All American indices ended the week down on Wall Street this Friday. The S&P 500 returns -0.65% to 5,123 pts (-0.14% over the week). The Dow Jones fell -0.18% to 38,722 pts (-0.69% weekly). The Nasdaq fell by -1.16% to 16,085 pts (-0.76% for the week). The markets are cautious after the publication of somewhat difficult to read US employment figures. Job creation for February is higher than expected, but a sharp downward revision for the month of January and an increasing unemployment rate are disrupting investors’ analysis of the data.
Thus, the government report on the employment situation in the United States for the month of February 2024 revealed 275,000 non-agricultural job creations, against a market consensus of 200,000 and a revised reading – sharply decreasing – to 229,000 for the previous month (353,000 previously estimated). The unemployment rate stood at 3.9%, compared to a consensus of 3.7% and a level of 3.7% also a month earlier. Job creations in the private sector totaled 223,000, compared to 175,000 consensus and 177,000 a month earlier (317,000 for the previous estimate for January). The average hourly wage increased by 0.1% compared to the previous month (0.2% consensus). It increases by 4.3% over one year. The labor force participation rate has changed little, at 62.5%, in line with market expectations.
This Friday, John Williams, head of the New York Fed, indicates that inflation expectations have fallen somewhat. He also specifies that “it is not clear that the neutral rate has increased”. He notes that demand has cooled due to restrictive monetary policy. The manager also notes that artificial intelligence could enable further improvement in productivity…
Yesterday, Jerome Powell again appeared before the Senate Committee on Banking, Real Estate and Urban Affairs. He estimated that if the economy develops as expected, rate cuts could well begin this year. He adds that the Fed is independent and intends to stay out of political issues. Thus, the Fed’s helmsman generally confirms his speech from the day before, specifying that the central bank stands ready to cautiously lift its restrictive policy.
The testimony of the head of the Fed comes two weeks before the next monetary meeting, at the end of which the officials of the institution should keep rates stable for the 5th consecutive meeting, between 5.25 and 5.50%, at the highest over 20 years old.
On the oil side, a barrel of WTI crude returned -1.82% to $78.11 (-0.84% over the week).
The dollar exchanges for 0.9141 euros.
An ounce of gold ended the week at $2,178 (+2.95% over the week). Bitcoin climbs 1.48% to $37,096
Values
* Gap (+8.23% to $20.92). In the 4th fiscal quarter, the group posted revenues of $4.3 billion, an increase of 1%, while annual turnover declined by 5% to $14.9 billion. Operating margin improved to 5% in the final quarter of the fiscal year, while annual adjusted operating margin was 4.1%. Quarterly net profit represented $185 million, while net profit for the year reached $502 million. For the closed quarter, the consensus revenue was $4.2 billion. Quarterly adjusted earnings per share were 49 cents, compared to a consensus of just 20 cents.
Thus, the brand’s recovery efforts seem to be paying off, with a return to modest growth and a strong improvement in profitability. For the current financial year, Gap expects its sales to be roughly stable, with the retailer citing the still uncertain consumer and macroeconomic environment. For the current quarter, Gap forecasts net sales of $3.3 billion.
* DocuSign (+4.5% to $55.97). The Californian electronic signature giant published a better-than-expected 4th quarter. Adjusted earnings per share were 76 cents, compared to 64 cents consensus and 65 cents a year earlier. Revenues totaled $712 million, up 8% year-over-year ($698 million consensus). Subscription revenues amounted to $696 million, an increase of 8%. Professional services and other revenues were $17 million, a growth of 5%. Cash, cash equivalents, restricted cash and investments totaled $1.2 billion at the end of the quarter. For the year, revenues were $2.8 billion, for adjusted EPS of $2.98. For the current financial year, revenues are expected between $2.915 and $2.927 billion, for an adjusted operating margin ranging from 26.5 to 28%.
* Marvell Technology (-11.36% to $75.42). The American designer of ‘chips’ drops after its quarterly publication. For the 4th fiscal quarter, its revenues were $1.43 billion, in line with expectations. Adjusted earnings per share were 46 cents, also in line with market consensus. For the current quarter, i.e. the first fiscal quarter of 2024, adjusted earnings per share are anticipated at 23 cents, plus or minus 5 cents, compared to 40 cents consensus. The group expects quarterly revenues of $1.15 billion, plus or minus 5%, far from the consensus of $1.37 billion. Marvell also announced a $3 billion share repurchase authorization. Management says it has “incredible confidence” in the business and prospects, but the market disagrees, with AI’s prospects not masking weakness in wireless infrastructure businesses and consumer markets and businesses.
* Costco (-7.64% to $725.56). The distribution giant beat the profit consensus on Thursday evening on Wall Street, but its revenues came in below expectations for the 2nd quarter of fiscal 2024. The distribution group posted quarterly adjusted earnings per share of 3. $92, well above the consensus (around $3.6). Revenues amounted to $58.4 billion, up 5.7% year-on-year, but slightly below expectations since analysts on average expected a level of more than $59 billion. Same-store sales, excluding gasoline and foreign exchange, increased 5.8%. In the United States, like-for-like growth was 4.8%.
* Broadcom (-6.99% to $1,308.72). The American chip designer beat the profit consensus on Thursday evening on Wall Street for its first fiscal quarter of 2024. However, the stock is consolidating despite the prospects for artificial intelligence – and a sales projection of $10 billion. of AI chips this year. Over the past quarter, adjusted earnings per share were $10.99, above consensus ($10.4 approximately), while revenues stood at $11.96 billion, compared to $11.8 billion. consensus and 8.92 billion a year before. Business growth was therefore 34%, while net profit reached $1.32 billion on a GAAP basis and $5.25 billion on an adjusted basis. For fiscal 2024, Broadcom still expects revenue of around $50 billion, including VMware. Annual adjusted EBITDA is expected to be around 60% of revenues.
* Nvidia (-5.55% to $875.28). The title of the American graphics and AI chip giant is taking a break as it approaches $1,000. Bloomberg notes that the group would be well placed to carry out a “split” of its stock. The last one, at 4 to 1, was operated in May 2021 when the stock was worth around $600. A new split would make the stock more affordable for small shareholders, notes the director of a management house cited by Bloomberg.
* Eli Lilly (-2.28% to $761.91). The FDA, the American drug authority, has postponed its verdict on donanemab, an experimental Alzheimer’s treatment for early-stage patients, by several months. No date has been set for the meeting of the advisory committee responsible for reviewing the treatment. Eli Lilly, however, maintains its annual financial forecasts.
* Taiwan Semiconductor (-1.86% to $146.42). Taiwan Semiconductor Manufacturing Company, the Taiwanese semiconductor foundry giant, is consolidating slightly after reaching an all-time high of $158.4 and a capitalization of approximately $760 billion. For the first two months of 2024, the group posted growth in its activity of 9.4% with the development of artificial intelligence, which now offsets the weakness of smartphone activities with the slowdown of the iPhone. TSMC therefore announced revenues totaling NT$397.4 billion for the months of January and February, or approximately $12.6 billion. This is a good performance, given the current weakness of Apple – a customer which accounted for a quarter of TSMC’s activity last year. TSMC is also Nvidia’s main production subcontractor.
