Wall Street ended in the red on Monday, after records broken at the end of last week on the S&P 500 and the Nasdaq. The S&P fell by 0.12% to 5,130 pts and the Dow Jones fell by 0.25% to 38,989 pts, while the Nasdaq lost 0.41% to 16,207 pts. Nvidia, the market engine, is rising to its all-time high at $852.37 (+3.6%), while Apple, on the other hand, continues its correction (-2.5%). On the Nymex, a barrel of WTI crude lost 1% to $78.35. An ounce of gold gained another 0.9% to $2,115, at its highest. The dollar index lost 0.1% against a basket of currencies, while bitcoin was approaching its historic highs at $67,460.
The week will be quite lively on Wall Street from an economic point of view, in particular with a double intervention from Fed boss Jerome Powell, as well as the monthly report on the employment situation…
On Tuesday, operators will monitor the final composite PMI for the month of February and therefore the services PMI in the United States, as well as industrial orders and the services ISM. PMI and ISM of services are expected in expansion territory over 50.
On Wednesday, the ADP report on American private employment for the month of February, as well as the JOLTS report on job openings for January, will be communicated… Mary Daly, boss of the San Francisco Fed, will speak in the day, but it is especially Jerome Powell who will attract attention with his monetary policy testimony before the Financial Services Committee of the House of Representatives. Investors will be listening closely for updates from Jerome Powell on the overall state of the U.S. economy, the fight against inflation and when the central bank might begin cutting interest rates. The Fed’s Economic Beige Book, a summary of regional conditions, will be released Wednesday evening…
On Thursday, markets will monitor the Challenger study on layoff announcements in the United States, the balance of international trade in goods and services, as well as weekly unemployment claims and quarterly productivity figures. J. Powell will speak again before the Senate Committee on Banking, Real Estate and Urban Affairs. The President of the Cleveland Fed will also have her say during the day…
Finally, on Friday, the US Department of Labor will publish its monthly report on the employment situation for the month of February (consensus 188,000 non-agricultural job creations, 3.7% unemployment). John Williams of the Fed will also speak during the day.
According to the CME Group’s FedWatch tool, the probability of an additional monetary status quo leaving the range on the fed funds rate between 5.25 and 5.50% on March 20, at the end of the next monetary meeting, is now at 97%. The probability that rates will still remain unchanged on May 1 after the next meeting reaches more than 74%. The first monetary easing could take place on June 12…
Values
Apple (-2.5%). The European Commission fined Apple 1.84 billion euros for practices deemed anti-competitive in the online music market, around five years after Spotify filed a complaint against the Cupertino giant for abuse of dominant position. . Apple was therefore penalized for preventing Spotify and other music streaming services from informing users about payment options outside of the App Store. The investigation followed Swedish group Spotify’s complaint in 2019 about Apple’s restrictions on information regarding payment methods, as well as the App Store’s 30% commission. The European Union’s competition authority said Apple’s restrictions amounted to unfair trading conditions. The fine is broken down into a basic “ticket” of 40 million euros and a “deterrent” element of 1.8 billion. Apple will appeal the decision.
Separately, Goldman Sachs just removed Apple from its buy conviction list following the stock’s recent underperformance and amid concerns about weak demand. Goldman’s ‘Directors’ Cut’ list, which includes around twenty stocks and has constituted since last June the new version of the investment bank’s buying convictions list, therefore no longer includes the Californian group from Cupertino. GS still maintains its purchase advice on Apple, judging that the market’s concentration on lower growth in product revenues masks the strength of Tim Cook’s group’s ecosystem, as well as the visibility and sustainability of associated revenues. .
Tesla (-7.1%). Tesla’s sales from its Shanghai factory collapsed to the lowest level in more than a year in February, as the country was in the midst of the Lunar New Year holiday season. The U.S. automaker shipped 60,365 vehicles, according to preliminary data released Monday by the China Passenger Car Association, down nearly 16 percent month-on-month and 19 percent year-on-year. Auto sales in China are typically lower during the Lunar New Year, a time of year when millions of people travel to visit family and friends.
Super Micro Computer gained 18.6%. The stock gained more than 280% in 2024 and has increased more than tenfold over one year! The American technology group, specializing in servers optimized for AI, is now worth more than $60 billion in the American market. For the current fiscal year, revenues are expected at $14.5 billion and earnings per share at $21.9. Super Micro will be included in the broad US S&P 500 index before opening on Monday March 18, as part of the index’s quarterly rebalancing. Note that Super Micro servers integrate Nvidia’s advanced AI chips.
S&P Dow Jones Indices also announced the integration of Deckers Outdoor (+2.5%), a Californian shoe designer and distributor, into the S&P 500 on the same date. Deckers capitalizes $24 billion on Wall Street after a 38% gain this year. Super Micro and Deckers will replace Whirlpool (-0.2%) and Zions Bancorporation (+1%) in the S&P 500.
Taiwan Semiconductor Manufacturing Company, a Taiwanese semiconductor foundry giant, gained another 0.6% above $140 on Wall Street, for a capitalization of more than $600 billion. The stock is reaching its historic highs, boosted by the current enthusiasm around generative AI. ‘TSMC’ is a major supplier to Nvidia and Apple. It is one of the main beneficiaries of today’s massive investments in artificial intelligence chips. Taiwan Semi’s return to a significant level of growth is expected this quarter…
Macy’s, the American chain of stores, climbed 13.5%. Arkhouse Management and Brigade Capital Management have in fact improved their offer to buy Macy’s to $24 per share, approximately 14% more than the previous offer of $21 per share, for a total valuation of $6.6 billion. Macy’s previously rejected a $5.8 billion proposal from Arkhouse and Brigade Capital Management, saying its value was unattractive. The channel also refused to enter into talks, doubting the financing of the offer. Macy’s confirmed receipt of the new, revised, unsolicited offer yesterday. The channel’s board of directors will study the proposal.
New York Community Bancorp, the American regional bank, fell by an additional 23% on Wall Street… Fitch Ratings has just downgraded its rating of the file to speculative category (‘junk’), after a further rating downgrade from Moody’s Investors Service. The American financial institution had previously warned of significant weaknesses in its way of measuring loan risks. Fitch downgraded its long-term issuer default rating of the bank from ‘BBB-‘ to ‘BB+’, below investment grade. Moody’s, which had already downgraded the bank to speculative status last month, further lowered its issuer rating, from ‘Ba2’ to ‘B3’. The bank’s discovery of weaknesses prompted a reconsideration of NYCB’s controls over the adequacy of provisions, particularly with respect to its concentrated exposure in commercial real estate, according to Fitch.
JetBlue (+4.3%). A month after the opposition of American justice to the proposed merger between JetBlue and Spirit Airlines, the two carriers have decided to throw in the towel. The two groups reached an agreement to terminate their project after determining that the terms of the agreement, including “obtaining necessary legal and regulatory approvals, were unlikely to be met” within the specified time frame. in the agreement. JetBlue, which also faces pressure from activist investor Carl Icahn to return to sustainable growth, will pay Spirit $69 million in compensation.
