Wall Street rebounded in limited volumes on the eve of a three-day weekend and the day after a turbulent session despite the surge in Nvidia… The S&P 500 advanced 0.70% to 5,304 pts, while that the Dow Jones nibbles 0.01% to 39,069 pts. The Nasdaq climbs 1.1% to 16,920 pts.
Investors rather welcomed the moderation of the indicator of one-year inflation expectations of households in May, while they are worried that the Fed will keep its interest rates at a high level for longer than expected after a series of robust statistics… On Wednesday, the minutes of the last meeting of the Federal Reserve showed that members of the monetary policy committee were ready to maintain rates permanently at a restrictive level, or even at raise them, while on Thursday, the American PMI indicators underlined that pressures on prices remained strong… According to FedWatch data, the financial markets now anticipate at 52.8% a drop in rates of at least 25 points of basis in September, compared to nearly 67% a week earlier.
Now moving in the direction of the market, Goldman Sachs economists have pushed back their expectations for the Federal Reserve’s first rate cut by two months. “Earlier this week, we noted that comments from Fed officials suggested that a July taper would likely require not only better inflation numbers, but also significant signs of weakness in activity or data of the labor market”, affirms the bank quoted by ‘Bloomberg’.
Investors are also keeping an eye on Taiwan, while the Chinese army has announced that it will continue its maneuvers around the island, exercises which aim to assess the capacity of its forces to “seize power” and control of certain areas. They come just days after Lai Ching-te was inaugurated as president of Taiwan for a four-year term…
In today’s macro agenda, durable goods orders came out stronger than expected, as did the final US Consumer Sentiment Index measured by the University of Michigan for the month of May. In business news, Boeing continues to worry…
On the bond market, the US 10-year rate rose 0.4 basis points to 4.4739%. The dollar index fell 0.3% against a basket of currencies and Bitcoin returned 3.5% to $67,410 on Coindesk. An ounce of gold gained 0.3% to $2,333. Finally, on the oil market, the barrel of WTI crude is now climbing nearly 1.3% to $77.75 on the Nymex despite concerns about demand during the upcoming Memorial Day weekend, which marks the start of the summer season in the United States.
Values
Ross Stores jumped 7.7%, the distributor having published earnings per share for the first quarter of $1.46 against $1.35 expected by the market. Sales reached $4.9 billion, slightly above expectations.
Tesla (+3.1%) has cut Model Y production by a double-digit percentage at its Shanghai factory since March, according to a Reuters source and industry data. Figures from the China Association of Automobile Manufacturers (CAAM) show that Model Y production in China stood at 49,498 units in March and 36,610 in April, down 17.7% and 33% respectively. over a year.
Micron Technology (+2.5%). A US court on Thursday ordered the chipmaker to pay $445 million in damages to computer memory company Netlist in a patent lawsuit.
NVIDIA takes another 2.5%. The chip intended for artificial intelligence designed by Nvidia for the Chinese market made a mixed start against a backdrop of oversupply which forced the American semiconductor giant to offer its product at a price lower than that of one of its competitor Huawei’s chips, sources informed of the matter told ‘Reuters’.
Lucid Group +2.2% as the American manufacturer of electric vehicles has just announced the elimination of around 400 positions in order to reduce its costs. The company plans to complete this restructuring process, which affects nearly 6% of its teams, by the end of the third quarter of 2024. It expects to record a charge of $21 million to $25 million, the majority of which part will be recognized during the current quarter. The cuts come several weeks after the company revealed a larger-than-expected loss for the start of the year and as the entire sector faces a sharp slowdown in demand for battery-powered cars.
Boeing (+1.3%) the day after a fall of more than 7%, weighed down by comments from its financial director. Speaking at the ‘Wolfe Research Global Transportation and Industrials’ conference, Brian West indicated that the American giant would ultimately “burn cash” this year and not generate sufficient cash as previously expected while the American aircraft manufacturer is grappling with a crisis which is slowing down the production of his best-seller. Boeing 737 production has slowed significantly in recent weeks due to increased scrutiny from regulators, airlines and lawmakers following a January incident in which a door plug came loose from a Alaska Airlines aircraft in mid-flight. Additionally, Boeing has once again stopped delivering planes to its customers in China. The shutdown stems from requests from the Civil Aviation Administration of China seeking additional information about batteries used in cockpit voice recorders, the executive said. Boeing only resumed 737 Max deliveries to China in January, nearly five years after Beijing banned the plane from flying following fatal crashes in Indonesia and Ethiopia.
Commercial aircraft deliveries will not increase in the second quarter compared to the first three months of the year, B.West said, noting that it had “frustrated and disappointed” customers due to supply chain issues and production. “If you are on the inside, you see progress,” the leader nevertheless indicated, while declaring that “everyone wants it to go faster.” Due to disruptions in factories and delivery delays to China, Boeing also forecasts cash burn in line with the second quarter, or even “perhaps a little worse” than the $3.9 billion burned in the first quarter. . B.West said cash flow will become positive in the second half of the year as 737 production increases and factory improvements come to fruition. “Our operational and financial performance will improve and it will accelerate over the third and fourth quarters… I understand that everyone would like it to go faster, but it is a long cycle business and we must be disciplined.”
SpaceX valued at $200 billion? Citing people familiar with the matter, ‘Bloomberg’ says Elon Musk’s company has started discussions about selling existing shares at a price between $108 and $110 apiece, which could add value to the privately held company. at around $200 billion. SpaceX is discussing such an operation – a transaction that allows employees and investors to sell shares – which could begin in June, the sources said. Terms are not finalized and the size of the offering could change depending on interest from insider sellers and buyers. During the last operation of this kind, the company specializing in the field of astronautics and space flight obtained a valuation of $180 billion. “We conduct liquidity rounds for employees and investors every approximately 6 months,” Elon Musk posted on X. He said SpaceX does not need additional capital and will repurchase shares…
