Market Update
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%.
Big Lots Swings to Quarterly Loss, Inventories Rise 23%
Scott Peters
30 Aug, 2022
New York City
Big Lots Inc increased 5.2% to $22.69 after the discount retailer posted a smaller-than-expected quarterly loss.
The closeout merchandiser is still struggling with inventory mismatch, persistent supply chain problems, and weaker consumer spending.
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.
Inventories
Inventories at the end of the second quarter rose largely on the higher prices and early ordering ahead to avoid supply chain disruptions.
Inventories increased 22.8% to $1,159.0 million compared to $943.8 million for the same period last year.
Credit Facility Refinancing
The company is in the process of relacing its existing $600 million 5-year unsecured credit facility with a new $900 million facility with an option to increase $300 million in the third quarter.
The new facility is arranged with PNC Bank and its affiliates.
Dividend and Stock Buybacks
A week ago, the company declared a quarterly cash dividend of 30 cents a common share totaling approximately $8.7 million payable on September 23, 2022 to shareholders of record as of September 9, 2022.
The company did not execute any share repurchases during the quarter and has $159 million remaining under its $250 million authorization.
Guidance and Outlook
For the third quarter, the company expects comparable sales from a year ago to be down in the "low double-digit range."
Net new stores will add about 140 basis points of growth compared to a year ago.
The company expects continued significant promotional activity in the fiscal year third quarter resulting in a gross margin rate into the mid-30s, and that SG&A expenses "will grow low single-digits" from a year ago.
Best Buy Domestic Comparable Second Quarter Sales Fall 12.7%
Scott Peters
30 Aug, 2022
New York City
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.
Sales continue to fall as consumers shift priorities and limit purchases beyond basic products,
The retailer has stepped up its online promotion activities to lure customers back.
Domestic revenue fell 13.1% from a year ago to $9.57 billion primarily driven by a comparable sales decline of 12.7%.
Comparable sales declined across almost all categories, with the largest drivers on a weighted basis being computing and home theater, the company said in the earnings release statement.
Domestic comparable online revenue declined 14.7% to $2.97 billion and as a percentage of total domestic revenue, online revenue edged down to 31.0% compared to 31.7% last year.
Second quarter net income dropped to $306 million or $1.35 a share from $734 million or $2.90 a share a year ago.
Guidance
The retailer guided full-year comparable sales to decline "slightly more than the 12.1% decline reported in the second quarter."
Stock Repurchase and Dividend
In the quarter, the company returned a total of $208 million to shareholders through share repurchases of $10 million and dividends of $198 million.
In the first-half the company has returned a total of $862 million to shareholders through share repurchases of $465 million and dividends of $397 million.
The company paused share repurchases in the second quarter and announced its regular quarterly cash dividend of $0.88 a common share payable on October 11, 2022, to shareholders of record as of September 20, 2022.
Movers: Baidu, Best Buy, Big Lots, First Solar, Lucid Group, Netflix, Peloton
Barry Adams
30 Aug, 2022
New York City
Stocks opened higher after two days of selloff and quickly dropped below the flat-line on the rising worries of economy tipping into a recession.
The S&P 500 index fell 0.5% to 4,008.13 and the Nasdaq Composite index declined 0.6% to 11,955.03.
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 lower to 3.08% and 2-year notes edged down to 3.46%.
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.
Futures of crude oil declined $4.20 to $92.92 a barrel and natural gas decreased 42 cents to $8.52 a British thermal unit.
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.
Netflix Inc declined 1.6% to $221.69 after the company denied a recent report published by Bloomberg news that it has finalized the price for its its ad-supported streaming services.
The company told to New York Post that the service plan is still in the early stage of development and there is no decision made on the price of the offering.
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.
Total July Job Openings Stable
Brian Turner
30 Aug, 2022
New York City
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.
In July, the number of hires was little changed at 6.4 million and the hire rate was unchanged at 4.2% and total separations held at 5.9 million including 4.2 million quits and 1.4 million layoffs and discharges.
Hires were little changed in all industries.
Stocks Lack Direction, Bond Yields and Energy Prices Ease
Barry Adams
30 Aug, 2022
New York City
Stocks opened higher after two days of selloff but struggled to stay in the positive zone after one hour of trading.
The S&P 500 index fell 0.5% to 4,008.13 and the Nasdaq Composite index declined 0.6% to 11,955.03.
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 lower to 3.08% and 2-year notes edged down to 3.46%.
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.
Futures of crude oil declined $4.20 to $92.92 a barrel and natural gas decreased 42 cents to $8.52 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.
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.
Treasury Yields Rise and Stocks Extend Losses
Barry Adams
29 Aug, 2022
New York City
Stocks extended losses after Friday's selloff and bond yields rose as central bankers mount a concerted campaign to lift rates.
Benchmark indexes eased as investors digested Friday's comments from the Federal Reserve chief and prepared for higher rates at the remaining two meetings of the policymakers in the year.
Bond yields advanced in the U.S. and Europe and markets are anticipating more comments from central bankers this week ahead of the U.S. payroll report on Friday.
Across the Atlantic, policymakers in Europe also accelerated the campaign for higher rates ahead of the next meeting in less than two weeks.
Eight-week long U.S. market rally from the lows of mid-June was powered by investors hoping economic soft landing and declining interest rates next year.
However, those hopes were dashed after the Fed chief forcefully reiterated that the inflation is too high and the central bank will take forceful measures as long as necessary to cool down the rapid price increases.
The strong message sent a clear signal that the Fed may dip the economy in recession if necessary to cool down the high inflation to its preferred target rate of 2%.
The S&P 500 index declined 0.7% to 4,030.51 and the Nasdaq Composite index dropped 1.0% to 12,017.67.
Tech stocks led the decliners in a broad selloff for the second day but the energy complex stock advanced after crude oil prices continued to advance on tight demand supply conditions.
The natural gas prices in Europe are still running nine times, yes nine-fold, higher to the U.S. prices on the persistent worries of Russian supply in the coming months.
Futures of crude oil rose $3.88 to $96.94 a barrel and natural gas advanced 2 cents to $9.35 a British thermal unit.
The yield on 10-year Treasury notes inched up to 3.11% and two-year notes rose to a 15-year record high of 3.41%
In trading on Wall Street, stocks lacked direction in morning trading but sell overwhelmed buy orders.
Microsoft, Alphabet, Amazon.com, and Apple declined between 0.5% and 1.3%.
Exxon Mobil, Marathon Oil, Hess Corp, and Valero Energy rose between 2% and 4%.
Moderna Inc increased 1.2% to $138.43 after Swiss regulators approved the company's latest vaccine that targets the omicron variant.
Walmart Inc rose 1.4% to $133.49 and the retailer offered to acquire the remaining stake in the South Africa-based Massmart for $378 million.
Walmart's offer for the 47% stake of Massmart is 53% higher than Friday's close price.
Etsy Inc increased 0.8% to $105.17 and the online platform operator tightened its seller's account and bank account information.
Pinduoduo Inc soared 16.6% to $67.14 after the China-based online commerce platform operator reported better-than-expected quarterly results.
European Markets Brace for Rate Hikes
European markets extended Friday's losses and the worries of faster and larger rate hikes in the euro zone.
Bond yields in the eurozone rose after leading European policymakers said immediate rate hikes are necessary to cool inflation even at the risk of tipping the economy into a recession.
Isabel Schnabel, a German economist and a member of the European Central Bank, stressed in a comment directed to other members to signal their determination to bring inflation back to target quickly.
Olli Rehn, another member of the governing council, said that the central bank should act now because "high inflation is spreading in the economy" and "time to act is now and manage the inflation expectations and keep it anchored to target rate."
The ECB governing council member Francois Villeroy and policymaker Martins Kazaks also hinted at aggressive policy tightening at the next rate decision meeting.
The European Central Bank is scheduled to meet on September 8 and economists are anticipating a rate increase of either 50 or 75 basis points.
The yield on the German government 10-year bunds rose to 1.506% and the yield on 2-year U.K. government bonds edged lower to 2.797%.
The yield on 10-year Italian government bonds yield rose to 3.8% and on French bonds of similar maturities edged up to 2.12%.
The DAX index decreased 0.6% to 12,892.22, the CAC-40 index dropped 0.8% to 6,222.28, and the FTSE 100 index eased 0.7% to 7,427.31.
The euro held firm in parity with the U.S. dollar and the British pound edged lower to $1.17, only 4 cents shy of its record low in nearly four decades, as the inflation continues to accelerate in the island nation.
The British pound is expected to decline more on the rising energy subsidies to households and dent bigger hole in the government finances.
In stock trading, benchmark indexes opened lower and continued to slide more after the weak trading in Jew York.
Popular indexes trimmed losses near the end of the session but closed down for the day.
Tech stocks led the decliners with STMicroelectronics and Infineon Technologies dropped between 3% and 4%.
Valneva SE declined 0.4% to 9.22 euros and the French drug maker reported positive late stage trial results for its Covid-19 vaccine with booster effects.
The Swiss Market index fell 1.1%or 121.72 points 10,942.16 and financials were among the leading decliners.
Credit Suisse, UBS, Givaudan, Alcon, and Richemont fell between 2% and 4%.