(Boursier.com) — Wall Street corrects before the stock market this Friday. The S&P 500 returned 1.2%, the Dow Jones 1.1% and the Nasdaq 1.2%. Operators remain extremely cautious, expecting a rate hike of 75 basis points or even a percentage point from the Fed on September 21, at the end of the next monetary meeting, in a context of heavy inflation. In addition, warnings from FedEx and GE affect the markets today, while Uber corrects following a hack… The barrel of WTI crude gleans 0.1% on the Nymex today at $85.3. The ounce of gold yields 0.5% to $1,669. The dollar index advanced 0.3% against a basket of currencies.
It’s Four Witches Day this Friday on Wall Street, which sometimes (but less and less) leads to increased market volatility. This stock market event, which occurs 4 times a year (the 3rd Friday of March, June, September and December), corresponds to the simultaneous expiry of 4 types of contracts: options on indices and on shares, as well as futures on indices and stocks…
Operators will also follow today at 4 p.m. the preliminary index of US consumer sentiment measured by the University of Michigan for the month of September (consensus 59.3 according to FactSet).
Elsewhere in the world this morning, Chinese industrial production and local retail sales for the month of August were pleasantly surprising, with growth of 4.2% and 5.4% respectively year-on-year. Retail sales in the United Kingdom, on the other hand, disappointed, down 1.6% in August, compared to the previous month, and 5.4% year-on-year. Finally, the final consumer price index for the euro zone for the month of August did not come as a surprise, confirmed up by 9.1% year-on-year and in harmonized European data according to Eurostat – a level unprecedented since the creation of the single currency. Compared to July, the consumer price index in the 19 countries of the region posted an increase of 0.6%, against +0.5% in the first estimate.
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General Electric fell ahead of the stock market on Wall Street, while the group’s chief financial officer, Carolina Dybeck Happe, warned last night that supply chain disruptions persisted and could affect the prospects for cash generation of the American industrial giant. The chief financial officer said supply chain disruptions therefore extended into the second half of the year, affecting everything from labor to parts and materials, making it difficult to deliver products to customers. Some orders are now pushed back to the fourth quarter, Dybeck Happe said, putting pressure on current quarter cash flow.
Speaking at the Morgan Stanley Laguna conference on Thursday, Dybeck Happe nonetheless said third-quarter cash flow would likely be in line with, or slightly better than, the second-quarter tally of $162 million, adding that the group s expected solid organic growth in its aerospace and healthcare businesses in the last three months of the year.
Finally, the American conglomerate is still pursuing its plans to separate into three entities focused on aviation, health and energy. GE Vernova will be the name of its electricity and renewable energy division, which will also include energy financial services. The division will be led by Scott Strazik and spun off into the markets in 2024. GE Healthcare would be listed on the Nasdaq Global Select Market under the symbol GEHC in early 2023. GE’s aviation unit, led by current CEO Larry Culp, would be called GE Aerospace.
FedEx plunged more than 20% before market on Wall Street, after a fairly blunt profit warning. UPS yields more than 7% in its wake… In the quarter ended at the end of August, the first fiscal quarter of 2023, FedEx reported adjusted revenues of 23.2 billion dollars, against 22 billion a year earlier. Estimated adjusted operating profit is $1.23 billion, compared to $1.49 billion a year earlier. Adjusted diluted earnings per share are estimated at $3.44, compared to $4.37 in the first quarter of fiscal 2022. Following this performance, and pending a still volatile operating environment, FedEx is withdrawing its earnings guidance for the 2023 financial year, provided at the end of June. The group will pursue aggressive cost reductions and expects business conditions to weaken further in the second quarter. For that period, FedEx expects revenue of $23.5 billion to $24 billion, diluted earnings per share of $2.65 or more and adjusted EPS of $2.75 or more. The group reaffirms its already announced intention to buy back $1.5 billion of its own shares during the year and $1 billion for the quarter started.
“Global volumes declined as macro trends worsened significantly later in the quarter, both internationally and in the U.S. We are addressing these issues quickly, but given the speed at which conditions have changed, the first quarter results are below our expectations,” said Raj Subramaniam, CEO of the company. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to improve productivity, reduce variable costs and implement structural cost reduction initiatives. These efforts are aligned with the strategy we set out in June, and I remain confident that we will achieve our financial targets for fiscal year 2025.”
Uber Technologies stalls on Wall Street, as the group investigates a cybersecurity incident, after a report said its network was hacked and the company had to shut down several internal communications and engineering systems. A hacker therefore allegedly compromised an employee’s workplace messaging app Slack and used it to send a message to Uber employees announcing that the company had suffered a data breach, according to an article. from the New York Times on Thursday quoting an Uber spokesperson. It emerged that the hacker was then able to gain access to other internal systems, posting an explicit photo on an internal employee information page, the NYT adds. “We are in contact with law enforcement and will post additional updates here as they become available,” Uber said in a tweet.
The Slack system was taken offline Thursday afternoon by Uber after employees received the hacker’s message, according to the Times report, citing two employees. “I am announcing that I am a hacker and that Uber has suffered a data breach,” the message read. The alleged hacker also listed several internal databases that were allegedly compromised. A person claiming responsibility for the hack told The New York Times that he texted an Uber employee claiming to be a corporate IT worker. The worker then allegedly handed over a password that allowed the hacker to access Uber’s systems, according to the NYT.
Texas Instruments announced an additional $15 billion share repurchase authorization, bringing total potential repurchases to $23.2 billion. In addition, the American semiconductor giant for the mobile phone industry raised its quarterly dividend by 8% to $1.24 per share. The enhanced dividend will be payable on November 15 to shareholders of record on October 31. The annualized dividend is now $4.96. Last night’s announcement marks the 19th consecutive year of dividend increases. Moreover, in the second quarter of 2022, the company had reduced the number of its shares outstanding… by 47% thanks to its share buybacks since the end of 2004.