Market Update
Movers: CSX, HCA Healthcare, PPG Industries, Procter & Gamble, SLB
Scott Peters
21 Apr, 2023
New York City
CSX Corporation increased 2.8% to $31.69 after the railroad operator reported first quarter results.
Revenue increased 9% to $3.7 billion and net earnings rose 15% to $987 million from $859 million and diluted earnings per share rose to 48 cents from 39 cents a year ago.
HCA Healthcare Inc increased 5.1% to $284.67 after the hospital operator reported quarterly results that exceeded expectations.
Revenue in the first quarter increased 3% to $15.6 billion from $14.95 billion and net income edged up to $1.54 billion from $1.46 billion and diluted earnings per share advanced to $4.85 from $4.14 a year ago.
The company lifted its full-year revenue range between $62.5 billion and $64.5 billion from the previous outlook to between $61.5 billion and $63.5 billion.
Net income range was revised higher to between $4.76 billion and $5.16 billion from $4.525 billion and $4.895 billion.
Earnings per share range was revised higher to between $17.25 and $18.55 from the previous outlook between $16.40 and $17.60.
Procter & Gamble rose 3.7% to $156.50 after the consumer products maker reported better-than-expected quarterly results.
P&G said revenue in the fiscal third quarter ending in March increased 4% to $20.1 billion, driven by 10% increase in prices and 3% decline in volume.
Net income attributable to common stockholders increased 1% to $3.39 billion from $3.35 billion and diluted earnings per share rose to $1.37 from $1.33 a year ago.
The company revised its full-year sales guidance to increase 1% from the previous estimated range between decline of 1% and in-line.
PPG Industries increased 0.8% to $142.55 after the company lifted its full-year outlook.
Revenue increased 2% to $4.3 billion and net income soared to $264 million from $18 million and diluted earnings jumped to $1.11 from 8 cents a year ago.
The company guided flat sales in the second quarter and earnings per share between $1.92 and $2.02 and adjusted earnings per share in the full-year 20223 between $6.95 and $7.25, excluding amortization charges and non-cash pension settlement charges.
Schlumberger NV decreased 5.2% to $49.33 after the offshore oil field contractor said revenue increased 30% to $7.7 billion.
Net income in the quarter soared 83% to $934 million from $510 million and diluted earnings per share rose to 65 cents from 36 cents a year ago.
The oilfield services provider guided full-year 2023 capital expenditure between $2.5 billion and $2.6 billion, higher than $2.3 billion in 2022.
During the quarter the company repurchased 4.4 million of its shares at an average price of $52.65 a share totaling $230 million.
The company's board approved a quarterly cash dividend of $0.25 per share of outstanding common stock, payable on July 13 to stockholders of record on June 7.
Benchmark Indexes Head for Weekly Losses On Weakening Earnings Outlook
Barry Adams
21 Apr, 2023
New York City
Stocks on Wall Street rested as investors mulled over a week of earnings releases and economic data.
Benchmark indexes are set to close down for the week but still up for the year as more data suggest that the U.S. economy is heading for a contraction.
Market averages are little changed after a week of earnings where most companies are reporting earnings that met lowered expectations.
About 300 companies have released earnings so far but investor expectations may have to be revised lower in the event the economy slows down or even heads into a milder recession.
Jobless claims inched slightly higher, indicating labor market tightness but Conference Board's index of leading indicators declined suggesting that the economy is heading into a contraction.
Investors have still not lowered earnings estimates in the event of an economic slowdown or even a mild recession, rendering broader averages vulnerable to more declines.
Indexes & Yields
The S&P 500 index edged up 1.24 points to 4,132.55 and the Nasdaq Composite index inched lower 2.43 points to 12,054.76.
The yield on 2-year Treasury notes inched lower to 4.11%, 10-year Treasury notes edged down to 3.50% and 30-year Treasury bonds traded at 3.73%.
Crude oil edged higher 72 cents to $78.11 a barrel and natural gas held at $2.24 a thermal unit.
Stock Movers
Procter & Gamble rose 3.7% to $156.50 after the consumer products maker reported better-than-expected quarterly results.
P&G said revenue in the fiscal third quarter ending in March increased 4% to $20.1 billion, driven by 10% increase in prices and 3% decline in volume.
Net income attributable to common stockholders increased 1% to $3.39 billion from $3.35 billion and diluted earnings per share rose to $1.37 from $1.33 a year ago.
The company revised its full-year sales guidance to increase 1% from the previous estimated range between decline of 1% and in-line.
CSX Corporation increased 2.8% to $31.69 after the railroad operator reported first quarter results.
Revenue increased 9% to $3.7 billion and net earnings rose 15% to $987 million from $859 million and diluted earnings per share rose to 48 cents from 39 cents a year ago.
PPG Industries increased 0.8% to $142.55 after the company lifted its full-year outlook.
Revenue increased 2% to $4.3 billion and net income soared to $264 million from $18 million and diluted earnings jumped to $1.11 from 8 cents a year ago.
The company guided flat sales in the second quarter and earnings per share between $1.92 and $2.02 and adjusted earnings per share in the full-year 20223 between $6.95 and $7.25, excluding amortization charges and non-cash pension settlement charges.
5th Weekly Gain In European Markets, Private Sector Activities Rebounded
Bridgette Randall
21 Apr, 2023
Frankfurt
European markets struggled and investors digested a fresh batch of earnings amid growing economic anxieties.
The latest PMI surveys in the Euro Area and UK showed service sector growth accelerated in April but manufacturing remained under pressure on weakening demand for goods.
The HCOB Eurozone Composite PMI increased to 54.4 in April, highest in 11 months.
The HCOB Germany Composite PMI rose to 53.9 in April from 52.6 in March, indicating accelerating business activities in the private sector after service sector activities rose to a 12-month high.
The S&P Global/CIPS UK Composite PMI increased to 53.9 in April from 52.2 in March, indicating the fastest pace of expansion since April 2022.
The index above 50 indicates expansion and below 50 shows deceleration.
Investors also welcomed positive quarterly results from EssilorLuxottica and Mercedes Benz reported sharply higher industrial free cash flow.
Poor Weather Contributed to March Retail Sales Decline In UK
Retail sales in the U.K. fell more than expected in March, the Office for National Statistics reported Friday.
Poor weather contributed to stretched consumer budgets, negatively impacting retail sales.
March retail sales, including motor fuel, decreased 0.9% from the previous month after rising for two months in a row.
February retail sales growth was downwardly revised to 1.1% from the previous estimate of 1.2%.
Retail sales, excluding motor fuel, declined 0.6% from the previous month, after rising 2.1% in February.
Retail sales volume in the three months to March increased 0.6% from the previous three-month period.
Europe Indexes & Yields
European markets were in holding patten in Friday's trading but benchmark indexes are set to close higher for the fifth week in a row.
The DAX index declined 0.3% to 15,755.08, the CAC-40 index decreased 1.09 points to 7,537.62 and the FTSE 100 index added 7.48 points to 7,910.09.
The yield on 10-year German Bunds eased to 2.44%, French bonds decreased to 2.96%, the UK gilts to 3.71% and Italian bonds to 4.32%.
The euro held at $1.096, the British pound at $1.284 and the Swiss franc
Brent crude edged up 11 cents to $81.09 a barrel and the Dutch TTF natural gas futures rose 36 cents to Є40.92 per MWh.
Europe Stock Movers
Glencore Plc decreased 1.1% to 496.54 pence and the resource company reported first quarter production that met investors' expectations.
Coal production declined 6% to 26.9 million tons and zinc production fell 15% to 205.3 kt or (thousands of tons) and copper production eased 5% to 244.1 kt.
Holcim AG declined 0.3% to Sfr 58.74 and the Swiss cement and construction materials company reiterated its full-year outlook.
Tele2 AB declined 1.1% to SEK 104.70 after the company reported less-than-expected 3% increase in first quarter revenue from a year ago.
Mercedes Benz Group AG rose 0.4% to €68.46 after the luxury automaker reported "strong" first quarter preliminary results.
Earnings before interest and taxes rose to €5.5 billion, largely driven by vans division and industrial free cash flow increased to €2.2 billion, surpassing market expectation of €1.2 billion.
SAP SE increased 1.3% to €117.14 after the German software company lowered its annual outlook following the sale of its Qualtrics unit.
EssilorLuxottica SA increased 6.6% to €187.0 after the French-Italian company reported a first quarter sales increase driven by the sales rebound in China.
Investors Turned Cautious After Earnings Reports, Tesla Dropped 10%
Barry Adams
20 Apr, 2023
New York City
Major averages on Wall Street traded lower after poor quality of earnings added to economic slowdown worries.
The latest earnings announcements signaled depressed gross margins and lower profitability at some of the largest companies, raising the prospects of another round of downward earnings revisions.
Tesla dropped 11% after the electric vehicle maker reported a decline in first quarter earnings, dragging Apple, Microsoft and Amazon lower.
Chipmakers declined between 2% and 4% and Seagate Technology estimated weak revenue in the current quarter citing lower demand for micro computing products.
Lack of earnings guidance from several companies so far in the earnings season has also dented investor confidence.
American Express reported a decline in earnings and the company sharply hiked its estimate of credit provision to $1.3 billion also soured mood on Wall Street.
Regional banks were in focus after Zions Bancorp reported a 16% decline in its deposit balances, reflecting ongoing stress in smaller banks as more deposits moved out to larger banks.
Market sentiment was weak after the Philadelphia Fed manufacturing index fell more than expected and dropped to its lowest level since May 2020.
The index declined to -31.3 points from -23.2 in March, marking the eighth negative reading in a row, driven by weak order outlook.
Weak earnings guidance and falling earnings compounded to general macroeconomic worries and initial jobless claims edged up slightly at the end of last week.
U.S. Jobless Claims Edged Higher
Unemployment claims for the last week highlighted the tight labor markets conditions despite multiple rate hikes by the Federal Reserve.
Weekly initial jobless claims rose 5,000 to 245,000 for the week ending April 15, the U.S. Department of Labor reported Thursday.
The previous week's claims were upwardly revised 1,000 to 240,000.
The 4-week moving average decreased 500 to 239,750 from the previous week's revised average. The previous week's average was revised up by 250 to 240,250.
The advance seasonally adjusted insured unemployment rate was 1.3% for the week ending April 8, an increase of 0.1 percentage point from the previous week's unrevised rate.
U.S. Indexes & Yields
The S&P 500 index fell 0.6% to 4,129.96 and the Nasdaq Composite index declined 0.8% to 12,057.83.
The yield on 2-year Treasury notes declined to 4.17%, 10-year Treasury notes traded at 3.54% and 30-year Treasury bonds hovered near 3.75%.
Crude oil futures price for immediate month delivery decreased $1.93 to $77.36 barrel and natural gas hovered near $2.21 a thermal unit.
U.S. Stock Movers
Tesla Inc decreased 8.3% to $165.67 after the electric vehicle maker reported a sharp fall in earnings in the first quarter.
Revenue in the quarter rose 24% to $23.3 billion and net income declined 24% to $3.3 billion from $3.7 billion and diluted earnings per share fell to 95 cents from $1.07 a year ago.
Vehicle deliveries increased 36% to 422,875 from 310,048 a year ago.
American Express Company declined 3.7% to $158.96 after the payment processor said revenue rose but net income declined.
Revenue in the first quarter increased 22% to $14.3 billion and net income fell 13% to $1.8 billion from $2.1 billion and diluted earnings per share declined to $2.40 from $2.73 a year ago.
D R Horton Inc rose 6.9% to $108.87 after the home builder reported flat revenue and a decline in earnings.
Revenue in the fiscal second quarter ending in March was flat $7.9 billion and net income plunged to $949 million from $1.4 billion and diluted earnings per share fell to $2.73 from $4.03 a year ago.
Net sales orders for the fiscal second quarter fell 5% to 23,142 homes and 11% in value to $8.6 billion compared to 24,340 homes and $9.7 billion in the same quarter a year ago.
European Markets Trade Near Record Highs, German Wholesale Inflation Eased
European markets paused for the second day in a row ahead of central bank announcements in the next few weeks.
Cautions investors pored over a fresh batch of earnings and debated the future rate paths in the U.S. and the euro area.
Germany's producer prices sharply eased in March and extended monthly decreases to the sixth month in a row following the downward trajectory of energy prices.
Investors also welcomed the international goods trade swinging to surplus in February after exports rose faster than imports.
Eurozone Posted Trade Surplus In February
The euro area international goods trade swung to a surplus of Є4.6 billion in February from a deficit of Є9.4 in January, Eurostat reported Thursday.
The Euro Area recorded, for the first time since September 2021,
The goods trade surplus in February was €4.6 billion with the rest of the world compared with a deficit of €9.4 billion in February 2022.
Exports from the region increased 7.6% to €232.7 billion and imports rose 1.1% to €228.1 billion.
The Euro Are reported a rise in exports with all of its major trading partners.
Exports to the UK and Switzerland rose 10.4%, to the U.S. 10.9%, to Norway 14%, to Turkey 27.6% and to China 5.8%.
Exports of manufactured goods increased 7.2% driven by machinery and vehicles exports increase of 13.2% and chemicals 2.3%.
Overall imports rose 1.1% driven by 1.8% increase in raw materials purchase and fuel imports declined 8.2% and food imports rose 13.2%.
Imports from Switzerland declined 13.8%, from China fell 4.3% and from Russia plunged 77.3%.
In January and February 2023, euro area exports of goods to the rest of the world rose 9.2% to €455.3 billion and imports advanced 5.6% to €482.4 billion.
As a result the euro area recorded a deficit of €27.0 billion, compared with €39.7 billion a year ago.
Germany's Wholesale Price Inflation Dropped In March
Producer price inflation or wholesale inflation in Germany slowed to 7.5% in March from 15.8% in February, destatis or the Federal Statistics Office reported Thursday.
The wholesale price decline was largely driven by a steep fall in energy price inflation to 6.8% in February from 27.6% in January, distributed natural gas prices rose 19.1% and electricity prices were flat.
The preliminary estimate on natural gas and electricity inflation is subject to revision after adjusting for the government subsidy starting March.
Excluding energy, producer prices rose 7.9% from a year ago.
Wholesale price inflation on a monthly basis declined 2.6% in March from February, extending monthly decline to the sixth month in a row.
Prices of non-durable consumer goods increased by 15.4% in March and consumer durable goods rose 10.0% from a year ago.
Indexes & Yields
The DAX index decreased 0.6% to 15,795.71, the CAC-40 index fell 0.1% to 7,538.17 and the FTSE 100 index added 0.05% to 7,902.61.
The yield on 10-year German Bunds decreased to 2.47%5 French bonds to 2.95%, the UK Gilts to 3.76% and Italian bonds to 4.31%.
The euro inched lower to $1.097, the British pound to $1.247 and the Swiss franc to 89.37 cents.
Brent crude oil decreased $2.34 to $80.77 a barrel and the Dutch TTF natural gas edged up 42 cents to Є40.58 per MWh.
Stock Movers
Renault SA decreased 6.4% to €34.24 after the French automaker said revenue in the first quarter increased 29% and the company reaffirmed its annual outlook.
The stock was under pressure after the automaker said the company is reviewing its pricing for electric vehicles worldwide.
Volvo AB Class B increased 1% to SEK211.25 after the Swedish vehicle and industrial equipment maker posted higher adjusted earnings and lifted its outlook for its heavy duty truck unit on easing supply chain issues.
Schindler Holding AG increased 0.9% to Sfr 190.80 after the Swiss elevator and escalator maker said first quarter profit jumped 47%.
Nokia Oyj fell 4.3% to €4.08 after the Finnish telecom and technology company reported weaker-than-expected earnings in the first quarter.
Centamin PLC declined 0.8% to 105.59 pence after the gold miner reported a decline in gold production from the previous quarter.