(Boursier.com) – Wall Street unscrews this Thursday, weighed down by the fall ofApple and fears of recession, in a context of determined monetary tightening. The Nasdaq now drops 3.07% to 10,712 pts, the Dow Jones 1.77% to 29,159 pts and the S&P 500 2.3% to 3,633 pts. Yesterday evening, the American rating had achieved a notable technical jump, with gains of more than 2% on the Nasdaq Composite and an almost equivalent performance of the DJIA. The trend is much less enthusiastic today. The barrel of WTI crude fell 0.9% to $81.4. An ounce of gold dropped 0.8% to $1,657. The dollar index climbed 0.2% against a basket of currencies.
No surprise for the final US GDP reading. The US economy has therefore, as previously estimated, regressed at a rate of 0.6% over the period from April to June, in line with the consensus of economists. Personal consumption expenditure over the period appreciated at a rate of 2%, against 1.5% consensus. The price index pegged to GDP climbed 9% in the final reading, against 8.9% consensus.
Jobless claims once again came out lower than expected last week in the United States. The US Department of Labor has just announced, for the week ended September 24, that jobless claims reached 193,000, down 16,000 from the downwardly revised level of the previous week. The consensus was counting on 215,000 new registrations. The four-week average was 207,000, down 8,750. Finally, the number of unemployed people receiving benefits for the week ended September 17 reached 1.347 million, down 29,000 over seven days (1.385 million consensus).
Cleveland Fed chief Loretta Mester and San Francisco Fed chief Mary Daly will speak during the day.
According to the real-time tool FedWatch, the probability of another 75 basis point rate hike from the Fed on Nov. 2 after the upcoming monetary meeting is 62.5%, down from 37, 5% for the probability of a move of 50 basis points. The US central bank has already raised its rates three times by 75bp, bringing the fed funds rate range between 3 and 3.25%.
Nike and Micron publish their quarterly accounts after trading on Wall Street this evening. CarMax announced before the opening, as Rite Aid and Bed Bath & Beyond.
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CarMax, the American retailer of new and used vehicles, lost 22% on Wall Street. The accounts for the second fiscal quarter just released have indeed disappointed, missing the consensus in terms of profits and revenues. Bill Nash, the business’ general manager, describes this quarter as difficult for the global used vehicle market. In the quarter ending at the end of August, revenues thus totaled $8.14 billion, a timid increase of 2% year-on-year, with used vehicle retail unit sales down 6.4% and even 8 .3% like-for-like. Diluted net earnings per share fell by more than half to 79 cents from $1.72 a year earlier.
Bed Bath & Beyond (-1%), the former Wall Street stock, retailer of miscellaneous goods for the home or drugstore, posted for its second fiscal quarter, ending at the end of August 2022, a net loss of 366 million dollars and 4 $.59 per share, against 73 million dollars and 72 cents per share a year earlier. The group is still struggling to attract customers and has cash, 325 million dollars for the quarter ended, but it has managed to find new financing and has a liquidity situation of 850 million dollars at the end of the period. Quarterly sales came in at $1.44 billion, down 26% like-for-like, as reported in late August. Sue Gove, administrator and interim CEO, believes that these results do not yet reflect the strategic and financial actions initiated to improve performance.
Warner Bros Discovery (-3%). The CEO of the group has put things right following speculation: “We are not for sale,” said the leader, quoted by Variety. A source told Variety that responding to a question from an employee, David Zaslav told company staff that Warner Bros. Discovery had everything it needed to succeed. Two weeks ago, The Hollywood Reporter reported that industry watchers believed Comcast Chairman and CEO Brian Roberts would seek to merge NBCUniversal and Warner Bros. Discovery after restrictions on a such agreement in 2024.
Apple, already battered yesterday on Wall Street over rumors of abandoning its plans to increase production of the iPhone 14, lost another nearly 5% on Thursday following a downgrade by Bank of America Global Research, which has just reviewed its ‘buy’ recommendation to ‘neutral’. Wamsi Mohan, an analyst at BofA, therefore sees risks to the outperformance of the Apple stock over the next year, due to weaker consumer demand. The analyst lowered his target price by $25, to $160 now. This specialist expects significant revisions of estimates concerning short-term profits. Mohan points to a weaker iPhone 14 cycle, and also fears a deceleration in service revenue gains, as well as a return to pre-covid levels of demand for iPad and Mac. Finally, the soaring dollar will also affect the results.
“Apple stocks have significantly outperformed this year and have been seen as a relative safe haven,” Mohan said in a client note. “However, we see a risk for this outperformance over the next year due to weaker consumer demand,” summarizes the specialist.
Rite Aid, the American pharmaceutical chain, won 28% on Wall Street. For its second fiscal quarter, the group posted revenue down to 5.9 billion dollars, against 6.1 billion a year earlier. Net loss per share was $6.07 with non-cash impairments. Adjusted net loss per share was 63 cents, down from 41 cents a year earlier. Adjusted EBITDA was $78.5 million, compared to $106 million a year earlier.
PG&E (-2%) announces a split of its non-nuclear production assets into an independent division of which 49.9% of the capital will be sold.
KKR (-4%). The launch of KKR’s takeover bid for Hitachi Transport System for around 670 billion yen will be delayed from the original schedule. The operation was expected at the end of September.
Western Petroleum (-1%). Berkshire Hathaway, a firm of Warren Buffett, has announced the acquisition of 5.99 million additional shares of Occidental, bringing its stake in the oil group to 20.9%.
Amazon (-4%), American colossus of online commerce, reports an increase in the average hourly wage to more than 19 dollars for employees of its warehouses and transport services.
You’re here (-6%) announced that billionaire Joseph Gebbia, co-founder ofAirbnbwould join its board of directors and replace the founder of Oracle, Larry Ellison, who no longer sits since August.