Intel
Dow futures contract fell 76 points or 0.2%, the S&P 500 shed 12 points, and the Nasdaq 100 down 112 points or 0.6% by 05:20 ET (10:20 GMT).
Intel forecasts poor sales
At the end of the week, Intel’s poor first-quarter revenue projection weighed on markets.
According to LSEG statistics reported by Reuters, the chip manufacturer predicts three-month revenue of $12.2 billion to $13.2 billion, well below Wall Street projections of $14.5 billion. Also, quarterly income excluding one-time factors was $0.13 per share, missing $0.33 estimates.
Friday premarket U.S. trade saw the California company’s shares fall.
In a post-earnings call with analysts, CEO Pat Gelsinger said that “discrete headwinds” at Mobileye and its programmable solutions spin-off are “impacting overall revenue,” resulting in gloomy guidance. Gelsinger highlighted that Intel’s core business—making PC and server chips—has also been affected by seasonal demand.
Over the previous year, Intel’s gross margin has been hurt by large investments in artificial intelligence. “Investors are beginning to pay for last year’s massive AI investments, which is a clear message for earnings season,” said Investing.com Senior Analyst Thomas Monteiro.
Visa expects slower revenue growth.
Visa shares fell premarket Friday after the world’s largest payments processor gave weak second-quarter sales guidance.
The company expects net revenue to rise by the “upper mid- to high single-digit” in the current period, down from 11% in 2023.
Chief Financial Officer Chris Suh told analysts that very cold weather in many U.S. locations slowed growth in the first week of January. This occurrence would likely be “smoothed back out” over the quarter, Suh said.
Visa had a market-leading adjusted per-share profit of $2.41 in the three months ended Dec. 31, mainly to high retail spending between Thanksgiving and Cyber Monday.
Friday will see the latest earnings from Visa rival American Express (NYSE:AXP), consumer products business Colgate-Palmolive (NYSE:CL), and transport firm Norfolk Southern.
Future PCE data
In December, headline and underlying U.S. price increase is expected to be 0.2%, which many economists believe might lower inflation to the Federal Reserve’s objective.
The PCE price index shows inflation rising 2.6% year-over-year last month, matching November’s pace.
The year-over-year “core” estimate, which excludes volatile goods like food and energy, is expected to rise 3.0% from 3.2% in November. The Fed’s favorite inflation index may indicate that price growth are slowing to the central bank’s 2% goal.
Lower inflation may have helped Americans spend more during the holidays. Consumer spending, which accounts for two-thirds of U.S. economic activity, is expected to rise 0.4%, up from 0.2% last month.
Along with Thursday’s strong GDP numbers, the statistics may influence the Fed’s decision to decrease interest rates from two-decade highs. Late last year, authorities expected cutbacks in March, but sluggish inflation and robust economy delayed them.
Economic Calendar
8:30 AM Personal Income M/M for December
8:30 AM Personal Spending M/M for December
8:30 AM PCE Price Index M/M for December
8:30 AM PCE Price Index Y/Y for December
8:30 AM Core-PCE Price Index M/M for December
8:30 AM Core-PCE Price Index Y/Y for December
10:00 AM Pending Home Sales M/M for December
1:00 PM Baker Hughes Weekly rig count data
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2023 Chinese growth exceeds objective, but difficulties persist
China’s economy grew slightly less than predicted in the fourth quarter due to sluggish spending and a property market slump, but it narrowly beat government expectations for 2023.
Gross domestic product rose 5.2% year-over-year in the three months to Dec. 31, the National Bureau of Statistics reported Wednesday. The reading was weaker than 5.3% predictions but up from 4.9% the quarter before.
This raised 2023 growth to 5.2%, above Beijing’s 5% target. Despite COVID-19 limits, activity increased from 3% in 2022 due to a lower base for comparison. Except for the three pandemic-era closures, it was the lowest yearly expansion rate since 1990.
Last year, the Chinese economy was hampered by falling consumer spending, a housing market crash, and deflation. The world’s second-largest economy has demographic concerns, as shown by new data showing a faster population fall in 2023.
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2023 Chinese growth exceeds objective, but difficulties persist
China’s economy grew slightly less than predicted in the fourth quarter due to sluggish spending and a property market slump, but it narrowly beat government expectations for 2023.
Gross domestic product rose 5.2% year-over-year in the three months to Dec. 31, the National Bureau of Statistics reported Wednesday. The reading was weaker than 5.3% predictions but up from 4.9% the quarter before.
This raised 2023 growth to 5.2%, above Beijing’s 5% target. Despite COVID-19 limits, activity increased from 3% in 2022 due to a lower base for comparison. Except for the three pandemic-era closures, it was the lowest yearly expansion rate since 1990.
Last year, the Chinese economy was hampered by falling consumer spending, a housing market crash, and deflation. The world’s second-largest economy has demographic concerns, as shown by new data showing a faster population fall in 2023.
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