Market Update
Movers: 1800Flowers, Bed Bath & Beyond, Broadcom, Lululemon, Pagerduty, Starbucks
Barry Adams
02 Sep, 2022
New York City
Energy stocks led the gainers after crude oil prices jumped 3% and natural gas prices hovered near $9 a thermal unit.
Hess Corp, Marathon Oil, Baker Hughes, Schlumberger and Devon Energy led the most active list gainers with a rise between 2% and 4%.
Dish Network, Generac, Zebra Technologies, 3M, ADP and Equinix led the most active decliners with a loss between 2% and 5%.
1-800-Flowers.com Inc declined 4.5% to $7.39 after the company reported weak quarterly results.
The online flower and gift retailer's stock dropped to a low last seen in 2015.
The online flower and gift retailer said revenues in the fiscal year fourth quarter ending on July 3 declined to $485.9 million from $487 million a year ago.
During the quarter, the company swung to a loss of $22.3 million or 34 cents a share from net income of $13.3 million or $0.20 a diluted share a year ago.
Bed Bath & Beyond declined 5.5% to $8.22 and the retailer announced a business and financial restructuring plan a few days ago.
Broadcom Inc rose 2.2% to $503.31 after the chipmaker reported better-than-expected quarterly results.
Revenues in the fiscal year third quarter ending on July 1 increased 25% to $8.5 billion.
Net income rose to $3.1 billion from $1.9 billion and diluted earnings per share increased to $7.15 from $4.20 a year ago.
During the quarter, the company also repurchased and eliminated 3.2 million shares for $1,792 billion.
The company also guided revenues in the fiscal fourth quarter ending in October to be $8.9 billion.
DXC Technology jumped 3.7% to $27.69 in an active trading after the company canceled its presentation to investors at a conference organized by Deutsche Bank.
The move prompted a speculation that the company may be in a merger discussion with a potential suitor.
Lululemon Athletica Inc surged 7.2% to $316.34 after the company reported better-than-expected quarterly results. The fitness apparel retailer also offered a positive annual outlook.
Pagerduty Inc declined 1.0% to $23.86 after the cloud computing company reported better-than-expected results.
The software as a service provider said the number of customers paying more than $100,000 a year jumped 38% from a year ago.
Starbucks Corp declined 1.6% to $83.96 after the company appointed Laxman Narasimhan as its new chief executive.
Narasimhan will join the company from October 1 and work with the founder and interim chief executive Howard Schultz before he takes over the role from April 1, 2023.
Job Growth Slowed but Solid Despite Rising Interest Rates
Barry Adams
02 Sep, 2022
New York City
On Wall Street stocks opened higher after the latest jobs report showed the pace of hiring decline in August, meeting the market expectations.
Non-farm payrolls increased 315,000 in August following the 526,000 additions in July, the Bureau of Labor Statistics said Friday.
In a broad-based hiring employers added positions across many industries.
Professional and business services including computer and system design led the job gains in the month with 86,000, followed by healthcare services with 48,000, retail trade with 44,000 , leisure and hospitality with 31,000 and manufacturing with 22,000.
Leisure and hospitality sector additions slowed down considerably after adding an average of 90,000 for the last seven months.
The unemployment rate increased to 3.7% and average hourly wages increased 0.3% from the previous month and 5.2% annually.
Historically August jobs data are volatile and in the past the statistics agency has revised the data substantially.
The BLS lowered the job additions in June to 293,000 from the previous estimate of 398,000 and July additions to 526,000 from 528,000.
The S&P 500 index increased 0.4% to 3,985.42 and the Nasdaq Composite index gained 0.3% to 11,821.86.
Oil prices rose in the U.S. and European trading ahead of the OPEC+ meeting on Monday.
Prices rose on the expectations that the cartel will announce production cuts at the gathering of finance ministers.
Futures of crude oil increased $2.50 to $89.10 a barrel and natural gas fell 27 cents to $8.99 a thermal unit.
The yield on 10-year Treasury notes declined to 3.21% and on 2-year notes eased to 3.41%.
Across the Atlantic, European markets traded higher after the release of the U.S. payrolls report.
The DAX index increased 2.5% to 12,955.28, the CAC-40 index advanced 1.7% to 6,135.97, and the FTSE 100 index added 1.7% to 7,271.26.
Producer prices, a measure of wholesale prices, in the euro zone rose 4% in July from the previous month, the eurostat report showed on Friday.
The 4-month high increase was driven by the 9% surge in energy prices compared to 3% increase in June.
Asian markets marginally lower ahead of the U.S. jobs report as more cities tighten restrictions to prevent coronavirus outbreak from spreading.
Shanghai index increased fractionally and indexes in Japan and India declined marginally after volatile trading.
Global Markets Struggle, Oil Falls On Rate-hike and China Worries
Barry Adams
01 Sep, 2022
New York City
Benchmark indexes closed mixed in volatile trading on Wall Street and bond yields continued to rise.
Tech-heavy Nasdaq fell for the fifth day in a row and bond yields rose to a 10-week highs not seen since 2007.
Market worries were also compounded by another lockdown in China and factory activities declined for the first time in three months in August.
Chengdu announced a lockdown for its 21 million residents to prevent the Covid-19 virus variant from spreading.
In the northeast, Dalian with a population of 5.7 million and in the south Shenzhen with a population of 12.6 million have implemented stricter restrictions on mobility and social gathering.
Benchmark index extended losses ahead of the jobs report on Friday and on the ongoing worries of the future rate hikes.
Investors are looking for clues on the health of the jobs market, consumer spending and energy prices.
So far, consumer spending has remained stable but the spending pattern is shifting and amid high energy and food price inflation many are limiting purchases to basic and necessary items.
However, if interest rates continue to rise and energy prices remain elevated, job market conditions are likely to turn unfavorable and economic growth will slow down further.
Weekly initial jobless claims declined to 232,000 for the week ending on August 27 and continuing claims increased 26,000 from the previous week to 1,44 million, the Labor Department reported Thursday.
A separate report from the labor department showed that unit labor costs rose 10.2% in the second quarter from the previous three-month period.
On an annual basis, unit labor cost rose 9.3% at the end of the second quarter.
The S&P 500 index increased 0.3% to 3,966.85 and the Nasdaq Composite fell 0.9% to 11,785.13.
Futures of crude oil prices declined $3.26 to $86.27 and natural gas rose 6 cents to $9.19 a thermal unit.
Bond yields rose to a two-month high ahead of highly anticipated jobs report on Friday
The yield on 10-year Treasury notes rose to 3.26% and on 2-year Treasury notes inched up to 3.51%.
Ciena Corp declined 10.4% to $45.47 after the networking equipment maker reported weaker-than-expected quarterly results.
In addition, the company said parts shortages are preventing the company from meeting its customer demands.
Lands' End, Inc declined 15.3% to $11.70 after the apparel retailer said quarterly loss narrowed but expenses and inventories rose.
For the second quarter, net revenue fell 8.6% to $351.2 million from $384.1 million a year ago.
The company swung to a net loss of $2.2 million or 7 cents a diluted share compared to net income of $16.2 million or 48 cents a diluted share last year.
For fiscal 2022, the apparel retailer guided revenue to be between $1.60 billion and $1.64 billion and net income between $16.5 million and $23.5 million, and diluted earnings per share between $0.49 and $0.70.
Signet Jewelers Ltd dropped 12.2% to $57.20 despite the retailer reaffirming its full-year outlook and exceeding quarterly earnings estimates.
Total sales declined 1.9% to $1.8 billion and same store sales fell 8.2% from a year ago.
Diluted earnings per share declined to $2.58 from $3.60 a year ago.
Signet lowered its full-year fiscal 2023 annual revenues to between $7.6 billion and $7.7 billion and diluted earnings per share between $10.98 and $11.57.
European Stock Indexes at 6-week Low, Yields at 8-year High
European markets declined on the first day of September and all major indexes in the region fell as investors debated the direction of interest rates and health of the economy.
Moreover, market sentiment was dented by additional lockdown and a contraction in Chinese factory activities.
After a sustained campaign by central bankers in the last five days, investors are betting that the next rate hike at the policymakers' meeting on Sept 8 could be as large as 75 basis points.
Bond yield across the euro zone rose ahead of the rate setting committee's meeting next week.
The German Bund yields rose to 1.57%, the U.K. bonds inched closer to 2.9%, and Italian bonds nearly touched 3.94%.
The bond yields in the euro zone rose to the levels last seen in 2014.
Commodities and energy prices inched lower on the worries that the demand from China may remain soft on the ongoing lockdown and weakening factory activities.
Brent crude oil declined $3.43 to $92.21 a barrel and natural gas futures increased 1.3% to 243.0 euros per megawatt hour.
The DAX index fell 1.6% to 12,160.23, the CAC-40 index dropped 1.5% to 6,034.12, and the FTSE 100 index fell 1.9% to 7,148.50.
Mining companies led the decliners in London trading after gold, silver and copper fell between 1% and 3% after weak Chinese data.
Anglo American, Antofagasta, and Glencore declined between 4% and 6%.
Rio Tinto plc declined 3.6% to 4,600 pence in London trading after it agreed to acquire Turquoise Hill Resources for $3.3 billion.
Reckitt Benckiser Group declined 4.9% to 6,323.55 pence after the company said its chief executive officer Laxman Narasimhan has decided to leave the company for personal reasons.
Later in the day, Starbucks announced the appointment of Narasimhan as its new chief executive from April 1, 2023.
Deutsche Lufthansa AG declined 3.2% to 5.75 euros after the pilots union announced a one-day strike on September 2 following a ground staff strike in July.
Pernod Ricard increased 0.5% to 184.40 euros after the spirits group reported its annual results.
Organic sales in the fiscal year fourth quarter ending in June increased 14% to 2.3 billion euros and fiscal year 2022 sales rose 17% to 10.7 billion euros.
The company proposed to increase dividend 32% to 4.12 euros in the fiscal year 2022.
The spirit group also guided capital expenditure to increase 7% in the fiscal 2023 and proposed to buyback between 500 million and 750 million of its stocks.
Hermes declined 2.5% to 1,250 euros and LVMH dropped 2.3% to 632.80 euros on the worries of a slowdown in China.
Asian markets declined on the worries that the newly imposed restrictions on gathering and traveling may slowdown the economic activities further.
Hong Kong's Hang Seng Index dropped 1.8% to 19,597.31 and Shanghai Composite Index declined 0.5% to 3,184.98.
Stock indexes fell to a one-month low in Tokyo after manufacturing activities rose at the slowest pace in a year in August.
The Nikkei 225 Index plunged 1.5% to 27,661.47 and the broader Topix declined 1.4% to 1,935.49.
Tokyo Electron and Advantest declined between 3% and 4% after the U.S. more restrictions in selling advanced chips to China.
Stocks turned lower on Dalal Street after economy expanded at a slower-than-expected pace in June quarter.
Gross domestic product in the fiscal first quarter 2023 shot up 13.5% from a year ago but below the 16% estimate from the Reserve Bank of India.
The robust rebound was driven by the rise in consumer activities but the international trade deficit weighed on the growth.
Australian market indexes fell 2% on the commodities demand worries after China imposed more lockdowns and restrictions impacting as many as 30 million people.
European Markets Drop to 6-week Low, Bond Yields at 8-year High
Bridgette Randall
01 Sep, 2022
Frankfurt
European markets declined on the first day of September and all major indexes in the region fell as investors debated the direction of interest rates and health of the economy.
Moreover, market sentiment was dented by additional lockdown and a contraction in Chinese factory activities.
After a sustained campaign by central bankers in the last five days, investors are betting that the next rate hike at the policymakers' meeting on Sept 8 could be as large as 75 basis points.
Bond yield across the euro zone rose ahead of the rate setting committee's meeting next week.
The German Bund yields rose to 1.57%, the U.K. bonds inched closer to 2.9%, and Italian bonds nearly touched 3.94%.
The bond yields in the euro zone rose to the levels last seen in 2014.
Commodities and energy prices inched lower on the worries that the demand from China may remain soft on the ongoing lockdown and weakening factory activities.
Brent crude oil declined $3.43 to $92.21 a barrel and natural gas futures increased 1.3% to 243.0 euros per megawatt hour.
The DAX index fell 1.6% to 12,160.23, the CAC-40 index dropped 1.5% to 6,034.12, and the FTSE 100 index fell 1.9% to 7,148.50.
Mining companies led the decliners in London trading after gold, silver and copper fell between 1% and 3% after weak Chinese data.
Anglo American, Antofagasta, and Glencore declined between 4% and 6%.
Rio Tinto plc declined 3.6% to 4,600 pence in London trading after it agreed to acquire Turquoise Hill Resources for $3.3 billion.
Reckitt Benckiser Group declined 4.9% to 6,323.55 pence after the company said its chief executive officer Laxman Narasimhan has decided to leave the company for personal reasons.
Later in the day, Starbucks announced the appointment of Narasimhan as its new chief executive from April 1, 2023.
Deutsche Lufthansa AG declined 3.2% to 5.75 euros after the pilots union announced a one-day strike on September 2 following a ground staff strike in July.
Pernod Ricard increased 0.5% to 184.40 euros after the spirits group reported its annual results.
Organic sales in the fiscal year fourth quarter ending in June increased 14% to 2.3 billion euros and fiscal year 2022 sales rose 17% to 10.7 billion euros.
The company proposed to increase dividend 32% to 4.12 euros in the fiscal year 2022.
The spirit group also guided capital expenditure to increase 7% in the fiscal 2023 and proposed to buyback between 500 million and 750 million of its stocks.
Hermes declined 2.5% to 1,250 euros and LVMH dropped 2.3% to 632.80 euros on the worries of a slowdown in China.
Signet Jewelers Lowered Annual Outlook, Cash Flow Turns Negative
Scott Peters
01 Sep, 2022
New York City
Signet Jewelers Ltd dropped 11.4% to $57.29 despite the retailer reaffirming its full-year outlook and exceeding quarterly earnings estimates.
Same store sales declined more than anticipated as higher prices deterred customers and lowered the number of transactions in the quarter.
Total sales declined 1.9% to $1.8 billion and same store sales fell 8.2% from a year ago.
North America sales declined 1.8% to $1.6 billion on 8.7% decline in same store sales.
International sales plunged 14.6% to $111.6 million on 1.5% decline in same store sales.
Gross margin, declined 220 basis points from a year ago, was $664.7 million or 37.9% of total sales.
Operating income was $186.8 million or 10.6% of sales compared to $225.4 million or 12.6% of sales last year.
Diluted earnings per share declined to $2.58 from $3.60 a year ago.
Inventories
Inventories at the end of the quarter increased to $2.2 billion from $2 billion last year.
Cash Flow
On larger purchases of inventories in the quarter, cash outflow was $114.9 million compared to cash inflow of 458.5 million a year ago.
Free cash outflow in the quarter was $173.1 million from cash inflow of $426.3 million last year.
Dividends and Stock Repurchase
The company declared a dividend of 20 cents a share to shareholders on record of October 28 and payable on November 25.
In the first-half ending on July 30, Signet repurchased approximately 4.7 million shares at an average cost per share of $72.14 or $341 million including $22.8 million during the second quarter and $50 million from the completion of the accelerated share repurchase program from fiscal 2022.
Approximately $622.4 million are still available for stock repurchase from its share authorization program.
Outlook and Guidance
Signet lowered its full-year fiscal 2023 annual revenues to fall between $7.6 billion and $7.7 billion and diluted earnings per share between $10.98 and $11.57.
The company previously guided annual revenues between $8.03 billion and $8.25 billon and diluted earnings per share between $12.47 and $13.47.
The above guidance excludes $190 million of legal charges, $11 million charges for the acquired inventories, and $133 million for the buyout of substantially all U.K. pension obligations.
The guidance also excludes planned capital expenses of up to $250 million.
Retail Footprint
During the quarter, Signet opened 23 new stores and closed 36 and ended with 2,493 stores in North America.
The retailer added one store and closed 9 and ended with 340 international stores.
At the end of the second quarter, Signet operated 2,833 jewelry stores covering 4.2 million square feet of selling space.
Lands' End Swings to Q2 Loss After Gross Margin Drops
Scott Peters
01 Sep, 2022
New York City
Lands' End, Inc declined 14% to $11.87 after the apparel retailer said quarterly loss narrowed but expenses and inventories rose.
For the second quarter, net revenue fell 8.6% to $351.2 million from $384.1 million a year ago.
Online sales declined 16% in the second quarter driven by 14.4% fall in the U.S. sales and 23.9% drop in international sales.
Gross margin decreased approximately 530 basis points to 41.0% from 46.3%, driven by $11.7 million higher transportation expenses and higher promotional activities.
Net Inventories increased to $569.2 million at the end of the quarter from $464.3 million last year.
The company swung to a net loss of $2.2 million or 7 cents a diluted share compared to net income of $16.2 million or 48 cents a diluted share last year.
Cash Flow
Earlier receipt of goods for fall and holiday seasons negatively impacted cash flows.
In the second quarter, net cash used in operations was $117.5 million compared to net cash provided by operations of $30.5 million.
Stock Repurchase Program
During the second quarter, the company repurchased $2.4 million of its common stock under its previously announced $50 million share repurchase program.
Guidance and Outlook
For fiscal 2022, the apparel retailer guided revenue to be between $1.60 billion and $1.64 billion and net income between $16.5 million and $23.5 million, and diluted earnings per share between $0.49 and $0.70.
For the third quarter of fiscal 2022, the retailer guided net revenues in the range between $375 million and $390 million and net income between $1 million and $4 million and diluted earnings per share between 3 cents and 12 cents.
Approximately $9 million and $35 million expenses in the third quarter and full-year outlooks are due to incremental transportation expenses linked to supply chain disruption and the rising share of air freight.
Movers: AMD, Ciena Corp, Lands' End, MongoDB, Nividia, Signet Jewelers
Barry Adams
01 Sep, 2022
New York City
Stocks fell for the fifth day in a row and bond yields rose to a 10-week highs not seen since 2007.
Benchmark index extended losses ahead of the jobs report on Friday and on the ongoing worries of the future rate hikes.
The S&P 500 index declined 1.3% to 3,906.45 and the Nasdaq Composite fell 1.9% to 11,585.91.
Futures of crude oil prices declined $1.16 to $88.41 and natural gas rose 16 cents to $9.29 a thermal unit.
Bond yields rose to a two-month high ahead of highly anticipated jobs report on Friday
The yield on 10-year Treasury notes rose to 3.28% and on 2-year Treasury notes inched up to 3.52%.
Chipmakers fell after the U.S. restricted sale of some of the advanced chips to China.
Nvidia Corp declined 11.5% to $133.93 after the company said new U.S. licensing requirements are expected to impact sales by $400 million.
Advanced Micro Devices fell 6.8% to $79.08 and the company also confirmed its sales are also likely to be impacted by the new U.S. restrictions.
Ciena Corp declined 9% to $45.97 after the networking equipment maker reported weaker-than-expected quarterly results.
In addition, the company said parts shortages are preventing the company from meeting its customer demands.
Lands' End, Inc declined 14% to $11.87 after the apparel retailer said quarterly loss narrowed but expenses and inventories rose.
For the second quarter, net revenue fell 8.6% to $351.2 million from $384.1 million a year ago.
The company swung to a net loss of $2.2 million or 7 cents a diluted share compared to net income of $16.2 million or 48 cents a diluted share last year.
For fiscal 2022, the apparel retailer guided revenue to be between $1.60 billion and $1.64 billion and net income between $16.5 million and $23.5 million, and diluted earnings per share between $0.49 and $0.70.
Mongo DB plunged 24.7% to $243.25 after the cloud computing company reported quarterly results that met analysts' expectations but its annual outlook fell short of expectations.
The company estimated fiscal 2023 revenues between $1.196 billion and $1.206 billion compared to the previous range between $1.172 billion and $1.192 billion.
The company revised its adjusted operating loss between $8 million and $13 million from the previous range between a profit of $1 million and a loss of $9 million.
Signet Jewelers Ltd dropped 11.4% to $57.29 despite the retailer reaffirming its full-year outlook and exceeding quarterly earnings estimates.
Total sales declined 1.9% to $1.8 billion and same store sales fell 8.2% from a year ago.
Diluted earnings per share declined to $2.58 from $3.60 a year ago.
Signet reaffirmed its full-year fiscal 2023 annual revenues to fall between $7.6 billion and $7.7 billion and diluted earnings per share between $10.98 and $11.57.
U.S. Stocks Sink Ahead of Jobs Report
Barry Adams
01 Sep, 2022
New York City
Stocks continued their downward slide for the fifth day in a row and bond yields rose to a 10-week highs not seen since 2007.
Benchmark index extended losses ahead of the jobs report on Friday and on the ongoing worries of the future rate hikes.
Investors are looking for clues on the health of the jobs market, consumer spending and energy prices.
So far, consumer spending has remained stable but the spending pattern is shifting and amid high energy and food price inflation many are limiting purchases to basic and necessary items.
However, if interest rates continue to rise and energy prices remain elevated, job market conditions are likely to turn unfavorable and economic growth will slow down further.
Weekly initial jobless claims declined to 232,000 for the week ending on August 27 and continuing claims increased 26,000 from the previous week to 1,44 million, the Labor Department reported Thursday.
A separate report from the labor department showed that unit labor costs rose 10.2% in the second quarter from the previous three-month period.
On an annual basis, unit labor cost rose 9.3% at the end of the second quarter.
The S&P 500 index declined 1.3% to 3,906.45 and the Nasdaq Composite fell 1.9% to 11,585.91.
Futures of crude oil prices declined $1.16 to $88.41 and natural gas rose 16 cents to $9.29 a thermal unit.
Bond yields rose to a two-month high ahead of highly anticipated jobs report on Friday
The yield on 10-year Treasury notes rose to 3.28% and on 2-year Treasury notes inched up to 3.52%.
Ciena Corp declined 9% to $45.97 after the networking equipment maker reported weaker-than-expected quarterly results.
In addition, the company said parts shortages are preventing the company from meeting its customer demands.
Lands' End, Inc declined 14% to $11.87 after the apparel retailer said quarterly loss narrowed but expenses and inventories rose.
For the second quarter, net revenue fell 8.6% to $351.2 million from $384.1 million a year ago.
The company swung to a net loss of $2.2 million or 7 cents a diluted share compared to net income of $16.2 million or 48 cents a diluted share last year.
For fiscal 2022, the apparel retailer guided revenue to be between $1.60 billion and $1.64 billion and net income between $16.5 million and $23.5 million, and diluted earnings per share between $0.49 and $0.70.
Signet Jewelers Ltd dropped 11.4% to $57.29 despite the retailer reaffirming its full-year outlook and exceeding quarterly earnings estimates.
Total sales declined 1.9% to $1.8 billion and same store sales fell 8.2% from a year ago.
Diluted earnings per share declined to $2.58 from $3.60 a year ago.
Signet reaffirmed its full-year fiscal 2023 annual revenues to fall between $7.6 billion and $7.7 billion and diluted earnings per share between $10.98 and $11.57.
Major Indexes Drop 4% In August After 4-day Decline
Barry Adams
31 Aug, 2022
New York City
On Wall Street market indexes declined on the last day of August and turned advances into losses as the month progressed.
Fed skepticism ran deep in early August as many believed that the central bank will slow down future rate hikes and may even begin to lower rates in the second half of 2023.
Those hopes of a dovish Fed were dashed asides after the Fed Chairman Powell strongly reiterated the Fed's commitment in fighting inflation.
Investors are increasingly focused on the future rate hikes and worried that the faster rate may accelerate the economic slowdown or even tip the economy into a recession and weaken the labor market conditions.
Private sector payrolls increased 132,000 in August after expanding 270,000 in July, the latest ADP survey data released Wednesday.
Economists are also awaiting the release of the non-farm payroll data on Friday from the Bureau of the Labor Statistics.
The non-farm payrolls are expected to show an increase between 310,000 and 370,000 in August, according to five economists surveyed by Ticker.com.
Total mortgage applications volume fell 3.7% in the last week from the previous week, the Mortgage Bankers Association reported Wednesday.
The seasonally adjusted index declined after mortgage rates on 30-year fixed-rate mortgage for 20% down payment increased to 5.80% from 5.65% in the previous week.
The average mortgage rate was 3.11% a year ago.
Futures of crude oil prices declined $2.60 to $89.04 a barrel and natural gas eased 5 cents to $8.97 a thermal unit.
The U.S. Treasury yields rose above 3.1% for the first time since June 29th as interest rates are expected to rise next month by at least 50 basis points.
The yield on 10-year Treasury notes rose to 3.16% and 2-year notes increased to 3.46%, record high since 2007.
Canada's economy expanded at 0.8% in the second quarter ending in June, matching the first quarter's rate, and expanded for the fourth quarter in a row.
The S&P 500 index declined 0.8% to 3,955.0 and the Nasdaq Composite index fell 0.6% to 11,816.20.
For the month, the S&P 500 index 4.2% and the Nasdaq Composite declined 4.6%.
Bed Bath & Beyond Inc plunged 20.3% to $9.64 after the company announced a business and financial restructuring plan.
The struggling retailer said it plans to close "low performing" 150 stores, eliminate 20% of its corporate and supply chain staff, bringing back merchandise from national brands.
The retailer also said it "may offer or sell shares" without disclosing the amount, in a regulatory filing with the SEC.
The retailer also said same store sales are down 26% in the current fiscal quarter ending on August 27.
Snap Inc rose 98 cents to $10.98 after the operator of the messaging platform said it plans to cut its operating costs and reduce its workforce by 20%.
The company also plans to stop working on several projects and tools development including its Pixy drone, mapping tool, online games and music library feature.
Chewy Inc declined 8.1% to $34.35 after the online pet products retailer reported an unexpected profit but lowered its annual outlook. The company said higher prices are forcing consumers to limit purchases to basic products and medicines.
HP Inc declined 6.9% to $28.90 after the company reported mixed quarterly results and the company said electronics spending by enterprises and consumers is slowing down.
European Inflation Stays High, Natural Gas Prices Fall
European markets closed down for the fourth day in a row and extended losses to more than 4% in the week on the rising energy supply uncertainties.
Natural gas prices eased today after Norway initiated natural gas supplies and Iraq-controlled oil companies said crude oil exports are unaffected despite the civil unrest.
Investors are also anticipating a hike in the interest rate of at least 50 basis points after central banks escalated the rhetoric in support of higher rates now to cool the rapid price increases.
The need for a large rate increase was underscored by the latest inflation reports from the eurozone, France and Spain today.
Euro zone inflation rose to a record high in August as elevated energy prices spread wide and deep in the broader economy.
Consumer prices inflation accelerated to 9.1% in August from 8.9% in July, the statistics agency of the currency zone eurostat reported Wednesday.
Core inflation, excluding energy, food, alcohol and tobacco prices, increased to 4.3% in August from 4.0% in July.
Separately, France's inflation declined to 6.5% in August from 6.8% in July and Spain's inflation dropped to 10.3% from 10.7% in the corresponding period, according to data released by statistics agencies of two nations.
The DAX index edged down 126.18 points to 12,834.29, the CAC-40 index declined 85.16 to 6,125.16, and the FTSE 100 index 77.49 to 7,284.10.
The DAX and the CAC-40 index declined 4.8 and the FTSE 100 index fell 1.8% in August.
For 2022, the DAX index fell 19.9% and the CAC-40 declined 15.1%, and the FTSE 100 index dropped 2.9%.
The euro edged up a fraction to $1.004 and the British pound weakened to $1.1684.
Brent crude edged up 97 cents to $98.79 a barrel and natural gas prices dropped 9.7% to 240euros per megawatt hours, a two-week low, after Norway began the supply natural gas.
In London trading, Pearson, Mondi, Smurfit Kappa Group, Ocado and Lloyds Banking Group were among the leading gainers today with a rise between 1% and 3%.
Shell, BP, and National Grid declined between 1% and 2%.
In Frankfurt trading, Allianz, Porsche Automobil, Hello Fresh and MTU Aero Engines were among the leading losers with a fall between 2% and 4%.
Bayer, Munich Re, SAP, Deutsche Bank and Infineon Technologies were among the leading gainers with a rise between 0.5% and 1.4%.
On the earnings front, investors are awaiting quarterly results on Thursday from Pernod Ricard, Johnson Mathey, Auto Trader Group and Imperial Brands.
Asian Markets Close Lower On China Worries
Asian markets closed lower dragged by China economic growth worries and fresh lockdowns in the second largest economy in the world.
The Shanghai Composite Index fell 25.08 points or 0.8% to closed at 3,202.14 and the Hang Seng index was nearly unchanged at 19,954.39.
India's economy rebounded at 13.5% in the second quarter ending in June from a year ago, slower than the 15% growth expectations set by some economists.
Household consumption accelerated to 25.9% from 14.4% but construction spending growth dropped to 16.8% from 71.3% a year ago.
Financial markets in India were closed to celebrate Ganesh Chaturthi.
The Nikkei 225 Index eased 104.05 points or 0.4% to closed at 28,091.53, dropping towards the three-week low after trading in a tight range.
Japan's factory output unexpectedly rose 1.0% in July from the previous month, beating the expectation of 0.6% decline.
Inpex dropped 3.5% and Japan Steel Works, Sky Perfect JSAT Holdings and Unitika dropped 3%.
The Korean Stock Exchange's Kospi Index added 21.12 points or 0.9% to close at 2,472.05.
European Markets Fall 5% In August On Rate Hike and Inflation Worries
Bridgette Randall
31 Aug, 2022
Frankfurt
European markets closed down for the fourth day in a row and extended losses to more than 4% in the week on the rising energy supply uncertainties.
Natural gas prices eased today after Norway initiated natural gas supplies and Iraq-controlled oil companies said crude oil exports are unaffected despite the civil unrest.
Investors are also anticipating a hike in the interest rate of at least 50 basis points after central banks escalated the rhetoric in support of higher rates now to cool the rapid price increases.
The need for a large rate increase was underscored by the latest inflation reports from the eurozone, France and Spain today.
Euro zone inflation rose to a record high in August as elevated energy prices spread wide and deep in the broader economy.
Consumer prices inflation accelerated to 9.1% in August from 8.9% in July, the statistics agency of the currency zone eurostat reported Wednesday.
Core inflation, excluding energy, food, alcohol and tobacco prices, increased to 4.3% in August from 4.0% in July.
Separately, France's inflation declined to 6.5% in August from 6.8% in July and Spain's inflation dropped to 10.3% from 10.7% in the corresponding period, according to data released by statistics agencies of two nations.
The DAX index edged down 126.18 points to 12,834.29, the CAC-40 index declined 85.16 to 6,125.16, and the FTSE 100 index 77.49 to 7,284.10.
The DAX and the CAC-40 index declined 4.8 and the FTSE 100 index fell 1.8% in August.
For 2022, the DAX index fell 19.9% and the CAC-40 declined 15.1%, and the FTSE 100 index dropped 2.9%.
The euro edged up a fraction to $1.004 and the British pound weakened to $1.1684.
Brent crude edged up 97 cents to $98.79 a barrel and natural gas prices dropped 9.7% to 240euros per megawatt hours, a two-week low, after Norway began the supply natural gas.
In London trading, Pearson, Mondi, Smurfit Kappa Group, Ocado and Lloyds Banking Group were among the leading gainers today with a rise between 1% and 3%.
Shell, BP, and National Grid declined between 1% and 2%.
In Frankfurt trading, Allianz, Porsche Automobil, Hello Fresh and MTU Aero Engines were among the leading losers with a fall between 2% and 4%.
Bayer, Munich Re, SAP, Deutsche Bank and Infineon Technologies were among the leading gainers with a rise between 0.5% and 1.4%.
On the earnings front, investors are awaiting quarterly results on Thursday from Pernod Ricard, Johnson Mathey, Auto Trader Group and Imperial Brands.
Movers: Bed Bath & Beyond, Chewy, Express, HP, HPE, PVH, Snap
Barry Adams
31 Aug, 2022
New York City
Stocks attempted a rebound in the early trading after a three-day sell-off and a concerted campaign from the central bankers and policymakers.
Private sector payrolls increased 132,000 in August after expanding 270,000 in July, the latest ADP survey data released Wednesday.
Economists are also awaiting the release of the non-farm payroll data on Friday from the Bureau of the Labor Statistics.
The non-farm payrolls are expected to show an increase between 310,000 and 370,000 in August, according to five economists surveyed by Ticker.com.
Total mortgage applications volume fell 3.7% in the last week from the previous week, the Mortgage Bankers Association reported Wednesday.
The seasonally adjusted index declined after mortgage rates on 30-year fixed-rate mortgage for 20% down payment increased to 5.80% from 5.65% in the previous week.
The average mortgage rate was 3.11% a year ago.
Futures of crude oil prices declined $2.63 to $89.01 a barrel and natural gas eased 5 cents to $8.97 a thermal unit.
The yield on 10-year Treasury notes rose to 3.14% and 2-year notes increased to 3.47, record high since 2007.
Stocks attempted a rebound in the pre-market trading and sentiment was weak ahead of the employment data on Friday.
Bed Bath & Beyond Inc plunged 24.3% to $9.19 after the company announced a business and financial restructuring plan.
The struggling retailer said it plans to close "low performing" 150 stores, eliminate 20% of its corporate and supply chain staff, bringing back merchandise from national brands.
The retailer also said it "may offer or sell shares" without disclosing the amount, in a regulatory filing with the SEC.
The retailer also said same store sales are down 26% in the current fiscal quarter ending on August 27.
Chewy Inc declined 6.2% to $35.25 after the online pet products retailer reported an unexpected profit but lowered its annual outlook. The company said higher prices are forcing consumers to limit purchases to basic products and medicines.
Express Inc plunged 33 cents to $1.76, traded at a new 52-week low, after the apparel retailer lowered its annual outlook and the company said difficult economic conditions deteriorated as the quarter progressed.
HP Inc declined 3.5% to $30.10 after the company reported mixed quarterly results and the company said electronics spending by enterprises and consumers is slowing down.
HP Enterprise Inc gained 0.9% to $13.75 after the company reported quarterly results that matched analysts expectations despite the slowing down IT spending.
PVH Inc dropped 4.5% to $59.97 after the Calvin Klein and Tommy Hilfiger brands apparel maker lowered its full-year revenue outlook to a decrease between 3% and 4% from the previous estimate of an increase between 1% and 2%.
Net revenues declined 8% to $2.13 billion from a year ago.
Earnings per share declined in the second quarter to $1.72 compared to a guidance of $2.20 and lower than $2.50 a year ago.
The company also said it plans to cut its employment cost by 10% and save $100 million a year through labor cost cuts.
Snap Inc rose 55 cents to $10.58 after the operator of the messaging platform said it plans to cut its operating costs and reduce its workforce by 20%.
The company also plans to stop working on several projects and tools development including its Pixy drone, mapping tool, online games and music library feature.
Stocks Lack Direction at Open, Crude Oil Drops
Barry Adams
31 Aug, 2022
New York City
Stocks attempted a rebound in the early trading after a three-day sell-off and a concerted campaign from the central bankers and policymakers.
Private sector payrolls increased 132,000 in August after expanding 270,000 in July, the latest ADP survey data released Wednesday.
Economists are also awaiting the release of the non-farm payroll data on Friday from the Bureau of the Labor Statistics.
The non-farm payrolls are expected to show an increase between 310,000 and 370,000 in August, according to five economists surveyed by Ticker.com.
Total mortgage applications volume fell 3.7% in the last week from the previous week, the Mortgage Bankers Association reported Wednesday.
The seasonally adjusted index declined after mortgage rates on 30-year fixed-rate mortgage for 20% down payment increased to 5.80% from 5.65% in the previous week.
The average mortgage rate was 3.11% a year ago.
Futures of crude oil prices declined $2.63 to $89.01 a barrel and natural gas eased 5 cents to $8.97 a thermal unit.
The yield on 10-year Treasury notes rose to 3.14% and 2-year notes increased to 3.47, record high since 2007.
Stocks attempted a rebound in the pre-market trading and sentiment was weak ahead of the employment data on Friday.
Bed Bath & Beyond Inc plunged 24.3% to $9.19 after the company announced a business and financial restructuring plan.
The struggling retailer said it plans to close "low performing" 150 stores, eliminate 20% of its corporate and supply chain staff, bringing back merchandise from national brands.
The retailer also said it "may offer or sell shares" without disclosing the amount, in a regulatory filing with the SEC.
The retailer also said same store sales are down 26% in the current fiscal quarter ending on August 27.
Snap Inc rose 55 cents to $10.58 after the operator of the messaging platform said it plans to cut its operating costs and reduce its workforce by 20%.
The company also plans to stop working on several projects and tools development including its Pixy drone, mapping tool, online games and music library feature.
Chewy Inc declined 6.2% to $35.25 after the online pet products retailer reported an unexpected profit but lowered its annual outlook. The company said higher prices are forcing consumers to limit purchases to basic products and medicines.
HP Inc declined 3.5% to $30.10 after the company reported mixed quarterly results and the company said electronics spending by enterprises and consumers is slowing down.
European markets traded lower on rate hike worries and the impact of higher on the broader economy in the currency zone.
Euro zone inflation rose to a record high in August as elevated energy prices spread wide and deep in the broader economy.
Consumer prices inflation accelerated to 9.1% in August from 8.9% in July, the statistics agency of the currency zone eurostat reported Wednesday.
Core inflation, excluding energy, food, alcohol and tobacco prices, increased to 4.3% in August from 4.0% in July.
The DAX index edged down 7.7 points to 12,946.29, the CAC-40 index declined 31.86 to 6,178.36, and the FTSE 100 index 90.49 to 7,271.80.
Mikhail Gorbachev, Last President of Soviet Union, Dies at 91
Brian Turner
30 Aug, 2022
New York City
Mikhail Gorbachev, former president of the USSR, passed away at the age of 91.
The last president of the Soviet Union, a political and economic reformer, led the vast nation from communism to capitalism and helped in ending the Cold War.
"Mikhail Gorbachev passed away tonight after a serious and protracted disease," the Russia's Central Clinical Hospital said.
Gorbachev was widely admired in the West for his political reforms that helped liberate several countries in the Baltics and Central Europe from the orbit of Russia and unit two Germany's in 1990.
However, many citizens of the Russian Federation blame him for his weak economic leadership and for the collapse of the Soviet Union.
Readara.com, the site for non-fiction book readers, researchers and scholars, has a list of notable books published in the last three decades on the Soviet Union and the Cold War topics.
https://readara.com/best-books-soviet-union-revolution-expansion-demise/booklist
https://readara.com/best-books-cold-war/booklist
Stocks Extend 3-day Slump and Look Beyond Labor Market Strength
Barry Adams
30 Aug, 2022
New York City
U.S. stocks extend losses for the third day in a row after rate hike worries dominated trading sentiment.
Investors ignored the the latest read on jobs front showing healthy and stable labor market conditions and consumer sentiment also improved according to a private survey.
However, economists are increasingly factoring a stagflation scenario for the U.S. economy in 2023 as rates rise and are expected to stay higher for a longer duration.
Bond yields rose as investors recalibrated from soft landing to stagflation scenario after the latest comments from the Fed Chairman raised the prospects of fed funds staying above the 4.5% level and holding longer than two quarters in a row.
The S&P 500 index fell 1.1% to 3,986.16 and the Nasdaq Composite index declined 1.1% to 11,883.13.
Corporate stock buyback activity is likely to pick up in the remainder of the year ahead of the imposition of the 1% tax next year as approved in the Inflation Reduction Act.
Weekly stock buybacks surged to the highest level in the last week since January, Savita Subramanian of Bank of America wrote in a research note.
The bond yields edged lower after rising for two days following the tough talks from central bankers in the U.S. and Europe.
The yield on 10-year treasury notes inched higher to 3.104% and 2-year notes edged up, to a record high not seen since 2007, to 3.466%.
Energy prices edged down on the worries that the demand for crude oil may decline and the current tight supply and demand conditions are likely to change if the global economic slowdown persists.
Moreover, Iraq controlled Somo confirmed that oil exports are unaffected by the ongoing civil unrest after a powerful cleric withdrew from politics.
At least 20 people killed and more than 250 were injured in one of the deadliest violence in Baghdad in years.
Futures of crude oil declined $4.60 to $92.42 a barrel and natural gas decreased 30 cents to $9.08 a British thermal unit.
Job openings in the U.S. rose after falling for three months in a row., the Bureau of Labor Statistics said Tuesday.
The number of job openings rose 199,000 to 11.2 million in July driven by the new postings in logistics, entertainment and recreation and governments at all levels.
Stocks lacked direction in trading today and traders reacted to the latest corporate news.
Energy complex and resource stocks led the decliners after crude oil and natural gas prices eased.
CF Industries, Freeport-McMoRan, Mosaic, Marathon Oil, Diamondback led the decliners with a loss between 5% and 7%.
PPG Industries, Best Buy, Masco, Sherwin Williams and Corning Inc led the gainers of the day.
Baidu Inc declined 6.4% to $137.81 and the China-based search engine operator reported better-than-expected results and said ad demand is recovering.
Bed Bath & Beyond declined 2.5% to $13.01 after surging 12% earlier in the day and following a 25% jump in the previous session.
The troubled retailer is scheduled to release its company strategy including its options to arrange more financing.
Best Buy rose 3.1% to $75.90 after the electronic retailer posted better-than-anticipated quarterly results.
The retailer said total revenues declined to $10.3 billion from $11.9 billion a year ago.
Second quarter net income dropped to $306 million or $1.35 a share from $734 million or $2.90 a share a year ago.
The retailer guided full-year comparable sales to decline "slightly more than the 12.1% decline reported in the second quarter."
Big Lots Inc increased 5.2% to $22.69 after the discount retailer posted a smaller-than-expected quarterly loss.
Net sales in the second quarter declined 7.6% to $1.35 billion driven by comparable sales decline of 9.2%.
The retailer swung to a loss of $84.2 million or $2.90 a share compared to a profit of $37.7 million or $1.09 a share a year ago.
The retailer plans to increase its promotion activities to clear unwanted inventories and anticipates gross margin to return in the fourth quarter matching the previous year.
First Solar Inc increased 1.2% to $123.20 after the solar equipment manufacturer said it reversed its earlier decision and now plans to expand its U.S. manufacturing including a new plant in the southeast after the passage of the Inflation Reduction Act.
Lucid Group fell 6.8% to $15.07 after the maker of electric vehicles filed a shelf offering to raise as much as $8 billion over the next three years. The company said it has no plans to raise capital soon.
Peloton Interactive declined 4% to $10.04 after the maker of fitness equipment said it needs more time to finalize its annual report as the company struggles with its restructuring plan.
Twitter Inc declined 1.05% to $39.59 after Elon Musk filed a second notice with the SEC for his reasons to terminate the $44 billion deal to acquire the company in early July.
Eurozone Confidence Drops, Record High German Inflation
European benchmark indexes closed mixed as investors prepare for higher rates.
Investors were on the defensive after several central bankers mounted a concerted campaign in support of higher rates at the next policy meeting on September 8.
On the economic front, Germany's annual inflation rose to 7.9% in August, after easing in the previous two months, the preliminary data released by the Destatis on Tuesday.
The consumer price index rose at a faster pace than 7.5% in July matching the record high in May, and strongest since the winter of 1973 and 1974.
Food prices rose 16.% from 14.8% in the previous month and energy prices remained elevated at 35.6% from 35.7% in the previous month.
The German government is expected to release a new energy relied package in a few days as the current support for public transportation is set to expire at the end of August
Eurozone economic confidence declined more than expected in August, the European Commission reported on Tuesday.
The economic sentiment index declined more than expected to 97.6 in August from 98.9 in the previous month.
The DAX index increased 0.5% to 12,961.14, the CAC-40 fell 0.2% to 6,210.52, and the FTSE 100 index dropped 0.9% to 7,361.61.
Banks led the gainers in the region as rising rates are generally beneficials to banks and financial lenders.
Deutsche Bank, Commerzbank. Credit Agricole and HSBC rose between 2% and 3%.
Adevinta SA surged 16..1% to 8.01 euros after the world's largest classified advertising company reported strong second quarter results.
The Oslo, Norway-based classified advertising company said second quarter revenues rose 8% to 417 million euros and underlying operating earnings increased 8% to $153 million euros.
Online classified revenues increased 11% from a year ago driven by double digit revenue increase in employment and automotive ad revenues.
The company also appointed Antoine Jouteau as its new chief executive as of August 15, 2022.
Aker Solutions ASA increased 8% to 3.94 euros after the company announced its plan to form a joint venture with Schlumberger for subsea engineering projects.
AstraZeneca Plc declined 1.9% to 11,145.75 pence and the company won a regulatory approval for its Evusheld COVID-19 treatment in Japan.
Uniper SE declined 1.6% to 5.50 euros after the German utility company said it has asked for more financial help from the German government.
Bunzl plc declined 5.9% to 2,930.84 pence after the distribution and outsourcing company posted an increase in first-half earnings.
Revenues in the period increased 16.1% to 5.6 billion pounds and net income increased to 221.6 million pounds from $211.0 pounds a year ago.
Diluted earnings per share increased to 65.5 pence from 63.0 pence a year ago.
Of the total revenues, North America accounted for 61%, Continental Europe 18% and the UK and Ireland 12%.
European Markets Confront Higher Rates, Record High German Inflation
Bridgette Randall
30 Aug, 2022
Frankfurt
European benchmark indexes closed mixed as investors prepare for higher rates.
Investors were on the defensive after several central bankers mounted a concerted campaign in support of higher rates at the next policy meeting on September 8.
On the economic front, Germany's annual inflation rose to 7.9% in August, after easing in the previous two months, the preliminary data released by the Destatis on Tuesday.
The consumer price index rose at a faster pace than 7.5% in July matching the record high in May, and strongest since the winter of 1973 and 1974.
Food prices rose 16.% from 14.8% in the previous month and energy prices remained elevated at 35.6% from 35.7% in the previous month.
The German government is expected to release a new energy relied package in a few days as the current support for public transportation is set to expire at the end of August
Eurozone economic confidence declined more than expected in August, the European Commission reported on Tuesday.
The economic sentiment index declined more than expected to 97.6 in August from 98.9 in the previous month.
The DAX index increased 0.5% to 12,961.14, the CAC-40 fell 0.2% to 6,210.52, and the FTSE 100 index dropped 0.9% to 7,361.61.
Banks led the gainers in the region as rising rates are generally beneficials to banks and financial lenders.
Deutsche Bank, Commerzbank. Credit Agricole and HSBC rose between 2% and 3%.
Adevinta SA surged 16..1% to 8.01 euros after the world's largest classified advertising company reported strong second quarter results.
The Oslo, Norway-based classified advertising company said second quarter revenues rose 8% to 417 million euros and underlying operating earnings increased 8% to $153 million euros.
Online classified revenues increased 11% from a year ago driven by double digit revenue increase in employment and automotive ad revenues.
The company also appointed Antoine Jouteau as its new chief executive as of August 15, 2022.
Aker Solutions ASA increased 8% to 3.94 euros after the company announced its plan to form a joint venture with Schlumberger for subsea engineering projects.
AstraZeneca Plc declined 1.9% to 11,145.75 pence and the company won a regulatory approval for its Evusheld COVID-19 treatment in Japan.
Uniper SE declined 1.6% to 5.50 euros after the German utility company said it has asked for more financial help from the German government.
Bunzl plc declined 5.9% to 2,930.84 pence after the distribution and outsourcing company posted an increase in first-half earnings.
Revenues in the period increased 16.1% to 5.6 billion pounds and net income increased to 221.6 million pounds from $211.0 pounds a year ago.
Diluted earnings per share increased to 65.5 pence from 63.0 pence a year ago.
Of the total revenues, North America accounted for 61%, Continental Europe 18% and the UK and Ireland 12%.