Wall Street appears uncertain before the market this Friday, for this last session of the year 2023. The S&P 500 is stabilizing just below its historic highs. The Dow Jones, which has already broken its records, also remains practically unchanged. The Nasdaq lost 0.1%. On the Nymex, a barrel of WTI crude rose 0.6% to $72.2. An ounce of gold fell 0.5% to $2,074. The dollar index recovered by 0.1% from its five-month lows against a basket of reference currencies. On the bond markets, the yield on the 2-year T-Bond is 4.30%, compared to 3.89% on the 10-year and 4.04% on the 30-year.
Company news remains very limited. On the economic front, the latest figures support the thesis of a soft landing and controlled inflation. Yesterday, weekly unemployment claims in the United States for the week ended December 23 stood at 218,000, compared to the FactSet consensus of 209,000 and 206,000 a week earlier. These figures from the US Department of Labor therefore show a deterioration in the labor market, which reinforces the probability of a rate cut by the Fed at the start of next year. The deficit in international trade in goods in the United States for the month of November stood at 90.3 billion dollars while the Bloomberg consensus was at 89.6 billion… The index of sales promises of housing from the American NAR (National Association of Realtors) for the month of November 2023 was stable compared to the previous month, against a consensus of +0.8% and after a decline of 1.2% in revised reading for the month of October.
This Friday, operators will still follow the Chicago PMI manufacturing index for December (consensus 50).
Operators are therefore banking on a relatively soft economic landing and a continued decline in inflation, a scenario which would allow the Fed to relax its monetary policy relatively quickly, after the accelerated tightening of recent months. According to the CME Group’s FedWatch tool, the probability of a new monetary status quo on January 31, 2024, for the next FOMC meeting, is more than 83%. The first rate cut could take place on March 20 (probability of more than 70% of a range 5-5.25% on the fed funds rate, compared to 5.25-5.5% currently). Rates are expected at the end of next year between 3.75 and 4% (‘probability’ of 38%) or between 3.5 and 3.75% (probability of 34%).
The annual results should be extremely positive for the main American stock indices, with the Nasdaq 100 even heading towards its best annual performance (+55% so far in 2023) since 1999, according to Bloomberg. The Nasdaq Composite as a whole is up around 44% this year, its best performance since 2003. The index rich in technology stocks was driven this year by the leaps of the ‘Magnificent Seven’ (Apple, Amazon, Alphabet, Meta, Tesla, Nvidia and Microsoft). The S&P 500 is up 25% this year and the Dow Jones is up 14%.
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Google (Alphabet) has settled a $5 billion consumer privacy dispute, Reuters reports. The Californian Internet giant was accused of secretly tracking the use of the Web by millions of people who thought they were browsing privately, the agency adds. U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, on Thursday suspended a trial scheduled for Feb. 5 in the proposed class action, after attorneys for Google and consumers said they had reached a preliminary settlement . Reuters adds that this lawsuit sought to obtain $5 billion or more. Terms of the settlement were not disclosed. The lawyers said they had agreed to a binding term sheet through mediation and planned to present a formal settlement for court approval by Feb. 24. The plaintiffs alleged that Google’s analytics, cookies and apps tracked their activity even when they set Google’s Chrome browser to ‘Incognito’ mode and other browsers to private mode. The lawsuits filed in 2020 covered millions of Google users since June 1, 2016 and sought at least $5,000 in damages per user for violations of federal wiretapping laws and California privacy laws, Reuters recalls.
Boeing has indicated that all of its 737 MAX aircraft operated by airlines in China will be back in service by the end of 2023. At least that is what Liu Qing, the group’s general manager for China, said, according to which the operations would have entirely taken over for the 737 MAX, which would represent nearly a hundred aircraft. This is therefore reassuring news for the American group, which has come a long way after the global immobilization of 2019. The group’s best-selling model was grounded after fatal accidents in Indonesia and Ethiopia.
JD.com, one of China’s e-commerce giants, said it had won a lawsuit against rival Alibaba, which was fined 1 billion yuan ($141 million) for monopolistic practices. It was thus found that Zhejiang Tmall Network, Zhejiang Tmall Technology and Alibaba Group had abused their dominant position on the market and had engaged in monopolistic practices, according to a court decision by the High People’s Court of Beijing mentioned by JD .com. “This decision is not only a fair decision (…), but it also constitutes a historic moment in respecting market fairness and the order of competition through the rule of law “, indicates JD on his official WeChat account. “This will be an important moment in China’s anti-monopoly legal process,” the group added.
UnitedHealth has agreed to sell its Brazilian operations to a private investor. The US healthcare and insurance group today revealed it expects to complete the sale in the first half of next year and record a largely non-cash charge of $7 billion as a result, largely part due to the impact of exchange rate losses. The buyer is the founder and managing director of the health insurance firm Qualicorp, José Seripieri Filho. A Reuters source previously valued the deal at $515 million.
Fisker, the small American designer of electric vehicles, indicated today that its EV deliveries had more than quadrupled during the last quarter, which would allow it to deliver around 4,700 vehicles over the whole year . The quarterly performance is mainly due to the success of the Fisker Ocean SUV, priced at around $69,000. The group thus posted growth in deliveries of more than 300% between the third and fourth quarters. “After approval delays in Europe and the United States, and while we resolved supplier issues, Fisker ultimately produced 10,142 units in 2023. Deliveries to customers began in June, with significant deliveries beginning in September and October. The company increased its deliveries by more than 300% between the third and fourth quarters, and total deliveries are approximately 4,700, the majority being Fisker Ocean One launch vehicles priced at $68,999 (comparable price in other markets)”, specifies the group.
Nvidia is undoubtedly the big star of Wall Street this year. With a performance of nearly 240% since January 1, the file now capitalizes more than 1,200 billion dollars. It must be said that Jensen Huang’s group has been literally boosted for several quarters by the incredible demand for its artificial intelligence products. It remains to be seen whether the graphics processor and AI giant will be able to maintain its dominance and circumvent the bans on the export of its most advanced products to China. Regardless, the level of global demand for AI products should largely offset this possible Chinese weakness. Note that the group has just launched a new gaming chip for China in order to comply with export restrictions.
