(Boursier.com) — Wall Street remained in the green on Tuesday, with the S&P 500 gaining another 0.59% to 4,768 pts, very close to its historic highs, while the Dow Jones is at its highest, rising by 0.68% to 37,557 pts. The Nasdaq increased by 0.66% to 15,003 pts. The indices are benefiting from hopes of monetary easing, controlled inflation and a soft landing. Note that the Nasdaq 100 and the Dow Jones are already at new records.
On the Nymex, a barrel of WTI crude is up 1.5% to $74. The dollar index lost 0.4% against a basket of reference currencies. On the bond markets, the yield on the 2-year T-Bond is 4.44%, compared to 3.91% on the 10-year bond and 4.03% on the 30-year bond.
According to today’s government report in the United States, housing starts for the month of November stood at a rate of 1.56 million units, against a consensus of 1.36 million and a level from 1.36 million a month ago according to the revised reading. Building permits, for their part, stood at 1.46 million, in line with the consensus, compared to 1.5 million a month before.
The current account balance, the Conference Board consumer confidence index, existing home resales and the weekly report on domestic oil stocks will be revealed tomorrow…
Final third-quarter GDP figures in the United States will be released on Thursday, including weekly jobless claims, the Philadelphia Fed manufacturing index, the leading indicators index and the Kansas City Fed manufacturing index. . Finally, durable goods orders, household income and spending, new home sales and the University of Michigan Consumer Sentiment Index will be released Friday…
Mary Daly, head of the San Francisco Fed, indicated that rate cuts by the US central bank “were probably going to be appropriate next year”, according to comments reported by the Wall Street Journal. She indeed mentions progress on the inflation front and the risk of going too far in restrictive policy. According to her, the Fed must therefore ensure that it does not give people price stability while destroying jobs. Interviewed by the WSJ, Daly specifies that the objective remains to bring inflation back towards the 2% objective, but that the Fed can continue to do so smoothly, with as little disruption as possible to the labor market. .
She also explains that her forecasts for interest rates and inflation are comparable to the median of the projections of the 19 Fed policymakers published last week, i.e. a reduction of 75 basis points in rates next year, compared to the current target range of 5.25 to 5.50%, and inflation falling to around 2.4% at the end of next year.
Daly observes, while the American unemployment rate has not yet risen significantly, that when unemployment increases, it generally does so significantly, a situation that the manager would like to avoid.
Loretta Mester, the boss of the Cleveland Fed, had previously tried to calm the heat of the financial markets a little… According to her, the next step would be to know how long monetary policy should remain restrictive, and not no knowing when rates will fall. Mester judges that the markets went a little too fast in speculating on the rate cut. The leader, also a voting member of the FOMC Monetary Committee, therefore suggested, cited by the Financial Times, that a rate cut was not imminent. These comments are in line with those of John Williams, head of the New York Fed, and Raphael Bostic of the Atlanta Fed, who were also cautious on Friday.
Mester therefore told the FT that “the next phase is not about when to cut rates, although that is where the markets are. It is about how long monetary policy should remain restrictive in order to ensure that inflation returns quickly and sustainably to 2%. She judges that the markets have gotten too far ahead by banking on a rapid normalization of rates.
The last monetary meeting of the Fed was an opportunity for Jerome Powell, its president, to adopt a much more flexible tone, suggesting that the peak in rates had been reached… The Fed’s forecasts also left highlight the anticipation of three rate cuts next year. Wall Street now expects the American central bank to start lowering rates in March. The current level of the fed funds rate is at a 22-year high, between 5.25 and 5.5%. According to the CME Group’s FedWatch tool, the probability of a quarter-point rate cut from the January 30-31 monetary meeting is around 10%. The probability of a relaxation on March 20 reaches almost 75%. According to the same tool, rates could be in a range of 3.75-4% at the end of next year (probability of 37%).
Projections released last week by the Fed showed that a majority of policymakers favored cutting rates by 0.75 percentage points in 2024 and another percentage point in 2025. Powell also said expressed some confidence in achieving the inflation target without having to go through a painful economic landing…
Micron, General Mills, Toro And BlackBerry will publish their accounts on Wednesday. Nike, Cintas, Paychex, carnival And CarMax are expected Thursday…
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Google (Alphabet +0.6%) accepted an antitrust agreement involving the payment of an amount of 700 million dollars and certain concessions aimed at promoting greater competition on its Play store, in order to resolve disputes over this store. applications on Android in the United States. Google will pay 630 million dollars corresponding to compensation for American consumers, and 70 million dollars to American states which had filed a complaint before a federal court in San Francisco. The group was accused of overcharging consumers through illicit restrictions on the distribution of applications and of applying excessive fees on transactions carried out in applications, indicates Reuters. The agency adds that the final agreement of a judge is required to validate this amicable settlement. Google, for its part, has not admitted any fault.
Apple (+0.5%) announced the suspensions from Thursday in the United States of sales of Apple Watch Series 9 and Ultra 2 connected watches due to a patent dispute with the medical technology supplier Masimo – regarding a pulse oximeter. The Californian giant from Cupertino is preparing to modify the algorithms of these smart watches, according to the Bloomberg agency, which recalls that this activity represents a turnover of 17 billion dollars. In October, a federal trade agency found that Apple had infringed the California-based medical technology company’s patent. The decision triggered a 60-day observation period, which ends on December 25. But Apple preferred to take the lead and preventively stop sales of its watches.
Heico (stable), the American aerospace and electronics group, which notably designs equipment or components for aircraft and spacecraft, as well as defense equipment and electronic products, announced last night for its fourth fiscal quarter, revenues up very sharply by 54% to $936 million, a record level. Operating profit rose 29% to $189 million, once again a historic high. Net profit, group share, increased by 6% to $103 million. Earnings per share were 74 cents. Adjusted EPS was 84 cents, compared to 70 cents a year earlier. The consensus was for 68 cents in adjusted earnings per share on $898 million in revenue. For the closed financial year, revenues totaled $2.97 billion, an increase of 34%, while net profit, group share, increased by 15% to $404 million, a record.
The Flight Support Group and Electronic Technologies activities contributed to the Florida group’s record turnover. FSG achieved growth of 74% for the quarter and 41% for the full year. The electronics segment recorded a 28% increase in activity in the fourth quarter and 26% over the year. Chairman and CEO Laurans A. Mendelson expressed confidence in the future, forecasting continued growth driven by recent acquisitions and product demand.
Accenture (-0.1%), the consulting giant, published for its first fiscal quarter 2024, ended at the end of November, adjusted earnings per share of $3.27 higher than market expectations, up 6% year-on-year , for revenues of $16.2 billion, up 3% in US dollars and 1% in local currencies. The consensus was for $3.14 in adjusted earnings per share on $16.2 billion in billings. Adjusted operating margin was 16.7%, an expansion of 20 basis points. The level of ‘new bookings’ was 18.4 billion dollars, an increase of 14%. The quarterly dividend is finally increased by 15% to $1.29.
Accenture confirms its 2024 financial outlook, expecting an increase in revenues of 2 to 5% in local currencies, for adjusted earnings per share ranging from $11.97 to $12.32, an increase of 3 to 6%. The consensus was $12.22.
FactSet (-2.1%), the group active in financial data management and software published for its first fiscal quarter 2024, ended at the end of November, GAAP revenues of $542 million, an increase of 7.4% year-over-year, GAAP earnings per share of $3.84, up 9.1%, and adjusted EPS of $4.12, up 3.3%. The consensus of analysts measured… by FactSet for the period was $540 million in revenue for $4.11 in adjusted EPS. The updated guidance for fiscal 2024 highlights the expectation of GAAP revenue growth of 5.5 to 6%, for an increase in adjusted operating margin expected between 10 and 50 basis points and growth adjusted diluted earnings per share of 6 to 9%.