past few years, it will be difficult for it to maintain the pace of growth and peak market share “as the market recovers in 2024, IDC expects Android to grow much faster than Apple.” IDC data provides the first look at the global performance of Apple’s most important product ahead of May 2 results.
* Moderna (-1.22% to $103.86). The legal action brought by the American laboratory against Pfizer and BioNTech for violation of its patent rights concerning their messenger RNA vaccine against Covid-19 will be suspended while the American Patent Office determines whether two of the three Moderna patents in question are valid, a federal court in Massachusetts ruled Friday.
* US Steel (-1.19% to $40.84). The steelmaker’s shareholders approved, on Friday, the takeover of the group by its Japanese competitor Nippon Steel for an amount of $14.9 billion, as planned, which brings the merger closer to completion, even though political opposition to the operation intensifies.
