Wall Street corrected on Tuesday with Nvidia (-4.3%), the S&P 500 dropping 0.60% to 4,975 pts, the Dow Jones -0.17% to 38,563 pts and the Nasdaq falling 0.92% to 15,630 pts . On the Nymex, a barrel of WTI crude lost 1.8% to $77.1. The dollar index fell by 0.3% against a basket of reference currencies.
Wall Street, closed the day before due to Presidents’ Day, resumed its activity without force and for a short four-day week. In economic news, the Conference Board leading indicator index for the month of January 2024 was down 0.4% compared to the previous month, compared to -0.3% market consensus and – 0.2% for the revised reading from the previous month…
Wednesday, the Atlanta Fed’s inflation expectations index (4 p.m.), the Minutes of the Fed’s last monetary meeting (8 p.m.), as well as several interventions by central bank officials – including those of Raphael Bostic and Michelle Bowman, will be to follow…
On Thursday, investors will be attentive to weekly jobless claims (2:30 p.m.), the Chicago Fed’s national activity index, as well as the US composite flash PMI index (3:45 p.m.) and housing resales existing (4 p.m.). Thursday will also be very active on the Fed side, with a slew of interventions from notably Philip Jefferson, Patrick Harker, Neel Kashkari, Lisa Cook and Christopher Waller…
In corporate news on Wall Street, on Wednesday Analog Devices, Exelon, Verisk and Garmin will reveal their results before the market opens. After the closing, THE most anticipated publication of the results season will be held, that of the “star” of artificial intelligence Nvidia! Synopsys, Suncor Energy, Rivian, Host Hotels and even Nordson are also publishing tomorrow evening.
Intuit, Booking Holdings, Copart, PG&E, Block, Newmont, Dominion Energy, Moderna, Archer-Daniels-Midland and Edison will announce their accounts on Thursday…
Values
Nvidia (-4.3%). Specialists are wondering, on the eve of the highly anticipated quarterly financial publication of the graphics chip and AI giant, while the market capitalization stood at nearly $1,800 billion on Friday evening, up 47%. already this year! Some think that Nvidia’s results on February 21 could be more important to the markets than the US inflation figures from January… Extreme caution prevails in the meantime, with the stock being the subject of sustained profit taking, despite a target revised upwards to $1,050 from the Baird firm…
The market capitalization of Jensen Huang’s group was indeed up by around $560 billion this year, practically the market value of Tesla! Nvidia’s rise in the stock market also represented… more than 35% of the total performance of the S&P 500 in 2024. In addition, Nvidia’s market capitalization had recently exceeded those of Amazon and Alphabet, making the designer of chips the third most valuable company on Wall Street, behind Apple and Microsoft.
Some believe that this overflowing enthusiasm could be excessive – especially as competition is heating up… Masayoshi Son, founder and director of the SoftBank group, has made no secret of his intention to redouble his efforts in the banking sector. ‘AI… According to Bloomberg, the founder of SoftBank is seeking $100 billion to create a new company that would compete with Nvidia in the field of AI chips. Named Izanagi, the new company would collaborate with Arm, a chip design firm that SoftBank introduced to Wall Street last year. SoftBank still holds around 90% of Arm shares… Sam Altman, the boss of OpenAI, would also display major ambitions in the design of artificial intelligence chips.
Walmart (+3.2%) published adjusted earnings per share of $1.80 for the quarter ended, compared to a consensus of $1.65. Revenues totaled $173.4 billion, compared to the market consensus of $169 billion. For the just ended fourth quarter, consolidated revenues were $173.4 billion, an increase of 5.7% year-on-year and 4.9% at constant currencies. Consolidated operating profit increased by 30%, while adjusted operating profit increased by 13%. Global e-commerce sales grew 23%. Like-for-like US growth excluding gasoline exceeded expectations at +3.9%. Adjusted operating profit reached 7.25 billion against 6.8 billion consensus.
Over the financial year, revenues were $648 billion (+6%), for consolidated operating profit up 32%. Adjusted earnings per share reached $6.65. The group increases its annual dividend by 9% to 83 cents per share.
For its delayed 2025 fiscal year now underway, Walmart is forecasting adjusted earnings per share ranging from $6.70 to $7.12, compared to a consensus of $7.1. Sales are expected to increase by 3 to 4%. For the first quarter alone, adjusted earnings per share are anticipated between $1.48 and $1.56.
Walmart has also confirmed the acquisition of American smart television manufacturer Vizio for $11.50 per share in cash, a little over $2 billion.
Home Depot (stable), the American leader in the distribution of home products, announced adjusted earnings per share of $2.82 for its fourth fiscal quarter versus a consensus of $2.77. Revenue was $34.8 billion, compared to the average analyst forecast of $34.6 billion. The group still deplored a drop in sales for the 2023 financial year. In the fourth quarter, turnover also fell, since it stood at 35.8 billion a year before. Like-for-like sales for the period ended declined by 3.5% in the USA. Management today speaks of “a year of moderation”, after three years of exceptional growth. For the quarter ended at the end of January 2024, the group generated net profit of $2.8 billion and $2.82 per share.
Home Depot anticipates, for fiscal 2024, slight sales growth of 1% (-1% on a comparable basis). Finally, the group increases its quarterly dividend by 8% to $2.25.
Medtronic (+1.7%), the American medical technology giant, published adjusted earnings per share of $1.30 for its fourth fiscal quarter, stable year-on-year, compared to a consensus of $1.26. Revenues were $8.09 billion versus the market consensus of $7.95 billion. Organic revenue growth reached 4.6%. The group is raising its annual forecasts once again, with strong demand for medical devices. Medtronic therefore expects adjusted earnings per share ranging from $5.19 to $5.21 for the 2024 financial year, compared to a previous range of $5.13 to $5.19. The organic revenue growth guidance is also revised upwards.
Fluor (-12.7%), the American engineering and construction group published revenues of $15.5 billion for its 2023 financial year, as well as group net profit of $139 million and 54 cents per share. The backlog grew more than 10% to $29.4 billion. Adjusted Ebitda was $613 million, for adjusted earnings per share of $2.73. In the fourth fiscal quarter, the group’s net loss was $21 million or 12 cents per share, compared to a profit of $9 million a year earlier. Quarterly revenues were $3.8 billion compared to $3.7 billion a year earlier. The 2024 adjusted Ebitda guidance ranges from $600 to $700 million, while adjusted EPS is anticipated between $2.50 and $3.
OpenAI, the artificial intelligence startup behind ChatGPT, financially supported by Microsoft (-0.3%), would have sealed a deal valuing it at $80 billion or more, the New York Times reported on Friday, citing sources. people with knowledge of the matter… OpenAI would thus sell existing shares as part of a public offering led by the venture capital company Thrive Capital. As part of this operation, employees could sell their shares in the company, an alternative solution to a traditional financing cycle which would have made it possible to raise funds. Earlier last year, Thrive, Sequoia Capital, Andreessen Horowitz and K2 Global agreed to buy shares of OpenAI in a similar offering, valuing the company at around $29 billion. .
Capital One Financial (+0.1%) agreed to acquire Discover Financial Services (+12.6%) in a $35 billion all-stock deal, which would create the American leader in credit cards by credit volume. Under the terms of the agreement, Capital One Financial will offer 1.0192 shares for each Discover share, a premium of nearly 27% over Friday’s closing prices on Wall Street. Completion of the transaction is expected at the end of 2024 or at the beginning of 2025, subject to customary conditions. At the end of the deal, the current shareholders of the McLean group, Capital One, would hold around 60% of the new group. Pre-tax synergies of $2.7 billion are expected.
The deal would position the combined company to compete with larger payments companies and deliver increased value to a franchise of more than 100 million customers, the two groups say. Such a deal would also allow Capital One to leverage its customer base, technology and data ecosystem “to generate more sales for merchants and good deals for consumers and small businesses.” An accretive effect greater than 15% is expected on adjusted earnings per share in 2027.
