Wall Street is uncertain this Monday. The S&P 500 consolidates by 0.13% to 5,453 points, while the Dow Jones loses 0.16% to 39,055 points. The Nasdaq gains 0.12% to 17,752 points, supported in particular by Tesla, which rebounds on the eve of the announcement of its quarterly deliveries. On the Nymex, the barrel of WTI crude gains 0.6% to $82. The ounce of gold loses 0.3% to $2,331. The dollar index falls by 0.1% against a basket of reference currencies. Caution dominates, while the indices remain close to historical highs and the political situation is not really exciting, with a very weakened Biden in the run-up to the November election.
The final manufacturing PMI index for June 2024 stood at 51.6, compared to a market consensus of 51.7 and a preliminary reading of 51.7 as well. This reflects a modest expansion in U.S. domestic manufacturing activity in June.
The US ISM manufacturing index for June 2024 came in at 48.5, compared to a FactSet consensus of 49.1 and a reading of 48.7 a month earlier. The index remains below 50, which signals a contraction in activity and enters into contraction with the PMI index released earlier today.
U.S. construction spending for May 2024 was down 0.1% from the prior month, versus a +0.3% consensus and a +0.3% revised reading from the prior month. Year-over-year, spending rose 6.4%.
In other major events this week on Wall Street, Fed Chairman Jerome Powell speaks early tomorrow. The JOLTS report on U.S. job openings will be released at 4 p.m. tomorrow.
On Wednesday, investors will be watching the Challenger, Gray & Christmas survey on layoff announcements, the ADP report on private employment, as well as the balance of international trade in goods and services and the final US composite PMI index. The ISM services and industrial orders are expected the same day. The FOMC Minutes will be published in the evening.
Finally, on Friday, operators will follow the monthly government report on the employment situation in the United States for the month of June (FactSet consensus 190,000 job creations for 4% unemployment rate).
Values
Boeing (+2%) has, as expected, reached an agreement to acquire Spirit AeroSystems, for a share amount of $4.7 billion. Note that Airbus will take advantage of the takeover to take over part of the American supplier’s activities. The European aircraft manufacturer has thus entered into a binding agreement with Spirit regarding a potential acquisition of major activities linked to Airbus, including the production of fuselage sections of the A350 in Kinston, North Carolina, in the United States, and in St. Nazaire; wings and mid-fuselage of the A220 in Belfast, Northern Ireland, and Casablanca, Morocco; as well as the A220 pylons in Wichita, Kansas.
Boeing, which split Spirit in 2005, will therefore buy its former subsidiary for approximately $37.25 per share, representing an enterprise value of $8.3 billion including debt. “The combination of Spirit and Boeing will enable greater integration of the two companies’ manufacturing and engineering capabilities, including safety and quality systems,” said Pat Shanahan, CEO of Spirit. Boeing has been thinking about buying its former subsidiary for a long time. The American aircraft manufacturer has announced the planned departure of its CEO Dave Calhoun, following the recent crisis. Some analysts cite Spirit’s Shanahan as a possible successor.
Separately, the U.S. Justice Department will criminally charge Boeing with fraud in two fatal crashes and ask the planemaker to plead guilty or face prosecution, two people familiar with the matter told Reuters on Sunday. The DoJ plans to formally offer Boeing a deal that includes a financial penalty and an independent monitor to monitor safety and compliance practices for three years, the people said. The Justice Department is expected to give Boeing until the end of the week to respond to the offer, which would be non-negotiable. If it refuses, the planemaker would be prosecuted…
Meta (-2%). “The DMA is here to give back to European users the power to decide on their ‘data’. Meta has forced millions of users across the EU to a binary choice: ‘pay or consent'”, launched Thierry Breton on X. “According to our preliminary conclusion, it is a violation of the DMA. Today, we take an important step to guarantee the conformity of Meta,” added the European Commissioner, the EU therefore accusing Meta, company mother of Facebook, for having violated its digital rules. European regulators are concerned about Meta’s “pay or consent” model, which launched ad-free subscription services for Facebook and Instagram in Europe in November, giving users the choice to consent to being “tracked.” by benefiting from a free service financed by advertising revenue or paying not to share their data. Regulators believe that the choice presented gives a false alternative.
They had previously accused Apple of also violating the DMA digital rules, a decision that could result in a hefty fine for the iPhone maker. The Apple group is also the subject of another investigation into the new fees imposed on app developers…
Chewy is down 4% on Wall Street, while influencer Keith Gill, better known by the nickname Roaring Kitty, has nevertheless taken a stake valued at 6.6% in the group’s capital, just after shaking up GameStop’s value (-8%). Chewy is an American retailer of pet products. Gill’s stake was revealed via a regulatory declaration to the SEC. He thus holds 9 million shares, which represents $245 million on Friday’s closing prices. Ryan Cohen, CEO of GameStop, is also the founder of Chewy.
Tesla (+6%!), the American electric vehicle giant, is due to announce its second-quarter deliveries tomorrow, Tuesday. Over the period, deliveries could have declined by nearly 4% to around 438,000 units according to the current consensus, which would reflect a second consecutive quarter of correction. Elon Musk’s group is indeed facing tough Chinese competition, as well as a more general slowdown in demand for EVs…
Among the quarterly financial publications on Wall Street this week, Constellation Brands announces Wednesday.
