Market Update
WD-40 Plunges 10% After Quarterly Revenues and Income Dropped
Scott Peters
07 Jul, 2022
New York City
WD-40 Company plunged 9.2% to $186.01 after the chemical maker reported earnings after the regular hours of trading.
WD-40 said sales in the third quarter ending in May declined 9% to $123.7 million and sales were affected after translating foreign sales to the strong U.S. dollar.
Net income in the quarter declined 31% to $14.5 million or $1.07 a diluted share from $21.0 million or $1.52 a share.
The company lowered its annual sales growth outlook to between $519 million and $532 million, an increase between 6% and 9%.
The company had previously guided sales between $522 million and $547 million, an increase between 7% and 12%.
Wd-40 estimated annual net income between $69.0 million and $71.1 million and diluted earnings per share between $5.02 and $5.10 based on an estimated 13.7 million weighted average shares outstanding.
The company had previously guided net income between $70.7 million and $72.5 million and diluted earnings per share between $5.14 and $5.27.
Kura Sushi Soars On Third Quarter Results
Scott Peters
07 Jul, 2022
New York City
Kura Sushi USA gained 7.3% to $54.10 and extended gains after the regular hours of trading by another 19.5% to $64.62 after the release of earnings.
Kura said revenues in the third quarter ending in May more than doubled to $38 million from $18.5 million a year ago on a comparable sales increase of 65%.
Net income was $0.5 million or $0.05 per diluted share compared to $0.8 million or $0.09 a share a year ago.
The company guided full-year 2022 total sales between $137 million and $142 million from the previous estimate between $130 million and $140 million.
The company plans to open 8 restaurants with average net capital expenditure of $2.0 million.
U.S. Indexes Extend Gains On Oil and Tech Stocks Rally
Barry Adams
07 Jul, 2022
New York City
U.S. benchmark indexes advanced for the fourth day in a row and energy stocks advanced reversing losses in the week.
The S&P 500 index increased 1.5% to 3,902.62 and the Nasdaq Composite index added 2.3% to 11,621.35.
Futures of crude oil jumped 3.7% to $102.23 and natural gas increased 12.5% to $6.20 a unit.
Energy prices rebounded after a 4-day decline.
Chipmakers advanced after South Korea based Samsung reported its strongest June quarter in four years.
Intel increased 3.1% to $38.14, Advanced Micro Devices added 5.2% to $79.34, and Qualcomm, Inc jumped 5.8% to $134.46.
The yield on 10-year Treasury notes increased to 3.002% after the latest Fed minutes of meeting indicated policymakers' commitment in fighting inflation.
Policymakers proposed a restrictive stance and a faster interest rate hike at the next Fed's meeting on July 26.
The tough talk from policymakers may not smooth markets for too long as the central bank ignored inflation above its target rate of 2% for more than 18 months.
Initial claims of jobless benefits rose 4,000 to 235,000 for the week ended July 2, the Department of Labor reported today.
The initial claims increased to the level last seen in the second week in January and the 4-week average increased to 232,500, its highest level since December 2021.
Goods and services trade deficit edged lower to $85.5 billion from $86.7 billion in April, the Commerce Department reported today.
Though the deficit declined on a monthly basis but surged 38.4% from a year ago after imports rebounded faster than exports.
On a monthly basis, the seasonally adjusted trade deficit with China declined in May by $2.8 billion to $32.2 billion.
After the close, Levi Strauss, WD 40 Company, and Kura Sushi USA reported earnings.
Kura Sushi USA gained 7.3% to $54.10 and extended gains after the regular hours of trading by another 19.5% to $64.62 after the release of earnings.
Kura said revenues in the third quarter ending in May more than doubled to $38 million from $18.5 million a year ago on a comparable sales increase of 65%.
Net income was $0.5 million or $0.05 per diluted share compared to $0.8 million or $0.09 a share a year ago.
The company guided full-year 2022 total sales between $137 million and $142 million and the addition of 8 new restaurants.
WD-40 Company plunged 9.2% to $186.01 after the chemical maker reported earnings after the regular hours of trading.
WD-40 said sales in the third quarter ending in May declined 9% to $123.7 million and sales were affected after translating foreign sales to the strong U.S. dollar.
Net income in the quarter declined 31% to $14.5 million or $1.07 a diluted share from $21.0 million or $1.52 a share.
The company lowered its annual sales growth outlook to between $519 million and $532 million, an increase between 6% and 9%.
Wd-40 estimated annual net income between $69.0 million and $71.1 million and diluted earnings per share between $5.02 and $5.10 based on an estimated 13.7 million weighted average shares outstanding.
U.S. Trade Deficit Edged Lower in May, 2022 Gap to Cross $1 Trillion
Brian Turner
07 Jul, 2022
New York City
Goods and services trade deficit edged lower to $85.5 billion from $86.7 billion in April, the Bureau of Economic Analysis reported today.
Though the deficit declined on a monthly basis but surged 38.4% from a year ago after imports rebounded faster than exports.
On a monthly basis, the seasonally adjusted trade deficit with China declined in May by $2.8 billion to $32.2 billion.
On a monthly basis, May exports increased $ 3.0 to $255.9 billion and imports rose $1.9 billion to $341.4 billion, $1.9 billion.
At the current rate of growth in trade deficit, the U.S. is set to report a record trade deficit of more than $1.0 trillion in 2022.
Trade deficit has been steadily rising and jumped from $653.9 billion in 2020 to $845.0 billion in 2021 to cross $1.0 trillion in 2022.
Weekly Jobless Claims Rise to 235,000
Brian Turner
07 Jul, 2022
New York City
Initial claims of jobless benefits rose 4,000 to 235,000 for the week ended July 2, the Department of Labor reported today.
The initial claims increased to the level last seen in the second week in January and the 4-week average increased to 232,500, its highest level since December 2021.
Movers: GameStop, Helen of Troy, Levi Strauss, PriceSmart, Wd-40
Barry Adams
07 Jul, 2022
New York City
U.S. benchmark indexes advanced for the fourth day in a row and tech and oil stocks led the gainers.
The S&P 500 index increased 1.2% to 3,890.29 and the Nasdaq Composite index added 1.8% to 11,599.67.
Futures of crude oil jumped 5.8% to $104.25 and natural gas increased 12.9% to $6.23 a unit. Energy prices rebounded after a 4-day decline.
Chipmakers advanced after South Korea based Samsung reported its strongest June quarter in four years.
Intel increased 2.7% to $37.99, Advanced Micro Devices added 4.5% to $78.74, and Qualcomm, Inc jumped 4.5% to $132.86.
The yield on 10-year Treasury notes increased to 3.008% after the latest Fed minutes of meeting indicated policymakers' commitment in fighting inflation.
GameStop Corp gained 12.1% to $133.55 after the video game retailer announced a 4-for-1 stock split.
Company stockholders of record at the close of business on July 18, 2022 will receive a dividend of three additional shares of the Company
Four Day Rally In U.S. Stocks
Barry Adams
07 Jul, 2022
New York City
U.S. benchmark indexes advanced for the fourth day in a row and tech and oil stocks led the gainers.
The S&P 500 index increased 1.2% to 3,890.29 and the Nasdaq Composite index added 1.8% to 11,599.67.
Futures of crude oil jumped 5.8% to $104.25 and natural gas increased 12.9% to $6.23 a unit. Energy prices rebounded after a 4-day decline.
Chipmakers advanced after South Korea based Samsung reported its strongest June quarter in four years.
Intel increased 2.7% to $37.99, Advanced Micro Devices added 4.5% to $78.74, and Qualcomm, Inc jumped 4.5% to $132.86.
The yield on 10-year Treasury notes increased to 3.008% after the latest Fed minutes of meeting indicated policymakers' commitment in fighting inflation.
Policymakers proposed a restrictive stance and a faster interest rate hike at the next Fed's meeting on July 26.
The tough talk from policymakers may not smooth markets for too long as the central bank ignored inflation above its target rate of 2% for more than 18 months.
Initial claims of jobless benefits rose 4,000 to 235,000 for the week ended July 2, the Department of Labor reported today.
The initial claims increased to the level last seen in the second week in January and the 4-week average increased to 232,500, its highest level since December 2021.
Goods and services trade deficit edged lower to $85.5 billion from $86.7 billion in April, the Commerce Department reported today.
Though the deficit declined on a monthly basis but surged 38.4% from a year ago after imports rebounded faster than exports.
On a monthly basis, the seasonally adjusted trade deficit with China declined in May by $2.8 billion to $32.2 billion.
After the close, Levi Strauss and WD 40 Company are set to report earnings.
UK Prime Minister Resigned After Conservative Party Rebellion
Bridgette Randall
07 Jul, 2022
New York City
British Prime Minister Boris Johnson resigned after more ministers quit his cabinet.
Only after three years in office, Johnson was forced to resign as more ministers quit following several policy missteps and a series of scandals.
The calls for Johnson's resignation grew louder after Chancellor of Exchequer Rishi Sunak and Health Secretary Sajid Javid tendered their resignation on Tuesday.
Finance minister Rishi Sunak resigned after the latest scandal rocked Downing Street involving Tory deputy chief Chris Pincher.
Last week Pincher resigned from the government over allegations that he groped two men at a private member's club.
"The public rightly expect the government to be conducted properly, competently and seriously.
I recognise this may be my last ministerial job, but I believe these standards are worth fighting for and that is why I am resigning.," said Sunak in a letter published on his twitter account.
"It has been an enormous privilege to serve in this role, but I regret that I can no longer continue in good conscience," Health Secretary of State & Social Care Sajid Javid tendered his resignation and said in a letter submitted to prime minister Johnson and published on twitter.
More junior ministers resigned yesterday and several party members urged Johnson to resign.
The drama reached a new high after the newly appointed finance minister Nadhim Zahawi urged Johnson to resign.
In 2016, Boris Johnson played a key role during the Brexit campaign that many say misled the British public and raised false hopes of better economic prospects outside the European Union and the scare of rising immigration from the Middle East.
The U.K.-EU relationship hit a new low after Johnson sought to rewrite the terms of Brexit and renege on the promises related to trade with Northern Ireland.
Johnson's administration placed some of the stringent sanctions on Russia and Russians after the country invaded Ukraine.
The Kremlin did not miss the opportunity and shot back after Johnson's sudden fall from power and his unceremonious departure.
"He doesn't like us, we don't like him either," Kremlin spokesman Dmitry Peskov said just before Johnson announced his resignation.
Boris Johnson, often invoking former prime minister and Conservative Party leader Churchill, offered vocal support to Ukraine and exhorted Ukrainians to fight the Russian aggression but rarely promoted a peaceful settlement.
The U.K. has provided less than 5% of military and arms support to Ukraine in its fight against Russia.
Just as Churchill led the U.K. into a disastrous war with Germany engulfing the whole world, Johnson advocated war with Russia on ideological grounds.
Boris Johnson has opposed any peaceful solution between Russia and Ukraine.
"Let me say now to the people of Ukraine, we in the UK will continue to back your fight for freedom for as long as it takes," Johnson said while delivering his speech.
Russian tycoon and billionaire Oleg Deripaska, who is close to the Kremlin, has opposed the war from the start and urged a peaceful solution with Ukraine.
Deripaska spoke for many Russians and people around the world when he posted his short statement on his Telegram channel.
"The inglorious end of the "inglorious stupid clown" who is responsible for tens of thousands of lives in this senseless conflict in Ukraine," Russian billionaire tycoon Oleg Deripaska.
Boris Johnson rose to power after his vocal support for Brexit in 2016, leaving the European Union, and led Conservative Party to a historic win of 80-seat majority in the 2019 elections.
However, his administration failed to capitalize on the British public's desire of speedy and total separation from the European Union.
Even after three years in office, Johnson has not completed Brexit negotiations with the European Union casting a pall over the economy and the pound.
With no clear front runner for the highest office in the U.K., the divided Conservative Party may take several weeks before a new leader is selected.
The British pound jumped 0.4% against the U.S. dollar to $1.197 and the 10-year U.K. government bond rose to 2.136%.
European Movers: ASM Holding, Lufthansa, Nordex, Persimmon, Telecom Italia
Bridgette Randall
07 Jul, 2022
New York City
European stock markets scaled higher and the euro struggled after the release of U.S. Federal Reserve policy meeting deliberations.
The DAX index gained 1.8% to 12,832.46, the CAC-40 index added 1.7% to 6,009.68, and the FTSE 100 index advanced 1.3% to 7,199.05.
Benchmark indexes in Frankfurt, Paris, and London opened higher after the Federal Reserve policymakers suggested restrictive policy stance and faster interest rate hikes at the next meeting.
The policy committee members proposed to lift rates by 50 o r75 basis points at the next meeting on July 26.
The strong commitment to tame inflation supported the market sentiment overcoming the worries that the Fed's aggressive action may lead to a recession.
Automakers and banks led the gainers.
HSBC Holdings, Commerzbank, BNP Paribas and Natwest Group increased between 2% and 3%.
Volkswagen, BMW, Renault, and Daimler Benz advanced between 3% and 5%.
Resource stocks gained after iron ore prices rose for China delivery.
Glencore, Antofagasta, and Anglo American surged between 6% and 7%.
ASM Holding rose 4.2% to 446.52 euros after South Korea based Samsung Electronics reported its strongest June quarter since 2018.
Nordex SE gained 7.5% to 8.45 euros after the German wind turbine maker said new orders drove total orders to 1.8 GW compared to 1.534 GW a year ago.
The company received a total of 346 wind turbines for projects in fifteen countries and Europe accounted for approximately 58%, Latin America 31% and North America 11%.
The strongest individual markets in Europe were Germany, Poland and Spain.
Lufthansa AG increased 4.7% to 5.77 euros after logistics entrepreneur Klaus-Michael Kuehne increased his stake in the state controlled carrier to 15% from 10%.
Telecom Italia SpA added 1% to 26 euro cents after the company laid out a detailed plan to separate its fixed network infrastructure from services.
Shell Plc added 3.9% to 23.97 euros after the oil refiner and explorer said rising refining margin is expected to add one billion dollars earnings to its refining business.
Persimmon Plc declined 6.1% 1,751.30 pence after the U.K.-based home builder said first-half revenues are estimated to decline to
European Markets Rally On Fed's Hawkish Inflation Tone
Bridgette Randall
07 Jul, 2022
London
European stock markets scaled higher and the euro struggled after the release of U.S. Federal Reserve policy meeting deliberations.
The DAX index gained 1.8% to 12,832.46, the CAC-40 index added 1.7% to 6,009.68, and the FTSE 100 index advanced 1.3% to 7,199.05.
Benchmark indexes in Frankfurt, Paris, and London opened higher after the Federal Reserve policymakers suggested restrictive policy stance and faster interest rate hikes at the next meeting.
The policy committee members proposed to lift rates by 50 o r75 basis points at the next meeting on July 26.
The strong commitment to tame inflation supported the market sentiment overcoming the worries that the Fed's aggressive action may lead to a recession.
British Prime Minister Boris Johnson resigned after more ministers quit his cabinet.
Johnson was forced to resign only after three years in office as more ministers resigned following several policy missteps and a series of scandals.
The U.K.-EU relationship hit a new low after Johnson sought to rewrite the terms of Brexit and renege on the promises related to trade with Northern Ireland.
The British pound jumped 0.4% against the U.S. dollar to $1.197 and the 10-year U.K. government bond rose to 2.136%.
Germany's industrial production in May rose 0.2% after rising 1.3% in April, deStatis reported on Thursday.
On an annual basis, the production declined 1.5% from a year ago after falling 2.5% in April.
Automakers and banks led the gainers.
HSBC Holdings, Commerzbank, BNP Paribas and Natwest Group increased between 2% and 3%.
Volkswagen, BMW, Renault, and Daimler Benz advanced between 3% and 5%.
Resource stocks gained after iron ore prices rose for China delivery.
Glencore, Antofagasta, and Anglo American surged between 6% and 7%.
ASM Holding rose 4.2% to 446.52 euros after South Korea based Samsung Electronics reported its strongest June quarter since 2018.
Nordex SE gained 7.5% to 8.45 euros after the German wind turbine maker said new orders drove total orders to 1.8 GW compared to 1.534 GW a year ago.
The company received a total of 346 wind turbines for projects in fifteen countries and Europe accounted for approximately 58%, Latin America 31% and North America 11%.
The strongest individual markets in Europe were Germany, Poland and Spain.
Lufthansa AG increased 4.7% to 5.77 euros after logistics entrepreneur Klaus-Michael Kuehne increased his stake in the state controlled carrier to 15% from 10%.
Oasis Petroleum and Whiting Petroleum Complete $6 Billion Merger
Scott Peters
06 Jul, 2022
New York City
Chord Energy Corporation dropped 5.6% to $96.58 after the newly named company completed the merger between Whiting Petroleum and Oasis Petroleum.
The newly merged company under the new symbol CHRD began trading on July 5.
The merged company also lifted its second quarter energy production to increase 18% from 9% using the three stream production assumption.
Whiting and Oasis announced a $6 billion merger on March 7.
The combined company is expected to produce equivalent of at least 156 4 million of barrels a day and spend about !65 million in capital expenditure in the fiscal year 2022.
Danny Brown, previous chief executive officer of Oasis is appointed president & chief executive officer of Chord Energy.
Amazon Includes Grubhub to Prime Membership With Warrant Deal
Scott Peters
06 Jul, 2022
New York City
Amazon.com, Inc declined 0.7% to $112.84 after the company added one year free delivery from Grubhub.com for its prime members.
Just Eat Takeaway.com, the parent of Grubhub, offered warrants totaling up to a 15% stake in the U.S. based Grubhub when fully exercised by Amazon.
The vesting of warrants is subject to the satisfaction of certain performance conditions, principally the number of new consumers delivered through the commercial agreement.
In certain circumstances the warrants can vest on an accelerated basis, in full or in part and may be be settled in cash or company shares, the press release noted.
Separately, the U.K. antitrust regulator is investigating the retailer if the company is offering an unfair advantage to its own sellers over third-party sellers.
The U.K. based Just Eat is actively looking to sell its U.S. food delivery unit Grubhub after the post-pandemic weakening of sales growth at the company.
France Plans to Nationalize EDF
Bridgette Randall
06 Jul, 2022
New York City
EDF SA soared 14.5% to 8.98 euros after French government announced its intention to nationalize the struggling utility company.
French government said it plans to nationalize the financially strapped Electricite de France SA as the utility company racks up billions of euros in losses.
France already controls 84% of the utility company and losses mounted after President Emmanuel Macron put price cap on utility prices and natural gas prices soared after the Russia's invasion of Ukraine.
President Macron had proposed to nationalize the utility company and accelerate the shift to renewable and nuclear energy and make France energy independent.
More than two thirds of electricity in France is provided by atomic power plants controlled by EDF.
Fed Policy Committee Favors Restrictive Stance and Larger Future Rate Hikes
Brian Turner
06 Jul, 2022
New York City
Fears of accelerating inflation and elevated prices across a broad category of products and services drove policymakers to a large rate hike at its last meeting in June.
The latest Fed's minutes of meeting held on June 14-15 and released today showed that policy members "agreed that inflation remained elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures."
The committee also held out for larger and faster rate increases if the economic conditions warrant and inflation remained elevated.
Fed policy members also held out for a rate hike of 50 or 75 basis points at its next two-day meeting on July 26 and the committee members also favored a restrictive stance of policy.
The yield on 10-year Treasury notes increased to 2.93% after the release of the Fed minutes, reflecting a more aggressive central bank.
U.S. Stocks Close Higher After Fed Minutes
Barry Adams
06 Jul, 2022
New York City
Late rally in U.S. stocks lifted major indexes higher after the release of Fed's latest minutes of meeting.
The S&P 500 index increased 0.4% to 3,845.08 and the Nasdaq Composite Index rose 0.4% to 11,361.81.
Futures of crude oil declined 1.0% to $98.56 a barrel and natural gas closed nearly unchanged at $5.54 a unit.
Fears of accelerating inflation and elevated prices across a broad category of products and services drove policymakers to a large rate hike at its last meeting in June.
The latest Fed's minutes of meeting held on June 14-15 and released today showed that policy members "agreed that inflation remained elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures."
The committee also held out for larger and faster rate increases if the economic conditions warrant and inflation remained elevated.
Fed policy members also held out for a rate hike of 50 or 75 basis points at its next two-day meeting on July 26 and the committee members also favored a restrictive stance of policy.
The yield on 10-year Treasury notes increased to 2.93% after the release of the Fed minutes, reflecting a more aggressive central bank.
Mortgage rates dropped for the second week in a row.
Mortgage rates for 30-year fixed-rate mortgage loans declined to 5.74% from 5.84% in the previous week, according to data from the Mortgage Bankers Association.
The origination and other fees rose to 0.65 percentage points from 0.64 for the loans with 20% down payment in the previous week, the press release noted.
The labor market conditions remained tight at the end of spring according to the latest employment situation report from the U.S. Department of Labor.
The number of job openings decreased 6.9% to 11.3 million on the last business day of May, the U.S. Bureau of Labor Statistics reported today.
Total hires in May were nearly unchanged at 6.5 million and separations were also unchanged at 6.0 million in May.
Hires totaled 78.4 million and separations totaled 72.0 million, yielding a net employment gain of 6.4 million, over 12 months to May.
These totals include workers who may have been hired and separated more than once during the year.
Defensive stocks including utilities and healthcare sectors led the gainers.
UnitedHealth Group and Cigna gained more than 2%, Constellation Energy increased 3%, Exelon increased 1.5%.
Energy companies declined for the third day after oil fell and natural gas closed nearly unchanged.
Amazon.com, Inc declined 0.7% to $112.84 after the company added one year free delivery from Grubhub.com for its prime members.
Separately, the U.K. antitrust regulator is investigating the retailer if the company is offering an unfair advantage to its own sellers over third-party sellers.
Microsoft increased 0.2% to $263.32 and the company's $68 billion acquisition of Activision Blizzard is facing an antitrust investigation from the U.K. regulator.
European Markets Rebound
European markets rebounded after natural gas prices dropped after Norwegian workers called off strike for now.
The DAX index increased 1.3% to 12,565.63, the CAC-40 index advanced 1.6% to 5,886.09, and the FTSE 100 index added 1.6% to 7,137.84.
Oil and gas workers at Equinor called off strike after Norway intervened and proposed a mandatory arbitration.
However, the union has not called off the proposed strike at other fields scheduled from July 9.
The Gudrun, Oseberg South and Oseberg East fields have started run-up of production and are expected to reach full production of 89,000 equivalent barrels of oil in two days.
Natural gas prices eased to 169.05 euros per megawatt after rising as much as 177 euros in the previous session.
Eurozone Retail Sales Rebound Slows
Eurozone retail sales rose at a slower than anticipated pace in May, the eurostat data showed on Wednesday.
On a monthly basis, retail sales increased 0.2% in May from the revised 1.4% in April.
Food, drinks and tobacco sales contracted 0.3% in May compared to a 2.3% fall in April.
On a yearly basis, retail sales growth eased to 0.2% in May from 4.0% in April.
Foreign Orders Drive German Orders' Rise
Germany's factory orders increased 0.1% in May after falling 1.8% in April, the destatis data showed on Wednesday.
On a yearly basis, new orders declined 3.1% in May, slower than 5.3% fall in April,
On a monthly basis, domestic orders declined 1.3% but foreign orders rose 1.6% after non-euro area orders increased 3.7%.
Construction Activities in UK and Germany Drop
Construction activities in Germany declined for the third month in a row in June, the latest survey from S&P Global showed on Wednesday.
Rising building costs and higher interest rates dragged the activities in the sector.
The construction Purchasing Managers' Index increased from a nine-month low of 45.4 in May to 45.9 in June.
Any reading below 50 indicates contraction.
UK construction activities dropped to a nine-month low in June on rising materials cost and higher interest rates, the survey from S&P Global reported on Wednesday.
The S&P Global/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 52.6 in June from 56.4 in May.
Home building was the weakest among all construction activities for the fourth month in a row and contracted for the first time since May 2020.
France Plans to Nationalize EDF
EDF SA soared 14.5% to 8.98 euros after French government announced its intention to nationalize the struggling utility company.
French government said it plans to nationalize the financially strapped Electricite de France SA as the utility company racks up billions of euros in losses.
France already controls 84% of the utility company and losses mounted after President Emmanuel Macron put price cap on utility prices and natural gas prices soared after the Russia's invasion of Ukraine.
President Macron had proposed to nationalize the utility company and accelerate the shift to renewable and nuclear energy and make France energy independent.
More than two thirds of electricity in France is provided by atomic power plants controlled by EDF.