Wall Street appears hesitant this Tuesday, the S&P dropping 0.18% to 5,274 pts and the Nasdaq dropping 0.21% to 16,794 pts. The Dow Jones, battered in recent days, recovered by 0.13% to 38,621 pts. The American rating had already shown itself to be very uncertain yesterday, saved nonetheless by the rebound of Nvidia following the opening of the Computex 2024 conference in Taiwan and a keynote by its charismatic boss Jensen Huang. GameStop also woke up yesterday following posts by “Roaring Kitty” on social networks.
The trend this Tuesday is therefore feverish, while operators doubt the economic and monetary outlook and valuations become more demanding.
On the Nymex, a barrel of WTI crude fell 1.7% to $72.9. An ounce of gold dropped 1.3% to $2,338. The dollar index gains 0.1% against a basket of reference currencies.
Yesterday, the American manufacturing PMI index for May 2024 came out at 51.3 in final reading. The FactSet consensus stood at 50.8 and the preliminary reading at 50.9. The index still signals a slight expansion in domestic manufacturing activity in the United States for the month of May.
The American ISM manufacturing index for May stood at 48.7, far from the consensus which was 49.7 according to FactSet. A month earlier, the indicator stood at 49.2. Thus, the index reflects a slight contraction in American manufacturing activity, contradicting the PMI index.
This Tuesday, American industrial orders for the month of April 2024 grew by 0.7% compared to the previous month, in line with the market consensus, after a revised gain of 0.8% for the month. Of March. The previous assessment for March was +1.6%.
Job openings in the United States for the month of April 2024 stood at 8.059 million units, significantly less than expected since the consensus was at 8.4 million. The revised reading for March came in at 8.355 million, compared to 8.488 million previously announced… This is rather good news, as the Fed is waiting for weakness in the labor market before change its monetary policy… Job openings in the USA have thus fallen to their lowest level since February 2021.
Tomorrow, employment will remain in the spotlight with the ADP report on American private employment for the month of May (consensus 175,000 job creations). Investors will also follow the final US Composite PMI and ISM Services (consensus 50.8).
On Thursday, the Challenger, Gray & Christmas report on layoff announcements, weekly unemployment claims, the balance of international trade in goods and services, as well as productivity figures for the first quarter, will be on the program.
Finally, on Friday, the monthly government report on the employment situation in the United States for the month of May will be followed (FactSet consensus 180,000 job creations for 3.9% unemployment rate).
PVH (after close), Donaldson Company, Guidewire (after close), Bath & Body Works, Hewlett Packard Enterprise (after close) or CrowdStrike (after close), announce this Tuesday.
Lululemon Athletica, Dollar Tree, Brown Forman and Campbell Soup will reveal their latest results tomorrow. Autodesk, Samsara, JM Smucker, Nio Inc, DocuSign, Toro and Ciena, will release Thursday.
Values
GitLab (-1%), the DevSecOps platform powered by AI, weakens on Wall Street following a financial publication that was variously appreciated. The group nevertheless exceeded expectations in the first fiscal quarter, posting adjusted earnings per share of 3 cents over the period, compared to a consensus loss of 4 cents per share and a deficit of 6 cents per share a year before. Quarterly revenue was $169 million, beating consensus by 2%. They stood at $127 million over the corresponding period last year. Thus, revenues increased by 33% year-on-year. Adjusted free cash flow was 37.4 million for the closed period. For the second fiscal quarter, the group expects revenues ranging from $176 to $177 million – in line with expectations – for adjusted EPS ranging from 9 to 10 cents – higher than consensus. For the financial year, revenues are expected between 733 and 737 million, while adjusted EPS is expected between 34 and 37 cents.
GameStop (-5%), Wall Street’s favorite “meme stock”, gained another 21% last night to $28 in exceptional volume, after an opening peak at $40. It must be said that Keith Gill, better known by the nickname Roaring Kitty, posted a screenshot showing what would be a long position of 5 million shares at $21.27. Remember that Keith Gill was one of the emblematic figures who “pushed” GameStop up during the collective speculative madness of 2021. Our man stood out for his publications, in particular on the famous wallstreetbets forum on Reddit. Gill used his Reddit account, DeepF-Value, to show what appears to be a massive long position, which would also include 120,000 call options with an expiration date of June 21, for a value that Bloomberg estimates at 65.7 millions of dollars. This was his first post in three years on Reddit.
On the social media platform , the E Trade broker plans to inform the influencer that he will no longer be able to use its platform. The online broker is indeed worried about potential price manipulation following the recent purchases of “Roaring Kitty” on the GameStop file. The WSJ explains in fact that Gill therefore acquired a very large quantity of options on GameStop on the E Trade platform just before igniting the powder with his messages.
Donaldson (+2%) published revenues for its third fiscal quarter that grew 6% year-on-year to $928 million. Earnings per share rose 22% to 92 cents. Net profit represented 113.5 million dollars, compared to 93.7 million a year before. The group, a leader in filtration solutions for engines, air, oils and liquids, which serves numerous sectors including aerospace, agriculture, construction and the agri-food industry, is also raising its forecasts annual financial statements.
Tesla (stable), the American electric vehicle giant, posted sales of Chinese-made EVs declining 6.6% year-on-year, to 72,573 units for the month of May. This marks, Reuters indicates, a second consecutive month of decline for the automaker. Tuesday’s data was released by the CPCA, China Passenger Car Association.
Bath & Body Works stumbles 11% on Wall Street. The group announced revenues of $1.384 billion for its first fiscal quarter, down 1% year-on-year. Diluted earnings per share were 38 cents compared to 35 cents for the comparable period last year. Operating profit represented 187 million dollars compared to 181 million a year before. Net profit was $87 million, compared to $81 million a year earlier. On an adjusted basis, earnings per share rose 15% to 38 cents. 2024 diluted earnings per share are expected between $3.05 and $3.35.
Intel (stable). The microprocessor giant has launched its new generation of Xeon chips for servers. The group, which is struggling in the field to cope with the overwhelming domination of Nvidia, said that its chips intended for AI would be significantly less expensive than those of its rivals. Intel CEO Pat Gelsinger directly criticized Nvidia CEO Jensen Huang’s assertion at the Computex conference that traditional processors would run out of steam in the AI era. “Moore’s Law is alive and well,” Gelsinger said, noting that Intel will have a major role to play in the proliferation of AI as a leading PC chip supplier. Nvidia remains fairly stable for the time being this Tuesday at $1,150, the all-time high on Wall Street.
