(Boursier.com) – The US rating is still trending down this Friday, after a heavy sanction yesterday on the technology stocks of the Nasdaq (-2.47%). The DJIA returns 0.88% to 35,580 pts, while the S&P 500 gives up 0.47% to 4,646 pts. The Nasdaq grabs 0.2% to 15.211 pts. A barrel of WTI crude fell 2.6% to $ 70.5. An ounce of gold gained 0.6% to $ 1,809. The dollar index is up 0.3% against a basket of currencies.
Operators therefore remain hesitant, faced with the less accommodating discourse of central banks, the surge in inflation and the health risk linked to the Omicron variant, which is highly transmissible but apparently not very virulent. On the fiscal front, it seems uncertain whether the Biden administration’s social and ecological Build Back Better plan can clear the congressional hurdle before next year.
John Williams, the chairman of the New York Fed, today ruled on CNBC that inflation was too high at this point. However, he does not consider it necessary to further accelerate the ‘tapering’, which has already been doubled to $ 30 billion per month this week following the FOMC meeting. In contrast, Williams believes that inflation could be a determining factor in the speed of subsequent rate hikes. The official adds that the Fed wants to keep an eye on real interest rates. Williams further specifies that the current economic situation has few historical comparisons. He notes, however, that asset values appear high overall by historical standards, and that some of these assets may correct.
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 each quarter), corresponds to the simultaneous expiration of 4 types of contracts: options on indices and on equities, as well as futures contracts on indices. and actions … Note that there will also be no notable statistics across the Atlantic today, nor any important quarterly publication of listed companies.
The purists will still be able to follow the interventions of Mary Daly and Christopher Waller of the Fed, at the end of a week marked by the officialization of the acceleration of ‘tapering’ (reduction of the purchases of monthly bond assets by the Fed ), faced with the increased risk of sustained inflation.
In the busy news for central banks, the Bank of England therefore surprised the markets yesterday, by becoming the first major central bank to raise its key rates (from 0.1% to 0.25%) for the first time since the start of the coronavirus pandemic. The stated objective is to curb inflation, which should peak at 6% over one year in April in the United Kingdom, said the BoE. A little earlier, yesterday morning, the Bank of Norway had unanimously decided to raise its key rate from 0.25% to 0.5%, while the Swiss National Bank maintained the status quo.
For its part, the ECB has started to downsize, but in a more cautious manner. The European Central Bank thus confirmed Thursday the end of its purchasing program during a pandemic (PEPP) next March, but it will in parallel strengthen its “classic” program to maintain a good level of support in a health context and economic still uncertain. The boss of the ECB, Christine Lagarde, also considered very unlikely a rate hike in 2022 despite inflation which reached 4.9% in November in the euro area.
In the United States, where the recovery cycle is more advanced than in Europe, the US Federal Reserve adopted a more “hawkish” tone on Wednesday evening, announcing the anticipated end of its massive asset purchases in March 2022. More importantly, the Fed is now planning to proceed with no less than three quarter-point rate hikes next year. This would bring the “fed funds” rate between 0.75% and 1%, in a context where inflation reached 6.8% over one year in November.
At his press conference after a two-day monetary policy meeting, Fed Chairman Jerome Powell declined to comment on the timing of a rate hike. But the time between the end of asset buybacks, scheduled for March, and the rise in rates (kept close to zero on Wednesday) may be short. “There is now a real risk that inflation will be more persistent,” added the boss of the Fed, who has just been appointed for a second four-year term by Joe Biden. “I think we are able to face this risk. We are ready to use our tools,” he said.
Values
Rivian (-11%) plunges again on Wall Street, after having already given up 5.3% yesterday Thursday. The electric vehicle start-up supported by Amazon yesterday announced plans to build a $ 5 billion plant in Georgia, its second assembly plant in the United States, to boost production. For its first quarterly results released since its IPO last month, Rivian, which still capitalizes more than $ 80 billion, posted a net loss of $ 1.2 billion in the third quarter. Rivian also expects production to be a few hundred vehicles lower than its target of 1,200 for 2021. Finally, the pre-order figures were somewhat disappointing.
“Starting and increasing the production of three different vehicles in a few months is an incredibly difficult challenge,” said the manufacturer’s general manager, RJ Scaringe. The issues cited include constraints in the global supply chain, the pandemic, a tight labor market, and short-term concerns about building electric battery modules. Scaringe added that Rivian is focused on advancing the schedule to increase production of its vehicles. The pickup launched in September and the SUV this week, and Rivian delivered 386 of the 652 vehicles it has built. The group plans to ship the first vans to Amazon this month.
You’re here (+ 2%). Tesla chief executive Elon Musk sold another $ 884 million worth of the company’s stock yesterday Thursday. Since the beginning of November and his famous Twitter poll on the subject, the billionaire has sold about $ 14 billion in Tesla shares, according to stock market reviews. The charismatic patron of You’re here and SpaceX, the richest man on the planet just named “personality of the year” by Time magazine and the Financial Times, should however be very heavily taxed. Faced with criticism, and more specifically that of Senator Elizabeth Warren, the businessman recalled recently on Twitter: “And if you opened your eyes for 2 seconds, you would realize that I will pay more taxes than no American in all of history this year “.
FedEx (+ 6%) climbs on Wall Street. The group published for its second fiscal quarter an adjusted earnings per share of $ 4.83, against a consensus of about $ 4.2. Revenue totaled $ 23.47 billion, beating consensus by 4%, compared to $ 20.6 billion for the corresponding period last year. Adjusted net income was $ 1.3 billion for the quarter ended Nov. 30, virtually unchanged from the previous year. The U.S. delivery company restored its original financial forecast for 2022 yesterday, yet even lingering labor issues squeezed profits ahead of the holiday season, when the number of packages it handles typically doubles. FedEx chief operating officer Raj Subramaniam said pressures on the workforce are expected to ease in the future. The leader believes that the group is ready, in terms of personnel, for the peak at the end of the year.
Concerns have subsided that this year’s holiday season could see a repeat of the pandemic delivery delays experienced last year. FedEx, a Memphis, Tennessee firm, now expects annual profit, excluding items, of $ 20.50 to $ 21.50 per share, as it originally forecast. In September, FedEx lowered this range to between $ 19.75 and $ 21 per share. In the company’s second fiscal quarter, however, labor shortages disrupted flows and the network, increasing costs, mainly at FedEx Ground.
Darden Restaurants (-4%) corrects on the stock market, while the American fast food group beat the profit consensus for the closed quarter, but at the same time announced the departure of its CEO. For the second fiscal quarter of 2022, total revenues appreciated 37% to $ 2.27 billion, up 34% on a like-for-like basis. Diluted EPS from continuing operations was $ 1.48 from 74 cents a year earlier. The FactSet consensus was $ 1.43 bpa and 2.23 billion billings. On the management side, Eugene I. Lee, Jr., CEO of the business, will leave his post on May 29 but will still serve on the board until the AGM 2022. Ricardo Cardenas, current director of operations, was unanimously appointed by the consulting as general manager.
General Motors (-4%) announced that Dan Ammann, CEO of Cruise, GM’s California company dedicated to autonomous vehicles, is leaving the company. Cruise president and chief technical officer Kyle Vogt will assume the role of interim general manager. In addition, Wesley Bush, the former CEO of Northrop Grumman and a member of the board of directors of GM, will join the board of directors of Cruise. Along with this change in leadership, GM will accelerate the strategy detailed by the company during its recent Investor Day, in which Cruise will play a critical role in building GM’s autonomous vehicle platform, at the time. where the manufacturer is aggressively attacking the ‘AV’ markets beyond carpooling and delivery.
Oracle (-5%) should buy back To encircle, US specialist in medical IT infrastructure and management based in Missouri. This is what the Wall Street Journal believes, citing people familiar with the matter. Cerner could be valued at $ 30 billion! The title is expected to rise sharply by 15% before market on Wall Street on this rumor. The current market capitalization is $ 23.39 billion.
The company software designer Oracle is said to be in talks to buy the specialist in electronic medical records in a deal that could be valued at $ 30 billion. The transaction could provide Oracle with a wealth of healthcare data to train and improve its AI-powered cloud services, further strengthening its presence in the healthcare industry. If the deal goes through, it will be the biggest ever for Oracle, which weighs $ 282 billion on Wall Street. The possible deal would also count among the most important of the year 2021.
Meta (+ 2%). The Federal Trade Commission is said to have opened an in-depth investigation into Meta’s (Facebook) plan to buy out Supernatural, a virtual reality-based fitness application, for $ 400 million. This is what the The Information site indicates.
Pfizer (-4%) / BioNTech (stable). The member states of the European Union have agreed to order more than 180 million doses of the covid vaccine adapted to the Omicron variant that the two partners are developing, said the European Commission. In addition, the French national ethics advisory committee has approved the expansion of vaccination to all children aged five to eleven … Note also that Pfizer said today during a meeting investors, that he expected covid vaccine sales of around $ 31 billion in 2022.
Moderna (stable). Moderna’s covid vaccine is up to four times more likely to cause inflammation of the heart muscle, a very rare side effect, than its competitor developed by Pfizer / BioNTech, according to a Danish study published in the British Medical Journal.
Johnson & johnson (-3%). The Centers for Disease Control and Prevention (CDC) recommend Moderna and Pfizer / BioNTech vaccines over Johnson & Johnson.