Market Update
The U.S. economy added 263,000 jobs in November, highlighting the economic strength and jobless rate dropped to 3.7%.
02 Dec, 2022
Major Averages Trim Gains After Inflation Moderated and Weak Retailers Earnings
Barry Adams
01 Dec, 2022
New York City
Stocks lacked direction a day after a market surge that lifted the Nasdaq Composite and the S&P 500 indexes above 4% and 3% respectively.
Gasoline prices at pump stations dropped to the level last seen in February, before Russia's invasion of Ukraine, that set off a worldwide surge in energy prices.
Retail stocks were under pressure after a flood of quarterly results suggested rising inventory and operating costs dampened quarterly performance.
Retailers are still struggling to control costs and discount retailers are finding it difficult to pass full-increase in goods costs to consumers.
Dollar General and Big Lots dropped more than 7%.
Investors welcomed the moderating of October price consumption expenditure index and small but steady increases in personal speeding and income.
Investors are looking ahead to non-farm payrolls data on Friday.
The U.S. economy added 261,000 jobs in October and averaged 407,000 additions in the year to October and averaged 562,000 monthly additions in 2021.
Personal Spending and Income Rose
Personal spending in October rose 0.8% following 0.6% in September and personal income increased 0.7%, the most in a year, the U.S. BEA reported Thursday.
PCE Price Index Growth Slows
The price consumption expenditure, the Federal Reserve's preferred measure of inflation which takes into account customers substituting higher-priced goods for cheaper alternatives, rose at the same rate in October but slowed to the lowest level from a year ago.
The PCE price index increased 0.3% in October from September and rose 6.0% from a year ago, the lowest in the year so far.
The monthly increase in the index in October matched the rates for the previous two months.
Prices for goods increased 7.2% and services rose 5.4% from a year ago.
The core PCE Index, which excludes food and energy, slowed to 5.0% from 5.2% in the previous month.
Weekly Jobless Claims Decline
Initial jobless claims for the week ending November 26 declined to 226,000 from the upwardly revised 241,000 in the previous week, the Department of Labor reported Thursday.
The previous week's level was revised up by 1,000 from 240,000 to 241,000.
The 4-week moving average increased by 1,750 to 228,750 from the previous week's revised average by 250 from 226,750 to 227,000.
Markets Overview, Gasoline Spike Reversed
The S&P 500 index declined 3.54 points to 4,076.57 and the Nasdaq Composite closed up 0.1% to 11,482.45.
The national average gasoline price dropped to $3.47 a gallon, below $3.54 average on February 24, the day Russia invaded Ukraine, said AAA.
The average regular gasoline price fell 12 cents in the last week and dropped 29 cents in the last month.
The national average after reaching a high of $5.02 a gallon in the past June is now down by $1.55 and the price spike since Russia's invasion of Ukraine has been reversed.
Crude oil increased 85 cents to $81.40 a barrel and natural gas decreased 13 cents to $6.79 a thermal unit.
The yield on 2-year Treasury notes declined to 4.24%, 10-year Treasury notes eased to 3.52% and 30-year Treasury bonds traded at 3.60%.
U.S. Stock Movers
Salesforce Inc declined 9.5% to $145.11 after the company said co-CEO Bret Taylor has decided to step down from the company without giving any reasons.
This is the second time in four years that the co-CEO has resigned from the company.
The software developer said fiscal third quarter revenue increased 14% to $7.8 billion and earnings declined to $210 million from $468 million or 21 cents from 48 cents a year ago.
Victoria's Secret & Company fell 6.7% to $42.91 after the company reported weaker-than-anticipated quarterly results.
Revenue in the fiscal third quarter fell 8.5% to $1.32 billion and earnings plunged to $24.4 million from $75.2 million or 29 cents from 81 cents a year ago.
Five Below soared 16.6% to $187.48 after the deep discount retailer reported stronger-than-anticipated quarterly results.
Revenue in the fiscal third quarter increased 6.2% to $645 million but net income plunged to $16.2 million from $24.2 million or 29 cents from 43 cents a year ago.
Costco Wholesale Corporation declined 6.2% to $505.83 after the company reported weak November sales and e-commerce sales fell.
Costco Wholesale said November sales increased 5.7% to $19.1 billion but e-commerce sales dropped 10.1% from a year ago.
European Markets Inch Closer to One-month High
European market indexes gained and closed near one-month high after investors digested the latest batch of economic news and dovish comments from the U.S. Federal Reserve Chairman.
Investors welcomed the possibilities of rate hike moderation at the next policy meeting on December 14 and China's softening stance on zero-Covid strategy.
In the region's economic news, investors digested the latest data on German retail sales and the jobless rate in the eurozone.
German Retail Sales Drop
Germany's retail sales in October declined 2.8% from September but still 1.8% ahead from pre-pandemic October 2019, Destatis said Thursday.
Retail sales declined 5.0% in October from a year ago.
October retail sales in nominal terms increased 1.7% from the previous month and increased 6.2% from a year ago.
Eurozone Jobless Rate Drops to New Record Low
The Eurozone jobless rate eased to a new record low of 6.5% in October from 6.6% in September, Eurostat said Thursday.
Markets Overview
The DAX index increased 0.7% to 14,490.30, the CAC-40 index added 0.2% to 6,753.97 and the FTSE 100 index fell 0.2% to 7,558.49.
Natural Gas Prices Trade Volatile
Natural gas prices continue to soar in the euro zone and traded above
European Markets Inch Closer to One-month High, Eurozone Jobless Rate Drops to New Record Low
Bridgette Randall
01 Dec, 2022
Frankfurt
European market indexes gained and closed near one-month high after investors digested the latest batch of economic news and dovish comments from the U.S. Federal Reserve Chairman.
Investors welcomed the possibilities of rate hike moderation at the next policy meeting on December 14 and China's softening stance on zero-Covid strategy.
In the region's economic news, investors digested the latest data on German retail sales and the jobless rate in the euro zone.
German Retail Sales Drop
Germany's retail sales in October declined 2.8% from September but still 1.8% ahead from pre-pandemic October 2019, Destatis said Thursday.
Retail sales declined 5.0% in October from a year ago.
October retail sales in nominal terms increased 1.7% from the previous month and increased 6.2% from a year ago.
Eurozone Jobless Rate Drops to New Record Low
The Eurozone jobless rate eased to a new record low of 6.5% in October from 6.6% in September, Eurostat said Thursday.
Markets Overview
The DAX index increased 0.7% to 14,490.30, the CAC-40 index added 0.2% to 6,753.97 and the FTSE 100 index fell 0.2% to 7,558.49.
Natural Gas Prices Trade Volatile
Natural gas prices continue to soar in the euro zone and traded above
Movers: Costco, Designer Brands, Dollar General, Five Below, PVH, Salesforce, Snowflake, Victoria's Secret
Scott Peters
01 Dec, 2022
New York City
Costco Wholesale Corporation declined 6.2% to $505.83 after the company reported weak November sales and e-commerce sales fell.
Costco Wholesale said November sales increased 5.7% to $19.1 billion but e-commerce sales dropped 10.1% from a year ago.
Designer Brands plunged 22.4% to $11.87 after the operator of Designer Shoe Warehouse retail chain missed quarterly results expectations and the company also lowered its full-year outlook.
Revenue in the third quarter increased 1.4% to $865.0 million and comparable sales increased 3.0%.
Net income in the quarter plunged to $45.2 million from $80.2 million and diluted earnings per share was 65 cents from $1.04 a year ago..
The shoe retailer lowered its diluted earnings per share range to between $1.75 and $1.80 from the previous range between $2.05 and $2.15.
Dollar General Corp fell 8.5% to $234.09 after the discount retailer reported weaker-than-expected earnings on unanticipated higher costs driven by higher storage costs and supply chain inefficiencies.
Sales in the fiscal third quarter increased 11.1% to $9.5 billion and same store sales increased 6.8%.
Net income in the quarter increased to $526.2 million from $487 million and diluted earnings per share rose to $2.33 from $2.08 a year ago.
The retailer guided fourth quarter earnings per share between $3.15 and $3.30, an increase between 7% and 8% from a year ago compared to previous growth between 12% and 14%.
Five Below soared 16.6% to $187.48 after the deep discount retailer reported stronger-than-anticipated quarterly results.
Revenue in the fiscal third quarter increased 6.2% to $645 million but net income plunged to $16.2 million from $24.2 million or 29 cents from 43 cents a year ago.
PVH Corp soared 9.5% to $73.61 after the designer apparel maker reported earnings ahead of expectations and said full-year revenues are likely to be near its top estimated range.
Revenue in the third quarter declined 2% to $2.28 billion and gross margin declined to 55.9% from 57.7% a year ago.
In the fiscal third quarter the company swung to a loss of $186.7 million from a profit of $279.7 million or a loss of $2.88 per share from a profit of $3.89 a year ago.
The apparel maker said full-year revenues are expected to drop 3% and "in-line with the top end of previous guidance range."
Full-year earnings per share is expected to drop to $1.37 from $7.64 a year ago.
Salesforce Inc declined 9.5% to $145.11 after the company said co-CEO Bret Taylor has decided to step down from the company without giving any reasons.
This is the second time in four years that the co-CEO has resigned from the company.
The software developer said fiscal third quarter revenue increased 14% to $7.8 billion and earnings declined to $210 million from $468 million or 21 cents from 48 cents a year ago.
Snowflake Inc rose 5.5% to $150.79 after the cloud computing company reported earnings ahead of expectations but outlook disappointed some investors.
Stock rebounded from the 5% decline in after-hours of trading after Morgan Stanley reiterated the company's long term potential.
Revenue in fiscal third quarter ending in October increased 66.7% to $557 million a year ago.
Net loss in the quarter increased to $200.9 million from $154.8 million and diluted loss per share rose to 63 cents from 51 cents a year ago.
The company guided fourth quarter revenue between $535 million and $540 million, an increase between 49% and 50% from a year ago.
Victoria's Secret & Company fell 6.7% to $42.91 after the company reported weaker-than-anticipated quarterly results.
Revenue in the fiscal third quarter fell 8.5% to $1.32 billion and earnings plunged to $24.4 million from $75.2 million or 29 cents from 81 cents a year ago.
Personal Income, Spending Rise; PCE Price Index Growth Slows
Brian Turner
01 Dec, 2022
New York City
Personal Spending and Income Rose
Personal spending in October rose 0.8% following 0.6% in September and personal income increased 0.7%, the most in a year, the U.S. BEA reported Thursday.
Personal income increased 0.7% to $155.3 billion in October and disposable personal income increased 0.7% to $132.9 billion and personal consumption expenditures or PCE increased 0.8% to $147.9 billion.
PCE Price Index Growth Slows
The price consumption expenditure, the Federal Reserve's preferred measure of inflation which takes into account customers substituting higher-priced goods for cheaper alternatives, rose at the same rate in October but slowed to the lowest level from a year ago.
The PCE price index increased 0.3% in October from September and rose 6.0% from a year ago, the lowest in the year so far.
The monthly increase in the index in October matched the rates for the previous two months.
Prices for goods increased 7.2% and services rose 5.4% from a year ago.
The core PCE Index, which excludes food and energy, slowed to 5.0% from 5.2% in the previous month.
Weekly Jobless Claims Declined
Brian Turner
01 Dec, 2022
New York City
Initial jobless claims for the week ending November 26 declined to 226,000 from the upwardly revised 241,000 in the previous week, the Department of Labor reported Thursday.
The previous week's level was revised up by 1,000 from 240,000 to 241,000.
The 4-week moving average increased by 1,750 to 228,750 from the previous week's revised average by 250 from 226,750 to 227,000.
Stocks Turn Lower and Alternative Inflation Measure Cooled
Barry Adams
01 Dec, 2022
New York City
Stocks pared some of the gains of the previous session and investors digested latest economic data on personal income, spending and inflation.
Investors also reacted to corporate news after Salesforce Inc unexpectedly announced the resignation of its co-CEO.
Latest earnings from Five Below, Victoria's Secret and Snowflake also impacted stocks.
Personal Spending and Income Rose
Personal spending in October rose 0.8% following 0.6% in September and personal income increased 0.7%, the most in a year, the U.S. BEA reported Thursday.
PCE Price Index Growth Slows
The price consumption expenditure, the Federal Reserve's preferred measure of inflation which takes into account customers substituting higher-priced goods for cheaper alternatives, rose at the same rate in October but slowed to the lowest level from a year ago.
The PCE price index increased 0.3% in October from September and rose 6.0% from a year ago, the lowest in the year so far.
The monthly increase in the index in October matched the rates for the previous two months.
Prices for goods increased 7.2% and services rose 5.4% from a year ago.
The core PCE Index, which excludes food and energy, slowed to 5.0% from 5.2% in the previous month.
Weekly Jobless Claims Decline
Initial jobless claims for the week ending November 26 declined to 226,000 from the upwardly revised 241,000 in the previous week, the Department of Labor reported Thursday.
The previous week's level was revised up by 1,000 from 240,000 to 241,000.
The 4-week moving average increased by 1,750 to 228,750 from the previous week's revised average by 250 from 226,750 to 227,000.
Markets Overview
The S&P 500 index declined 0.3% to 4,066.80 and the Nasdaq Composite traded lower 0.2% to 11,440.70.
Crude oil increased $2.40 to $82.94 a barrel and natural gas increased 2 cents to $6.95 a thermal unit.
The yield on 2-year Treasury notes declined to 4.32%, 10-year Treasury notes eased to 3.62% and 30-year Treasury bonds traded at 3.74%.
U.S. Stock Movers
Salesforce Inc declined 9.5% to $145.11 after the company said co-CEO Bret Taylor has decided to step down from the company without giving any reasons.
This is the second time in four years that the co-CEO has resigned from the company.
The software developer said fiscal third quarter revenue increased 14% to $7.8 billion and earnings declined to $210 million from $468 million or 21 cents from 48 cents a year ago.
Victoria's Secret & Company fell 6.7% to $42.91 after the company reported weaker-than-anticipated quarterly results.
Revenue in the fiscal third quarter fell 8.5% to $1.32 billion and earnings plunged to $24.4 million from $75.2 million or 29 cents from 81 cents a year ago.
Five Below soared 16.6% to $187.48 after the deep discount retailer reported stronger-than-anticipated quarterly results.
Revenue in the fiscal third quarter increased 6.2% to $645 million but net income plunged to $16.2 million from $24.2 million or 29 cents from 43 cents a year ago.
Costco Wholesale Corporation declined 6.2% to $505.83 after the company reported weak November sales and e-commerce sales fell.
Costco Wholesale said November sales increased 5.7% to $19.1 billion but e-commerce sales dropped 10.1% from a year ago.
Euro zone jobless rate eased to a new record low of 6.5% in October from 6.6% in September, Eurostat said Thursday.
01 Dec, 2022