Wall Street in the red. Foot Locker and Applied Materials fall
Profit-taking prevailed on Wall Street, before market on Friday, the DJIA making 0.6% and the S&P 500 0.3%. Only the Nasdaq timidly resists in positive territory. A barrel of WTI crude lost 2.7% on the $ 76 on the Nymex. The ounce of gold stabilizes at $ 1,862. The dollar index jumped 0.5% against a basket of currencies. Bitcoin drops 3% over 24 hours to below $ 58,000.
There will be no notable economic statistics this Friday in the United States. Operators will still be able to follow the interventions of Christopher Waller, governor of the Fed, and vice-president of the central bank, Richard Clarida.
Biden said on Tuesday that the choice of Fed chairman would come within four days, although the White House later appeared to back down, suggesting a decision would come before Thanksgiving instead. The Powell vs Lael Brainard debate therefore continues. Despite some momentum behind a potential choice by Brainard, consensus continues to revolve around a reappointment of Powell which has an easier route to Senate confirmation and bipartisan support. Keeping Powell also mitigates the risk of an adverse market reaction. At the same time, Brainard was seen as highly skilled and very similar to Powell in terms of vision and monetary policy.
ECB President Christine Lagarde was speaking again this Friday. According to her, a tightening of monetary policy would only accentuate the negative impact of the current situation on the economy. A monetary tightening would indeed affect the economy only once the shock has passed, says Lagarde. The leader, who had previously hinted that the central bank is unlikely to hike rates until 2023, therefore says the ECB should not react to the current surge in inflation. She still assures us that this price surge should dissipate. In such a scenario, premature monetary tightening could therefore jeopardize the economic recovery. « It does not make sense to react by tightening monetary policy, » summarized the boss of the ECB, judging that such a tightening would rather have the effect of weighing on household income.
European stock markets are uncertain on Friday, fearing the return of health restrictions and confinements. Moreover, ‘transitory’ inflation continues to accelerate ‘temporarily’, including in Europe. In Germany, the producer price index for October revealed this morning, excluding seasonal adjustments and compared to the previous month, an increase of 3.8%, compared to a FactSet consensus of 1.4% and an increase of 2.3% a month before. Excluding seasonal adjustments and compared to last year, the German producer price index soared 18.4%, against 16.3% of market consensus. Inflationary pressures are therefore increasing further in Germany, with the 18.4% year-on-year PPI growth being the highest since November 1951, when producer prices soared by 20.6%.
On the budget front in the US, House Democrats have postponed the final vote on Build Back Better to Friday. House Majority Leader Steny Hoyer said the Democrats would return for this final vote as well. Hoyer noted that Democrats have the necessary votes to pass legislation. The final vote was slated for Thursday night, but was thwarted by a marathon speech from minority parliamentary leader McCarthy denouncing the legislation. The cost estimate of the proposed bill by the CBO shows that it would add $ 367 billion to the deficit over the next 10 years, not including revenues from strengthening the IRS that would reduce the deficit by $ 127 billion . While the CBO’s deficit projection contradicts the White House’s claim that the legislation is fully paid, moderate House Democrats who were awaiting the CBO’s estimate had signaled that they would proceed to the vote. Even if the House passes the bill, it will face challenges in the Senate that could delay its final passage.
In the news of companies listed on Wall Street today, Foot Locker publishes its accounts. Yesterday evening, Applied Materials, giant of equipment intended for the production of semiconductors, for its part disappointed, which could weigh on the compartment today. Apple, for its part, is accelerating its developments in the electric automobile.
Values
Applied Materials. Supply chain issues have constrained growth for the semiconductor production equipment maker, which on Thursday night released accounts deemed disappointing for its fiscal 4th quarter. The group’s forecasts also came out below analysts’ expectations. For the quarter ended at the end of October, the sales of the group based in Santa Clara amounted to 6.12 billion dollars (+ 30%), but the consensus was counting on 6.39 billion dollars. Net income stood at $ 1.71 billion ($ 1.89 per share) against $ 1.13 billion ($ 1.23 per share) a year earlier, a jump of 51%. On an adjusted basis, EPS hit $ 1.94, just below the consensus expected $ 1.96. For the first quarter of the current fiscal year 2022, AMAT expects EPS of $ 2.01 and revenues of $ 6.16 billion, while analysts expected $ 2.01 and $ 6.5 billion respectively.
Apple. The Apple Car project is ramping up to market Apple’s first self-driving electric cars in 2025. The revelations made Thursday by ‘Bloomberg’ took Apple stock to a new all-time high on Thursday night at Wall Street, at $ 157.87 (+ 2.85%), at the end of a series of 5 consecutive sessions of increase. Apple’s market capitalization ($ 2.590 billion Thursday evening) is at the same time passed above that of Microsoft ($ 2.560 billion), which had become less than 3 weeks ago the world’s leading market capitalization. The two American “tech” giants have been fighting for this title for several years, followed by the other “Gafa”, Alphabet ($ 1.999 billion), Amazon ($ 1.870 billion) and Tesla ($ 1.080 billion).
Apple, which was working on two projects, a car with limited autonomous driving capabilities, and a fully autonomous car, would now have chosen the second option. The future vehicle could not be equipped with either a steering wheel or pedals, a major innovation that will have to be accepted by motorists. The issue of the steering wheel remains to be resolved, however, and Apple is still considering an emergency mode allowing the user to take manual control. The passengers of the Apple Car could be seated along the sides of the vehicle, face to face, as in the Lifestyle Vehicle already marketed by the American start-up Canoo (ex-Evelozcity). Within the firm at Apple, the autonomous car project is led by Kevin Lynch, who joined the team a few months ago and who previously worked on watchOS, the operating system for the Apple Watch. According to ‘Bloomberg’, Apple has now completed the basic work on the chip that will power its car, namely a very powerful chip made up of neural processors capable of handling the artificial intelligence necessary for autonomous driving. Such a complex component will undoubtedly require the development of a sophisticated cooling system.
Apple is still looking for an industrial partner to build its vehicle, after negotiations with South Korean Hyundai collapsed. The group would have many other options, some of which would involve production on American soil, according to ‘Bloomberg’. As for marketing, it could be done on the model of VTCs such as Uber, Lyft or Waymo robotaxis (Google), but direct sales to individuals is also being considered. By 2025, however, many parameters will still evolve.
Foot Locker wins before market on Wall Street. The quarterly profits of the American retailer of sports shoes and accessories have yet beaten the consensus, but the group warns of the persistence of supply problems. In this third fiscal quarter, net income was $ 158 million or $ 1.52 per share, against $ 265 million and $ 2.52 per share a year earlier. Excluding items, earnings per share were $ 1.93, down from $ 1.21 a year earlier and consensus $ 1.37. Revenues appreciated 4% to $ 2.19 billion, against the consensus of 2.15 billion. Quarterly like-for-like growth was 2.2%.
« The third quarter was another period of strong performance for our company, reflecting the powerful connectivity we have established with our customers, » said Richard Johnson, Chairman and CEO, welcoming these results despite « the current challenges of the supply chain « .
Moderna flies before market to Wall Street. The lab announced today that the Food and Drug Administration (FDA) has extended its emergency use authorization to include a booster dose of its Covid-19 vaccine for all adults aged 18 and over . This recall also applies to people 18 years of age and over who have completed a primary vaccination course with any other authorized or approved Covid-19 vaccine. « This emergency use authorization comes at a critical time as we enter the winter months and face an increase in the number of Covid-19 cases and hospitalizations across the country, » said Stéphane Bancel, CEO of Moderna. « We thank the FDA for its review and are confident in the strong clinical evidence that a booster dose of 50 micrograms of mRNA-1273 induces a strong immune response against Covid-19. »
The booster dose should be given at least six months after the end of any primary vaccination against Covid-19. On October 20, the FDA cleared a booster dose of the Moderna Covid-19 vaccine at the dosage level of 50 micrograms for emergency use for people aged 65 and older as well as adults aged 18 to 64. who are at high risk of severe covid, and for people aged 18 to 64 years with frequent institutional or occupational exposure to SARS-CoV-2.
Pfizer announced Thursday that the US administration would pay $ 5.3 billion for 10 million doses of its experimental antiviral treatment for covid. The German weekly Wirtschaftswoche, citing sources, reported that the American laboratory would submit a request for approval of the treatment to European authorities on Friday.
Intuit leaps to Wall Street. The American publisher of accounting software anticipates a growth in its turnover of 26% to 28% for the 2022 fiscal year, against 15% to 16% previously. For the first fiscal quarter, the group’s accounts beat consensus, with adjusted earnings per share of $ 1.53 to approximate a market estimate of less than a dollar. Revenue for the quarter ended in October totaled $ 2.01 billion, beating consensus by 11%, from $ 1.32 billion a month earlier.
Farfetch, specialist in online fashion, unscrews on the American coast. The group announced a net loss in the third quarter, revenues below expectations and disappointing guidance. In Q3, the adjusted loss per share was 25 cents, down from -50 cents a year earlier. Revenue hit $ 583 million, 3% below consensus, from $ 387 million a year earlier.
Blackstone has submitted a $ 6.2 billion takeover bid to Australian casino group Crown Resorts, after Star Entertainment’s $ 6.6 billion proposal withdrew.
Activision Blizzard. Phil Spencer, boss of Microsoft’s Xbox division, said his group was re-examining its relationship with Activision, which is the target of accusations of sexual abuse among its employees.
