Wall Street Pre-Opening AOF Analysis – The Souffle Must Fall Back

(AOF) – Euphoria is falling on Wall Street, which rose more than 3% yesterday. The Fed reassured investors by rejecting the scenario of a 75 basis point increase at its next meeting. If such tightening is no longer on the agenda, the US economy will face increasingly restrictive monetary policy as it shows signs of weakness. Weekly unemployment claims thus exceeded expectations. A few minutes before the first trades, futures on the S&P 500 and the Nasdaq Composite lost 0.66% and 0.88%.

Yesterday on Wall Street

US stock markets closed sharply higher after the Fed. Volatility was high ahead of the Fed’s Monetary Policy Committee meeting. Not surprisingly, the central bank raised its key policy rate by 50 basis points. On the other hand, Chairman Jerome Powell surprised positively by rejecting the scenario of a 75 basis point increase at the next meeting. This slightly more “quenching” than expected tone reassured markets that they would be robbed of liquidity too suddenly. The Dow Jones gained 2.81% and the Nasdaq 3.19%.

Macroeconomic figures

Non-farm productivity in the United States fell 7.5% in the first quarter, while it was expected to be -2.8%, from +6.3% in the previous quarter. Unit labor costs increased by 11.6%, compared to expectations of +7.3% and +1% in the previous quarter.

The number of jobless claims was 200,000 in the United States last week, against a consensus of 184,000 and 181,000 the week before, a revised figure of 180,000.

The values ​​that follow

kellogg

Kellogg released quarterly results that exceeded expectations and raised its annual forecast. The American agri-food group made a net profit of 422 million dollars compared to 368 million a year earlier. Excluding exceptional items, EPS came in at $1.1 against a consensus of $0.93. Turnover rose from 3.584 to 3.672 billion. Wall Street was aiming for $3.586 billion. Kellogg now expects 4% organic growth for 2022 from 3% to date. The market expects 1.5%.

Twitter

Elon Musk has brought together a group of investors, including a Saudi prince, Larry Ellison, and a cryptocurrency exchange, Binance, to raise more than $7 billion to support its takeover bid for Twitter Inc, according to a filing with the SEC.

Metlife

Metlife posted adjusted earnings of $2.08 per share in the first quarter of 2022, a 5% year-over-year decline, but beat the Zacks consensus of $1.63. The insurer’s revenue increased slightly from $15.56 billion a year ago to $15.76 billion in the first three months of 2022. Return on equity (ROE) rose sharply to 4.3% (+2. 5 points).

eBay

The world’s largest online auction house, eBay, will come under pressure due to yet another disappointing forecast and a full-year profit warning. In the first quarter, eBay posted a net loss of $1.3 billion, or $2.28 per share, compared to $641 million and $94 million, respectively, a year earlier. This loss is explained by the deterioration in the value of its participations. Adjusted for exceptional items, earnings per share from continuing operations came in at $1.05, beating expectations by 1 cent.

Royal Caribbean

Royal Caribbean reported a loss of $1.17 billion in the first quarter of 2022, or $4.58 per share, after a loss of $1.13 billion at the same time last year. Excluding special items, the loss was $4.57 per share, against a FactSet consensus of $4.46. The cruise line also disappointed in terms of revenue, which rose to $1.06 billion (compared to 42 million a year ago) against expectations of $1.15 billion. However, it expects record bookings for 2023 and a return to profitability from the second quarter.

Berkshire Hathaway/Occidental Petroleum

Berkshire Hathaway has bought 5.9 million additional shares of oil company Occidental Petroleum, according to SEC filings. Shares were purchased on May 2 and May 3 at prices ranging from $56 to $58.37 per unit. Warren Buffet’s investment company had already built up a stake of about 14.6% in the company.

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