ticker

Movers: First Republic Bank, JP Morgan, Global Payments, Norwegian Cruise, ON Semiconductor, SoFi Technologies

Scott Peters
01 May, 2023
New York City

First Republic Bank dropped 34% to $2.30 after the Federal Deposit Insurance Corporation seized the ailing bank.

JP Morgan agreed to acquire all deposits and a "substantial majority" of the seized bank after the U.S. government agency failed to convince rival banks to acquire the troubled lender.

First Republic marks the third bank failure of an American bank since March.

The acquisition includes approximately $173 billion of loans and $30 billion of securities and assumption of approximately $92 billion of deposits, including $30 billion of large bank deposits, which will be repaid post-close or eliminated in consolidation.

FDIC will provide loss share agreements covering acquired single-family residential mortgage loans and commercial loans, as well as $50 billion of five-year, fixed-rate term financing.

JP Morgan Chase increased 4.4% to $144.30.

Regional banks traded volatile on the back of seizure of First Republic Bank.

Zions Bancorp fell 2.3% to $27.20, Western Alliance Bancorp declined 0.4% to $36.97 and PacWest plunged 7.1% to $9.44.

Norwegian Cruise Line Holdings Ltd advanced 1.5% to $13.55 after the company reported its latest quarterly results.

Revenue in the first quarter soared to $1.8 billion from $521.9 million and the net loss shrank to $159.2 million from $982.7 million and diluted loss per share fell to 38 cents from $2.35 a year ago.

Gross cruise costs per capacity day was approximately $298 in the quarter and $301 in constant currency.

Adjusted net cruise costs excluding fuel per capacity day in constant currency was approximately $161, a 14% decrease compared to the second half of 2022 as the company stepped up its cost containment efforts.

ON Semiconductor Corp increased 7% to $76.96 after the company reported its latest quarterly results.

Revenue increased 1% to $1.96 billion and net income attributable to shareholders decreased to $461,7 million from $530.2 million and diluted earnings per share fell to $1.03 from $1.19 a year ago.

The company forecasted second quarter revenue between $1,975 million to $2,075 million and gross margin between and gross margin between 45.4% and 47.4% diluted earnings per share between $1.08 and $1.22 based on 449 million outstanding shares.

SoFi Technologies Inc declined 9.9% to $5.61 after the student loan and auto loan refinancing company reported its quarterly results.

Revenue in the first quarter increased 43% to $472.2 million from $330.3 million and net loss shrank 69% to $34.4 million from $110.4 million and diluted loss per share fell to 5 cents from 14 cents a year ago.

The company said higher interest rates will impact its ability to refinance loans.

The company added 433,000 new members in the quarter and increased total members to 5.7 million by the end of the quarter, an increase of 1.8 million from a year ago or 46% from a year ago.

Total deposits surged by a record $2.7 billion, up 37% during the quarter to $10 billion at quarter-end, and 97% of the deposits are insured under the new $2 million FDIC insurance program.

Global Payments Inc declined 7.7% to $104.0 after the company released its quarterly results and announced the appointment of a new chief executive officer from June 1.

Revenue in the first quarter increased 6.3% to $2.29 billion and the company swung to a net loss of $11.0 million from a profit of $244.7 million and diluted earnings per share to ($0.04) from 87 cents a year ago.

Constant currency payment processing volume growth in the quarter was 10%, higher than 9% from the previous quarter but near the two-year low.

JP Morgan to Acquire Deposits and Assets of First Republic Bank

Scott Peters
01 May, 2023
New York City

First Republic Bank dropped 34% to $2.30 after the Federal Deposit Insurance Corporation seized the ailing bank.

JP Morgan agreed to acquire all deposits and a "substantial majority" of the seized bank after the U.S. government agency failed to convince rival banks to acquire the troubled lender.

First Republic Bank’s 84 branches in eight states will reopen as branches of JPMorgan Chase Bank.

First Republic marks the third bank failure of an American bank since March and the second-largest ever U.S. bank failure.

Just months ago, eleven largest U.S. banks pledged $30 billion in deposits to shore up confidence in the San Francisco-based bank.

However, the measure fell short and failed to stem deposit outflow over the next several weeks. The bank also had a high 68% of deposits that were uninsured, meaning they exceeded the threshold established by the FDIC.

As of April 13, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits.

The acquisition includes approximately $173 billion of loans and $30 billion of securities and assumption of approximately $92 billion of deposits, including $30 billion of large bank deposits, which will be repaid post-close or eliminated in consolidation.

FDIC will provide loss share agreements covering acquired single-family residential mortgage loans and commercial loans, as well as $50 billion of five-year, fixed-rate term financing.

The FDIC and JPMorgan Chase Bank also entered into a loss-share transaction on single family, residential and commercial loans it purchased of the former First Republic Bank and $50 billion of five-year fixed rate term financing.

The FDIC as receiver and JPMorgan Chase Bank will share in the losses and potential recoveries on the loans covered by the loss–share agreement.

JP Morgan said it will recognize an upfront, one-time, after-tax gain of approximately $2.6 billion, which does not reflect the estimated restructuring cost of $2.0 billion of after-tax over the next 18 months.

The transaction is expected to be modestly EPS accretive and generate more than $500 million of incremental net income per year, not counting the cost and gains or losses linked to restructuring.

JP Morgan Chase increased 4.4% to $144.30.

Stocks On Wall Street Meandered After Seizure of First Republic Bank

Barry Adams
01 May, 2023
New York City

Stocks on Wall Street traded slightly higher in a cautious trading after the regional banking crisis devoured another bank after weeks of chaos.

First Republic Bank was taken over by the California Department of Financial Protection and Innovation and appointed FDIC as receiver.

After the competitive bidding process over the weekend, FDIC transferred the majority of all assets and deposits to JP Morgan Bank.

First Republic Bank is the second example after the failure of Silicon Valley Bank of how regulators at all levels and board of directors failed to stem the risk stemming from the rapid rise in interest rates over the last thirteen months.

The failure of Silicon Valley Bank cost the deposit insurance fund about $20 billion and the First Republic Bank seizure is expected to cost at least $13 billion, according to the FDIC.

The FDIC has its own capital shortfall issues as well, the deposit insurance fund is very thinly capitalized and needs at least another $85 billion to meet the statutory capital requirement as determined by the U.S. Congress.

This capital shortfall was before the cost of the failure of Silicon Valley Bank and First Republic Bank.

Indexes & Yields

The S&P 500 index increased 3.32 points to 4,174.36 and the Nasdaq Composite index fell 6.28 points to 12,219.98.

In the last week, the S&P 500 index added 0.3% and the Nasdaq Composite advanced 0.9%.

The yield on 2-year Treasury notes inched lower to 4.09%, 10-year Treasury notes rose to 3.47% and 30-year Treasury bonds held at 3.71%.

Crude oil fell $1.83 to $74.94 a barrel and natural gas prices fell 4 cents to $2.36 a thermal unit.

Stock Movers

First Republic Bank dropped 34% to $2.30 after the Federal Deposit Insurance Corporation seized the ailing bank.

JP Morgan agreed to acquire all deposits and a "substantial majority" of the seized bank after the U.S. government agency failed to convince rival banks to acquire the troubled lender.

First Republic marks the third bank failure of an American bank since March.

The acquisition includes approximately $173 billion of loans and $30 billion of securities and assumption of approximately $92 billion of deposits, including $30 billion of large bank deposits, which will be repaid post-close or eliminated in consolidation.

FDIC will provide loss share agreements covering acquired single-family residential mortgage loans and commercial loans, as well as $50 billion of five-year, fixed-rate term financing.

JP Morgan Chase increased 4.4% to $144.30.

Norwegian Cruise Line Holdings Ltd advanced 1.5% to $13.55 after the company reported its latest quarterly results.

Revenue in the first quarter soared to $1.8 billion from $521.9 million and the net loss shrank to $159.2 million from $982.7 million and diluted loss per share fell to 38 cents from $2.35 a year ago.

Gross cruise costs per capacity day was approximately $298 in the quarter and $301 in constant currency.

Adjusted net cruise costs excluding fuel per capacity day in constant currency was approximately $161, a 14% decrease compared to the second half of 2022 as the company stepped up its cost containment efforts.

Global Weakness In Tech Demand Dragged S Korea's Exports and Taiwan's Economy, Factory Activities Diverged In India and China

Arjun Pandit
01 May, 2023
Mumbai

Asian and European markets are closed for Labor Day holiday and crude oil prices eased.

Crude oil prices in Asia and London traded down on private trading platforms following the unexpected decline in factory activities in China.

South Korea's exports fell for the seventh month in a row on the persistent demand weakness for semiconductor chips and shipments to China plunged.

India's factory activities expanded for the fourth month in a row on the rising new orders and shipments.

However, export-reliant and tech-focused Taiwan's economy decreased 3.02% from a year ago in the first quarter ending in March and fell 6.37% from the final quarter of 2022.

The technology hardware and components weakness is driven by a sharp fall in demand for smartphones, personal computers and other advanced electronics products.

China's Manufacturing Activities Eased In April

China's manufacturing activities slowed in April, the latest data from the National Bureau of Statistics showed over the weekend.

The official Purchasing Managers' Index declined to a four-month low of 49.2 from 51.9 in March,

The reading above 50 indicates expansion and below shows a contraction in growth, and the latest data indicated contraction for the first time in factory activities since December.

Factory output grew the least since January but new orders and purchasing activities declined after advancing in the prior three months.

India's Factory Activities Accelerated In April

India's factory activity index or purchasing manager's index accelerated to a four-month high of 57.2 in April from 56.4 in March, the S&P Global said in a report Monday.

Input costs accelerated on the faster price increases for raw materials but output prices rose to a 3-month high.

Forward looking sentiment improved from an eight-month low in March on higher demand inquiries and clearance of pending order approvals.

South Korea's Exports Fall On Semiconductor Weakness

South Korea's exports declined for the seventh month in a row, the Ministry of Trade, Industry and Energy reported Monday.

Exports declined 14.2% from a year ago to a three-month low to $49.6 billion, following a 13.6% decline in the previous month.

The 7-month string of exports decline is the longest period since 2019 and the sharpest fall on the ongoing weakness in semiconductor chip demand.

Exports to China, South Korea's largest trading partner, dropped 26.5% to China, 4.4% to the U.S. but rose 9.9% to the European Union and 30.3% to the Middle East.

Chips exports plunged 41% from a year ago and steel products shipments fell 10.7%.

Imports fell 13.3% in April, the largest fall since August 2020, resulting in a smaller trade deficit of $2.62 billion compared to $4.63 billion in March.

Tokyo and Sydney Indexes Advanced

Most Asian markets were closed for the Labor Day Holiday.

The Nikkei index increased 0.9% to 29,123.18 and the ASX 200 index in Sydney increased 0.4% to 7,334.60.

Financial markets in Indonesia, Shanghai, Hong Kong, Indonesia and Thailand were closed.

U.S. Inflation Cooling Raised Hopes for Soft Landing and Peak Terminal Rates

Barry Adams
28 Apr, 2023
New York City

Market rally broadened beyond tech stocks on the third day of advance after the inflation index cooled, lifting hopes of the arrival of peak terminal rates.

Stocks advanced for the third day in a row after the latest economic data highlighted challenges faced by the Federal Reserve but also lifted hopes that the Fed may not have to continue to keep raising rates.

A closely watched alternative measure of inflation, which generally understates inflation felt by urban residents, rose 4.6% on an annual basis and advanced 0.3% from the previous month in March.

Prices paid by consumers are rising at a slower pace, largely reflecting the deceleration in gasoline prices at the pump stations and cheaper commodities. But that is not the case for services.

The headline inflation measure has been steadily declining for several months but the core rate of inflation has been stuck near 4.6%, indicating that the inflationary forces are now well entrenched in the economy.

The elevated level of inflation after several interest rate hikes shows how difficult it will be for the Fed to bring down inflation to its preferred level of 2% without the help of base effect.

Elevated inflation report came a day later when the data indicated a slight increase in GDP in the first quarter, showing the difficult task of keeping the economy humming while arresting inflationary forces.

Market participants are anticipating the Federal Reserve to lift interest rate by 25 basis points after the policy meeting next week, but investors are anxiously awaiting the Fed's explanation of how long high interest rates have to be kept to bring down inflation closer to 2%.

Some investors are hoping that the Fed may be done raising rates after one more increase next week, and few are hoping that rates may begin to go down towards the year's end or early 2024.

March Personal Spending Flat, PCE Inflation Eased

Personal income rose slightly in March and personal spending was unchanged, the Commerce Department report showed Friday.

Personal income increased 0.3% in March, matching the rate in February and personal spending was unchanged in the month after edging up a revised 0.1% in February.

The report also included a measure of consumer price inflation, that generally understates urban inflation, but preferred by policymakers at the Federal Reserve.

The personal consumption expenditure price index increased 0.1% from the previous month in March, easing from a 0.3% advance in February.

The PCE inflation was the smallest since July 2022 and core PCE, which excludes food and energy, rose 0.3% and matched the rate in the previous month.

The annual rate of consumer price growth eased to 4.2% in March from a revised 5.1% in February and annual core PCE rate slowed to 4.6% from 4.7% respectively.

U.S. Indexes & Yields

The S&P 500 index increased 0.5% to 4,155.13 and the Nasdaq Composite index gained 0.4% to 12,185.58.

For the week, the S&P 500 index advanced 0.4% and the Nasdaq Composite gained 0.9%.

The yield on 2-year Treasury notes inched lower to 4.06%, 10-year Treasury notes rose to 3.45% and 30-year Treasury bonds held at 3.68%.

Crude oil rose 46 cents to $75.23 a barrel and natural gas prices eased a fraction to $2.35 a thermal unit.

U.S. Stock Movers

Intel Corporation soared 6.9% to $31.91 after the advanced semiconductor chipmaker reported smaller-than-expected quarterly loss.

Amazon.com, Inc declined 3.8% to $105.68 after the online retail platform operator reported weaker-than-expected revenue growth in its cloud services segment.

Capital One Financial Corp declined 1.5% to $94.47 after the credit card company reported first quarter earnings that were sharply lower than analyst estimates.

Exxon Mobil Corp rose 1.8% to $119.0 after the oil company reported record first quarter profit, driven by higher output.

Chevron Corporation declined 1% to $165.43 after the oil company reported higher first quarter profit despite the decline in oil and natural gas prices.

European Markets Trim Weekly Losses, Euro Area Economy Barely Grows

Major averages in Europe turned lower after investors reviewed the latest corporate results and economic data.

Caution prevailed in the final trading day of the week, after economic growth in the eurozone was a meager 0.1% and the German economy registered flat growth after higher interest rates and elevated inflation hit the aggregate demand.

On the earning front, companies reported mixed quarterly results. Mercedes Benz lifted its outlook for its vans division but Swedish appliance maker Electrolux reported weak demand.

Danske Bank posted a sharp increase in first quarter profit and NatWest reported higher profit but the the U.K.-based Amundi reported a decline in assets under management.

Euro Area Registered Weak Q1 Economic Growth

Economic growth in the Euro Area in the first quarter was 0.1%, according to the preliminary data released by the Eurostat, the statistical office of the European Union.

GDP expanded 0.1% from the previous quarter in the currency union and rose 0.2% in the wider European Union.

From a year ago, seasonally adjusted GDP increased 1.3% in both the euro area and the EU in the first quarter of 2023, after a rise of 1.8% in the euro area and 1.7% in the EU in the fourth quarter of 2022.

Among the member states, economic growth from the previous quarter in Germany was flat, in France 0.2% and Spain and Italy 0.5%

Portugal led the region with a rise of 1.6% and the Irish economy registered the largest decline of 2.7%.

Spain and French Inflation Rates Accelerated

Inflation rate in France unexpectedly accelerated in April to 5.9% from 5.7% in March, according to the data released by the statistical office INSEE on Friday.

Inflation accelerated following the faster rise in energy prices of 7% in April compared to 4.9% in March and services at 3.2% from 2.9%.

On a monthly basis, the consumer price inflation rose 0.6% following a 0.9% gain in March.

The harmonized inflation index increased 0.7% on a monthly basis and rose 6.9% from a year ago.

Consumer price index in Spain accelerated to 4.1% in April from an 18-month low of 3.3% in March, the National Statistics Institute INE reported Friday.

The electricity prices declined at a slower pace and fuel prices rebounded in April, offset by a smaller rise in food and alcohol beverages.

Core rate of inflation, which excludes energy and food prices, weakened to 6.6% from 7.5% in March.

On a monthly basis, consumer prices rose 0.4% in April, matching the rate in the previous month.

Europe Indexes & Yields

The DAX index increased 0.8% to 15,922.38, the CAC-40 index increased 0.1% to 7,491.50 and the FTSE 100 index added 0.5% to 7,807.57.

For the week, the DAX index increased 0.4%, the CAC-40 index dropped 1.8% and the FTSE 100 index declined 0.6%.

The yield on 10-year German Bunds eased to 2.38%, French bonds to 2.96%, the UK gilts to 3.73% and Italian bonds to 4.28%.

The euro hovered near a one-year high against the dollar as the U.S. economy faced banking turmoil.

The euro edged higher to $1.093, the British pound to $1.246 and the Swiss franc to 89.53 cents.

Brent crude rose 19 cents to $78.41 a barrel and the Dutch TTF natural gas increased 83 cents to €39.89 per MWh.

Europe Stock Movers

Electrolux AB increased 7.8% to SEK 144,30 after the Swedish appliance maker posted a smaller-than-expected loss.

Revenue in the first quarter rose 9% to SEK 32.73 billion from SEK 30.12 billion, and organic sales rose 2.2%.

The company maintained higher prices but sales volume declined in the quarter.

Loss in the first quarter was SEK 588 million compared to a profit of 950 million and diluted earnings per share was (SEK 2.18) compared to SEK 3.14 a year ago.

Eni SpA declined 0.7% to €13.40 after net income in the first quarter declined 11% from a year ago on lower oil and natural gas prices.

Covestro AG soared 6.4% to €39.02 after the German chemical company said it plans to resume its previously announced stock repurchase program.

NatWest Group Plc declined 4.5% to 260.0 pence after the UK-based bank reported weaker-than-expected outlook.

Pearson Plc rose 3.3% to 882.80 pence after the U.K.-based publishing company reported quarterly results and announced its plan to commence a stock repurchase program in the second-half of 2023.

Mercedes Benz Group AG declined 1% to €69.37 after the vehicle maker reported a 12% rise in its first quarter profit.

Moreover, the luxury vehicle maker warned that recent turmoil in the banking sector in the U.S. and Europe may negatively impact future sales.

Exxon Mobil Corp rose 1.8% to $119.0 after the oil company reported record first quarter profit, driven by higher output.

Revenue in the first quarter declined to $86.56 billion from $90.5 billion a year ago. Net income in the quarter soared to $11.4 billion from $5.5 billion and diluted earnings per share soared to $2.79 from $1.28 a year ago.

The company hiked quarterly dividend to 91 cents a common share from 88 cents a year ago, payable June 9 to shareholders on record on May 16.

Net production in the first quarter was 3.8 million oil-equivalent barrels per day, an increase of nearly 160,000 barrels per day compared to the same quarter last year. In the quarter, Exxon Mobil increased oil and gas net production by nearly 300,000 oil-equivalent barrels per day from a year ago, excluding divestments and Russia-based Sakhalin-1 oil field expropriation.

The oil company started Beaumont Refinery expansion and reached full capacity of 250,000 barrels of production per day in the quarter.

The company distributed $8.1 billion to shareholders including $4.3 billion of share repurchases, keeping the company on track to repurchase up to $17.5 billion in 2023.

28 Apr, 2023

Chevron Corporation declined 1% to $165.43 after the oil company reported higher first quarter profit despite the decline in oil and natural gas prices.

Consolidated revenue in the first quarter declined to $50.8 billion from $54.4 billion a year ago. Net income in the quarter increased to $6.6 billion from $6.3 billion and diluted earnings per share rose to $3.46 from $3.22 a year ago.

Worldwide net oil-equivalent production declined 3% from a year ago to 2.97 million barrels per day.

The company distributed $6.6 billion during the quarter, including dividends of $2.9 billion and share repurchases 22 million for $3.75 billion. The company expects to repurchase $4.375 billion in shares in the second quarter.

The company's board declared a dividend of $1.51 a share payable on June 12 to shareholders on record on May 19.

28 Apr, 2023

Intel Corporation soared 6.9% to $31.91 after the advanced semiconductor chipmaker reported smaller-than-expected quarterly loss.

Revenue in the first quarter plunged 36% to $11.2 billion and gross margin dropped to 34.2% from 50.4% a year ago. The company swung to a net loss of $2.8 billion from a profit of $8.1 billion and diluted earnings per share was ($0.66) compared to $1.98 a year ago.

The PC market weakness was one of many challenges faced by the advanced semiconductor company. Revenue in the client computing segment declined 38% to $5.8 billion, data center and AI dropped 39% to $3.7 billion, network and edge fell 30% to $1.5 billion but autonomous vehicle focus Mobileye Global increased 16% to $458 million.

The company forecasted second quarter revenue between $11.5 billion and $12.5 billion and gross margin of 33.2% and diluted loss per share of 62 cents.

28 Apr, 2023

Amazon.com, Inc declined 3.8% to $105.68 after the online retail platform operator reported weaker-than-expected revenue growth in its cloud services segment.

Revenue in the first quarter increased 9% to $127.4 billion from $116.4 billion a year ago. North America sales advanced 11% to $76.9 billion and international sales rose 1% to $29.1 billion and AWS segment sales advanced 16% to $21.4 billion.

Net income was $3.2 billion compared to a net loss of $3.8 billion and the company swung to a diluted earnings per share of 31 cents from a loss of 38 cents in the prior year.

Amazon.com forecasted second quarter revenue between $127.0 billion and $133.0 billion, an increase between 5% and 10% from a year ago. Operating earnings between $2.0 billion and $5.5 billion, compared to $3.3 billion a year ago.

28 Apr, 2023

Movers: Amazon.com, Chevron, Capital One, Exxon Mobil, Intel

Scott Peters
28 Apr, 2023
New York City

Amazon.com, Inc declined 3.8% to $105.68 after the online retail platform operator reported weaker-than-expected revenue growth in its cloud services segment.

Revenue in the first quarter increased 9% to $127.4 billion from $116.4 billion a year ago.

North America sales advanced 11% to $76.9 billion and international sales rose 1% to $29.1 billion and AWS segment sales advanced 16% to $21.4 billion.

Net income was $3.2 billion compared to a net loss of $3.8 billion and the company swung to a diluted earnings per share of 31 cents from a loss of 38 cents in the prior year.

Amazon.com forecasted second quarter revenue between $127.0 billion and $133.0 billion, an increase between 5% and 10% from a year ago.

Operating earnings between $2.0 billion and $5.5 billion, compared to $3.3 billion a year ago.

Intel Corporation soared 6.9% to $31.91 after the advanced semiconductor chipmaker reported smaller-than-expected quarterly loss.

Revenue in the first quarter plunged 36% to $11.2 billion and gross margin dropped to 34.2% from 50.4% a year ago.

The company swung to a net loss of $2.8 billion from a profit of $8.1 billion and diluted earnings per share was ($0.66) compared to $1.98 a year ago.

The PC market weakness was one of many challenges faced by the advanced semiconductor company.

Revenue in the client computing segment declined 38% to $5.8 billion, data center and AI dropped 39% to $3.7 billion, network and edge fell 30% to $1.5 billion but autonomous vehicle focus Mobileye Global increased 16% to $458 million.

The company forecasted second quarter revenue between $11.5 billion and $12.5 billion and gross margin of 33.2% and diluted loss per share of 62 cents.

Capital One Financial Corp declined 1.5% to $94.47 after the credit card company reported first quarter earnings that were sharply lower than analyst estimates.

Chevron Corporation declined 1% to $165.43 after the oil company reported higher first quarter profit despite the decline in oil and natural gas prices.

Consolidated revenue in the first quarter declined to $50.8 billion from $54.4 billion a year ago.

Net income in the quarter increased to $6.6 billion from $6.3 billion and diluted earnings per share rose to $3.46 from $3.22 a year ago.

Worldwide net oil-equivalent production declined 3% from a year ago to 2.97 million barrels per day.

The company distributed $6.6 billion during the quarter, including dividends of $2.9 billion and share repurchases 22 million for $3.75 billion. The company expects to repurchase $4.375 billion in shares in the second quarter.

The company's board declared a dividend of $1.51 a share payable on June 12 to shareholders on record on May 19.

Exxon Mobil Corp rose 1.8% to $119.0 after the oil company reported record first quarter profit, driven by higher output.

Revenue in the first quarter declined to $86.56 billion from $90.5 billion a year ago.

Net income in the quarter soared to $11.4 billion from $5.5 billion and diluted earnings per share soared to $2.79 from $1.28 a year ago.

The company hiked quarterly dividend to 91 cents a common share from 88 cents a year ago, payable June 9 to shareholders on record on May 16.

Net production in the first quarter was 3.8 million oil-equivalent barrels per day, an increase of nearly 160,000 barrels per day compared to the same quarter last year.

In the quarter, Exxon Mobil increased oil and gas net production by nearly 300,000 oil-equivalent barrels per day from a year ago, excluding divestments and Russia-based Sakhalin-1 oil field expropriation.

The oil company started Beaumont Refinery expansion and reached full capacity of 250,000 barrels of production per day in the quarter.

The company distributed $8.1 billion to shareholders including $4.3 billion of share repurchases, keeping the company on track to repurchase up to $17.5 billion in 2023.

Major U.S. Averages Extend 3-day Rally, Stubborn Core Inflation Highlights Policy Challenges

Barry Adams
28 Apr, 2023
New York City

Stocks advanced for the third day in a row after the latest economic data highlighted challenges faced by the Federal Reserve.

A closely watched alternative measure of inflation, which generally understates inflation felt by urban residents, rose 4.6% on an annual basis and advanced 0.3% from the previous month in March.

The headline inflation measure has been steadily declining for several months but the core rate of inflation has been stuck near 4.6%.

The elevated level of inflation after several interest rate hikes shows how difficult it will be for the Fed to bring down inflation to its preferred level of 2%.

Elevated inflation report came a day later when the data indicated a slight increase in GDP in the first quarter, showing the difficult task of keeping the economy humming while arresting inflationary forces.

Market participants are anticipating the Federal Reserve to lift interest rate by 25 basis points after the policy meeting next week, but investors are anxiously awaiting the Fed's explanation of how long high interest rates have to be kept to bring down inflation to the long term average of 2%.

March Personal Spending Flat, PCE Inflation Eased

Personal income rose slightly in March and personal spending was unchanged, the Commerce Department report showed Friday.

Personal income increased 0.3% in March, matching the rate in February and personal spending was unchanged in the month after edging up a revised 0.1% in February.

The report also included a measure of consumer price inflation, that generally understates urban inflation, but preferred by policymakers at the Federal Reserve.

The personal consumption expenditure price index increased 0.1% from the previous month in March, easing from a 0.3% advance in February.

The PCE inflation was the smallest since July 2022 and core PCE, which excludes food and energy, rose 0.3% and matched the rate in the previous month.

The annual rate of consumer price growth eased to 4.2% in March from a revised 5.1% in February and annual core PCE rate slowed to 4.6% from 4.7% respectively.

U.S. Indexes & Yields

The S&P 500 index increased 0.2% to 4,146.46 and the Nasdaq Composite index was nearly unchanged at 12,147.72.

For the week, the S&P 500 index is up 0.3% and the Nasdaq Composite is higher 0.9%.

The yield on 2-year Treasury notes inched lower to 4.06%, 10-year Treasury notes rose to 3.45% and 30-year Treasury bonds held at 3.68%.

Crude oil rose 46 cents to $75.23 a barrel and natural gas prices eased a fraction to $2.35 a thermal unit.

U.S. Stock Movers

Intel Corporation soared 6.9% to $31.91 after the advanced semiconductor chipmaker reported smaller-than-expected quarterly loss.

Amazon.com, Inc declined 3.8% to $105.68 after the online retail platform operator reported weaker-than-expected revenue growth in its cloud services segment.

Capital One Financial Corp declined 1.5% to $94.47 after the credit card company reported first quarter earnings that were sharply lower than analyst estimates.

Exxon Mobil Corp rose 1.8% to $119.0 after the oil company reported record first quarter profit, driven by higher output.

Chevron Corporation declined 1% to $165.43 after the oil company reported higher first quarter profit despite the decline in oil and natural gas prices.

March Personal Spending Flat, PCE Inflation Eased

Brian Turner
28 Apr, 2023
New York City

Personal income rose slightly in March and personal spending was unchanged, the Commerce Department report showed Friday.

Personal income increased 0.3% in March, matching the rate in February and personal spending was unchanged in the month after edging up a revised 0.1% in February.

The report also included a measure of consumer price inflation, that generally understates urban inflation, but preferred by policymakers at the Federal Reserve.

The personal consumption expenditure price index increased 0.1% from the previous month in March, easing from a 0.3% advance in February.

The PCE inflation was the smallest since July 2022 and core PCE, which excludes food and energy, rose 0.3% and matched the rate in the previous month.

The annual rate of consumer price growth eased to 4.2% in March from a revised 5.1% in February and annual core PCE rate slowed to 4.6% from 4.7% respectively.

Movers: Covestro, Electrolux, Eni, Mercedes Benz, NatWest, Pearson

Bridgette Randall
28 Apr, 2023
Frankfurt

Covestro AG soared 6.4% to €39.02 after the German chemical company said it plans to resume its previously announced stock repurchase program.

First quarter sales declined 20.1% to €3.7 billion from €4.7 billion a year ago, driven by 16.8% decline in volume and 3.% fall in prices.

The company swung to a net loss of €26 million compared to a profit of €416 million and earnings per share of (14 cents) from €2.15 a year ago.

The German chemical company estimated second quarter EBITDA between €330 million and €430 million.

In addition, the company revised its full-year 2023 outlook and estimated EBIT between €1.1 billion and €1.6 billion and free operating cash flow between zero and €500 million.

Electrolux AB increased 7.8% to SEK 144,30 after the Swedish appliance maker posted a smaller-than-expected loss.

Revenue in the first quarter rose 9% to SEK 32.73 billion from SEK 30.12 billion, and organic sales rose 2.2%.

The company maintained higher prices but sales volume declined in the quarter.

Loss in the first quarter was SEK 588 million compared to a profit of 950 million and diluted earnings per share was (SEK 2.18) compared to SEK 3.14 a year ago.

Eni SpA declined 0.7% to €13.40 after net income in the first quarter declined 11% from a year ago on lower oil and natural gas prices.

Revenue in the first quarter declined 15% to €27.2 billion from €32.1 billion and net income attributable to shareholders fell 33% to €2.4 billion from €3.6 billion a year ago.

In the first quarter, Brent crude oil price dropped 20% to $81.27 a barrel from $101.40 and spot natural gas price fell 42% to €606 from €1,043 kcm.

The company recommended a dividend of €0.94 a share and plans to increase its stock repurchase program by €2.2 billion to €3.5 billion.

Mercedes Benz Group AG declined 1% to €69.37 after the vehicle maker reported a 12% rise in its first quarter profit.

Revenue in the first quarter increased 8% to €37.5 billion from €34.9 billion and earnings before taxes and interest advanced to €5.5 billion from €5.2 billion.

Shift to electric vehicles continued, battery electric car sales surged 89% and van sales soared 22%.

Moreover, the luxury vehicle maker warned that recent turmoil in the banking sector in the U.S. and Europe may negatively impact future sales.

The free cash flow of the industrial business increased to €2.2 billion from €1.2 billion a year ago.

Beginning March, Mercedes Benz announced a stock repurchase plan of €4.0 billion to be completed over two years.

NatWest Group Plc declined 4.5% to 260.0 pence after the UK-based bank reported weaker-than-expected outlook.

Pearson Plc rose 3.3% to 882.80 pence after the U.K.-based publishing company reported quarterly results.

In its trading update, the company did not disclose any meaningful sales, earnings or cash flow data and said it is on track to achieve its full-year 2023 "guidance."

The publishing company said it plans to launch a stock repurchase program of £300 million in the second half of 2023.

European Markets Rebounded, Euro Area GDP Barely Expanded