US stock indexes closed lower yesterday as investors awaited a series of corporate earnings reports including from tech giants Meta and Microsoft. Both then showed better-than-expected quarterly results, but managers reduced profit prospects and expected more investments for the development of artificial intelligence (AI). Both companies have invested heavily inartificial intelligence. Meta has introduced Meta AI on its WhatsApp, Facebook and Instagram platforms. Significant capital expenditures could threaten the margins of these companies, which is worrying investors. Apple and Amazon They will communicate the data this evening.
The Dow Jones industrial average fell 0,22% to 42.141,54, the S&P 500 lost 0,33% to 5.813,67 and the Nasdaq Composite lost 0,56% to 18.607,93. In economic data, the gross domestic product U.S. GDP rose at an annualized rate of 2,8%, according to the Commerce Department's advance estimate of third-quarter GDP, slightly below economists' forecasts for 3,0% growth. Another report showed that U.S. GDP growth pay slips in the private sector of the United States rose by 233.000 units, a higher number than expected, in October. Worth noting in the price lists Eli Lilly, down 6,2% after missing sales estimates for its popular weight-loss and diabetes drugs and Nvidia slipped by 1,4%.
Meta and Microsoft
MetaPlatforms posted record revenue, with only a slowdown in digital advertising revenue and a “significant acceleration” in infrastructure spending related to its artificial intelligence deployment. The stock closed the regular session down 0,2% and was down 1,5% after the close of trading.
In third quarter, the colossus led by Mark Zuckerberg reported profits of $15,7 billion, up 35%, and earnings per share of $6,03. Revenue rose 19% to $40,59 billion. It also forecast revenue in fourth quarter between 45 and 48 billion, which is also better than expected. The company also indicated that its investments will continue to increase significantly next year. However, it disappointed in the extent of daily active users: increased by 5% to 3,39 billion.
The cornerstone of Meta's results remains the dealer generated from his collection of social media apps, which include Facebook and Instagram: represents 96% of revenue. However, to enhance its services and its offering it has increasingly expanded investment in artificial intelligence, part of the $38-40 billion in capital expenditures expected this year, an upward revision from what was previously indicated. Among the most recent initiatives, the spread of the AI platform called Calls. Analysts had on average expected revenue of 40,27 billion, up 18%, and profits of 13,58 billion, equal to 5,21 dollars per share. A year ago, profits had been 11,58 billion. All figures exceeded by the results. But the trend in turnover represents a deceleration compared to the immediately preceding quarters, when it had recorded increases of 22% at the end of June and 27% at the end of March. On Wall Street, the stock has gained more than 2022% from the lows of 500, about 70% since the beginning of the year.
Microsoft, In its first quarter fiscal 2025, reported profits of $24,67 billion, up from $22,29 billion a year ago, and equal to earnings per share of $3,30. turnover rose by 16% to 65,59 billion. It achieved in particular an increase in 33% in the crucial segment cloud powered by Azure, linked to the'artificial intelligence, which also beat expectations. The giant in software and Artificial Intelligence led by Satya Nadella, was expected to have a turnover of 64,57 billion, up a more limited 14%, and earnings per share of 3,10 dollars. The Intelligent Cloud segment, which includes Azure and infrastructure for the “cloud” driven by AI, was expected to grow between 29% and 32%.
In the last fiscal year 2024, Azure had achieved growth of 33%, with 9% attributed to AI. In the post-market on Wall Street, the stock rose slightly, while since January it has accumulated a gain of 16%.
Asia falls, Boj leaves rates unchanged
With Wall Street closing weak, Asia Pacific markets are mixed. Tokyo, the Nikkei 225 index is down 0,6%, after three consecutive increases. The Bank of Japan (BOJ) has maintained rates unchanged ultra-low interest rates, underscoring the importance of closely monitoring global economic trends, especially given the risks to Japan's recovery. While BOJ officials forecast inflation to remain close to the 2% target in the coming years, they maintained a cautious stance on future rate hikes, saying any policy adjustment would depend on sustained economic growth. The short-term interest rate held steady at 0,25%. This morning's data on Japanese industrial production was higher than expected in September with a 1,4% increase on a monthly basis, after the -3,3% recorded in August. Analysts' estimates are for a 0,9% increase. Modest Yen recovery, this morning at 152,9 from 153,4 on Wednesday. The China stocks fall. Hong Kong's Hang Seng -0,1%. CSI 300 Index -0,2%. South Korea's Kospi +0,6%. Mumbai's BSE Sensex -0,5%.
European stock markets: eyes on Stellantis, Prysmian, Stm
European stock markets are expected to fall at the opening this morning as suggested by the -0,51% of the Eurostoxx50 future. US futures are also falling (-0,22% on the Dow Jones and -0,52% on the S&P500)
Volkswagen, the German automotive giant, believes that a 10 percent pay cut would give the group the means to make future investments to remain competitive and safeguard jobs. The announcement comes after a demand from union IG Metall for a 7 percent pay increase and the reinstatement of collective agreements, with the company saying it was unable to meet those demands.
stellantis. The Italian-French carmaker closed the third quarter of 2024 with net revenues of 33 billion euros, down 27% compared to the third quarter of 2023, mainly due to lower deliveries and an unfavorable mix, in addition to the impact of prices and exchange rates. The financial guidance for 2024, which was updated on September 30, 2024, was confirmed. Coupon and buyback calibration at the beginning of 2025. Doug Osterman, Stellantis' new CFO: Q3 is below our potential, progress on operational issues
Prysmian, active in the sector of cable systems for energy and telecommunications, closed the first nine months of 2024 with Group Revenues of 12.362 million euros, with an organic growth of -1,4%. The improvements in Transmission (+12,3% organic growth) and Power Grid (+1,8% organic growth) were offset by a decrease in Electrification (-3,0% organic growth) and in Digital Solutions (-17,3% organic growth). In the third quarter, an overall positive organic growth of 1,8% was recorded.
St Microelectronics, the Italian-French semiconductor giant, has cut its 2024 outlook after a third quarter in which net revenues saw a 26,6% year-over-year decline. Net sales to OEMs and Distributors fell 17,5% and 45,4%, respectively. Gross profit fell 41,8% year-over-year. Revenues for the current year are forecast at approximately $13,27 billion, corresponding to a 23,2% year-over-year decline, at the lower end of the range indicated in the previous quarter.
Intesa Sanpaolo publishes the third quarter 2024 accounts. Meanwhile, Moody's has confirmed the Baa1 ratings on deposits and senior unsecured debt with a stable outlook
