Wall Street is trying to continue its rise before the market this Tuesday, while the American market had corrected heavily last week, notably with Netflix. The S&P 500 rose by 0.3% in pre-session, the Dow Jones also by 0.3% and the Nasdaq by 0.4%. The easing of geopolitical tensions in the Middle East seems to be somewhat reassuring since yesterday. The week will be lively, with numerous statistics, but also several essential quarterly publications, including those from technological giants Tesla (this evening), Microsoft, Meta and Alphabet… On the Nymex, the barrel of WTI crude yields 1.2% at $80.9. An ounce of fine gold lost 1% to $2,324. The dollar index lost 0.1% against a basket of reference currencies.
On the economic front, the flash American composite PMI index for April (3:45 p.m., FactSet consensus 52 for the manufacturing index and 52 for services), new home sales for March (4 p.m., consensus 670,000) and the Richmond Fed manufacturing index for April (4 p.m., FactSet consensus -6) will be announced today.
Durable goods orders and the weekly report on US domestic oil stocks will be released tomorrow. The US GDP for the first quarter, the balance of international trade in goods, weekly unemployment claims, as well as promises of housing sales and the manufacturing index of the Kansas City Fed, will be followed on Thursday. Household income and spending as well as the core PCE inflation index will be monitored on Friday, as will the University of Michigan Consumer Sentiment Index.
However, there will be no intervention from Fed officials this week, in the run-up to the monetary meeting on April 30 and May 1, which should result in a new status quo. According to the CME Group’s FedWatch tool, there is a greater than 94% probability that the Fed will leave rates unchanged in a range of 5.25 to 5.5% on May 1. The probability of a comparable range of 5.25-5.5% on June 12, at the end of the next FOMC meeting, stands at 87%. It has risen sharply following recent inflation figures, raising fears of a lastingly high level of prices in a context of a resilient economy. It is possible, however, that the Fed will be able to lower its rates on July 31, at the end of the next meeting, but the highest probability for the moment is still that of a status quo (62% ‘proba’ of an unchanged range on the fed funds rate).
PepsiCo, GE Aerospace, Danaher, Philip Morris International, RTX, UPS, NextEra Energy, Lockheed Martin, Fiserv, Sherwin-Williams, Freeport-McMoran, Spotify, General Motors, Kimberly-Clark, Halliburton and PulteGroup, announced their pre-market results this Tuesday, while Visa, Tesla, Texas Instruments, Chubb, Baker Hughes, Seagate and Steel Dynamics publish after the close.
Thermo Fisher Scientific, AT&T, Boeing, Boston Scientific, General Dynamics, CME Group, Amphenol, Norfolk Southern, Hilton Worldwide, Humana, Biogen and Otis Worldwide, will announce before market Wednesday, while Meta, IBM, ServiceNow, Lam Research, Waste Management , Chipotle Mexican Grill and Ford will reveal their latest figures after the market close.
Microsoft and Alphabet will dominate business news Thursday evening on Wall Street with their respective quarterly reports. Merck, T-Mobile US, Caterpillar, Comcast, Intel, Union Pacific Corporation, S&P Global, Honeywell, Bristol-Myers Squibb, KLA Corporation, Gilead Sciences, Altria, Northrop Grumman, Valero, Capital One Financial, Hess, Edwards Lifesciences, Newmont , Dow Inc, Nasdaq Inc and Royal Caribbean Cruises, also report Thursday.
ExxonMobil, Chevron, AbbVie, HCA Healthcare, Colgate-Palmolive, Phillips 66, Roper, Centene and Charter Communications will finally announce their latest results on Friday.
Values
Apple posted a drop of more than 19% in its smartphone sales in China in the first quarter, according to a Counterpoint Research study reported by Reuters. Local competitor Huawei, for its part, posted very strong growth of more than 69% in its smartphone sales in China over the same period. Apple’s market share in China thus declined to 15.7% over the period compared to 19.7% a year earlier, while that of rival Huawei reached 15.5% compared to 9.3% a year earlier. .
Nvidia, the colossus of graphics and AI chips, is still gaining a little ground before the market after a rebound of 4.3% yesterday, Monday. Reuters reports that Chinese universities and research institutes have recently obtained high-end AI chips from Jensen Huang’s group through resellers, despite the strengthening in November of the US embargo on exports of semiconductors. Reuters mentions on this subject the examination of “hundreds of tender documents”. These chips would have been integrated into products from Super Micro, Dell, as well as the Taiwanese group Gigabyte Technology.
Tesla announces its quarterly results this evening, after a stock market fall of 43% already this year. Victim of tough competition, particularly in China, and weakening demand, Elon Musk’s group announced last week a reduction in its workforce of more than 10% on a global scale. Remember that the workforce of the Texan EV manufacturer reached more than 140,000 people at the end of 2023. Furthermore, the group is further lowering its prices in China, Germany and France. Musk explained on his social network X that Tesla’s prices had to change frequently in order to adapt to demand. The price of the Model 3 first version has been reduced by 3,000 euros to 39,990 euros, according to data from the group’s website noted this Monday by Reuters. The price of the Model 3 in Germany increased from 42,990 to 40,990 euros. In China, the vehicle’s starting price was lowered by 14,000 yuan ($1,930) to 231,900 yuan, Reuters notes. U.S. prices for Model Y, X and S vehicles were reduced by $2,000 on Friday. On Saturday, Tesla also reduced the price of its fully autonomous driving assistance software, from $12,000 in the United States to $8,000.
Tesla is due to release its first quarter financial results this evening, after Wall Street closes. Earlier this month, the group warned of a decline in global deliveries for this period, the first decline in four years reflecting weaker demand. Tesla could reveal a 40% drop in its quarterly operating profit tomorrow, Bloomberg indicates. Revenues are expected to decline for the first time in four years. The group is now banking on its autonomous robotaxi concept, and investors will therefore be watching Musk’s comments on the subject tomorrow evening. In the meantime, plans for the $25,000 consumer vehicle have been postponed.
PepsiCo shows relatively little reaction on Wall Street following its first quarter publication. The Purchase group posted revenues above expectations with rising prices, growing 2% to 18.3 billion, with solid international activity. Net income rose 6% to around $2 billion, while adjusted earnings per share were $1.61 versus $1.52 consensus. Average prices increased by 5% over the period, year-on-year, while organic volumes declined by 2%.
GE Aerospace raised its financial profit forecast on Tuesday, with solid demand for aircraft engine equipment and services. The group now expects 2024 operating profit ranging from $6.2 to $6.6 billion. Earlier this month, GE finalized its split into three companies dedicated to aviation, energy and health respectively. GE Aerospace indicated last month that it expected an operating profit of around $10 billion in 2028.
Danaher reported revenues down 2.5% to $5.8 billion in the first fiscal quarter, ended at the end of March, and adjusted revenues down 4%. Net income was $1.1 billion or $1.45 per share, while adjusted earnings per share were $1.92. For the financial year, the group expects adjusted revenues to decline “in the low single digits”.
Philip Morris International beat consensus profit for the quarter ended. Revenues were $8.79 billion versus the consensus of $8.47 billion. Adjusted earnings per share were $1.50 versus $1.41 on average estimated by specialists. However, the group reduces its annual guidance somewhat and now expects adjusted EPS ranging from $6.19 to $6.31. Excluding currency effects, however, the guidance is solid, between $6.55 and $6.67.
RTX exceeded expectations with military demand. The Arlington group posted revenues of 19.3 billion (+12%) against 18.4 billion consensus. Adjusted earnings per share were $1.34 (+10%) versus $1.23 market consensus. The group reaffirms its forecasts and anticipates annual sales of 78-79 billion, for adjusted EPS ranging from $5.25 to $5.40. Free cash flow is expected to be around 5.7 billion.
UPS achieved revenues of $21.7 billion in the first quarter compared to $22.9 billion a year earlier. The adjusted consolidated operating margin was 8%. Adjusted earnings per share represented $1.43 compared to $2.20 for the corresponding period, a year earlier. The group reaffirms its annual financial forecasts.
Lockheed Martin exceeded profit expectations for its first quarter. Revenue rose 14% to $17.2 billion. Earnings per share were $6.39 versus $5.8 consensus. The group reaffirms its January guidance, namely revenues of 68.5-70 billion, for an EPS of $25.65 to $26.35.
Spotify, the Swedish music streaming giant, listed on Wall Street, jumped on the stock market after exceeding profit expectations for the quarter. However, the group also missed a key metric regarding the number of users.
General Motors raised its financial forecasts and climbed on Wall Street this Tuesday. The manufacturer’s first quarter revenues increased by 7.6% to 43 billion, against 42 billion consensus. Net profit reached 3 billion dollars, an increase of 24%, against 2.5 billion consensus. Net profit for the year is now expected to be between $10.1 billion and $11.5 billion.
Kimberly-Clark is gaining ground in the American market, while the group beat the consensus for the first quarter and raised its forecasts.
Halliburton, the oilfield services giant, beat revenue expectations for the quarter ended and posted robust profits, along with international activity. Revenues were $5.8 billion versus the consensus of $5.7 billion. The Houston group’s adjusted earnings per share were 76 cents versus the market consensus of 74 cents.
