(Boursier.com) — Wall Street is showing very strong growth now, before market trading this Wednesday, following the publication deemed reassuring of inflation figures. The S&P 500 climbs 1.6%, the Dow Jones 1.5% and the Nasdaq 1.9%! Expectations of a rate cut for 2025 are rising a bit, while consumer price figures (and those of producer prices yesterday) did not reveal any disaster. The markets are also benefiting today from a good series of quarterly banking results. On the Nymex, a barrel of WTI crude rose 0.9% to $77.1. An ounce of fine gold advances 0.5% to $2,690. The dollar index lost 0.5% against a basket of currencies.
Yesterday, the US producer price index for December 2024 was up 0.2% month-on-month and 3.3% year-on-year, against a FactSet consensus of +0 .3% compared to November and +3.4% year-on-year. Excluding food and energy this time, the American 'PPI' for December is… stable from one month to the next and increased by 3.5% over one year, against respectively +0.2% and +3.8 % consensus.
The American consumer price index for December 2024 was today up 0.4% month-on-month and 2.9% year-on-year, compared to 0.3% respectively. % and 2.8% FactSet consensus. Excluding food and energy this time, the price index increased by 0.2% compared to the previous month and by 3.2% over one year, against +0.2% and +3.3% of market consensus . The average hourly wage, as expected, increased by 0.3% month-on-month and by 3.9% year-on-year.
The New York Fed's Empire State manufacturing index for January, which has also just been announced, stood at -12.6 versus -2 consensus. It therefore signals a clear contraction in manufacturing activity in the region.
The US Department of Energy's weekly report on domestic oil inventories, for the week ending January 10, will be revealed at 4:30 p.m. The Fed's economic Beige Book, a summary of regional conditions, is finally due at 8 p.m.
Tomorrow, American economic news will be busy again, with weekly unemployment claims for the week ending January 11 (2:30 p.m., consensus 213,000), retail sales for December (also 2:30 p.m., consensus +0.6% of a month on month, +0.5% excluding automobiles, +0.4% excluding automobiles and gasoline). The Philadelphia Fed manufacturing index for January will be known at the same time (consensus -4). Import and export prices for December will also be communicated at 2:30 p.m. (consensus -0.4% for import prices compared to November). Business inventories and sales, as well as the U.S. housing market index, will be announced at 4 p.m.
Finally, on Friday, operators will follow housing starts and building permits for December (2:30 p.m.), as well as American industrial production figures for the same month (3:15 p.m.).
On the Fed side, Thomas Barkin, Neel Kashkari, John Williams and Austan Goolsbee speak today. Officials of the American central bank have in recent days minimized the risk of a resurgence of inflation, still pleading for monetary easing – at an admittedly more moderate pace. According to the CME Group's FedWatch tool, the Fed should opt for a monetary status quo at the end of the next three meetings (January, March and May). The tool indicates that rates are expected to fall by 25 or 50 basis points this year (probabilities of 34% and 30% respectively), with the assumption of a status quo throughout the year (approximately 15.6%) still remaining. possible. On the bond markets, the yield on the 10-year T-Bond fell to 4.7%, compared to 4.89% on the '30-year'.
Regarding the quarterly publications of companies listed on Wall Street, the serious things begin today with JP Morgan Chase, Goldman Sachs, Wells Fargo, BlackRock, Citigroup, Charles SchwabKinder Morgan et Bank of New York Mellon. TSMC, UnitedHealth, Bank of America, Morgan Stanley, PNC Financial, US BancorpM&T Bank, JB Hunt and First Horizon, announce tomorrow.
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JP Morgan Chase published a record profit for the closed financial year, at 58.5 billion dollars compared to 49.6 billion a year before, as well as an adjusted profit also historic at 54 billion dollars and $18.22 per share. Jamie Dimon, boss of the group, discusses in particular the resilience of the American economy and consumer spending. In the fourth quarter alone, the largest bank generated a net profit of $14 billion, or $4.81 per share, compared to $9.3 billion a year before. The EPS consensus was around $4.1. Investment banking revenues increased 46% in the quarter to $2.6 billion, while reported total revenues were $42.8 billion, above expectations, as were adjusted revenues, at $43.7 billion. Assets under management stood at close to $4,000 billion, up 18% year-on-year.
Goldman Sachs didn't do poorly either. The group more than doubled its profits in the fourth quarter, to $4.11 billion and $11.95 per share, compared to $2.01 billion a year earlier. The consensus was for just $8 in adjusted EPS. This is the New York investment bank's highest profit since the third quarter of 2021. Revenues were 13.9 billion against 12.2 billion consensus. Investment banking fees increased 24% in the quarter to $2.05 billion. Revenue in the global banking and markets division rose 33% to nearly $8.5 billion in the quarter ended at the end of December. Total investment banking revenues for the year increased 26% worldwide to $86.8 billion (+33% in North America).
Wells Fargo for its part announced earnings per share of $1.43 for its fourth fiscal quarter, significantly above consensus, for revenues of $20.38 billion, which were a little short. Regardless, net interest income (NII) reached $11.84 billion, beating analysts' expectations. Charlie Scharf, CEO of the bank, talks about a solid quarterly performance and a year of progress. Wells envisages an NII increase of 1 to 3% in 2025 compared to 2025.
Bank of New York Mellon reported earnings per share of $1.54 for its fourth quarter, in line with the expectations of local brokers, for revenues of $4.85 billion above forecasts. For 2025, the establishment plans to maintain growth thanks to strategic customer acquisitions and an expanded product offering. The group says it is focused on operational efficiency and technology-driven solutions. Robin Vince, CEO of the group, highlights the historic annual results, testimony to strategic concentration.
Citigroup returned to profits, thanks in particular to trading and mergers and acquisitions activities. The group posted a net profit of $2.86 billion and $1.34 per share for the quarter ended at the end of December, compared to a loss of around $1.8 billion for the corresponding period last year. Markets revenues climbed 36% to $4.6 billion, while total revenues were $40.9 billion ($19.6 billion after interest expenses).
BlackRockthe asset management giant, says clients entrusted it with a record $641 billion more (net inflows) in 2024, including $281 billion in the fourth quarter. Thus, assets under management increased by 26% year-on-year to more than $11.5 trillion, while revenues and operating profit set new records. Over the closed quarter, revenues reached 5.68 billion, up 23% and above consensus. Adjusted earnings per share were $11.93 versus $11.43 consensus.
Intelthe fragile processor giant, announced yesterday that it will spin off its venture capital and investment arm 'Intel Capital', which will therefore become a standalone company. Intel thus intends to focus on improving efficiency across the company. The Californian group will remain a main investor. It says Intel Capital's standalone operations are expected to begin in the second half of 2025, under a new name. The existing Intel Capital team will be transferred to the new entity. Intel Capital has over $5 billion in assets under management and invests in the technology ecosystem.
Pfizer sold around 700 million Haleon Plc shares, representing a 7.7% stake in the capital of the British manufacturer of Sensodyne toothpaste. The operation allowed the American pharmaceutical giant to raise around 2.5 billion pounds, or 3.1 billion dollars. The securities were sold via an accelerated placement to investors, indicates Bloomberg. The offer was priced at 3.57 pounds per share, a discount of 2.8% to yesterday's prices. According to Bloomberg, investor demand exceeded the amount offered a few minutes after the launch of the operation. Pfizer had already sold Haleon shares last year. Haleon was formed in 2022 from the combination of the consumer health units of GSK and Pfizer.
Meta Platformsthe parent company of Facebook, WhatsApp and Instagram, is cutting around 5% of its workforce. These are layoffs based on performance, while the group also plans to hire new people to fulfill their functions this year, according to an internal memo sent to all employees and relayed in particular by Bloomberg. In September, Meta employed around 72,000 people. The cuts would therefore represent around 3,600 jobs. “I have decided to raise the bar on performance management and eliminate poor performers more quickly,” the group's CEO, Mark Zuckerberg, reportedly said in a memo posted on an internal forum and reviewed by Bloomberg News.
Tesla plans to suspend part of the manufacturing lines for its recently “refreshed” Model Y vehicles in Shanghai for about three weeks over the Chinese New Year, Bloomberg News reported today, citing people familiar with the matter.
