Market Update
European Markets Near One-month High, Naturas Gas Drops to 4-month Low
Bridgette Randall
18 Oct, 2022
Frankfurt
European markets extended gains as natural gas price dropped to a 4-month low.
Natural gas declined for the fourth day in a row on milder than usual weather conditions across Europe and a large stockpile eased shortage worries.
Germany ordered two nuclear power plants to continue operating till mid-2023 and Spain's national gas grid operator Enagas said it may reject the next shipment of LNG on the account of lack of storage capacity.
Italy's trade account swung to a deficit in August and Spain's trade deficit widened in the month.
German business sentiment improved in October by 2.7 points to -59.2, from the previous month's 14-year low of 61.9, the Center for Economic Research said Tuesday.
Brent crude fell $2.66 to $88.94 a barrel and natural gas TTF futures dropped 11.7% to 113.11 euros MWh.
The DAX index jumped 1.75% or 221.99 to 12,869.00, the CAC-40 index increased 1.06% or 63.82 to 6,104.48.
The euro edged down to 98.28 U.S. cents and the British pound inched lower to $1.129.
The yield on 10-year German Bunds declined to 2.23%, French bonds edged lower to 2.817%, British Gilt to 3.92% and Italian bonds to 4.61%.
Asian Markets Extend Rally On Earnings Optimism
Arjun Pandit
18 Oct, 2022
Mumbai
Stocks in Asia closed higher as investors focused on domestic earnings and the Hang Seng index soared.
BYD, the maker of electric vehicles, reported third quarter earnings soared more than three-fold.
The People's Bank of China pumped 500 billion renminbi or $70 billion of liquidity into the financial system on Monday.
The new medium term lending facility offered loans at 2.75%, the key rate that acts as a base for the prime lending rate.
The PoB is set to announce its rate decision on October 20 and rates are expected to be left unchanged.
The Nikkei 225 average rose 1.4% or 382.35 to 27,156.14, the Hang Seng index increased 1.8% or 301.68 to 16,914.58 and the Sensex index rose 0.9% or 549.62 to 58,960.60.
The Kospi gained 1.4% to close at 2,249.95 ahead of earnings from Hyundai Motor and several other large conglomerates.
Hyundai Motor added 0.6% and SK Telecom increased 2.5%.
Stocks in Mumbai advanced after the Reserve Bank of India highlighted resilient economic activities.
L&T Tech Services said fiscal second quarter revenue increased 24% and net income jumped 23% from a year ago.
Adani Defence & Aerospace agreed to acquire the largest independent air services contractor Air Works for 400 crore rupees or $50 million.
The yield on 10-year Japanese bonds held firm at 0.25%, Chinese bonds at 2.70% and Indian bonds at 7.42%.
The yen traded near a 32-year low of 149.11 against a dollar, the Indian rupee at 82.20 and Chinese yuan at 7.22.
Volatile S&P 500 and Nasdaq Soar 3% Following BofA Earnings
Barry Adams
17 Oct, 2022
New York City
Stocks on Wall Street jumped after Bank of America reported better-than-expected earnings and bond yields rose.
After a week of wild swings the S&P 500 declined 1.5% and the Nasdaq Composite dropped 3.1% and bond yields hovered above 4%.
In Monday's trading, major averages advanced and the yield on Treasuries rose as investors digested better-than-expected earnings from Bank of America.
The S&P 500 index jumped 2.65% or 94.88 to 3,677.95 and the Nasdaq Composite index soared 3.4% or 354.41 to 10,675.80.
Natural gas futures fell to a three-month low and below $6 on falling demand and rising supply, according to the Energy Information Agency report.
U.S. utilities increased natural gas storage by 125 billion cubic feet, an increase over 100 billion cubic feet for the fourth week in a row.
The natural gas price fell after the demand for power decreased following Hurricane Ian and a decline in LNG exports.
Crude oil fell 17 cents to $85.48 and natural gas declined 49 cents to $5.95 a thermal unit.
The Yield on 2-year Treasury notes increased to 4.45%, 10-year bonds edged higher to 4,01% and the 30-year bonds rose to 4.03%.
U.S. Movers
Bank of America Corp jumped 6.5% to $33.76 after the bank reported better-than-expected third quarter sales and earnings.
Revenue, net of interest income, in the third quarter increased 8% to $24.5 billion from $22.8 billion a year ago.
Net income soared to $7.1 billion or 81 cents from $6.2 billion or 73 cents a share.
"Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts," said chief executive officer Brian Moynihan.
Continental Resources, Inc gained 8.6% to $74.08 after founder and chairman Harold Hamm and his family agreed to acquire the remaining shares in the oil producer for $74.28 a share.
Credit Suisse increased4.5% to $4.57 after the company settled a lawsuit for $475 million stemming from the sale of mortgage backed securities dating as back as 2008 with New Jersey State.
The company is also looking to sell a stake to a group of investors according to reports on the weekend.
Dish Network Corp jumped 7.7% to $13.95 and rebounded from a loss of more than 7% last week after Conx Corp was in talks to acquire Boost Mobile from the company.
Fox Corp declined 9.4% to $28.58 and News Corp gained 3.8% to $16.20 after founder Rupert Murdoch formed a special committee to merge the two companies together.
Roblox Corp soared 20.7% to $42.88 after the online gaming company said average daily active users in September jumped 23% to 57.8 million
Estimated booking increased between 11% and 15% to between $212 million and $219 million from a year ago and estimated revenues increased between -2% and +3% to between $171 million and $180 million.
Splunk Inc increased 5.8% to $74.25 after the activist investor Starboard Value is said to hold approximately 5% stake in the company with a plan to boost shareholder value.
Europe Stock Movers
Credit Suisse AG gained 2.6% to 4.53 Swiss francs and the troubled investment bank reached a financial settlement with the New Jersey State regulator related to residential mortgage securities dating back to 2008.
ASOS Plc plunged 8.4% to 485 pence after the U.K.-based online fashion retailer confirmed that the company is in negotiations with lenders in revising credit facility terms.
Energy complex companies rose after crude oil prices rose more than 1% and the dollar edged down.
BP Plc, Eni SpA, Repsol SA, TotalEnergies SE and Shell Plc increased between 1% and 2.5%.
Hargreaves Lansdown plunged as much as 8% before recovering to close down 3.5% to 787.95 pence and the investment platform is facing multi-million pound lawsuits from thousands of investors over the fallen equity income fund managed by Neil Woodford.
Dr
Movers: BofA, Continental Resources, Credit Suisse, Dish Network, Fox Corp, Roblox, Splunk
Scott Peters
17 Oct, 2022
New York City
Bank of America Corp jumped 6.5% to $33.76 after the bank reported better-than-expected third quarter sales and earnings.
Revenue, net of interest income, in the third quarter increased 8% to $24.5 billion from $22.8 billion a year ago.
Net income soared to $7.1 billion or 81 cents from $6.2 billion or 73 cents a share.
"Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts," said chief executive officer Brian Moynihan.
Continental Resources, Inc gained 8.6% to $74.08 after founder and chairman Harold Hamm and his family agreed to acquire the remaining shares in the oil producer for $74.28 a share.
Credit Suisse increased4.5% to $4.57 after the company settled a lawsuit for $475 million stemming from the sale of mortgage backed securities dating as back as 2008 with New Jersey State.
The company is also looking to sell a stake to a group of investors according to reports on the weekend.
Dish Network Corp jumped 7.7% to $13.95 and rebounded from a loss of more than 7% last week after Conx Corp was in talks to acquire Boost Mobile from the company.
Fox Corp declined 9.4% to $28.58 and News Corp gained 3.8% to $16.20 after founder Rupert Murdoch formed a special committee to merge the two companies together.
Roblox Corp soared 20.7% to $42.88 after the online gaming company said average daily active users in September jumped 23% to 57.8 million
Estimated booking increased between 11% and 15% to between $212 million and $219 million from a year ago and estimated revenues increased between -2% and +3% to between $171 million and $180 million.
Splunk Inc increased 5.8% to $74.25 after the activist investor Starboard Value is said to hold approximately 5% stake in the company with a plan to boost shareholder value.
European Markets Jump 1.7%, UK Reverses Budget Proposals
Bridgette Randall
17 Oct, 2022
Frankfurt
European market indexes soared and bond yields declined after the UK finance minister reversed unfunded tax measures proposed in the mini-budget just a few weeks ago.
The DAX index increased 1.7% or 211.22 to 12,649.03, the CAC-40 index advanced 1.8%or 108.73 to 6,040.66 and the FTSE 100 index added 0.9% or 60.18 to 6,920.25.
The euro was nearly unchanged at 97.81 U.S. cents and the British pound increased 1.4% to $1.13.
The yield on 10-year German bunds declined to 2.22%, French bonds fell to 2.82%, the British Gilts to 3.96%, Swiss bonds eased to 1.2% and Italian bonds to 4.64%.
Brent crude edged up 84 cents to $92.45 and the TTF natural gas fell 8.1% to 130.34 euros a megawatt hour.
UK Reverses Tax Proposals, gilt Yields Drop, Pound Rises
The U.K. bond yields rose after the recently appointed finance minister Jeremy Hunt reversed all tax proposals released in the mini-budget ahead of parliamentary approval.
The Pound rebounded and the Gilt yields dropped the most in decades after the government reversal but the longevity and credibility of the British government in doubt.
The Liz Truss government is not likely to survive the remaining term ahead of the required general election in 2024.
The yields fell 40 basis points for the 20-year and the 30-year Gilts and the pound edged slightly higher but investors are concerned about how long the current government will survive.
The growing political chaos and the Conservative Party infighting may force the UK general election earlier than the required date in early 2024.
Europe Stock Movers
Credit Suisse AG gained 2.6% to 4.53 Swiss francs and the troubled investment bank reached a financial settlement with the New Jersey State regulator related to residential mortgage securities dating back to 2008.
ASOS Plc plunged 8.4% to 485 pence after the U.K.-based online fashion retailer confirmed that the company is in negotiations with lenders in revising credit facility terms.
Energy complex companies rose after crude oil prices rose more than 1% and the dollar edged down.
BP Plc, Eni SpA, Repsol SA, TotalEnergies SE and Shell Plc increased between 1% and 2.5%.
Hargreaves Lansdown plunged as much as 8% before recovering to close down 3.5% to 787.95 pence and the investment platform is facing multi-million pound lawsuits from thousands of investors over the fallen equity income fund managed by Neil Woodford.
Dr
Stocks Trade Higher, Focus Shifts to Earnings
Barry Adams
17 Oct, 2022
New York City
Stocks on Wall Street opened higher and investors shifted focus to a parade of earnings after a wild week of trading.
After a week of wild swings the S&P 500 declined 1.5% and the Nasdaq Composite dropped 3.1% and bond yields hovered above 4%.
In Monday's trading, major averages advanced and the yield on Treasuries edged lower as investors shifted focus to earnings releases.
The S&P 500 index jumped 2.72% or 97.31 to 3,680.25 and the Nasdaq Composite index soared 3.21% or 331.26 to 10,652.31.
Crude oil rose 87 cents to $86.43 and natural gas declined 43 cents to $6.03 a thermal unit.
The Yield on 2-year Treasury notes eased to 4.41%, 10-year bonds edged lower to 3,911% and the 30-year bonds fell to 3.93%.
Investors await corporate results as the earnings season picks up pace and Goldman Sachs, IBM, Tesla, AT&T, Netflix and Johnson & Johnson are among the companies scheduled to release results this week.
Bank of America jumped 5.5% to $33.46 after the company reported better-than-expected revenues and earnings in the third quarter.
European Markets Trade Higher, Euro Stable
European market indexes traded higher and bond yields declined after the UK finance minister reversed unfunded tax measures proposed in the mini-budget just a few weeks ago.
The DAX index increased 1.4% or 172.65 to 12,609.42, the CAC-40 index advanced 1.2%or 71.57 to 6,002.63 and the FTSE 100 index added 0.9% or 60.18 to 6,918.95.
The euro was nearly unchanged at 97.81 U.S. cents and the British pound increased 1.4% to $1.13.
The yield on 10-year German bunds declined to 2.22%, French bonds fell to 2.82%, the British Gilts to 3.96%, Swiss bonds eased to 1.2% and Italian bonds to 4.64%.
Brent crude edged up 84 cents to $92.45 and the TTF natural gas fell 8.1% to 130.34 euros a megawatt hour.
UK Reverses Tax Proposals, gilt Yields Drop, Pound Rises
The U.K. bond yields rose after the recently appointed finance minister Jeremy Hunt reversed all tax proposals released in the mini-budget ahead of parliamentary approval.
The Pound rebounded and the Gilt yields dropped the most in decades after the government reversal but the longevity and credibility of the British government in doubts.
The Liz Truss government is not likely to survive the remaining term ahead of the required general election in 2024.
The yields fell 40 basis points for the 20-year and the 30-year Gilts and the pound edged slightly higher but investors are concerned about how long the current government will survive.
The growing political chaos and the Conservative Party infighting may force the UK general election earlier than the required date in early 2024.
China Communist Party Congress In Focus
Asian markets generally traded higher after the Chinese government proposed to increase government spending and support economic growth.
China abruptly delayed the release of GDP and other economic data indefinitely without giving a reason.
The weeklong gathering of Communist Party is set to appoint premier Xi Jinping for the third consecutive five-year term.
Chinese officials continued to crack down social mobility following the strict zero-Covid policy. Zhengzhou city in Henan province shut down parts of city to tame the spread of virus.
Foxconn factory located in the city with about 300,000 workers is responsible for the production of about half the iPhones production.
The Nikkei 225 average fell 1.16% or 314.97 to 26,775.79, the Hang Seng index increased 0.15% or 25.21 to 16,612.90 and the Sensex index added 0.85% or 491.01 to 58,410.98.
The yields on Japanese bonds held steady at 0.25%, Chinese bonds traded down to 2.71% and Indian bonds edged down to 7.4%.
Yen Drop Extends Yearly Loss to 30%
The Japanese yen dropped to a 32-year low to 149 against a dollar prompting fears of intervention from the Bank of Japan.
The yen has dropped nearly 30% against the U.S. dollar and the Bank of Japan conducted its largest currency market intervention and spent 2.84 trillion yen in shoring the currency with temporary success.
Kroger and Albertsons Merger Plan to Face Scrutiny
Anand Sheth
14 Oct, 2022
New York City
Albertsons Companies declined 7.4% to $26.50 on news that the company has agreed to be acquired by Kroger for $24.6 billion or $34.10 a share.
Albertsons owns and operates 2,200 stores in 34 states and Washington D.C. with 290,000 employees.
Albertsons store network spans 22 brands including Acme, Safeway and Tom Thumb.
Kroger Co declined 7.7% to $43.99.
Kroger owns and operates 2,800 stores in 35 states with 420,000 employees.
Kroger operates a portfolio of 25 store brands including West Coast-based Ralphs and Fred Meyer.
The acquisition is most likely to draw antitrust scrutiny from regulators as Kroger looks to expand its network and strengthen its position in a market dominated by Walmart and Amazon.
Indexes Sink Deeper After a Wild Week, Bond Yields Rise Above 4%
Barry Adams
14 Oct, 2022
New York City
Stocks on Wall Street struggled a day after posting a sharp advance as investors digested the implication of a slight decline in consumer price inflation.
In Thursday's trading, the latest inflation reports sparked two diverging reactions from stock and bond markets.
Stock investors hoped that the slight cooling of consumer inflation may be followed by weaker inflation data in the months ahead while bond investors focused on the elevated inflation rate above 8% and surmised that the Fed will continue its aggressive rate hike campaign.
In Friday's trading, stocks accelerated declines after retail sales in September were flat from August, U.S. Census Bureau reported Friday.
Retail sales in the month were unchanged from the previous month, below the expectations of at least 0.2% rise, as retail sales for motor vehicles and parts, building materials and electronics and gasoline stores fell.
Groceries stores sales were up, only supported by a rise in prices.
The retail sales data are not adjusted for inflation, indicating that consumer spending declined across most categories of goods.
The yield on Treasuries extended gains to new 14-year highs while major stock averages erased most of Thursday's gains and sank deeper in the year so far.
The S&P 500 index fell 2.4% to 3,583.08 and the Nasdaq Composite index dropped 3.08% to 10,321.39.
For the week, the S&P 500 declined 1.5% and the Nasdaq Composite index dropped 3.1%.
Crude oil fell $3.35 to $85.72 a barrel and natural gas dropped 28 cents to $6.45 a thermal unit.
The yield on 2-year Treasury notes inched higher to 4.50%, 10-year Treasury notes to 4.02% and 30-year bonds to 3.99%.
U.S. Stock Movers
Albertsons Companies declined 7.4% to $26.50 on news that the company has agreed to be acquired by Kroger for $24.6 billion or $34.10 a share.
Albertsons owns and operates 2,200 stores in 34 states and Washington D.C. with 290,000 employees.
Albertsons store network spans 22 brands including Acme, Safeway and Tom Thumb.
Kroger Co declined 7.7% to $43.99.
Kroger owns and operates 2,800 stores in 35 states with 420,000 employees.
Kroger operates a portfolio of 25 store brands including West Coast-based Ralphs and Fred Meyer.
The acquisition is most likely to draw antitrust scrutiny from regulators as Kroger looks to expand its network and strengthen its position in a market dominated by Walmart and Amazon.
Beyond Meat Inc dropped 7.8% to $13.64 after the company said it plans to reduce its workforce by 200 employees or 19% of its workforce and take one-time charge of $4 million in the fourth quarter of 2022.
The company also guided its third quarter sales to decline 23% to $82 million and fourth quarter sales are estimated to fall between $400 million and $425 million, a decrease between 9% and 14%.
The food company had previously guided full-year 2022 net revenues in the range of $470 million to $520 million.
Citigroup Inc added 0.8% to $43.30 after the global bank said revenues rose in rising interest rates but earnings fell 25% on weak investment banking revenues and the company increased credit loss provisions.
Revenues increased 6% to $18.5 billion from $17.4 billion a year ago, primarily on the gain in sale of its consumer business in the Philippines.
Without the transaction, revenue declined 1% as higher interest income was more than offset by non-interest income decline.
Net income fell 25% to $3.5 billion from $4.6 billion and earnings per share declined to $1.63 from $2.15 a year ago.
JPMorgan Chase & Co increased 2.4% to $111.79 after the company said net revenue in the third quarter rose 10% to $32.7 billion.
Net income plunged 17% to $9.7 billion from $11.7 billion and diluted earnings per share dropped to $3.12 from $3.74 a year ago.
Net income declined as the bank took credit loss provisions ahead of the expected economic slowdown.
Net income decline was driven by a net credit reserve build of $808 million compared to a net reserve release of $2.1 billion in the prior year.
The current quarter included net investment securities losses of $959 million resulting in a decrease of $729 million in after-tax net income.
Morgan Stanley fell 5.3% to $75.08 after the investment bank reported third quarter revenues declined to $13 billion from $14.8 billion a year ago.
Net income in the period fell to $2.6 billion from $3.7 billion and diluted earnings per share dropped to $1.47 from $1.98 a year ago.
Investment banking revenues in the quarter plunged 55% to $1.27 billion from $2.85 billion a year ago.
Fee-based asset inflow in its wealth management unit declined to $16.7 billion from $70.6 billion and fee-based client assets declined to $1.3 trillion from $1.75 trillion a year ago.
European Markets Log Weekly Advance, Hungary Hikes Rates to 25%
European indexes trimmed morning gains following the market weakness in New York.
The elevated U.S. inflation report on Thursday sparked a rally in New York and Europe but stocks turned lower after the U.S. consumer spending was flat in September.
Retail sales in the month were unchanged from the previous month, below the expectations of at least 0.2% rise, as retail sales for motor vehicles and parts, building materials and electronics and gasoline stores fell.
Groceries stores sales were up, only supported by a rise in prices.
The retail sales data are not adjusted for inflation, indicating that consumer spending declined across most categories of goods.
The FTSE index increased 0.6% to 6,893.77, the DAX index jumped 0.7% to 12,437.81 and CAC-40 index advanced 0.90% to 5,931.93.
For the week, the FTSE 100 index decreased 1.9%, the DAX gained 1.3% and the CAC-40 index added 1.0%.
UK Pound Weakens On Government U Turn and Minister Change
UK Prime Minister Liz Truss fired finance minister Kwasi Kwarteng and reversed corporate tax cuts announced in the mini-budget last month.
Truss doubled down on her growth policies but said corporate tax cut will remain at 29% and reversed the earlier proposal to lower it to 19%.
The U-turn on the unfunded tax reduction proposal is expected to calm volatile Gilt market but questions remain how the government will fund its energy subsidies to households and other measures that are expected to cost the treasury 45 billion pounds.
Truss announced the appointment of Jeremy Hunt replacing finance minister Kwasi Kwarteng only after five weeks in office.
The Bank of England is set to end its long-term bond purchase program today, an emergency measure in support of the orderly functioning of the bond market and provide a rare rebalancing opportunity to pension fund managers.
The euro fell 0.5% to 97.24 U.S. cents and the British pound dropped 1% to $1.118.
The yield on 10-year UK bonds increased to 4.21%, German bunds rose to 2.308%, French bonds to 2.908% and Italian bonds to 4.74%.
Big Rate Hike in Hungary
The Hungarian Forint advanced more than 2% and traded near 429 against the dollar after the National Bank of Hungary lifted its overnight collateral lending rate by 950 basis points to 25% in an emergency meeting on Friday.
The central bank lifted rates by a large amount in support of the falling forint and said that the bank will provide foreign currency for energy imports from its reserves.
Hungary, like many countries in Europe, is battling sky-high energy price driven inflation. Consumer price inflation in September surged above 20.0% for the first time since 1996.
The NBH has lifted rates at every policy meeting since June to combat high inflation above its target range between 2% and 4%.
Europe Stock Movers
TomTom NV dropped 11.7% to
Movers: Albertsons, Beyond Meat, Citigroup, JPMorgan, Morgan Stanley, PNC, US Banc, Wells Fargo
Scott Peters
14 Oct, 2022
New York City
Albertsons Companies declined 7.4% to $26.50 on news that the company has agreed to be acquired by Kroger for $24.6 billion or $34.10 a share.
Albertsons owns and operates 2,200 stores in 34 states and Washington D.C. with 290,000 employees.
Albertsons store network spans 22 brands including Acme, Safeway and Tom Thumb.
Kroger Co declined 7.7% to $43.99.
Kroger owns and operates 2,800 stores in 35 states with 420,000 employees.
Kroger operates a portfolio of 25 store brands including West Coast-based Ralphs and Fred Meyer.
The acquisition is most likely to draw antitrust scrutiny from regulators as Kroger looks to expand its network and strengthen its position in a market dominated by Walmart and Amazon.
Beyond Meat Inc dropped 7.8% to $13.64 after the company said it plans to reduce its workforce by 200 employees or 19% of its workforce and take one-time charge of $4 million in the fourth quarter of 2022.
The company also guided its third quarter sales to decline 23% to $82 million and fourth quarter sales are estimated to fall between $400 million and $425 million, a decrease between 9% and 14%.
The food company had previously guided full-year 2022 net revenues in the range of $470 million to $520 million.
Citigroup Inc added 0.8% to $43.30 after the global bank said revenues rose in rising interest rates but earnings fell 25% on weak investment banking revenues and the company increased credit loss provisions.
Revenues increased 6% to $18.5 billion from $17.4 billion a year ago, primarily on the gain in sale of its consumer business in the Philippines.
Without the transaction, revenue declined 1% as higher interest income was more than offset by non-interest income decline.
Net income fell 25% to $3.5 billion from $4.6 billion and earnings per share declined to $1.63 from $2.15 a year ago.
JPMorgan Chase & Co increased 2.4% to $111.79 after the company said net revenue in the third quarter rose 10% to $32.7 billion.
Net income plunged 17% to $9.7 billion from $11.7 billion and diluted earnings per share dropped to $3.12 from $3.74 a year ago.
Net income declined as the bank took credit loss provisions ahead of the expected economic slowdown.
Net income decline was driven by a net credit reserve build of $808 million compared to a net reserve release of $2.1 billion in the prior year.
The current quarter included net investment securities losses of $959 million resulting in a decrease of $729 million in after-tax net income.
Morgan Stanley fell 5.3% to $75.08 after the investment bank reported third quarter revenues declined to $13 billion from $14.8 billion a year ago.
Net income in the period fell to $2.6 billion from $3.7 billion and diluted earnings per share dropped to $1.47 from $1.98 a year ago.
Investment banking revenues in the quarter plunged 55% to $1.27 billion from $2.85 billion a year ago.
Fee-based asset inflow in its wealth management unit declined to $16.7 billion from $70.6 billion and fee-based client assets declined to $1.3 trillion from $1.75 trillion a year ago.
Nutanix Inc soared 23.4% to $26.14 on the news that the company is looking to find a merger partner or go private.
The news was first reported by the Wall Street Journal.
PNC Financial Services Group fell 1.6% to $149.04 after the company said revenue in the third quarter increased 8% to $5.5 billion from $5.2 billion a year ago.
Net income in the period increased 10% to $1.64 billion from $1.49 billion and diluted earnings per share rose to $3.78 from $3.30 a year ago.
Loans in the quarter increased 3% to $313 billion from $291.3 billion and total deposits rose to $439.2 billion from $454.4 billion a year ago.
Total nonperforming loans increased 1% to $2.1 billion as lower consumer nonperforming loans were more than offset by higher commercial nonperforming loans.
US Bancorp rose 3.5% to $42.73 after the company said third quarter net interest income increased 7.4% to $6.3 billion from $5.9 billion a year ago.
Net income fell 10.7% to $1.8 billion from $2.03 billion and diluted earnings per share declined to $1.16 from $1.30 a year ago.
Pretax income before the provision for credit losses and excluding MUFG Union Bank merger and integration-related charges increased 11.0% compared with a year ago.
The net interest margin increased to 2.83% in the current quarter from 2.53% in the third quarter of 2021 primarily due to the impact of higher rates on earning assets, partially offset by deposit pricing and short-term borrowing costs
Wells Fargo & Co increased 2.9% to $43.53 after the company said third quarter revenues increased 4% to $19.5 billion from $18.8 billion a year ago.
Net income in the quarter dropped on higher credit loss provision of $784 million compared to addition of $1.4 billion in the prior year's period.
Net income declined 31% to $3.5 billion from $5.1 billion and diluted earnings per share fell to 85 cents from $1.17 a year ago.
Lower mortgage activities and lower revenues from securitization activities dragged non-interest income by 25%.
Europe Movers: Danone, Diageo, Nordex, Temenos, Royal Mail, TomTom
Bridgette Randall
14 Oct, 2022
Frankfurt
Danone SA gained 0.6% to
European Markets Log Weekly Advance, Hungary Hikes Rates to 25%
Bridgette Randall
14 Oct, 2022
Frankfurt
European indexes trimmed morning gains following the market weakness in New York.
The elevated U.S. inflation report on Thursday sparked a rally in New York and Europe but stocks turned lower after the U.S. consumer spending was flat in September.
Retail sales in the month were unchanged from the previous month, below the expectations of at least 0.2% rise, as retail sales for motor vehicles and parts, building materials and electronics and gasoline stores fell.
Groceries stores sales were up, only supported by a rise in prices.
The retail sales data are not adjusted for inflation, indicating that consumer spending declined across most categories of goods.
The FTSE index increased 0.6% to 6,893.77, the DAX index jumped 0.7% to 12,437.81 and CAC-40 index advanced 0.90% to 5,931.93.
For the week, the FTSE 100 index decreased 1.9%, the DAX gained 1.3% and the CAC-40 index added 1.0%.
UK Pound Weakens On Government U Turn and Minister Change
UK Prime Minister Liz Truss fired finance minister Kwasi Kwarteng and reversed corporate tax cuts announced in the mini-budget last month.
Truss doubled down on her growth policies but said corporate tax cut will remain at 29% and reversed the earlier proposal to lower it to 19%.
The U-turn on the unfunded tax reduction proposal is expected to calm volatile Gilt market but questions remain how the government will fund its energy subsidies to households and other measures that are expected to cost the treasury 45 billion pounds.
Truss announced the appointment of Jeremy Hunt replacing finance minister Kwasi Kwarteng only after five weeks in office.
The Bank of England is set to end its long-term bond purchase program today, an emergency measure in support of the orderly functioning of the bond market and provide a rare rebalancing opportunity to pension fund managers.
The euro fell 0.5% to 97.24 U.S. cents and the British pound dropped 1% to $1.118.
The yield on 10-year UK bonds increased to 4.21%, German bunds rose to 2.308%, French bonds to 2.908% and Italian bonds to 4.74%.
Big Rate Hike in Hungary
The Hungarian Forint advanced more than 2% and traded near 429 against the dollar after the National Bank of Hungary lifted its overnight collateral lending rate by 950 basis points to 25% in an emergency meeting on Friday.
The central bank lifted rates by a large amount in support of the falling forint and said that the bank will provide foreign currency for energy imports from its reserves.
Hungary, like many countries in Europe, is battling sky-high energy price driven inflation. Consumer price inflation in September surged above 20.0% for the first time since 1996.
The NBH has lifted rates at every policy meeting since June to combat high inflation above its target range between 2% and 4%.
Stock Movers
TomTom NV dropped 11.7% to
Inflation Data Spark Diverging Views in Stocks and Bonds
Barry Adams
14 Oct, 2022
New York City
Stocks on Wall Street struggled a day after a sharp advance as investors digested the implication of a slight decline in consumer price inflation.
The latest inflation reports sparked two diverging reactions from stock and bond markets.
Stock investors hoped that the slight cooling of consumer inflation may be followed by weaker inflation data in the months ahead while bond investors focused on the elevated inflation rate above 8% and surmised that the Fed will continue its aggressive rate hike campaign.
Stocks reversed 3% decline and closed up more than 2% and Treasury yields advanced in Thursday's trading.
The yield on Treasuries extended gains on Friday while major stock averages erased most of Thursday's gains.
The S&P 500 index fell 0.5% to 3,649.28 and the Nasdaq Composite index dropped 1.20% to 10,521.51.
Crude oil fell $2.65 to $86.52 a barrel and natural gas dropped 28 cents to $6.45 a thermal unit.
The yield on 2-year Treasury notes inched lower to 4.45%, 10-year Treasury notes to 3.96% and 30-year bonds to 3.96%.
European Markets Trim Gains, UK Government's Tax U-Turn
European markets trimmed morning gains following the weakness in New York trading.
The FTSE index increased 0.6% to 6,893.77, the DAX index jumped 1.7% to 12,571.05 and CAC-40 index advanced 2.04% to 5,999.03.
UK Prime Minister Liz Truss fired finance minister Kwasi Kwarteng and reversed corporate tax cuts announced in the mini-budget last month.
Truss doubled down on her growth policies but said corporate tax cut will remain at 29% and reversed the earlier proposal to lower it to 19%.
The U-turn on the unfunded tax reduction proposal is expected to calm volatile Gilt market but questions remain how the government will fund its energy subsidies to households.
The Bank of England is set to end its long-term bond purchase program today, an emergency measure in support of the orderly functioning of the bond market and provide a rare rebalancing opportunity to pension fund managers.
The euro fell 0.5% to 97.24 U.S. cents and the British pound dropped 1% to $1.118.
The yield on 10-year UK bonds increased to 4.21%, German bunds rose to 2.308%, French bonds to 2.908% and Italian bonds to 4.74%.
The Hungarian Forint advanced more than 2% and traded near 429 against the dollar after the National Bank of Hungary lifted its overnight collateral lending rate by 950 basis points to 25% in an emergency meeting on Friday.
The central bank lifted rates by a large amount in support of the falling forint and said that the bank will provide foreign currency for energy imports from its reserves.
Asian Markets Advance Following Gains in New York
Markets in Asia jumped following Thursday's advance in New York.
The Japanese yen dropped to a new 24-year low of 148.23 against the dollar and the rupee held stable near record low of 82.22.
Consumer price inflation accelerated at the fastest pace in more than two years but wholesale prices eased, according to the data released by the statistics bureau.
Consumer prices rose 2.8% in September from 2.5% in August but wholesale price growth moderated to 0.9% on falling commodities prices and a change in comparison base.
The Nikkei 225 average soared 3.2% to 27,090.76, the Hang Seng index increased 1.2% to 16,587.69 and the Sensex index gained 1.2% to 57,919.97.
Benchmark indexes in India jumped led by a rise in IT sector after Infosys and MindTree reported better-than-expected earnings.
Domino's Pizza Sales Advance On U.S. Price Hikes, Reiterates Food Costs Increases
Scott Peters
13 Oct, 2022
New York City
Domino's Pizza Inc sizzled 9.8% to $331.42 after the company said revenue in its latest quarter increased 7.1% to $1.07 billion.
Net income declined to $100.5 million from $120.4 million a year ago.
Revenue increase was largely driven by 4.1% price hike at the company owned stores and similar increases charged to stores owned by franchisees.
Same store sales at U.S. locations increased 2.0%, driven by 2.2% increase in franchised stores offset by 1.9% decline at company owned stores.
Same store sales at international locations declined 1.8%, excluding foreign currency impact.
Total global retail sales fell 1.6%, driven by 4.1% increase at the U.S. locations offset by 6.8% decline at international locations.
Diluted earnings per share fell to $2.79 from $3.24 a year ago.
Outlook and Guidance
The company lifted its estimate of the negative impact of changes in foreign currency exchange rates on royalty revenues in the range between $29 million and $31 million from $22 million and $26 million.
The company plans to cut its capital expenditure to $100 million from the previous estimate of $120 million.
General and administrative expenses the current year are estimated to fall between $415 million and $420 million from the previous estimate between $420 million and $428 million.
The company reiterated its price increase outlook for the current year across all products between 13% and 15%.
Free Cash Flow
Net cash provided by operating activities was $330.2 million during the three fiscal quarters of 2022 and the company invested $50.5 million in capital expenditures in the period.
Free cash flow was approximately $279.6 million during the three fiscal quarters of 2022.
Liquidity and Long Term Debt
Long term debt at the end of the quarter was $5.2 billion.
At the end of the quarter as of September 11, 2022, the company had $114.8 million of unrestricted cash and cash equivalents.
The borrowing capacity available at the end of the quarter was $35.8 million under its 2021 Variable Funding Notes, net of $120.0 million of outstanding borrowings and letters of credit issued of $44.2 million.
Subsequent to the end of the third quarter, the company repaid $60.0 million of its outstanding borrowings under its 2021 Variable Funding Notes and entered into the 2022 Variable Funding Notes facility which provides for an additional $120.0 million of borrowing capacity.
Stock Repurchase and Dividend
During the third quarter of 2022, the company repurchased and retired 490,789 shares of common stock for a total of $196.1 million.
As of September 11, 2022, the Company had a total remaining authorized amount for share repurchases of $410.4 million.
On October 11, 2022, the Board of Directors declared a $1.10 per share quarterly dividend to shareholders of record as of December 15, 2022 to be paid on December 30, 2022.
Store Network
During the quarter, the company owned stores increase by one to 402 and franchisee added 23 increasing the count to 6,241, totaling U.S. stores to 6,643.
In the third quarter, International stores increased 201 to 12,876.
In the quarter, the net store increased 225 to 19,519.
Taiwan Semiconductor Q3 Net Income Soars 80%
Scott Peters
13 Oct, 2022
New York City
Taiwan Semiconductor Manufacturing Co Ltd closed up 4.8% to $67.21 after the company said third quarter revenues increased 35.9% from a year ago and 11.4% from the previous quarter to $20.23 billion.
Consolidated revenue increased 47.9% to NT$613.14 billion, net income jumped 79.7%to NT$280.87 billion and diluted earnings per share surged 79.8% to NT$10.83 or $1.79 per ADR unit.
Gross margin in the quarter was 60.4%, operating margin was 50.6% and net profit margin was 45.8%.
In the third quarter, shipments of 5-nanometer accounted for 28% of total wafer revenue; 7- nanometer accounted for 26%.
Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 54% of total wafer revenue, the statement from the company noted.
The company said it plans to cut its capital expenditure to $36 billion from the previous estimate of $40 billion reflecting weak demand for smartphones and personal computers.
The company also confirmed its plan to expand its Nanjing, China facility after it secured one-year U.S. extension to ship equipment
U.S. tightened its technology export controls to China, thwarting the second largest economy's tech ambitions.
TSMC's China sales declined to about 10% in 2021 from 17% in 2020, and the latest restrictions are likely to push sales below 7% of 2023 sales.
Despite the waiver, TSMC will not be able to support its Chinese customers and provide chips to clients like Nvidia and Advanced Micro Devices selling high end chips in China.
On Wall Street Stocks Staged Stunning Reversal
Barry Adams
13 Oct, 2022
New York City
Stocks staged a stunning reversal after benchmark indexes rebounded from the morning's 3% decline to close up more than 2%.
Major averages dropped as much as 3% to new 2022 lows in the first thirty minutes of trading but managed to recover losses and trade in positive territory.
Benchmark indexes rebounded after banks and energy complex stocks advanced and tech stocks reversed earlier losses.
Goldman Sachs jumped 4%, JPMorgan soared 5.5%, Apple, Visa and Microsoft increased between 3% and 3.5%.
The S&P 500 increased 2.6% to 3,669.91 and the Nasdaq Composite index added 2.2% to 10,649.15.
Crude oil rose $1.80 to $89.06 a barrel and natural gas increased 26 cents to $6.70 a thermal unit.
Inflation Stays Elevated In September
Consumer prices rose at a faster pace in September, reflecting deeply entrenched inflation expectations in the services driven economy.
The Consumer Price Index increased 0.4% in September on a seasonally adjusted basis, after rising 0.1% in August, the Bureau of Labor Statistics reported today.
Prices rose 8.2% from a year ago on a seasonally unadjusted basis, the slowest increase in seven months, compared to 8.3% in August.
Core index, excluding food and energy, rose 0.6% in September, matching the monthly rise in the previous month.
On an annual basis, core rate increased 6.6% from a year ago, a new four-decade high highlighting elevated inflation pressures.
The elevated inflation provides another signal for the Fed to continue its campaign of big rate hikes.
The Federal Reserve is widely expected to lift interest rates by 75 basis points at its next policy meeting ending on November 2.
There is no progress on inflation despite the Federal Reserve lifting rates five times in the last seven months.
The yield on 2-year Treasury notes inched higher to 4.47%, 10-year Treasury notes increased to 3.95% and 30-year Treasury bonds edged up to 3.94%.
US Stock Movers
Albertsons Companies Inc soared 11.9% to $28.73 after CNBC and Bloomberg suggested that the retailer is likely to strike a merger deal with Kroger as early as this week.
Both companies did not return calls to confirm the news.
Victoria's Secret & Company sparkled 6.2% to $34.46 after the apparel retailer guided its latest quarterly earnings is likely to be near the high end of the range.
Third quarter operating earnings are expected to be near the high end of the range between $10 million and $40 million and diluted earnings per share between breakeven and 25 cents a share.
The revised operating income and earnings guidance is based on the estimated net sales decline in the high single digit range, as previously stated.
Walgreens Boots Alliance Inc burped up 5.9% to $33.82 after the pharmaceutical retailer said revenue in the fiscal fourth quarter ending in August declined to $32.4 billion from $34.3 billion a year ago.
The retailer swung to a net loss of $415 million from $627 million and diluted earnings per share to a loss of 48 cents from 72 cents a year ago.
Walgreens guided fiscal 2023 adjusted earnings per share between $4.45 and $4.65.
Sharp Reversal In European Indexes
European indexes closed up after a wild day that saw indexes plunging as much as 1.5%, after the release of the U.S. consumer inflation data.
Geopolitical tensions stayed high after Russia intensified its bombing campaign in Ukraine.
The market decline was sharp and brief after energy and resource stocks led the rebound in the region following the rise in New York.
The UK bond market turmoil continued after reports suggested that the government is likely to reverse most of the tax proposals.
The expectations of tax reversal supported a rally in the UK gilt market and also lifted the British pound for the second day in a row.
German Inflation Jumped to 10%
Consumer price inflation accelerated to 10.0% in September from 7.9% in August, according to final data reported by Destatis on Thursday.
Excluding food and energy prices, inflation increased to 4.6%.
Energy prices surged 43.9% and food prices rose 18.7% from a year ago and the ending of 9-euro tickets and a fuel discount fueled the price surge in September.
Goods prices jumped 17.2% and services prices gained 3.6% in the month.
Volatile Markets Closed Higher
The DAX index increased 1.5% to 12,355.58, the CAC-40 index added 1.04% to 5,879.19 and the FTSE 100 index advanced 0.4% to 6,850.27.
The Swiss benchmark SMI added 0.3% or 28.58 to 10,227.92 after volatile trading.
The euro edged up 0.8% to 97.78 U.S. cents and the pound jumped 2.2% to $1.135.
Europe Stock Movers
Oxford Instruments Plc gained 7.7% to 1,854.0 pence after the high-tech company sounded optimistic about first-half results.
Banks in Switzerland closed up following the surge in the sector across Europe ahead of earnings.
Credit Suisse jumped 6.5% and UBS Group increased 3.5%.
Suedzucker AG closed down 2.7% to