Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
18:23
In the storm of Meta and other tech giants, there is also another tech giant, IBM which published its financial statements – the company exceeded expectations with an operating profit of $1.68 per share and above the expectation of $1.59. Revenues were $14.46 billion, slightly less than the expected $14.5 billion.
The stock is falling today after its announcement of the acquisition of the cloud technology company Hashi Corp For $35 per share, or $6.4 billion.
17:41
Check Point Overtook analysts’ forecasts in the line of profit and revenue, but the company misses analysts’ expectations for the second quarter of the year and the stock falls. The company is still looking for a new CEO to replace Gil Shvid.
Mobileye Global published its results for the first quarter of the year this afternoon – the results are mixed. The company reports an adjusted loss (Non-GAAP) of 7 cents per share on revenue of $239 million, while analysts expected it to post an adjusted loss of 6 cents per share on revenue of $231.6 million. This is a 48% drop in revenue compared to $458 million in the corresponding quarter last year, but similar results to Mobileye’s profit warning at the beginning of the year.
16:57
The disappointing growth data and the technology shares are bringing down the indices in Wall Street trading – NASDAQ is down more than 2%, Dow Jones and S&P 500 are down 1.7% and 1.3% respectively.
Chipotle Mexican Grill Bill Ackman’s favorite stock is soaring in trading today after the company surprised analysts’ expectations with quarterly revenues of $2.7 billion and adjusted earnings per share of $13.4 compared to expectations of $11.66. The company attributes the improvement to the faster and more efficient service as well as to special promotions they conducted during the month of March.
Ackman purchased shares in the restaurant chain about 8 years ago at $411 per share, and is now at a 640% profit. About 18% of the stock portfolio of his Pershing Square hedge fund is invested in the stock. From the “Magnificent Seven”, Ekman is invested in one – Alphabetical (Google) .
16:35
Trading on Wall Street opened in the afternoon with sharp price drops. Nasdaq is down more than 2%, Dow Jones and S&P 500 are down 1.3%.
The declines are led by technology stocks. Meta, the parent company of Facebook, Instagram, WhatsApp plunges at the opening of trade despite showing positives. Despite the numbers, what startled investors was the forecast presented by the company. The revenues for the next quarter are expected to be in the range between 36.5-39 billion dollars compared to an expectation of 38.25 billion.
In addition, the company stated that it plans additional large expenses as investors begin to internalize the cost of the company’s artificial intelligence dream.
● Analysis | The reasons for the decline of Meta stock despite strong results, and the fear of a domino effect reaches as far as Google
stock Alphabetical (Google) andMicrosoft which will be published today after the lock down by about 5%.
15:31
USA – a steep drop in growth that dropped to 1.6% in the first quarter only compared to an expectation of 2.5% and compared to a growth rate of 3.4% measured in the previous quarter. This is a surprising figure after the members of the Federal Reserve recently spoke about the strong American economy that shows resistance in the face of high interest rates.
The shekel has now weakened by about 1.1% and is trading at 3.79 shekels to the dollar, the euro is trading at 4.06 shekels.
Following the index, the yield on the 10-year American bond rises by 5 basis points to a record since November – 4.7%.
Yoni Penning, chief strategist of the transaction room, Mizrahi Tefahot, commented on the surprising figure: “A few years of the ‘Biden economy’ caused the GDP data in the US to have a tendency to surprise upwards, and even more so in the last six months. In the most recent data, of course, this tendency is also reflected in more immediate data from the employment market, and as I recall, we also saw several upward surprises in inflation In recent months, and more than that, indications of somewhat ‘sticky’ inflation. In this sense, today’s figure with the significant downward surprise should have been a good reason for the markets to heave a sigh of relief.”
“In our estimation, to a large extent, nominal GDP managed to maintain positive momentum during the second half of 2023. And in this sense, the moderation of inflation during that period helped bring about very strong real growth during that period. On the other hand, the rise in GDP prices during the current quarter (3.7% ) brings us closer to the high environment we have known. And the moderation it casts on the real product explains much of today’s low figure.
“At the current stage, the high level of product price inflation is a significant factor in the market’s interpretation of the data. As a result, today’s figure does not result in a significant change in expectations from the Federal Reserve, which remain on the order of magnitude of a 50% probability of a reduction until the decision at the end of July (inclusive). Despite this, It is possible that tomorrow’s PCE price index, even if it does not surprise downwards, will be a moderating factor in the Fed’s interest rate expectations.”
14:54
Mobileye , published mixed results for the first quarter of the year. The company reports an adjusted loss (Non-GAAP) of 7 cents per share on revenue of $239 million, while analysts expected it to post an adjusted loss of 6 cents per share on revenue of $231.6 million. This is a 48% drop in revenue compared to $458 million in the corresponding quarter last year, but similar results to Mobileye’s profit warning at the beginning of the year. The company’s stock loses about 4% of its value in pre-trade on Wall Street.
13:30
The main indices in Europe are currently trading in a mixed trend. The DAX falls by about 0.8%, the French CAC sheds about 1% of its value and the British Potsey rises by 0.6%.
Futures in the US are trading in a negative trend.
12:04
The Israeli cyber security company Check Point Gil Shvid’s exceeded analysts’ expectations when it reported adjusted earnings per share of $2.04 per share (a 13% increase compared to the corresponding quarter) on revenues of $598.8 million (a 6% increase compared to the corresponding quarter). Analysts were expecting a profit of $2 per share on revenue of $594.9 million.
In doing so, the company also surpassed its own forecast, which it presented last quarter. The company expected adjusted profit (Non-GAAP) of $2 (mid-term) on revenues of $592.5 million (mid-term). For the entire year, the company expected growth of about 6% to revenues of 2.475-2.625 billion dollars, and a net profit of 8.7-9.3 dollars per share. The annual analyst expectation is for earnings per share of $9.07 per share on revenues of $2.56 billion.
Now the market is expected to wait for the forecast that the company will publish, as usual, at 16:00. The analysts expect that in the second quarter the adjusted profit will be $2.16 per share on revenues of $623.3 million.
11:04
stock Unilever Rising sharply after the consumer goods company reported a larger than expected increase in sales (4.4% compared to the corresponding period) in the first quarter of the year.
On the other hand, the Swiss Food and Beverage Company Nestlé is trading lower after reporting a 5.9% drop in sales in the first quarter of 2024, which amounted to approximately 22.1 billion Swiss francs ($24.18 billion).
10:46
The European trading day follows a mixed trend. The FTSE rises by 0.5%, the DAX falls by 0.5% and the French CAC loses its value by 0.3%.
08:47
This morning in Asia, the leading indexes are trading hourly in a mixed trend. The Nikkei plunges by about 2%, the Hang Seng rises by 0.6%, the Shanghai Stock Exchange adds 0.2% to its value and the Kospi index falls by 1.2%.
In the US, the futures are trading in a negative trend this morning.
On Wall Street, the reporting season for the first quarter is gaining momentum. Meta reported last night (Wed) revenues of $36.46 billion, a 27% increase compared to the corresponding quarter. Early forecasts expected revenues around $36.1 billion. This is the fifth quarter in a row in which Meta shows good revenue growth. However, Meta stated that it expects revenues in the second quarter in the range of 36.5 to 39 billion dollars and emphasized that the changes in the foreign exchange rates are expected to damage the company’s revenues by about 1%.
● The American stock market on the way down? This is what the big banks think
The developments in the field of artificial intelligence have raised the concern among analysts about the increase in expenses and investments that the company will have to make. Indeed, Meta also expects that the developments in the field of artificial intelligence will lead to an increase in the company’s expenses.
Meta predicts that the expenses for 2024 will increase to the range of 96-99 billion dollars, unlike the 94-99 billion dollars predicted earlier. The reasons for this are due to higher infrastructure and legal costs. Even now, the company mentions that the virtual worlds division, the Metaverse, will continue to accumulate operating losses significantly from year to year.
Despite the strong results that Meta presented for the quarter, investors were alarmed by the forecast for the second quarter of the year and the company’s expenses in the field of artificial intelligence. Following this, Meta’s stock plunged by about 15% in late trading, wiping out about 200 billion dollars from the company’s value.
Tonight (Thursday), after the end of trading, they will also report their financial results Alphabetical and Microsoft . Investors expect that Alphabet will record a profit of $1.51 per share and revenues of approximately $79 billion. As for Microsoft, the expectation is for a profit of $2.82 per share and about $61 billion in revenue in the quarter.
Among chip stocks, the second largest memory chip manufacturer in the world after Samsung, the South Korean SK Hynix, which supplies among other things to Nvidia high bandwidth memory chips that serve AI chipsets, this morning (Thursday) published its financial results for the quarter. The company reported a net profit of 1.92 trillion South Korean won ($1.39 billion) in the first quarter, after posting a loss of 2.58 trillion won in the corresponding period.
At the same time, the company’s revenues in the first quarter of the year stood at 12.43 trillion won, an increase of 144% compared to last year. The total revenue presented by the company is the highest since the third quarter of 2022. According to LSEG’s analysts, the strong performance was due to the increase in sales of artificial intelligence server products that includes, among other things, high-bandwidth memory chips, as well as the company’s efforts to drive profitability.
In the American debt market, government bond yields are trading stable this morning. The yield on the 10-year US bond is currently at 4.65%.
In the commodity market, the price of oil rises slightly this morning and the price of a Brent barrel stands at 88.2 dollars.
In the macro sector, in the next two days significant data will be published for the US economy and the interest rate plan of the central bank, the Fed. First, the quarterly GDP figure will be published, after two quarters with an extremely high figure and despite the heavy monetary restraint on the economy, the market expects another strong quarter with 2.5% growth. The high GDP testifies to the stable market there which does not weaken even under the high interest rate regime imposed by the Fed. With such strong growth figures, the central bank officials will be able to feel comfortable maintaining continuous restraint to ensure that inflation will indeed reach the target set for it, and further delay the interest rate cut.
The Swiss bank Lombard Odier, in his review, expands on how the investment portfolio should be positioned in light of the geopolitical tensions:
“Our current portfolio positioning is rooted in our basic scenario that predicts a continuation of conflict without a significant escalation of the conflict between Israel and Iran. In stocks, we are overweight US stocks at the expense of Europe, with a preference for cyclical stocks in the energy and consumer services sectors, over real estate and infrastructure. In fixed income, we prefer an overweight in US government bonds, and in currencies, the US dollar. These portfolio biases continue to benefit from the performance of the US economy and the dollar’s yield advantage.
“In a risk scenario of significant escalation, we would expect stock markets to correct sharply, with defensive sectors such as real estate and services likely to outperform. Commodity prices, especially energy, may rise and increase inflation expectations. Central banks will likely have to delay interest rate cuts, while the long end of government bond curves will normalize and yields will fall in line with demand. This will flatten the yield curve, especially in Europe, where the European Central Bank is more sensitive to rising commodity prices. The US is likely to benefit from such a scenario. On the credit side, both the investment grade and high yield sectors will be hit, although we expect the former to outperform the latter. In such a risk-averse environment the US dollar will likely benefit.
“In a de-escalation scenario, we would expect our current positioning to be beneficial. However, with recent credit spread widening, we are likely to see a turnaround that gives some momentum to riskier credit (such as high yield) and the more cyclical equity sectors. Our preference for BB-rated debt within a segment The higher yields may be beneficial, even if lower-rated debt may rise temporarily on the back of tighter spreads. Still, we’d prefer the higher-quality segment of the high-yield spectrum.
“Overall, we think our current tactical positioning could benefit under a variety of outcomes. In particular, we see our overweight in the US dollar, our constructive stance on gold – which we maintain at strategic levels – and our equity sector preference for energy companies, not just the sector’s capabilities to demonstrate performance, but also as a hedge for portfolios in an environment of rising inflationary and geopolitical risks. Given these risks, we also see a potential role for Treasury Inflation Protected Securities (TIPS) within portfolio bond allocations.”