Market Update
U.S. Movers: Analog Devices, Nvidia, Toll Brothers, Viasat, Urban Outfitters
Scott Peters
22 May, 2024
New York City
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.
Urban Outfitters rose 4.2% to $43.0 after the apparel retailer reported better-than-expected sales and earnings in its latest quarter.
Comparable retail sales increased 4.6%, driven by high single-digit positive sales growth in online sales and low single-digit positive growth in retail store sales.
Revenue in the first quarter increased 7.6% to record $1.2 billion from $1.11 billion, net income advanced to $61.76 million from $52.8 million, and diluted earnings per share rose to 65 cents from 56 cents a year ago.
The company did not purchase its shares in the first quarter ending in April 2024 and in the year ending in January 2024, and 19.2 million of the authorized 20.0 million shares are still available under its stock repurchase program.
Toll Brothers decreased 0.5% to $129.50 after the luxury home builder's quarterly results surpassed market expectations and the company raised its full-year outlook.
Total fiscal second quarter revenue increased to $2.8 billion from $2.5 billion, net income rose to $481.6 million from $320.2 million, and diluted earnings per share advanced to $4.55 from $2.85 a year ago.
At the end of the fiscal second quarter in April, the backlog value of homes declined 12% to $7.4 billion, and the backlog of homes fell 6% to 7,093.
The company raised its estimate of home deliveries in the fiscal third quarter to 2,850 from 2,750 and in the fiscal year to 10,800 from 10,400.
In the quarter, Toll Brothers repurchased approximately 1.5 million shares at an average price of $120.60 per share, for a total purchase price of approximately $181.2 million.
On March 12, the company also hiked its cash dividend by 10% to 23 cents per share, which was paid on April 19 to shareholders on record on April 5.
Nvidia Corp. increased 0.6% to $957.50 ahead of the advanced chipmaker's quarterly results after the close of regular trading sessions.
Nvidia has jumped 98% in the year so far and soared 205% in the last year of trading.
Viasat declined 10.4% to $16.82 after the satellite communication service provider reported a loss of 80 cents in its fiscal fourth quarter.
Revenue in the fiscal fourth quarter ending in March surged to $1.15 billion from $666 million, net income swung to a loss of $100.3 million from a profit of $1.2 billion, and diluted earnings per share were a loss of 80 cents compared to a profit of $15.56 a year ago.
Last year's net income in the fiscal fourth quarter included an after-tax gain of $1.26 billion from discontinued operations, and net income excluding one-time gains was a loss of $58.6 million.
Analog Devices increased 5.4% to $228.32 after the company reported better-than-expected quarterly results in the fiscal second quarter ending in April.
Revenue in the quarter decreased 34% to $2.2 billion from $3.3 billion, net income decreased to $302.2 million from $977.6 million, and diluted earnings per share fell to 61 cents from $1.92 a year ago.
The company's board of directors declared a quarterly cash dividend of 92 cents per share payable on June 17 to shareholders of record at the close of June 4.
The company estimated fiscal third quarter revenue of $2.27 billion with a band of $100 million, an increase of 20.1% from a year ago.
The company also estimated earnings per share of 70 cents with a band of 10 cents and adjusted earnings per share of $1.50 with a band of 10 cents.
Wall Street Indexes Trade Sideways, Target Drops 9% On Earnings Weakness
Barry Adams
22 May, 2024
New York City
U.S. stocks traded slightly lower in early trading as investors digested a fresh batch of earnings from retailers.
The S&P 500 index and the Nasdaq Composite inched lower after Target Corp. reported weaker-than-expected earnings and said consumers are restricting discretionary items.
Artificial intelligence technology-driven stocks were also in focus ahead of Nvidia's earnings release after the market close.
The S&P 500, the Dow, and the Nasdaq Composite reached new record highs last week, and the market rally was driven by positive corporate results and continued expectations of interest rate cuts in the second half.
However, policymakers in recent weeks have signaled that rate-cut expectations in the near future may be misplaced as inflation is still too high and higher rates may be needed longer than previously anticipated to bring down inflation to 2%.
Inflation has dropped from a high of 9.5% to below 4%, but prices are still rising faster than 3% despite multiple rate hikes over the last two years.
U.S. Indexes and Treasury Yields
The S&P 500 index was nearly unchanged at 5,323.05, and the Nasdaq Composite edged down 0.02% to 16,835.57.
The yield on 2-year Treasury notes edged higher to 4.88%, 10-year Treasury notes increased to 4.48%, and 30-year Treasury bonds edged higher to 4.59%.
WTI crude oil decreased $0.57 to $78.09 a barrel, and natural gas prices declined 4 cents to $2.62 a thermal unit.
Gold decreased by $10.31 to $2,411.39 an ounce, and silver fell 39 cents to $31.63.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.84.
U.S. Stock Movers
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.
Urban Outfitters rose 4.2% to $43.0 after the apparel retailer reported better-than-expected sales and earnings in its latest quarter.
Toll Brothers decreased 0.5% to $129.50 after the luxury home builder's quarterly results surpassed market expectations and the company raised its full-year outlook.
Nvidia Corp. increased 0.6% to $957.50 ahead of the advanced chipmaker's quarterly results after the close of regular trading sessions.
Nvidia has jumped 98% in the year so far and soared 205% in the last year of trading.
Viasat declined 10.4% to $16.82 after the satellite communication service provider reported a loss of 80 cents in its fiscal fourth quarter.
Analog Devices increased 5.4% to $228.32 after the company reported $1.26 earnings per share and $2.16 billion in revenue in the fiscal second quarter.
Europe Movers: Aalberts, Billeurd, British Land, Marks & Spencer, RS Group
Inga Muller
22 May, 2024
Frankfurt
European market indexes edged lower amid ongoing interest rate uncertainty and an uneven economic rebound in the region.
The DAX index decreased by 0.2% to 18,681.88; the CAC-40 index fell by 0.5% to 8,104.25; and the FTSE 100 index inched lower by 0.2% to 8,398.51.
The yield on 10-year German bonds edged up to 2.53%; French bonds inched higher to 3.02%; the UK gilts edged higher to 4.23%; and Italian bonds inched higher to 3.83%.
British Land Company advanced 1.7% to 401.59 pence and gained for the second day in a row after the real estate developer agreed to sell its stake in a shopping center located in Sheffield, UK.
Marks & Spencer Group gained 6.6% to 290.40 pence, and the retailer said annual profit rose to a decade-high.
Revenue in the fiscal year ending in March rose 9.3% to £13.0 billion from £11.9 billion, profit after tax increased to £425.2 million from £364.5 million, and basic earnings per share advanced 18.4% to 21.9 pence from 18.9 pence a year ago.
The company announced its final dividend of 2 pence per share, resulting in a full-year dividend of 3 pence, payable on July 5, to shareholders on record on May 31.
RS Group PLC gained 1.1% to 815.50 pence after the British industrial and electrical products maker reported underlying annual profit declined by 25%.
Aalberts NV decreased 3.1% to €46.56 after the Dutch engineering company said revenue in the first four months fell 2.6% from a year ago.
Organic revenue for the building technology segment fell 6.1% and the industrial technology segment rose 1.7%, and the company said the added value margin "remained on a good level."
In 2023, the company's revenue increased by 4.5% to €3.3 billion, and earnings per share before amortization were €3.38.
Billeurd AB added 1.2% to SEK 112.50 after the Swedish paper company said it no longer plans to convert its Escanaba, Michigan, paper mill to cardboard production and focus on packaging materials after eighteen months of deliberations.
EU Passenger Car Sales Rebounds, UK Inflation Slows to 3-year Low
Bridgette Randall
22 May, 2024
Frankfurt
European markets headed lower amid ongoing rate uncertainty as investors reviewed the latest update on UK inflation.
Benchmark indexes in Frankfurt, Paris, and London turned lower for the second day in a row and traded below record levels set in the previous week.
UK Consumer Price Inflation Eases In April
Consumer price inflation in the U.K. rose 2.3% in April, slower than 3.2% in March, the Office for National Statistics reported Wednesday.
The annual inflation rate dropped to the lowest level since July 2021 after gas and electricity costs declined and recreation and culture costs rose at a slower pace.
The core rate of inflation, which excludes food and energy prices, eased to 3.9% from 4.2% in March and dropped to the lowest level since October 2021.
EU Car Registrations Rebound In April
The passenger car market in the European Union expanded by 13.7% in April, the European Automobile Manufacturers' Association reported on Wednesday.
Vehicle sales rebounded from a 5.2% decline in March, following the strength in the four largest markets: Germany, France, Spain, and Italy.
Sales rose in Spain by 23.1%, in Germany by 19.8%, in France by 10.9%, and in Italy by 7.7%.
The increase in April's vehicle sales could be attributed to two more selling days compared to a year ago, when Easter holidays fell in April last year.
Battery electric car sales in April rose 14.8% to 108,552 units and held its market share steady around 12%.
Battery-powered vehicle sales in France soared 45.2%, in Belgium they advanced 41.6%, and in Germany they decreased 0.2%.
Petrol car sales increased 7.3% to 328,967, and hybrid car sales surged 33.1% to 265,992.
During the first four months of the year, new car registration in the European Union increased 6.6% to 3.7 million units, and battery-powered vehicle sales advanced 6.4% to 442,000.
Europe Indexes and Yields
The DAX index decreased by 0.2% to 18,681.88; the CAC-40 index fell by 0.5% to 8,104.25; and the FTSE 100 index inched lower by 0.2% to 8,398.51.
The yield on 10-year German bonds edged up to 2.53%; French bonds inched higher to 3.02%; the UK gilts edged higher to 4.23%; and Italian bonds inched higher to 3.83%.
The euro edged higher to $1.084; the British pound inched higher to $1.273; and the U.S. dollar gained to 91.35 Swiss cents.
Brent crude decreased $0.40 to $82.47 a barrel, and the Dutch TTF natural gas rose by €0.70 to €33.60 per MWh.
Europe Stock Movers
British Land Company advanced 1.7% to 401.59 pence and gained for the second day in a row after the real estate developer agreed to sell its stake in a shopping center located in Sheffield, UK.
Marks & Spencer Group gained 6.6% to 290.40 pence, and the retailer said annual profit rose to a decade-high.
Revenue in the fiscal year ending in March rose 9.3% to £13.0 billion from £11.9 billion, profit after tax increased to £425.2 million from £364.5 million, and basic earnings per share advanced 18.4% to 21.9 pence from 18.9 pence a year ago.
The company announced its final dividend of 2 pence per share, payable on July 5, to shareholders on record on May 31.
RS Group PLC gained 1.1% to 815.50 pence after the British industrial and electrical products maker reported underlying annual profit declined by 25%.
Aalberts NV decreased 3.1% to €46.56 after the Dutch engineering company said revenue in the first four months fell 2.6% from a year ago.
Organic revenue for the building technology segment fell 6.1% and the industrial technology segment rose 1.7%, and the company said the added value margin "remained on a good level."
In 2023, the company's revenue increased by 4.5% to €3.3 billion, and earnings per share before amortization were €3.38.
Billeurd AB added 1.2% to SEK 112.50 after the Swedish paper company said it no longer plans to convert its Escanaba, Michigan, paper mill to cardboard production and focus on packaging materials after eighteen months of deliberations.
China Stock Market Rally Loses Steam, Xpeng Reports Narrower Quarterly Loss
Li Chen
22 May, 2024
Hong Kong
Stocks in Shanghai and Hong Kong rebounded in early afternoon trading, and investors await earnings from leading tech companies.
Market indexes in Shanghai and Hong Kong struggled to stay above flatline, and electric vehicle makers rebounded a day after Li Auto reported sharply lower earnings.
EV makers advanced after Xpeng reported better-than-expected earnings.
Lenovo and Xiaomi were in focus, and both companies are set to report earnings later in the session.
The market rally appears to have run its course as investors looked for more signs of improving earnings.
China Stock Movers
The CSI 300 index increased 0.4% to 3,690.28, and the Hang Seng index advanced 0.2% to 19,253.54.
Xpeng jumped 13.5% to HK$34.75 after the electric vehicle maker reported stronger-than-expected quarterly earnings.
Net loss in the first quarter narrowed to 1.37 billion yuan from 2.34 billion yuan, after revenue surged 62% to 6.55 billion yuan from a year ago, respectively.
The company sold 21,821 vehicles in the quarter, an increase of 20% from a year ago, and vehicle margin improved to 5.5% from a loss of 2.5% a year ago.
Lenovo Group jumped 12.5% to HK$11.50 ahead of the personal computer maker's earnings later in the day.
Xiaomi advanced 0.2% to HK$19.34, ahead of the smartphone maker's earnings later in the day.
In Wednesday's trading, banks advanced and tech stocks traded down.
ICBC, Bank of China, Agriculture Bank of China, and China Construction Bank gained between 0.2% and 0.7% in Wednesday's trading.
Li Auto and Geely Automobile advanced about 1.8% after falling sharply in the previous session.
China Vanke rose 2.8%, Longfor Group declined 1.8%, and China Resources Land added 0.1%.
India Movers: Apollo Tyres, GSFC, Gulf Oil Lubricants, Ircon International, Hitachi Energy
Arun Goswami
22 May, 2024
Mumbai
Benchmark indexes in Mumbai advanced in cautious trading, and investors digested the fresh batch of earnings.
The Sensex index increased by 0.1% to 74,034.56, and the Nifty index rose by 0.1% to 22,552.25.
On the Mumbai stock exchange, 127 stocks traded at their 52-week highs, and 10 stocks traded at their 52-week lows.
GSFC declined 8.2% to ₹221.10 after the fertilizer company reported a decline in revenue and earnings in the March quarter.
Total revenue declined 16.3% to ₹2,017.46 crore and net income plunged 89% to ₹24.43 crore from a year ago, respectively.
Apollo Tyres increased 1.1% to ₹487.95 after the subsidiary of private equity firm Warburg Pincus's subsidiary, Iris Investment, sold its entire stake of 3.5% in the company.
Ircon International declined 3% to ₹281.05 after the railway construction company reported weak quarterly results.
Revenue in the March quarter fell 1% to ₹3,742 crore and profit declined 3.8% to ₹243.8 crore from a year ago, respectively.
Gulf Oil Lubricants rose 12.8% to ₹1,060.55 after the company reported rising revenue and earnings in the latest quarter.
Revenue in the March quarter rose 9.8% to ₹869.6 crore and net income soared 38.7% to ₹86.2 crore from a year ago, respectively.
Hitachi Energy rose 2.2% to ₹11,068.0 after the company reported positive quarterly results.
Revenue in the March quarter rose 27.1% to ₹1,695.3 crore from ₹1,334 crore, and net income more than doubled to ₹113.7 crore from ₹50.8 crore a year ago, respectively.
World Markets In Holding Pattern Ahead of Nvidia Earnings
Alexander Garcia
21 May, 2024
Miami
Market indexes entered the freezing zone as investors eagerly awaited the latest earnings from Nvidia, the leading artificial intelligence technology provider.
Stocks were in a holding pattern after investors digested the latest batch of earnings from retailers and tech companies, and advanced chipmakers traded volatile ahead of Nvidia's earnings.
Market indexes in early afternoon traded around flatline as investors digested a mixed batch of earnings from leading retailers including Macy's, Lowe's, and AutoZone.
Palo Alto Networks also dropped more than 5% after the cybersecurity company's guidance fell short of market expectations.
Investors have built expectations of rate cuts in the second half, but those expectations may have to be scaled back after policymakers signaled the need to keep rates higher.
On Tuesday, Fed Governor Christopher Wallace said he would prefer more encouraging data on the inflation front for several months before lowering rates.
"In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” Wallace added.
U.S. Indexes and Treasury Yields
The S&P 500 index was nearly unchanged at 5,308.15, and the Nasdaq Composite declined 0.2% to 16,762.19.
The yield on 2-year Treasury notes edged higher to 4.84%, 10-year Treasury notes increased to 4.41%, and 30-year Treasury bonds edged higher to 4.54%.
Natural gas prices advanced in the previous four sessions in a row and hovered near this year's high on the expectation of rising demand from U.S. electric utilities.
WTI crude oil decreased $0.76 to $78.51 a barrel, and natural gas prices declined 6 cents to $2.69 a thermal unit.
Gold increased by $0.80 to $2,427.05 an ounce, and silver rose 15 cents to $31.91.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.54.
U.S. Stock Movers
Palo Alto Networks declined 4.8% to $308.21 after the cybersecurity company reported better-than-expected quarterly earnings, but the company's guidance for the current quarter fell short of market expectations.
Lowe's Companies decreased 1.8% to $225.04 after the home improvement retailer said comparable store sales declined 4.1% in the first quarter.
The retailer reported better-than-expected quarterly results.
Macy's Inc. gained 0.1% to $19.13 after the department store chain reported better-than-expected quarterly results.
The retailer also lifted its full-year outlook.
AutoZone declined 1.8% to $2,875.78 after the specialty retainer reported mixed results in the fiscal third quarter.
European Markets Struggle Near Record Highs Amid Rate Jitters
European markets turned lower, and benchmark indexes were under pressure in Tuesday's trading after rising in the previous session.
Market sentiment was weak after several policymakers urged caution and stressed that inflation is still too high and restrictive, and higher rates may be needed for a longer time to bring down inflation to 2%.
Moreover, policymakers in Europe also stressed the need to assess the incoming data before raising hopes for multiple rate cuts, as stated in June.
Eurozone Current Account Surplus Widens
The European Central Bank president, Christine Lagarde, raised hopes of a rate cut as early as June during a press conference after the last policy meeting on April 11.
On the economic front, the eurozone current account surplus improved in March after primary income improved in March, the European Central Bank reported Tuesday.
The current account surplus adjusted for seasonal factors rose to €36 billion in March from €29 billion in February, having surged from €13 billion a year ago.
Current account surplus, unadjusted for seasonal factors, rose to €44.5 billion from €27.0 billion a year ago.
The goods surplus increased to €41.5 billion from €39.6 billion, the services surplus rose to €3.9 billion from €1.8 billion and the primary income surplus surged to €12 billion from €1.2 billion.
Also, the secondary income gap narrowed to €12.9 billion from €15.6 billion.
German Producer Price Inflation Accelerates
Producer price inflation in Germany fell at a faster annual pace of 3.3% in April, faster than the 2.9% pace in March, Destatis reported Tuesday.
Producer prices declined for the tenth month in a row, driven by the steady decline in energy prices.
Europe Indexes and Yields
The DAX index decreased by 0.5% to 18,680.30; the CAC-40 index fell by 1.0% to 8,116.39; and the FTSE 100 index inched higher by 0.3% to 8,443.72.
The yield on 10-year German bonds edged up to 2.51%; French bonds inched higher to 3.01%; the UK gilts edged higher to 4.15%; and Italian bonds inched higher to 3.81%.
The euro edged higher to $1.086; the British pound inched higher to $1.271; and the U.S. dollar gained to 90.93 Swiss cents.
Brent crude decreased $1.21 to $82.50 a barrel, and the Dutch TTF natural gas rose by €0.26 to €31.45 per MWh.
Europe Stock Movers
Kontron AG increased 3.1% to €20.48 after the German IoT company said it won a significant order to supply smart wallboxes.
Generali SpA decreased 2.6% to €23.21 after the company reported a slightly weaker profitability in its property and casualty unit.
Saipem SpA rose 3.2% to €2.36 after the energy contractor won three new orders worth $3.7 billion.
Greencore Group PLC soared 18.6% to 165.33 pence after the sandwich supplier to supermarkets announced its plans to buy back its own stock.
The company also said pre-tax profit in the first half soared to £14.7 million from a loss of £6.2 million a year ago.
Japan Indexes Erase Morning Gains
Stocks in Tokyo struggled to advance after erasing gains in the morning session ahead of key economic releases.
Benchmark indexes in Tokyo eased by 0.2% as investors awaited the release of consumer price inflation and international trade data.
Market sentiment turned cautious after the morning rally in tech stocks failed to broaden to the financial, industrial, and automobile sectors due to the persistent weakness in the yen.
The yen declined to 156.45 against the U.S. dollar in late afternoon trading in Tokyo on the worries that, despite tough talks from the ministry of finance and the Bank of Japan,.
Traders are targeting the yen to trade between 165 yen and 170 yen against the U.S. dollar, as the Bank of Japan is not in a hurry to increase its policy rate and the U.S. Federal Reserve is likely to keep its current rates in pace in the near future.
Japan Movers: Tokio Marine, MS&AD, T&D Holdings
The Nikkei 225 Stock Average decreased 0.2% to 39,014.70, and the Topix index fell 0.2% to 2,763.60.
Tech stocks cut early gains in the late afternoon as investors worried about the negative impact of the persistent decline in the yen.
Tokyo Electron, Advantest, Disco Corp., and Screen Holdings gained between 0.5% and 2.4%.
Sumitomo Mitsui gained 1.4%, Mitsubishi UFJ declined 0.9%, and Mizuho Financial dropped 2.4%.
Tokio Marine advanced 2.6% to ¥5,096.0 after the insurance company said it plans to buy back up to 200 billion yen worth of its own stock.
MS&AD Insurance soared 14.5% to ¥3,172.0 despite the company reporting fourth-quarter results that fell short of the company's estimates.
Net income in the March quarter was 87.67 billion yen, compared to a projection of 193.66 billion yen.
Revenue in the fiscal year 2024 rose 25.2% to 6.5 trillion from 5.2 trillion yen, net profit advanced to 369.2 billion yen from 211 billion yen, and diluted earnings per share rose to 231.77 yen from 130.50 yen.
The company increased its fourth-quarter dividend to 150 yen from 100 yen, and its total annual dividend rose to 270 yen from 200 yen a year ago.
Sompo Holdings, Daikin Industries, and T&D Holdings fell between 3% and 6%.
Hang Seng Index Drops 2%
Stocks in Shanghai and Hong Kong traded down after investors turned cautious.
Benchmark indexes in China have been on the upswing for the last two months after regulators, the central bank, and policymakers signaled support for market-supportive measures.
Stocks fell sharply after Li Auto, a leading electric vehicle maker, reported a sharp decline in earnings in its latest quarter, highlighting intense market pressures.
The People's Bank of China held steady its two reference rates on Monday and announced the setting up of a lending facility for regional governments to purchase existing homes.
Despite the flurry of announcements, investors are increasingly worried that stocks may have run too far from fundamentals, as corporate earnings may not pick pace in the near future and property market malaise is likely to drag on for years to come.
The Hang Seng index dropped the most in five weeks after weak earnings from Li Auto dragged down other electric vehicle makers.
China Movers: Intense EV Price War Drags Li Auto
The CSI 300 index fell 0.4% to 3,676.48, and the Hang Seng index declined 2.1% to 19,234.33.
Li Auto plunged 19% to HK$81.10 after the electric vehicle maker said net income in the first quarter declined 37% to 591.1 million yuan, or about $82 million, and revenue was 25.6 billion yuan.
The electric vehicle maker said it plans to deliver between 105,000 and 110,000 vehicles this quarter, representing an increase of between 21% and 27% from a year ago.
The company also estimated revenue in the quarter to range between 29.9 billion and 31.7 billion yuan, an increase between 4.2% and 9.7% from a year ago.
BYD declined 3.8% to HK$218.40, Geely Automobile decreased 3.6% to HK$10.26, and Xpeng tumbled 7.8% to HK$31.75.
Tech stocks were also among the leading decliners on the worry that valuations may have stretched too far from the sector's fundamentals.
Tencent Holdings decreased 3.4% to HK$383.60, JD.com fell 2.4% to HK$133.50, and Baidu fell 3.2% to HK$104.0.
U.S. Movers: AutoZone, Macy's, Lowe's, Palo Alto Networks
Scott Peters
21 May, 2024
New York City
Palo Alto Networks declined 4.8% to $308.21 after the cybersecurity company reported better-than-expected quarterly earnings, but the company's guidance for the current quarter fell short of market expectations.
Revenue in the fiscal third quarter ending in April rose 15% to $2.0 billion from $1.7 billion, net income soared to $278.8 million from $107.8 million, and diluted earnings per share advanced to 79 cents from 31 cents a year ago.
The company guided revenue in the fourth quarter to rise to between $2.15 billion and $2.17 billion, an increase between 9% and 11% from a year ago.
The company revised its annual revenue estimate to between $7.99 billion and $8.01 billion, an increase of 16% from a year ago.
Lowe's Companies decreased 1.8% to $225.04 after the home improvement retailer said comparable store sales declined 4.1% in the first quarter.
The retailer reported better-than-expected quarterly results.
Total sales in the first quarter declined to $21.4 billion from $22.3 billion, net income dropped to $1.8 billion from $2.26 billion, and diluted earnings per share declined to $3.06 from $3.77 a year ago.
Earnings in the quarter a year ago included gains from the sale of Canadian retail operations; after adjusting for the sale, earnings were $3.67 a share.
The retailer declared a dividend of $1.10, compared to $1.05 a year ago.
The company estimated annual sales between $84 billion and $85 billion, comparable sales to fall between 2% and 3%, and diluted earnings per share between $12.0 and $12.30.
Macy's Inc. gained 0.1% to $19.13 after the department store chain reported better-than-expected quarterly results.
Net sales in the first quarter declined 2.7% to $4.84 billion from $4.98 billion, net income dropped to $62 million from $155 million, and diluted earnings per share fell to 22 cents from 55 cents a year ago.
The retailer tightened its annual sales range to between $22.3 billion and $22.9 billion from the previous estimate of between $22.2 billion and $22.9 billion.
The company also lifted its adjusted diluted earnings per share range to between $2.55 and $2.90 from the $2.45 and $2.85 range released on February 27.
AutoZone declined 1.8% to $2,875.78 after the specialty retailer reported mixed results in the fiscal third quarter.
Revenue in the third quarter increased 3.5% to $4.2 billion from $4.1 billion, net income advanced to $651.7 million from $647.7 million, and diluted earnings per share increased to $36.69 from $34.12 a year ago.
Total comparable same-store sales rose 1.9%, driven by an 18.1% sales increase at international stores and flat sales at domestic stores.
The company repurchased 242,000 of its own shares at an average price per share of $3,036, for a total of $734.7 million. The company still had $1.4 billion available at the end of the fiscal third quarter.
U.S. Averages Hovered Near Record Highs; Retailers and Tech Stocks In Focus
Barry Adams
21 May, 2024
New York City
Benchmark indexes hovered near record highs, and tech stocks lacked direction ahead of the closely watched earnings report from Nvidia.
Market indexes traded around flatline as investors digested a mixed batch of earnings from leading retailers including Macy's, Lowe's, and AutoZone.
Palo Alto Networks also dropped more than 5% after the cybersecurity company's guidance fell short of market expectations.
Investors have built expectations of rate cuts in the second half, but those expectations may have to be scaled back after policymakers signaled the need to keep rates higher.
On Tuesday, Fed Governor Christopher Wallace said he would prefer more encouraging data on the inflation front for several months before lowering rates.
"In the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” Wallace added.
U.S. Indexes and Treasury Yields
The S&P 500 index was nearly unchanged at 5,308.15, and the Nasdaq Composite declined 0.2% to 16,762.19.
The yield on 2-year Treasury notes edged higher to 4.84%, 10-year Treasury notes increased to 4.41%, and 30-year Treasury bonds edged higher to 4.54%.
Natural gas prices advanced in the previous four sessions in a row and hovered near this year's high on the expectation of rising demand from U.S. electric utilities.
WTI crude oil decreased $0.76 to $78.51 a barrel, and natural gas prices declined 6 cents to $2.69 a thermal unit.
Gold increased by $0.80 to $2,427.05 an ounce, and silver rose 15 cents to $31.91.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.54.
U.S. Stock Movers
Palo Alto Networks declined 4.8% to $308.21 after the cybersecurity company reported better-than-expected quarterly earnings, but the company's guidance for the current quarter fell short of market expectations.
Lowe's Companies decreased 1.8% to $225.04 after the home improvement retailer said comparable store sales declined 4.1% in the first quarter.
The retailer reported better-than-expected quarterly results.
Macy's Inc. gained 0.1% to $19.13 after the department store chain reported better-than-expected quarterly results.
The retailer also lifted its full-year outlook.
AutoZone declined 1.8% to $2,875.78 after the specialty retainer reported mixed results in the fiscal third quarter.
Europe Movers: Greencore, Generali, Kontron, Saipem
Inga Muller
21 May, 2024
Frankfurt
European markets traded down after policymakers across Atlantic commented to scale down rate-cut expectations in the near future.
The DAX index decreased by 0.5% to 18,680.30; the CAC-40 index fell by 1.0% to 8,116.39; and the FTSE 100 index inched higher by 0.3% to 8,443.72.
The yield on 10-year German bonds edged up to 2.51%; French bonds inched higher to 3.01%; the UK gilts edged higher to 4.15%; and Italian bonds inched higher to 3.81%.
Kontron AG increased 3.1% to €20.48 after the German IoT company said it won a significant order to supply smart wallboxes.
Generali SpA decreased 2.6% to €23.21 after the company reported a slightly weaker profitability in its property and casualty unit.
Saipem SpA rose 3.2% to €2.36 after the energy contractor won three new orders worth $3.7 billion.
Greencore Group PLC soared 18.6% to 165.33 pence after the sandwich supplier to supermarkets announced its plans to buy back £50 million of its own stock over the next 12 months starting with £30 million purchase.
Revenue declined 6.1% to 866.1 million from 925.8 million and comparable sales rose 4.1% from a year ago, respectively.
Revenue decline reflects the sale of low-margin business Trilby Trading.
Basic earnings per share rose to 2.5 pence from a loss of 0.9 pence a year ago.
The company also said pre-tax profit in the first half soared to £14.7 million from a loss of £6.2 million a year ago.
Eurozone Current Account Surplus Widens, German Producer Price Inflation Accelerates
Bridgette Randall
21 May, 2024
Frankfurt
European markets turned lower, and benchmark indexes were under pressure in Tuesday's trading after rising in the previous session.
Market sentiment was weak after several policymakers urged caution and stressed that inflation is still too high and restrictive, and higher rates may be needed for a longer time to bring down inflation to 2%.
Moreover, policymakers in Europe also stressed the need to assess the incoming data before raising hopes for multiple rate cuts, as stated in June.
The European Central Bank president, Christine Lagarde, raised hopes of a rate cut as early as June during a press conference after the last policy meeting on April 11.
On the economic front, the eurozone current account surplus improved in March after primary income improved in March, the European Central Bank reported Tuesday.
The current account surplus adjusted for seasonal factors rose to €36 billion in March from €29 billion in February, having surged from €13 billion a year ago.
Current account surplus, unadjusted for seasonal factors, rose to €44.5 billion from €27.0 billion a year ago.
The goods surplus increased to €41.5 billion from €39.6 billion, the services surplus rose to €3.9 billion from €1.8 billion and the primary income surplus surged to €12 billion from €1.2 billion.
Also, the secondary income gap narrowed to €12.9 billion from €15.6 billion.
Producer price inflation in Germany fell at a faster annual pace of 3.3% in April, faster than the 2.9% pace in March, Destatis reported Tuesday.
Producer prices declined for the tenth month in a row, driven by the steady decline in energy prices.
Europe Indexes and Yields
The DAX index decreased by 0.5% to 18,680.30; the CAC-40 index fell by 1.0% to 8,116.39; and the FTSE 100 index inched higher by 0.3% to 8,443.72.
The yield on 10-year German bonds edged up to 2.51%; French bonds inched higher to 3.01%; the UK gilts edged higher to 4.15%; and Italian bonds inched higher to 3.81%.
The euro edged higher to $1.086; the British pound inched higher to $1.271; and the U.S. dollar gained to 90.93 Swiss cents.
Brent crude decreased $1.21 to $82.50 a barrel, and the Dutch TTF natural gas rose by €0.26 to €31.45 per MWh.
Europe Stock Movers
Kontron AG increased 3.1% to €20.48 after the German IoT company said it won a significant order to supply smart wallboxes.
Generali SpA decreased 2.6% to €23.21 after the company reported a slightly weaker profitability in its property and casualty unit.
Saipem SpA rose 3.2% to €2.36 after the energy contractor won three new orders worth $3.7 billion.
Greencore Group PLC soared 18.6% to 165.33 pence after the sandwich supplier to supermarkets announced its plans to buy back its own stock.
The company also said pre-tax profit in the first half soared to £14.7 million from a loss of £6.2 million a year ago.