Mid-session analysis AOF Wall Street
(AOF) – US equity markets are flat mid-session. Investors are rewarding American Express and punishing Intel as earnings season heats up. The day’s US statistics also painted a picture of an economy in good shape without overheating. However, they have risen 3 basis points to 3.48% over the 10-year period in the US, which is weighing on the indices. The Dow Jones, measured by Intel and Chevron, was up 0.02% at 33,955.37 at 5:30 p.m. The Nasdaq Composite rose 0.45% to 11,564.38 points.
Intel fell nearly 8% to $27.74, closing the Dow Jones index higher. Not only did the world’s number one semiconductor company deliver a worse-than-expected report, but its outlook is bleak. This bad release from Intel is polluting the entire chip sector on Wall Street, with the Sox down more than 1%. Intel is losing market share to rivals such as AMD, but it is also struggling with a weak PC market and continued weak demand for data center chips.
Today’s economic indicators
The University of Michigan’s consumer confidence index came in at 64.9 in January, slightly beating the consensus of 64.6. It was 59.7 in December.
US home sales pledges rose 2.5% in December, while they were expected to fall 0.9%. In November, they decreased by 2.6%.
The PCE price index rose 0.1% for the month in December, after +0.1% in November versus +0.2% consensus. On an annual basis, the Fed’s preferred measure of inflation came in at 5% versus the +5.5% consensus, after 5.5% in May. Excluding inflation and food, it rose 0.3% for the month in December, in line with expectations.
Household incomes in the US increased by 0.2% in December, while their consumption decreased by 0.2% in the same month. The market was expecting +0.2% and -0.1% respectively after +0.3% and -0.1% in November.
Values to watch today
American Express
American Express is expected to rise on the back of a favorable outlook and dividend growth. The credit card issuer’s fourth-quarter net income fell 9% to $1.57 billion, or $2.07 per share. Earnings per share were 13 cents below consensus. Revenue rose 17% to $14.18 billion, while Wall Street was expecting $14.22 billion.
Chevron
American oil company Chevron has set a record annual revenue of $35.5 billion in 2022, more than doubling in 2021: $15.6 billion ($8.14 per share – diluted). Its adjusted earnings are $36.5 billion ($18.83 per share – diluted) in 2022, compared with adjusted earnings of $15.6 billion ($8.13 per share – diluted) in 2021. The oil group’s sales and other operating income rose from $45.8 billion to $55 billion. The fourth quarter of 2021 and the fourth quarter of 2022.
Hasbro
Hasbro, whose stock is expected to drop at the opening, announced that it expects results for the fourth quarter below expectations. The American toy giant also announced that it intends to cut about 15% of its workforce worldwide this year amid falling demand. The American firm expects adjusted earnings per share of $1.29 to $1.31, versus the FactSet consensus of $1.52. A net loss of between 93 cents and $1 per share is expected.
Visa
The Visa payments specialist reported higher-than-expected profits. In the first quarter ended in late December, its net profit rose 6% to $4.2 billion, or $1.99 per share. Excluding exceptional items, earnings per share were $2.18, beating consensus of $2.01. Its revenue rose 12% to $7.9 billion, slightly more than the 3% consensus. They increased by 15% at constant exchange rates.
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