(Boursier.com) – Wall Street appears slightly in the green now, before trading on Friday, the day after a session of slight rebound. The S&P 500, the Dow Jones and the Nasdaq advanced 0.2 to 0.3% in pre-session. On the Nymex, a barrel of WTI crude fell 0.6% to $77.7. An ounce of gold advanced 0.7% to $1,853. The dollar index lost 0.3% against a basket of benchmark currencies.
In US economic news this Friday, the final composite PMI for February will be known at 3:45 p.m. (consensus 50.2 according to FactSet, with a services index expected at 50.5). The US services ISM for February will be released at 4 p.m. (consensus 54.5).
The day will also be marked by several interventions from Fed officials, namely Lorrie Logan, Michelle Bowman, Thomas Barkin and Raphael Bostic.
Last night, markets turned higher on Wall Street following comments from Atlanta Fed Chairman Raphael Bostic (non-voting member), who said he favored a rate hike. 25 basis points at the March meeting, although it is ready to revise its terminal rate upwards from its current outlook of 5 to 5.25%. Bostic also and above all indicated the possibility of a pause in monetary tightening this summer. The risks are now roughly balanced, he said, although the Fed may need to do more given the still-high inflation and strong job market.
Later last night, Fed Governor Christopher Waller, said the Fed may have to push rates past the general December view of 5.1-5.4% if labor market and economic data continued the momentum of January. Waller also reiterated that Fed action should depend on new data, but also said he could support a peak rate in that December range if incoming job creation data softens and the CPI (consumer prices) fell from January’s level.
Wall Street economists meanwhile continue to post hawkish forecasts, with Bank of America eyeing Fed rates potentially climbing to 6% given strong US consumer demand and labor market tensions.
According to the CME Group’s FedWatch tool, the Fed is expected to raise rates by a quarter point on March 22, between 4.75 and 5% (72% probability), then probably proceed with another tightening of the screw. a quarter point on May 3 (68% probability of a range of 5 to 5.25%). For June 14, FedWatch assigns a 58% probability to the 5.25-5.5% range. Concerning the meeting of December 12 and 13, the strongest probability is that of a range of 5.25-5.5% (38%).
Elsewhere in the world, the figures from Asia are positively surprising. Japan’s unemployment rate for January came in below expectations at 2.4%, while the local services PMI index came in at 54 in February versus 53.6 consensus. China’s Markit/Caixin services index for the month of February hit a level of 55, versus consensus of 54.3.
In Europe, the German trade surplus in January reached 16.7 billion euros, against 9.2 billion consensus, with exports growing by 2.1%. French industrial production in January declined more than expected, down 1.9% compared to the previous month.
The European PMI indices were also published this morning. the Spanish Markit PMI services index for February came in at 56.7, well above expectations, while the Italian index came out at 51.6, below consensus. The final French services index stands at 53.1 against 52.8 consensus. The final German services index, at 50.9, narrowly missed expectations. The final European index thus comes out at 52.7 against 53 consensus, while the British indicator is very close to expectations at 53.5.
Finally, the European producer price index for the month of January fell by 2.8% compared to the previous month, a more substantial drop than expected, which brings its increase to 15% year-on-year in the euro zone against 24.5% a month earlier.
Values
Broadcom, the American semiconductor giant, posted first fiscal quarter earnings of $3.8 billion, $8.8 per share, on sales of $8.9 billion compared to $7.7 billion dollars from the previous year. After adjusting for stock-based compensation and other costs, Broadcom posted earnings of $10.33 per share. Analysts on average had expected adjusted earnings of $10.17 per share, on revenue of $8.9 billion. The San Jose, Calif.-based chipmaker announced a relatively strong outlook. Broadcom forecast second-quarter revenue of about $8.7 billion, while analysts on average had expected $8.58 billion. The leaders again avoided formulating a numerical guidance, simply counting on a year of growth.
marvel technology, the American designer of semiconductors, unscrews on Wall Street. For its fourth fiscal quarter, the group posted a loss of 15 million dollars and 2 cents per title, against a profit of 6 million a year before. On an adjusted basis, however, the group generated EPS of 46 cents, in line with consensus, compared to 50 cents last year. Revenue was $1.42 billion, versus $1.34 billion last year and $1.4 billion consensus. For the first quarter, the guidance is cautious, management expecting 1.3 billion in revenues in the middle of the range against 1.38 billion consensus. Mid-range adjusted EPS is expected at 29 cents vs. 42 cents FactSet consensus. Inventory corrections and related product mix changes therefore impact short-term estimates.
Costco Wholesale, the American distribution group based in Issaquah, beat the profit consensus for the quarter ended last night, but its sales for the end-of-year holiday season came out lower than market expectations. The group generated over the period ended, its second fiscal quarter, a profit of 1.47 billion dollars and 3.3$ per share, against 1.30 billion dollars or 2.92 dollars per share over the corresponding period of the previous year. Total sales reached $55.3 billion, compared to $51.9 billion a year earlier. The FactSet consensus was $3.21 EPS and $55.6 billion in revenue. Costco also reported sales of more than $17 billion in February, a 4.7% year-over-year increase.
Hewlett-Packard Enterprise, the American computer giant, published a net profit of 501 million dollars in the first fiscal quarter, or 38 cents per share, against a loss of 304 million dollars in the comparable quarter of the previous year. Adjusted earnings were 63 cents per share. Revenue was $7.8 billion, up 12%. High-performance computing and artificial intelligence sales were $1.1 billion, up 34%. Analysts polled by FactSet had expected adjusted EPS of 54 cents and revenue of 7.45 billion. HPE expects second-quarter revenue of $7.1 billion to $7.5 billion, versus a FactSet consensus of $7 billion.
Dell Technologies. For its fourth fiscal quarter, the group posted adjusted earnings per share of $1.8, against $1.64 consensus and $1.72 a year earlier. Revenues were $25 billion, compared to $28 billion a year earlier, in the same period, and $23.4 billion by FactSet consensus. Consolidated net profit was $606 million, or 84 cents per share, against a slight loss a year earlier. Over the financial year, Dell made a net profit of 2.42 billion dollars and revenues of 102.3 billion. The annual cash dividend is increased to $1.48, up 12%. Tom Sweet, the group’s chief financial officer, who is stepping down after a quarter century at Dell, expects fiscal first-quarter revenue to fall 15-21% year-on-year, which comes in below analysts’, prudent IT spending.
vmware, the virtualization giant, exceeded market expectations in terms of revenue and profit for the quarter ended. For this fourth fiscal quarter, the group achieved adjusted earnings per share of $2.13, against a consensus of less than $2 and a level of $2.02 a year earlier. The group’s revenues meanwhile totaled $3.71 billion for the period ending January 2023, beating consensus by 2% from $3.53 billion a year earlier. Operating cash flow for the quarter was $1.63 billion and free cash flow was $1.51 billion. For the year ended, VMware thus posted a net profit of 1.31 billion dollars and revenues totaling 13.35 billion dollars.
Zscaler, the Californian cloud security group, landed on Wall Street. However, the group unveiled rather solid results and strong guidance. Management has indeed mentioned the postponement of certain “deals”, customers being more attentive now to budgets. For its second fiscal quarter, the group posted a loss of 57 million dollars and 40 cents per title, compared to a deficit of 100 million dollars a year earlier. Adjusted EPS was 37 cents, versus consensus 29 cents and 13 cents a year earlier. Revenues totaled $388 million, compared to $256 million a year earlier and consensus $341 million. The group is now expecting annual EPS ranging from $1.52 to $1.53, while revenues are expected to be $1.56 billion. Billings are anticipated between 1.94 and 1.95 billion.
You’re here, which corrected last night on Wall Street the day after its investor day, regained a little height before the stock market this Friday. The group sold just over 74,400 Chinese-made electric vehicles in February, representing a 32 percent year-on-year growth according to the China Passenger Car Association (CPCA). Compared to January, growth is almost 13%. But Elon Musk’s group is dealing with a strong party. Its competitor BYD, appreciated by Warren Buffett’s Berkshire Hathaway, is gaining momentum with its electric and hybrid vehicles. BYD sold 191,664 units in February according to the CPCA.
walmart. The retail giant’s chief executive, Doug McMillon, plans to stay on for at least three more years, Reuters reported. According to people familiar with the matter cited by the agency, McMillon’s decision to stay in the role will extend Walmart’s deadline to find its next CEO as it continues its search to identify a successor.