The main American indices ended in the red on Friday after employment figures deemed “too solid” for the Fed regarding the future of its still unclear monetary policy… The S&P 500 lost 0.11% to 5,346 pts, the Dow Jones lost 0.22% to 38,798 pts and the Nasdaq -0.23% to 17,133 pts.
On the bond markets, the yield on the 10-year T-Bond stands at 4.42% and the ’30-year’ at 4.54%. On the Nymex, a barrel of WTI crude is sitting at over $75. The dollar index advances 0.7% against a basket of currencies, while bitcoin falls below $70,000.
Non-agricultural job creations in the United States for the month of May 2024 stood at 272,000 according to the US Department of Labor, compared to a FactSet consensus of 180,000 and a revised level (down) to 165,000 for the previous month. . Creations in the private sector were 229,000, compared to 165,000 consensus and 158,000 for the revised reading for the month of April. The unemployment rate stood at 4% against a consensus of 3.9%. Employment increased further in May in several sectors, led by health care, government, leisure and hospitality, and professional, scientific and technical services. The labor force participation rate stood at 62.5%.
The average hourly wage increased a little more than expected in May, up 0.4% compared to the previous month and 4.1% year-on-year.
Preliminary wholesale stocks in the United States for the month of April 2024 were up 0.1% compared to the previous month, compared to +0.2% market consensus and -0.5% for the revised reading from the previous month.
Operators are also still monitoring Nvidia (stable) on Wall Street, now valued as much as Apple (+1.2%) at around $3,000 billion in capitalization… The stock has been the driving force of the American stock market these past few months. last months. Finally, the ‘meme stocks’ are moving in the wrong direction again with GameStop (-39.3%), while the influencer Keith Gill, aka Roaring Kitty, makes his return to YouTube and tries to galvanize his troops after having taken a significant stake in the capital of the fragile video game retailer. Unfortunately for him, the group has just published poor results…
Hopes for monetary easing have diminished following US employment figures. The ECB had nevertheless set an example yesterday… As far as the Fed is concerned, the next monetary meeting will be held on June 11 and 12. The American central bank is expected to leave its rates unchanged between 5.25 and 5.50%, at a 23-year high. The status quo is also the most likely scenario for the next meeting, which takes place at the end of July, but the Fed could then start reducing rates from September or November.
As for major market strategists, Michael Hartnett of Bank of America believes that future rate cuts by the Fed could signal problems for the economy and “an increased risk of a painful landing.”
Values
GameStop (-39.3%) while the influencer Roaring Kitty had boosted the action of the video game chain in recent days, the latest results published this Friday bring investors back to the sad reality. The group remains in losses in the first quarter, while turnover collapses with weak hardware and accessories sales. GameStop posted a quarterly net loss of $32.3 million, or 11 cents per share, for the quarter ended in early May, compared to a deficit of $50.5 million a year earlier. Sales fell to $882 million from $1.24 billion a year earlier.
The group will not hold a conference to present the results. Let’s hope that Roaring Kitty will do it for him, since he is holding a “live” on YouTube in a few hours to try to “pump” his GameStop shares a little more, numbering 5 million according to a previous post on Reddit, to which are added 120,000 call options with a strike of $20 and expiry on June 21…
In the meantime, GameStop could well take advantage of the ambient turmoil to raise further funds. The group has thus filed documents with regulatory authorities indicating its intention to sell up to 75 million additional shares. In the documents, GameStop recalls that since January 2021, the price of its shares has experienced fluctuations unrelated to its fundamentals or results…
Taiwan Semiconductor Manufacturing Co (-1.6%) posted very strong growth in its activity of 30% for the month of May, generating revenues of 229.6 billion new Taiwan dollars over the period, or approximately 7. 1 billion dollars. The group obviously benefits from very significant demand from the AI segments. The largest contract chip manufacturer, which produces in particular for Nvidia, is also benefiting from a semblance of a recovery in smartphone sales, fueling expectations for orders for mobile chips. The group manufactures chips for Apple and AMD. TSMC is also the exclusive manufacturer of Nvidia’s most advanced AI accelerators.
DocuSign (-4.6%). The Californian electronic signature giant beat expectations in the first quarter, recording adjusted EPS of 82 cents, compared to a consensus of 79 cents and a level of 72 cents a year earlier. Revenues were $709 million compared to $661 million a year earlier. The expected billings for the second quarter, however, tend to disappoint, between $715 and $725 million. Revenues over this period are expected to be between $725 and $729 million. Over the financial year, revenues are expected between 2.92 and 2.93 billion, while billings are anticipated between 2.98 and 3.03 billion. Finally, the group strengthened its share buyback program by a billion dollars.
Samsara (-12%) published adjusted earnings per share of 3 cents for its first fiscal quarter, compared to a consensus of one cent and a loss a year earlier. The group’s revenues were 281 million in the quarter ended in April, exceeding expectations by 3%. In the corresponding period last year, turnover stood at 204 million. The American IoT group therefore achieved growth of 37% over the period. Revenues for the current quarter are expected to be around $289 million in the middle of the range and in line with consensus. EPS is expected to be in balance or positive one cent, as anticipated. It is forecast between 13 and 15 cents for the year, compared to 12 cents consensus. Finally, annual revenues are expected between 1.205 and 1.213 billion…
