Wall Street is heading upwards again this Monday, in the wake of its rally last weekend driven by the major technology stocks on the stock market, in particular Nvidia. The S&P 500 gained another 0.38% from its peaks, to 4,858 pts, while the Dow Jones advanced 0.56% to 38,077 pts. The Nasdaq takes 0.38% to 15,368 pts. On the Nymex, a barrel of WTI crude increased by 1.7% to $74.5. An ounce of gold consolidates by 0.1% to $2,027. The dollar index changes little against a basket of currencies.
Markets have been buoyed in recent weeks by persistent hopes for rate cuts, inflation control and a soft landing. Fed officials will be silent this week as the January 30-31 monetary meeting approaches. A new monetary status quo is expected – at 99% according to FedWatch – but the Fed could then begin to reduce its rates in March or May according to the same barometer.
As the quarterly and annual earnings season continues on Wall Street, economic news will also be provided. This Monday, the Conference Board’s leading indicators index for the month of December 2023 was down 0.1% compared to the previous month, compared to a FactSet consensus of -0.3% and a drop of 0.5% a month earlier.
Tomorrow Tuesday, the Richmond Fed manufacturing index for the month of January will be revealed at 4 p.m. (consensus -2.8). On Wednesday, investors will follow the January composite flash PMI (3:45 p.m., consensus 51, with the manufacturing index expected at 48 and the services indicator expected at 51.8), as well as the weekly report from the US Department of Energy on domestic oil stocks, for the week ending January 19 (4:30 p.m.).
Thursday will be a busy day, with durable goods orders for December starting at 2:30 p.m. (consensus +1%, or +0.2% excluding transport), the Chicago Fed’s national activity index for December (consensus 0 .05), weekly unemployment claims for the week ended January 20 (consensus 200,000), the balance of international trade in goods for December (consensus -$88.5 billion), as well as the first preliminary estimate of GDP for the fourth quarter (consensus at a rate of +2% according to Bloomberg, +2.5% for personal consumption expenditure). December new home sales will be released at 4 p.m. (FactSet consensus 645,000), while the Kansas City Fed’s manufacturing index will be announced at 5 p.m.
Finally, on Friday, operators will monitor personal income and household expenditure at 2:30 p.m. (consensus +0.3% for income, +0.5% for expenditure, +0.2% for the price index adjusted in comparison of the previous month, i.e. +3% over one year), then at 4 p.m. the promises of housing sales for December (consensus +2% compared to the previous month).
The earnings season continues on Wall Street, with some big tech names this week, including Netflix, IBM, Intel and Tesla.
This Monday, Brown & Brown and United Airlines announce after the close. Tomorrow Tuesday, Johnson & Johnson, Procter & Gamble, Verizon, General Electric, RTX, Lockheed Martin, 3M, DR Horton, Paccar and Halliburton will report before the markets open, while Netflix, Texas Instruments, Intuitive Surgical, Baker Hughes, Steel Dynamics and Stride will be there after market.
On Wednesday, ASML (Dutch giant listed on Wall Street), Abbott, AT&T, Elevance Health, General Dynamics, Freeport-McMoran, Kimberly-Clark and Textron will announce before market, while Tesla, ServiceNow, IBM, Lam Research, CSX, Crown Castle , Las Vegas Sands and Seagate will release after the close. Thursday will also be a busy day, with Comcast, Union Pacific, NextEra, Marsh & McLennan, Blackstone, Sherwin-Williams, Northrop Grumman, Valero, Southwest Airlines, McCormick, American Airlines and Dow Inc in pre-session, then Visa, Intel, T-Mobile US, Kla Corporation, Capital One, Weyerhaeuser, Western Digital or Levi Strauss after market.
On Friday, American Express, Colgate-Palmolive, Norfolk Southern, First Citizens BancShares, Booz Allen Hamilton and Autoliv will release their latest quarterly financial results.
Values
Microsoft (-1%). Sam Altman, chief executive of Microsoft-backed star AI startup OpenAI, is talking to investors and chipmakers about launching a new AI chip company, the Financial Times reports. People with direct knowledge of the negotiations told the FT that Altman was talking to investors in the Middle East about providing funds for a chipmaking project to train and build AI models, and that it was in talks with Taiwan Semiconductor about a chip production partnership. The article was unable to specify how much money Altman was seeking, but said the idea would likely require billions of dollars. It is also not specified whether or not the company in question would be a subsidiary of OpenAI, but people with knowledge of the plans told the FT that OpenAI would be that company’s main customer.
Nvidia (stable), the driving force behind the Nasdaq’s jump on Friday, reached a new historic high on the American market today, at more than $600 for a market capitalization close to $1,500 billion. The graphics and AI chip giant is therefore still not weakening after its vertical rise, and despite this potential competition.
Macy’s (+3%), the American chain of stores, indicated this weekend that it was not interested in an acquisition offer at $21 per share, or $5.8 billion in total, formulated last month by Arkhouse Management and Brigade Capital Management. Macy’s therefore rejected the proposal, judging that its value would not be attractive. Such an amount presents a premium of 19% to Friday’s close. The chain nevertheless refuses to enter into talks with investors Arkhouse and Brigade, also doubting the financing of the offer. Macy’s also indicated yesterday that it remains open to opportunities that would be in the best interests of the company and its shareholders. Arkhouse, for its part, threatened to propose the offer directly to shareholders if the group did not begin discussions.
Archer-Daniels-Midland, the American multinational agribusiness and raw materials, lost 19% on Wall Street, while its financial director was suspended amid an accounting investigation into the group’s trading practices. agricultural. Vikram Luthar, CFO of the case, is therefore suspended. ADM also says it is cooperating with the Securities & Exchange Commission in the investigation. The Chicago group withdraws its forecasts on the nutrition activity and plans to postpone its annual publication. The group expects adjusted earnings per share of more than $6.90 for the financial year ending at the end of December.
Boeing (stable) remains quite uncertain on Wall Street, while the American FAA (Federal Aviation Administration) has recommended that airlines also inspect their 737-900 aircraft to detect possible problems with the door plugs. Regulators have stepped up their monitoring following the incident that struck an Alaska Airlines MAX 9 on January 5. Boeing has appointed an independent advisor to review the quality control of its manufacturing processes.
Tesla (-1%) remains under pressure on Wall Street as it approaches its quarterly publication expected on Wednesday. Morgan Stanley remains a buy but is more cautious, adjusting its price target to $345 compared to $380 previously due to the current market trend. The firm is also lowering its earnings per share estimates.
