Wall Street finished slightly higher this Friday, posting a fourth consecutive week of progression, a first since February… Enough to propel the Dow Jones to more than 40,000 points at closing, at 40,003 pts, up 0 .34%, new historic record! The S&P 500 gained 0.12% to 5,303 pts, while the Nasdaq lost 0.07% to 16,685 pts. Investors have nonetheless limited risks, as several monetary policymakers have said in recent hours that the Fed “should keep borrowing costs high for longer, pending additional evidence of a slowdown in inflation “…
According to the CME Group’s FedWatch tool, the probability of a new monetary status quo from the Fed on June 12, at the end of the next FOMC meeting, stands at 91.3%… The ‘probability’ that rates still remain in their current range of 5.25 to 5.50% on July 31 at the end of the next meeting is almost 67% while there is now a one in two chance of seeing the Fed reduce its rates on September 18, according to this same tool…
In today’s macro agenda, the Conference Board’s leading indicators index came out significantly lower than expected in April.
In business news, Take-Two Interactive Software was talked about after its forecasts and the announcement of the launch of the next GTA in the fall of 2025. GameStop is still shaken and Applied Materials revealed its accounts…
The dollar index stabilizes against a basket of currencies and Bitcoin gains 0.4% to $66,850. An ounce of gold gained 1.7% to $2,418. Finally, on the oil market, a barrel of WTI crude is back at $80.
Values
Reddit climbs 10%. ChatGPT, designed by OpenAI, will be able to tap into content from the social media platform, the two companies said.
Take-Two Interactive Software advances by 1.2% despite disappointing forecasts for its 2025 financial year… And for good reason, the highly anticipated “Grand Theft Auto VI” will not ultimately be released until the fall of 2025. The game should experience an instant success with billions of dollars in sales each year according to several analysts. The American video game publisher now expects fiscal 2025 bookings of between $5.55 billion and $5.65 billion, down from its previous forecast of just over $7 billion. and a consensus of $6.92 billion. Adjusted EPS is anticipated between $2.34 and $2.59 versus $5.86 consensus.
This gloomy outlook follows disappointing forecasts from Electronic Arts and Roblox last week. Take-Two laid off about 5% of its workforce last month and scrapped several projects in development as part of a cost-cutting plan, aligning with similar moves in the gaming industry, which is grappling with the slowdown in household consumption expenditure. Nonetheless, the company and analysts expect bookings to accelerate from fiscal 2025 onwards, helped by the launch of GTA and a series of other releases, including titles from its recent acquisition of maker of “Borderlands,” Gearbox Entertainment. In the fourth quarter of its 2024 financial year, the group generated adjusted EPS of 28 cents for revenues of $1.40 billion (-3.2%). Net bookings fell 2.9% to $1.35 billion.
Applied Materials (-0.9%). The semiconductor equipment maker expects third-quarter revenue to beat Wall Street estimates, thanks to robust demand fueled by a boom in artificial intelligence. During the three months ended April 28, the Californian firm reported net profit up 8.9% to $1.72 billion, or diluted EPS of $2.06. Gross margin improved from 46.7% to 47.4% while operating margin remained unchanged at 28.8%. Revenues stagnated for the second consecutive quarter, at $6.65 billion. For the third quarter of 2024, Applied expects another period of low to no revenue growth. Management expects net sales of around $6.65 billion, plus or minus $400 million. Non-GAAP diluted EPS is expected to be between $1.83 and $2.19.
GameStop corrects by 19%, penalized after the announcement of disappointing preliminary results. The company said its first-quarter net revenue is expected to be between $872 million and $892 million, compared to $1.237 billion a year ago and a consensus of $1.05 billion. The net loss for the quarter ended May 4 is expected to be between $27 million and $37 million, less than the $50.5 million a year ago as GameStop benefits from its cost-cutting measures. As customers shift to purchasing video games and NFTs online, the retailer still relies heavily on physical stores. Additionally, in a new regulatory filing, the company said it will sell up to 45 million shares of Class A common stock in an at-the-market offering. After a euphoric start to the week with the return to the forefront of ‘meme stocks’, GameStop is preparing to suffer a third consecutive sharp decline this Friday.
Ford Motor (-0.8%) has asked its electric vehicle suppliers to reduce costs to support profitability, saying “everything is on the table” to improve profitability, according to an internal memo seen by ‘Reuters’ .
Microsoft (-0.2%) plans to offer customers of its cloud computing products access to artificial intelligence chips manufactured by AMD, and capable of competing with Nvidia components. Separately, the UK’s Competition and Markets Authority has given the green light to the AI partnership between the US giant and French firm Mistral after previously seeking opinions on whether the deal qualified fusion. The CMA said in a brief statement that the deal “cannot be investigated under the merger provisions of the Enterprise Act 2002”.
Boeing (+1%). Shareholders of the aerospace giant voted to retain outgoing CEO Dave Calhoun on the board of directors… The consulting firm Glass Lewis had recommended that shareholders vote against the re-election of Dave Calhoun and two other members of the board of directors. Boeing administration, due to dissatisfaction with the aircraft manufacturer’s lack of efforts to reform its safety culture…
