Wall Street ended the session in a slight decline, after a battery of statistics, including a disappointing new inflation indicator. Thus, the S&P 500 fell by -0.29% to 5,150 pts. The Dow Jones fell -0.35% to 38,905 pts. Also, the Nasdaq rises by -0.30% to 16,128 pts. Nvidia is declining again, while Apple is rising slightly following positive announcements from Foxconn.
Today’s figures relate to US retail sales and the producer price index, while the markets had, remember, reacted favorably the day before yesterday to mixed figures for US consumer price inflation for the month of February.
According to today’s government report in the United States, retail sales for the month of February 2024 showed an increase of 0.6% compared to the previous month (+0.7% consensus). Excluding automobiles, they increased by 0.3% (0.4% market consensus). Excluding automobiles and gasoline, sales increased by +0.3%, a little more than expected.
The producer price inflation figures also came as an unpleasant surprise, since the producer price index increased by 0.6% in February, compared to the previous month, against 0.3% consensus and 0 .3% a month before – an increase of 1.6% year-on-year in February (1.1% consensus). Excluding food and energy, the producer price index increased by 0.3% compared to the previous month (0.2% consensus). Over one year, the index excluding food and energy increased by 2%.
According to today’s report, business inventories in the United States for the month of January 2024 were stable compared to the previous month, compared to +0.3% market consensus and +0.3% for the revised reading of the previous month.
Finally, US weekly jobless claims for the week ended March 9 stood at 209,000, compared to the FactSet consensus of 218,500 and 210,000 a week earlier, in revised reading.
Fed officials did not comment this week, due to the ‘quiet period’ preceding the March 20 monetary meeting. However, Janet Yellen, American Secretary of the Treasury, who is not bound by this obligation, made some comments yesterday, dismissing the idea of a stagflation scenario and considering a gradual decline in American inflation.
According to the FedWatch tool, the probability that the Fed will leave its rates unchanged at the highest in more than 20 years on March 20, between 5.25 and 5.50%, on the occasion of its next monetary meeting, is at 99%. The probability of an additional status quo on May 1, at the next meeting, reaches 91%. The probability of a first rate cut on June 12 remains significant, but the ‘probability’ of status quo in June rises to 38% following the producer price index…
A barrel of WTI crude rose 1.91% to $81.11. Also, Brent gained 1.47% to $85.18.
An ounce of gold appreciated by +0.19% to $2,163.
The dollar gained +0.58% against the euro, to $0.9185.
Bitcoin fell a new record during the session today, climbing to $73,802 before retracing $70,511 at the close (-3.42%). Over the rolling week, the cryptocurrency gained 4.62%.
Tomorrow, for Four Witches Day, investors will follow the New York Fed’s Empire State manufacturing index for March (consensus -8), import and export prices for February, industrial production figures for February (consensus stable), and the University of Michigan’s preliminary consumer sentiment index for March (consensus 77.4).
Values
* Fisker (-51.94% to $0.155). The small American electric car manufacturer plunges on the stock market. The group has hired financial advisors and lawyers to prepare for a potential bankruptcy filing, according to the Wall Street Journal, citing sources familiar with the matter. The group has struggled to increase sales amid stagnant demand for electric vehicles in the United States, and last month issued a going concern warning. In its fourth-quarter earnings report published in February, Fisker stated that there were substantial doubts about its ability to continue its activities… At the time, Fisker said it was in discussions with an investor on the opportunity to invest more in the business to keep it afloat. The manufacturer also announced that it would reduce its workforce by 15%.
* SentinelOne (-16.64% to $23.29). The American cybersecurity group dropped this Thursday on Wall Street on guidance considered too short, and despite results above market expectations for its 4th fiscal quarter. For the quarter ended, revenues increased by +38% to $174 million. Annual recurring revenue increased by +39% to $724 million. Revenues for the first fiscal quarter of 2025 are expected to be around $181 million, while the annual guidance ranges from $812 to $818 million.
* Under Armor (-10.74% to $7.23). The retailer of shoes, clothing and sportswear accessories announced the return of its founder Kevin Plank as CEO, in a fairly tense economic environment. The title fell on this unexpected news, with general manager Stephanie Linnartz therefore leaving her position. Plank, who controls 65% of the retailer’s voting rights, becomes its fourth chief executive in four years.
* Lennar (-7.64% to $152.86). The American real estate manufacturer announced, for its first fiscal quarter ending in February 2024, revenues of $7.3 billion, up +13% year-on-year, but below the consensus which was around $7.4 billion. Adjusted earnings per share were $2.57, compared to $2.12 for the corresponding period last year, and $2.21 consensus. The Miami group’s net profit increased by +21% to $719 million, while earnings per share increased by 25%. New orders increased by +28% to 18,176 homes. Quarterly deliveries increased 23% to 16,798 units. The group is therefore benefiting from sustained demand for new housing and historically low supply. For the current quarter, Lennar expects deliveries ranging from 20,900 to 21,300 units.
* UiPath (-6.88% to $22.75). The company, which presents itself as the leader in RPA and automation and emphasizes its activities linked to artificial intelligence, published results last night on Wall Street that exceeded expectations. The group dear to Cathie Wood revealed adjusted earnings per share of 22 cents for its 4th quarter (15 cents a year earlier and 15 cents consensus). Quarterly revenues totaled $405 million (+31%), or 6% above consensus. Adjusted free cash flow reached $146 million. For the first fiscal quarter of 2025, which has just begun, revenues are expected between $330 and $335 million, for adjusted operating profit of $55 million. Over the full year, revenues are expected to be between $1.555 and $1.56 billion, while adjusted operating profit is expected to be around $295 million.
* Dollar General (-5.13% to $150.06). The American discount retailer announced sales for the 4th quarter down -3.4% to $9.9 billion, for an annual turnover of $38.7 billion. At constant stores, activity increased by 0.7% over the last quarter of the financial year. Quarterly diluted earnings per share fell 38% to $1.83. The group exceeds expectations for the quarter ended with the increase in traffic. The outlook is also solid, with the group counting on like-for-like growth of +2 to +2.7% for the year started (1.4% consensus).
* MicroStrategy (-5.06% to $1,676.85). The group intends to raise even more funds through a new $500 million convertible bond offering to institutional investors. For the second time this month, Michael Saylor’s group will raise capital in order to acquire even more Bitcoin. The new offer concerns convertible bonds maturing in 2031. The group has already completed an issue of $800 million in convertible senior bonds maturing in 2030 and at the same time acquired an additional 12,000 Bitcoin for approximately $822 million. Thus, MicroStrategy, the main ‘corporate’ holder of Bitcoin, now owns 205,000 Bitcoin, which represents an amount of nearly $15 billion at today’s prices.
* Tesla (-4.2% to $162.35). UBS has in turn reduced its price target for the electric car giant, amid concerns about deliveries and demand.
* Altria (+2.19% to $44.3). The Marlboro cigarette group announced its intention to sell more than $2 billion worth of shares in Belgian brewing giant Anheuser-Busch InBev (-5.48% to $61.01). AB InBev will repurchase up to $200 million of these securities.
* Apple (+1.09% to $173). The Cupertino firm is making progress on the stock market, while the Taiwanese giant Foxconn, its major supplier, indicated that it anticipated a significant increase in its revenues in 2024, against a backdrop of increased demand for artificial intelligence products. Foxconn’s management had previously provided much more cautious forecasts for 2024. The group also announced results for its 4th quarter that exceeded market expectations, achieving net profit over the period that grew by more than 30% to 53.1 billions of dollars from Taiwan, or approximately US$1.7 billion. A year earlier, at the same period, this profit amounted to $40 billion from Taiwan.
In this 4th quarter, smartphones and other consumer electronics products represented 58% of revenues, while the cloud and networking products including servers (increasing sharply with AI) represented around a fifth of sales. . The group expects a slight decline in its revenues in the 1st quarter, but the trend should then be significantly more positive, since Foxconn is therefore counting on a significant increase in revenues over the whole year.
