Wall Street is now suffering this Tuesday, for this first session of the year 2024. The S&P 500 lost 0.7% to 4,736 pts, while the Dow Jones gained 0.07% to 37,715 pts. The Nasdaq fell by 1.76% to 14,747 pts, weighed down mainly by Apple, victim of a deterioration. On the Nymex, a barrel of WTI crude gained 0.5% to $72. An ounce of gold fell by 0.2% to $2,067. The dollar index rose 0.7% against a basket of reference currencies. On the bond markets, the yield on the 2-year T-Bond is 4.33%, compared to 3.94% on the 10-year bond and 4.09% on the 30-year bond.
The final US manufacturing PMI index for December 2023 stood at 47.9, in a contraction zone below the 50 mark, compared to a FactSet consensus of 48.2 and a level of 48.2 as well. in preliminary reading.
Construction spending in the United States for the month of November 2023 increased by 0.4% compared to the previous month, compared to +0.5% of FactSet consensus and +1.2% for the revised reading of the previous month. The previous reading for October was +0.6%. Year-on-year, November construction spending climbed 11.3%.
Elsewhere in the world this morning, the Markit/Caixin Chinese manufacturing PMI for December stood at 50.8 versus the consensus 49.9. In Europe, the final Spanish manufacturing PMI index stood at 46.2 in December, compared to 45.3 for the Italian index, 42.1 for France and 43.3 for Germany. These indices reflect a significant contraction in manufacturing activity. The final Eurozone manufacturing index for December stood at 44.4, compared to 44.2 consensus and 44.2 also for the flash reading. The British CIPS manufacturing index came in at 46.2, compared to the consensus of 46.4.
Black gold prices are rising for this first session of the year against a backdrop of tensions in the Red Sea where the attack on a cargo ship by Yemeni Houthi rebels was repelled by the US Navy on Sunday. In a further sign of geopolitical tensions in this corner of the planet, Iran sent a warship there… A Houthi delegation met with officials in Tehran after the American response to the attack on an AP container ship Moller-Maersk. The Danish group has once again suspended all transit of its ships on the Red Sea to assess the situation in this vital waterway for global trade.
Values
Tesla (stable) is hesitant on Wall Street, while the news is quite mixed on the file of the electric vehicle giant. In the United States, many EVs have just lost their eligibility for tax credits of up to $7,500, with the entry into force yesterday of new rules regarding the supply of batteries. The Cybertruck as well as certain versions of Tesla’s Model 3 are therefore removed from the list of eligible vehicles. The US administration published guidelines last month detailing new battery supply requirements to encourage domestic manufacturing.
Operators also fear competition from Chinese manufacturer BYD, supported in particular by Warren Buffett’s firm, Berkshire Hathaway. BYD will sell more than 3 million electric and hybrid vehicles in 2023, including 1.6 million electric passenger cars and 1.4 million hybrids. This represents a jump of 61.9%. The company stopped producing only gasoline and diesel cars in March 2022. For its part, Tesla announced for the fourth quarter the production of around 495,000 vehicles and deliveries of more than 484,000 vehicles. In 2023, vehicle deliveries increased 38% year-on-year to 1.81 million, while production increased 35% year-on-year to 1.85 million units. The group sold a total of 484,507 units over the last quarter, compared to around 483,200 consensus. Production, at 494,989 units, also beats the consensus which stood at 482,300 units.
Rivian corrects by 10% on Wall Street, the designer of electric vehicles having missed the consensus for deliveries for its fourth quarter, with 13,972 units sold against 14,400 consensus. Deliveries were down 10% compared to the previous quarter, while the rise in rates impacted demand. Rivian produced 17,541 units in the last quarter of 2023, representing growth of more than 7% sequentially. Annual production stands at more than 57,000 units, while the group’s guidance was 54,000.
DoorDash (-3%) is seeking to diversify beyond its core business, indicates the Financial Times. In an interview, group CEO Tony Xu told the FT that with growing cash flow, “the two main areas of investment are expansion and penetration outside the US, as well as outside restaurants,” adding that the company will maintain a “high bar” before purchasing anything and that this will avoid “inefficient growth…but we’re always looking to reinvest.” Xu told the FT that DoorDash intends to expand through retail and grocery delivery, as well as its advertising unit. The article notes that DoorDash works with companies such as BJ’s WHolesale, Dick’s Sporting Goods and Sephora.
ASML (-4%), Dutch seedling giant, listed on Wall Street, has confirmed that the Dutch government has partially revoked its export license for certain lithography systems. Thus, a license for shipping the NXT:2050i and NXT:2100i lithography systems in 2023 was recently partially revoked by the Dutch government, affecting a small number of customers in China. The company does not expect the current revocation of its export license or the latest U.S. export control restrictions to have a material impact on its 2023 financial outlook. In recent discussions with the U.S. government, ASML has obtained additional clarification on the scope and impact of U.S. export control regulations.
Apple loses nearly 4% on Wall Street, victim of a downgrade by Barclays. The broker is concerned about the potential slowdown in demand for the iPhone. Thus, the research firm revises its recommendation to ‘underweight’ and adjusts its price target from $161 to $160, which would result in a drop of 17% on current prices. “We expect a turnaround after a year in which most quarters missed consensus and the stock outperformed,” Barclays said. “Our controls remain negative regarding volumes and mix for the iPhone 15, and we do not see any features or upgrades likely to make the iPhone 16 more convincing,” tackles the broker, who previously posted a ‘weighted’ advice online’ on the file of the Californian giant from Cupertino.
Nvidia, the big stock market star of the year 2023 on Wall Street, also stumbled by almost 4% today on strong profit-taking.
Coinbase falls by 7%, while Bitcoin has just reached a 21-month high of $45,000. Traders are speculating on the Securities & Exchange Commission’s verdict on a spot BTC ETF.
Voyager Therapeutics is up 28% on Wall Street, as the laboratory has just reached an agreement with Novartis including milestone payments of up to $1.2 billion. The licensing and strategic collaboration agreement with Novartis Pharma concerns the development of potential gene therapy candidates. Novartis will make an upfront payment of $100 million, including a purchase of $20 million of newly issued shares of Voyager.
