- Scott Peters
- 12 Oct, 2023
- New York City
Stocks struggled after the release of consumer price inflation report showed stubborn inflation in September.
The S&P 500 index increased 0.1% to 4,381.14 and the Nasdaq Composite rose 0.1% to 13,673.63.
The yield on 2-year Treasury notes increased to 5.06%, 10-year Treasury notes inched higher to 4.61% and 30-year Treasury bonds held at 4.75%.
Delta Air Lines jumped 3% to $37.10 after the international carrier said third-quarter earnings soared 60% from a year ago on strong travel demand.
Revenue in the September quarter jumped 11% to $15.5 billion from $14.0 billion and net income rose 59% to $1.1 billion from $695 million and diluted earnings per share advanced to $1.72 from $1.08.
The company repaid $3.7 billion of debt year-to-date and management anticipated to repay over $4 billion in the year.
Standard & Poor's in August revised the airline's debt rating to BB+ with a "positive outlook."
The company forecasted total revenue in the December quarter to increase between 9% and 12%.
Walgreens Boots Alliance increased 0.8% to $22.89 after the retail pharmacy chain reported mixed quarterly results and forecasted weak annual earnings growth outlook.
Revenue in the fiscal fourth quarter ending in August increased to $35.4 billion from $32.4 billion and net loss shrank to $180 million from $415 million and diluted loss per share fell to 21 cents from 48 cents a year ago.
Fiscal 2023 sales increased 4.8% to $139.1 billion from $132.7 billion and net income swung to a loss of $3.1 billion from $4.3 billion a year ago.
Earnings in the year were impacted by the sharp decline in Covid-19 testing and vaccine volumes.
The pharmacy retail chain guided fiscal 2024 sales in the range between $141 billion and $145 billion and adjusted earnings per share between $3.20 and $3.50.
Ford Motor Company declined 2.2% to $11.98 after United Auto Workers expanded its strike to a key plant in Kentucky where the company builds popular SUVs.
Domino's Pizza Inc declined 3.4% to $346.50 after the food company reported weaker-than-expected earnings and sales at the U.S. comparable locations declined 0.6%.
Total revenue in the quarter ending on August 10 eased to $1.02 billion from $1.06 billion and net income soared to $147.7 million from $100.5 million and diluted earnings per share surged to $4.18 from $2.79 a year ago.
Excluding the impact of the closure of the Russia market, the global net store count in the third quarter was 135 stores, comprising 27 net U.S. and 108 net international store openings.
The pizza delivery company forecasted its 2023 global net store growth "to trend at or slightly below the low-end" of its 5% to 7% two- to three-year outlook.
Additionally, the company estimated its 2023 global retail sales growth, excluding foreign currency impact, "to trend modestly below the midpoint" of its 4% to 8% two -to three-year outlook.
- Barry Adams
- 12 Oct, 2023
- New York City
Stocks lacked direction and investors reviewed the latest inflation report.
Market indexes were little changed after consumer price inflation held steady in September on an annual basis but rose from the previous month in September.
Despite the weakening inflation, prices are still rising at faster than 2% target rate set by the Federal Reserve, supporting the case for higher interest rates through 2024.
A separate report showed that initial jobless claims were unchanged from the previous week at 209,000 in the week ending October 7, the U.S. Department of Labor reported Thursday.
The weekly claims were near the seven-month low of 202,000, indicating tight labor market conditions and supporting the case of higher interest rates through 2024.
Continuing claims rose 30,000 from the previous week to 1.702 million.
Overall Inflation Held Steady In September
The Consumer Price Index, a measure of overall inflation, rose 0.4% in September and jumped 3.7% from a year ago, the U.S. Bureau of Labor Statistics reported Thursday.
Core inflation, which excludes volatile food and energy prices, rose 4.1% from a year ago, the slowest pace of increase since September 2021.
On a monthly basis, overall consumer price inflation declined to 0.4% from 0.6% increase in the previous month and core inflation held steady at 0.3%.
U.S. Indexes & Yields
The S&P 500 index increased 0.1% to 4,381.14 and the Nasdaq Composite rose 0.1% to 13,673.63.
The yield on 2-year Treasury notes increased to 5.06%, 10-year Treasury notes inched higher to 4.61% and 30-year Treasury bonds held at 4.75%.
Crude oil prices were in focus on the worries that the latest flare up between Israel and Hamas may spread to neighboring oil producing states and disrupt global oil supply.
Crude oil decreased $1.67 to $85.16 a barrel and natural gas prices eased 4 cents to $3.32 a thermal unit.
The dollar index edged higher to 105.07, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Delta Air Lines jumped 3% to $37.10 after the international carrier said third-quarter earnings soared 60% from a year ago on strong travel demand.
Walgreens Boots Alliance increased 0.8% to $22.89 after the retail pharmacy chain reported mixed quarterly results and forecasted weak annual earnings growth outlook.
Ford Motor Company declined 2.2% to $11.98 after United Auto Workers expanded its strike to a key plant in Kentucky where the company builds popular SUVs.
Domino's Pizza Inc declined 3.4% to $346.50 after the food company reported weaker-than-expected earnings and sales at U.S. comparable locations declined 0.6%.
- Inga Muller
- 12 Oct, 2023
- Frankfurt
European benchmark indexes advanced to 3-week highs after bond yields edged lower and investors reacted to corporate earnings news.
The DAX index increased 0.7% to 15,562., the CAC-40 index rose 0.6% to 7,175.02 and the FTSE 100 index advanced 0.8% to 7,678.89.
The yield on 10-year German bonds decreased to 2.72%, French bonds traded lower to 3.24%, the UK gilts edged up to 4.35% and Italian bonds rose to 4.66%.
LM Ericsson Class B advanced 3.5% to skr 55.28 after the Swedish telecom company booked a $2.9 billion charge linked to its acquisition of Vonage in 2022.
EasyJet plc decreased 5.2% to 414.0 pence despite the U.K.-based discount airline reporting record fiscal fourth quarter profit.
Givaudan SA increased 1.5% to CHF 2,937.0 despite the Swiss fragrance company reporting a decline in sales in its latest quarter.
Restaurant Group Plc soared 37.6% to 66.4 pence after the operator of pubs and restaurants agreed to go private in a $625 million deal with Apollo Global Management.
Suedzucker AG increased 1.4% to €14.30 after the world's largest sugar producer revised its annual earnings outlook.
The sugar and starch products maker said consolidated sales in the first-half ending in August rose 10% to €5.08 billion from €4.6 billion a year ago.
Operating earnings in the first-half increased to €739 million from €465 million a year ago.
The company forecasted full-year revenue to range between €10.0 billion and €10.5 billion compared to €9.5 billion and operating earnings in the range of €1.3 billion to €1.4 billion compared to the previous estimate between €1.2 billion and €1.4 billion and €1.1 billion a year ago.
Siemens Energy AG added 2.3% to €12.48 after the company agreed to sell its Trench business to an investment firm Triton as the company sharpened its focus on its core business.
Publicis Groupe SA increased 4.8% to €76.84 after the public relations and advertising company reported an increase in revenue in the third quarter.
Publicis revised higher its organic growth outlook for the full-year to range between 5.5% and 6% from the previous estimate of 5.0%.
- Bridgette Randall
- 12 Oct, 2023
- Frankfurt
Stocks extended weekly gains and investors debated future direction and level of interest rates.
Benchmark indexes in London, Paris and Frankfurt jumped more than 0.5% and investors reacted to corporate news as earnings season gathered pace.
In economic news, the U.K. gross domestic product increased 0.2% in August from July, when the economy shrank revised 0.6%, the Office for National Statistics reported Thursday.
From a year ago, GDP advanced 0.5% after service sector expansion overwhelmed the decline in production and construction.
In the three months to August, GDP increased 0.3% and manufacturing, services and construction showed growth.
Europe Indexes & Yields
The DAX index increased 0.7% to 15,562.04, the CAC-40 index rose 0.6% to 7,175.02 and the FTSE 100 index advanced 0.8% to 7,678.89.
The yield on 10-year German bonds decreased to 2.72%, French bonds traded lower to 3.24%, the UK gilts edged up to 4.35% and Italian bonds rose to 4.66%.
The euro edged lower to a three-month low to $1.06, the British pound to $1.23 and the U.S. dollar fetched 89.97 Swiss cents.
Brent crude increased $1.16 to $86.98 a barrel and the Dutch TTF natural gas edged higher by €3.13 to €49.20 per MWh.
Europe Stock Movers
LM Ericsson Class B advanced 3.5% to skr 55.28 after the Swedish telecom company booked a $2.9 billion charge linked to its acquisition of Vonage in 2022.
EasyJet plc decreased 5.2% to 414.0 pence despite the U.K.-based discount airline reporting record fiscal fourth quarter profit.
Givaudan SA increased 1.5% to CHF 2,937.0 despite the Swiss fragrance company reporting a decline in sales in its latest quarter.
Restaurant Group Plc soared 37.6% to 66.4 pence after the operator of pubs and restaurants agreed to go private in a deal with Apollo Global Management.
Suedzucker AG increased 1.4% to €14.30 after the world's largest sugar producer revised its annual earnings outlook.
The sugar and starch products maker said consolidated sales in the first-half ending in August rose 10% to €5.08 billion from €4.6 billion a year ago.
Operating earnings in the first half increased to €739 million from €465 million a year ago.
The company forecasted full-year revenue to range between €10.0 billion and €10.5 billion compared to €9.5 billion and operating earnings in the range of €1.3 billion to €1.4 billion compared to the previous estimate between €1.2 billion and €1.4 billion and €1.1 billion a year ago.
Siemens Energy AG added 2.3% to €12.48 after the company agreed to sell its Trench business to an investment firm Triton as the company sharpened its focus on its core business.
Publicis Groupe SA increased 4.8% to €76.84 after the public relations and advertising company reported an increase in revenue in the third quarter.
Publicis revised higher its organic growth outlook for the full-year to range between 5.5% and 6% from the previous estimate of 5.0%.
- Barry Adams
- 11 Oct, 2023
- New York City
Stocks meandered and the release of the FOMC policy meeting minutes did little to change direction.
Market indexes headed higher after Treasury yields edged lower for the fourth day in a row and averages dipped below the flatline by midday and managed to rebound in late afternoon trading.
The S&P 500 index traded between 0.4% and -0.2% and the Nasdaq Composite index ranged between 0.7% and -0.1% after the yield on 10-year U.S. Treasury notes declined 12 basis points.
Market sentiment was positive in early trading after Exxon Mobil announced a $60 billion deal to acquire shale oil producer Pioneer Natural Resources and double its energy production in the Permian Basin.
Investors also reviewed the minutes of the latest FOMC policy meeting minutes released today and participants were divided about an additional rate hike.
The Federal Reserve held fed funds steady at the end of a two-day meeting on September 20.
“A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted,” minutes of the meeting showed.
On the economic front, the producer price index rose 0.5% in September from the previous month, and slower than 0.7% in August, the U.S. Bureau of Labor Statistics reported Wednesday.
However, wholesale inflation on an annual basis accelerated to 2.2% in the month from 2.0% in the previous month and advanced for the third month in a row.
Investors are also awaiting the release of the Federal Reserve's policy meeting minutes later in the afternoon.
Market indexes are likely to trade volatile ahead of the release of September's consumer price inflation report on Thursday and economists are expecting annual inflation to jump as much as 3.6%.
U.S. Indexes & Yields
The S&P 500 index increased 0.2% to 4,365.59 and the Nasdaq Composite rose 0.5% to 13,618.85.
The yield on 2-year Treasury notes decreased to 4.99%, 10-year Treasury notes inched lower to 4.59% and 30-year Treasury bonds edged down to 4.75%.
Crude oil decreased $2.28 to $83.67 a barrel and natural gas prices eased 1 cent to $3.37 a thermal unit.
The dollar index edged higher to 105.68, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Humana Inc declined 1.2% to $494.0 after the health insurance company said chief executive Bruce Broussard will step down in the second-half of 2024.
The company named health care industry veteran Jim Rechtin as President and Chief Operating Officer effective January 8, 2024, as part of a long-planned CEO transition and Rechtin will assume chief executive's role after Broussard steps down.
Sherwin-Williams Company was unchanged at $252.0 and the company said President Heidi G Petz will assume additional role of chief executive from the start of 2024.
Novo Nordisk AS jumped 3.4% to $96.34 after the Danish company said it will stop kidney trials earlier because of promising results.
The company's drug therapy Ozempic uses active ingredient semaglutide, which the company also uses in the making of its weight-loss drug Wegovy.
After the Novo Nordisk's news, Davita Inc plunged 18% to $54.58 and Fresenius Medical Care dropped 16.7% to $17.45.
Pioneer Natural Resources Company jumped 1.9% to $241.79 after the company agreed to be acquired by Exxon Mobil in an all-stock merger for $253 a share or $60 billion.
European Markets and Bond Yields Eased
Stocks in Europe hovered near flatline as investors prepared for a barrage of earnings next week.
Market indexes in London, Paris and Frankfurt lacked direction and investors debated interest rate paths amid resurgent crude oil and natural gas prices.
Central bank policymakers are sending mixed signals about the future direction and level of interest rates.
Policymakers stress their commitments in lowering inflation but show no urgency or set a timetable to bring down inflation, and at the same time inflationary forces are spreading across the wider areas of economy.
Longer inflation stays elevated, harder it will become to dislodge without dipping the economy into a severe recession.
Europe Indexes & Yields
The DAX index decreased 0.01% to 15,460.01, the CAC-40 index fell 0.4% to 7,131.21 and the FTSE 100 index eased 0.1% to 7,620.03.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.27%, the UK gilts edged down to 4.32% and Italian bonds rose to 4.68%.
The euro edged lower to a three-month low to $1.06, the British pound to $1.222 and the U.S. dollar fetched 90.32 Swiss cents.
Brent crude decreased $1.39 to $86.24 a barrel and the Dutch TTF natural gas edged lower by €2.26 to €47.20 per MWh.
Europe Stock Movers
FirstGroup plc added 4.4% to 153.0 pence after the UK-based bus and rail group lifted its annual profit outlook.
Marston's Plc declined 4.3% to 27.60 pence despite the pub operator reporting an 11% rise in sales in the fiscal year ending in September.
Travis Perkins Plc dropped 5.7% to 759.60 pence after the U.K.'s largest distributor of building materials said annual earnings are likely to be below its forecast.
"With commodity deflation expected to continue and the exit rate from the third quarter indicating further challenging conditions for the balance of the year," the company said in a regulatory filing.
The company forecasted its adjusted operating profit in the range of £175 million to £195 million for the full-year.
Pagegroup dropped 4.0% to 407.0 pence after the UK-based recruitment company said its annual profits are likely to fall by a third because of ongoing macroeconomic headwinds in the UK, U.S. and Asia.
Accor SA advanced 1.4% to €31.98 after the French hospitality group launched a €400 million stock repurchase plan.
LVMH dropped 6.0% to €689.90 after the French luxury goods maker reported lower sales growth in the third quarter, prompting worries of an end of the post-pandemic luxury boom.
Luxury peers Kering SA and Hermes International declined 1.5%.
- Brian Turner
- 11 Oct, 2023
- New York City
The producer price index rose 0.5% in September from the previous month, and slower than 0.7% in August, the U.S. Bureau of Labor Statistics reported Wednesday.
However, wholesale inflation on an annual basis accelerated to 2.2% in the month from 2.0% in the previous month and advanced for the third month in a row.
The annual increase in wholesale was the largest since the gain of 2.3% in April.
Goods price index rose 0.9%, driven by 5.4% increase in gasoline prices.
Core wholesale prices, excluding foods, energy, and trade services, increased 0.2% from the previous month in September, the fourth consecutive increase.
Core wholesale inflation, on an annual basis, jumped 2.8%.