the Nasdaq plunges, after the employment and the warning of Elon Musk

Wall Street stalled on Friday, after Elon Musk’s warning about the economy and rather resilient economic statistics for services and employment. The Dow Jones now yields 0.81% to 32,977 pts, while the S&P 500 loses 1.38% to 4,119 pts. The Nasdaq finally drops 2.19% to 12,047 pts. A barrel of WTI crude is up 1.5% on the Nymex at $118.6. The ounce of gold yields 0.5% to $1,860. The dollar index advanced 0.3% against a basket of currencies. Bitcoin stumbles below $30,000.

Non-farm job creations in the United States for the month of May 2022 came out at 390,000, well above the consensus of 323,000. The unemployment rate stood at 3.6% according to the Labor Department, against 3.5% consensus and 3.6% a month earlier. Job creations in the private sector came out at 333,000, against a consensus of 302,000. The average hourly wage rose 0.3% from the previous month, against 0.4% consensus. This salary increases by 5.2% over one year. The labor force participation rate stood at 62.3%.

Non-farm payrolls for April were also revised up to 436,000 from 428,000 previously estimated.

The final US composite PMI for May 2022 came out at 53.6, very close to consensus expectations (53.8 according to FactSet), with a services indicator at 53.4 (53.5 consensus) . Overall, these indicators signal continued expansion of the US economy.

The ISM US services index for May came in at 55.9, down from a FactSet consensus of 55.7 and a level of 57.1 a month earlier. The indicator signals a slight slowdown in growth, but still reflects a clear expansion.

Fed Vice-Chair Lael Brainard will speak in the afternoon. Yesterday, Brainard indicated that the US central bank was anticipating a slowdown in the economy, but that it was still too early to specify the timing. She also said that the Fed made controlling inflation its priority.

Fed officials have for some pushed back on the idea of ​​a September “pause” initially mooted by Raphael Bostic, who himself clarified this week that his comments were not intended to signal a ‘Fed put’. Brainard also indicated yesterday that there was no reason at this stage to consider a break in September in raising rates, while inflation remains far too high.

Values

Okta, which jumped 11% at the close last night on Wall Street, is still up 12% today! The American identity and access management firm has raised its forecast on the sidelines of strong quarterly. For the first fiscal quarter, revenue soared 65% and subscription revenue 66%. Total revenues were $415 million. Adjusted operating loss was $41 million. Adjusted net loss was $43 million, 27 cents per share, versus $13 million a year earlier. Free cash flow was positive at $11 million over the period, compared to $53 million a year earlier. For the staggered fiscal year 2023, total revenue is now expected between $1.805 billion and $1.815 billion, up 39 to 40%, for an adjusted operating loss ranging from 167 to 162 million and an adjusted net loss of 1.11 at $1.14 per title.

Lululemon (-1%), the Wall Street-listed Canadian group specializing in sportswear, particularly in the area of ​​yoga, announced robust quarterly results last night, surpassing its already notable performance from the pandemic. LULU has also boosted its forecast. The company now anticipates annual revenue of $7.61 billion to $7.71 billion, down from a previous range of $7.49 billion to $7.62 billion. 2022 earnings per share are expected between $9.42 and $9.57, down from a previous range of $9.15 to $9.35. Adjusted earnings per share are expected to be between $9.35 and $9.5, higher than the consensus. Over the quarter, adjusted EPS was $1.48, beating expectations, versus $1.16 a year earlier. Revenue hit $1.61 billion, beating consensus 4% from $1.23 billion a year earlier.

CooperCompanies (-2%), the American designer of medical equipment, specialist in ophthalmology, announced yesterday evening, for its second fiscal quarter, revenues up 15% to 830 million dollars, with above all a performance of 40 % of CooperSurgical. GAAP diluted earnings climbed to $2.55, while adjusted EPS fell 4% to $3.24. The adjusted EPS consensus was $3.43, for $821 million in revenue. Management emphasizes revenue growth and market share gains. The 2022 guidance is adjusted. Revenues are expected between 3.28 and 3.312 billion dollars, with organic growth of 9 to 10%. Adjusted earnings per share are expected between $13.09 and $13.29.

Toro (+2%), the American giant of lawn care equipment, active in particular in mowers, missed the sales consensus for the quarter ended but beat that of profits. For its second fiscal quarter, which ended at the end of April, the group posted a net profit of $131 million, or $1.24 per share, against $142 million a year earlier. Excluding items, adjusted EPS was $1.25 versus $1.24 FactSet consensus. Revenue improved 8.7% to $1.25 billion. Toro is also allowing itself to revise its annual financial forecasts upwards, despite the supply chain challenges.

Turning Point Therapeutics jumps 116% on Wall Street! Bristol-Myers Squibb will indeed buy this biotechnology group active in oncology, at the clinical stage, as part of a cash deal valuing Turning Point at 3.8 billion dollars. The total consideration for the deal is $4.1 billion. Under the terms of the agreement, Turning Point shareholders will receive $76 per share in cash, a premium of 122.5% over the previous day’s closing price. Bristol-Myers anticipates an accretive impact of the deal on its adjusted earnings per share from 2025. BMS intends to finalize the operation using its available cash.

American Airlines (-6%) in turn raises its revenue forecast for the current quarter given the strength of demand and the increase in fares. The first American airline now anticipates total revenue 11% to 13% higher than the level of the second quarter of 2019, against a rise of 6 to 8% previously envisaged. It expects its capacities to represent 92% to 93% of the level observed over the same period of 2019 against 92 to 94% previously. Unit revenue should increase by 20 to 22% against a previous range of 14 to 16%, while unit costs, excluding fuel, are expected to rise by 10 to 11% (vs. 8 to 10%).

Kohl’s (+3%) is gaining ground on Wall Street, while according to the New York Post, the group’s sale process is however suspended for the time being. The deadline was set for this week for the final offers, but several potential buyers would have withdrawn, according to multiple sources. According to the NYP, the process would have been affected by the group’s recent warning on sales and profits for the year, on the sidelines of the publication of the first quarter. NYP sources add that the postponement could extend beyond the next quarter, to give Kohl’s more time to stabilize its business. For its part, the Wall Street Journal understands that Sycamore Partners would have provided an offer of around $55 per share, while Franchise Group would have offered nearly $60 per share.

Apple (-4%) to improve working conditions at retail stores amid union organizing efforts, Bloomberg reports. Citing employees with knowledge of the plans, the article says the California-based Apple group has told staff at some stores that changes aimed at easing work hours will come into effect in the coming months, with some of the changes to be put in place. in place in the coming weeks, and others later in the year. Changes to be made would include a 12-hour minimum between work shifts, up from the current 10-hour minimum, a maximum of three days per work week after 8 p.m., a maximum of five consecutive work days up from six days currently, and one dedicated weekend day off for each six-month period for full-time employees.

Coinbase drops 10% on Wall Street today. The cryptocurrency exchange announced on its corporate blog: “In response to current market conditions and continued efforts to prioritize business, we will be extending our hiring freeze for new roles and replacements for the foreseeable future. and cancel a number of accepted offers”.

Tesla picks up 7%!. Elon Musk, chief executive of the electric vehicle maker, who had recently made it clear to his employees that returning to work in person was essential, indicated this time that he had a “super bad feeling” about the economy. At least that’s what Reuters learned, citing an email from the billionaire to Tesla executives. Musk would thus like to cut 10% of the group’s workforce. The email in question is captioned: “Suspend all hiring worldwide”. Tesla currently employs approximately 100,000 people globally.

Musk is not the first boss to warn about the very significant economic risk. Earlier this week, JP Morgan boss Jamie Dimon said he feared a “hurricane” to come.

Musk’s message about the hiring freeze and expected job cuts comes two days after the world’s richest man told employees to return to work or leave the company. On Tuesday, the businessman had asked his staff to return to the workplace or leave the company, a request which has already been rebuffed in Germany where the company has a new factory. “Everyone at Tesla is required to spend at least 40 hours in the office per week,” Musk wrote in that email. “If you don’t show up, we’ll assume you quit.”

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