Wall Street will return to the green on Tuesday, but remains enthusiastic. The S & P 500 rose 0.4% to 4,137 points, the Dow Jones rose 0.17% to 32,972 points, and the Nasdaq rose 0.71% to 12,147 points. The market is still very cautious, affected by the outlook for accelerating monetary tightening, but attempts are being made to buy what appears to be cheap. Target’s warning about profits initially sealed the distribution sector, but seems to have already been integrated. At Nymex, a barrel of crude oil rose 1.3% to $ 120. One ounce of gold was up 0.5% to $ 1,853. The dollar index returned 0.1% against a basket of reference currencies. The Bitcoin limit remains at $ 30,000.
In US economic news on Tuesday, the US international trade deficit for goods and services in April 2022 was $ 87.1 billion, with a consensus of $ -90 billion last month and a revised level of $ -1077 billion. April consumer credit figures will be revealed at 9 pm (consensus + $ 35 billion according to FactSet).
On the Fed’s side this time, regular players are in a “quiet period” before the June 14th and 15th Financial Conference (FOMC). This is inflation. Faced with this enthusiasm for the US central bank to strengthen its tone and this intense inflation, concerns are still focused on possible scenarios of painful economic landings. Australia’s central bank was surprised today by halving key interest rates, warning concerns about a global acceleration in monetary tightening and warnings that the move could continue. The European Central Bank (ECB) Board of Directors’ meeting will be held on Thursday. On Friday, the May US Consumer Price Index will be released (unadjusted CPI consensus + 8.2%, year-on-year). In the United States, the market expects to raise rates by 0.5 points this month and July, almost 200 basis points by the end of the year, while the euro area is expected to rise 133 points over the same period.
For China, which continues to be “unrestricted,” U.S. Secretary of Commerce Gina Raimondo estimated at CNN that tariff increases on certain imported Chinese goods would make sense to combat inflation. please give me. It has been ruled that certain tariffs related to national security (eg steel and aluminum) need to be maintained, but other tariffs can be reduced for consumer products and bicycles. Biden intends to discuss this subject of “tariffs” imposed on China with Treasury Secretary Janet Yellen. US trade representative Katherine Tai said tariffs should be maintained to force China to review abusive trade practices.
Note that in the oil market, Goldman Sachs expects its clients to average $ 140 a barrel between July and September. According to GS, consumers need to “feel” a pump-like price similar to $ 160 Brent …
Elsewhere in the world, German industrial orders in April fell 2.7% in seasonally adjusted data, but consensus expected + 1%. Spain’s industrial production fell 0.4% in April against a -1.4% consensus. Germany’s construction PMI was lower than expected at 45.4 in May. The Eurozone economic sentiment sentix index was negative at 15.8 in June, which was higher than expected. The final UK service PMI for May came in at 53.4 against a market consensus of 51.8.
On Wall Street, there are also some expected quarterly financial publications, especially JM Smucker, Caseys General Stores, United Natural Foods, Guidewire Software, Verint Systems and Chico’s FAS.
Wal-Mart’s rival US discount store Target (-2%) has been modified on Wall Street after being warned of profits. The title had already lost one-third of its value this year. In this way, the group is looking to evoke excess inventory, reduce guidance and currently bring its second quarter operating margin closer to 2%. Tuesday’s target said it needed to lower its quarterly margin forecast released a few weeks ago, offer deeper discounts and stock more important items as inflation pushes consumer spending down. The surprise guidance revision is a new blow to the company, which has already shown a significant decline in May quarterly profits. Soaring inflation and rising gas prices have certainly forced consumers to change their shopping habits, surprise many retailers and offer more discounts.
Target said it will focus on eliminating excess inventory, canceling orders, and strengthening parts of the supply chain that may be affected by “external volatility” in the second quarter. The company also prioritizes categories such as food, beverages and household items over discretionary items such as household items. Target’s strategy of keeping many of its products affordable is now proving to be costly to retailers. Retailers need to raise prices to offset unusually high transportation and fuel costs. Brian Cornell, Target’s Chief Executive Officer, said:
Retailers now expect operating margins for the second quarter to be around 2%, up from the previous estimate of 5.3%. While maintaining the full-year sales target, we expect a profit margin of approximately 6% in the second half.
JM Smucker (+ 5%) also warned bystanders of the fourth-quarter financial announcement, but this does not surprise the market. The American food group has lowered its annual guidance against the backdrop of a recall of gif peanut butter. The group also discusses inflation and supply chain issues. In the last quarter, sales increased by 6%. Fiscal year sales of $ 8 billion are fairly stable. Adjusted earnings per share for the closing quarter were up 18% to $ 2.23. Annual adjusted EPS was down 3% to $ 8.88.
Coles soared 11%. According to sources in The Wall Street Journal, American chain stores will have advanced and exclusive discussions with franchise groups. Therefore, the latter could acquire Coles as part of a $ 8 billion worth of business. Those familiar with the issue told the WSJ that the monopoly period with the franchise group is expected to last for several weeks. This article also reminds us of last week’s rumors that the franchise has submitted an offer valuing about $ 60 per share of the call.
JetBlue (stable) has submitted a modified offer to acquire Spirit Airlines for a total of $ 31.5 per share, compared to the previous offer of about $ 30 per share. Therefore, according to the new terms of the proposal, Spirit’s current shareholders will acquire $ 31.5 in cash per share. This includes $ 30 and $ 1.5 prepayments at the time the transaction is closed. The move will take place a few days before the expected shareholder vote on June 10 in a rival bid from the Frontier Group. Yesterday Monday, JetBlue raised $ 150 million in cancellation fees paid to Spirit shareholders in the event of an antitrust transaction failure, now at $ 350 million. Therefore, the battle between “low cost” airlines is intensifying in the United States. Last month, Spirit rejected JetBlue’s previous proposal and said it was unlikely to get regulatory approval. As part of that, Frontier has agreed to pay $ 250 million if the bid fails.
Apple (+ 1%) held the traditional annual developer conference WWDC yesterday Monday. Apple took this opportunity to announce a new version of CarPlay, a software specifically designed for cars. This confirms the desire to be able to personalize the dashboard display of equipped vehicles and play a growing role in the mobility market. .. The new version of CarPlay displays, among other things, the speed and range of the vehicle. Apple said several manufacturers, including Ford, Nissan, Honda and Renault, are planning to use the new software in cars that will go on sale next year.
Apple also announced that it has “completely redesigned” the MacBook Air laptop around the new M2 processor. It claims to be 35% faster than its predecessor, the M1. The M2 will also power the new 13-inch MacBook Pro next month. Among the many new features announced on Monday are the ability to edit messages sent by iMessage applications and a “safety check” that disables access to all sensitive information on all Apple devices for users. There is a function called (security check). Apple has also announced the launch of the “Apple Pay Later” service. This allows you to pay for group product purchases in four installments free of charge. This latest announcement will reduce block titles on Wall Street, a group that offers afterpay services in the region. Another player in the sector, Affirm, needs to be fixed in the stock market.
Exercise bike maker Peloton Interactive (stable) announced last night that its chief financial officer, Jill Woodworth, has resigned on behalf of Liz Coddington from Amazon.
Twitter (+ 1%) threatens to withdraw the $ 44 billion offer to acquire social media networks if it doesn’t get accurate data about “bots” and fake accounts that exist on the platform. It is doing well.
Robin Hood loses 6%, but the Wall Street Journal shows that the Securities and Exchange Commission, a US financial market police officer, will consider plans to intensify competition in the execution of investors’ orders.