(Boursier.com) — Wall Street is now back in the red before the market this Monday. The S&P 500 lost 0.2%, the Dow Jones 0.3% and the Nasdaq 0.1%. However, the American Congress adopted a provisional financing bill on Saturday evening to avoid the partial closure of federal administrations, in other words the famous ‘shutdown’. The Senate, with a Democratic majority, approved the draft provisional budget, sending the text to Joe Biden for ratification on Saturday. The House of Representatives had earlier adopted this text. The latter offers respite with funding from American federal administrations until November 17. The Chamber had previously validated the text… However, the stock market indices are now returning to the red on Wall Street, after an initial rebound. Operators’ attention is once again focused on rates and the prospect of a lasting austere policy from the Fed…
A ‘government shutdown’ was narrowly averted before the October 1 deadline after House Speaker McCarthy introduced a bill approved on a bipartisan basis in the House and Senate before being signed into law by President Biden on Saturday evening. The bill will keep the government funded for 45 days until mid-November. That bill passed without additional funding for Ukraine, which members of both parties said would be addressed in the coming weeks. Although the shutdown was expected to begin this weekend, the deal is unlikely to have much of an impact on markets. In recent days, economists have noted that any drag on economic growth from a shutdown would be recovered later, while previous shutdowns that did not include a potential breach of the debt ceiling had little impact on the S&P 500 or rates. An agreement also means that government economic data will continue without interruption, in other words that government statistics will be published as normal.
On the economic front, this week on Wall Street, operators will follow within an hour this Monday the final manufacturing PMI index for September (consensus 48.5) and the ISM manufacturing index (consensus 47.9), as well as construction spending for the month of August (consensus +0.5% compared to the previous month). Jerome Powell, Patrick Harker, Michael Barr, John Williams and Loretta Mester from the Fed speak during the day.
The US Department of Labor’s JOLTS report on job openings will be released tomorrow. ADP’s report on private non-agricultural employment, the final composite PMI, industrial orders, ISM services and the weekly report on domestic oil stocks will be released on Wednesday. The balance of international trade in goods and services, unemployment claims, as well as the Challenger study on announcements of job losses, will be revealed on Thursday. The monthly government report on the employment situation and consumer credit figures will be released on Friday.
Fears of a monetary policy error or a hard landing still weigh on the markets, with many expecting a further tightening of financial conditions while the Fed and other central banks mostly maintain their positions restrictive. The surge in crude oil prices also plays a role in concerns about persistent inflation which fuels prospects of further tightening.
Elsewhere in the world, economic news is marked by the manufacturing PMI indices. Asian indicators were mixed in China and Japan. The euro zone’s final manufacturing PMI index was unchanged from the flash, at its lowest in two months at 43.4. UK house price data shows prices changed little in September. Over one year, they declined by 5.3%. The British CIPS manufacturing PMI index for September came out as expected or almost at 44.3. The unemployment rate in the euro zone for the month of August was in line with expectations at 6.4%.
In Wall Street business news, McCormick And Cal-Maine Foods will publish their quarterly financial results tomorrow Tuesday. RPM International, Acuity Brands And Tilray announced Wednesday. Constellation Brands, Lamb Weston Holdings, ConAgra And Levi Strauss will be there on Thursday.
Values
Nvidia regains further ground before the market on Wall Street at $440, supported by a favorable opinion from the essential Goldman Sachs, which has just moved from ‘buy’ to ‘conviction to buy’, which, on its rating scale, is even more positive. The price target is ambitious, at $605 on the graphics processor and AI giant. The advice comes as Nvidia shares have just fallen by 10% over one month. The stock reached an all-time high at the end of August around $493. It has tripled in value since the start of the year, with the current enthusiasm around artificial intelligence.
Walmart will rationalize its job titles, which could be accompanied, according to the American retail giant, by salary increases.
You’re here is now dropping nearly 3% before market on Wall Street, while Elon Musk’s group, electric vehicle giant, has just published relatively disappointing production and delivery figures for the third quarter. During the quarter, Tesla produced 430,488 units, including 13,688 Model S and quarterly unit figures therefore reached a record, growing by more than 26% year-on-year, but were lower than many brokers’ estimates. Tesla also clarifies that a sequential decline in volumes was caused by planned downtime for factory upgrades, as noted during the most recent earnings conference call. “Our volume target for 2023 of around 1.8 million vehicles remains unchanged,” adds the manufacturer.
Rivian, Tesla’s small rival, announced deliveries higher than market expectations for the third quarter, as its production ramps up to meet sustained demand for its pickups and SUVs. The Californian group thus produced 16,304 units in the closed quarter compared to 13,992 in the second quarter. It says it is able to produce 52,000 units in 2023, in accordance with the objective raised in August, with the absorption of bottlenecks. Rivian delivered 15,564 units in the quarter ended at the end of September, representing growth of 23% sequentially, compared to the previous quarter.
General Motors / Ford. At the same time, the UAW (United Auto Workers) strike affecting the Big Three automakers GM, Ford and Stellantis is entering its third week.