(Boursier.com) – The US rating is now back in positive territory on Monday, following figures from the manufacturing industry. The S&P 500 took 0.31% to 4,143 pts, while the Dow Jones grabbed 0.27% to 32,935 pts and the Nasdaq advanced 0.79% to 12,488 pts. However, caution dominates, following the strong technical rebound in July, and against a backdrop of Sino-American tensions. The barrel of WTI crude fell 5% on the Nymex to $93.8. The ounce of gold gleans 0.3% to $1,787. The dollar index fell 0.5% against a basket of currencies. Bitcoin is settling at $23,000 following its recent rebound.
The Markit US Manufacturing PMI for July ended at 52.2, compared to a consensus of 52.3 and a level of 52.3 also for its preliminary reading. It therefore still signals an expansion of US domestic manufacturing activity.
The US manufacturing ISM for the month of July 2022 stood at 52.8, against 52 consensus and 53 a month earlier, signaling relative stability in the expansion. Notably, the ISM index of manufacturing prices fell back to 60, against 74.9 consensus and 78.5 a month earlier. This is the biggest fall in this index of prices paid (18.5 points!) since 2010. Finally, note that the new orders indicator stands at 48, against 49.2 a month before.
US construction spending for the month of June, which has also just been revealed, was down 1.1% compared to the previous month, against +0.2% consensus and +0.1% one month previously (revised reading).
Debates continue regarding the Fed’s monetary policy and the impact of the rate hike on the economy in a context of record inflation, while the United States has just ‘technically’ entered a recession but the job market remains healthy. According to the CME Group’s FedWatch tool on Monday, the probability of an additional half-point rate hike on September 21, after the next monetary meeting, is 75.5%, compared to 24, 5% chance of a three-quarter point rise. The federal funds rate is currently housed in a range of 2.25 to 2.5%, after two increases of 0.75%.
Neel Kashkari, the head of the Minneapolis Fed, felt that the markets were moving too fast in anticipating the “pivot of the Fed” and therefore the future rate cuts of 2023. According to the official, quoted by the New York Times, the The Fed still has a long way to go in its fight against inflation. Neel Kashkari therefore indicated on Friday that the markets had taken the lead in anticipating that the central bank – which has raised interest rates quickly this year – would soon start to retreat. “I’m surprised by the markets’ interpretation,” Kashkari said in an interview. “The (Fed Monetary) Committee is united in its determination to bring inflation down to 2%, and I think we will continue to do what we need to do until we are satisfied that inflation is on track to get back down to 2% – and we’re a long way off.”
Fed officials raised interest rates by three-quarters of a percentage point last week, their second consecutive ‘oversized’ rate hike, and a move that took rates to a range of 2.25 to 2 .5%. This is roughly what policymakers see as a neutral framework, which neither fuels nor slows growth, and further increases in interest rates would begin to actively dampen the economy.
It should also be noted that the President of the US House of Representatives, Nancy Pelosi, is launching her “tour” in four Asian countries, without certainty however concerning her possible visit to Taiwan, following warnings from China. On Sunday, the Democratic leader’s office announced that she was leading a congressional delegation to the region, the route including Singapore, Malaysia, South Korea and Japan, with no indication of Taiwan. Pelosi’s visit comes amid deteriorating relations between Washington and Beijing. Chinese President Xi Jinping warned Joe Biden last week that Washington must abide by the one-China principle and that “those who play with fire will perish therein.” Biden clarified to Xi that US policy toward Taiwan had not changed…
The speaker of the United States House of Representatives is still expected to visit Taiwan on Tuesday, defying Chinese authorities who have warned of consequences if the visit goes ahead, Taiwanese national newspaper Liberty Times reported, citing authorities. people close to the file.
Elsewhere in the world today, note that the Asian manufacturing PMI indices (Japan and China) came out slightly below expectations in the final reading – but still at 50 and therefore in the expansion zone. German retail sales fell sharply in June. In the euro zone, manufacturing PMIs came out in contraction, below 50, in Spain, Italy, France and Germany. The PMI indicators in France and Germany came in close to the consensus, at 49.5 and 49.3 respectively. The final index in the euro zone is just below 50, at 49.8 against 49.6 consensus. The final British manufacturing CIPS indicator, on the other hand, settled on this demarcation of 50, at 52.1, almost ‘in line’. Finally, the European unemployment rate came out at 6.6% in June against 6.7% consensus.
Quarterly financial publications continue on Wall Street, after Amazon and Apple at the end of last week. This Monday, Activision Blizzard, Williams Companies, Devon Energy, Simon Property, Global Payments, Mosaic, Check Point Software, Loews, pinterest, CNA-Financial, Budget Reviews Where Leggett & Plattwill announce their latest results.
AMD, S&P Global, Starbucks, Caterpillar, PayPal, Gilead Sciences, Zimmer Biomet, Airbnb, Illinois Tool Works Where Western Petroleum – Warren Buffett’s new ‘darling’ -, as well as Marriott, Uber, Electronic Arts, Prudential Financial, DuPont de Nemours, Match Group and Marathon Oilpublish tomorrow Tuesday. CVS Health, Booking Holdings, Moderna, Regenerate, MetLife, McKesson, Yum! Brands, Lucid, eBay, Clorox and Allstateannounced on Wednesday. Eli Lilly, Ali Baba, Amgen, Conoco Phillips, Cigna, Thomson Reuters, block, Motorola Solutions, DoorDash Where Intercontinental Exchangewill be there on Thursday. Berkshire Hathaway, Liberty Broadband, Western Digital Where Goodyear Tirewill finally publish on Friday.
Apple (stable), the Californian colossus of Cupertino whose quarterly results had reassured at the end of last week, has just launched a bond issue in four parts in order to finance its dividends and share buybacks. The longer-dated tranche of the offer, at 40 years, could yield around 150 basis points versus US Treasuries, according to a person familiar with the matter quoted by Bloomberg. Proceeds from the sale will therefore be used for general corporate purposes, including funding share buybacks and dividends, said the source, who asked not to be identified as details are private.
Boeing (+6%). The Federal Aviation Administration, the US government agency responsible for regulations and controls in civil aviation, has approved plans for the inspection and modification of Boeing for its 787 Dreamliner. The New York Times reports that the FAA has approved Boeing’s plans to resume deliveries of the Dreamliner. The regulator has approved Boeing’s proposal which requires specific inspections to verify that the condition of the aircraft meets requirements and that all work has been completed. This should allow Boeing to resume deliveries in August… These deliveries had been interrupted in May 2021.
Ali Baba (stable), the Chinese e-commerce giant, listed on Wall Street, plunged 11.1% on the American market on Friday, even as its American comparable Amazon ignited by 10.4% on reassuring quarterly results. Alibaba intends to do what is necessary to maintain its listing on the New York Stock Exchange alongside that of Hong Kong, while the Chinese has just been placed on a list under surveillance by the SEC. Alibaba has therefore been included in the SEC’s “Delisting Watchlist”, a list of more than 270 Chinese companies, compiled by the American regulatory and market supervision authority, which could be delisted for not having complied with the requirements. in terms of auditing. Thus, the American authorities demand full access to the working documents of the audits of Chinese companies listed in New York, even as Beijing prohibits foreigners from inspecting the documents of local accounting firms. Chinese companies listed on the US exchange have until early 2024 to comply with US audit requirements. Congress is even considering bipartisan legislation that could accelerate the deadline to 2023. China, for its part, has made it clear that the two parties are determined to find an agreement.
Target (+3%) benefited from a rating from Wells Fargo, which has just revised its ‘online weighting’ recommendation to ‘overweight’, perceiving a potential of 20% on the file of the American discount retailer following its brutal correction of the last months.
Global Payments (+5%), the American fintech group, announced the planned acquisition ofEVO Payments (+27%!) in order to strengthen its presence in the B2B segment. Global Payments will pay $34 per share to take over the Atlanta firm, giving EVO an enterprise value of $4 billion. The group has also reported its accounts for the second quarter and reaffirms its forecasts at constant currencies. For the quarter ended, GAAP revenue was $2.3 billion, while adjusted revenue increased 6% to $2.06 billion. Adjusted earnings per share improved 16% to $2.36. Adjusted EPS at constant exchange rates is expected between $9.53 and $9.75 over the year.
Nvidia (+3%), Texas Instruments (-1%), AMD (+4%), Intel (+3%) and the other values of the sector are to be followed today, while the American Department of Commerce intends to limit the amount of government subsidies for the manufacture of semiconductors and affirms that it will not let companies use these funds to ‘inflate their results’. Recall that the Chinese Ministry of Foreign Affairs had also risen at the end of last week against the American bill aimed at reviving the semiconductor industry, adopted by the Senate.
Twitter (-2%). Elon Musk, boss of Tesla and SpaceX, counter-attacked on Friday against the social media network Twitter, concerning the planned and then abandoned acquisition of the group for 44 billion dollars.
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