Wall Street was trending higher again on Wednesday, even setting new highs on the S&P500. Operators took note of a new series of quarterly results including Ford, Amgen, Alibaba, Uber and CVS Health. The S&P 500 rose 0.82% to 4,995 pts and the Dow Jones rose 0.40% to 38,677 pts, while the Nasdaq climbed 0.95% to 15,756 pts.
On the economic front, the American deficit in international trade in goods and services for the month of December stood at $62.2 billion, in line with the market consensus, compared to $61.9 billion for the revised reading for the previous month. .
The Department of Energy’s weekly report on U.S. domestic oil inventories for the week ended February 2 showed an increase of 5.5 million barrels in crude inventories compared to the previous week, a decrease of 3. 1 million barrels of gasoline stocks and a decline of 3.2 million barrels of distilled product stocks…
Loretta Mester, Neel Kashkari, Susan Collins and Patrick Harker spoke on behalf of the Fed and the next intentions of the American central bank… Mester, boss of the Cleveland Fed, warned against a premature rate cut which could put the economy at risk. She is, however, open to the idea of easing if it becomes clear that inflation is easing further. She believes the Fed will have more confidence in a rate cut later in the year if the economy performs as expected.
Kashkari, head of the Minneapolis Fed, said for his part that at this stage, two or three rate cuts this year seemed appropriate. He added that if the Fed saw a few more months of “good” inflation data, it would give it confidence in a return to the 2% target…
Harker, head of the Philadelphia Fed, estimated that a soft economic landing was in sight for the United States, noting falling inflation and the still-solid job market. He sees real progress towards a return of inflation to 2%.
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 nearly 78%, compared to a 22% probability of a relaxation of a quarter of a point. The same tool shows a 55% probability of a quarter-point rate cut on May 1, the date which corresponds to the next monetary meeting.
On the corporate side, S&P Global, Philip Morris International, ConocoPhillips, Duke Energy, Intercontinental Exchange, Thomson Reuters, Apollo Global Management, Motorola Solutions, Hershey, Archer-Daniels-Midland, Zimmer Biomet, Pinterest, Expedia, Take-Two Interactive and Interpublic, will reveal their accounts on Thursday. PepsiCo, Newell Brands and Catalent will announce their results on Friday, before market.
On the Nymex, a barrel of WTI crude advanced 0.7% to $74. The dollar index lost 0.2% against a basket of currencies.
Values
Snap, parent company of Snapchat, drops 34% on Wall Street! As is often the case, the stock reacts very violently to results announcements. For the fourth quarter, Evan Spiegel’s group revealed revenues up timidly by 5% to 1.36 billion dollars, while the consensus was at 1.38 billion. Over the financial year, sales were stable, reflecting a difficult operating environment. Quarterly adjusted Ebitda also missed the consensus. The quarterly net loss reached $249 million, compared to $288 million for the comparable period last year. Adjusted earnings per share were 8 cents, compared to the consensus estimate of 6 cents. Snapchat now claims 414 million daily active users, an increase of 10% compared to last year. The Snapchat+ subscription service has 7 million paying users.
For the first fiscal quarter just started, Snap expects revenues ranging from $1.1 billion to $1.14 billion, growing up to 15%. This performance would be in line with market expectations. On the other hand, the group forecasts an adjusted Ebitda loss ranging from $55 to $95 million over the period, much more than expected.
New York Community Bancorp (+6.6%), the most closely watched regional American bank at the moment, which took over the assets of Signature Bank last year following its collapse, is of great concern. The stock has plunged 65% since the start of the year and lost 22% at the close yesterday. The fall continued after the close, while the financial rating agency Moody’s downgraded NYCB to junk category, from ‘Baa3’ to ‘Ba2’. The agency judges that the regional bank faces high governance risks due to its transition. The bank faces multifaceted financial risks and governance challenges, according to Moody’s, which is lowering its long-term issuer rating to Ba2 and indicating it could go further if conditions deteriorate.
Ford (+6%). The Michigan-based automaker announced revenues of $46 billion for its fourth fiscal quarter, compared to a consensus of $43 billion. Quarterly revenues increased 4% compared to last year, despite the effects of the UAW strike at the start of the period. Quarterly adjusted earnings per share were 29 cents, compared to 12 cents consensus. Adjusted Ebit was $1.1 billion versus around $990 million consensus. The consolidated net loss was $523 million, on a non-cash accounting charge of $1.7 billion. Over the financial year, the group generated adjusted EBIT of $10.3 billion, at the top of its guidance range. For the 2024 financial year this time, the group is counting on an adjusted EBIT ranging from 10 to 12 billion dollars, compared to a consensus of 9.2 billion dollars. The group finally announced an additional dividend of 18 cents per share in addition to the regular dividend of 15 cents.
Amgen (-6.3%), the American biotechnology giant revealed adjusted earnings per share of $4.71 for its fourth quarter, slightly above expectations, compared to adjusted EPS of $4.09 a year ago. year ago. Revenues totaled $8.2 billion, exceeding consensus by 1%, compared to $6.84 billion a year earlier. Thus, adjusted EPS increased by 15% and revenues increased by 20% following the October acquisition of Horizon Therapeutics. For the 2024 financial year, the group says it expects adjusted earnings per share ranging from $18.9 to $20.3, for revenues ranging from $32.4 to $33.8 billion. The consensus was around $20 in adjusted EPS and $32.7 billion in revenue.
Gilead Sciences (-4.2%), the American pharmaceutical laboratory, announced for its fourth fiscal quarter adjusted earnings per share of $1.72, compared to a consensus of $1.76 and a level of 1.67 $ a year ago. Revenue fell 4% to $7.12 billion, compared to a consensus of $7.08 billion. Net profit, group share, fell to 1.43 billion dollars compared to 1.64 billion a year earlier, during the same period. Regarding the outlook, product revenues are anticipated between $27.1 and $27.4 billion for the fiscal year, representing slight growth of around 1%, which would reach 5% excluding Veklury. The consensus was 27.4 billion.
Chipotle Mexican Grill (+7.2%) announced adjusted earnings per share of $10.36 for its fourth fiscal quarter, compared to the market consensus of $9.7. The restaurant chain posted revenue of $2.52 billion, also above analysts’ expectations. Like-for-like growth was solid at 8.4%, compared to around 7% consensus. Total revenue was expected at $2.49 billion. Over the current financial year, growth should be a little more moderate, with comparable expansion expected at around 5%, in line with brokers’ expectations. The group maintains its plans to open restaurants in Dubai and Kuwait.
Alibaba (-5.8%), the Chinese online commerce giant listed on Wall Street announced quarterly revenues lower than expected but also boosted its share buyback plans by $25 billion – a program valid until at the end of March 2027. Revenues represented 260.3 billion yuan against 261.2 billion consensus. Adjusted Ebitda reached 59.6 billion yuan, up 1%, but the consensus was at 57.3 billion. Profit adjusted by ADR was 18.97 yuan versus 19.3 yuan consensus. Adjusted net profit reached 48 billion yuan, down 4% year-on-year.
Uber Technologies (+0.2%) posted its first operationally profitable year since its IPO, and expects continued expansion. In the October to December quarter, the group reported revenues up 15% to $9.94 billion and gross bookings up 22% to $37.6 billion. Net profit more than doubled to $1.43 billion, although there was a tax benefit of around $1 billion on a revaluation of investments. For the year, revenues were $37.3 billion, up 17%, for an operating profit of $1.11 billion compared to a loss of $1.83 billion a year earlier. Adjusted Ebitda soared 137% to more than 4 billion. Net profit, group share, reached $1.89 billion, compared to a massive loss of more than $9 billion in 2022. Annual free cash flow for 2023 finally reached $3.36 billion, compared to $390 million a year before .
The group now expects adjusted Ebitda ranging from $1.26 billion to $1.34 billion for the quarter ending in March, compared to a consensus of $1.26 billion. The guidance for gross reservations over the period ranges from 37 to 38.5 billion, also better than expected.
CVS Health (+3.1%), the American pharmacy chain, provider of health solutions, lowered its 2024 profit forecasts with the increased costs of medical procedures. The group now only anticipates annual adjusted earnings per share of “at least $8.30”, compared to at least $8.50 previously expected. For the closed quarter, the group still generated adjusted earnings per share of $2.12, higher than market expectations. In the quarter ended at the end of December, the group generated a net profit of $2.05 billion, compared to $2.33 billion the previous year. Quarterly revenues totaled 93.8 billion, compared to 83.8 billion a year earlier and 90.8 billion consensus.
Yum! Brands (+1.8%) posted sales lower than market expectations for the fourth quarter. The parent company of KFC, Taco Bell and Pizza Hut announced stable revenues for the quarter ended, at $2.04 billion, for adjusted earnings per share of $1.26. The group’s three major restaurant chains showed weaker performance in terms of growth.
Roblox (+10.2%) jumped on Wall Street, while the video game platform easily exceeded consensus for the closed quarter, also delivering solid 2024 forecasts. Quarterly adjusted Ebitda was $260 million , against 191 million consensus. The level of net bookings for the quarter ended was 1.13 billion dollars, a new record, against 1.08 billion consensus. The level of annual ‘net bookings’ is expected between 4.14 and 4.28 billion for the financial year started, while the consensus was 4.03 billion.
Tesla (+1.3%) remains watched on Wall Street, after a fall of 25% since the start of the year. The stock is recovering a little, while the managers of the Texan automaker were reportedly asked which employee positions were critical. This has stoked fears of layoffs within the company, Bloomberg News reported today. Tesla may have sent a request for each job after canceling the semi-annual performance reviews of some employees, some people familiar with the matter told Bloomberg. Thus, Tesla staff would prepare for possible job cuts…
