(Boursier.com) – Wall Street, which suddenly turned into the red last night at the end of a trying session, once again, for technology stocks, remains hesitant on Friday. The DJIA returned 0.12% to 34,674 pts, while the S&P 500 lost 0.43% to 4,463 pts. The Nasdaq fell 0.67% to 14,059 pts. The barrel of WTI crude fell 0.7% to $85 on the Nymex. The ounce of gold corrected by 0.5% to $1,833. The dollar index lost 0.2% against a basket of currencies.
Bitcoin drops nearly 11% in 24 hours below $39,000 as risky investments flee and Russia threatens a cryptocurrency ban amid risks to financial stability and political sovereignty monetary.
Fears persist over the speed of the Fed’s monetary tightening in the face of the inflationary threat. The high level of valuations and a wave of quarterly publications so far lackluster do the rest, justifying profit taking for many investors. The Biden administration’s fiscal stalemate does little to comfort. Finally, geopolitical fears are also very present, with the Russia-Ukraine file.
In economic news this Friday on Wall Street, the Conference Board’s index of leading indicators for the month of December 2021 emerged up 0.8% compared to the previous month, against a consensus of 0.7% and a revised reading of +0.7% for the previous month. The previous November valuation was +1.1%.
Quarterly financial publications continue at a fairly brisk pace on Wall Street, in the aftermath of the disappointment netflix, with Huntington Bancshares, Ally Financial, First Hawaiian, IHS Markit and especially Schlumberger. The announcements will accelerate further next week, with IBM, Timberland and Halliburton on Monday.
Values
Schlumberger (-2%), oil services giant, is progressing on Wall Street. The Houston group posted net income of $601 million or 42 cents per share in its fourth fiscal quarter, compared to $374 million a year earlier. Adjusted earnings per share were 41 cents, versus the FactSet consensus of 39 cents. Revenues climbed 13% to $6.22 billion, from $5.53 billion a year earlier and $6.08 billion from the FactSet consensus. Regarding the outlook, the group notes that the fundamentals of the industry are very favorable for this year, due to robust anticipated demand, tight supply and increased oil prices. This trend should benefit North America and international markets.
Intel (+1%) plans to invest at least $20 billion in a ‘chip’ production site near Columbus, Ohio, creating around 3,000 jobs according to the Wall Street Journal.
netflix (-25%) collapses, back on its pre-pandemic stock market levels… The streaming giant added 8.3 million new subscribers to its services in the 4th quarter of 2021, bringing the number to 221.8 million total subscribers, which is in line with Wall Street expectations. On the other hand, the American group was much more pessimistic than expected for the beginning of 2022. For the 1st quarter of 2022, the group expects 2.5 million new paying subscribers, less than half of what analysts hoped. The FactSet consensus was expecting 5.8 million new subscribers.
Management explains its conservative forecasts in particular by the late release, scheduled for March, of several new productions, including season 2 of ‘Bridgerton’ and the film ‘The Adam Project’. Although retention and engagement rates remain high, the pace of new customer acquisition has not returned to its pre-Covid crisis pace. “We think this could be due to several factors including the longer than expected aftershock of the pandemic, and the macro-economic difficulties that persist in several parts of the world”.
As for the fourth quarter 2021 accounts, Netflix reported a 17% increase in sales to $7.71 billion, a figure in line with analysts’ expectations. Profits reached $607 million, or $1.33 per share against $1.19 a year earlier (+11.7%) and much higher than the consensus, which was expecting only $0.83 per share .
CSX (-3%), the American railway group, reacted negatively last night on Wall Street, to the announcement of a fourth quarter yet higher than market expectations. Over the period, the group revealed an adjusted profit per share of 42 cents, against 41 cents of consensus and 35 cents a year before. Revenues totaled $3.43 billion in the quarter ended December, beating the consensus by 4%. They were 2.83 billion dollars over the corresponding period last year.
Platoon (+5%), which stalled last night on Wall Street, remains under surveillance. The group’s CEO indicated that the company was reviewing the size of its workforce and its level of production, in order to adapt to more seasonal demand. John Foley was reacting to Peloton’s stock price crashing following reports from CNBC that the group had halted production of exercise bikes and treadmills in the face of falling demand.
Twitter (-2%), the American social media network, has announced the launch of a feature allowing users to present their NFTs (non-fungible tokens) as a profile picture.
Pfizer (-2%) has obtained special permission from the Japanese authorities to administer its covid vaccine to children aged 5 to 11.