Wall Street ended the session well on Monday, with its three main indices in the green. Thus, after some hesitation, the S&P 500 gained +0.27% to 5,475 pts. The Dow Jones’s performance was more modest, with a gain of +0.13% to 39,169 pts. The Nasdaq was once again carried by Tesla and was up +0.83% to 17,879 pts.
The final manufacturing PMI for June 2024 came in at 51.6, compared to a consensus of 51.7 and a preliminary reading of 51.7. It reflects a modest expansion in U.S. domestic manufacturing activity in June.
The U.S. ISM manufacturing index for June 2024 came in at 48.5, compared with the FactSet consensus of 49.1 and a reading of 48.7 a month earlier. The index remains below 50, which signals a contraction in activity and enters into contraction with the PMI released earlier today.
U.S. construction spending for May 2024 is down -0.1% month-over-month, versus +0.3% consensus and +0.3% revised from the prior month. Year-over-year, spending is up 6.4%.
On the Wall Street calendar this week, Fed Chairman Jerome Powell will speak early tomorrow. The JOLTS report on job openings in the United States will also be released tomorrow at 4 p.m.
On Wednesday, investors will be watching the Challenger, Gray & Christmas survey on layoff announcements, the ADP report on private employment, as well as the balance of international trade in goods and services and the final US composite PMI index. The ISM services and industrial orders are expected the same day. The FOMC Minutes will be published in the evening.
Finally, on Friday, operators will follow the monthly government report on the employment situation in the United States for the month of June (FactSet consensus 190,000 job creations for a 4% unemployment rate).
On the oil side, the barrel of WTI crude jumped by 2.26% to $83.33. Brent is more modest with a gain of +0.3% to $86.66.
The dollar is quite firm against the European currency. The greenback is up +0.23%, trading at 1.074 euros.
Gold lost -0.3% to $2,331 per ounce.
Values
* Tesla (+6.05% to $209.86). Elon Musk’s group is due to announce its 2nd quarter deliveries tomorrow, Tuesday. Over the period, deliveries could have declined by nearly 4% to around 438,000 units according to the current consensus, which would reflect a 2nd consecutive quarter of correction. Indeed, the American electric vehicle giant is facing tough Chinese competition, as well as a more general slowdown in demand for EVs…
* Boeing (+2.58% to $186.7). As expected, the world’s leading aircraft manufacturer has reached an agreement to acquire Spirit AeroSystems (+3.35% to $33.97), for an amount in shares of $4.7 billion. European Airbus (+2.64% to €131.64) will take advantage of this acquisition to take over part of the American supplier’s activities. The aircraft manufacturer has thus reached a binding agreement with Spirit concerning a potential acquisition of major activities linked to Airbus, in particular the production of A350 fuselage sections in Kinston, North Carolina, in the United States, and in St. Nazaire; A220 wings and mid-fuselage in Belfast, Northern Ireland, and Casablanca, Morocco; as well as A220 pylons in Wichita, Kansas.
Boeing, which spun off Spirit in 2005, will buy its former subsidiary for about $37.25 per share, or an enterprise value of $8.3 billion including debt. “The combination of Spirit and Boeing will allow for greater integration of the manufacturing and engineering capabilities of both companies, including safety and quality systems,” said Spirit CEO Pat Shanahan. Boeing has long been considering buying its former subsidiary. The American planemaker announced the planned departure of its CEO Dave Calhoun, following the recent crisis. Some analysts have cited Spirit’s Shanahan as a possible successor.
In a completely different register, according to sources “close to the case”, the US Department of Justice will criminally charge Boeing with fraud in the context of two fatal accidents and ask the manufacturer to plead guilty or be prosecuted. The DoJ is reportedly planning to officially offer Boeing a deal that includes a financial penalty and the imposition of an independent observer to verify safety and compliance practices for three years. The Department of Justice is expected to give Boeing until the end of the week to respond to the offer, which would be non-negotiable. In the event of refusal, the aircraft manufacturer would be prosecuted…
* Nvidia (+0.62% to $124.3). The chipmaker remains in positive territory despite reports that the French competition authority is preparing to sue it for alleged anticompetitive practices. This would be the first such action against the semiconductor giant. The case follows raids targeting the graphics card sector in September that some sources said targeted Nvidia.
* Meta (+0.09% to $504.68). European regulators are concerned about Meta’s “pay or consent” model, which launched ad-free subscription services for Facebook and Instagram in Europe in November, giving users the choice of consenting to be “tracked” by benefiting from a free service funded by advertising revenue or paying not to share their data. Regulators believe that the choice presented provides a false alternative. “The DMA is here to give back to European users the power to decide on their ‘data’. Meta has forced millions of users across the EU into a binary choice: ‘pay or consent’,” Thierry Breton said on X. “According to our preliminary conclusion, this is a violation of the DMA. Today, we are taking an important step to ensure Meta’s compliance,” added the European Commissioner, the EU thus accusing Meta, parent company of having violated its digital rules.
Europeans had previously accused Apple (+2.91% to $216.75) of violating the DMA digital rules, a decision that could result in a hefty fine for the iPhone maker. The Apple brand is also the subject of another investigation into new fees imposed on app developers…
* Chewy (-6.61% to $25.44). The stock is down despite the fact that influencer Keith Gill, better known by the nickname Roaring Kitty, took a stake valued at 6.6% in the group’s capital, just after shaking up the value of GameStop (-5.51% to $23.33). Chewy is an American retailer of pet products. Gill’s stake was revealed via a regulatory declaration to the SEC. He thus holds 9 million shares, which represents $245 million on Friday’s closing prices. Remember that Ryan Cohen, CEO of GameStop, is also the founder of Chewy.
