Wall Street progressed before market this Tuesday, recovering quickly following its correction the day before under the weight of GAFA and Intel. The S&P 500 gained 0.2%, the Dow Jones 0.1% and the Nasdaq 0.3%. The week will be brief (Wall Street is closed on Friday) but intense, with numerous interventions from Fed officials, as well as some notable statistics such as the revised GDP for the fourth quarter of 2023 (Thursday), or household income and spending with the ‘core PCE’ price index (Friday). Note also that Jerome Powell, head of the Fed, intervenes on Friday…
Yesterday, new home sales in the United States for the month of February came in at 662,000, compared to the FactSet consensus of 680,000 and the revised reading of 664,000 for the previous month. The Chicago Fed’s national activity index for the month of February came in at +0.05, compared to -0.4 in the FactSet consensus and -0.54 a month earlier, in a revised reading.
Raphael Bostic, the head of the Atlanta Fed, sticks to his very cautious positions and anticipates only one drop in fed funds rates this year, compared to three downward adjustments, on average, for his colleagues. Bostic warns of the risk of premature monetary easing. He added that the rate cut will likely begin later than he had previously anticipated. He predicts a gradual slowdown in the economy and inflation. He also asserts that “we still find ourselves in a pandemic economy.” Austan Goolsbee, the president of the Chicago Fed, quoted by Bloomberg, for his part foresees three rate cuts this year, but adds that it is still necessary to observe progress on the inflation front. Fed Governor Lisa Cook said in a speech at Harvard that cutting rates too early could risk entrenching inflation, while cutting too late could harm economy. She believes that a prudent approach to monetary policy could ensure the path towards a return of inflation to 2%…
This Tuesday, orders for durable goods in the United States for the month of February 2024 increased by 1.4% compared to the previous month, compared to +1% market consensus and -6.9% in revised reading. , a month before. Excluding transport, orders increased by 0.5% compared to the previous month, against +0.6% consensus and -0.4% for the revised reading for the month of January.
Traders will continue to monitor the S&P Case-Shiller and FHFA home price indexes (2 p.m., consensus +0.2% for the Case-Shiller ’20 City’ for January compared to the previous month), as well as the consumer confidence from the Conference Board for the month of March (3 p.m., consensus 107) and the Richmond Fed manufacturing index (3 p.m., consensus -4).
The weekly report on US domestic oil stocks for the week ending March 22 will be released on Wednesday. Christopher Waller of the Fed intervenes the same day.
On Thursday, the news will be busy, with revised US GDP figures for the fourth quarter, weekly jobless claims for the week ended March 23, the Chicago manufacturing PMI, the US consumer sentiment index from the University of Michigan’s Home Sales Promises Index, as well as the Kansas City Fed’s Manufacturing Index.
Finally, on Friday, investors will monitor the inflation index as part of the publication of the report on household income and spending. The balance of international trade in goods will also be revealed. Jerome Powell will also liven up the day… Wall Street will nevertheless be closed on Friday for Good Friday – but then open for Easter Monday.
In corporate news on Wall Street this week, McCormick and GameStop report this Tuesday. Cintas, Paychex, Carnival, Rumble and Jefferies announce Wednesday. Walgreens Boots Alliance releases Thursday.
While the S&P 500 has gained around 10% this year, some strategists, such as those at JP Morgan and Morgan Stanley, are more cautious and believe that high valuations will be difficult to justify if they are not accompanied by a significant improvement in prices. business profits. The first quarter financial publication season will begin in around two weeks and will therefore be of major importance, while euphoria in the artificial intelligence segment and expectations of rate cuts have supported the markets for the time being. .
Values
UPS is gaining premarket ground on Wall Street, as the delivery giant said it expects revenue of $108 billion to $114 billion in 2026, while the consensus was at $102 billion. In January, the group said it planned to cut costs by $1 billion. He added that he did not expect business conditions to improve before the second half of 2024. UPS said today that it expects total savings of $3 billion by the end of the year. 2028. Management hopes for a return to growth in the industry during the year.
Lucid Motors, the U.S. electric vehicle maker, got a $1 billion cash infusion from Ayar Third Investment Co., its main financial backer, an affiliate of Saudi Arabia’s Public Investment Fund. This is an investment in the form of a private placement in convertible preferred securities. This is therefore relatively positive news for the group, while some were wondering about the continued support of the Saudi PIF for the American EV manufacturer.
Fisker, the small American manufacturer of electric vehicles, fell by an additional 28% on Wall Street yesterday Monday before its price was suspended. The title has lost 95% of its value since the start of the year, and the New York Stock Exchange has just announced its decision to delist the file. The group said discussions with a “major car manufacturer” for a potential deal had not been successful. Fisker also won’t be able to satisfy a closing condition related to its attempt to raise up to $150 million through a convertible bond issue, after missing an interest payment. In short, Fisker has never been closer to bankruptcy, with its options now appearing extremely limited.
Microsoft is changing its management, while Satya Nadella’s group accelerates its offensive in artificial intelligence. Mikhail Parakhin, head of Bing’s search engine and advertising business, will leave the role and seek a new position, a week after the software giant named Mustafa Suleyman to oversee work on consumer artificial intelligence, overseeing the Parakhin passage.
Parakhin, who was general manager of advertising and web services, will report to chief technology officer Kevin Scott while seeking his next role, Microsoft said, as cited by Bloomberg. Parakhin also oversaw parts of the Windows software business. This work will be entrusted to Pavan Davuluri, who oversaw the hardware and the rest of Windows. Davuluri will now manage all Windows and Surface hardware, reporting to executive vice president Rajesh Jha. Bloomberg cites in this regard an email sent by Jha yesterday Monday to staff. The message did not specify whether Parakhin would leave Microsoft or take a new role within the group.
The SPAC Digital World Acquisition listed on Wall Street soared last night by 35.2% to nearly $50 at the close and was still growing by 7.5% after market trading. Operators thus welcomed the merger of “DWAC” with Donald Trump’s social media firm, Trump Media & Technology Group, owner of the Truth Social platform. The former president of the United States will hold a stake of nearly 60% in the combined entity, which will begin trading this Tuesday on Nasdaq under the symbol “DJT”. The valuation basis of the merged entity was around $6 billion. The merger, which has been in the works for several years, has encountered several obstacles along the way, including allegations of insider trading, but the deal is finally coming to fruition and could therefore bring the former president a huge windfall, just as his liquidity and net worth were being called into question.
DWAC shares reacted late to the announcement of the approval of the merger by shareholders, since they had initially plunged 14% on Friday. But that was without counting on the “meme stock” aspect of the file, which also quickly took off.
The combined entity will be led by Devin Nunes, who previously left Congress to take over as CEO of Trump Media. Eric Swider, CEO of Digital World Acquisition, will become a director of the new group…
McCormick, the American seasoning and spice giant, jumped to Wall Street after the accounts. In the first fiscal quarter ended at the end of February, sales increased (+3%) with the rise in prices. Operating profit climbed to 234 million compared to 199 million a year before. Adjusted earnings per share were 63 cents compared to 59 cents in the corresponding period last year. For its 2024 financial year, the group confirms its estimates in terms of sales, operating profit and adjusted earnings per share.
Dell Technologies has indicated its intention to reduce its workforce and expenses. At the beginning of February, the group had 120,000 employees compared to 126,000 a year before. External hiring will be limited and the current workforce reorganized, said the IT giant, which had already eliminated more than 6,000 positions last year.
Krispy Kreme, the donut giant, takes off on Wall Street following the announcement of the extension of its partnership agreement with fast food leader McDonald’s.
Ford Motor maintains its outlook today. Annual adjusted Ebit is expected between $10 and $12 billion, while free cash flow is expected between $6 and $7 billion. Capital expenditures are expected to be between $8 billion and $9.5 billion. The accounts for the first fiscal quarter are due on April 24.
