(Boursier.com) — The rebound will have fizzled on Wall Street. The US market took a nosedive at the start of the session, overtaken by fears of a slowdown in economic activity after lackluster quarterly results from several major industrial groups as well as rather disappointing economic indicators. And this while the big names in US tech are expected in the coming days, starting with Microsoft and Alphabet after the closing. the Dow Jones currently loses 1.24% to 33,627 points. The broad index S&P500 loose 1.65% to 4,226 pts, while the Nasdaq Compositerich in technology and biotech stocks, stumbled 2.68% to 12,654 pts.
Nervousness thus remains very present in the trading rooms against a backdrop of monetary tightening to come on both sides of the Atlantic to deal with soaring inflation, the spread of the coronavirus pandemic in China or still war in Ukraine. The VIX, the famous ‘fear index’ which measures market volatility, rose 2.1 points to 27.6.
Yes Twitter gave a boost to the market after the announcement of its takeover by Elon Musk, the GAFAM will have to take over: Microsoft, Alphabet, Meta Platforms, Apple and Amazon will publish their quarterly accounts in the coming days. Overall, 180 S&P500 companies will release their first quarter results this week. Of the 102 S&P 500 companies that have reported earnings so far (as of Monday evening), 77.5% have exceeded analysts’ expectations (vs. 66% on average), according to Refinitiv data.
On the macro front, new durable goods orders in the US for the month of March rebounded by 0.8% compared to the previous month, against a rise of +1% expected by the consensus. The fall in February was also revised from -2.1% to -1.7%. Excluding transport, orders increased by 1.1%, against +0.6% market consensus, and after a drop of 0.5% in February.
The US consumer confidence index measured by the Conference Board came out at 107.3 for the month of April, against 108.2 consensus and 107.6 for the revised reading of the previous month. The current situation sub-index fell from 153.8 to 152.6, while that of expectations climbed from 76.7 to 77.2.
In the real estate market, new home sales for the month of March came in at 763,000, compared to the market consensus of 768,000 and the upwardly revised reading of 835,000 from the previous month. According to the S&P Case-Shiller index, house prices rose 19.8% in February year-on-year after jumping 19.1% in January. This is the third highest reading since the index was established 35 years ago. The ’20-City’ indicator of the 20 main cities rose again by 20.2% year-on-year, against 18.9% the previous month, and +19% by consensus.
In China, the Central Bank has pledged to support the economy with targeted financing for small businesses and a quick resolution to the ongoing crackdown on tech companies in Beijing’s latest bid to reassure worried investors at About growth. The People’s Bank of China will “step up prudent monetary policy support to the real economy, especially for industries and small businesses hit hard by the pandemic,” it said in a statement. It will also promote healthy and stable development of financial markets and maintain reasonably sufficient liquidity.
After a sharp drop on Monday, the oil market is rebounding despite persistent fears about the situation in China, the world’s largest importer of black gold. A barrel of US light crude oil (WTI) for June delivery advanced 0.7%% in electronic trading on the Nymex at $99.2. gold rises for its part timidly from 0.4% to $ 1,904 an ounce in London, after three sessions of decline.
On the forex, the euro lost another 0.5% against the dollar, to $1.0659, the lowest level since March 2020. More generally, the dollar index gained 0.37% to stand at 102.2 points against a basket of reference currencies, levels not seen since March 2020. The greenback continues to benefit from its status as a safe haven as well as the prospect of a rapid pace of rate hikes in the United States.
Values
* Whirlpool climbed 6.2% despite a downward revision to its full-year revenue and profit guidance due to slower demand from levels seen during the pandemic and a sharp rise in the cost of raw materials. The appliance maker now expects net sales growth of between 2% and 3% in 2022, compared to at least 6% previously. Adjusted continuing earnings per share are expected to be between $24 and $26, down from an earlier range of $27 to $29. The KitchenAid owner also announced a strategic review of its business in Europe, the Middle East and Africa to adjust to factors such as geopolitical tensions. Whirlpool seeks to focus on businesses with high growth and margin potential, while focusing its efforts on the Americas and India.
* Pepsico edged up 0.2% after the announcement of better-than-expected quarterly revenue and raised sales forecasts for the full year on the back of sustained demand for its products despite several rounds of price increases. The soda giant saw its revenues grow by 9.3% in the first quarter (+13.7% organically) to 16.20 billion dollars, fully benefiting from the lifting of restrictions linked to Covid-19 in places public such as bars and restaurants. The consensus was positioned at $15.57 billion. Adjusted EPS reached $1.29 versus $1.21 a year ago and a consensus of $1.23. The firm is now aiming for organic growth of 8% this year, against an earlier forecast of +6%. On the other hand, it reduced its earnings per share forecast to $6.63 from $6.67 previously due to the strength of the US dollar and rising costs. Pepsico also recorded a charge of $241 million in the first quarter related to the war in Ukraine.
* General Electric 10% drop. The US industrial and financial giant now expects full-year profit at the low end of its January guidance ($2.8-$3.5) due to continued supply issues and rising costs freight and raw materials. Over the three months to the end of March, the firm recorded an adjusted EPS of 24 cents, stable over one year, but higher than market expectations (19 cents). Revenues came out at $17.04 billion, in line with the consensus. Revenues from the aviation branch reached $5.6 billion, up 12% organically over one year, while those from the energy division fell by 6%. The group is also on the right track to split into three separate “investment grade” companies, a plan unveiled last year by the historic firm and which marks one of the most important changes in its existence.
* UPS fell 3.7% as the market focused on falling parcel volumes. The American delivery giant, however, exceeded analysts’ forecasts in the first quarter, taking advantage of the dynamism of online commerce to raise its prices and offset rising costs. Over the period, the firm recorded a fair EPS of $3.05 against $2.77 a year earlier and $2.88 consensus. Turnover increased by 6.4% to $24.38 billion. Management confirmed that it is aiming for annual revenues of $102 billion and a share buyback program of $2 billion.
* Twitter (-3.5%). Elon Musk has won his bet! After long discussions, the boss of You’re here and SpaceX reached an agreement on Monday to buy the social network Twitter for nearly 44 billion dollars, i.e. a price of $54.2 per share, announced Twitter on Monday evening, confirming the rumors that have been circulating all day. The title Twitter jumped 5.6% to end at $51.88 on Wall Street in response to this announcement. While the operation seemed uncertain last week, the richest man in the world had accelerated the file by meeting several leaders of the blue bird social network on Sunday, after having seduced many shareholders of the group by revealing the details. financials of its offer.
The American billionaire, who acquired a 9.1% stake in Twitter in early April, then announced on April 14 his plan to acquire 100% of the securities, explaining that the social network, founded in 2006 by Jack Dorsey among others , would then be withdrawn from the Stock Exchange to be able to relaunch its growth and become a platform dedicated to freedom of expression. “Freedom of expression is the foundation of a functioning democracy, and Twitter is the digital public square where issues vital to the future of humanity are debated,” Elon Musk said in a statement Monday evening. The CEO of Tesla and SpaceX mentioned “new features” for the social network, without specifying which ones.
* United Airlines (-2.6%) is optimistic. As proof, the American company is planning the largest transatlantic expansion in its history this summer with capacity 25% higher than 2019 levels in order to meet strong demand. The carrier will notably open five new destinations on April 29 to London, Milan, Bergen, Munich and Nice. The Chicago-based company will also add five new “in vogue” destinations to its network: Amman in Jordan, Bergen in Norway, the Azores in Portugal, Palma de Mallorca and Tenerife. New routes that are not served by any other North American company. United will also return to service 14 transatlantic routes the airline has historically served and will add frequencies on six others. With this expansion, United will serve more transatlantic destinations than all other US carriers combined and will be the largest airline over the Atlantic for the first time in history.
*3M fell 2.3%, the downward revision of the annual forecast outweighing a quarterly profit higher than analysts’ expectations. The American diversified industrial giant recorded a profit of $1.299 billion or $2.26 per share in the first three months of 2022 compared to a profit of $1.624 billion or $2.77 per share a year earlier. Adjusted EPS stood at $2.65 versus $2.32 consensus. Revenues fell 0.3% to $8.85 billion, slightly above analysts’ expectations. Management is now counting on a 2022 EPS of between $9.89 and $10.39 against a previous range of $10.15 to $10.65. Adjusted EPS is expected between $10.75 and $11.25. 3M and most other manufacturers are facing soaring labor and raw material costs. The Saint Paul-based group is also facing falling demand for its N95 disposable masks with the decline of the Covid-19 pandemic.
* Warner Bros Discovery (-5.2%) posted quarterly revenue up 13% for its first results since Discovery merged with AT&T’s media assets for $43 billion.
* DIDI (-2.8%). The Chinese VTC group’s plan to list its shares on the Hong Kong Stock Exchange has been suspended indefinitely, reports the South China Morning Post, citing people familiar with the matter.