Wall Street continues its rally from last weekend. The Nasdaq gained another 0.64% this Monday to 16,261 pts. The S&P 500 gained 0.59% to 5,158 pts. The Dow Jones rose 0.28% to 38,783 pts. The week will still be quite rich in quarterly company publications, including Walt Disney, Uber and Airbnb… On the Nymex, the barrel of WTI crude rose 0.9% to $78.8 with geopolitical uncertainty. An ounce of gold climbs 0.9% to $2,329. The dollar index lost 0.1% against a basket of currencies.
In economic news this week on Wall Street, many Fed officials will be speaking out. Thomas Barkin and John Williams will speak this Monday, while Neel Kashkari will speak tomorrow. Philip Jefferson, Susan Collins and Lisa Cook will be there on Wednesday. Michelle Bowman, Austan Goolsbee and Michael Barr are expected on Friday.
There will be no notable statistics this Monday on Wall Street. Tomorrow Tuesday, investors will only follow the consumer credit figures. Wholesale stocks and the U.S. Department of Energy’s weekly report on domestic oil stocks for the week ended May 3 will be released Wednesday. Unemployment claims for the week ending May 4 will be released Thursday. Finally, the preliminary index of American consumer sentiment for the month of May measured by the University of Michigan, as well as the American budgetary balance, will be announced on Friday.
In corporate news on Wall Street, Vertex Pharmaceuticals, Palantir Technologies, Microchip Technology, Williams Companies, Symbotic, Coty, Lucid Group and International Flavors & Fragrances, publish their latest quarterly accounts this Monday after market trading. Tyson Foods, Loews, CNA Financial or BioNTech, announce before the opening.
Walt Disney, Arista Networks, Ferrari, Duke Energy, McKesson, TransDigm, Occidental Petroleum, Sempra, Datadog, Electronic Arts, Kenvue, Rockwell Automation, GlobalFoundries or Waters, publish tomorrow.
Uber Technologies, Anheuser-Busch, Airbnb, Arm Holdings, Shopify, Emerson Electric, The Trade Desk, Li Auto, Fox Corp, News Corp and Robinhood Markets, will announce Wednesday.
Constellation Energy, Akamai, Hyatt Hotels, Warner Music Group, Warner Bros. Discovery, Roblox and Mettler-Toledo will reveal their latest figures on Thursday.
Wall Street rebounded at the end of last week, following the latest figures from Apple and a very mixed report on American employment for the month of April. This weakness in the labor market, so hoped for by the Fed, finally seems to be materializing. It would offer the American central bank the possibility of lowering its rates a little earlier than expected. For the moment, following a sixth consecutive status quo by the Fed this week keeping the fed funds rate between 5.25% and 5.50%, at a 23-year high, the markets are not really maintaining hope of short-term easing. However, the probability of a rate cut for the month of July or September rose again after the employment figures…
Non-agricultural job creations in the United States for the month of April 2024 totaled only 175,000, compared to a market consensus of 235,000 measured by FactSet, a Bloomberg consensus of 243,000 and a level of 315,000 a month earlier . The previous reading for March was 303,000. The unemployment rate stood at 3.9%, compared to the consensus 3.8% and 3.8% a month earlier. The average hourly wage increased by 0.2% compared to the previous month, against +0.3% of consensus and +0.3% a month earlier – or +3.9% over one year against +4% of consensus. Job creation in the private sector stood at 167,000 against a consensus of 180,000.
According to the CME Group’s FedWatch tool, the probability of a new monetary status quo at the end of the next meeting on June 11 and 12 is now almost 92%. The probability of a first monetary easing on July 31 becomes more significant, with more than 33% chance that rates will go down a notch by then. Finally, the dominant probability for September 18 (49%) is that of a rate range of 5-5.25%, which would therefore represent a drop of a quarter of a point.
Values
Berkshire Hathaway (stable), Warren Buffett’s investment firm, published its first quarter financial results this weekend and held its general meeting, without historic partner Charlie Munger, who died at the end of November. For its first quarter of 2024, the Omaha group generated net income attributable to shareholders of $12.7 billion, compared to $35.5 billion last year – which included $27.4 billion in gains. on investments. The operating profit, more representative, was 11.22 billion, compared to 8.06 billion for the corresponding period of last year. The accounts were notably supported by insurance operations, which posted profits up sharply by 80% to 5.2 billion with Geico.
Traders were also on the lookout for news about Berkshire’s investment portfolio. Without any real surprise, the group has significantly reduced its exposure to Apple, which still remains very significant. In value terms, Berkshire Hathaway’s stake in the capital of the Californian Cupertino group fell 22% to $135.4 billion at the end of March 2024, compared to $174.3 billion a quarter before. Apple’s price certainly fell by more than 10% over the period, but the drop in the value of the stake also comes from new sales of shares from Berkshire – which owned around 790 million shares of the Apple group at the end of the year. March. Thus, the Omaha firm reduced its stake by 13% or 115 million shares.
Apple (stable). Remember that Apple shares rose sharply, by almost 6% on Friday, on the announcement of quarterly results slightly above expectations, of expected plans in AI, but also and above all of a disproportionate share buyback program. of 110 billion dollars, which will undoubtedly give Berkshire the opportunity to further reduce its position under very good conditions if the firm so desires… Buffett promised that Apple would remain, barring an unforeseen and spectacular event, the main investment of his firm. However, he did not rule out the group further lightening its position. In any case, Berkshire remains, for the moment, the very largest shareholder of Apple.
The level of Berkshire’s war chest has swelled further to $189 billion, a record. Warren Buffett clarified this weekend that this level of liquidity could even reach $200 billion at the end of June. Note that at the same time, Berkshire acquired $2.6 billion worth of its own securities during the first quarter.
Paramount (+3%)… Buffett also indicated that Berkshire had sold its entire stake in Paramount, while losing “a lot of money” in this operation. The Oracle of Omaha said it was “100% responsible” for this decision. Berkshire held 63.3 million Paramount shares at the end of December, while the firm had already reduced its share by a third in the fourth quarter… Paramount will put an end to its exclusive negotiations for a takeover of its company parent by Skydance Media, said a Reuters source familiar with the discussions. The file remains coveted, and a special committee of the board of directors responsible for evaluating offers for the company met Saturday morning. According to Reuters, potential buyers are waiting to learn more about the next steps, following the end of discussions with Skydance.
BioNTech (stable) announced revenues totaling 188 million euros for its first fiscal quarter of 2024, compared to sales of 1.28 billion euros over the comparable period last year. Pfizer’s German partner in Covid-19 vaccines therefore shows a very sharp drop in its turnover. The net loss reached 315 million euros for the closed quarter, 1.31 euros per share, compared to a net profit of 502 million euros for the comparable period last year. The consensus was for $1.17 adjusted loss per share on $460 million in revenue for the period. The fall in sales is mainly due to sharply declining revenues from Covid-19 vaccines. At the end of March 2024, the level of cash, equivalents and investments was $16.94 billion.
“We started the year making good progress in our oncology pipeline. We administered the first patient in our second pivotal Phase 3 trial and aim to conduct at least ten potentially registered trials by the end of 2024 First quarter revenue reflects seasonal demand for Covid-19 vaccines, and we expect to record approximately 90% of our annual revenue in the final months of 2024, primarily in the fourth quarter of 2024. strong cash position of €16.9 billion, we are well placed to invest in our innovative R&D pipeline and grow the business towards commercial readiness in oncology,” said Jens Holstein, CFO of BioNTech . The group maintains its 2024 revenue forecasts between 2.5 and 3.1 billion euros. Research and development expenses are anticipated between 2.4 and 2.6 billion euros. General and administrative expenses are expected between 700 and 800 million euros. The capex for operational activities is expected to be between 400 and 500 million euros.
Tyson Foods (-7%), the American food group, published this Monday for its second fiscal quarter 2024 revenues totaling 13.07 billion dollars, compared to 13.13 billion a year before. Operating profit recovered to $312 million, compared to a loss of $49 million for the corresponding period last year. Adjusted operating profit was 406 million compared to 65 million a year earlier. Adjusted earnings per share came in at 62 cents, compared with a deficit of 4 cents per share for the second quarter of 2023. The consensus was for 39 cents in adjusted earnings per share on $13.16 billion in revenue.
“The strategies we have implemented are delivering tangible results, as evidenced by our return to year-over-year profit growth,” said Donnie King, president and CEO of Tyson Foods. “Looking ahead to the second half of the year, we will continue to focus on executing the fundamentals and leveraging our multi-protein portfolio. We are energized by our progress to date and focused on creation of long-term value. The group expects total adjusted operating profit of between $1.4 billion and $1.8 billion for fiscal 2024. Tyson expects “relatively stable” sales for the fiscal year.
Loews (+2%) announced for its first fiscal quarter net profit of $457 million, up 22%, earnings per share of $2.05, and revenues up 12% to $4.23 billion. of dollars. The book value per share stands at $83.68 compared to $81.92 at the end of 2023. The increase in net profit reflects a robust performance of key subsidiaries, particularly CNA Financial (-1%) and Boardwalk, indicates Loews, diversified holding company listed on Wall Street, active in insurance, energy, packaging and hospitality. Loews owns 90% of CNA, its unit dedicated to insurance. “CNA continues to experience strong profitable growth, reporting its highest ever core profit in the first quarter,” said James S. Tisch, Loews Chairman and CEO.
US Steel (+3%) is gaining ground on Wall Street today, as the European Commission today approved the acquisition of the American steel group by the Japanese group Nippon Steel in an operation worth close to $15 billion. The Commission indicated that the operation would not pose a problem from a competitive point of view.
