Wall Street remained on the defensive on Wednesday, awaiting Nvidia’s accounts which will be published in the evening after the market close. The S&P 500 regained 0.13% to 4,981 pts, the Dow Jones rose 0.13% to 38,612 pts, but the Nasdaq lost 0.32% to 15,580 pts. On the Nymex, a barrel of WTI crude regained 0.9% to $78. The dollar index changes little against a basket of reference currencies.
Wall Street, closed Monday for the Presidents’ Day holiday, had resumed its quotations the day before in decline, the Nasdaq having corrected by 0.92% with Nvidia… The title of the graphics chip and AI giant had in effect decreased by 4.4% at closing. This Wednesday the value fell again cautiously by 2.8%. The test will therefore be very important after the closing, with the publication of the accounts of the Californian group, which has largely contributed to the performance of the S&P 500 and Nasdaq indices in recent months, Nvidia having become the real “leader” of the stock market rally in the artificial intelligence.
On the rate side, Barkin, the head of the Richmond Fed, put the latest consumer and production price indices in the United States into perspective, believing that “we should not give so much importance to the figures for a single month”.
According to the CME Group’s FedWatch tool, the probability of a new monetary status quo on March 20, following the next Fed meeting, reaches 94%. For the next meeting, the probability of status quo stands at over 63%, which would leave rates between 5.25 and 5.5%. The first relaxation could therefore take place on June 12…
On Thursday, investors will be attentive to weekly jobless claims (2:30 p.m.), the Chicago Fed’s national activity index, as well as the US composite flash PMI index (3:45 p.m.) and housing resales existing (4 p.m.). Thursday will also be very active on the Fed side, with a slew of interventions from notably Philip Jefferson, Patrick Harker, Neel Kashkari, Lisa Cook and Christopher Waller…
On the business side, Intuit, Booking Holdings, Copart, PG&E, Block, Newmont, Dominion Energy, Moderna, Archer-Daniels-Midland and Edison will announce their accounts on Thursday.
Values
Palo Alto Networks plunges 28.4%. The Californian computer security giant, now a member of the S&P 500, posted results for the closed quarter that exceeded market expectations, but its forecasts were adjusted downward. The cybersecurity firm revealed revenues of $1.98 billion for its just-ended fiscal second quarter, up 19% year-on-year, versus $1.97 billion consensus. Adjusted earnings per share were $1.46, compared to $1.30 market consensus and $1.05 a year earlier. However, caution prevails regarding the outlook, with Nikesh Arora’s group counting, for its third quarter, on revenues ranging from 1.95 to 1.98 billion dollars, compared to a consensus of 2.04 billion. Adjusted earnings per share are expected between $1.24 and $1.26, versus $1.29 consensus for the quarter.
For the financial year, the group expects revenues ranging from $7.95 to $8 billion and adjusted earnings per share ranging from $5.45 to $5.55. The group previously envisaged revenues of up to 8.2 billion, which was in line with consensus.
Public Storage (+1.5%), the personal storage giant announced for its fourth quarter adjusted FFO per share of $4.20 per share, compared to a consensus of $4.15 and a level of 2, $06 a year ago. Revenue totaled $1.16 billion for the quarter ended December 2023, beating consensus by 2%. This represents growth of 6.6% year-on-year. Net income reaches $1.9 billion in 2023. Annual adjusted FFO reaches $16.89, up 6%. Like-for-like revenues increased by 4.7% year-on-year. In terms of outlook, the group envisages adjusted FFO per share ranging from $16.60 to $17.20 for the 2024 financial year.
International Flavors & Fragrances, the New York-based group active in the perfume and flavoring industry, fell 6.4%. IFF reported mixed results for its fourth quarter, posting adjusted EPS of 72 cents compared to a consensus of 75 cents and a year-ago level of 97 cents. Revenues were $2.7 billion, down 5% year-on-year, compared to a consensus of $2.72 billion. Full-year 2024 sales are expected to be between $10.8 billion and $11.1 billion and adjusted Ebitda between $1.9 billion and $2.1 billion. In light of continued macroeconomic uncertainty, IFF expects volume developments of between 0 and 3%. Prices are expected to decline by around 2.5%, given lower input costs and competitive dynamics. Comparable adjusted operating Ebitda, currency neutral, is expected to grow at a faster rate than sales, by 3-11%.
Analog Devices (+2.2%), one of the major American semiconductor players, published revenues of more than $2.5 billion for its first fiscal quarter of 2024, with continued growth in the automotive sector. Operating cash flow over twelve rolling months reached 4.6 billion and free cash flow 3.2 billion. The group recalls having returned more than $600 million to shareholders during the quarter through dividends and share buybacks. It increases its dividend by 7%. Over the past quarter, adjusted diluted earnings per share came to $1.73, down 37% but higher than expectations. The market consensus was $1.71 in adjusted earnings per share for $2.5 billion in revenue. For the second fiscal quarter, revenues are expected at $2.1 billion, plus or minus 100 million, while adjusted EPS is expected at $1.26, plus or minus 10 cents. The consensus was for $1.57 in adjusted EPS and $2.36 billion in revenue.
Garmin (+8.8%), the designer of connected objects for navigation, communications and information, delivered consolidated revenues of $1.48 billion for its fourth fiscal quarter of 2023, up 13% year-on-year, for a gross margin improved to 58.3% and operating profit increased by 27% to $340 million. Adjusted earnings per share reached $1.72, up 27% compared to last year. The consensus was for $1.39 in quarterly adjusted earnings per share on $1.41 billion in revenue. Over the year, revenues reached a record $5.23 billion, up 8%, while adjusted earnings per share stood at $5.59, up 9%. For the 2024 financial year this time, revenues are expected at 5.75 billion, for adjusted earnings per share of $5.40.
Chesapeake (+8%), the American natural gas producer, announced adjusted earnings per share of $1.31 for its fourth fiscal quarter versus a consensus of 73 cents. The group has reduced its operating expenses in the face of low prices. The Oklahoma group’s production declined to 3.43 billion cubic feet equivalent per day. Net profit for the year reached $2.4 billion and free cash flow reached $551 million. The capital expenditure guidance is reduced by 20% to 1.25-1.35 billion.
Amazon gains less than 1% on Wall Street, while the American online commerce giant will replace Walgreens (-2.5%) within the historic Dow Jones index. Thus, Amazon will integrate the index of 30 stocks in place of Walgreens Boots Alliance, according to a press release from S&P Dow Jones Indices. The change will take effect before opening on February 26. The index change follows Walmart’s decision (-1.2%) to split its action 3 to 1, which will reduce the weighting of the distribution colossus in the Dow Jones. Walgreens, an American pharmaceutical chain, was integrated into the DJIA in June 2018, but its stock fell by 30% last year, while Amazon soared by 80% at the same time… During Meanwhile, Jeff Bezos continues his sales of Amazon securities, which amount to $8.4 billion in 2024.
Walt Disney (-1.6%) is transferring the majority of its DVD and Blu-ray activities in the United States and Canada to Sony, according to Bloomberg. People with knowledge of the transaction say Disney is moving its physical media business toward a licensed model, which will allow Sony to make and sell the discs. Disney would therefore have sealed this agreement so that Sony Group Corp. is resuming the majority of its DVD and Blu-ray sales in the United States and Canada, exiting a business that has declined significantly in recent years. Depending on the licensed model, Sony will market and distribute the discs to retailers. Bloomberg’s sources asked not to be identified because the discussions were private.
Nvidia yields another 2.8% on Wall Street before its financial publication… The value is the third most weighted in the S&P 500 behind Microsoft and Apple. Analysts on average expect $20.4 billion in quarterly revenue, a jump of nearly 240% from last year and a third period of triple-digit growth. The consensus adjusted earnings per share is around $4.6, which would represent… more than 400% increase. For the following quarter, this consensus reaches more than $5 in adjusted EPS and 22.2 billion in revenue…