Wall Street ends the session with a further decline this Friday, still digesting the poor inflation figures (consumer and producer prices) announced this week across the Atlantic. On this day of the Four Witches and an anthology of macroeconomic publications, the S&P 500 lost -0.65% to 5,117 pts, but remained more or less stable over the week. The Dow Jones dropped -0.49% to 38,714 pts (-0.14% weekly). The Nasdaq fell by -0.96%, sliding below 16,000 points. The technology stock index ended at 15,973 pts (-0.29% during the week).
According to the government report unveiled Thursday in the United States, retail sales for the month of February 2024 showed an increase of 0.6% compared to the previous month (+0.7% consensus). Excluding automobiles, they increased by 0.3% (0.4% market consensus). Excluding automobiles and gasoline, on the other hand, sales increased by 0.3%, a little more than expected.
The producer price inflation figures were also an unpleasant surprise yesterday, since the producer price index increased by 0.6% in February, compared to the previous month, against 0.3% consensus and 0.3% a month before – an increase of 1.6% over one year in February against 1.1% consensus. Excluding food and energy, the producer price index increased by 0.3% compared to the previous month against 0.2% consensus. Over one year, the index excluding food and energy increased by 2%… This follows Tuesday’s announcement of an increase already greater than market expectations in consumer prices in February.
This Friday, investors followed the New York Fed’s Empire State manufacturing index for March 2024, which came in at -20.9, compared to a consensus of -8 and a reading of -2.4 a months ago. The index is therefore clearly falling into the red, signaling a very strong contraction in manufacturing activity in the region considered this month.
The import price index in the USA for the month of February 2024 showed an increase of 0.3% compared to the previous month (+0.2% market consensus). Compared to last year, this index fell by 0.8%. The export price indicator for February increased by 0.8% from one month to the next (0.1% consensus). Over one year, it declined by 1.8%.
American industrial production for the month of February 2024 showed a slight increase of 0.1% compared to the previous month, against a consensus close to stability and after a revised decline of 0.5% for the month of January. Manufacturing production increased by 0.9% month-on-month, against a consensus here which is still practically stable, and after a revised decline to 1.1% for the month of January. The production capacity utilization rate stood at 78.3% (78.4% consensus).
The preliminary index of American consumer sentiment from the University of Michigan for the month of March 2024 stood at 76.5 (77.4 market consensus and 76.9 a month earlier). The indicator of one-year inflation expectations linked to this index stood at 3%, in line with the market consensus.
Fed officials did not comment this week, due to the ‘quiet period’ preceding the March 20 monetary meeting. However, Janet Yellen, American Secretary of the Treasury, who is not bound by this obligation, made some comments the day before yesterday, ruling out the idea of a stagflation scenario and envisaging a gradual decline in American inflation. .
A barrel of WTI crude lost 0.04% to $81.04, but gained 3.79% over the week.
The dollar exchanges for 0.918 euros.
An ounce of gold ended at $2,155, but fell -1.23% this week.
Bitcoin gained +0.31% to $71,697.
Values
* Fisker (+12.78% to $0.175). Speculation continued during the session on the file of the small American manufacturer of electric cars which, last night, fell by -51.9% at the close on Wall Street on rumors of bankruptcy. The group has reportedly hired financial advisors and lawyers to prepare for a potential bankruptcy filing, according to the Wall Street Journal, citing sources close to the matter… A new twist, however, supports the value today on Wall Street. According to Bloomberg, the startup could enter into a partnership with a large manufacturer. Reacting to the Wall Street Journal article, the group spoke of “strategic discussions”. Fisker said he doesn’t usually comment on market rumors, although he added that he often works with outside advisors. The group says it is focused on raising additional capital, and intends to enter into a partnership with “a major manufacturer”…
* United Airlines (+1.8% to $43.62). The airline is reportedly set to acquire at least three dozen Airbus A321neo aircraft from aircraft lessors. The American company has been seeking for several weeks to fill the gap created by delayed orders for the Boeing 737 MAX 10. According to ‘Bloomberg’ sources, the carrier is in final negotiations for planes to be delivered between 2025 and 2027. The agency has first reported in January that Airbus was looking for A321 production slots that it could supply to United Airlines. Delays in certification of the 737 Max 10 have jeopardized growth plans for United, which was expected to be the first major customer of the larger 737 variant.
* Jabil (-16.49% to $123.15). The American electronics production subcontractor announced, for its second fiscal quarter 2024, revenues of $6.8 billion, adjusted operating profit of $338 million, and adjusted earnings per share of $1.68. The consensus was for $1.66 in adjusted quarterly earnings per share for $6.89 billion in revenue. For its third fiscal quarter 2024, Jabil anticipates revenues ranging from $6.2 to $6.8 billion, adjusted operating profit between $325 and $385 million, and adjusted earnings per share ranging from 1.65 to 2.05. $. The consensus over this period was $2.12 adjusted EPS and $7.37 billion in revenue.
* Adobe (-13.67% to $492.46). The American software group – known for its Acrobat, Photoshop, Flash and InDesign products – is diving into Wall Street. Operators are especially punishing forecasts that are too short for the 2nd fiscal quarter, while for the first, results exceeded expectations. For the first fiscal quarter of 2024, Adobe posted adjusted earnings per share of $4.48 compared to a consensus of $4.38. Revenues totaled $5.18 billion over the period, up 11% year-on-year, compared to a consensus of $5.14 billion. This is a record level of revenue. The digital media unit posted sales of $3.82 billion, expanding by +12%. The division including marketing and analytics software grew by +10%, with a turnover of $1.29 billion.
For the 2nd quarter, the group anticipates revenues ranging from $5.25 to $5.3 billion, compared to a consensus of $5.31 billion. The group anticipates $440 million in new recurring revenues in the ‘creative’ segment, a level below expectations which shows a less significant impact than expected from the new AI functionalities. Adjusted earnings per share for the quarter are expected between $4.35 and $4.40 ($4.38 consensus).
Furthermore, Adobe announced a rather generous share buyback program of $25 billion, while a previous program of $15 billion was due to end at the end of the 2024 financial year.
* Ulta Beauty (-5.21% to $535.98). The specialist in the distribution of beauty products corrects. The group posted revenues of $3.55 billion for the closed quarter, an increase of +10.2% compared to last year, and around 1% higher than consensus. Adjusted earnings per share were $8.08, compared to $6.68 a year earlier and $7.5 consensus. Like-for-like sales increased by 2.5% in the 4th quarter and 5.7% for the year. Ulta nevertheless displays annual financial forecasts considered too short, with the growth of costs. The group is now planning an annual operating margin ranging from 14% to 14.3% (15% in 2023). Revenues are expected between $11.7 and $11.8 billion. Diluted earnings per share are anticipated between $26.2 and $27. A new share buyback authorization of $2 billion was announced.
* McDonald’s (-0.92% to $279.14). McDonald’s was the victim of a massive outage this Friday around the world. Many restaurants were forced to stop taking orders from customers in person and by telephone due to the system disruption, said a spokesperson for McDonald’s Holdings Company Japan. The popular fast food chain said an IT outage disrupted operations at a large number of outlets around the world, including in Japan, China, the United Kingdom, Australia and France. However, it excludes the possibility of a cybersecurity incident.
* Nvidia (-0.12% to $878.37). The American graphics and AI chip giant, whose products are now coveted by technology companies around the world, will kick off its annual GTC conference on Monday. Jensen Huang, its CEO, will hold a 2-hour speech at the SAP Center in San Jose, California. In recent years, Nvidia has used the show to announce some of its biggest products. This year, Nvidia is expected to launch its latest architecture and graphics processing chip. The new architecture, ‘Blackwell’, and B100 GPU, are expected to deliver much better performance when it comes to running AI models than the company’s current high-end H100 and H200 cards…
