Wall Street continued its momentum this Friday, with the S&P 500 gaining another 0.29% to 5,012 pts, to its all-time high, and the Nasdaq gaining 0.85% to 15,926 pts. The Dow Jones returned 0.20% to 38,650 pts, a little more cautious. The American rating is therefore at or almost at its highest, the S&P 500 clearing the 5,000 pts mark. Dow Jones and Nasdaq 100 were already at their best historical levels. The Nasdaq Composite has about 1% left to do the same.
Many members of the Fed have spoken out in recent days… Governor Adriana Kugler presented on Wednesday her optimistic vision regarding the continued decline in inflation, while emphasizing that there was no rush to reduce rates . Susan Collins, president of the Boston Fed, said it was necessary to have more evidence of an easing of inflation before easing monetary policy. Thomas Barkin, president of the Richmond Fed, also judged that it made sense to be patient regarding rates. Governor Michelle Bowman, in the same spirit, indicated that it was not yet time to reduce rates, while recognizing the fall in inflation… Barkin spoke again yesterday Thursday on Bloomberg, now that decision-makers monetary authorities would have time to be patient regarding the timing of the rate cut, while disinflation is confirmed and the labor market remains strong…
According to the CME Group’s FedWatch tool, the probability of a new monetary status quo from the Fed on March 20, at the end of its next meeting, stands at 82%, compared to an 18% probability of an easing of monetary policy. ‘a quarter of a point. The same tool shows a 54% probability of a quarter-point rate cut on May 1, the date which corresponds to the next monetary meeting.
Lorie Logan, the president of the Dallas Fed, takes her turn today…
On the business side, PepsiCo, Newell Brands and Catalent announced their accounts this Friday, before market.
On the Nymex, a barrel of WTI crude is now up 0.4% to $76.5. An ounce of fine gold returns 0.5% to $2,038. The dollar index lost 0.1% against a basket of currencies.
Values
Pinterest drops 11% on Wall Street. The group published adjusted earnings per share of 53 cents for its fourth quarter, higher than the market consensus, but revenues too short at $981 million (+12%), compared to a consensus of $990 million. For its first fiscal quarter which has just begun, the social media group anticipates a turnover ranging from 690 to 705 million dollars, against 700 million consensus. Note also that the group now claims 498 million monthly users, a record and a performance superior to expectations.
Interpublic (stable), the American advertising group, exceeded expectations for its fourth fiscal quarter, but warned of reductions in client spending in the technology and telecoms sectors. Earlier this week, Omnicom also revealed better than expected accounts. Over the closed quarter, Interpublic generated adjusted earnings per share of $1.18 versus a consensus of $1.13. The McCann and Mediabrands agency group posted total revenues of $2.59 billion, slightly above market expectations.
Expedia, the American online tour operator, lost 17% on Wall Street. The group generated adjusted earnings per share of $1.72 for the quarter ended, compared to a consensus of $1.69. Revenues were in line with expectations at $2.89 billion (+10%), but gross bookings missed consensus at $21.7 billion – down from $22 billion. In addition, the group announces the appointment of Ariane Gorin as Managing Director, replacing Peter Kern from May 13. Kern has served as CEO since 2020 and will continue as vice chairman of the board of directors. Gorin has been an Expedia executive since 2013.
Zimmer Biomet (-1%), the American medical device supplier, announced adjusted earnings per share of $2.20 for its fourth quarter of 2023, up 17% year-on-year and exceeding the consensus by 2%. Quarterly revenues were $1.94 billion, up 6.3% from last year and slightly above market expectations. For the year, adjusted earnings per share amounted to $7.55 and revenues reached $7.39 billion, an increase of 6.5%. In terms of outlook, Zimmer Biomet envisions growth of 4.5 to 5.5% in 2024 consolidated revenues, as well as adjusted diluted earnings per share ranging from $8 to $8.15.
Take-Two Interactive Software, the American video game publisher, corrects by 9% on Wall Street. The results revealed for the third fiscal quarter were mixed. The group announced adjusted earnings per share of 71 cents, compared to a market consensus of 73 cents. The level of net bookings was 1.34 billion dollars compared to 1.32 billion expected and 1.38 billion a year earlier. GAAP revenue was $1.37 billion, down 3%, while GAAP net loss narrowed to $91.6 million. The guidance for net bookings for the fourth quarter which has just started, nevertheless appears lower than expectations. For the 2024 financial year, net bookings are expected between 5.25 and 5.3 billion. The group is finally implementing significant cost reductions in order to optimize its margins.
Motorola Solutions (stable) published profits and revenues above expectations for its fourth fiscal quarter. Adjusted earnings per share were $3.90, compared to a market consensus of around $2.81 and a level of $3.60 a year earlier. Revenue totaled $2.85 billion, growing 5.3% and almost 1% above consensus. The group generated 1.2 billion dollars in operating cash flow over the quarter and 2 billion over the financial year. The end-of-quarter backlog finally stands at the very high level of $14.3 billion.
Illumina (-3%) is losing ground on Wall Street, while the sequencing technology supplier only forecasts stable sales for the 2024 financial year on its core business, in the face of sluggish demand. For the fiscal fourth quarter, revenue was $1.12 billion, compared to $1.09 billion consensus. On an adjusted basis, earnings per share were 14 cents, compared to the consensus estimate of 2 cents. Moderate demand for genetic testing and diagnostic tools is confirmed. The designer of genetic sequencing machines is thus suffering from customers’ caution in terms of spending and the tense economic context in China.
Newell Brands (-12%), an American specialist in consumer products, published net and adjusted revenues down 9% for its fourth fiscal quarter. Sales totaled $2.1 billion, for a gross margin of 29.9% and a normalized gross margin of 32.3%. Adjusted earnings per share were 22 cents, compared with 16 cents a year earlier. The market consensus was for 17 cents in adjusted earnings per share on $1.98 billion in revenue. Operating cash flow recovered significantly to $930 million over the financial year. Finally, Newell initiates very cautious 2024 forecasts, expecting a revenue decline of 5 to 8% and adjusted EPS ranging from 52 to 62 cents.
PepsiCo (-3%) has just delivered somewhat short revenues for the closed quarter. The outlook is also cautious for the current financial year. Over the past period, adjusted earnings per share were $1.78, above consensus ($1.72), while revenues were $27.9 billion, versus $28.4 billion consensus. and 28 billion a year before. Net income more than doubled to $1.3 billion and 94 cents per share. The group plans 2024 organic growth of at least 4%, while the consensus was more than 5%. The group is also increasing its annual dividend by 7% and is announcing a billion-dollar share buyback plan.
Tesla (+1%) announced that production at the Berlin gigafactory would resume on February 12, after being suspended due to disruptions in the Red Sea. The Texan manufacturer of electric cars therefore intends to restart production at the Gigafactory Berlin next week after having put it on pause due to supply problems. Tesla recently reached record production at the Berlin gigafactory, producing up to 6,000 Model Ys in a week.
Nvidia (+3%!). Sam Altman, the boss of OpenAI, an artificial intelligence startup supported by Microsoft, displays his ambitions. According to the Wall Street Journal, the young boss would like to embark on a project worth up to $7,000 billion to reshape the chip and AI sector. The leader of OpenAI is therefore looking for investors with deep pockets, particularly from the United Arab Emirates, “for a project that could require up to 7,000 billion dollars”. It’s difficult to know whether this is a threat or an opportunity for the champion of AI chips, Nvidia, which nevertheless reached a new peak today around $714…
