(Boursier.com) — The American rating, which opened sharply lower on Friday with Tesla and the banks, is now rising towards equilibrium or almost. The S&P 500 only lost 0.15% to 3,977 pts, the Nasdaq gained 0.01% to 11,002 pts and the Dow Jones advanced 0.11% to 34,227 pts. On the Nymex, a barrel of WTI crude rose 1.5% to $79.5. The ounce of gold advances by 1% to $1,917. The dollar index is stabilizing against a basket of reference currencies.
Caution dominates, the day after a session of increases following figures “in line” with US inflation expectations for the month of December. Operators, comforted in the idea of a gradual decline in inflation and therefore less vigorous monetary tightening by the Fed, are now awaiting quarterly publications from large companies.
The fourth quarter results season indeed begins quite seriously this Friday on Wall Street, with the publication of the accounts of many large banks, as well as other firms. UnitedHealth, JP Morgan Chase, Bank of America, Wells Fargo, BlackRock, Citigroup, Bank of New York Mellon, Delta Airlines Where Wipropublished in particular before market.
In economic news on Wall Street today, import prices rose 0.4% in December (FactSet consensus -0.8% compared to the previous month). Export prices, on the other hand, fell by 2.6% compared to November, against -0.7% consensus.
The preliminary index of US consumer sentiment measured by the University of Michigan for the month of January 2023 stood at 64.6, well above the economists’ consensus of 60.4 (FactSet measurement). This indicator of US consumer sentiment stood at 59.7 in December.
Finally, the Fed’s Patrick Harker will speak during the day, but according to his prepared remarks, will not comment on the monetary outlook.
The major investment banks remain divided on the strategy to adopt in today’s markets. According to the strategists of Bank of AmericaUS equities are poised for another plunge before finally rebounding in the second half as economic conditions stabilize.
S&P 500 earnings revisions point to a hard landing, even as the market anticipates a soft landing, Goldman Sachs strategists led by David Kostin said in a note released last night.
Finally, Barclays believes that the markets may have good reason to see the glass half full on inflation and to reject the central bank’s hawkish rhetoric.
Values
You’re here (-2%) lowers the prices of Model 3 and Model Y for the American market. According to a Reuters calculation based on prices from Tesla’s website, the declines range between 6% and 20% from past prices. These new prices also do not take into account the federal credit of 7,500 dollars granted since the beginning of the month for the purchase of a certain number of electric vehicles in the United States. Elon Musk’s group had already granted discounts in China, South Korea, Japan, Singapore and Australia in recent days, while it is visibly orienting its strategy towards market share gains rather than margins. .
In China, a crucial market, the Texas electric car giant, which lost two-thirds of its value on Wall Street last year, is also lowering the prices of the Model 3 and Model Y. The latest reduction, as well as the cuts of October and that various incentives of up to 10,000 yuan granted to Chinese buyers over the past three months, represent a 13% to 24% reduction in Tesla prices since September, according to Reuters calculations.
Price reductions are finally confirmed in Europe. In Germany, for example, Reuters reports that Tesla has slashed prices of the Model 3 and Model Y – its best sellers worldwide – by 1% to nearly 17% depending on configuration. The group also cut prices in Austria, Switzerland and France.
JP Morgan Chase (+1%) has just published its latest quarterly accounts. The largest US bank by assets has announced an increase in its quarterly profits, but now expects a slight recession. Jamie Dimon’s bank has also provisioned $ 1.4 billion in this case. In the quarter to the end of December, earnings reached $11 billion and $3.57 per share, compared to $10.4 billion or $3.33 per share a year earlier. Adjusted earnings per share were $3.56, well above market expectations.
Bank of America (-1%) published results above expectations for the quarter ended, which does not prevent the title from consolidating on Wall Street. Profit attributable to common shareholders rose 2% to $6.9 billion in the fourth quarter. Earnings per share were $0.85. Net banking income increased by 11% to 24.5 billion dollars. The consensus was 77 cents in adjusted earnings per share on $24.3 billion in revenue. Net interest income soared 29% in the fourth quarter to 14.7 billion.
Wells Fargo (-1%) stumbles on Wall Street, while the American bank reported profits halved and revenues below market expectations. ‘Wells’ has racked up more than $3 billion in costs from a fake account scandal and increased its loan loss reserves in the event of an economic downturn. Provision for credit losses was $957 million, compared with a reversal of $452 million a year earlier. The fourth-largest US lender reported earnings of 67 cents per share for the quarter to the end of December, compared with $1.38 per share a year earlier. Group CEO Charlie Scharf is working to fix the bank’s problems after it spent billions on lawsuits and regulatory fines.
BlackRock (stable), American asset management giant, announced for its fourth quarter a profit down 23%. Quarterly adjusted earnings were $1.36 billion or $8.93 per share, compared to $1.65 billion for the comparable period last year. The consensus was around $8.1 adjusted EPS. Total assets under management at the end of the period reached nearly 8.590 billion dollars, against 7.960 billion at the end of the third quarter. Annual revenue declined 8% year-over-year, with markets falling and the greenback surging, as well as lower performance fees.
UnitedHealth (+2%), the American group of insurance and health care, published for its fourth fiscal quarter revenues of 82.8 billion dollars, against 73.7 billion a year earlier. Profit from operations was $6.9 billion, down from $5.5 billion in the comparable period a year earlier. The net margin stood at 5.8% against 5.5% a year earlier. Adjusted earnings per share were $5.34. The consensus was $5.17 adjusted EPS for $82.6 billion in revenue.
Goldman Sachs (stable) revised the pre-tax loss relating to its newly created financial solutions subsidiary to $1.2 billion for the first nine months of 2022.
Citigroup (stable) posted a decline in net banking income and profit over the quarter ended, the bank having increased its provisions to better cope with the probable deterioration of the economic context. Net income reached $2.5 billion and $1.16 per share, compared to $3.2 billion for the corresponding period last year.
Delta Airlines (-4%) fell, with operators sanctioning somewhat short forecasts for the first quarter of 2023. The Atlanta-based carrier expects adjusted EPS of 15 to 40 cents over the period, against a consensus of 54 cents. Unit expenses, excluding fuel, will climb up to 4% from a year ago, a forecast that Delta says includes “expected increases in labor costs” and rebuilding impacts of the network. Even as Delta warns of cost pressures, chief executive Ed Bastian said “the environment for air travel remains favorable” in 2023.
Wendy’s (+5%). Nelson Peltz’s activist Trian Fund Management said it would not make a takeover bid for the fast food chain.