Wall Street started the week on the rise on Monday, with the S&P 500 gaining 0.74% to 4,547 pts and the Dow Jones gaining 0.58% to 35,151 pts. The Nasdaq even showed an increase of 1.13% to 14,284 pts in the wake of Nvidia before the announcement of its accounts and of Microsoft (+2%) which remained closely monitored, while the management of the software group quickly took control of the situation on the OpenAI side, following the unexpected ousting of CEO Sam Altman. The latter will take the head of a new team at Microsoft.
On the Nymex, a barrel of WTI crude is up 2% to $77.15. The dollar index lost another 0.3% against a basket of reference currencies. On the bond markets, the yield on the 2-year T-Bond stood at 4.91%, compared to 4.46% for the 10-year and 4.61% for the 30-year.
On the economic front, the Conference Board’s leading indicators index for the month of October 2023 showed a sharp decline of 0.8% compared to the previous month, compared to a market consensus of -0.6% measured by FactSet, and after a decline of 0.7% in September.
On Tuesday, the Chicago Fed’s national activity index, resales of existing homes and the Minutes of the Fed’s last monetary meeting will be followed… On Wednesday, investors will be attentive to orders for durable goods, weekly jobless claims, as well as the University of Michigan Consumer Sentiment Index and the weekly report on U.S. domestic oil stocks.
On Thursday, Wall Street will be closed for Thanksgiving. The American stock market will only resume on Friday for a shortened session closing at 7 p.m. French time – with the publication of the American composite flash PMI index.
Janet Yellen, US Treasury Secretary, indicated on CNBC that Joe Biden’s meeting with Xi Jinping last week “deepened communication between the two parties”, with Washington and Beijing recognizing the possibility of “working together”… The United States, however, has concerns about privacy and social media, with issues involving TikTok and its parent company ByteDance remaining unresolved. “This was not an issue explicitly discussed” between Biden and Xi, according to Yellen, who for her part discussed Chinese investments in the USA with her local counterpart, as well as the role of CFIUS, the American committee studying investments foreigners in the United States and national security issues.
On the business side, the week will be especially marked by the quarterly publication of the essential AI “star” Nvidia Tuesday evening, after market… Lowe’s, Medtronic, Analog Devices, Baidu, Best Buy, Abercrombie & Fitch and American Eagle outfitters will reveal their accounts before the opening on Tuesday, while Nvidia, Autodesk, Urban Outfitters and Nordstrom will be in the party after the market. Deere will release before opening Wednesday…
Values
Microsoft (+2%) is in the green on Wall Street, in the midst of a governance crisis at OpenAI… Sam Altman and Greg Brockman, respectively former CEO and chairman of the board of directors of OpenAI, who have just leave their positions, will therefore join Microsoft! Thus, Satya Nadella, general manager of the Redmond software giant, announced that the two men would lead a new Microsoft research team on advanced AI. Nadella also confirmed the appointment of former Twitch boss Emmett Shear to head OpenAI, creator of ChatGPT. These decisions therefore seem to stabilize the situation, whereas since Friday evening and the announcement by the OpenAI board of directors of the abrupt ousting of Altman, the twists and turns have been incessant on this issue.
“We remain committed to our partnership with OpenAI and are confident in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and to continue supporting our customers and partners. We look forward to to get to know and work with Emmett Shear and the new OAI leadership team. And we are extremely excited to announce that Sam Altman and Greg Brockman, along with their colleagues, will join Microsoft to lead a new research team on advanced AI. We look forward to acting quickly to provide them with the resources they need to succeed,” Satya Nadella said on social network X.
“I’m very excited to have you join us as CEO of this new group that is setting a new pace for innovation, Sam. We have learned a lot over the years about how to give founders and innovators a space to build independent identities and cultures across Microsoft, including GitHub, Mojang Studios, and LinkedIn, and I can’t wait for you to do the same,” Nadella added, speaking to Sam Altman on X. Altman had “tweeted ” previously: “The mission continues”. Note also that the majority of OpenAI employees seem to want to join Microsoft if the startup’s board of directors is not disembarked…
General Motors (+1.7%). Kyle Vogt, head of GM’s Cruise self-driving car division, has resigned amid concerns about the safety of robotaxi operations, following an accident in early October that led to the suspension of Cruise’s license in the field of autonomous taxis in California. “Cruise is in its early stages and I believe it has a bright future ahead of it. The people at Cruise are bright, driven and resilient. They are executing on a strong, multi-year roadmap and exciting product vision. I can’t wait to see what Cruise has in store for us next,” the outgoing leader said in a message on X, ex-Twitter.
Bristol-Myers Squibb corrected by 3.8% in the wake of Bayer (-18%), which has just abandoned a large-scale trial on Asundexian, an anticoagulant treatment, due to a lack of effectiveness. Bristol-Myers is working with Johnson & Johnson on a comparable treatment, Milvexian…
Nvidia (+2.2%) reached new all-time highs above $500, on the eve of its third quarter financial publication. Nvidia forecast revenues of $16 billion at the end of August, plus or minus 2%, while the consensus at the time was only $12.6 billion. GAAP and non-GAAP gross margins for the period are expected to be 71.5% and 72.5% respectively, plus or minus 50 basis points, according to the group’s latest guidance. The current market consensus is $3.37 quarterly earnings per share for $16.18 billion in revenue…
