(Boursier.com) – Wall Street is oriented sharply higher before the market on Wednesday, the S&P 500 winning 1.1%, the Dow Jones 1% and the Nasdaq 1.5%. The barrel of WTI crude recovered by 1.1% on $97 on the Nymex, after its fall the day before. The ounce of gold consolidates by 0.5% to $1,920. The dollar index returned 0.4% against a basket of reference currencies. Bitcoin is recovering for its part on $40,000.
The hopes relating to the Russian-Ukrainian negotiations persist, the operators not abandoning the idea of a possible diplomatic solution. Central banks, and in particular the Fed, will also be in the news this week. Finally, the resurgence of Covid-19 in China is of concern, but Beijing announces that it is considering measures favorable to its capital markets, in order to maintain “stability and consistency” of expectations, according to Deputy Prime Minister Liu He. Discussions between China and the United States about Chinese firms listed on Wall Street have also progressed, with “specific cooperation plans”.
In geopolitical news, Ukrainian President Volodymyr Zelensky said negotiations with Russia would resume today. The talks would seem more realistic, according to the Ukrainian leader, who nevertheless judges that more time will be necessary before a possible decision. A neutral Ukraine but displaying its own army, on the model of Austria or Sweden, would be a compromise solution considered, the Kremlin said for its part on Wednesday. “It is a variant which is currently being discussed and which could really be considered as a compromise”, indicated Dmitry Peskov, spokesman for the Russian presidency. Zelensky said yesterday that Ukraine was ready to accept security guarantees from Western countries even if it meant giving up NATO membership.
The Fed meanwhile is the star on Wall Street today, and is expected to announce a rate hike in the face of heavy inflation at the end of its monetary meeting. The statement from the US central bank and Jerome Powell’s press conference are expected tomorrow evening, at 7 p.m. and 7:30 p.m. French time. The Fed’s task is considerably complicated by the invasion of Ukraine and the further spike in prices. According to the CME Group’s FedWatch tool, the probability of a quarter-point rate hike on federal funds, between 0.25 and 0.5%, on March 16 is 98.3%, compared to 1.7% for the probability of a rise of half a point. It would be the first hike in the cycle of rate hikes expected from the Fed, which must also gradually reduce its balance sheet after massive purchases of bond assets. The probability of another move higher on May 4th is nearly 100% (with nearly equal odds of a 25 bps or 50 pts move).
US retail sales for the month of February 2022 have slowed much more than expected. They show a slight increase of 0.3% compared to the previous month, against 0.4% market consensus and 4.9% increase in January. Excluding automobiles, retail sales grew even more timidly by 0.2% in February, compared to the previous month, against 0.9% consensus and 4.4% a month before. Finally, excluding cars and gasoline, US consumption fell by 0.4% compared to the previous month, against +0.6% consensus and +5.2% in January.
According to the government report of the day in the USA, import prices for the month of February 2022 appreciated by 1.4% compared to the previous month, against 1.5% consensus and 1.9% for the revised reading from the previous month. Import prices thus increased by 10.9% over one year. Export prices, meanwhile, increased by 3% in February (consensus +1.3%) and by 16.6% over one year.
Business inventories and sales for the month of January will be announced at 3 p.m. (consensus +1.1% for inventories compared to the previous month).
The National Association of Home Builders’ US Housing Market Index for March will also be announced at 3 p.m. (consensus 81).
The Atlanta Fed Inflation Expectations Index for March will be released at the same time.
The Energy Department’s weekly report on domestic oil inventories for the week ending March 11 will be released at 3:30 p.m.
Values
Apple rose again before the stock market on Wednesday on Wall Street after recovering almost 3% at the close yesterday. Its subcontractor Foxconn has announced a restart of part of its production at its site in Shenzhen, southern China, after complying with government constraints by establishing a closed circuit system in which employees live and work “in a bubble”. The title of the Californian apple group had previously corrected heavily on Wall Street, posting a decline of 18% compared to its record at the beginning of January, brushing the territory of the ‘bear market’ characterized by a drop of more than 20% on the peaks.
The Cupertino company had been affected by the resurgence of Covid-19 cases in China, where the group outsources most of its production. Asian groups foxconn and Unimicron Technologymajor suppliers of Apple, had thus suspended their activities in Shenzhen, the Chinese Silicon Valley, due to the epidemic context, raising fears of shortages and delays in delivery.
You’re here for its part suspended activity for two days at its Shanghai factory, which now produces, on average, more than 2,000 electric vehicles per day. The suspension comes in this context of resurgence of the epidemic in China. Reuters learned the news by taking note of an internal note addressed to the employees and suppliers of the group of Elon Musk…
Ali Baba jumped before the stock market on Wall Street, while according to Reuters sources, the Chinese e-commerce giant and its compatriot Tencent, active in internet and mobile services, are planning to cut tens of thousands of jobs this year due to the tightening of regulations in the sector by the Chinese authorities. In addition, Beijing reported progress in discussions with Washington regarding Chinese firms listed on Wall Street, with “specific cooperation plans”.
Starbucks just announced that Kevin Johnson, Chairman and CEO, intends to retire after 13 years with the company, including the last five years as CEO. Johnson will leave his current role on April 4, 2022 and will continue as a Starbucks partner (employee) and special consultant to the company and board until September. The Starbucks Board of Directors has engaged in ongoing CEO succession planning, assisted by Russell Reynolds Associates since 2021, and expects to select a new leader by the fall. To ensure transparent management of the business until a permanent successor is appointed, the Board of Directors has appointed Howard Schultz as interim Chief Executive Officer, effective April 4, 2022. Schultz will also join the company’s board of directors.
NortonLifeLock. Avast unscrews on the British market, while the local competition authority, the Competition and Markets Authority (CMA), has just announced the opening of an in-depth investigation into the proposed acquisition of the group by NortonLifeLock for $8.6 billion. Czech cybersecurity firm Avast is to be acquired by anti-virus parent company Norton, NortonLifeLock, formerly Symantec. The group from Tempe, Arizona, believed that such a combination would bring together two companies with aligned visions, highly complementary business profiles and a common commitment to innovation and the protection of digital lives. The new entity would display more than half a billion users worldwide.
Pfizer / Moderna. Japan will buy 145 million doses of the Covid-19 vaccines from the two American laboratories for a second booster injection, according to the Kyodo news agency.
seagen agreed with the French Sanofi. The American biotechnology firm and the French announce an exclusive collaboration agreement for the design, development and marketing of antibody-drug conjugates (ADC) against up to three forms of cancer. This collaboration will leverage Sanofi’s proprietary monoclonal antibody technology and Seagen’s proprietary ADC technology. ADCs are antibodies designed to deliver potent anti-cancer drugs to tumor cells expressing a specific protein. Sanofi currently has an ADC in development.