Wall Street ended the week well on Friday, with all three indexes in the green. The S&P 500 gained +0.59% to 4,594 pts (+0.97% over the week). The Nasdaq takes +0.55% to 14,305 pts (+0.45% weekly). Once again, the Dow Jones showed firmness with a gain of +0.82% to 36,245 pts (+2.58% over the week). The historical index of the place comes into contact with its highest of January 5, 2022 (36,952.65 points). The month of November proved to be particularly positive, driven by hopes of a peak in rates and an easing of inflation.
During his (highly anticipated) speech at a conference in Atlanta, Jerome Powell, President of the Fed, tried to temper investors’ optimism, indicating that it was still premature to assert that the policy monetary policy was sufficiently restrictive. He said the US central bank could raise rates further, if appropriate. It would also be premature to try to speculate on the timing of a possible relaxation of the bank’s policy. Jerome Powell nevertheless noted the significant progress, “considerable” even, in terms of reducing inflation. The Fed’s helmsman recalled that it is appropriate for the United States to move even closer to the 2% inflation target… Certainly, the pace of inflation has calmed, but the Core inflation still remains too high. “We need to see more progress on bringing inflation down towards 2%,” Powell insists. It also notes that uncertainty over the economic outlook is “unusually high.” The FOMC, the Fed’s Monetary Policy Committee, is therefore proceeding cautiously in its approach, while the risks of “under” and “over” monetary tightening become more balanced.
On the macroeconomic data side, the final Markit manufacturing PMI for November 2023 stood at 49.4, in line with the FactSet consensus and the preliminary reading for the same month. This indicator therefore remains below the 50 mark, signaling a slight contraction in national manufacturing activity.
The US ISM manufacturing index for November missed the consensus, coming in at 46.7. Analysts on average expected a level of 47.7, according to economist estimates compiled by FactSet. The new orders indicator still recovered to 48.3 (45.5 in October). The price index linked to the manufacturing indicator stood at 49.9, much higher than expected.
Construction spending in the United States for the month of October 2023 showed an increase of 0.6% compared to the previous month, according to today’s report, while the consensus was at +0.4%. A month earlier, this spending had increased by 0.2% (revised reading).
On the oil side, the barrel of WTI crude fell again by -1.10%, returning to $76.69.
The dollar ended at 0.9188 against the euro.
An ounce of gold is at its highest of the week at $2,071.35, even touching a historic record of £2,074.75 during the session.
Values
* UiPath (26.72% at $25.04). The, designer of automation software, beat the market consensus in the 3rd quarter. Quarterly revenues totaled $326 million, up +24% year-on-year. Adjusted operating profit reached $44 million and cash flow from operations $42 million. The group anticipates 4th quarter revenues ranging from $381 to $386 million.
* Ulta Beauty (+10.81% to $472.03). The specialist in the distribution of beauty products posted revenues of $2.49 billion for the quarter ended in October, an increase of +6.4% compared to last year and approximately 1% higher than consensus. Adjusted earnings per share were $5.07 ($5.34 a year ago and $4.96 consensus). Ulta is also raising its annual financial forecast, adjusting the lower end of its profit and sales estimate ranges, with demand for skin care products and fragrances. Thus, annual adjusted earnings per share are now expected between $25.20 and $25.60, while revenues for the year are expected between $11.1 and $11.15 billion.
* Apple (+0.68% to $191.24) and Paramount (+8.3% to $5.09). The two groups are reportedly discussing the merger of their streaming services, according to the Wall Street Journal. They would have mentioned the possibility of bundling their streaming services in a reduced price offer, with the combined Paramount+ / Apple TV+ offer studied having to cost less than separate subscriptions to the two services. The negotiations are only at a preliminary stage and the final form that the combined offer could take is not yet clear.
* Marvell Technology (-5.26% to $52.8). The American chip designer plans continued growth in its data center activities. Operators prefer to note that some customers are suffering from current economic conditions, which could weigh on other activities. For the 4th fiscal quarter, the period started, revenues are anticipated at $1.42 billion, plus or minus 5% ($1.46 billion consensus). Adjusted earnings per share are expected at 46 cents, plus or minus 5 cents (49 cents market consensus). For the quarter ended October 2023, revenues nevertheless exceeded expectations, at $1.42 billion, while adjusted EPS represented 41 cents, compared to 40 cents consensus.
* Dell Technologies (-5.19% to $71.93). For the closed quarter, the American IT group posted adjusted earnings per share of $1.88 compared to a consensus of $1.47. A year earlier, earnings per share stood at $2.30. Revenues totaled $22.25 billion, down -10% year-on-year ($22.9 billion consensus). Dell comfortably beat the earnings consensus, but disappointed in revenue, with the business PC segment remaining at half-mast. Dell’s ‘client solutions’ group, comprising corporate and consumer PC sales, posted sales down -11%.
For the quarter ending in January, Dell expects revenues of around $22 billion, compared to a consensus of $23.9 billion. A “low single-digit” sales decline is still expected in the PC unit, compared to the previous quarter. On the server side, sales for the past quarter were however solid, at $4.7 billion ($4.4 billion consensus), up 9% sequentially with customer interest in generative AI. Dell finally expects revenue growth for the new fiscal year starting in February, with a resumption of IT spending, particularly in the United States.
* Pfizer (-5.12% to $28.91). While the pharmaceutical group has decided to abandon the development of an oral treatment for obesity with its danuglipron molecule, due to a high rate of side effects such as nausea, vomiting and diarrhea. Pfizer instead intends to focus on a modified-release, once-daily version of danuglipron. In the twice-daily version study, the drug achieved its primary goal of weight reduction in obese adults without type 2 diabetes, with an average weight loss observed across all doses, between 6.9 and 11 .7% in patients receiving treatment at 32 weeks.
* Tesla (-0.52% to $238.83). The group has kicked off deliveries of the long-awaited Cybertruck electric pickup truck. According to the Tesla France website, the vehicle with a look worthy of Mad Max has a towing capacity of 4,990 kilos – the equivalent of the weight of an African elephant -, an estimated range of 547 km (for the longest version autonomy) and acceleration from 0 to 100 km/h in 2.7 seconds “in beast mode”. The Cybertruck will be available in 3 configurations: rear-wheel drive, all-wheel drive and “Cyberbeast”. The cheapest version will cost $60,990, significantly more than the price Musk announced in 2019. Additionally, this version, a rear-wheel drive model with a battery range of 250 miles, won’t be available until 2025.
Tesla is offering delivery next year for the two most expensive models, including the Cyberbeast which will cost $99,990. The all-wheel drive version will have an estimated starting price of $80,000. The rear-wheel drive version, the cheapest of the three, with a starting price of around $61,000 and available in 2025, is therefore far from the $40,000 estimated in 2019 by Musk. Since then, the rise in material costs has happened. This is Tesla’s first new model in 4 years, which makes this launch quite critical.
* Walt Disney (-0.12% to $92.58). The entertainment group has confirmed its intention to restore a dividend of 30 cents per share, undoubtedly pushed by activist investor Nelson Peltz who is maintaining pressure on management – the entertainment group having rejected its request for representation on the board of administration. Disney therefore declared a cash dividend of 30 cents per share payable on January 10 to shareholders of record at the close of December 11, for the second fiscal half of 2023.
