(Boursier.com) — The S&P 500 rose by 1.06% to 5,171 pts this Monday and the Nasdaq by 1.62% to 16,231 pts, while the Dow Jones gained 0.34% to 38,846 pts. The two highlights of the week are Nvidia’s GTC conference – which begins this Monday – and the Fed monetary meeting – which takes place on Tuesday and Wednesday. Alphabet (Google) is also jumping in the hope of an agreement with Apple on its Gemini AI tool. On the Nymex, a barrel of WTI crude gained 0.7% to $81.1. An ounce of gold gains 0.1% to $2,162. The dollar index advances 0.1% against a basket of currencies.
The National Association of Home Builders / Wells Fargo American real estate market index for the month of March 2024 stood at 51, a level significantly higher than the market consensus which stood at 48. A month before, the indicator was housed at 48.
Tomorrow, Tuesday, the Fed’s monetary meeting begins. Investors will follow housing starts and building permits for the month of February at 1:30 p.m. (consensus at a rate of 1.45 million for construction starts and 1.5 million for permits). Tencent Music Entertainment also announces its quarterly accounts before market on Tuesday.
On Wednesday, the Atlanta Fed’s inflation expectations index for March will be released at 3 p.m., while the U.S. Department of Energy’s weekly report on domestic oil inventories for the week ended March 15 will be revealed at 3:30 p.m. The Fed’s monetary decision will be known at 7 p.m., with a very likely new status quo leaving rates unchanged on fed funds between 5.25 and 5.50%. Fed Chairman Jerome Powell will hold his press conference at 7:30 p.m.
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According to the CME Group’s FedWatch tool, the probability of a status quo on Wednesday is 99%. It is still almost 95% on May 1 (next monetary meeting). There is also a 41% ‘probability’ that the federal funds rate range will remain between 5.25% and 5.50% on June 12.
In the news of companies listed on Wall Street, PDD, Micron, General Mills, Chewy, BioNTech Or KB Homereveal their accounts on Wednesday.
On Thursday, operators will follow the weekly US unemployment claims for the week ended March 16 (1:30 p.m.), the Philadelphia Fed manufacturing index for March (1:30 p.m.), the current account balance for the fourth quarter (also 1:30 p.m. ), as well as the US composite flash PMI for March (2:45 p.m.), existing home resales for February (3 p.m.) and the Conference Board Leading Indicator Index (same time).
Accenture, Nike, FedEx, Lululemon, Darden Restaurants And FactSetalso publish their quarterly accounts on Thursday.
Finally, on Friday, investors will follow interventions by Jerome Powell, Philip Jefferson and Raphael Bostic of the Fed.
Values
Nvidia gains 3% on Wall Street. The American graphics and AI chip giant is kicking off its GTC conference this Monday. Jensen Huang, its CEO, should present some highly anticipated new features. 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 in running AI models than the company’s current high-end H100 and H200 cards… The group invited the GTC “leaders, researchers and developers who are helping shape the future of AI and accelerated computing.” The stakes are high for the markets, while Nvidia has amply supported the indices with a performance of almost 80% since the start of the year and 240% over 12 months.
The Santa Clara group is holding its GTC conference in person this year for the first time since 2019 and expects 16,000 participants, double the last in-person event according to Reuters.
Apple (+3%) would lead negotiations with Google (Alphabet +7%!) to integrate its Gemini artificial intelligence engine into the iPhone, Bloomberg believes, citing people familiar with the discussions. Bloomberg indicates that Apple and Google are actively negotiating an agreement that would allow the Californian Cupertino group to integrate Gemini to power certain new software features for the iPhone expected this year. No decision has yet been made regarding the terms of the possible deal. According to sources, Apple has also recently discussed with OpenAI, the creator of ChatGPT supported by Microsoft, and the Apple group has considered using its model.
Apple would therefore prepare new features for iOS 18. The features would be based on its own AI models, but Tim Cook’s group would also look for a partner to power the generative AI functions, in particular those concerning the creation of images and the writing texts. Bloomberg adds that it is unlikely that an agreement will be revealed before June and the Apple group’s Worldwide Developers Conference. Regardless, these initiatives show the importance Apple now places on AI. Tim Cook, CEO of the group, said last month that Apple should provide more information later this year on its plans in generative AI.
Microsoft (+1%) told European antitrust regulators that Google (Alphabet) had a competitive advantage in generative artificial intelligence due to its wealth of data and AI-optimized chips. This is what Fox Business indicates, citing comments from Microsoft following a consultation launched by the European Commission in January on the level of competition in the field of generative AI. “Today, just one company, Google, is vertically integrated in a way that gives it strength and independence at every layer of AI, from chips to a thriving mobile app store. Everyone needs to step up. rely on partnerships to innovate and compete,” Microsoft told the Commission. Microsoft further explained that Google’s AI chips would give it a competitive advantage for years to come and that its vast proprietary data sets from Google Search and YouTube allowed it to train large language models powering Gemini.
Shift4 Payments (-8%) stumbles on Wall Street, while its director Jared Isaacman indicated according to Bloomberg that the offers from potential competitors for its acquisition did not sufficiently value the payment service provider. The board of directors therefore determined that none of the offers received by Shift4 adequately evaluated the group or its prospects. The offers would, however, be higher than current prices. Reuters previously reported in February that Fiserv and Amadeus Group were competing to acquire Shift4, which has a current market capitalization of $6.7 billion. The payment processing group has a large clientele of restaurants, casinos, hotels and sports teams.
Fisker (-12%), the small American manufacturer of electric cars, very heckled last week on Wall Street over rumors of bankruptcy, announced a six-week pause in its production of EVs and a fundraising of up to 150 million dollars through the issuance of convertible bonds. The group also confirmed discussions with a major manufacturer with a view to a potential transaction, without giving the name of the “major”. The title had previously fallen on rumors of bankruptcy. The Wall Street Journal believed it was known last week that Fisker had hired financial advisors and lawyers to prepare for a potential bankruptcy filing.
The IPO of Reddit would have been four to five times oversubscribed, according to Reuters, citing people familiar with the matter. Thus, the social media platform should reach at least its indicative range during the IPO pricing in New York this Wednesday. Recall that the group told potential investors during a presentation that it expected revenue growth of more than 20%. In 2023, revenues had already increased by just over 20%. Reddit anticipates adjusted Ebitda to break even this year, which compares to an adjusted Ebitda loss of $69.3 million in 2023. Reddit claims 73.1 million daily active users and 267.5 million users. weekly active users, on average, in the quarter ending at the end of December 2023. For the year 2023, revenues increased by 21% to $804 million, for a net loss reduced to approximately $91 million.
During a financing round in 2021, the file was valued at $10 billion. According to Bloomberg, Reddit and its shareholders are seeking to raise up to $748 million in what would be one of the biggest deals of the year. The platform and its shareholders would thus consider the sale of 22 million shares at a price ranging from $31 to $34. The targeted valuation for this IPO could be around $6.5 billion.