Market Update
Movers: Alphabet, Disney, PacWest Bancorp, Unity Software
Scott Peters
11 May, 2023
New York City
Walt Disney Company declined 8.8% to $92.29 after the theme park operator and media company reported a significant decline in streaming subscribers even as quarterly loss in the division improved.
Revenue in the first quarter increased 13% to $21.8 billion from $19.2 billion and net income from continuing operations more than doubled to $1.2 billion from $470 million and diluted earnings per share rose to 69 cents from 26 cents a year ago.
Disney television networks segment revenue declined 7% to $6.6 billion from $7.1 billion and streaming services revenue increased 12% to $5.5 billion from $4.9 billion a year ago.
Disney streaming services subscribers in the U.S. and Canada declined to 46.3 million from 46.6 million and international subscribers including Hotstar edged up 2% to 58.6 million from 57.7 million a year ago.
ESPN+ subscriber base increased 2% to 25.3 million from 24.9 million in the previous year's quarter.
Unity Software Inc rose 11.4% to $31.95 after the video game software developer lifted its revenue estimate for 2023.
Revenue jumped 56% to $500.3 million from $320.1 million and net loss expanded to $253.7 million from $177.5 million and diluted loss per share rose to 67 cents from 60 cents a year ago.
Disney theme parks, products and experiences revenue in the first quarter increased 17% to $7.7 billion from $6.6 billion in the previous year's comparable quarter.
Operating income in the segment increased 23% to $2.1 billion from $1.78 billion in the first quarter a year ago.
PacWest Bancorp plunged 19.5% to $4.88 after the regional bank said deposits declined 9.5% for the week ended May 5.
In the first quarter, total interest income increased to $517.7 million from $322.9 million and the company swung to a net loss of $1.2 billion from a profit of $120.1 million and diluted earnings per share was ($10.22) from $1.01 a year ago.
The goodwill impairment charge of $1.38 billion led to a net loss $1.2 billion in the quarter.
The goodwill charge is a non-cash charge and had no impact on bank's regulatory capital ratios, cash flows, or liquidity position.
Total deposits decreased by $5.7 billion or 16.9% in the first quarter and most of the decrease in deposits was from uninsured deposits, which resulted in the percentage of insured deposits to total deposits to increase from 48% at December 31, 2022 to 71% of total deposits at March 31, 2023.
Following the closure and sale of First Republic Bank on May 1, during the week ended May 5, 2023, deposits declined approximately 9.5%, with a majority of that decline occurring on May 4th and May 5th after the news reports on the afternoon of May 3rd when the company was the focus of financial news across the nation.
Other regional banks declined on the news and Western Alliance and Zions Bancorp fell 3%.
Alphabet Inc Class A stock gained 5.0%to $117.0 after the company released AI tools at its annual conference for developers in Mountainview, California.
The parent of Google and YouTube also released a foldable phone with AI search tools that cost as much as $1,799.
Producer Price Index Eased In April, 10th Monthly Slowdown In a Row
Brian Turner
11 May, 2023
New York City
Producer price index in April increased 0.2% from the previous month, the U.S. Bureau of Labor Statistics reported Thursday.
The measure of wholesale inflation declined 0.4% in March and was unchanged in February.
The index for final demand goods increased 0.2% and for services rose 0.3% and contributed to an 80% increase in overall index.
Core index, which excludes food, energy and services, increased 0.2% in April after increasing 0.1% in March. On an annual basis the core index advanced 3.4%.
Over one third of the April advance in the index for final demand services can be traced to a 4.1% rise in prices for portfolio management and 8.4% advance in prices for gasoline was a major factor in the April increase in the index for final demand goods.
On an annual basis, the wholesale price inflation index declined for the tenth month in a row to 2.3% from the high of 11.2% in July.
Stocks, Treasury Yields Fell After Wholesale Inflation Eased, Debt Ceiling Uncertainties
Barry Adams
11 May, 2023
New York City
Stocks on Wall Street declined after investors reviewed wholesale inflation report and another batch of corporate earnings amid a growing uncertainties about the debt ceiling negotiations.
Benchmark indexes traded lower despite the second inflation reading in as many days showed cooling of price increases.
Producer price index, a measure wholesale inflation declined for the tenth month in a row.
On Wednesday, consumer prices index also eased to 4.9% in April following the slower increases in food and energy costs.
Regional bank worries resurfaced after the Los Angeles-based PacWest reported outflow of deposits, a critical pillar for the support of its business.
Disney stock dropped close to 9% after the company reported a drop in streaming services subscriber growth
G7 finance ministers and central bank governors kicked off their meeting in Niigata, Japan on Thursday but focus was on the ongoing discussion between U.S. leaders in finding a compromise in raising the debt ceiling.
U.S. Treasury Secretary Janet Yellen said at a press conference in Japan that the U.S. could run out of money on June 1 if the current debt ceiling of $31.4 trillion is not raised.
Default on financial obligation "would produce an economic and financial catastrophe" and added "there was no good reason to generate a crisis of our own making."
Producer Price Index Extended 10-month Decline In April
Producer price index in April increased 0.2% from the previous month, the U.S. Bureau of Labor Statistics reported Thursday.
The measure of wholesale inflation declined 0.4% in March and was unchanged in February.
The index for final demand goods increased 0.2% and for services rose 0.3% and contributed to an 80% increase in overall index.
Core index, which excludes food, energy and services, increased 0.2% in April after increasing 0.1% in March. On an annual basis the core index advanced 3.4%.
Over one third of the April advance in the index for final demand services can be traced to a 4.1% rise in prices for portfolio management and 8.4% advance in prices for gasoline was a major factor in the April increase in the index for final demand goods.
On an annual basis, the wholesale price inflation index declined for the tenth month in a row to 2.3% from the high of 11.2% in July.
U.S. Indexes & Yields
The S&P 500 index increased 0.6% to 4,112.12 and the Nasdaq Composite dropped 0.6% to 12,262.25.
The yield on 2-year Treasury notes hovered at 3.82%, 10-year Treasury notes edged up to 3.35% and 30-year Treasury bonds held at 3.74%.
Crude oil fell $1.13 to $71.44 a barrel and natural gas prices fell 1 cent to $2.18 a thermal unit.
U.S. Stock Movers
Walt Disney Company declined 8.8% to $92.29 after the theme park operator and media company reported a significant decline in streaming subscribers even as quarterly loss in the division improved.
Unity Software Inc rose 11.4% to $31.95 after the video game software developer lifted its revenue estimate for 2023.
PacWest Bancorp plunged 19.5% to $4.88 after the regional bank said deposits declined 9.5% for the week ended May 5.
In the first quarter, total interest income increased to $517.7 million from $322.9 million and the company swung to a net loss of $1.2 billion from a profit of $120.1 million and diluted earnings per share was ($10.22) from $1.01 a year ago.
Other regional banks declined on the news and Western Alliance and Zions Bancorp fell 3%.
Alphabet Inc Class A stock gained 5.0%to $117.0 after the company released AI tools at its annual conference for developers in Mountainview, California.
The parent of Google and YouTube also released a foldable phone with AI search tools that cost as much as $1,799.
Europe Movers: Bayer, Deutsche Telekom, Engie, Rolls Royce, ThyssenKrupp, Telefonica, Vodafone Group
Bridgette Randall
11 May, 2023
Frankfurt
Energy and mining companies declined after China reported near zero inflation confirming uneven recovery and weak demand for manufactured goods.
Wholesale deflation deepened for the seventh month in a row in April and consumer prices rose 0.1% in the month.
Anglo American, Glencore and Antofagasta declined between 2% and 3% and BP Plc and Shell Plc dropped between 1% and 2%.
Vodafone Group Plc decreased 1.5% to 91.34 pence and the company announced an expanded partnership with Emirates Telecommunications.
Deutsche Telekom AG increased 1.2% to €21.51 after the German telecom group slightly lifted its 2023 profit estimate.
Bayer AG decreased 6.8% to €54.31 after the German drug pesticide maker estimated 2023 earnings to be near the low end of its estimate.
ThyseenKrupp AG declined 2.2% to €6.52 after the German steel maker swung to a loss in its latest quarter and reported a decline in orders.
Sales in the fiscal second quarter declined to €10.11 billion from 10.6 billion and new orders declined to €10.2 billion from €13.6 billion and adjusted EBIT dropped to €205 million from €802 million a year ago.
The company blamed a sharp decline in operating earnings on higher energy and operating costs and lower steel prices in the quarter.
Engie SA increased 1.1% to €14.84 after the French utility company reported a rise in first quarter net income.
Rolls Royce Holdings PLC decreased 5.5% to 147.78 pence after the aerospace company and defense contractor said it is on track to meet its annual target.
The struggling aerospace company is in the middle of a restructuring and the new chief executive Tufan Erginbilgic has implemented deep cost cuts as a part of his turnaround plan.
Telefonica SA declined 3.5% to €3.89 after the Spanish telecom company reported a 58% decrease in first quarter income on higher debt servicing expenses.
Revenue in the first quarter increased 6.7% to €10.0 billion and net income declined 57.9% to €298 million and free cash flow declined 11.6% to €454 million.
The company revised its full-year 2023 revenue organic growth estimate to 4.9% from the previous estimate of "low single digit growth" and lowered its capex to sales ratio to 11.3% from the previous target of 14%.
European Stocks Waver, Bank of England Lifts Rates and Estimates Slower Inflation Decline
Bridgette Randall
11 May, 2023
Frankfurt
European markets attempted a rebound and investors digested inflation reports from two largest economies of the world and awaited resolution to U.S. debt ceiling negotiations.
The consumer price Inflation in the U.S. cooled for the tenth month in a row and China's consumer prices rose at the slowest pace in more than two years but wholesale inflation fell deeper in the deflation territory.
The falling energy prices and slower increase in food prices slowed the U.S. inflation in April, which may help the Federal Reserve in pausing interest rate hike at the next meeting.
The sharp decline in inflation in China was driven by weak consumer demand for manufactured goods after prices rose sharply in the corresponding moth last year.
China's service inflation was 1.0% because of a stronger rebound in demand for services after travel and leisure activities returned following the end of zero-Covid policy.
The weak inflation data highlighted slow and uneven recovery in China and most economists are estimating between three and five years before China's manufacturing and service activities return to pre-Covid levels.
G7 finance ministers and central bank governors kicked off their meeting in Niigata, Japan on Thursday but focus was on the ongoing discussion between U.S. leaders in finding a compromise in raising the debt ceiling.
U.S. Treasury Secretary Janet Yellen said at a press conference in Japan that the U.S. could run out of money on June 1 if the current debt ceiling of $31.4 trillion is not raised.
Default on financial obligation "would produce an economic and financial catastrophe" and added "there was no good reason to generate a crisis of our own making."
China's Wholesale Price Deflation Deepened
China's consumer price inflation dropped to near zero and wholesale inflation extended decline for the seventh month in a row.
The consumer price index rose 0.1% from a year ago in April from a 0.7% rise in March, the National Bureau of Statistics reported Thursday.
A high base price in April last year played a key role in comparison, dragging the inflation near zero.
Prices advanced rapidly last year after the ending of zero-Covid policies but the surge in demand put additional pressure on domestic food supply chains.
Core CPI, which excludes volatile food and energy, was unchanged at 0.7%.
Services price index rose at the fastest pace in four months to 1% but the overall weakness indicated sluggish Post-Covid rebound.
In addition, the producer price index, a measure of wholesale inflation, declined at a faster pace of 3.6% in April from 2.5% in March.
Wholesale prices declined for the seventh month in a row, and most economists anticipate recovery to take between three and five years.
BoE Estimated Slower Inflation Decline, Rate Hiked to 4.5%
The Bank of England lifted its key lending rate by 25 basis points to 4.5% as the central bank battled double-digit inflation.
The Monetary Policy Committee voted 7-2 in favor of the rate hike as the central bank reiterated its commitment in fighting high inflation.
The latest rate increase is the 12th rate hike in a row since December 2021 as inflation remained near 10%.
In the accompanying economic update, the central bank said economic activities are expected to be less weak than previous forecasted in April and labor market is expected to remain tighter with jobless rate lower than 4% until the end of 2024.
The U.K. economy is expected to stall the first and second quarter and advance 0.25% in 2023 compared to a 0.5% contraction estimated in February.
The Bank of England estimated a slower inflation decline and revised its estimate of inflation by the end of the year to 5.1% from the previous estimate of 3.9%, and drop further to its target rate of 2% in late 2024.
Europe Indexes & Yields
The DAX index increased 0.1% or 18.28 points to 15,915.10, the CAC-40 index rose 0.6% or 40.223 points to 7,401.39 and the FTSE 100 index advanced 0.08% or 5.93 to 7,747.37.
For the year so far to the close of Tuesday, the DAX index increased 13.1%, the CAC-40 index 11.9% and the FTSE 100 index about 2.6%.
The yield on 10-year German Bunds inched down to 2.25%, French bonds traded slightly lower to 2.83%, the UK gilts inched lower to 3.75% and Italian bonds decreased to 4.17%.
The euro edged higher to $1.093, the British pound to $1.257 and the Swiss franc to 89.41 cents.
Brent crude fell 59 cents to $77.01 a barrel and the Dutch TTF natural gas increased €0.14 to €35.15 per MWh.
Europe Stock Movers
Energy and mining companies declined after China reported near zero inflation confirming uneven recovery and weak demand for manufactured goods.
Wholesale deflation deepened for the seventh month in a row in April and consumer prices rose 0.1% in the month.
Anglo American, Glencore and Antofagasta declined between 2% and 3% and BP Plc and Shell Plc dropped between 1% and 2%.
Vodafone Group Plc decreased 1.5% to 91.34 pence and the company announced an expanded partnership with Emirates Telecommunications.
Deutsche Telekom AG increased 1.2% to €21.51 after the German telecom group slightly lifted its 2023 profit estimate.
Bayer AG decreased 6.8% to €54.31 after the German drug pesticide maker estimated 2023 earnings to be near the low end of its estimate.
ThyseenKrupp AG declined 2.2% to €6.52 after the German steel maker swung to a loss in its latest quarter and reported a decline in orders.
Engie SA increased 1.1% to €14.84 after the French utility company reported a rise in first quarter net income.
Rolls Royce Holdings decreased 5.5% to 147.78 pence after the aerospace company and defense contractor said it is on track to meet its annual target.
The struggling aerospace company is in the middle of a restructuring and the new chief executive Tufan Erginbilgic has implemented deep cost cuts as a part of his turnaround plan.
Telefonica SA declined 3.5% to €3.89 after the Spanish telecom company reported a 58% decrease in first quarter income on higher debt servicing expenses.
China's Weak Inflation Shows Delayed Recovery, Japan's Current Account Surplus Shrinks
Arjun Pandit
11 May, 2023
Mumbai
Markets in Asia reacted to local economic news and welcomed the cooling of inflation in the U.S.
Indexes in China and Hong Kong traded down after inflation in mainland China slowed to the lowest level in more than two years on uneven post-Covid recovery.
The consumer price index rose 0.1% from a year ago in April from a 0.7% rise in March, the National Bureau of Statistics reported Thursday.
A high base price in April last year played a key role in comparison, dragging the inflation near zero.
Prices advanced rapidly last year after the ending of zero-Covid policies but the surge in demand put additional pressure on domestic food supply chains.
Core CPI, which excludes volatile food and energy, was unchanged at 0.7%.
Services price index rose at the fastest pace in four months to 1% but the overall weakness indicated sluggish Post-Covid rebound.
In addition, the producer price index, a measure of wholesale inflation, declined at a faster pace of 3.6% in April from 2.5% in March.
Wholesale prices declined for the seventh month in a row, and most economists anticipate recovery to take between three and five years.
In Shanghai stock trading, the SSE Composite index decreased 0.1% to 3,315.71 and the Hang Seng index in Hong Kong dropped 0.5% to 19,670.12.
In Tokyo, the Nikkei 225 index was nearly unchanged at 29,119.06 and Japan reported its second current account surplus in a row in March.
Current account surplus dropped to 2.278 trillion yen in March from 3.235 trillion yen in February, the ministry of finance reported Thursday.
The ASX 200 index in Sydney closed nearly unchanged at 7,251.90 and the KOSPI index in Seoul closed down 0.2% to 2,491.0.
Tech Stocks Led Market Advance After Inflation Cooled In April
Barry Adams
10 May, 2023
New York City
Stocks traded higher and tech stocks led the way after cooler-than-expected inflation stoked market rally.
Consumer prices rose at a slower pace for the 10th month in a row but underlying inflationary forces remained strong, reflecting rapid rise in shelter costs.
A slight easing of inflation dragged yields on 2-year and 10-year Treasury notes, further supporting market gains.
Food prices rose at a slower pace and energy prices continued to decline but rising cost of accommodation sustained the overall inflation.
Despite the cooling of inflation over the last ten months in a row, prices are still rising.
Accumulated inflation has lifted prices of many manufactured items and services between 20% and 80% and home prices have jumped between 50% and 200% in several urban areas.
While Federal Reserve policymakers are still debating the amount of rate increase and hoping that cumulating rate increases will slow the economy and cool inflation, prices of most items and homes are not likely to drop to pre-Covid level.
Stubborn inflation is becoming deeply entrenched in the broader economy, sending a signal to policymakers that a premature pause on the rate hike may make it even harder to bring down inflation to the Fed's target rate of 2%.
Policymakers are hoping for a cumulative effect of ten rate increases to lower aggregate demand and weaken inflation forces but prices are still rising, stoking wage inflation.
Interest rates have been on the rise since March 2022 but real rates are still negative and not restrictive enough for the economy to slow down and cool inflation below the long term average of 2%.
Inflation Cooled 10th Month In a Row
Consumer price index in April eased to 4.9% from a year ago after rising at 5.0% in March, the U.S. Bureau of Labor Statistics reported Wednesday.
On a monthly basis, seasonally adjusted inflation index accelerated to 0.4% in April after rising 0.1% in March.
The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline.
The annual pace of shelter inflation edged slightly down to 8.1% from 8.2% in the previous month, used car and trucks prices declined 6.6% after falling 11.6%, food prices eased to 7.7% from 8.5% and energy costs fell 5.1% from 6.4% after gasoline prices dropped 12.2% and fuel costs declined 20.2%.
Core prices, which excludes food and energy, rose 5.5% from a year ago and 0.4% from the previous month.
U.S. Indexes & Yields
The S&P 500 index increased 0.5% to 4,137.64 and the Nasdaq Composite jumped 1.04% to 12,306.44.
The yield on 2-year Treasury notes hovered at 3.92%, 10-year Treasury notes edged up to 3.45% and 30-year Treasury bonds held at 3.81%.
Crude oil fell $1.03 to $72.67 a barrel and natural gas prices fell 7 cents to $2.19 a thermal unit.
U.S. Stock Movers
Airbnb Inc plunged 13.6% to $109.56 after the company released quarterly results and forecasted weak second quarter outlook.
Revenue in the first quarter increased 20% to $1.8 billion from $1.5 billion and gross booking value soared 19% to $20.4 billion.
The online booking company swung to a profit of $117 million compared to a loss of $19 million and diluted earnings per share was 18 cents compared to (3 cents) a year ago.
Nights and experiences booked on the platform increased 19% to 121.1 million.
The company forecasted revenue in the second quarter between $2.35 billion and $2.45 billion, an increase between 12% and 16%. The company also estimated a slight decline in average daily rate driven by "driven by mix shifts and the introduction of new Host pricing tools."
GoodRx Holdings Inc decreased 5.1% to $4.45 after the company reported quarterly results that were ahead of market's expectations but the online pharmacy estimated weaker-than-expected second quarter and full-year results.
Akamai Technologies Inc increased 5.1% to $82.90 after the cloud computing services provider lifted its annual revenue outlook on better-than-expected quarterly results.
Rivian Automotive Inc soared 8.2% to $15.0 after the electric vehicle maker reiterated its 2023 production target of 50,000 trucks and reported narrower-than-expected quarterly loss.
Dutch Bros Inc declined 7.3% to $30.33 after the coffee chain operator reported weaker-than-expected same store sales and total revenue in the first quarter.
European Markets Struggle On Rate Path Worries
European markets drifted lower and investors reacted to corporate results.
Benchmark indexes in Frankfurt, Paris and London traded lower but hovered near record highs as investors worried about future rate paths.
Despite multiple interest rate hikes and four-decade high inflation, corporate profits have met or exceeded investor expectations.
Travel and leisure companies are reporting stronger-than-expected sales and energy companies are reporting weaker revenues and earnings after record results in the previous year.
The Bank of England is set to increase its key lending rate by 25 basis points to 4.5% as inflation stayed near 10% in March.
Investors across Europe are worried that rapid rise in interest rates are feeding into the broader economy and negatively impacting the commercial real estate sector.
Banks in the region are also in focus on the worries that higher rates have caused significant losses, though unrealized, in government securities held by banks of all sizes.
Investors are also awaiting the latest report on the U.S. consumer price inflation later in the day with expectations running around 5% and core inflation easing slightly to 5.5%.
Europe Indexes & Yields
The DAX index decreased 0.3% or 40.68 points to 15,914.85, the CAC-40 index fell 0.2% or 15.72 points to 7,380.71 and the FTSE 100 index declined 0.2% or 15.52 to 7,748.67.
For the year so far to the close of Tuesday, the DAX index increased 13.1%, the CAC-40 index 11.9% and the FTSE 100 index about 2.6%.
The yield on 10-year German Bunds inched up to 2.31%, French bonds traded slightly higher to 2.92%, the UK gilts inched higher to 3.84% and Italian bonds advanced to 4.24%.
The euro edged higher to $1.095, the British pound to $1.262 and the Swiss franc to 89.09 cents.
Brent crude fell 77 cents to $76.67 a barrel and the Dutch TTF natural gas decreased €0.40 to €36.55 per MWh.
Europe Stock Movers
Alstom SA decreased 2.5% to €22.84 after the transportation company delayed its mid-year targets by a year and blamed it on macroeconomic conditions.
Revenue in the full-year 2023 ending in March increased 7% to €16.5 billion and adjusted net profit increased to €292 million from a loss of €173 million a year ago.
Credit Agricole SA increased 5.5% to €11.76 after the French lender reported record first quarter revenue.
Reported group revenue increased 0.5% to €8.9 billion and net income rose 23.6% to €1.7 billion.
Loans issued in the quarter by regional banks declined 6.2% driven by a 14.3% fall in home loans as higher rates and elevated home prices kept buyers away from the market.
Credit Agricole SA, standalone revenue in the fiscal year 2023 increased to €6.1 billion from €5.6 billion and net income rose to €1.2 billion from €0.57 billion and earnings per share increased to 36 cents from 15 cents a year ago.
TUI AG declined 3.6% to 541.80 pence after the tour operator reported a narrower underlying operating loss.
Revenue in the second quarter increased to €3.1 billion from €2.1 billion and the group's loss expanded to €326.2 million from €321.4 million and loss per share increased to €1.26 from €1.21 a year ago.
The travel company said summer and winter season bookings increased to 12.9 million and forecasted air travel capacity for summer travel to match 2019 level.
Melrose Industries PLC increased 3.5% to 439.30 pence after the company said revenues are "materially ahead of expectations."
The company said in its trading update revenue in the first four months to April increased 19% and adjusted operating margin increased about 10% from a year ago.
The company forecasted full-year 2023 revenue between £3.35 billion and £3.45 billion and adjusted operating profit between £340 million and £360 million.
Compass Group Plc increased 1.7% to 2,100 pence after the UK-based catering company reported strong first-half results and lifted its annual outlook.
Movers: Airbnb, Akamai Technologies, Dutch Bros, GoodRx, Icahn Enterprises, Rivian
Scott Peters
10 May, 2023
New York City
Airbnb Inc plunged 13.6% to $109.56 after the company released quarterly results and forecasted weak second quarter outlook.
Revenue in the first quarter increased 20% to $1.8 billion from $1.5 billion and gross booking value soared 19% to $20.4 billion.
The online booking company swung to a profit of $117 million compared to a loss of $19 million and diluted earnings per share was 18 cents compared to (3 cents) a year ago.
Nights and experiences booked on the platform increased 19% to 121.1 million.
The company forecasted revenue in the second quarter between $2.35 billion and $2.45 billion, an increase between 12% and 16%. The company also estimated a slight decline in average daily rate driven by "driven by mix shifts and the introduction of new Host pricing tools."
Akamai Technologies Inc increased 5.1% to $82.90 after the cloud computing services provider lifted its annual revenue outlook on better-than-expected quarterly results.
Revenue in the first quarter increased to $915.7 million from $903.6 million and net income dropped to $97.1 million from $133.4 million and diluted earnings per share fell to 62 cents from 82 cents a year ago.
The company estimated revenue in the second quarter between $927 million and $937 million and for the full-year 2023 between $3.740 billion and $3.785 billion.
Akamai forecasted capital expenditure as a percentage of revenue to range between 21% and 22% in the second quarter and between 18.5% and 19.0% in the full-year 2023.
Dutch Bros Inc declined 7.3% to $30.33 after the coffee chain operator reported weaker-than-expected same store sales and total revenue in the first quarter.
Company-operated store revenues soared 33.0% to $173.2 million, as compared to $130.2 million in the same period of 2022.
Total revenue in the first quarter increased 29.6% to $197.2 million from $152..2 million and net loss shrank to $9.4 million from $16.3 million and diluted loss per share fell to 7 cents from 10 cents a year ago.
In the quarter, the company opened 45 new stores, 42 of which were company-operated, across 9 states.
Systemwide same store sales declined 2% and company owned same stores sales fell 3.% in the quarter.
GoodRx Holdings Inc decreased 5.1% to $4.45 after the company reported quarterly results that were ahead of market's expectations but the online pharmacy estimated weaker-than-expected second quarter and full-year results.
Revenue declined to $183.9 million from $203.3 million and the company swung to a net loss of $3.3 million from a profit of $12.3 million and diluted earnings per share was ($0.01) compared to 3 cents a year ago.
Net loss in the quarter was impacted by $25.5 million of stock-based compensation expense, $6.9 million of which related to the non-recurring awards granted to co-founders in connection with the company's initial public offering.
As of the end of March, GoodRx had cash and cash equivalents of $761.1 million and total outstanding debt of $665.3 million.
Icahn Enterprises LP plunged 16.5% to $31.69 and extended previous week's loss of 25% after the company said in a regulatory filing that the U.S. Attorney's office for the Southern District New York is seeking information related to corporate governance, dividend, valuation and marketing materials.
Rivian Automotive Inc soared 8.2% to $15.0 after the electric vehicle maker reiterated its 2023 production target of 50,000 trucks and reported narrower-than-expected quarterly loss.
The company delivered 7,946 vehicles and produced 9,395 vehicles in the first quarter.
Revenue in the first quarter surged six-fold to $661 million from $95 million and net loss narrowed to $1.4 billion from $1.6 billion and diluted loss per share shrank to $1.45 from $1.77 a year ago.
The company confirmed its capital expenditure in 2023 of $2 billion and adjusted operating earnings of $4.3 billion.
Negative free cash flow increased to $1.8 billion from $1.45 billion in the quarter a year ago.
Muted Gains In Stocks After Stubborn Inflation Stoked Rate Hike Worries
Barry Adams
10 May, 2023
New York City
Benchmark indexes struggled to advance after the mixed consumer price inflation in April but tech stocks led the gainers.
Consumer prices rose at a slower pace for the 10th month in a row but inflation forces remained strong reflecting rapid rise in shelter costs.
Food prices rose at a slower pace and energy prices continued to decline but rising cost of accommodation sustained the overall inflation.
Stubborn inflation is becoming deeply entrenched in the broader economy, sending a signal to policymakers that a premature pause on the rate hike may make it even harder to bring down inflation to the Fed's target rate of 2%.
With each passing month, the pace of price rises has slowed but despite the ten rate increases in a row, overall inflation is significantly higher than the Fed's target rate.
Policymakers are hoping for a cumulative effect of ten rate increases to lower aggregate demand and weaken inflation forces but prices are still rising at rapid pace stoking wage inflation.
Rates have been on the rise since March 2022 but real rates are still negative and not restrictive enough for the economy to slow down and cool inflation below the long term average of 2%.
CPI In April Eased to 4.9%, Sustained Housing Inflation
Consumer price index in April declined to 4.9% from a year ago after rising at 5.0% in March, the Bureau of Labor Statistics reported Wednesday.
On a monthly basis, seasonally adjusted inflation index accelerated to 0.4% in April after rising 0.1% in March.
The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline.
The annual pace of shelter inflation edged slightly down to 8.1% from 8.2% in the previous month, used car and trucks prices declined 6.6% after falling 11.6%, food prices eased to 7.7% from 8.5% and energy costs fell 5.1% from 6.4% after gasoline prices dropped 12.2% and fuel costs declined 20.2%.
Core prices, which excludes food and energy, rose 5.5% from a year ago and 0.4% from the previous month.
U.S. Indexes & Yields
The S&P 500 index decreased 0.5% to 4,119.17 and the Nasdaq Composite fell 0.6% to 12,179.55.
The yield on 2-year Treasury notes hovered at 4.00%, 10-year Treasury notes edged up to 3.499% and 30-year Treasury bonds held at 3.82%.
Crude oil fell 75 cents to $72.42 a barrel and natural gas prices rose 3 cents to $2.25 a thermal unit.
U.S. Stock Movers
Airbnb Inc plunged 13.6% to $109.56 after the company released quarterly results and forecasted weak second quarter outlook.
Revenue in the first quarter increased 20% to $1.8 billion from $1.5 billion and gross booking value soared 19% to $20.4 billion.
The online booking company swung to a profit of $117 million compared to a loss of $19 million and diluted earnings per share was 18 cents compared to (3 cents) a year ago.
Nights and experiences booked on the platform increased 19% to 121.1 million.
The company forecasted revenue in the second quarter between $2.35 billion and $2.45 billion, an increase between 12% and 16%. The company also estimated a slight decline in average daily rate driven by "driven by mix shifts and the introduction of new Host pricing tools."
GoodRx Holdings Inc decreased 5.1% to $4.45 after the company reported quarterly results that were ahead of market's expectations but the online pharmacy estimated weaker-than-expected second quarter and full-year results.
Akamai Technologies Inc increased 5.1% to $82.90 after the cloud computing services provider lifted its annual revenue outlook on better-than-expected quarterly results.
Rivian Automotive Inc soared 8.2% to $15.0 after the electric vehicle maker reiterated its 2023 production target of 50,000 trucks and reported narrower-than-expected quarterly loss.
Dutch Bros Inc declined 7.3% to $30.33 after the coffee chain operator reported weaker-than-expected same store sales and total revenue in the first quarter.
CPI In April Eased to 4.9%, 10th Monthly Decline In Inflation Rate
Brian Turner
10 May, 2023
New York City
Consumer price index in April declined to 4.9% from a year ago after rising at 5.0% in March, the Bureau of Labor Statistics reported Wednesday.
On a monthly basis, seasonally adjusted inflation index accelerated to 0.4% in April after rising 0.1% in March.
The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline.
The annual pace of shelter inflation edged slightly down to 8.1% from 8.2% in the previous month, used car and trucks prices declined 6.6% after falling 11.6%, food prices eased to 7.7% from 8.5% and energy costs fell 5.1% from 6.4% after gasoline prices dropped 12.2% and fuel costs declined 20.2%.
Core prices, which excludes food and energy, rose 5.5% from a year ago and 0.4% from the previous month.
Headline inflation declined for the 10th month in a row, helping policymakers in tackling inflation. But prices are still rising but at a slower pace partly because of the base effect.