- Brian Turner
- 18 Jan, 2023
- New York City
Retail and food services sales in December declined 1.1% from November, the U.S. Census Bureau reported Wednesday.
December retail sales declined 1.1% from the previous month after adjusting for seasonal variations and trading day differences but not adjusted for price changes.
Total sales for the 12 months of 2022 were up 9.2% from 2021.
Retail trade sales in December were down 1.2% from November 2022, but up 5.2% above last year.
December non-store retailers rose 13.7% from a year ago while food services and drinking places sales were up 12.1% from last year.
- 18 Jan, 2023
- 18 Jan, 2023
- Barry Adams
- 18 Jan, 2023
- New York City
Profit taking dictated market sentiment and Microsoft's plan to eliminate thousands of jobs weighed on market sentiment.
Benchmark indexes opened higher after the wholesale price index dropped to near a two-year low, but the decline was largely driven by the sharp fall in crude oil and gasoline prices.
Producer prices for services continued to rise at elevated levels, stoking fears that the higher interests are likely to stay longer despite the recent easing in goods prices.
Market sentiment was also after retail sales in December fell more-than-expected.
Moreover, investors turned cautious after Microsoft announced its plan to eliminate as many as 10,000 jobs and take a one-time charge of $1.2 billion to cover severance costs and consolidate its leases.
S&P 500 and Nasdaq Drop 1%
Stocks opened higher on the hopes of inflation peaking but lost momentum after Microsoft announced a lay off plan and benchmark indexes dropped in the negative zone.
The S&P 500 index decreased 1.6% to 3,928.86 and the Nasdaq Composite index dropped 1.2% to 10,957.01.
Energy Prices Advanced On Demand Recovery Hopes
Energy prices traded higher on the hopes of rising demand from China.
Business activities and social mobility have picked up after the abrupt ending of zero-covid policy and ahead of the Lunar New Year, but the pace of increase is slow and halting.
Crude oil fell $1.20 to $78.98 a barrel and natural gas prices declined 30 cents to $3.28 a thermal unit.
Treasury Yields Drop After Weak Inflation Report
The yields on Treasuries declined following a fall in wholesale inflation, confirming the recent trend in easing price pressures.
The wholesale price inflation decline was largely driven by the sharp fall in gasoline and crude oil prices in December, however prices for these commodities have risen in the month so far.
The yield on 2-year Treasury notes fell to 4.08%, 10-year Treasury notes declined to 3.37% and 30-year Treasury bonds dropped to 3.54%.
U.S. Wholesale Goods Inflation Slowed In December
Wholesale prices rose at a slower pace in nearly two years, largely on the account of the decline in energy prices, the Labor Department reported Wednesday.
The producer price index rose 6.2% in December from a year ago and declined 0.5% from the previous month.
On a monthly basis, the price decline was the largest since April 2020 and the annual pace of inflation was the smallest since March 2021.
The sharp decline in energy prices by 7.9% on the month dragged the inflation index lower. Gasoline price index, a subcategory in the energy price index, dropped 13.4%.
Food price index also decreased 1.2%.
The core PPI, which excludes food and energy, increased 0.1%.
Despite the goods price moderation trend in recent months, prices for services and wages have been on the rise.
Looking ahead, the inflation trend could be reversed since gasoline prices at pump stations and crude oil prices have edged up 8% and 1.8% in the month so far.
December Retail Sales Dropped, 2022 Sales Up
Retail and food services sales in December declined 1.1% from November, the U.S. Census Bureau reported Wednesday.
December retail sales declined 1.1% from the previous month after adjusting for seasonal variations and trading day differences but not adjusted for price changes.
Total sales for the 12 months of 2022 were up 9.2% from 2021.
Retail trade sales in December were down 1.2% from November 2022, but up 5.2% above last year.
December non-store retailers rose 13.7% from a year ago while food services and drinking places sales were up 12.1% from last year.
European Markets Paused After Recent Gains
European markets paused after advancing for days in the first two weeks of 2023 and investors turned cautious.
The Euro Area and the U.S. inflation data and the Bank of Japan's continuation of ultra-loose monetary policy dominated the news cycle.
Investors also took a cautious view of China's abrupt switch from zero-covid policy to rapid spread of coronavirus as the expected pick up in business and social activities lag market's expectations.
Retail sales, industrial production, highway traffic and airline passenger bookings in January are recovering after three years of lockdowns but the pace of rebound is still slow, according to local sources in Shanghai, Shenzhen and Beijing.
Euro Area Inflation Eased but Remained Elevated In December
The Euro Area inflation eased to 9.2% in December from 10.1% in November as previously estimated, Eurostat said in a report released Wednesday.
Core inflation, excluding food and energy, accelerated to 5.2% in December from 5.0% in November, keeping the pressure on the European Central Bank to continue with its aggressive rate hikes.
On a monthly basis, the harmonized inflation index decreased 0.4% in December.
Across the region, the lowest annual inflation rates were recorded in Spain with 5.5%, Luxembourg 6.2% and France 6.7%.
The highest annual rates were recorded in Hungary after prices soared 25.0%, Latvia 20.7% and Lithuania 20.0%.
Compared to November, annual inflation fell in twenty-two member states, and the rate was stable in two and rose in three.
Passenger Car Registration Growth Slowed
Automakers advanced after European passenger car sales rose for the fifth month in a row, but the pace of increase slowed in December.
New car sales in the European Union increased 12.8% in December, slower than 16.3% increase in November.
European Market Indexes Hovered Near 9-month Highs
European markets opened higher and advanced in morning trading but faced selling pressure following the weakness in New York trading.
Benchmark indexes lost early gains and closed down in the region.
The DAX index declined 5.27 points to 15,181.80, the CAC-40 index increased 6.2 points to 7,083.39 and the FTSE 100 index dropped 20.33 points or 0.3% to 7,830.70.
European Bond Yields Traded Down Despite Elevated Inflation
The yield on 10-year German Bunds decreased to 2.16%, French bonds declined to 2.65%, UK Gilts dropped to 3.26% and Italian bonds eased to 3.69%.
Weakening U.S. Inflation Drags U.S. Dollar Lower
The euro advanced to $1.0824, the British pound rose to $1.239 and the Swiss franc edged higher to 91.11 U.S. cents.
Europe Stock Movers
Automakers were in focus after the release of December industry sales data as sales rose for the fifth month in a row.
Volkswagen AG, Daimler AG, Porsche Automobil, Renault SA and Peugeot SA traded between a loss of 0.3% and an increase of 1%.
Continental AG declined 3.0% to €66.20 after the German automobile parts maker lowered its adjusted free cash flow estimate and the company blamed the shortfall on the delay in customer payments.
Adjusted free cash flow is expected to be around €1.6 billion in the fourth quarter and around €200 million for the year compared to the estimated range between €600 million to €800 million.
Pearson Plc declined a fraction to 915.85 pence after the British-publishing company reported 2022 results ahead of expectations.
Underlying sales for the full-year increased 5% from a year ago and adjusted operating profit rose 11% to £455 million based on the British pound to the U.S. dollar rate at $1.24.
Richemont SA increased 0.6% to Sfr 137.90 after the Swiss luxury group reported higher sales in all regions except Asia Pacific.
Sales increased 5% and rose 8% in constant currency despite the ongoing Covid-linked disruptions in China.
Sales increased to €5.4 billion from €4.98 billion a year ago after sales in Europe increased 17% to €1.3 billion and in the U.S. rose 16% to €1.3 billion.
Asia Pacific sales declined 7% to €1.9 billion.
Just Eat Takeaway.com NV closed up 4% to 2,215.50 pence after the company reported higher-than-expected revenues in the fiscal second-half.
Total gross orders placed on the delivery platform in the fourth quarter 2022 declined 2% to €7.1 billion from €7.3 billion a year ago and were stable at €28.2 billion in 2022.
Adjusted operating earnings was €150 million or 1.1% of gross sales in second-half 2022 from a loss of €134 million in the first-half, driven by higher revenue per order, lower delivery costs per order and overheads & operating expenses.
Full-year adjusted operating earnings improved to approximately €16 million in 2022 from a loss of €350 million in 2021.
Nikkei Soared After BoJ Left Rates Unrevised
Stocks in Japan soared after the Bank of Japan held its interest rate policy and yield curve control, dashing all hopes of ending its ultra-low rate stance.
The central bank said it will hold rates at zero percent, with a band of 50 basis points or plus or minus 0.5%, and it will continue to buy unlimited amounts of 10-year Japanese government bonds.
The central bank will maintain its short term interest rates at -0.1%.
Last month when the Bank of Japan widened its band to 50 basis points from 25 basis points, investors raised hopes that the bank is finally prepared to lift rates higher and end its decades old ultra-low rate policy.
The Bank of Japan is likely to leave rates and its short term stance unchanged for the rest of the term of Governor Haruhiko Kuroda term, which ends in April.
The Nikkei index soared 2.5% to 26,791.12 and the yen was nearly unchanged at 128.32 against the U.S. dollar.
China Indexes Lacked Direction
Stocks in China lacked direction on the rising worries that the covid-infections are likely to flare-up in rural and urban areas after the ending of holiday period.
Tech stocks led the gainers in Hong Kong after regulatory crackdown appear to be waning.
The Shanghai Composite index increased 0.1% to 3,224.41 and the Hang Seng index advanced 0.5% to 21,678.0.
Sensex Extended Gains to Second Day
Stocks in Mumbai rose for the second day in a row following the market advance in Japan and market sentiment improved on the hopes of stronger-than-anticipated domestic demand.
The Sensex index advanced 0.6% or 390.02 points and the Nifty index added 0.6% or 112.05 to 18,165.35.
- Scott Peters
- 18 Jan, 2023
- New York City
Amazon.com, Inc decreased 0.6% to $95.46 and the company said in an internal memo that the retailer has started its largest lay off plan in the company's history.
The retail and logistics company had earlier said it plans to eliminate 18,000 jobs and trim its workforce amid economic uncertainties.
ASM International NV soared 4.6% to $339.15 after the maker of advanced semiconductor equipment reported better-than-expected fourth quarter revenue.
The Holland-based company said sales in the fourth quarter increased to €720 million mainly due to better-than-expected supply chain conditions and higher conversion of the backlog, exceeding the previous guidance of €630million to €660 million released on November 28, 2022.
Higher-than-expected new orders of €820 million also lifted the book-to-bill ratio above 1.
"The upside was predominantly driven by the power/analog/wafer segment, including an exceptionally high order intake in our silicon carbide epitaxy business," said the company in its investor update.
Bed Bath & Beyond Inc declined 4.8% to $3.94 after the struggling retailer said it is looking for a buyer ahead of filing for a corporate bankruptcy.
Burberry Group Plc ADR rose 4% to $28.49 after the luxury fashion products maker reiterated its medium-term business outlook.
Comparable sales in the fiscal third quarter ending in December increased 1% and excluding mainland China rose 11%.
Revenue in the quarter ending in December increased 5% to £756 million and sales were flat when measured in constant currencies.
Comparable sales rose 19% in the EMEIA region, declined in the Americas by 1%, fell 7% in the APAC region including a 23% plunge in mainland China.
Burberry said it has completed the repurchase of £363 million of its stocks of the authorized £400 million buyback plan.
The company reiterated its near and medium term outlook of high-single digit revenue growth.
J B hunt Transport Services Inc increased 4.5% to $185.02 after the company released quarterly results and positive comments on freight rate outlook.
The transportation services provider said fourth quarter revenue increased 4% to $3.65 billion from $3.5 billion a year ago.
Net income in the quarter decreased to $201.3 million from $242.2 million or diluted earnings per share fell to $1.92 from $2.28.
Microsoft Corp declined 1.7% to $236.32 after the software developer said it plans to cut 10,000 jobs or about 5% of staff by the end of March as a part of its plan to cut expenses.
Microsoft said it will take a one-time charge of $1.2 billion related to severance costs, consolidate lease obligations and manage a change in hardware portfolio.
The one-time charge will negatively impact diluted earnings per share by 12 cents in the fiscal third quarter 2023.
Moderna Inc increased 3.3% to $196.99 after the pharmaceutical company said its vaccine is effective against respiratory syncytial virus in older adults.
Based on the results of the study, the company plans to submit the vaccine for a regulatory approval in the first-half of 2023.
The PNC Financial Services Group, Inc declined 6% to $152.07 after the regional bank reported weaker-than-expected quarterly revenue and earnings.
Revenue in the fourth quarter increased 4% to $5.8 billion from $5.5 billion a year ago, primarily on higher net interest income.
Net income in the quarter decreased 6% to $1.55 billion from $1.6 billion or diluted earnings per share eased to $3.47 from $3.87 a year ago.
Net interest margin of 2.92% increased 10 basis points due to higher interest-earning asset yields, partially offset by higher funding costs.
Prologis Inc increased 1.0% to $122.65 after the logistics and warehouse management company posted quarter results.
Revenue in the fourth quarter increased to $1.75 billion from $1.27 billion a year ago.
Net earnings attributable to shareholders declined to $585.7 million from $1.3 billion and diluted earnings per share fell to 63 cents from $1.57 a year ago.
The company said full-year 2022 earnings rose to $3.3 billion from $2.93 billion and diluted earnings per share rose to $4.25 from $3.94 a year ago.
The company guided full-year 2023 earnings per share to range between $3.0 and $3.15.