(Boursier.com) — Wall Street corrects again before market this Friday, falling following better than expected American employment figures for the month of December. The S&P 500 lost 0.5%. The Dow Jones and the Nasdaq are showing comparable declines… After having boosted the year 2023, the titles of the ‘Magnificent Seven’ are weighing on the American market this week, with in particular a return ofApple at an eight-week low following two broker downgrades… The latest (too?) robust US employment figures were also appreciated differently, while operators consider that an overly resilient labor market limits capacity Fed action.
According to the US Department of Labor this Friday, non-agricultural job creations for the month of December 2023 stood at 216,000, well above the consensus which was only 160,000. The unemployment rate stood at 3.7% against a consensus of 3.8%. The average hourly wage increased by 0.4% compared to the previous month against 0.3% consensus. The labor force participation rate was 62.5%. Job creations in the private sector totaled 164,000, compared to 130,000 consensus and 136,000 for the revised reading of the previous month. Total job creations for November were posted at 173,000 in revised reading against 199,000 previously estimated.
The latest ADP report on American private employment showed 164,000 job creations for the month of December, against a FactSet consensus of 125,000 and a revised reading of 101,000 for the previous month. “We are returning to a labor market very much in line with pre-pandemic hiring levels. Although wages were not the cause of the recent surge in inflation, now that wage growth has “reduced, any risk of a wage-price spiral has practically disappeared”, judges Nela Richardson, chief economist at ADP. Job creation increased for the fourth consecutive month, thanks to strong growth in hiring in the leisure and hospitality sectors. Construction held up despite high interest rates, but the manufacturing industry continued to struggle, posting another month of losses. Small businesses with 1 to 49 employees created 74,000 jobs in December, while businesses with 50 to 249 employees created 58,000 positions. Companies with 500 people or more or generated 40,000 jobs.
The Challenger, Gray & Christmas study for December revealed announcements of layoffs affecting 34,817 jobs, compared to 44,510 a month earlier.
Unemployment claims fell more than expected last week in the United States. The US Department of Labor announced unemployment claims for the week ending December 30 at 202,000, down 18,000 from the previous week. The consensus was positioned at 216,000.
Operators will continue to monitor American industrial orders this Friday (4 p.m., consensus +1.8%) and the ISM for services (4 p.m., consensus 52.6).
Elsewhere in the world this morning, the Japanese services PMI for December was in expansion territory at 51.5. German retail sales, on the other hand, corrected much more than expected (-2% excluding adjustments and year-on-year for the month of November, -2.5% month-on-month and after adjustments). Preliminary figures for consumer prices in the euro zone showed a rebound in line with expectations. The annual inflation rate in the region is in fact estimated at 2.9% in December, compared to 2.4% the previous month according to preliminary data from Eurostat. Regarding the main components of inflation, food, alcohol & tobacco should experience the highest annual rate in December (6.1%, compared to 6.9% in November), followed by services (4. 0%, stable compared to November), industrial goods excluding energy (2.5%, compared to 2.9% in November) and energy (-6.7%, compared to -11.5% in November ). Sequentially, prices should have increased by 0.2%… Annual ‘core’ inflation, which excludes the most volatile elements, should reach 3.4% compared to 3.6% in November. A level in line with market expectations.
On the Nymex, a barrel of WTI crude rose 1.1% today to $73. An ounce of gold lost 0.3% to $2,043. The dollar index gained 0.5% against a basket of reference currencies. On the bond markets, the yield on the 2-year T-Bond is now at 4.45%, compared to 4.07% on the 10-year and 4.2% on the 30-year… The FedWatch tool of CME Group highlights a 95% probability of a new monetary status quo on January 31 following the next FOMC meeting. For the meeting on March 19 and 20, the tool gives a 52% probability of a rate cut to 5-5.25% and a 46% ‘probability’ of a status quo.
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Apple remains under pre-market pressure on Wall Street after deploring two broker downgrades this week. Taiwanese electronics production subcontractor Foxconn, main assembler of the iPhoneApple, warned this Friday that it expected a decline in revenues in the first quarter, on a demanding comparison basis and in a context of weak demand. However, the first quarter is traditionally lower for the group, and revenues reached a record last year, at the same time, with the post-covid recovery. Foxconn also published revenues for its fourth quarter down 5.4% to 1,851 billion Taiwan dollars, narrowly beating the consensus. Revenue last month was 460 billion Taiwan dollars, or about 14.8 billion dollars. Fourth-quarter revenue from the consumer electronics business including smartphones was flat, reflecting slowing demand.
You’re here “recalls” 1.6 million cars in China due to accident risk linked to Autopilot, Bloomberg reports. Tesla will actually use remote vehicle upgrade technology to provide newly developed functions to vehicles to reduce risks. Bloomberg observes that the “recall” applies to virtually every car Tesla has ever sold in the country. This decision echoes that concerning 2 million vehicles in the United States last month. The affected cars in China were produced between August 2014 and December 2023, including locally produced Model 3 and Y and imported premium models, according to the local administration.
Tesla drivers could abuse Autopilot functions, increasing the risk of collision and posing a safety risk, the Chinese regulator said. The “recall” therefore reflects the Texas automaker’s response last month to the US National Highway Traffic Safety Administration, determining that Elon Musk’s group was not doing enough to ensure that drivers were using Autopilot correctly. . NHTSA had said it would keep open a years-long defect investigation to monitor the effectiveness of Tesla’s fixes to 2 million cars.
Costco Wholesale, the American distribution giant, posted revenues for the month of December totaling $26.15 billion, an increase of 9.9% year-on-year. Over the 17 weeks ending at the end of December 2023, the group posted total revenue of $82.9 billion, an increase of 5.9% compared to the previous year.
Constellation Brands, known for its Corona beer, published disappointing revenues and a profit above expectations for its third fiscal quarter. The group lowers its annual revenue forecasts. For the closed quarter, adjusted earnings per share were $3.19 versus $3 consensus. Quarterly revenues stood at $2.47 billion versus the consensus of $2.54 billion. The group maintains guidance for annual adjusted earnings per share ranging from $12 to $12.2, but now only expects $9.15 to $9.35 billion in annual revenue, compared to $9.6 to $9.8 billion. billion before.
Microsoft. OpenAI, the firm supported by Microsoft, behind the chatbot ChatGPT, is talking to dozens of publishers about licensing deals, Bloomberg reports. In an interview, an OpenAI official calls the discussions “active” and “positive” and says, “You’ve seen some deals announced, and there will be more in the future.” The article reminds readers that OpenAI has already signed agreements with Axel Springer and the Associated Press. The executive further claims that OpenAI was “in the midst of a very active and productive negotiation” with the New York Times until the newspaper filed a copyright infringement lawsuit last month. The OpenAI store will also soon open its doors. After a slight delay, the startup behind ChatGPT should launch its GPT online store next week, announced during the DevDay conference last November, as indicated in an email addressed to GPT Builder users, relayed by ‘ The Verge’. “Dear GPT Builder, we would like to inform you that we will launch the GPT Store next week,” OpenAI announced, inviting users who wish to share their GPT in the store to “review our updated usage policies and GPT brand guidelines to ensure (its) GPT is compliant.”
ExxonMobil said it would write down approximately $2.5 billion in California assets in the fourth quarter and also said the drop in energy prices would reduce its operating profit. Operating profit could fall to around $8.9 billion, down 30% year-on-year. Exxon said oil and gas properties along the Southern California coast are expected to experience depreciation ranging from $2.4 billion to $2.6 billion. Energy startup Sable Offshore agreed more than a year ago to pay $643 million for the assets. Ongoing challenges in the state’s regulatory environment have hampered progress in resuming operations, the group lamented. Oil majors are turning away from California due to mature oil fields and the state’s environmental policies…
Exxon also indicated its intention to take a writedown of approximately $250 million in its chemicals business. Lower oil prices affected profits by $600 million, but this was partially offset by rising natural gas markets. The $1.6 billion decline in refining profits was partly offset by a $1.2 billion gain in derivatives.