Market Update
Silicon Valley Bank's Rapid Collapse Fueled Losses On Wall Street
Barry Adams
10 Mar, 2023
New York City
The rapid collapse of a major bank located in the Silicon Valley stunned the market and raised the memories of the worst of the Great Recession in 20008-09.
Silicon Valley Bank, the 16th largest bank in the U.S. with more than $175 billion in deposits suffered a bank run following its announcement to raise capital on Thursday following the losses in its bond portfolio.
The announcement was viewed by the highly interconnected venture community as a sign of larger trouble and urged its client companies to withdraw deposits.
The 40-year institution that survived many ups and downs of the tech industry was gone in 48 hours after social media posits ricocheted in the tech community urging employees and depositors to safeguard their bank funds.
The Silicon Valley Bank run lasted only two working days, forcing a sell-off in regional and smaller banks from coast to coat and dragged the market averages down in the final three hours of trading.
The Silicon Valley Bank's collapse is the second largest bank failure in U.S. history following the demise of Washington Mutual Bank in 2008 with a deposit base of $188 billion.
The turmoil in bank stocks overshadowed the February jobs report showing a robust employment market but investors focused on a moderate wage gain and interpreted a decline in inflationary pressures.
Employers expanded payrolls at a brisk pace and businesses in leisure and hospitality, education and healthcare led the gains.
The latest employment report offered another signal to policymakers as consumers shift spending to services and experiences from goods, driving the demand higher in travel and hospitality segments.
Service inflation, excluding the housing market, is still running ahead of the overall inflation by a wider margin, making it difficult for policymakers to decide the future rate path.
Crude oil and natural gas prices turned lower in volatile trading and hovered near recent one-year lows.
While stocks accelerated declines, bond yields plunged after wage gains moderated, lifting hopes that policymakers may stick to smaller interest rate hikes of 25 basis points at the next meeting in two weeks.
Strong Job Gains In February
Total nonfarm payroll employment increased 311,000 in February following the downwardly revised 504,000 in January, the U.S. Bureau of Labor Statistics reported Friday.
Both the unemployment rate, at 3.6%, and the number of unemployed persons, at 5.9 million, edged up in the month.
February payroll gain took the six-month average to 343,000 with notable job gains occurring in leisure and hospitality, retail trade, government, and health care.
In February, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, or 0.2%, to $33.09 and increased 4.6%.
Stock Indexes Trend Lower
Banks were added to the list of declining sectors including home builders, technology and specialty retailers.
A total of 31 stocks in the widely followed S&P 500 index traded at new 52-week lows.
The S&P 500 index dropped 1.5% to 3,861.59 and the Nasdaq Composite index declined 1.7% to 11,38.89.
For the week, the S&P 500 index dropped 4.6% and the Nasdaq Composite index fell 4.7%.
Bond Yields Dropped After Wage Gains Moderated In February
The yield on 2-year Treasury notes dropped 23 basis points to 4.59%, 10-year Treasury notes declined 31 basis points to 3.68% and 30-year Treasury bonds fell 18 basis points to 3.69%.
Crude oil price increased 83 cents to $76.55 a barrel and natural gas price fell 10 cents to $2.43 a thermal unit.
U.S. Stock Movers
Banks drifted lower after Silicon Valley Bank's parent announced a plan to raise as much as $2 billion.
Regional banks M&T Bank, Fifth & Third Bank, KeyCorp, Comercia and Signature Bank declined between 2% and 5%.
Allbirds Inc plunged 44% to $1.34 after the company said quarterly sales declined for the first time in its history and also announced a restructuring plan including shakeup in executive ranks.
Oracle Corporation declined 2.7% to $84.46 after the database company reported, slightly lower-than-expected, revenue of $12.4 billion in its latest quarter.
Gap Inc declined 3.5% to $11.07 after the specialty apparel retailer reported a fall in quarterly revenue and larger loss.
European markets closed lower on the final day of the week and investors reviewed inflation and trade data in the region.
Germany's inflation held steady in February and France's trade deficit shrank in January after the fall in energy prices but Spain's retail sales surged following the increase in non-food sales.
Investors also reviewed the latest U.S. employment report which showed solid gains in February.
Nonfarm payrolls increased 311,000 in February after business in leisure and hospitality and education and healthcare expanded payrolls, the U.S. Labor Department reported on Friday.
However, the wage gains moderated and jobless rate increased to 3.6% from 3.4% in the previous month.
Germany's Inflation Held Steady In February
Germany's consumer inflation held steady in February as previously reported, DeStatis or the Federal Statistics Office said on Friday.
The consumer price index increased 8.7% in the month matching the flash estimate and inflation rate in December.
Core inflation, which excludes energy and food, rose 5.7% in February.
Energy inflation from a year ago slowed to 19.1% in February from 23.1% in the previous month however food inflation accelerated to 21.8%, following a 20.2% increase in January.
Goods inflation slowed to 12.4% and service inflation was 4.7% in February.
Harmonized index of consumer prices on an annual basis increased to 9.3% in February from 9.2% in January and increased to 1.0% from 0.5% in the previous month.
France's Trade Deficit Shrank In January
The recent decline in energy prices helped France to shrink its international trade gap, the Customs Office said in a report Friday.
International trade deficit shrank to Є12.9 billion in January from Є14.7 billion in December but the trade gap rose from Є8.7 billion in similar month a year ago.
On a monthly basis, exports fell 2.2% and imports declined 4.5% from the previous month in January.
From the previous year, exports increased 9.8% and imports advanced 15.7%.
Spain's Retail Sales Advanced for the Second Month In a Row
Spain's retail sales rose 5.5% in January following the 4.8% rise in December, the statistics office INE said in a report on Friday.
Retail sales expanded at the fastest pace in 20 months after non-food products sales rose 15.7% and food products sales decreased 1.7%.
European Indexes & Yields
Banks led the decliners and leading banks in Germany, UK, France and Spain fell between 3% and 6% following a bank run in the U.S.
Silicon Valley Bank with bank deposits of $175 billion was closed down by the industry regulators after customer deposits accelerated.
The DAX index declined 1.3% to 15,427.97, the CAC-40 index fell 1.3% to 7,220.67 and the FTSE 100 index dropped 1.7% to 7,748.35.
The yield on 10-year German Bunds eased to 2.46%, French bonds fell to 2.96%, UK gilts to 3.6% and Italian bonds to 4.3%.
The euro inched higher to $1.06, the British pound to $1.201 and the Swiss franc to 92.1 cents.
Brent crude oil increased $1.20 to $82.87 a barrel and the Dutch TTF natural gas increased Є8.80 to Є52.40 per MWh.
Europe Movers
Casino Guichard Perrachon SA declined 5.6% to €8.12 after the French discount grocery store chain reported a smaller loss in the full-year 2022.
Sandvik AB decreased 3.3% to kr 208.0 after the Swedish engineering company said it plans to set up a new production unit in Malaysia and invest kr 350 million over the next three years.
Berkeley Group Holdings PLC decreased 0.5% to 4,015.17 pence after the UK-based homebuilder held its 2023 outlook despite the ongoing economic slowdown.
European Markets Extended Weekly Losses, German Inflation Held Steady
Bridgette Randall
10 Mar, 2023
Frankfurt
European markets closed lower on the final day of the week and investors reviewed inflation and trade data in the region.
Germany's inflation held steady in February and France's trade deficit shrank in January after the fall in energy prices but Spain's retail sales surged following the increase in non-food sales.
Investors also reviewed the latest U.S. employment report which showed solid gains in February.
Nonfarm payrolls increased 311,000 in February after business in leisure and hospitality and education and healthcare expanded payrolls, the U.S. Labor Department reported on Friday.
However, the wage gains moderated and jobless rate increased to 3.6% from 3.4% in the previous month.
Germany's Inflation Held Steady In February
Germany's consumer inflation held steady in February as previously reported, DeStatis or the Federal Statistics Office said on Friday.
The consumer price index increased 8.7% in the month matching the flash estimate and inflation rate in December.
Core inflation, which excludes energy and food, rose 5.7% in February.
Energy inflation from a year ago slowed to 19.1% in February from 23.1% in the previous month however food inflation accelerated to 21.8%, following a 20.2% increase in January.
Goods inflation slowed to 12.4% and service inflation was 4.7% in February.
Harmonized index of consumer prices on an annual basis increased to 9.3% in February from 9.2% in January and increased to 1.0% from 0.5% in the previous month.
France's Trade Deficit Shrank In January
The recent decline in energy prices helped France to shrink its international trade gap, the Customs Office said in a report Friday.
International trade deficit shrank to Є12.9 billion in January from Є14.7 billion in December but the trade gap rose from Є8.7 billion in similar month a year ago.
On a monthly basis, exports fell 2.2% and imports declined 4.5% from the previous month in January.
From the previous year, exports increased 9.8% and imports advanced 15.7%.
Spain's Retail Sales Advanced for the Second Month In a Row
Spain's retail sales rose 5.5% in January following the 4.8% rise in December, the statistics office INE said in a report on Friday.
Retail sales expanded at the fastest pace in 20 months after non-food products sales rose 15.7% and food products sales decreased 1.7%.
Indexes & Yields
Banks led the decliners and leading banks in Germany, UK, France and Spain fell between 3% and 6% following a bank run in the U.S.
Silicon Valley Bank with bank deposits of $175 billion was closed down by the industry regulators after customer deposits accelerated.
The DAX index declined 1.3% to 15,427.97, the CAC-40 index fell 1.3% to 7,220.67 and the FTSE 100 index dropped 1.7% to 7,748.35.
The yield on 10-year German Bunds eased to 2.46%, French bonds fell to 2.96%, UK gilts to 3.6% and Italian bonds to 4.3%.
The euro inched higher to $1.06, the British pound to $1.201 and the Swiss franc to 92.1 cents.
Brent crude oil increased $1.20 to $82.87 a barrel and the Dutch TTF natural gas increased Є8.80 to Є52.40 per MWh.
Europe Movers
Casino Guichard Perrachon SA declined 5.6% to €8.12 after the French discount grocery store chain reported a smaller loss in the full-year 2022.
Sandvik AB decreased 3.3% to kr 208.0 after the Swedish engineering company said it plans to set up a new production unit in Malaysia and invest kr 350 million over the next three years.
Berkeley Group Holdings PLC decreased 0.5% to 4,015.17 pence after the UK-based homebuilder held its 2023 outlook despite the ongoing economic slowdown.
Movers: Allbirds, DocuSign, Gap, Oracle, SVB, Signature Bank, Vail Resorts
Scott Peters
10 Mar, 2023
New York City
SVB Financial Group was halted in the early trading and later in the day the FDIC announced the takeover of the bank after customer deposit withdrawals accelerated in the week.
The California Department of Financial Protection and Innovation assigned the bank's assets to the Federal Deposit Insurance Corporation, according to the press release by the regulator.
SVB carried a total deposit of $175.4 billion and assets of $209 billion at the end of 2022, according to the company documents.
Signature Bank plunged 21% to $71.35 following the closure of Silicon Valley Bank and troubles at Silvergate Capital Corp.
Regional banks M&T Bank, Fifth & Third Bank, KeyCorp, and Comercia declined between 2% and 5%.
Allbirds Inc plunged 44% to $1.34 after the company said quarterly sales declined for the first time in its history and also announced a restructuring plan including shakeup in executive ranks.
Revenue in the fourth quarter declined 13% to $84.2 million from $97.2 million and net loss expanded to $24.8 million from $10.4 million and diluted loss per share rose to 17 cents from 9 cents a year ago.
In the full-year 2022, revenue increased 7% to $297.8 million and net loss increased to $101.3 million from $45.4 million and diluted loss per share rose to 68 cents from 65 cents a year ago.
DocuSign Inc dropped 20.1% to $51.46 after the electronic signature platform operator reported revenue and earnings ahead of expectations.
The company also announced chief financial officer Cynthia Gaylor would step down in the next few months.
The e-signature company said revenue in the fourth quarter ending in January 14% to $659.6 million and the company swung to a profit of $4.8 million from a loss of $30.4 million and diluted earnings per share was 2 cents compared to a loss of 15 cents a year ago.
In the full-year 2022, revenue increased 19% to $2.5 billion and net loss expanded to $97.5 million from $70.0 million and diluted loss per share rose to 49 cents from 36 cents a year ago.
Gap Inc declined 3.5% to $11.07 after the specialty apparel retailer reported a fall in quarterly revenue and larger loss.
Revenue in the fourth quarter declined 6% to $2.4 billion and net loss expanded to $273 million from $16 million or diluted loss per share rose to 75 cents from 4 cents a year ago.
In the full-year 2022, revenue decreased to $15.6 billion from $16.7 billion and the company swung to a net loss of $202 million from a profit of 256 million and diluted earnings per share was ($0.55) compared to 67 cents a year ago.
Oracle Corporation declined 2.7% to $84.46 after the database company reported, slightly lower-than-expected, revenue of $12.4 billion in its latest quarter.
Revenue in the fiscal third quarter ending in February rose 18% to $12.4 billion from $10.5 billion and net income decreased 18% to $1.9 billion from $2.3 billion and diluted earnings per share fell to 68 cents to 84 cents a year ago.
Bond Yields Dropped After Investors Focused on Moderate Wage Gains In Employment Report
Barry Adams
10 Mar, 2023
New York City
After two hours of trading on Wall Street, stocks lacked direction following the mixed nonfarm payroll report for February.
Employers expanded payrolls at a brisk pace and businesses in leisure and hospitality, education and healthcare led the gains.
The latest employment report offered another signal to policymakers as consumers shift spending to services and experiences from goods, driving the demand in travel and hospitality segments.
Service inflation, excluding the housing market, is still running ahead of the overall inflation by a wider margin, making it difficult for policymakers to decide the future rate path.
Crude oil and natural gas prices turned lower in volatile trading and hovered near recent one-year lows.
While stocks lacked direction, bond yields plunged after wage gains moderated, lifting hopes that the inflationary forces may be waning and providing one more reason for policymakers to stick to smaller interest rate hikes of 25 basis points.
Strong Job Gains In February
Total nonfarm payroll employment increased 311,000 in February following the downwardly revised 504,000 in January, the U.S. Bureau of Labor Statistics reported Friday.
Both the unemployment rate, at 3.6%, and the number of unemployed persons, at 5.9 million, edged up in the month.
February payroll gain took the six-month average to 343,000 with notable job gains occurring in leisure and hospitality, retail trade, government, and health care.
In February, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, or 0.2%, to $33.09 and increased 4.6%.
Stock Indexes Trend Lower
Banks were added to the list of declining sectors including home builders, technology and specialty retailers.
A total of 31 stocks in the widely followed S&P 500 index traded at new 52-week lows.
The S&P 500 index decreased 0.2% to 3,910.95 and the Nasdaq Composite index declined 0.4% to 11,295.66.
Bond Yields Dropped After Wage Gains Moderated In February
The yield on 2-year Treasury notes dropped 26 basis points to 4.64%, 10-year Treasury notes declined 24 basis points to 3.68% and 30-year Treasury bonds fell 18 basis points to 3.69%.
Crude oil price increased 31 cents to $76.03 a barrel and natural gas price fell 5 cents to $2.48 a thermal unit.
Stock Movers
Banks drifted lower after Silicon Valley Bank's parent announced a plan to raise as much as $2 billion.
Regional banks M&T Bank, Fifth & Third Bank, KeyCorp, Comercia and Signature Bank declined between 2% and 5%.
Allbirds Inc plunged 44% to $1.34 after the company said quarterly sales declined for the first time in its history and also announced a restructuring plan including shakeup in executive ranks.
Oracle Corporation declined 2.7% to $84.46 after the database company reported, slightly lower-than-expected, revenue of $12.4 billion in its latest quarter.
Gap Inc declined 3.5% to $11.07 after the specialty apparel retailer reported a fall in quarterly revenue and larger loss.
Solid February Job Growth, Wage Growth Moderated
Brian Turner
10 Mar, 2023
New York City
Total nonfarm payroll employment increased 311,000 in February following the downwardly revised 504,000 in January, the U.S. Bureau of Labor Statistics reported Friday.
Both the unemployment rate, at 3.6%, and the number of unemployed persons, at 5.9 million, edged up in the month.
February payroll gain took the six-month average to 343,000 with notable job gains occurred in leisure and hospitality, retail trade, government, and health care.
In February, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, or 0.2%, to $33.09 and increased 4.6%.
The increase in total nonfarm payroll employment for December was revised down by 21,000, from 260,000 to 239,000, and for January was revised down by 13,000, from 517,000 to 504,000.
With these revisions, employment gains in December and January combined were 34,000 lower than previously reported.
S&P 500 and Nasdaq Down 2% Ahead of Friday's Jobs Report
Barry Adams
09 Mar, 2023
New York City
Stocks lost early momentum and fell sharply as investors reviewed comments from the Fed chairman and jobless claims ahead of Friday's nonfarm payrolls data.
The changing narrative on the rate path and the level of peak rates have lingered on for months but optimism prevailed on Wall Street that the Fed is ready to pause as early as this summer.
Chairman Powell clarified that is simply not the case in his comments to lawmakers and investors, replacing the prospect of rate pause with retracing of aggressive rate hikes.
Higher-rates-for-longer theory is going to face its test on Friday after the release of nonfarm payrolls data before the opening of financial markets.
Economists polled by Ticker.com are estimating net job gains of as much as 275,000 in February, sharply lower than the 517,000 increase in January which is widely seen as an anomaly.
In other news, initial jobless claims in the last week rose to the most in 2023 and investors await a broader report on the state of the labor market and health of the economy.
ADP's private payroll data and the Labor Department's monthly JOLT survey showed tight labor market conditions and resilient economy, raising worries that the Fed may have to raise faster to cool the economy that may be deemed too hot.
Weekly Jobless Claims Advanced
Initial jobless claims for the week ended March 4 surged by 21,000 from the previous week to 211,000, the U.S. Labor Department reported Thursday.
The weekly claims were the highest in 2023 after tech layoffs accelerated. The four-week moving average which smoothes out the weekly volatility increased 4,000 to 197,000.
Continuing claims ending in the previous week increased 69,000 to 1.72 million, the highest since January 2022.
Indexes & Yields
The S&P 500 index decreased 1.9% to 3,918.32 and the Nasdaq Composite index fell 2.1% to 11,338.35.
The yield on 2-year Treasury notes decreased to 4.87%, 10-year Treasury notes edged down to 3.91% and 30-year Treasury bonds fell to 3.85%.
Crude oil fell 95 cents to $75.71 a barrel and natural gas fell 6 cents to $2.48 thermal unit.
U.S. Stock Movers
Silvergate Capital Corp fell 28.3% to $3.39 after the company said it plans to initiate the process of liquidating crypto-assets focused Silvergate Bank.
SVB Financial Group plunged 38.9% to $163.43 after the company announced its plan to raise through a $1.25 billion common stock offering and $500 million depository receipts.
MongoDB Inc declined to $211.45 after the database company offered weak revenue guidance.
The company said revenue in the fourth quarter increased 36% to $361.3 million and net loss declined to $64.4 million from $84.4 million and diluted loss per share fell to 93 cents from $1.26 a year ago.
The company guided full-year 2023 revenue in the range of $1.48 billion and $1..51 billion, indicating a slower revenue growth than in 2022.
Tesla Inc declined 0.6% to $180.83 on the news that federal safety regulators are looking to investigate what happened in a fatal collision involving a Tesla S model and a firetruck.
European Markets Weigh Latest Corporate Results Against Higher Rates
Market indexes in Europe lacked direction after central bankers carried out hawkish rate hike campaign in the previous three days.
Stocks struggled to shake off rate path worries as investors mulled the latest economic data.
France's payroll growth slowed in the fourth quarter and the UK's housing market showed another month of weakness as buyers struggled with affordability.
France's Payroll Growth Slows In Q4
France's payroll increase slowed in the fourth quarter of 2022 driven by gains in the private sector, said the statistical office INSEE on Thursday.
Payroll in the quarter increased 0.2% or 44,000 following the 0.3% rise or 84,100 in the third quarter.
Private sector payroll employment was revised higher to an increase of 0.2% from the preliminary estimate of flat growth reported on February 8.
On the other hand, public payroll was stable in the fourth quarter after a slight decrease of 0.1% in the third quarter.
Temporary employment rose 1.1% in the fourth quarter after a 1.5% increase in the third quarter.
UK Housing Markets Remains In Downward Trend
The UK housing market remained in the downward trend after rising rates piled on higher cost of homes, the Royal Institute of Chartered Surveyors said in a report Thursday.
The new home inquiry index improved to -29 in February from -45 in January, the best level since July 2022 and measure of new home sales recovered to -26 from -36 in January and time to sell a home approached 19 weeks.
The weakness in the housing market is likely to persist for the next several months after the Bank of England showed a downward trend in mortgage approval to 39,600 in January from 40,500 in December.
Higher home prices and higher rates are keeping many buyers away from the market. The Bank of England lifted its key lending rate by 390 basis points since the current tightening cycle began in December.
Indexes & Yields
The DAX index increased 1.34 points to 15,633.21, the CAC-40 index fell 8.88 points to 7,315.88 and the FTSE 100 index decreased 0.6% or 49.94 points to 7,879.98.
The yield on the 2-year German Bund closed at 2.606%, French bonds at 3.13%, the UK gilts at 3.81% and Italian bonds at 4.38%.
The euro inched up to close at $1.059, the British pound edged higher to $1.19 and the Swiss franc increased to 93.46 cents.
Brent crude oil decreased 80 cents to $81.85 and the Dutch TTF natural gas increased Є1.26 to Є43.60 per MWh.
Europe Movers
Credit Suisse AG declined 1.9% to Sfr 2.62 after the troubled financial services provider delayed the publication of its annual report.
Domino's Pizza Group PLC declined 8.9% to 260.0 pence after the company reported a decline in annual profit in 2022.
Enel SpA was nearly unchanged after falling as much as 1.5% to Є5.32 and Italy's utility group agreed to sell its operations in Romania to Public Power Corp of Greece.
Informa PLC rose as much as 2.5% before closing unchanged at 68.42 pence after the event management company agreed to acquire Tarsus Group from the private equity group Charterhouse Capital Partners for $940 million.
Aviva Plc increased 2.8% to 462.50 pence after the insurance group agreed to allocate more capital to shareholders.
The company declared a final dividend of 20.7 pence totaling annual dividend to 31.0 pence in 2022 and also announced a new stock repurchase program of £300 million.
Revenue in the period increased to £2.7 billion from £2.2 billion and the insurance company swung to a loss of £1.1 billion from £2.0 billion and basic earnings per share was (38.2 pence) from 50.1 pence a year ago.
Hugo Boss AG decreased 3.3% to €62.54 and the fashion apparel retailer said sales in 2022 increased 27% to record €3.7 billion.
The luxury fashion retailer forecasted sales to rise "in the mid-single-digit percentage rate" in 2023.
Informa Agreed to Buy Dubai Air Show Manager Tarsus for $940 Million
Scott Peters
09 Mar, 2023
New York City
Informa PLC rose as much as 2.5% before closing unchanged at 68.42 pence after the event management company agreed to acquire Tarsus Group from the private equity group Charterhouse Capital Partners for $940 million.
The event and book publishing company announced the acquisition along with its annual financial results for 2022.
Informa agreed to pay $210 million in cash and the remainder through its stock with a two-year lock up and additional earnout of $45 million if Informa stock price traded at 850 pence in the lock-up period.
Tarsus owns and operates a portfolio of 160 live and on-demand business to business events and ten largest events attract 515,000 attendees and 8,350 exhibitors.
The purchase price is 9.9 times Tarsus's operating earnings in the financial year 2023-24 and 9 times operating earnings in 2024-25.
Revenue in 2022 increased to £2.2 billion from £1.6 billion and net income from the continuing operations increased to £142.1 million from £44.3 million a year ago.
Tarsus is known for its Off Price Show in the U.S. and Dubai Air Show in the UAE and the business-to-business event management company generates about 49% of its revenue in the Americas and 25% in Asia including Turkey.
The acquisition of Tarsus Group is expected to expand Informa's portfolio of events in top 10 category to 85.
Informa estimated annual operating synergy of $20 million through better event contracts, procurements and real estate management.
“We have long admired the Tarsus business which, like Informa, has been built around major brands in attractive, specialist B2B markets in the growing regions of Asia, China, the Middle East and the Americas,” Informa Chief Executive Officer Stephen Carter said.
The acquisition is expected to be completed by the end June 2023.
Under Carter's leadership the company has been busy reshuffling its portfolio and last year acquired business news publisher Industry Dive and sold its interest in Pharma Intelligence, Maritime Intelligence and
Europe Movers: Aviva, Credit Suisse, Domino's Pizza, Enel, Hugo Boss, Informa
Bridgette Randall
09 Mar, 2023
Frankfurt
Aviva Plc increased 2.8% to 462.50 pence after the insurance group agreed to allocate more capital to shareholders.
The company declared a final dividend of 20.7 pence totaling annual dividend to 31.0 pence in 2022 and also announced a new stock repurchase program of £300 million.
Revenue in the period increased to £2.7 billion from £2.2 billion and the insurance company swung to a loss of £1.1 billion from £2.0 billion and basic earnings per share was (38.2 pence) from 50.1 pence a year ago.
Credit Suisse AG declined 1.9% to Sfr 2.62 after the troubled financial services provider delayed the publication of its annual report.
Domino's Pizza Group PLC declined 8.9% to 260.0 pence after the company reported a decline in annual profit in 2022.
Enel SpA was nearly unchanged after falling as much as 1.5% to Є5.32 and Italy's utility group agreed to sell its operations in Romania to Public Power Corp of Greece.
Hugo Boss AG decreased 3.3% to €62.54 and the fashion apparel retailer said sales in 2022 increased 27% to record €3.7 billion.
Sales in the Europe, Middle East and Africa region soared 32% to €2.3 billion, in the Americas rose 45% to €789 million and in Asia Pacific rose 10% to €467 million.
Net income increased 54% to €222 million from €144 million and earnings per share rose to €3.04 from €1.99 a year ago.
The luxury fashion retailer forecasted sales to rise "in the mid-single-digit percentage rate" in 2023.
Informa PLC rose as much as 2.5% before closing unchanged at 68.42 pence after the event management company agreed to acquire Tarsus Group from the private equity group Charterhouse Capital Partners for $940 million.
Informa agreed to pay $210 million in cash and the remainder through its stock with a two-year lock up and additional earnout of $45 million if Informa stock price traded at 850 pence in the lock-up period.
The purchase price is 9.9 times Tarsus's operating earnings in the financial year 2023-24 and 9 times operating earnings in 2024-25.
Revenue in 2022 increased to £2.2 billion from £1.6 billion and net income from the continuing operations increased to £142.1 million from £44.3 million a year ago.
European Markets Weighed Latest Corporate Results Against Future Rate Hikes
Bridgette Randall
09 Mar, 2023
Frankfurt
Market indexes in Europe lacked direction after central bankers carried out hawkish rate hike campaign in the previous three days.
Stocks struggled to shake off rate path worries as investors mulled the latest economic data.
France's payroll growth slowed in the fourth quarter and the UK's housing market showed another month of weakness as buyers struggled with affordability.
France's Payroll Growth Slows In Q4
France's payroll increase slowed in the fourth quarter of 2022 driven by gains in the private sector, said the statistical office INSEE on Thursday.
Payroll in the quarter increased 0.2% or 44,000 following the 0.3% rise or 84,100 in the third quarter.
Private sector payroll employment was revised higher to an increase of 0.2% from the preliminary estimate of flat growth reported on February 8.
On the other hand, public payroll was stable in the fourth quarter after a slight decrease of 0.1% in the third quarter.
Temporary employment rose 1.1% in the fourth quarter after a 1.5% increase in the third quarter.
UK Housing Markets Remains In Downward Trend
The UK housing market remained in the downward trend after rising rates piled on higher cost of homes, the Royal Institute of Chartered Surveyors said in a report Thursday.
The new home inquiry index improved to -29 in February from -45 in January, the best level since July 2022 and measure of new home sales recovered to -26 from -36 in January and time to sell a home approached 19 weeks.
The weakness in the housing market is likely to persist for the next several months after the Bank of England showed a downward trend in mortgage approval to 39,600 in January from 40,500 in December.
Higher home prices and higher rates are keeping many buyers away from the market. The Bank of England lifted its key lending rate by 390 basis points since the current tightening cycle began in December.
Indexes & Yields
The DAX index increased 1.34 points to 15,633.21, the CAC-40 index fell 8.88 points to 7,315.88 and the FTSE 100 index decreased 0.6% or 49.94 points to 7,879.98.
The yield on the 2-year German Bund closed at 2.606%, French bonds at 3.13%, the UK gilts at 3.81% and Italian bonds at 4.38%.
The euro inched up to close at $1.059, the British pound edged higher to $1.19 and the Swiss franc increased to 93.46 cents.
Brent crude oil decreased 80 cents to $81.85 and the Dutch TTF natural gas increased Є1.26 to Є43.60 per MWh.
Europe Movers
Credit Suisse AG declined 1.9% to Sfr 2.62 after the troubled financial services provider delayed the publication of its annual report.
Domino's Pizza Group PLC declined 8.9% to 260.0 pence after the company reported a decline in annual profit in 2022.
Enel SpA was nearly unchanged after falling as much as 1.5% to Є5.32 and Italy's utility group agreed to sell its operations in Romania to Public Power Corp of Greece.
Informa PLC rose as much as 2.5% before closing unchanged at 68.42 pence after the event management company agreed to acquire Tarsus Group from the private equity group Charterhouse Capital Partners for $940 million.
Aviva Plc increased 2.8% to 462.50 pence after the insurance group agreed to allocate more capital to shareholders.
The company declared a final dividend of 20.7 pence totaling annual dividend to 31.0 pence in 2022 and also announced a new stock repurchase program of £300 million.
Revenue in the period increased to £2.7 billion from £2.2 billion and the insurance company swung to a loss of £1.1 billion from £2.0 billion and basic earnings per share was (38.2 pence) from 50.1 pence a year ago.
Hugo Boss AG decreased 3.3% to €62.54 and the fashion apparel retailer said sales in 2022 increased 27% to record €3.7 billion.
The luxury fashion retailer forecasted sales to rise "in the mid-single-digit percentage rate" in 2023.
Movers: BJ's Wholesale Club, Credit Suisse, Life Time Group, MongoDB, Silvergate Capital, SVB Financial, Tesla
Scott Peters
09 Mar, 2023
New York City
BJ's Wholesale Club Holdings Inc increased 5.1% to $78.09 after the company posted better-than-expected results in its latest quarter.
Revenue in the fourth quarter ending on January 28 increased 13.1% to $4.9 billion from $4.3 billion a year ago.
Net income rose 20.7% to $129.8 million from $1107.6 million and diluted earnings per share rose to 95 cents from 78 cents a year ago.
Total comparable club sales increased 9.8% and comparable club sales, excluding gasoline sales advanced 8.7% from the previous year.
Membership fee income increased 8.0% from the previous year in the quarter to $101.8 million and the company achieved a record 90% tenured member renewal rate.
Credit Suisse AG decreased 2.4% to $2.83 after the company delayed releasing its annual report following a call from the U.S. Securities and Exchange Commission.
Life Time Group Holdings Inc increased 2.0% to $17.83 after the fitness center chain operator reported a rebound in revenue.
Revenue in the fourth quarter increased 31.1% to $472.7 million and the company swung to net income of $13.7 million from a loss of $304.8 million and diluted earnings per share was 7 cents compared to a loss of $1.64 in the previous year.
Comparable center sales rose at a slower pace of 26% from 52% in the year ago and membership increased 11.7% to 725,206.
Average monthly dues per center membership increased approximately 20% to $162.0.
MongoDB Inc declined to $211.45 after the database company offered weak revenue guidance.
The company said revenue in the fourth quarter increased 36% to $361.3 million and net loss declined to $64.4 million from $84.4 million and diluted loss per share fell to 93 cents from $1.26 a year ago.
The company guided full-year 2023 revenue in the range of $1.48 billion and $1..51 billion, indicating a slower revenue growth than in 2022.
Silvergate Capital Corp fell 28.3% to $3.39 after the company said it plans to initiate the process of liquidating crypto-assets focused Silvergate Bank.
SVB Financial Group plunged 38.9% to $163.43 after the company announced its plan to raise through a $1.25 billion common stock offering and $500 million depository receipts.
Tesla Inc declined 0.6% to $180.83 on the news that federal safety regulators are looking to investigate what happened in a fatal collision involving a Tesla S model and a firetruck.
Investors Struggle to Adjust to Fed's Delayed Stronger Action Message
Barry Adams
09 Mar, 2023
New York City
Stocks lost early momentum as investors reviewed comments from the Fed chairman and jobless claims ahead of Friday's nonfarm payrolls data.
Initial jobless claims in the last week rose to the most in 2023 and investors await a broader report on the state of the labor market and health of the economy.
ADP's private payroll data and the Labor Department's monthly JOLT survey showed tight labor market conditions and resilient economy, raising worries that the Fed may have to raise faster to cool the economy that may be deemed too hot.
Weekly Jobless Claims Advanced
Initial jobless claims for the week ended March 4 surged by 21,000 from the previous week to 211,000, the U.S. Labor Department reported Thursday.
The weekly claims were the highest in 2023 after tech layoffs accelerated. The four-week moving average which smoothes out the weekly volatility increased 4,000 to 197,000.
Continuing claims ending in the previous week increased 69,000 to 1.72 million, the highest since January 2022.
Indexes & Yields
The S&P 500 index decreased 0.2% to 3,985.68 and the Nasdaq Composite index eased 2.12 points to 11,570.95.
The yield on 2-year Treasury notes decreased to 4.98%, 10-year Treasury notes edged down to 3.98% and 30-year Treasury bonds fell to 3.88%.
Crude oil advanced $1.12 to $77.77 a barrel and natural gas rose 6 cents to $2.61 thermal unit.
U.S. Stock Movers
Silvergate Capital Corp fell 28.3% to $3.39 after the company said it plans to initiate the process of liquidating crypto-assets focused Silvergate Bank.
SVB Financial Group plunged 38.9% to $163.43 after the company announced its plan to raise through a $1.25 billion common stock offering and $500 million depository receipts.
MongoDB Inc declined to $211.45 after the database company offered weak revenue guidance.
The company said revenue in the fourth quarter increased 36% to $361.3 million and net loss declined to $64.4 million from $84.4 million and diluted loss per share fell to 93 cents from $1.26 a year ago.
The company guided full-year 2023 revenue in the range of $1.48 billion and $1..51 billion, indicating a slower revenue growth than in 2022.
Tesla Inc declined 0.6% to $180.83 on the news that federal safety regulators are looking to investigate what happened in a fatal collision involving a Tesla S model and a firetruck.