(Boursier.com) – Wall Street points slightly in the green before the market on Tuesday, pending the intervention of Jerome Powell. The S&P 500 advances by 0.1%, the Dow Jones grabs a few points and the Nasdaq takes 0.2%. Operators remain quite cautious, while the President of the Fed intervenes today at 4 p.m. and could be cautious, faced with strong American economic activity and still high inflation. On the Nymex, a barrel of WTI crude fell 0.6% to $79.9. An ounce of gold returned 0.8% to $1,839. The dollar index rose 0.1% against a basket of currencies.
Two big events are expected this week, with Fed Chairman Jerome Powell’s monetary policy testimony before the Senate Banking Committee on Tuesday and the House committee tomorrow Wednesday, and the February US jobs report on Friday. . The latter is likely to be an influential directional mover for the market given the data reliance rightly pointed out by Powell’s Fed. UBS expects Powell to tell Congress that the Fed remains rightly dependent on data and still has work to do. Non-farm payrolls are expected to rise by 215,000 in February in the US, after January’s outsized gain of 517,000. The potential slowdown in February, however, should not undermine the tight labor market narrative. The US unemployment rate for February is expected to be stable at 3.4%. Job creations in the private sector are expected at 213,000 against 443,000 a month earlier.
Jerome Powell therefore intervenes today and tomorrow, the boss of the Fed being heard by Congress. Powell’s comments could provide more specific guidance on the direction of US central bank policy. The leader had noted in February the beginning of a process of disinflation, which had stimulated the stock markets. Subsequently, the US inflation statistics were not reassuring, however, calling for caution.
According to the CME Group’s FedWatch tool, the Fed is expected to raise rates by another quarter point (71% probability) on March 22, which would bring the range on the ‘fed funds’ from 4.75 to 5%. Concerning the next meeting, on May 2 and 3, the most important probability is that of a range of 5 to 5.25% (62% of ‘proba’), i.e. a new tightening of the screw by a quarter of a point , but the probability of a range of 5.25 to 5.5% is still one third. For June 14, the most likely guess right now is a range of 5.25-5.5% (56% chance). Rates could peak between 5.25 and 5.5%, or between 5.5 and 5.75%, according to the FedWatch tool, which still favors the scenario of a rate peak between 5.25 and 5.5%. It remains to be seen how Powell’s speech will change these expectations.
Among the most recent Fed speakers, San Francisco Fed President Mary Daly (non-voting) echoed other officials in signaling the need for further policy tightening that is held longer a long time. Noted headline inflation remains well above target and the required disinflationary momentum is far from certain, according to Daly, who sees the inflationary forces of reshoring/deglobalization trends, labor shortages, transition to the green economy and the potential for rising inflation expectations. Elsewhere, Richmond Fed President Thomas Barkin (non-voting) said that while there was still a lot to do on rates, it would make sense to act more “consciously”. Although inflation has probably passed its peak, getting it back on target will take much more time and effort. Barkin cites the impact of pandemic-era economic upheaval, corporate efforts to restore margins and boost profits through price increases, workers demanding above-normal wage increases and the underlying movement inflation expectations.
On the economic front this Tuesday, operators will also follow in the USA at 4 p.m. wholesaler stocks for the month of January (consensus -0.4% in final reading compared to the previous month), as well as consumer credit figures of January (consensus 28 billion dollars).
Elsewhere in the world, German industrial orders for the month of January surprised up 1% compared to the previous month against -1% of FactSet consensus, which brings their decline to 10.9% year-on-year against -13% of consensus. Spanish industrial production in January also beat expectations, growing by 1.2% compared to the previous year.
It should also be noted that the Australian central bank raised its main key rate on Tuesday to its highest level in more than ten years, but left open the possibility that there was only one increase in the tightening cycle, while consumption is slowing down and the inflationary risk seems less substantial. The Reserve Bank of Australia (RBA) therefore raised its key rate by 25 basis points to 3.6%, the tenth increase since May. However, the bank is no longer referring to rate increases, but to “a” potential further tightening.
Finally, on the geopolitical front, Beijing blamed the United States on Tuesday for the growing tensions between the two superpowers, warning of a risk of “conflict and confrontation” if Washington did not change the trajectory. Speaking to reporters in Beijing on the sidelines of the annual plenary session of parliament, Reuters reports, the Chinese foreign minister also said an invisible hand seemed to be fueling the conflict in Ukraine.
Values
Meta, ex-Facebook, will still cut thousands of jobs even though its CEO had pledged not to reduce the workforce. The Bloomberg agency, citing people familiar with the subject, confirms recent information from the Washington Post and adds that the additional layoffs will take place this week. In November, the group of Mark Zuckerberg had announced, let us recall, a vast social plan, eliminating 13% of its workforce, which represented more than 11,000 jobs.
Salesforce.com is gaining ground before the stock market on Wall Street, as the group has just announced a partnership with OpenAI (ChatGPT) and other firms in generative AI. The San Francisco firm will add ChatGPT to its Slack collaborative software as part of the OpenAI partnership. More generally, Salesforce will add generative artificial intelligence to its enterprise software. The San Francisco group says its “EinsteinGPT” technology will combine its proprietary AI with that of other partners, including OpenAI, to help enterprise customers generate email drafts, customer account information and computer code.
General Motors. Cruise, GM’s autonomous vehicle unit, will cut spending this year, according to a senior executive quoted by Reuters. Growing losses from self-driving vehicle companies have raised concerns among investors, the agency said, which says GM “spent” nearly $2 billion on Cruise last year. “We will continue to look at hardware, software – both in terms of component costs and quantity of components on the vehicle – and will continue to reduce costs as we move forward,” Cruise’s COO said. , Gil West, at a technology conference, without quantifying the level of expenditure this year.
Rivian Automotivethe American manufacturer of electric vehicles supported by Amazon, plans to sell green bonds for $1.3 billion, as weakening demand and high costs weigh on the liquidity of Tesla’s smaller rivals. Initial investors will have an option to purchase an additional $200 million of bonds for settlement 13 days after the bond issuance, Rivian said. This capital will help facilitate the launch of Rivian’s R2 family of vehicles. The convertible debt was “an optimal cost of capital relative to selling securities at current levels,” a spokesman for the Irvine, California-based automaker, which makes electric pickup trucks and SUVs, told Reuters.
Dick’s Sporting Goods, an American sporting goods distribution group, climbed before the stock market on Wall Street following its quarterly financial publication. For the fourth fiscal quarter, like-for-like growth was 5.3%, while total sales rose 7.3% to $3.6 billion. Consolidated net profit declined 32% to $236 million, while adjusted earnings per share fell 20% to $2.93. The consensus over the period was $2.88 adjusted EPS for $3.45 billion in revenue. Annual revenues reached a record $12.4 billion, up 0.6% compared to the previous year and 41% compared to 2019. The group raised its annualized dividend to $4 per share, more twice the previous dividend.
BlackBerry loses ground before the stock market on Wall Street, after an annual guidance of activity below expectations. Preliminary FY2023 revenue is estimated at approximately $656 million, with IoT revenue of $206 million and cybersecurity revenue of $418 million. The consensus was $675 million in total annual revenue.