Breaking News
Jun 12, 2024
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The annual rate of consumer inflation unexpectedly cooled to 3.4% in May, the U.S. Bureau of Labor Statistics said on Wednesday.
Consumer price inflation decreased for the second month in a row and fell from 3.5% in March to 3.4% in April.
Food price inflation slowed to 2.1% from 2.2% in April, shelter inflation slowed to 5.4% from 5.5%, and transportation dropped 10.5% from 11.2%.
The annual rate of core inflation slowed to 3.4% in May, the lowest rate since April 2021.
On a monthly basis, consumer price inflation was unchanged from the previous month after rising 0.3% in April, and the monthly core rate of inflation slowed to 0.2% from 0.3% in the previous month.
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The Federal Reserve left the fed funds rate range unchanged between 5.25% and 5.50%, at the end of the two-day policy meeting.
The policymakers committee dialed back on the rate expectations and estimated rates to drop to 5.1% by the end of the year, down from March's estimate of as many as three rate cuts.
The committee also held 2024's GDP growth outlook at 2.1% and the unemployment rate at 4.0%.
But the committee revised its PCE inflation estimate to 2.6% from 2.4% in March and core inflation, which excludes food and energy price inflation, to 2.8% from 2.6%.
Fed officials estimated as many as four rate cuts in 2025, the fed funds rate to drop to 4.1% by the end of 2025, and additional cuts to bring down interest rates to 3.1% in 2026.
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Nonfarm payrolls increased by 272,000 in May from the downwardly revised 165,000 in April, higher than the monthly average of 232,000 in the last 12 months.
In May, employment continued to trend up in several industries, led by health care; government; leisure and hospitality; and professional, scientific, and technical services.
Average hourly wages increased 0.4%, or 14 cents, to $34.91 and edged up 4.1% over the last year, the U.S. Bureau of Labor Statistics reported Friday.
Both the unemployment rate, at 4.0%, and the number of unemployed people, at 6.6 million, changed little in May; a year ago, the jobless rate was 3.7%, and the number of unemployed people was 6.1 million.
The jobless rate increased despite the surge in employment in the last several months because the expanding labor market is attracting more people to look for jobs, increasing the jobless rate.
Both the labor force participation rate, at 62.5%, and the employment-population ratio, at 60.1%, barely budged in May.
These measures showed little change over the year. -
Marathon Oil jumped 8.3% to $28.64 after the company agreed to be acquired by ConocoPhillips for $17.1 billion and assume $5.4 billion in debt.
Marathon Oil shareholders will receive 0.2550 shares of ConocoPhillips common stock for each share of Marathon Oil common stock, representing a 14.7% premium to the closing share price of Marathon Oil on May 28, 2024, and a 16.0% premium to the prior 10-day volume-weighted average price.
The deal is expected to be immediately attractive to ConocoPhillips shareholders.
After the transaction, the third-largest U.S. oil company plans to increase its dividend by 34% to 78 cents per share starting in the fourth quarter of 2024.
Upon closing of the transaction, ConocoPhillips expects share buybacks to be over $20 billion in the first three years, with over $7 billion in the first full year, at recent commodity prices.
The oil industry has experienced a wave of transactions in recent months. Exxon Mobil agreed to acquire Pioneer Natural Resources for $60 billion, and Hess' shareholders approved the merger of the company with Chevron.
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Dick's Sporting Goods jumped 10.2% to $214.75 after the specialty retailer reported better-than-expected quarterly earnings and comparable sales rose 5.3%.
Increase in customer visits, more customer transactions, and a larger average ticket size drove sales higher.
The specialty retailer said revenue in the quarter ending on May 4 rose 6% to $3.02 billion from $2.84 billion, net income fell to $275 million from $303 million, and diluted earnings per share eased to $3.30 from $3.40 a year ago.
The retailer estimated full-year earnings per share to range between $13.35 and $13.75, higher than the previous estimate between $12.85 and $13.25. -
Abercrombie & Fitch soared 10.4% to $170.59 after the company reported record first-quarter sales.
Revenue in the quarter ending on May 4 rose 22.1% to $1.02 billion, driven by an Abercrombie sales increase of 31.1% to $571.1 million and Hollister sales growth of 12.3% to $449.2 million.
Net income in the quarter advanced to $113.9 million from $16.6 million, and diluted earnings per share rose to $2.14 from 32 cents a year ago, respectively. -
Cava Group dropped 8.5% to $75.50 after the salad restaurant chain reported better-than-expected quarterly results.
The stock declined after the Mediterranean fast-casual restaurant chain operator reported a decline in customer traffic.
Revenue increased 30.3% to $256.3 million, driven by a 2.3% increase in same-store sales. The sales increase was also driven by a 3.5% increase in menu prices, offset by a 1.2% decrease in store traffic.
Net income swung to a profit of $14.0 million from a loss of $2.1 million, and diluted earnings per share were 12 cents compared to a loss of $1.30 a year ago.
The company estimated new store openings between 50 and 54 from the previous estimate between 48 and 52, and the same store sales growth range between 4.5% and 6.5% from the previous estimate between 3.0% and 5.0%. -
American Airlines Group declined 14.5% to $11.47 after the company said in a regulatory filing that it plans to slow its capacity growth in the second half and that its Chief Commercial Officer, Vasu Raja, will depart the airline in June.
The company lowered its adjusted operating margin guidance by 1 percentage point to between 8.5% and 10.5% from the previous estimate of between 9.5% and 10.5%.
The airline also lowered its fiscal second-quarter adjusted earnings per share to between $1.0 and $1.15 from the previous estimate of between $1.15 and $1.45.
The airline said its capacity growth in the second quarter will slow to 3.5% from 8.5% in the first half of fiscal 2024. -
Chewy jumped 6.5% to 18.0 after the online pet food store reported better-than-expected fiscal first quarterly results.
Revenue in the fiscal first quarter increased to $2.9 billion from $2.8 billion, net income to $67.3 million from $22.8 million, and diluted earnings per share advanced to 15 cents from 5 cents a year ago.
Chewy also announced today that its board has authorized a share repurchase program of up to $500 million of its Class A and/or Class B common stock.
The company's active customer base in the quarter edged slightly lower to 20.0 million from 20.4 million a year ago, and net sales per active customer increased to $562 from $513 a year ago.
The company estimated net sales in the fiscal second quarter to range between $2.84 billion and $2.86 billion, an increase of between 2% and 3% from a year ago.
The company estimated fiscal year 2024 sales to range between $11.6 billion and $11.8 billion, an increase of between 4% and 6% from the previous year. -
Target Corp. declined 8.8% to $142.10 after the retailer reported weaker-than-expected earnings and a decline in sales driven by weakening growth trends in discretionary item sales.
Consumers limit their purchases of groceries and discretionary items like apparel and home decor.
Moreover, shoppers are chasing discounts, and relatively high-priced grocery items sold at Target still face competition from discount stores like Walmart, Aldi, Lidl, and other regional discount chains.
Target has been struggling to convince customers to spend more, as about 20% of its total sales are groceries, unlike 60% of Walmart's sales.
Total revenues declined 3.1% to $24.5 billion from $25.3 billion, net income dropped 0.8% to $942 million from $980 million, and diluted earnings per share fell to $2.03 from $2.05 a year ago.
Comparable sales declined 3.7% in the first quarter, reflecting a comparable store sales decline of 4.8%, partially offset by a comparable digital sales increase of 1.4%.
For the second quarter and for the full year, the company anticipated comparable sales to increase between zero and 2%.
For the full year, the company reiterated its adjusted earnings per share outlook to be between $8.60 and $9.60.
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