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Wall Street: more caution ahead of Powell


(Boursier.com) — Wall Street is still hesitating this Wednesday, after two sessions of decline as concerns from China could begin to dissipate thanks to a gradual relaxation of health restrictions. On the Nymex on Tuesday, a barrel of WTI crude regained 2.5% to $81. The dollar index is stable against a basket of reference currencies with the euro at 1.0320/$… before a new public intervention by Jerome Powell, the president of the American Federal Reserve, scheduled for the end of the day. midday.

The social movements of recent days in China are beginning to produce their first effects: The city of Canton in the south of the country has just announced that it has relaxed anti-COVID-19 measures in several districts, “implementing the directives of the national authorities to ease some very strict restrictions against the disease”. Some of the inhabitants demonstrated violently last weekend against the restrictions imposed by the Chinese authorities and new clashes took place last night between demonstrators and police…
The authorities of several districts of the city which has 19 million inhabitants have thus announced lift the temporary containment measures.
“Face-to-face classes in schools in the Conghua district can resume and restaurants and other businesses can reopen,” local authorities announced. In addition, the latter had already announced on Tuesday that they would allow people who have had close contact with Covid patients to remain in quarantine at their home, rather than being forced to go to a specialized accommodation center built for this purpose…
However, areas of the city classified as “high risk” will remain closed for some time…

On the stock market too, the indices have rebounded in recent hours, up to Wall Street where the Chinese groups listed on the American market (ALI BABA (+10%), PINDUODUO (+2%) or JD.COM (+9%)) are progressing this Wednesday after the relaxation of these health measures which could prefigure a change of policy on the part of the central power which would abandon the “Covid 0” strategy.
In addition to social unrest, it is true that local economic activity has largely suffered from this “hardliner” policy in recent months: Manufacturing activity thus contracted at a faster pace than expected in November. According to official data published on Wednesday, the PMI manufacturing index stood at just 48 in November, against 49.2 last month, once again below the 50 threshold which separates contraction and expansion of activity. Analysts on average expected an index at 49…
Data released by the National Bureau of Statistics also indicated that activity in the services sector declined in November: The official services PMI fell to 46.7 in November from 48.7 last month.
Bringing the two sectors together, the official composite PMI came in at just 47.1 this month, down from 49 in October…

On the economic front across the Atlantic, the growth of the US economy was a little stronger than expected in the third quarter, according to the second estimate of GDP published by the US Department of Commerce: GDP has indeed increased by +2 9% at an annualized rate, against 2.6% in the first estimate, while economists were forecasting an average revision to 2.7%.
The increase in household consumption expenditure was revised to 1.7%, against 1.4% initially published and that of business investment to 5.1%, against 3.7% in annualized data.
The Commerce Department also reports a 15.3% jump in exports, against +14.4% in the first estimate, and a 7.3% drop in imports, against -6.9%, which results in an increased contribution of foreign trade to the variation in GDP…

The private sector in the United States created only 127,000 jobs in November, according to the monthly ADP survey, a figure below expectations which confirms the trend of a slowdown in the labor market against a backdrop of rising interest rates. Economists predicted an average of 200,000 job creations… The ADP survey is published two days before the monthly report from the Department of Labor which should, according to the market consensus, show a slowdown in non-agricultural job creation at 200,000 in November after 261,000 in October.

The values ​​to follow

Horizon Therapeutics jumped more than 27% after the announcement of preliminary discussions with Amgen, Sanofi and Janssen Global Services, a subsidiary of Johnson & Johnson, with a view to its takeover… The laboratory has confirmed that it is of interest to certain buyers! What to agitate Wall Street this Wednesday … The group is developing drugs to treat rare inflammatory and autoimmune diseases. There are indeed very preliminary talks with AmgenJanssen Global Services (Johnson & Johnson) and the French group Sanofi, said management. The Wall Street Journal had recently mentioned rumors of active negotiations for a change of hands… Horizon, which manufactures drugs for rare, autoimmune and serious inflammatory diseases, however added “that there is no had no certainty that an offer would be made”.

Workday climbs 11% after the publication of adjusted third-quarter earnings above analysts’ expectations and the announcement of a new $500 million share buyback plan…

You’re here (+1.5%) which has just lost around 100 dollars per title in the space of two months, is trying to recover on Wall Street… According to data published by China Merchants Bank International, the latter show that sales of the American car manufacturer practically doubled in China in November over one year with the reduction in prices for the Model 3 and Model Y! Analyst Itay Michaeli, a specialist in the automotive sector at Citi, had earlier revised his recommendation from ‘sell’ to ‘neutral’ on Tesla, with a new price target of $176 – from around $141.3 previously…” We believe the stock’s decline since the start of the year has balanced the short-term risk/reward ratio,” the analyst said in a detailed note.
With a contraction in PER to around 30 times estimated 2023 earnings per share, Citi believes some of the earlier expectations it was out of sync with have now evaporated… Although Citi’s latest model update leads the broker to cut its near-term earnings per share estimates, the firm still sits slightly above consensus for Q4 2024 EPS.
The specialist still fears a persistence of macro/competitive concerns, but in the scenario of a hard landing, the group’s position could on the contrary improve…

Boeing rose 0.6%, while the aircraft manufacturer received the support of the chairman of the Commerce Committee in the United States Senate, Maria Cantwell, concerning its request for an extension of the certification of two models of its 737 MAX.

Hewlett-Packard advance of 2.8% after having published a quarterly turnover better than expected and announced to anticipate for the current quarter revenues above expectations.

intuitive (+2.5%), the accounting software publisher said it anticipated for the 2023 financial year a turnover lower than Wall Street expectations.

netapp plunges 8%. The cloud-computing group forecasts revenue for its third fiscal quarter of between $1.53 billion and $1.68 billion, against a Refinitiv consensus of $1.71 billion.



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