(Boursier.com) — After the shock wave Apple yesterday Thursday (-2.84% on the Nasdaq, -1.54% on the DJIA and -4.9% for Apple), the American rating remains uncertain for the time being this Friday. The S&P 500 gained 0.31% to 3,651 pts, the Nasdaq 0.72% to 10,815 pts, but the Dow Jones fell 0.04% to 29,212 pts. The barrel of WTI crude fell 1.7% on the Nymex at $79.8. An ounce of gold advanced 0.7% to $1,681. The dollar index is stabilizing against a basket of reference currencies.
Today’s US inflation figures still cause concern, while in the euro zone, both figures are reached by this same inflation and put a little more pressure on the ECB. In the United Kingdom, British Prime Minister Liz Truss is still unable to appease the markets, and is today meeting the president of the Office for Budget Responsibility (OBR), an independent public finance monitoring body.
According to today’s report, the personal income of American households for the month of August 2022 increased by 0.3% compared to the previous month, in line with the market consensus, after a comparable increase in July. Personal household spending, meanwhile, appreciated by 0.4% against 0.2% consensus, while they were down 0.2% a month earlier. The core PCE price index monitored by the Fed rose more than expected, up 4.9% year on year (4.7% consensus) and 0.6% compared to the previous month.
The Chicago PMI manufacturing index for September 2022 stood at 45.7, against a consensus of 52 and a level of 52.2 a month earlier.
The final index of US consumer sentiment measured by the University of Michigan for the month of September 2022 came in at 58.6, down from 59.5 from the FactSet consensus and 59.5 also for its preliminary reading.
Thomas Barkin (Richmond Fed President), Michelle Bowman (Governor), John Williams (New York Fed Boss) and Lael Brainard (Fed Vice Chair), speak during the day. Brainard, during introductory remarks at a conference on Financial Stability Considerations in Monetary Policy. In her opening remarks, the Fed Vice Chair noted that many central banks around the world have pivoted their monetary policies sharply to curb inflation, with adjustment occurring quickly in some sectors and lagging behind. in other. Brainard also warned of the risk of premature monetary easing as inflation remains high. Thus, confirming Jerome Powell’s recent speech, Brainard judged that the Fed should maintain the rate hike for a while in order to calm inflation. “Monetary policy is focused on restoring price stability in an environment of high inflation,” Brainard said in remarks prepared for a speech at a conference in New York.
It will take time for the full effect of the tightening of financial conditions caused by the rate hikes to be felt in the economy and the easing of price pressures, Brainard also added, noting that “monetary policy will have to be restrictive for some time to ensure that inflation returns to target. For these reasons, we are committed to avoiding a premature retreat.” She also said it was far too early to claim victory over the awards. “Inflation is very high in the United States and abroad, and the risk of additional inflationary shocks cannot be ruled out,” she said.
According to the CME Group’s FedWatch tool, the probability of another 75 basis point rate hike, the fourth in a row, on November 2, after the next Fed meeting, is 61.2%. , compared to 38.8% for the probability of a 50bp tightening. The current range of fed funds rates is between 3 and 3.25%. The probability of 75 bp has just risen today following the still worrying inflation figures.
Values
Micron (+3%) is progressing, the day after the quarterly. The memory chip designer missed the sales consensus for the past quarter and delivered very weak forecasts. In its fourth fiscal quarter ended in August, Micron posted adjusted earnings per share of $1.45, compared to a consensus of $1.4 and a level of $2.42 a year earlier. Revenues stood at 6.64 billion dollars, missing the consensus by 4%, when they were 8.27 billion a year earlier.
The group warns that difficult times are ahead, with the drop in demand for PCs and smartphones. Micron has thus significantly reduced its forecasts for capex (capital expenditure) and is counting on a capex of around 8 billion dollars for the year under way, down by more than 30%. For the second half of the 2023 financial year, management still anticipates a return to strong growth with the expected recovery in demand. For the first fiscal quarter of 2023, however, the guidance is very cautious with expected revenues at 4.25 billion dollars, more or less 250 million, compared to a consensus of 5.6 billion. Quarterly earnings per share are expected at 4 cents, plus or minus 10 cents, against… 64 cents consensus.
Nike (-10%) unscrewed on Wall Street on Friday, the American giant of sports shoes and accessories having published last night quarterly profits slightly above expectations, but having also reported a strong increase in inventories and weak margins. The group said price reduction efforts to eliminate off-season clothing from warehouses in North America would reduce gross margins for the remainder of the fiscal year. The group also warned of a large potential impact from the stronger dollar. Management also said it expects rivals to continue cutting prices at least through the end of the calendar year as they try to eliminate their own inventory.
But Nike executives said inventory levels in North America likely peaked in the fiscal first quarter, which ended in late August, and expect levels to even out with new products in demand, aligned with seasons, in the coming months, before the holiday season. “We are taking decisive action to eliminate excess inventory, focusing on specific pockets of backlog seasonal products, primarily in apparel,” management said, saying these moves will therefore have a transitory impact on margins.
For the fiscal first quarter ended late August, Nike reported net income of $1.5 billion and 93 cents per share, compared to $1.9 billion and $1.16 per share a year earlier. Sales totaled $12.7 billion, up from $12.2 billion a year earlier. The FactSet consensus was 92 cents in earnings per share and 12.28 billion in billings. Gross margin fell to 44.3%. Nike executives said the decline “was primarily due to North America, which took steps to liquidate excess inventory through markdowns and wholesale market actions. Nike’s inventory s was $9.7 billion, a 44% increase over the prior year comparable period, due to what executives described as “continued supply chain volatility, partially offsetting by strong consumer demand in the quarter.”
Nike, in June, said it expected “higher promotional activity” in the first quarter as it tries to sell seasonal items that arrived late, following factory closures last year in Asia. However, for the whole coming year, the management had then declared that it was planning price increases of around 5%.
The lopsided inventory levels followed factory closures last year in Asia, where most of its shoes are made, leading to late product deliveries. But those late deliveries are now intermingling with holiday season deliveries that are expected to arrive earlier than expected. Earlier arrivals, executives said, were a function of prior orders, due to shipping delays that have characterized the past year and then a sudden, more recent improvement in those shipping times.
In addition, with the dollar continuing to strengthen, Nike management expects the negative full-year foreign exchange impact on sales and reported earnings before interest and taxes to be $4 billion. dollars and $900 million, respectively.
Meta (+2%), Facebook’s parent company, announced a hiring freeze and further restructuring, against a backdrop of increased economic uncertainty. Mark Zuckerberg’s group would have communicated in this sense to its employees, Bloomberg understands. “I had hoped the economy would have stabilized more clearly now, but from what we’re seeing, that’s not the case yet, so we want to plan somewhat conservatively,” Zuckerberg told employees. during a weekly question-and-answer session. The social media company had cut plans to hire engineers by at least 30% this year, Reuters previously reported in June. Zuckerberg also said yesterday that Meta will cut budgets for most teams and that individual teams will have to figure out how to handle roster changes.
Boeing (-1%). The US Federal Aviation Administration (FAA) told the group that it had not finalized the necessary steps for the certification of the 737 MAX 7 for December, according to a letter consulted by the Reuters agency.
Dupont de Nemours (stable) received the necessary authorizations to acquire Rogers for 5.2 billion dollars, with the exception of the Chinese agreement.
Apple (steady). Apple’s Vice President of Procurement Tony Blevins has left the company following a TikTok video showing him making inappropriate remarks. Blevins left the company after the TikTok video leaked that showed him making jokes about women at a car show. An Apple representative confirmed the departure to CNBC. Blevins’ primary role was to negotiate with suppliers in an effort to keep the prices the company pays for computer parts as low as possible.