Market Update
Wholesale Prices Rise 0.3% In November
Brian Turner
09 Dec, 2022
New York City
The producer price index increased 0.3% in November from October and eased to 7.4% from a year ago on higher cost of services, the U.S. Bureau of Labor Statistics said.
Core rate of inflation in November accelerated to 0.4% from 0.1% in October but eased to 6.2% annual pace from 6.6% rate in October.
The higher-than-expected wholesale price data contrasted with other economic data in recent times indicating moderating of inflation.
The 3.3% decline in energy price in the month was offset by a similar rise in the food index after wholesale vegetable prices soared 38%.
The elevated inflation is likely to keep policymakers on Wednesday on track to deliver another rate hike of at least 0.5% and lift the federal funds rate target range between 4.25% and 4.50%.
Monthly inflation pace has moderated to 0.3% from 1.0% increase in November 2021 but price increases have spread to the service sector of the economy.
The index for final demand for services accelerated to 0.4% in November from 0.1% in October.
Stocks Turn Volatile, Wholesale Inflation Stays Elevated In November
Barry Adams
09 Dec, 2022
New York City
Stocks on Wall Street eased and investors digested the latest read on inflation.
Wholesale inflation was unchanged on a monthly basis and eased but remained elevated on an annual pace
Investors are also awaiting consumer price data on Tuesday and the Fed's rate decision on Wednesday.
Investors are hoping that widely watched consumer price inflation may show larger moderation in November as gasoline prices drop to a one-year low.
U.S. Wholesale Inflation Stay Elevated
The producer price index increased 0.3% in November from October and eased to 7.4% from a year ago on higher cost of services, the U.S. Bureau of Labor Statistics said.
Core rate of inflation in November accelerated to 0.4% from 0.1% in October but eased to 6.2% annual pace from 6.6% rate in October.
Stock Market Indexes Trade Volatile
Benchmark indexes opened higher but quickly lost direction lacking momentum after wholesale inflation data raised the prospect of higher terminal rates.
The S&P 500 index fell 0.2% to 3,955.93 and the Nasdaq Composite index fell 0.3% to 11,046.73.
Crude oil price increased 95 cents to $72.46 a barrel and natural gas prices rose 37 cents to $6.33 a thermal unit.
The yield on 2-year Treasury notes rose to 4.33%, 10-year Treasury notes increased to 3.57% and 30-year Treasury bonds to 3.50%.
China Inflation Eases
Consumer price index in China eased to 1.6% in November from 2.1% in October and declined by 0.2% from the previous month, the National Bureau of Statistics said Friday.
Brazil Inflation Drops to 20-month Low
Brazil's inflation eased to an annual pace of 5.9% in November from 6.4% in October, the lowest since February 2021, after transportation and housing prices cooled, the statistical office said Friday.
U.S. Stock Movers
Costco Wholesale Corporation eased 0.2% to $480.71 after the membership warehouse club operator said fiscal first quarter sales increased 8.1% to $53.4 billion.
Net income increased to $1.36 billion from $1.32 billion or $3.07 from $2.98 a diluted share a year ago.
lululemon athletica Inc declined 12.5% to $328.01 after the company issued lighter guidance for the current quarter.
The specialty apparel retailer said third quarter revenue increased 28% to $1.9 billion and net income soared to $255.5 million from $187.8 million or $2 from $1.44 a share a year ago.
For the fourth quarter of 2022, the company expects net revenue between $2.605 billion and $2.655 billion, representing a three-year compound annual growth rate of approximately 24%.
Diluted earnings per share are expected to be in the range of $4.20 to $4.30 for the quarter.
DocuSign soared 12.8% to $49.37 after the company reported better-than-expected quarterly results.
The only verification system provider said third quarter revenue increased 18% to $645.5 million and net loss widened to $29.8 million from $5.7 million or 15 cents from 3 cents a share from a year ago.
Global Markets In Holding Pattern, FTC Seeks to Block Activision Deal
Barry Adams
08 Dec, 2022
New York City
Benchmark indexes opened higher and spent the session in positive territory after volatile trading and investors reacted to corporate news and awaited the Fed decision next week.
Investors are anticipating the Federal Reserve to moderate rate hike after a two-day meeting on Thursday December 14th and consumer price inflation data on Tuesday December 13th.
The Consumer price index increase slowed to an annual pace of 7.7% and monthly pace was unchanged at 0.4% in October and investors are hoping to see more moderation in price increases in November.
The S&P 500 index increased 0.8% to 3,963.51 and the Nasdaq Composite index advanced 1.1% to 11,082.00.
FTC Sues to Block Largest Microsoft Acquisition
The Federal Trade Commission is seeking to block Microsoft's $69 billion acquisition of Activision Blizzard.
The U.S. government agency is alleging that the purchase would enable the tech giant in suppressing competition for its Xbox game console and further enhance its subscription business to the detriment of other console operators.
Separately, the Pentagon awarded cloud computing contracts worth $9 billion to Amazon, Microsoft, Oracle and Google.
Crude Oil Rebounds, Gasoline at One-year Low
The unleaded gasoline price at pump stations fell to $3.329 a gallon, below the $3.343 price a year ago despite geopolitical tensions in Europe and OPEC+ production cuts, AAA said Thursday.
Crude oil fell 11 cents to $71.96 a barrel and natural gas increased 20 cents to $5.92 a thermal unit.
Treasury Yields Stay Near 2-month Low
The U.S. Treasury note yields inched higher but traded near 2-month lows and the spread between 2-year and 10-year debt held at 0.8 percentage points.
The yield on 2-year Treasury notes increased to 4.31%, 10-year Treasury notes inched up to 3.47% and 30-year Treasury bonds edged up to 3.43%.
Weekly Jobless Claims Rise
Initial jobless claims increased to 230,000 and continuing claims rose 62,000 to 1.67 million for the week ending November 26, the U.S. Department of Labor said Thursday.
Continuing claims increased for the eighth week in a row and the claims were the largest since early February.
U.S. Stock Movers
GameStop Corp increased 8.4% to $24.13 after the game console retailer said fiscal third quarter revenue fell 8.5% to $1.18 billion and net loss shrank to $94.7 million from $105.4 million and diluted loss per share fell to 31 cents from 35 cents a year ago.
In the quarter, cash flow from operating activities swung to $177 million from outflow of $293.7 million a year ago reflecting lower investment in inventories.
Ciena Corporation soared 19.4% to $51.64 after the telecom gear maker said revenue in the fiscal fourth quarter fell 6.8% to $971 million and net income plunged to $57.6 million from $103.5 million or 39 cents to from 66 cents a year ago.
Express, Inc soared 31.2% to $1.28 after the company said revenue in the fiscal third quarter declined 8% to $434.1 million and net loss increased to $34.4 million from $13.1 million or 50 cents per share from 90 cents a year ago.
The company also amended and increased its revolving credit facility by $40 million to $290 million and expanded the term loan facility by $50 million to $140 million.
The struggling retailer and WHM Global also struck an intellectual property partnership and WHM plans to invest $235 million for a 60% stake.
WHM also agreed to acquire 5.4 million shares of the company priced at $4.60 a share, representing pro forma 7.4% stake in the company.
European Markets Deepen 5-day Losses, Rate Worries In Focus
European markets closed down and investors assessed the health of business in an economic slowdown environment, rising rates and stretched consumer budgets.
Investors also reviewed the latest comments from the ECB president Christine Lagarde focused on systemic risks arising from the decentralized financial systems linked with cryptocurrencies.
"Crypto-assets are exceptionally volatile and pose considerable risks to consumers.
After peaking in November 2021, the price of Bitcoin fell by almost 75% in the space of a year. And only last month we saw the chaotic collapse of FTX, a crypto-asset exchange once valued at $32 billion," highlighted Lagarde.
Czech Unemployment Stable
The Czech Republic's unemployment was stable at 3.5% in November for the second month in a row after edging up by 0.1 percentage point in September, data from the labor office showed Thursday.
Ireland's Inflation Inches Lower
Ireland's consumer price inflation declined in November but stayed above 5.0% for the fourteenth month in a row, the Central Statistics Office said Thursday.
The consumer price index declined to an annual pace of 8.9% in November after rising at 9.2% in October.
On a monthly basis, consumer prices rose 0.3%.
Hungary's Inflation Accelerates, Trade Deficit Widens
Hungary's consumer prices accelerated in November driven by higher food prices and rising costs of utilities.
Consumer price inflation increased 22.5% in November from a year ago following 21.1% in October, the Hungarian Central Statistical Office showed on Thursday.
On a monthly basis, consumer price eased to 1.8% after rising at 2.0% in October.
Trade deficit jumped to
European Markets In Five-day Slump, Rate Worries In Focus
Bridgette Randall
08 Dec, 2022
Frankfurt
European markets closed down and investors assessed the health of business in an economic slowdown environment, rising rates and stretched consumer budgets.
Investors also reviewed the latest comments from the ECB president Christine Lagarde focused on systemic risks arising from the decentralized financial systems linked with cryptocurrencies.
"Crypto-assets are exceptionally volatile and pose considerable risks to consumers.
After peaking in November 2021, the price of Bitcoin fell by almost 75% in the space of a year. And only last month we saw the chaotic collapse of FTX, a crypto-asset exchange once valued at $32 billion," highlighted Lagarde.
Czech Unemployment Stable
The Czech Republic's unemployment was stable at 3.5% in November for the second month in a row after edging up by 0.1 percentage point in September, data from the labor office showed Thursday.
Ireland's Inflation Inches Lower
Ireland's consumer price inflation declined in November but stayed above 5.0% for the fourteenth month in a row, the Central Statistics Office said Thursday.
The consumer price index declined to an annual pace of 8.9% in November after rising at 9.2% in October.
On a monthly basis, consumer prices rose 0.3%.
Hungary's Inflation Accelerates, Trade Deficit Widens
Hungary's consumer prices accelerated in November driven by higher food prices and rising costs of utilities.
Consumer price inflation increased 22.5% in November from a year ago following 21.1% in October, the Hungarian Central Statistical Office showed on Thursday.
On a monthly basis, consumer price eased to 1.8% after rising at 2.0% in October.
Trade deficit jumped to
Movers: Ciena, Express, GameStop, Ollie's Bargain, Oxford Industries, Rent the Runway
Scott Peters
08 Dec, 2022
New York City
Ciena Corporation soared 19.4% to $51.64 after the telecom gear maker said revenue in the fiscal fourth quarter fell 6.8% to $971 million and net income plunged to $57.6 million from $103.5 million or 39 cents to from 66 cents a year ago.
Express, Inc soared 31.2% to $1.28 after the company said revenue in the fiscal third quarter declined 8% to $434.1 million and net loss increased to $34.4 million from $13.1 million or 50 cents per share from 90 cents a year ago.
The company also amended and increased its revolving credit facility by $40 million to $290 million and expanded the term loan facility by $50 million to $140 million.
The struggling retailer and WHM Global also struck an intellectual property partnership and WHM plans to invest $235 million for a 60% stake.
WHM also agreed to acquire 5.4 million shares of the company priced at $4.60 a share, representing pro forma 7.4% stake in the company.
GameStop Corp increased 8.4% to $24.13 after the game console retailer said fiscal third quarter revenue fell 8.5% to $1.18 billion and net loss shrank to $94.7 million from $105.4 million and diluted loss per share fell to 31 cents from 35 cents a year ago.
In the quarter, cash flow from operating activities swung to $177 million from outflow of $293.7 million a year ago reflecting lower investment in inventories.
Ollie's Bargain Outlet Holdings Inc soared 7.1% to $51.04 after the deep discount retailer said third quarter sales increased 9% to $418.1 million and comparable store sales increased 1.9%.
Net income decreased 0.4% to $23.1 million or 37 cents compared with $23.2 million or 36 cents per diluted share a year ago.
Inventories at the end of the fiscal third quarter increased 11% to $523.7 million compared to $471.8 million a year ago reflecting higher store counts, the timing of merchandise receipts, and higher supply chain costs.
Oxford Industries decreased 2.6% to $105.40 after the parent of Tommy Bahamas and Lily Pulitzer reported quarterly results that were ahead of market expectations.
Revenue in the fiscal third quarter increased 26% to $313 million from $248 million a year ago.
Net income in the period decreased to $19.7 million from $25.98 million and diluted earnings per share fell to $1.22 from $1.54 a year ago.
The fashion apparel retailer revised higher its revenue estimate of fiscal 2022 to between $1.395 billion and $1.410 billion compared to $1.14 billion a year ago and GAPP diluted earnings per share between $9.89 and $10.04.
Revenue in the fiscal fourth quarter is expected to fall between $366 million and $381 million compared to $300 million a year ago.
Rent the Runway Inc soared 65.5% to $2.25 after the online apparel retailer platform reported were ahead of market expectations and offered an optimistic outlook.
Revenue in the third quarter increased 31% to $77.4 million and gross margin increased 7 percentage points to 41%
Net loss in the quarter shrank to $36.1 million from $87.8 million and diluted loss per share declined to 56 cents from $6.72 a year ago.
The online retailer estimated revenue in the fourth quarter between $72 million and $74 million and adjusted operating margin between 4% and 5%.