(Boursier.com) – Wall Street returns to the red on Tuesday, after a very brief attempt at a start at the very start of the session. The S&P 500 now drops 0.18% to 3,917 pts, the Dow Jones 0.11% to 31,287 pts and the Nasdaq 0.62% to 11,564 pts. On the Nymex, a barrel of WTI crude consolidates 0.1% to $86.7. The ounce of gold stabilizes at $1,717. The dollar index gained 0.3% against a basket of currencies.
After a three-day break for the American ‘Labor Day’, Wall Street resumes its activity on Tuesday. The final US Markit PMI composite index for August came in at 44.6, well below the 50 mark separating expansion from contraction. The consensus was 45 according to FactSet, in line with the preliminary reading. The PMI services index for its part was displayed at 43.7, against 44.2 market consensus and 44.1 for the flash reading.
On the other hand, the American services ISM for the month of August, which has also just been revealed, reflects strong expansion! It stood at 56.9, against the market consensus of 55 and 56.7 a month earlier.
There will be no significant quarterly publication from companies listed on Wall Street on Tuesday.
The narrative remains substantially the same as the last days on Wall Street. However, the operators have integrated and partly ‘priced’ the idea that the accommodating pivot of the Fed was not for now, the priority of Jerome Powell and his cronies being to control inflation, at the risk of stumble the economy a bit more. According to the CME Group’s FedWatch tool, the current probability of another three-quarter point rate hike on September 21, which would be the third in a row, is 72%, which would take the federal funds rate between 3%. and 3.25%. The probability of a half-point rise stands at 28%.
Oil is erasing some of its recent gains, shaken by concerns over global demand amid heightened recession risk. OPEC+ has finally decided to cut production by 100,000 barrels a day next month, bringing supplies back to August levels. Just a month ago, the cartel had on the contrary increased its production by 100,000 bpd, symbolically responding to the request of the White House which wanted an increase in the supply of crude to bring down prices. But current fears are indeed about demand against a backdrop of soaring inflation and new multiple restrictions in China to deal with the health crisis.
“OPEC+ news is now in the market and attention has temporarily shifted to economic and inflationary concerns of which the two relevant factors are China’s extended Covid-related lockdowns and Thursday’s rate decision. of the ECB,” Tamas Varga at PVM told Reuters. “Without a doubt, they raise fears of a destruction of demand.”
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CVS Health (stable) accepted the acquisition of Signify Health for about $8 billion in cash. The health platform Signify Health will therefore enter the scope of CVS, which owns pharmacies and provides health insurance services. Signify has a platform that uses technology and analytics to support home healthcare providers. CVS expects to finalize the deal during the first half of 2023. The group expects a “significantly accretive” impact of this operation on profits. CVS offers $30.5 per Signify title. Karen Lynch, the channel’s chief executive, said management would work with regulators to ensure there were no antitrust issues.
Illuminated (+5%), American life sciences giant, should divest from the biotechnology firm Grail, the European Commission having banned this takeover of 7.1 billion dollars on the pretext that the operation would harm competition on the market for cancer detection tests. Illumina intends to appeal. The group had completed the deal in August last year before the agreement of the European antitrust regulator. The EU had then ordered to keep the activity separate until the conclusion of the European investigation. The “in-depth” investigation confirmed initial concerns, the Commission says, finding that Illumina would then display a dominant position in NGS systems, with the ability to thwart rivals.
Digital World Acquisition (-19%) would not receive the necessary support from shareholders to extend the merger agreement with Truth Social, Donald Trump’s social media group, for one year, Reuters understands. People familiar with the matter say that far fewer than the necessary 65% of shareholders would have voted in favor of a 12-month extension to the proposal deadline, and Digital World executives would not think they could reach the level of acceptance. here is the exceptional meeting scheduled for today. Reuters sources say executives are considering options including extending the voting deadline. If nothing happens, SPAC is expected to go into liquidation on September 8. Digital World can extend SPAC’s life by six months without shareholder approval, but it’s unclear whether the company will go that route. A person familiar with the matter said that over the past few weeks Digital World bankers had been gauging investor interest in the company’s billion-dollar PIPE extension.
Trump Media & Technology Group (TMTG), which operates Trump’s Truth Social app created in response to the ex-president’s ouster from Twitter, was to receive a $1.3 billion cash infusion as part of of the agreement with Digital World, SPAC which had sealed the deal in October with TMTG. Since then, investigations into the circumstances of the deal have greatly complicated the case. Thus, the Securities & Exchange Commission and the Financial Industry Regulatory Authority, as well as federal prosecutors, are investigating the operation. A liquidation of Digital World would result in the return to shareholders of the funds raised in September 2021 during its IPO. On the other hand, in the event of a finalization of the transaction, a hypothesis which has not yet been completely ruled out, TMTG would receive the 293 million dollars of cash from Digital World, as well as the billion dollars of commitments from a group investor (the famous PIPE).
Meta Platforms (-1%) acquired German virtual reality startup Lofelt, even as the US FTC recently found that Mark Zuckerberg’s group was trying to dominate the VR sector. This obviously does not undermine the ambitions of the parent company of Facebook, which has therefore just offered this young shoot from Berlin, whose technology aims to replicate the illusion of touch. The acquisition, finalized several weeks ago, was formalized on Friday in response to questions from the Wall Street Journal. The legal battle with the Federal Trade Commission should continue.
In addition, following an investigation into the processing of children’s data, the Irish Data Protection Commission (DPC), the equivalent of the French Cnil, imposed a heavy fine on the social network, owned by the Meta group. , for violation of the General Data Protection Regulation (GDPR) to its European users who are minors. The Irish regulator has fined Instagram 405 million euros.
Amazon (-1%), the American e-commerce giant is considering entering the Japanese prescription drug market, the Nikkei understands. This would then be a major turning point for the sector in Japan. Amazon plans to partner with small and medium-sized pharmacies to create a platform where patients can receive online instructions on how to take their medications. Customers could have their treatments delivered to their homes without having to go to a pharmacy.
It should also be noted that the American FTC has officially launched its review of the acquisition for 1.7 billion dollars of the designer of robot vacuum cleaners iRobot, known for its Roomba brand, by Amazon. It is therefore a question of determining whether the deal complies with antitrust requirements. A lengthy investigation is expected, according to two sources familiar with the matter cited by Politico.
Apple (stable), the Californian giant from Cupertino, is considering almost doubling the size of its digital advertising team, the well-informed Financial Times understands. The FT reports that Apple would hire 216 people for its digital advertising business on the company’s careers website, while the current team is only 250 people according to LinkedIn.
Bed Bath & Beyond (-15%). Gustavo Arnal, chief financial officer of the distribution chain, 52, was found dead after an apparent fall from a New York building, the Jenga, just days after the announcement of the restructuring and refinancing plan of BB&B – which plans to cut 20% of its workforce and close 150 stores. The inquest concluded a suicide.
‘Fortune’ indicates that the chief financial officer was also accused of having participated in a ‘pump and dump’ scheme (to artificially raise a stock to sell it better) with investor Ryan Cohen, as part of an action August 23 collective in the Court of the District of Columbia. Asked by Reuters about this complaint, BB&B considered it without merit. The plaintiffs claim that Arnal was approached by Cohen about a plan to allow them to benefit from an artificial rise in the price. Bed Bath & Beyond had become a ‘meme stock’ over the summer on Wall Street, as small US holders invested heavily in the stock hoping that Cohen, boss of GameStop, would manage to turn around BB&B as well. The title Bed Bath had collapsed on August 18 after the revelation of the sale of the participation of Cohen (11.8% of the shares), which had allowed him to pocket a capital gain of 68 million dollars. Arnal meanwhile sold 55,000 shares for $1.4 million on the recent stock market ‘peak’ in August, but he still had more than 255,000 left.
“Mr. Arnal joined Bed Bath & Beyond Inc. in May 2020 after a distinguished global career in finance with Avon, Walgreens Boots Alliance and Procter & Gamble. At Bed Bath & Beyond Inc., Mr. Arnal was instrumental in guiding the organization through the coronavirus pandemic, transforming the company’s financial foundations and building a strong and talented team. He was also a valued colleague in the financial community,” said for its part indicated Bed Bath & Beyond.