Stocks Turn Lower After U.S. Job Openings Near 2-year Low

Barry Adams
04 Apr, 2023
New York City

With changing narrative came the change in direction of stock prices. 

Market indexes traded lower after economic slowdown worries resurfaced.

The number of U.S. job openings fell by 632,000 to 9.9 million in February, the lowest since May 2021, the U.S. Bureau of Labor Statistics reported Tuesday.

The decline in job openings lowered the available jobs to workers ratio to 1.7 to 1 from 2 to 1. 

The Federal Reserve has been looking to cool the jobs market and after nine rate hikes finally the red hot employment market may be beginning to soften. 

Treasury yields turned lower after the release of jobs data and higher oil prices may convince policymakers to slow or even pause rate hikes.  

investors are worried that the regional bank crisis may not be over and higher rates may force small and mid-sized banks to focus on their balance sheets rather than increase lending to customers.   

Next week, first quarter earnings calls from banks may provide answers if banks are curtailing lending and rebuilding capital to counter rising unrealized losses in treasury securities in the held-to-maturity account.  

The Federal Reserve is scheduled to meet in less than four weeks and many bond investors are looking for the central bank to raise interest rates by 25 basis points and then pause for a while. 

The banking system stress and the surprise production cut from eight oil producing nations are going to add another layer of complexity for the policymakers in deciding the future trajectory of monetary policy. 

Indexes & Yields 

The S&P 500 index decreased 0.6% to 4,100.61 and the Nasdaq Composite index futures eased 0.5% to 12,126.33. 

The yield on 2-year Treasury notes decreased a fraction to 3.89%, 10-year Treasury notes inched up to 3.34% and 30-year Treasury bonds edged up to 3.60%. 

Crude oil decreased 6 cents to $80.35 a barrel and natural gas edged down 1 cent to $2.09 a thermal unit.  

U.S. Stock Movers 

Virgin Orbit Holdings Inc declined 18% to 16 cents after the rocket launch company filed for Chapter 11 bankruptcy protection in the U.S. 

The company sought bankruptcy protection in the district of Delaware after it failed to secure emergency funding and is looking to sell its assets. 

AMC Entertainment Holdings Inc plunged 27.5% to $3.69 after the company settled a shareholder lawsuit to proceed with exchanging its preferred stocks for common stocks. 

AMC's preferred equity units soared 22.9% to $1.83 after the company's recapitalization plan will issue more shares to preferred shareholders. 

The company will issue an additional one common share for every 7.5 preferred shares units, called APE units, held in connection with the planned conversion to common stock.  

The settlement consideration includes additional 6.9 million common shares which will be distributed to holders of preferred units prior to conversion.  

The settlement was announced by lawyers representing the stockholders group. 

European Indexes Hovered Around One-year Highs 

Benchmark indexes in the Euro Area trimmed early gains and two inflation reports showed weakening trends in the region. 

Wholesale price inflation in the eurozone slowed in February after energy prices cooled further. 

Moreover, a survey from the European Central Bank showed that consumers lowered their expectations of inflation in February. supporting the weakening inflation trend. 

Moreover, Germany's exports continued to climb at a steady pace on the back of sustained demand from the U.S. and China. 

Weaker-than-expected U.S. manufacturing growth and the number of job openings declined to the low last seen in may 2021 also encouraged investors that inflation trends are easing in the largest economy in the world. 

Germany's International Goods Trade Surplus Stable 

German international trade showed steady growth from the previous month and a year ago in February, the Federal Statistics Office said Tuesday. 

February goods exports adjusted for seasonal and calendar factors increased 4.0% from the previous month and rose 7.6% from a year ago to Є136.7 billion. 

Goods imports in February adjusted for seasonal and calendar factors increased 4.6% from the previous month and 3.8% from a year ago to Є120.7 billion. 

From a year ago, exports growth more than halved to 6.3% in February from 12.8% in the previous month and imports rose 2.6%, weaker than the  9.1% surge in January. 

International goods trade surplus was stable from the previous month and jumped 49.7% from a year ago to Є16.0 billion. 

Eurozone Wholesale Inflation Slowed In February  

Wholesale prices in the eurozone slowed further in February after energy prices continued to slide, the latest report from Eurostat indicated Tuesday. 

Producer price index, a measure of wholesale prices, increased 13.2% in February after rising at 15.1% in January, the slowest increase since a 12.4% rise in January 2021. 

Excluding energy, producer price increase slowed to a moderate pace of 10.2% in the month from 11.1% in the previous month. 

Energy price increase slowed to 17.4% in the month after January's 20.7% rise in January. 

Intermediate goods inflation slowed to 9.3% from 11.2% in the previous month. 

On a monthly basis, the producer price index declined 0.5% in February after energy prices decreased 1.6% 

Europe Indexes & Yields 

The DAX index increased 0.1% to 15,603.47, the CAC-40 index declined 1.0 points to 7,344.96 and the FTSE 100 index decreased 0.5% to 7,634.52. 

The yield on 10-year German Bunds edged up to 2.26%, French bonds rose to 2.75%, the UK Gilts to 3.43% and Italian bonds to 4.12%. 

The euro inched higher to $1.095, the British pound edged up to $1.25 and the Swiss franc to 90.82 cents.  

Brent crude oil gained 35 cents to $85.30 a barrel and the Dutch TTF natural gas fell Є4.02 to Є47.25 per MWh. 

Europe Stock Movers 

L'Oreal SA increased 0.9% to €419.25 after the France-based luxury products company agreed to acquire Australia's luxury brand Aesop from Brazil-based Natura & Co for an enterprise value of $2.53 billion. 

Natura plans to use proceeds to lower its debt and focus on Avon and The Body Shop businesses in Latin America. 

OKYO Pharma Ltd plunged 26.8% to 1.50 pence after the bio-pharma company announced its plan to delist its stock from the London Stock Exchange in May.  

NatWest Group PLC decreased 0.2% to 263.70 pence after the UK government extended the deadline to lowering its stake in the bank by two more years. 

Nordex Group SE decreased 0.3% to €13.15 after the German wind turbine maker won a 106 MW wind project in Lithuania from E energija group. 

Europe Movers: L'Oreal, NatWest, Nordex, OKYO Pharma, Renewi, Rheinmetall

Bridgette Randall
04 Apr, 2023
Frankfurt

L'Oreal SA increased 0.9% to €419.25 after the France-based luxury products company agreed to acquire Australia's luxury brand Aesop from Brazil-based Natura & Co for an enterprise value of $2.53 billion. 

Natura plans to use proceeds to lower its debt and focus on Avon and The Body Shop businesses in Latin America. 

NatWest Group PLC decreased 0.2% to 263.70 pence after the UK government extended the deadline to lowering its stake in the bank by two more years. 

Nordex Group SE decreased 0.3% to €13.15 after the German wind turbine maker won a 106 MW wind project in Lithuania from E energija group. 

OKYO Pharma Ltd plunged 26.8% to 1.50 pence after the bio-pharma company announced its plan to delist its stock from the London Stock Exchange in May.  

Renewi Plc increased 0.3% to 607.0 pence after the glass and paper recycling company forecasted annual profit to be "slightly ahead of market expectations" for the year ending in March. 

Rheinmetall AG rose as much as 1.5% but closed down 1% to €275.0 and the company's trading division won an order to provide structural parts for e-mobility vehicles. 

Rheinmetall will be producing left- and right-hand shock absorber mounting sets for Geely, as well as front shock absorber mountings in sets for Jidu Auto, a new automaker. 

China-based Geely and the owner of Volvo placed a supply order for nearly 200,000 of the sets consisting of front shock absorber mountings and the two side members.

Each of the three orders are worth "a figure in the double-digit million-euro range."

Eurozone Wholesale Inflation Slowed, Stable German Trade Surplus In February

Bridgette Randall
04 Apr, 2023
Frankfurt

Benchmark indexes in the Euro Area trimmed early gains and two inflation reports showed weakening trends in the region. 

Wholesale price inflation in the eurozone slowed in February after energy prices cooled further. 

Moreover, a survey from the European Central Bank showed that consumers lowered their expectations of inflation in February. supporting the weakening inflation trend. 

Moreover, Germany's exports continued to climb at a steady pace on the back of sustained demand from the U.S. and China. 

Weaker-than-expected U.S. manufacturing growth and the number of job openings declined to the low last seen in may 2021 also encouraged investors that inflation trends are easing in the largest economy in the world. 

Germany's International Goods Trade Surplus Stable 

German international trade showed steady growth from the previous month and a year ago in February, the Federal Statistics Office said Tuesday. 

February goods exports adjusted for seasonal and calendar factors increased 4.0% from the previous month and rose 7.6% from a year ago to Є136.7 billion. 

Goods imports in February adjusted for seasonal and calendar factors increased 4.6% from the previous month and 3.8% from a year ago to Є120.7 billion. 

From a year ago, exports growth more than halved to 6.3% in February from 12.8% in the previous month and imports rose 2.6%, weaker than the  9.1% surge in January. 

International goods trade surplus was stable from the previous month and jumped 49.7% from a year ago to Є16.0 billion. 

Eurozone Wholesale Inflation Slowed In February  

Wholesale prices in the eurozone slowed further in February after energy prices continued to slide, the latest report from Eurostat indicated Tuesday. 

Producer price index, a measure of wholesale prices, increased 13.2% in February after rising at 15.1% in January, the slowest increase since a 12.4% rise in January 2021. 

Excluding energy, producer price increase slowed to a moderate pace of 10.2% in the month from 11.1% in the previous month. 

Energy price increase slowed to 17.4% in the month after January's 20.7% rise in January. 

Intermediate goods inflation slowed to 9.3% from 11.2% in the previous month. 

On a monthly basis, the producer price index declined 0.5% in February after energy prices decreased 1.6% 

Europe Indexes & Yields 

The DAX index increased 0.1% to 15,603.47, the CAC-40 index declined 1.0 points to 7,344.96 and the FTSE 100 index decreased 0.5% to 7,634.52. 

The yield on 10-year German Bunds edged up to 2.26%, French bonds rose to 2.75%, the UK Gilts to 3.43% and Italian bonds to 4.12%. 

The euro inched higher to $1.095, the British pound edged up to $1.25 and the Swiss franc to 90.82 cents.  

Brent crude oil gained 35 cents to $85.30 a barrel and the Dutch TTF natural gas fell Є4.02 to Є47.25 per MWh. 

Europe Stock Movers 

L'Oreal SA increased 0.9% to €419.25 after the France-based luxury products company agreed to acquire Australia's luxury brand Aesop from Brazil-based Natura & Co for an enterprise value of $2.53 billion. 

Natura plans to use proceeds to lower its debt and focus on Avon and The Body Shop businesses in Latin America. 

OKYO Pharma Ltd plunged 26.8% to 1.50 pence after the bio-pharma company announced its plan to delist its stock from the London Stock Exchange in May.  

NatWest Group PLC decreased 0.2% to 263.70 pence after the UK government extended the deadline to lowering its stake in the bank by two more years. 

Nordex Group SE decreased 0.3% to €13.15 after the German wind turbine maker won a 106 MW wind project in Lithuania from E energija group. 

Movers: Acuity Brands, AMC Entertainment, Butterfly Network, General Motors, Virgin Orbit

Scott Peters
04 Apr, 2023
New York City

Acuity Brands Inc dropped 5.5% to $173.30 after the industrial technology company reported higher sales and earnings in its fiscal second quarter 2023. 

Revenue increased 3.8% to $943.6 million from $909.1 million and net income rose 10.5% to $83.2 million from $75.3 million and diluted earnings per share increased to $2.57 from $2.13 a year ago. 

In the first-half of fiscal 2023, the company repurchased approximately 0.7 million shares of common stock for a total of $124.1 million.

AMC Entertainment Holdings Inc plunged 27.5% to $3.69 after the company settled a shareholder lawsuit to proceed with exchanging its preferred stocks for common stocks. 

AMC's preferred equity units soared 22.9% to $1.83 after the company's recapitalization plan will issue more shares to preferred shareholders. 

The company will issue an additional one common share for every 7.5 preferred shares units, called APE units, held in connection with the planned conversion to common stock.  

The settlement consideration includes additional 6.9 million common shares which will be distributed to holders of preferred units prior to conversion.  

The settlement was announced by lawyers representing the stockholders group. 

Butterfly Network Inc increased 21.9% to $2.28 after the digital health focused company said it received 510(k) clearance for "AI-enabled Auto B-line Counter" that may simplify how healthcare professionals evaluate adults with suspected diminished lung function. 

General Motors Company decreased 1.8% to $35.59 after the company said first quarter vehicle deliveries increased 18% to 603,208 units. 

Separately, chief financial officer Paul Jacobson said about 5,000 salaried employees accepted the voluntary separation and the company will take about $1 billion of charge in the first quarter. 

The company earlier had announced its plan to cut annual costs by $2 billion by the end of 2024, Jacobson confirmed that the company will be able to meet that target and avoid involuntary layoffs. 

Virgin Orbit Holdings Inc declined 18% to 16 cents after the rocket launch company filed for Chapter 11 bankruptcy protection in the U.S. 

The company sought bankruptcy protection in the district of Delaware after it failed to secure emergency funding and is looking to sell its assets. 

U.S. Stock Indexes and Treasury Yields Advance As Crude Oil Prices Rise

Barry Adams
04 Apr, 2023
New York City

Traders reassessed the prospects of higher interest rates after oil prices soared more than 6% and inflation worries resurfaced. 

Treasury yields rose slightly  ahead of bank earnings next week and investors are looking for more clues on stress in the financial system. 

Next week, first quarter earnings calls from banks may provide answers if banks are curtailing lending and rebuilding capital to counter rising unrealized losses in treasury securities in the held-to-maturity account.  

The Federal Reserve is scheduled to meet in less than four weeks and many bond investors are looking for the central bank to raise interest rates by 25 basis points. 

The banking system stress and the surprise production cut from eight oil producing nations are going to add another layer of complexity for the policymakers in deciding the future trajectory of monetary policy. 

Indexes & Yields 

The S&P 500 index increased 0.1% to 4,128.54 and the Nasdaq Composite index futures added 0.2% to 12,202.05. 

The yield on 2-year Treasury notes increased a fraction to 3.99%, 10-year Treasury notes inched up to 3.45% and 30-year Treasury bonds edged up to 3.65%. 

Crude oil increased 75 cents to $81.14 a barrel and natural gas edged up 1 cent to $2.10 a thermal unit.  

U.S. Stock Movers 

Virgin Orbit Holdings Inc declined 18% to 16 cents after the rocket launch company filed for Chapter 11 bankruptcy protection in the U.S. 

The company sought bankruptcy protection in the district of Delaware after it failed to secure emergency funding and is looking to sell its assets. 

AMC Entertainment Holdings Inc plunged 27.5% to $3.69 after the company settled a shareholder lawsuit to proceed with exchanging its preferred stocks for common stocks. 

AMC's preferred equity units soared 22.9% to $1.83 after the company's recapitalization plan will issue more shares to preferred shareholders. 

The company will issue an additional one common share for every 7.5 preferred shares units, called APE units, held in connection with the planned conversion to common stock.  

The settlement consideration includes additional 6.9 million common shares which will be distributed to holders of preferred units prior to conversion.  

The settlement was announced by lawyers representing the stockholders group. 

Australia Paused Rate Hikes, More Interventions to Support Hong Kong Dollar

Arjun Pandit
04 Apr, 2023
Mumbai

Asian markets closed with moderate gains after investors assessed the impact of recent production cuts announced by the OPEC+ member nations. 

The voluntary cuts are in addition to the earlier cuts announced by the alliance in last October, reflecting the oil producing nations target price for oil to stay above $90 a barrel. 

In Japan, investors are also awaiting policy direction from Kazuo Ueda, the newly appointed governor of the Bank of Japan. 

Governor Ueda is scheduled to chair his first meeting of the central bank on April 27 and April 28 amid rising speculation that the ultra loose monetary policy may come to an end.     

The Nikkei 225 index increased 02% to 28,287.42, the Hang Seng Index closed down 0.5% to 20,294.10 and the Shanghai Composite Index added 0.35% to 3,308.05. 

The yield on Japanese government bonds closed at 0.39% and the Chinese government bonds at 2.86%. 

Automakers led the gainers in Tokyo trading. 

Honda Motor Company gained 1.1%, Toyota Motor Corp added 0.5% and Nissan Motor Co Ltd added 0.3%. 

SoftBank Group Corp increased 0.5% to ¥5,244.0 after tech stocks edged higher and overlooked the oil price surge in the previous session. 

Advantest Corp declined 1.9% to ¥11,420.0 and Fanuc Corp dropped 1.1% to ¥4,737.0. 

Market indexes in Hong Kong closed lower in light trading ahead of public holiday in the city and mainland China. 

Alibaba Group Holding Ltd declined 2.8% but CNOOC Ltd advanced 2.8% following the rise in international price of crude oil. 

Capital flight from Hong Kong also weighed on the market sentiment and the Hong Kong Monetary Authority purchased HK$7.1 billion or US$905 million of the local currency to defend its peg to the U.S. dollar.  

The HKMA has intervened in the currency market for the third time this year. 

Markets in India were closed for a public holiday and the Reserve Bank of India is scheduled to announce its interest rate decision tomorrow. 

Investors are anticipating the central bank to hike interest rates by 25 basis points and extend the cumulative 250 basis points increase in a year.  

The ASX 200 index gained 0.2% to 7,236.0 and the Reserve Bank of Australia held its rate at 3.6% after a policy meeting on Tuesday. 

The central bank left its rate unrevised  after raising rates by 350 basis points since May 2022. 

The policymakers' committee decided to wait for some time to judge the effect of several rate hikes on the economy. 

The board noted that monetary policy operates with a lag and the full impact of these cumulative rates are still to be felt by the broader economy. 

Commonwealth Bank, Westpac, ANZ Group Holdings and National Australia Bank rose between 0.1% and 0.3%. 

On Merger Monday Stocks Lacked Direction After Oil Jumped 6%

Barry Adams
03 Apr, 2023
New York City

Merger Monday lived up to its reputation after two mega deals dominated news flow. 

Extra Space Storage agreed to acquire Life Storage for a $12.7 billion deal and World Wrestling Entertainment agreed to merge with UFC for approximately $9 billion. 

Both deals were all-stock deals and avoided bridge loans or expensive financing in the face of rising interest rates. 

Stock markets lacked direction after oil producing nations announced additional production cuts to shore up faltering oil prices. 

Collectively, production cuts will remove about 1.66 million barrels per day from the world markets in addition to 2 million barrels per day cuts announced at the previous OPEC+ meeting in October 2022.  

The latest oil production cut complicates the complex calculation of inflation and interest rates and is likely to dash hopes of rate-pause by some investors.

OPEC+ Member Nations Announce Voluntary Production Cuts

In other news, OPEC+ member nations announced voluntary production quotas to shore up the weakening oil prices in the last two weeks. 

Crude oil prices fell more than 20% and dropped to a new 13-month low in March after investors worried that the fast moving regional bank crisis may slow down the economy. 

Moreover, the demand surge expected after the reopening of China has still not materialized. 

OPEC+ nations voluntarily agreed to cut production and avoid the pressure on the alliance as the member nations seek to keep the price above $90 a barrel for the rest of 2023. 

Eight OPEC+ producer nations - led by Saudi Arabia, UAE and Kuwait - announced to remove 1.16 million barrels per day starting May until the end of the year. 

The product cut announced on Sunday was designed to separate the alliance from international pressure. 

Previously Russia had announced its production cut target of 500,000 barrels per day starting this month, increasing the total production cut by 1.66 million barrels a day. 

The Joint Ministerial Monitoring Committee's meeting on Monday acknowledged the voluntary production cuts, but did not announce its own policy change.   

Saudi Arabia led the voluntary production cuts with 500,000 barrels per day. 

Iraq said it plans to cut its production by 211,000, UAE by 144,000, Kuwait by 128,000, Kazakhstan by 78,000,  Algeria by 48,000, Oman by 40,000 and Gabon by 8,000. 

The Sunday's product cuts are in addition to Russia's 500,000 barrels per day cut announced in February. 

U.S. Indexes & Yields 

The S&P 500 index fell 0.4% to 4,124.61 and the Nasdaq Composite index decreased 0.3% to 12,189.45.  

The yield on 2-year Treasury notes edged  to 4.1%, 10-year Treasury notes inched up 3 basis points to 3.51% and the 30-year Treasury bonds was nearly unchanged at 3.7%. 

Crude oil jumped $4.68 to $80.35 a barrel and natural gas futures declined 9 cents to $2.11 a thermal unit. 

U.S. Movers 

Tesla Inc declined 1.7% to $204.0 after the electric vehicle maker reported quarterly production data. Investors feared that the company may be forced to offer more discounts and incentives to sustain growth. 

Tesla said in the first quarter of 2023 vehicle production increased 5% to 440,808 from 422,875 in the previous year. 

The production of model 3/Y advanced 5% to 421,375 from 412,180 and model 5/X jumped 10% to 19,437 from 10.695 a year ago. 

Tesla's production in the December quarter increased 4% to 439,701 from 405,278 a year ago. 

McDonald's Corp increased 0.7% to $279.61 and a report suggested that the company temporarily closed its headquarter offices ahead of layoff announcements. 

European Markets Lacked Direction On Resurgent Inflation Worries 

European markets traded lower after inflation worries resurfaced following a surprise production cut by 8 member nations linked to OPEC+. 

The surprise production cut is expected to be in force from May 1 and last till the end of the year. 

Asian markets were on the defensive as well after China's manufacturing growth stalled in  March but India's manufacturing advanced to a 3-month peak.  

Swiss Inflation Weakened In March 

The annual inflation rate in Switzerland weakened to 2.9% in March from 3.4% February, the Swiss Federal Statistics Office reported Monday. 

The annual inflation rate was the lowest since June 2022 after the prices of food, beverages and housing and energy rose at a slower pace. 

Core inflation, which excludes food and energy, rose 2.2% in March, slower than 2.4% in February. 

On a monthly basis, consumer prices rose 0.2% in March slower than 0.7% in February. 

Separately, Portugal's inflation eased in March after energy prices rose at a slower pace, the Statistics Portugal said Friday. 

Consumer prices inflation eased to 7.4% in March from 8.2% in February and core inflation eased to 7.0% from 7.2% respectively. 

Europe Indexes & Yields 

The DAX index decreased 0.31% to 15,580.92, the CAC-40 index added 0.3% to 7,345.96 and the FTSE 100 index rose 0.5% to 7,673.0. 

The yield on 10-year German Bunds rose to 2.26%, French bonds advanced to 2.75%, the UK gilts to 3.42% and Italian bonds to increased to 4.09%. 

The euro inched higher to $1.09, the British pound advanced to $1.24 and the Swiss franc to 91.29 cents. 

Brent crude oil increased 4.4% or $5.23 to $85.11 a barrel and the Dutch TTF natural gas futures increased Є3.52 to Є51.37 per MWh.  

Europe Stock Movers 

TotalEnergies SE increased 4.4% to €56.60, BP Plc advanced  4.03% to 531.40 and Shell PLC added 3.9% to €27.51. 

Banks were in focus after inflation worries resurfaced. 

UBS Group AG declined 1.5% to Sfr 19.0, Deutsche Bank increased 2.3% to €9.57 and HSBC Holdings Plc increased 2.2% to 561.70 pence. UniCredit SpA advanced 2.3% to €17.83. 

Extra Space to Buy Life Storage and Create Largest Storage Company

Scott Peters
03 Apr, 2023
New York City

Life Storage Inc agreed to be acquired by Extra Space Storage Inc for $145.82 a share or $12.7 billion in an all-stock deal.  

The combined company is expected to have a $36 billion equity market capitalization or total enterprise value of $47 billion. 

Life Storage shareholders will receive 0.8950 of an Extra Space share for each share they own,  representing a total consideration of approximately $145.82 per share based on Extra Space's share price close on March 31, 2023. 

After the closing of the deal, Extra  Space shareholders will own 65% of the combined company and Life Storage shareholders 35%.

Extra Space management will lead the combined company. 

Kenneth W. Woolley will remain Chairman of the Board  and Joseph D. Margolis will remain as CEO and Director. 

The Extra Space board will be expanded from 10 to 12 directors and will consist of nine  directors from Extra Space's board and three directors from Life Storage.

The merger deal between the two has been approved by the board of directors of both companies. 

The transaction is expected to be closed in the second half of 2023. 

The transaction will increase the size of Extra Space's portfolio by more than 50% by store count with the addition of Life Storage's 1,198 properties,  including 758 wholly-owned, 141 joint ventures, and 299 third-party managed stores. 

In total, the transaction adds over 88 million square feet to the  portfolio. 

At the end of 2022, Extra Space managed 887 stores for  third parties and 318 stores in unconsolidated joint ventures, for a total of 1,205 managed stores. 

The company owned and/or operated 2,338 self-storage properties, which comprise  approximately 1.6 million units and approximately 176.1 million square feet of rentable storage space 

After the acquisition of Life Storage, the combined portfolio represents the largest storage operation in the country with over 3,500 locations, over 264 million square feet with two million customers. 

Extra Space Storage dropped 6.3% to $153.0 and Life Storage gained 2.9% to $134.88.  

Extra Space revenue in 2022 was $1.9 billion and net income was $860.7 million and diluted earnings per share was $6.41. 

Life Storage revenue in 2022 was $1.04 billion and net income was $358.1 million or diluted earnings per share was $4.22. 

Citigroup Global Markets Inc. is acting as lead financial advisor and Latham & Watkins LLP is serving as legal advisor to Extra Space. 

J.P. Morgan  Securities LLC is also serving as a financial advisor to Extra Space. 

Wells Fargo Securities and BofA Securities are acting as financial advisors and  Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan LLP are serving as legal advisors to Life Storage. 

WWE and UFC Agreed On $21 Billion Deal

Scott Peters
03 Apr, 2023
New York City

Endeavor Group Holdings, Inc the media and entertainment ,company, agreed to spin off its Ultimate Fighting Championship unit and merge it with World Wrestling Entertainment Inc in a deal worth $21 billion. 

The newly merged company would be 51% controlled by Endeavor and 49% by WWE shareholders. 

The transaction values UFC at an enterprise value of $12.1 billion and WWE for $9.3 billion. 

In 2022, WWE generated $1.3 billion in revenue and $195 million net income or diluted earnings per share of $2.29. 

Merged companies are estimated to deliver cost synergies between $50 million and $100 million a year, leveraging media rights, ticket sales and yield management. 

Culturally two media companies are similar, while WWE fights are scripted the UFC fights are "not fake" according to athletic commission and often end with a submission or a knockout which is not staged.  

Under the terms of the transaction, existing WWE shareholders will roll all existing equity into the new entity that will be the parent company of UFC and WWE.

Ari Emanuel will act chief executive of both Endeavor and the newly merged company and Vince McMahon will be executive chairman. 

The board of directors will consist of 11 members, six will be appointed by Endeavor and five by WWE.

The new company will be named later and intends to list on the New York Stock Exchange under the ticker symbol TKO. 

The proposed transaction has been approved by the board of directors of both companies, including certain regulatory approvals.

The deal between the two companies is expected to be completed in the second half of 2023. 

Morgan Stanley and Goldman Sachs are serving as financial advisors to Endeavor, and Latham & Watkins is serving as legal advisor to Endeavor.

 The Raine Group is acting as lead financial advisor to WWE. 

J.P. Morgan and Moelis & Company are also acting as financial advisors to WWE.

Movers: Endeavor Group, Extra Space Storage, Life Storage, McDonald's, Tesla, WWE

Scott Peters
03 Apr, 2023
New York City

Energy stocks rallied after OPEC+ member nations surprised markets with production cuts. 

Energy producing eight nations announced voluntary production cuts totaling to 1.16 million barrels per day in addition to 2 million barrels a day production cut announced by the alliance in last October. 

Russia previously announced its production cut of 500,000 barrels a day from February. 

Crude oil prices soared as much as 5% in New York and London trading. 

Exxon Mobil Corp jumped 3.8% to $113.90, Chevron advanced 4.0% to $170.0, Halliburton Company advanced 6.2% to $33.65 and Marathon Oil Corp jumped 7.3% to $25.80. 

Life Storage Inc increased 1.9% to $133.65 after the company agreed to be acquired by Extra Space Storage Inc for $145.82 a share or $36 billion equity market capitalization. 

The transaction is expected to be closed in the second half of 2023. 

Extra Space Storage dropped 6.3% to $153.0.

 Endeavor Group Holdings, Inc increased 2.1% to $24.44 after the media and entertainment company agreed to spin off its Ultimate Fighting Championship unit and merge it with World Wrestling Entertainment Inc in a deal worth $21 billion. 

The newly merged company would be 51% controlled by Endeavor and 49% by WWE shareholders. 

The transaction values UFC at an enterprise value of $12.1 billion and WWE for $9.3 billion. 

McDonald's Corp increased 0.7% to $279.61 and a report suggested that the company temporarily closed its headquarter offices ahead of layoff announcements. 

The news was first reported by the Wall Street Journal and independently confirmed by Ticker.com 

Tesla Inc declined 1.7% to $204.0 after the electric vehicle maker reported quarterly production data. 

Tesla said in the first quarter of 2023 vehicle production increased 5% to 440,808 from 422,875 in the previous year. 

The production of model 3/Y advanced 5% to 421,375 from 412,180 and model 5/X jumped 10% to 19,437 from 10.695 a year ago. 

Tesla's production in the December quarter increased 4% to 439,701 from 405,278 a year ago. 

U.S. Averages Wobble After 8 OPEC+ Members Announced Production Cuts

Barry Adams
03 Apr, 2023
New York City

Stock futures on Wall Street traded mixed with a downward bias after eight member nations linked to OPEC+ announced a surprise production cut. 

Eight OPEC+ producer nations - led by Saudi Arabia, UAE and Kuwait - announced to remove 1.16 million barrels per day starting May until the end of the year. 

The product cut announced on Sunday was designed to separate the alliance from international pressure. 

Previously Russia had announced its production cut target of 500,000 barrels per day starting this month, increasing the total production cut by 1.66 million barrels a day. 

The Joint Ministerial Monitoring Committee's meeting on Monday acknowledged the voluntary production cuts, but did not announce its own policy change.   

U.S. Indexes & Yields 

The S&P 500 index fell 0.4% to 4,110.38 and the Nasdaq Composite index decreased 0.2% to 12,171.63.  

The yield on 2-year Treasury notes edged higher to 4.1%, 10-year Treasury notes inched up 3 basis points to 3.51% and the 30-year Treasury bonds was nearly unchanged at 3.7%. 

Crude oil jumped $3.91 to $79.55 a barrel and natural gas futures declined 13 cents to $2.07 a thermal unit. 

U.S. Movers 

Tesla Inc declined 1.7% to $204.0 after the electric vehicle maker reported quarterly production data. 

Tesla said in the first quarter of 2023 vehicle production increased 5% to 440,808 from 422,875 in the previous year. 

The production of model 3/Y advanced 5% to 421,375 from 412,180 and model 5/X jumped 10% to 19,437 from 10.695 a year ago. 

Tesla's production in the December quarter increased 4% to 439,701 from 405,278 a year ago. 

McDonald's Corp increased 0.7% to $279.61 and a report suggested that the company temporarily closed its headquarter offices ahead of layoff announcements. 

European Markets Turned Mixed After Surprise OPEC+ Production Cut

Bridgette Randall
03 Apr, 2023
Frankfurt

European markets traded lower after inflation worries resurfaced following a surprise production cut by 8 member nations linked to OPEC+. 

The surprise production cut is expected to be in force from May 1 and last till the end of the year. 

Saudi Arabia led the voluntary production cuts with 500,000 barrels per day. 

Iraq said it plans to cut its production by 211,000, UAE by 144,000, Kuwait by 128,000, Kazakhstan by 78,000,  Algeria by 48,000, Oman by 40,000 and Gabon by 8,000. 

The Sunday's product cuts are in addition to Russia's 500,000 barrels per day cut announced in February. 

Collectively, these production cuts will remove about 1.66 million barrels per day from the world markets in addition to 2 million barrels per day cuts announced at the previous OPEC+ meeting in October 2022.  

The latest oil production cut complicates the complex calculation of inflation and interest rates and is likely to dash hopes of rate-pause by some investors. 

Asian markets were on the defensive as well after China's manufacturing growth stalled in  March but India's manufacturing advanced to a 3-month peak.  

Swiss Inflation Weakened In March 

The annual inflation rate in Switzerland weakened to 2.9% in March from 3.4% February, the Swiss Federal Statistics Office reported Monday. 

The annual inflation rate was the lowest since June 2022 after the prices of food, beverages and housing and energy rose at a slower pace. 

Core inflation, which excludes food and energy, rose 2.2% in March, slower than 2.4% in February. 

On a monthly basis, consumer prices rose 0.2% in March slower than 0.7% in February. 

Separately, Portugal's inflation eased in March after energy prices rose at a slower pace, the Statistics Portugal said Friday. 

Consumer prices inflation eased to 7.4% in March from 8.2% in February and core inflation eased to 7.0% from 7.2% respectively. 

Europe Indexes & Yields 

The DAX index increased 0.17% to 15,655.14, the CAC-40 index added 0.5% to 7,361.75 and the FTSE 100 index rose 0.7% to 7,685.56. 

The yield on 10-year German Bunds rose to 2.35%, French bonds advanced to 2.85%, the UK gilts to 3.55% and Italian bonds to increased to 4.17%. 

The euro inched higher to $1.08, the British pound advanced to $1.23 and the Swiss franc to 91.75 cents. 

Brent crude oil increased 4.4% or $5.55 to $84.39 a barrel and the Dutch TTF natural gas futures increased 56 cents to Є48.40  per MWh.  

Europe Stock Movers 

TotalEnergies SE increased 4.4% to €56.60, BP Plc advanced  4.03% to 531.40 and Shell PLC added 3.9% to €27.51. 

Banks were in focus after inflation worries resurfaced. 

UBS Group AG declined 1.5% to Sfr 19.0, Deutsche Bank increased 2.3% to €9.57 and HSBC Holdings Plc increased 2.2% to 561.70 pence. UniCredit SpA advanced 2.3% to €17.83. 

PCE Price Index Eased In February, Personal Income Inched Higher

Brian Turner
31 Mar, 2023
New York City

The personal consumption price index increased 0.3% in February, slower than 0.6% in January when measured on a monthly basis, the U.S. Bureau of Economic Analysis reported Friday. 

Core PCE price index, which excludes food and energy, increased 0.3%, slowest in five months and matched the rate in October 2022.  

The watered down measure of inflation, the preferred inflation gauge by the Federal Reserve, increased 5.0% when measured on an annual basis in February. 

The PCE Price index rose at the slowest pace since September 2021. 

Core PCE price index, which excludes food and energy, slowed to 4.6% from 4.7% in January.  

The PCE price index is the Federal Reserve's preferred measure of inflation, but the gauge also understated price increases by a large margin for most urban households. 

The personal income increased $72.9 billion or 0.3% in February, disposable personal income advanced $89.9 billion or 0.5% and personal consumption expenditure rose $27.9 billion or 0.2%.  

Personal outlays increased $40.7 billion in February, personal saving was $915.8 billion and the personal saving rate (personal saving as a percentage of disposable personal income) was 4.6%. 

Wall Street Stocks Advanced After a Weak Measure of Inflation Cooled

Barry Adams
31 Mar, 2023
New York City

Stocks accelerated gains for the week, month and quarter after investors hoped that the ongoing regional bank crisis has stabilized. 

Regional bank stocks rebounded after worries of more bad news in the sector eased. 

Market sentiment also improved after an alternative measure of inflation showed a slower pace of inflation. 

In the first quarter, the S&P 500 index added 7.0% and the Nasdaq Composite index increased 16.8%.

The Nasdaq Composite index registered its best quarterly return since the second quarter 2020 when the tech heavy index advanced 30.6%. 

PCE Price Index Eased In February 

The personal consumption price index increased 0.3% in February, slower than 0.6% in January when measured on a monthly basis, the U.S. Bureau of Economic Analysis reported Friday. 

Core PCE price index, which excludes food and energy, increased 0.3%, slowest in five months and matched the rate in October 2022.  

The watered down measure of inflation, the preferred inflation gauge by the Federal Reserve, increased 5.0% when measured on an annual basis in February. 

The PCE Price index rose at the slowest pace since September 2021. 

Core PCE price index, which excludes food and energy, slowed to 4.6% from 4.7% in January.  

The PCE price index is the Federal Reserve's preferred measure of inflation, but the gauge also understated price increases by a large margin for most urban households. 

Indexes & Yields 

The S&P 500 index advanced 0.9% to 4,088.64 and the Nasdaq Composite index added 1.3% to 12,165.55. 

The yield on 2-year Treasury notes was nearly unchanged at 4.1%, 10-year Treasury notes traded at 3.51% and the 30-year Treasury bonds fetched 3.70%. 

Crude oil increased $1.14 to $75.10 a barrel and natural gas prices edged up 10 cents to $2.21 a thermal unit. 

U.S. Stock Movers 

Nikola Corp decreased 11.1% to $1.25 after the electric-truck maker announced a secondary stock offering of $100 million priced at a 20% discount to Thursday's closed price.  

Digital World Acquisition Corp increased 6.8% to $13.97. The SPAC linked to former President Donald Trump rose after the New York City Grand Jury formally indicted according to a report by NBC. 

Donald Trump is expected to be arraigned as early Tuesday..   

Virgin Orbit Holdings Inc plunged 36.8% to 22 cents after the space technology company said it plans to stop all operations immediately and lay off about 90% of its staff. 

BlackBerry Ltd increased 14.1% to $4.57 after the company reported lower-than-expected revenue and a smaller loss per share in its latest quarter. 

Investors Refocus On Tech and Semiconductor Stocks, Global Markets Advanced

Barry Adams
30 Mar, 2023
New York City

Benchmark indexes spent most of the session in the plus territory after investors warmed up to tech stocks. 

With no new bad news from regional banks and stable treasury yields also strengthened interest in growth stocks - mid and large caps. 

Major averages jumped as much as 0.7% in the early trading but steadily lost ground, however market sentiment improved in late afternoon and benchmark indexes rebounded to the intra-day highs. 

Tech stocks led the gainers and mega cap tech leaders including Meta Platforms, Apple Inc, Netflix Inc, Amazon.com Inc and Tesla Inc advanced between 1% and 2%. 

Investors also reviewed the latest downward revision of the fourth quarter real GDP growth but noticed the core PCE Price Index remained elevated. 

Weekly Jobless Claims Advanced 

Weekly jobless claims increased by 7,000 to 198,000 for the week ending March 25, the U.S Department of Labor reported Thursday. 

The initial claims declined from the previous week's unrevised level of 191,000. 

The 4-week moving average increased 2,000 to 198,250 from the previous week's unrevised average of 196,250.

Real GDP Estimate Revised Lower In Fourth Quarter  

Real gross domestic product growth for the final quarter of 2022 was revised lower, according to the third and final estimate released by the U.S. Bureau of Economic Analysis Thursday. 

The U.S. economy expanded at an annual pace of 2.6% in the December quarter, slower than the previous estimate of 2.7% and 3.2% in the third quarter. 

Consumer spending increase was revised lower to 1.0% from the previous estimate of 1.4% and international 

Real GDP increased 2.1% in 2022, compared with an increase of 5.9% in 2021. 

The increase in real GDP in 2022 primarily reflected increases in consumer spending, exports, private inventory investment, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and federal government spending. 

Despite the cooling of energy prices and slowing of goods inflation, elevated inflation remains well anchored in the economy. 

The price index for gross domestic purchases increased 6.8% in 2022, compared with an increase of 4.2% in 2021. 

The PCE price index, a preferred measure of inflation by policy makers, increased 6.3%, compared with an increase of 4.0%. 

Excluding volatile food and energy prices, the core PCE price index increased 5.0%, compared with an increase of 3.5%.

The Federal Reserve has vowed to bring down inflation to 2% but despite the nine-rate hikes, prices are still rising at a faster pace than the Fed's preferred level.  

U.S. Indexes & Yields 

The S&P 500 index increased 0.6% to 4,050.83 and the Nasdaq Composite index rose 0.7% to 12,013.47. 

For the month, the S&P 500 index is up 2.5% and the Nasdaq Composite index 5.6%. 

The yield on 2-year Treasury notes increased 3 basis points to 4.11%, 10-year Treasury notes advanced 2 basis points to 3.55% and 30-yearTreasury bonds  edged down 4 basis point to 3.74%. 

Crude oil advanced $1.21 to $74.18 a barrel and natural gas fell 7 cents to $2.11 a thermal unit. 

US Movers 

Bed Bath & Beyond Inc dropped 23.3% to 61 cents after the struggling home goods retailer filed to raise $300 million in stock offering but also raised the prospect of a bankruptcy filing. 

Evgo Inc soared 24.5% to $7.16 after the electric vehicle charging network company reported a surge in fourth quarter revenue and a rise in network throughput. 

AMC Entertainment Holdings Inc edged down 0.4% to $4.98 after surging more than 13% in the last three days of trading on a speculation that Amazon.com Inc may acquire the network of movie theater  operators. 

 Zebra Technologies Corp increased 3.1% to $305.33 after the mobile computing and scanning solutions provider announced a leadership change. 

The company appointed Joe White as new Chief Product & Solutions Officer, replacing Bill Burns who became the company's CEO earlier this month. 

Investors' enthusiasm for electronics production services providers lifted select stocks to record highs.

Cirrus Logic, the maker of fabless semiconductors and integrated circuits closed at a new high of $109.56 and Jabil Inc advanced to a record high of $86.74.

Both Cirrus and Jabil are making new highs for the last three months in a row.  

Graphic Packaging closed at a new record high of $25.26 and the stock extended its monthly gains for the third month in a row.

European Markets Approached 3-week Highs After Inflation and Bank Worries Eased 

European markets advanced for the third day in a row after investors looked beyond the recent banking crisis in the U.S. and Switzerland. 

Market indexes advanced on the hopes that the decline in energy prices will continue to weaken goods price inflation and policymakers may slow interest rate hikes. 

Spain's inflation fell sharply in March after electricity and fuel prices declined and the UK's automobile production rebounded after parts shortages eased. 

Italy's jobless rate held at 7.0% in February, matching the rate in January, the statistical office ISTAT said Thursday. 

Spain's Inflation Weakened In March 

Consumer price inflation  in Spain slowed at a slower pace in March after energy and fuel price fell, the statistical office INE reported Thursday. 

Consumer price inflation on an annual basis in March rose at 3.3%, slower than 6.0% in February and the prices rose at the slowest pace since August 2021. 

Core inflation, which excludes non-processed food and energy. eased slightly to 7.5% from 7.6% in February. 

On a monthly basis, overall consumer prices rose 0.4%, slower than 0.9% increase in February. 

The Bank of Spain has estimated EU harmonized inflation rate in Spain to drop to 3.7% in 2023 and weaken to 3.6% in 2024.   

UK Automobile Production Rebounded In February 

The UK automobile production in February rose 13.1% to 69.707 units after electronic chips and components shortages eased, the Society of Motor Manufacturers and Traders reported Thursday. 

Passenger car production for the home market increased 20.3% to 13,073 units and exports rose 11.5% to 56,634 units. 

Exports to international markets accounted for 81.2% of total production. 

Europe Indexes & Yields 

The DAX index increased 1.1% to 15,499.89, the CAC-40 index advanced 1.2% to 7,273.02 and the FTSE 100 index added 0.8% to 7,624.49. 

The yield on 10-year German Bunds rose to 2.32%, French bonds traded at 2.82%, the UK gilts at 3.46% and Italian bonds hovered near 4.14%. 

The euro advanced to $1.086, the British pound to $1.234 and the Swiss franc to 91.51 cents.  

Brent crude oil added 55 cents to $78.84 a barrel and the Dutch natural gas added 77 cents to Є43.57 a MWh. 

Europe Movers 

Resource stocks led the gainers after crude oil, copper and iron ore prices advanced. 

Shell Plc, BP Plc, Glencore, Antofagasta, and Anglo American increased between 1% and 3%. 

Vestas Wind Systems A/S added 5.0% to DKK 197.92 after the Danish wind turbine maker won a 1.31 GW onshore order in Brazil. 

Casa dos Ventos Energias Renovaveis S/A placed an order for 756 MW wind turbine order for Rio Grande do Norte (Serra do Tigre) and 554 MW Bahia (Babilônia Centro) orders to be commissioned by 2025. 

H & M Hennes & Mauritz AB surged 16.3% to DKK 142.88 after the apparel retailer reported a surprise operating profit in the quarter ending in February. 

Revenue in the fiscal first quarter increased 12% to SEK 54.8 billion and operating profit rose to SEK 725 million from SEK 458 million a year ago. 

Sellpy, the second-hand platform and an associated  company is consolidated into the H&M group from the first quarter resulting in a one-time gain SEK 999 million. 

After-tax net income in the fiscal first quarter increased to SEK 540 million compared to SEK 217 million and earnings per share rose to SEK 0.33 from SEK 0.13 a year ago. 

Moonpig Group Plc soared 14.7% to 130.30 pence after the online greeting card and gifting platform in the UK and the Netherlands reiterated its annual revenue and adjusted earnings outlook. 

The company estimated annual revenue for the financial year ending April remain "unchanged" at around £320 million. 

The company added adjusted operating earnings guidance for the year also "remain unchanged."