Wall Street hesitates in pre-session this Monday, S&P 500 and Dow Jones remaining almost unchanged, against a timid increase of 0.1% on the Nasdaq. The news will be provided this week, with the Fed meeting, a new battery of economic statistics, as well as the financial results of several large technology market capitalizations. Among the Magnificent Seven, five are reporting their accounts this week, namely Apple, Alphabet, Amazon, Meta and Microsoft. Tesla having already published last week, then only Nvidia will remain to follow at the end of February, the star of graphics chips and AI revealing its figures well after the end of the “season”.
Note that this week is the main week of the season for corporate financial publications, since the results announcements concern approximately 40% of the capitalization of the S&P 500, with in particular the two heavyweights at nearly 3,000 billion dollars, Apple and Microsoft.
First in economic news, the Dallas Fed’s manufacturing index is expected this afternoon. Operators will monitor the Case-Shiller and FHFA home price indexes tomorrow, as well as the Conference Board’s consumer confidence index and the JOLTS report on job openings in the United States.
On Wednesday, investors will watch the ADP report on US private employment, the employment cost index, the Chicago PMI index and the weekly report on US domestic oil stocks, but it is mainly the Fed meeting which will attract attention in the evening. According to the FedWatch tool, the probability that the Fed will leave its rates unchanged between 5.25 and 5.50% is 98%, but it is above all the vocabulary of Jerome Powell’s Fed which will decide the direction of the rates. markets. Investors are indeed hoping for a rate cut in March or May. The probability of a quarter-point cut in the fed funds rate on March 20 is 48.6% according to FedWatch.
On Thursday, operators will follow the Challenger, Gray & Christmas study on layoff announcements in the United States, weekly unemployment claims, figures for non-agricultural productivity and unit labor costs, and the final manufacturing PMI index. , the manufacturing ISM and construction spending. Finally, on Friday, the monthly government report on the employment situation for the month of January, the consumer sentiment index from the University of Michigan and industrial orders will be in the news.
Regarding the quarterly financial publications on Wall Street, Nucor, Super Micro Computer, Whirlpool, SoFi or Cleveland-Cliffs, announce this Monday. Tuesday, Danaher, Pfizer, UPS, HCA Healthcare, Marathon Petroleum, General Motors, Sysco, Johnson Controls, Corning and PulteGroup will publish before market, while the evening will be very lively with Microsoft, Alphabet, AMD, Starbucks, Stryker, Mondelez, Electronic Arts, Juniper, Match Group, Fortune Brands or Chubb.
On Wednesday, Mastercard, Thermo Fisher Scientific, Boeing, Automatic Data Processing, Boston Scientific, Phillips 66, Roper, Hess, Otis, Nasdaq Inc and Rockwell Automation will announce before market, while Qualcomm or Metlife will be there after market. On Thursday, Merck, Honeywell, Eaton, Ferrari, Illinois Tool Works, Altria, Becton, Dickinson, Parker-Hannifin, Royal Caribbean Cruises, Cardinal Health, Sirius giants Apple, Amazon and Meta Platforms will publish after the close.
Finally, on Friday, ExxonMobil, AbbVie, Chevron, Regeneron, Bristol-Myers Squibb, Cigna and Charter Communications will announce their latest quarterly figures.
Values
Apple benefits this Monday on Wall Street from a more favorable recommendation from Baird, who has just adjusted his price target on the value of the Californian Cupertino group from $186 to $200, while Apple will publish its latest results on Thursday evening quarterly financial statements. Remember that the group is struggling with the slowdown in sales in China and antitrust accusations. It could, however, give investors a better idea of early demand for its Vision Pro mixed reality headset, which some big-name developers are avoiding.
Spotify, the music streaming group, reacts to the changes proposed by the Californian giant from Cupertino in connection with the European law of the Digital Markets Act: “Although they have behaved badly for years, this raises the level of arrogance to a whole new level. Under the false pretense of compliance and concessions, they have presented a new plan that is a complete and utter farce,” explains Spotify. “Essentially, the old tax was made unacceptable under the DMA, so they created a new one under the guise of compliance with the law…” Earlier this week, thanks to the plain language of the DMA, we explained how we planned to offer EU customers more choice, more control, and better experiences. Today, that future is less clear,” adds Spotify, as Apple considers new fees for downloads in outside the App Store.
Microsoft. The Italian data protection authority has told ChatGPT creator OpenAI that its AI chatbot violates data protection rules. Reuters reports that following an investigation launched last year, the Italian regulator therefore judged that elements would indicate potential violations. OpenAI has thirty days to present its defense. The Italian authority briefly banned ChatGPT last year due to alleged violations of European rules on private data.
Western Digital. Bain Capital plans to restart negotiations on the Western Digital-Kioxia merger, says Kyodo News, citing sources and reported by Reuters. Kyodo reports that Bain Capital, a shareholder of Japan’s Kioxia Group, is in talks with SK Hynix to resume merger negotiations between the two companies. In October, Western Digital and Kioxia ended merger talks after failing to gain support from Kioxia shareholder SK Hynix. The latter invested nearly $2.7 billion in Kioxia in 2018 as part of a consortium led by Bain, which acquired the Japanese firm from Toshiba. SK has convertible bonds which could give it 15% of the capital of Kioxia and make its agreement essential to achieve a merger.
United Airlines has reportedly started discussions with Airbus due to Boeing’s delays, according to Reuters. Industry sources said United Airlines had contacted Airbus about purchasing additional A321neo aircraft to fill the gap created by delayed Boeing 737 MAX 10 orders. Scott Kirby, CEO of United, reportedly went to Toulouse a short time ago to question Airbus on the issue. It would therefore be a question of finding alternatives to the problems encountered by Boeing. The discussions would be preliminary, with no guarantee that an agreement would be reached.
AMD is benefiting from several bullish adjustments from brokers this Monday. Specialists are in fact raising their price targets, while the file has gained 20% in one month with the euphoria around AI and the demand for advanced chips. According to market sources, Susquehanna increased its target price on AMD from $170 to $210, while Bank of America increased its target from $165 to $195. AMD publishes its quarterly accounts Tuesday evening, after market trading.
The Biden administration would also provide billions of dollars in subsidies to chipmakers in the coming weeks, according to Reuters. Citing industry executives familiar with the negotiations, a news report said that under the ‘Chips Act’ and in an effort to produce more advanced semiconductors in the United States, Intel and Taiwan Semiconductor would notably obtain grants for new factories, and that Micron, Texas Instruments and GlobalFoundries could also get funding.
Lockheed Martin, the US defense contractor, will cut around 1% of its workforce to cut costs, according to Reuters. The cuts will take place during the year, the agency citing a company spokesperson on the subject. Hiring freezes and voluntary separations are notably on the agenda. The contractor currently employs just over 120,000 people worldwide.
