(Boursier.com) – Wall Street is accelerating before the market on Tuesday. The S&P 500 gained 1.5%, the Dow Jones 0.9% and the Nasdaq 2.4%. Producer price figures boost indices. They indeed confirm the slowdown in US inflation, giving the Fed more leeway. The barrel of WTI crude fell 1.1% on the Nymex at $84.9. The ounce of gold advances by 0.4% to $1,785. The dollar index lost 0.7% against a basket of benchmark currencies. On the value side, walmart stands out after his results. TSMC benefits from Berkshire’s investment…
The US producer price index for October 2022 was up only 0.2% compared to the previous month, against a market consensus of +0.5%. Excluding food and energy this time, US producer price inflation for October came out at…zero compared to September, against 0.4% market consensus. Over one year, the ‘PPI’ climbed 8% (consensus 8.3%) and 6.7% excluding food and energy (consensus 7.2%). This is therefore another very good surprise on the side of US inflation, which provides one more argument for the Fed to moderate the pace of its rate hikes, after four consecutive increases of 75 basis points. In September, the producer price index in the USA had risen by 0.4% compared to the previous month and by 8.5% over one year (+0.3% and +7.2% respectively, excluding food and energy).
Recall that the US consumer price index for October, published last week, was up 0.4% compared to the previous month, against a FactSet consensus of 0.6%. Excluding food and energy, the CPI had increased by 0.3% compared to the previous month, against 0.5% consensus. Over one year, the consumer price index was therefore up 7.7%, against 7.9% consensus and 8.2% a month earlier. This excellent news boosted Wall Street last week, fueling hopes of a ‘Fed pivot’. Excluding food and energy, the US consumer price index rose 6.3% over one year.
The Empire State manufacturing index of the New York Fed, which has also just been published, came out positive at 4.5 in November, against -7 consensus and -9.1 a month earlier. This signals a return to expansion in manufacturing activity in this region.
According to the CME Group’s FedWatch tool on Tuesday, the probability of a more moderate rate hike by the Fed, of 50 basis points, after its next monetary meeting on December 14, stands at more than 85. %.
The three-hour meeting between Joe Biden and Xi Jinping on the sidelines of the G20 in Bali did not resolve any major issues, but reflected the mutual desire to improve relations. Goodwill gestures include resuming talks on climate change, economic stability and debt relief, and health and food security. Secretary of State Antony Blinken will pay a follow-up visit to China. Biden said the United States would compete vigorously but not seek conflict. Biden warned Xi about North Korea, although allied defensive activities in the region were not directed against China. Biden raised concerns about Xinjiang, Tibet and Hong Kong, and human rights more broadly. Biden has raised objections to China’s coercive and increasingly aggressive actions toward Taiwan. Xi said for his part that Taiwan was the “first red line not to cross”. The U.S. president also voiced continued concerns about Chinese economic practices…
Values
walmart did not disappoint for its third fiscal quarter. The title ignites more than 6% before the stock market on Wall Street, following the publication of the accounts. For the quarter ended, the US retail giant delivered solid revenue growth of 8.7% and adjusted earnings per share of $1.5. Walmart is even allowing itself to raise its financial forecast for the staggered fiscal year 2023. Total quarterly revenue was $152.8 billion, against $148 billion of consensus. Growth at constant currencies was 9.8%. Walmart US posted like-for-like growth of 8.2%, bringing its two-year performance to 17.4%. Growth in e-commerce is 16% year-on-year and 24% over two years. Sam’s Club grew 10% like-for-like. Walmart International posted growth of 7.1% to $25.3 billion, despite adverse currency effects of $1.5 billion. Global ad business soared 30%, with Walmart Connect and Flipkart Ads. Consolidated operating profit was $2.7 billion in the quarter, down 53%, but adjusted operating profit rose 4% to $6 billion. Adjusted EPS of $1.5 excludes net tax effects of $1.11 for equity and investment losses and $1.05 per share of legal opioid settlements. The group will pay $3.1 billion to settle the opioid lawsuits. The adjusted EPS consensus was $1.32.
walmart also approved a new $20 billion share buyback program replacing the previous authorization. Annual sales forecasts are revised upwards. Adjusted earnings per share for the 2023 financial year are expected to decline by 6 to 7%, against a previous guidance ranging from -9 to -11%. Revenues for this same financial year are expected to increase by 5.5%, whereas the previous estimate was 4.5%. More cautiously, however, Walmart anticipates US growth on a like-for-like basis and excluding gasoline, for the end-of-year holiday quarter, of around 3% against 3.4% consensus. Fourth quarter adjusted EPS is expected to decline by 3 to 5%, a slightly less pronounced decline than expected.
Home Depot, the American giant of the distribution of household equipment products, announced for the quarter ended profits and sales higher than market expectations, also confirming its outlook for 2022. The net profit for the third fiscal quarter ended at the end of October was $4.34 billion or $4.24 per share, compared to $4.13 billion a year earlier. The FactSet consensus was $4.12 EPS. Quarterly revenue rose 5.6% to $38.9 billion, compared to consensus just below $38 billion. Like-for-like growth was 4.3%, well above market expectations. The group also benefited from higher prices and resilient demand from professionals. Home Depot confirms that it expects growth of around 3% on a like-for-like basis for fiscal 2022.
Krispy Kreme, the donut giant, announced for its third fiscal quarter revenues of $377.5 million, up 10.1% year-on-year. Organic growth accelerated to 12%. GAAP net loss was $11.8 million, while adjusted net income was $5.9 million, 3 cents per share. Quarterly Adjusted EBITDA was $38.5 million, including a $3.1 million negative impact from the strong dollar. The group maintains its 2022 guidance and evokes strong momentum at the start of the fourth fiscal quarter.
Estee Lauder is closing in on an acquisition of Tom Ford in a nearly $2.8 billion deal, the Wall Street Journal reports, according to which the New York-based personal care and cosmetics production and distribution group l would thus prevail by anticipating Kering. The agreement could therefore be imminent between Estée Lauder and Tom Ford, according to people familiar with the matter quoted by the WSJ. The deal would build on a long-standing licensing agreement and mark the biggest acquisition ever for the US cosmetics giant, according to people familiar with the matter. The French Kering was yet on the verge of winning the auction at the beginning of the month, adds the Wall Street Journal. The Financial Times had clarified on Friday that Estée Lauder was now the favorite for this takeover of Tom Ford.
Taiwan Semiconductor (TSMC) jumped before the stock market on Wall Street, while the firm of Warren Buffett, Berkshire Hathaway, has just declared a $4.1 billion stake in the capital of the Taiwanese semiconductor foundry giant. Thus, the declarations to the American Securities and Exchange Commission (SEC) of Berkshire show that the firm held at the end of September approximately 60.1 million ADS (American depositary shares) of TSMC. Last month, the Taiwan ‘founder’ delivered its best earnings in two years, while also posting mixed forecasts and slashing its 2022 capital expenditure estimate to around $36 billion. Buffett’s group therefore doesn’t seem intimidated that Taiwan Semi remains subject to supply chain challenges and tough economic conditions amid slowing global demand.
You’re here, now profitable, is it in a position to buy back its own shares, while the stock market has lost more than half of its value to its historical peaks? Elon Musk, chief executive of the electric vehicle maker, tweeted that a possible share buyback program for the group was up to the board. Last month, Musk had already hinted after the stock market crash that a Tesla stock buyback plan was not out of the question. He then evoked the study of a plan ranging from 5 to 10 billion dollars. Yesterday Monday, in response to a shareholder, Leo KoGuan, who presents himself as the third individual shareholder of Tesla and complains in particular about the sales of shares of the billionaire, Musk therefore simply replied that this responsibility for share buybacks lies with the board administration.
Amazon plans to lay off about 10,000 people, according to the ‘New York Times’, which quotes people “close to the matter”… The layoffs could be effective as early as this week and would affect Amazon’s device division, including including voice assistant Alexa, but also retail functions and human resources. That would represent about 3% of Amazon’s employees and less than 1% of its global workforce (more than 1.5 million people), mostly made up of workers paid by the hour…