Stocks Accelerate Gains Ahead of Jobs Report and Fed Comments

Stocks advanced in morning trading ahead of the release of economic data on employment and comments from the Federal Reserve. 

Economic reports on the U.S. labor market and jobless rate survey are expected to impact market sentiment later in the week. 

Federal Reserve Chairman Jerome Powell is scheduled to offer his views to congressional lawmakers and investors on Tuesday and Wednesday. 

The U.S. Labor Department is scheduled to release the February jobs report on Friday and economists polled by Ticker.com are estimating net payroll additions between 265,000 and 295,000. 

January's payrolls increase by 517,000 is viewed by most economists as an anomaly, despite the tight labor market conditions. 

The U.S. labor market is expected to add less than 260,000 jobs a month, slower than 401,000 in 2022 and 600,000 in 2021.     

Investors are looking ahead to the release of the Euro Area GDP data and comments from the European Central Bank policymakers. 

Crude oil traded with a downward bias after China forecasted a modest increase in economic growth in 2023.  

New orders for manufactured goods in January fell $8.9 billion or 1.6% to $542.8 billion, following the downwardly revised 1.7% rise, the U.S. Census Bureau reported Monday. 

New orders declined in two of the last three months but shipments declined for the third month in a row in January by 0.7% following the fall by 0.6%.  

China Sets Modest Economic Growth Target In 2023 

China lowered its economic growth target in 2023 to 5% after missing the 5.5% in the previous year. 

China's economy expanded at 3.3% in 2022 and is likely to advance at a slower pace on the weak export growth and falling property prices.  

Outgoing Premier Li Keqiang announced the target rate at the annual legislative conference on Sunday and the party officials focused on reviving growth through other measures.

Indexes & Yields 

The S&P 500 index increased 0.7% to 4,072.31 and the Nasdaq Composite index added 1.0% to 11,805.63. 

The yield on 2-year Treasury notes edged lower to 4.88%, 10-year Treasury notes to 3.96% and 30-year Treasury bonds eased to 3.88%. 

Crude oil increased 55 cents to $80.21 a barrel and natural gas eased 39 cents to $2.60 a thermal unit. 

Stock Movers 

Snap Inc gained 13% to $12.03 as the U.S. lawmakers make progress in advancing a bill to provide an authority to President Joe Biden in banning TikTok, the company's main competitor. 

Credit Suisse declined 0.7% to $3.01 after the company's main shareholder Harris Associates sold its entire stake in the company. 

The news was first reported by the Financial Times and independently verified by Ticker.com. 

Chicago-based Harris Associates reportedly owned as much as 10% last year but sold its entire stake in the last two months. 

"There is a question about the future of the franchise. There have been large outflows from wealth management," deputy chair and chief investment officer David Hero said to Financial Times. 

Ciena Corporation rose 4% to $51.14 after the networking equipment maker reported revenue in the last quarter increased 25.1% to $1.06 billion from $844.44 million a year ago. 

Net income increased to $76.24 million or $0.51 per share from $45.82 million or $0.29 per share in the prior-year quarter.

Euro Area Retail Sales Eased, UK Vehicle Registrations Approached Pre-pandemic Level

European market indexes advanced and investors looked ahead to a busy week of economic reports and a fresh batch of corporate earnings. 

Energy explorers and resource stocks closed lower following the weakness in crude oil and natural gas prices after China lowered its economic growth target in 2023. 

European indexes are expected to trade volatile as investors look ahead to India's money supply growth, foreign exchange reserves and industrial production data, U.S. jobs market and the Euro Area GDP data later in the week.

Investors will also review comments from the U.S. Federal Reserve and the European Central Bank policy makers during the week. 

Euro Area Retail Sales Eased 

On the economic front, the Euro Area retail sales rose less than expected in January, Eurostat reported on Monday. 

Retail sales in January rose 0.3% after falling 1.7% in December on a monthly basis. 

On an annual basis, retail sales decline eased to 2.3% at the start of the year after falling 2.8% in December. 

The weaker-than-expected retail sales suggested that consumers are still struggling under the high prices of food and energy. 

Food, drinks and tobacco sales rose 1.8% after a 2.1% decline and non-food product sales rose 0.8% after falling 2.5%. 

Automotive fuel sales fell 1.5% reversing a 0.5% increase in the prior month.

UK new car registration increased for the seventh month in a row on the sustained demand for electric vehicles, the Society of Motor Manufacturers and Traders reported Monday. 

Passenger vehicle sales increased 26.2% in February from 14.7% rise in January and new car registration increased to 74,441 units from 58,994 a year ago. 

The 7-month sustained rebound in vehicle sales lifted automobile registration and approached the pre-pandemic 2020 registration in the corresponding month.  

Vehicle registrations were only 6.5% lower than February 2020.

China Sets Modest Economic Growth Target In 2023 

China lowered its economic growth target in 2023 to 5% after missing the 5.5% in the previous year. 

China's economy expanded at 3.3% in 2022 and is likely to advance at a slower pace on the weak export growth and falling property prices.  

Outgoing Premier Li Keqiang announced the target rate at the annual legislative conference on Sunday and the party officials focused on reviving growth through other measures. 

Indexes & Yields 

The DAX index increased 0.2% to 15,615.14, the CAC-40 index added 0.1% to 7,358.28 and the FTSE 100 index decreased 0.6% to 7,901.03. 

The yield on the 10-year German Bunds edged lower to 2.66%, French bonds eased to 3.2%, the UK gilts to 3.8% and Italian bonds to 4.4%. 

The euro inched higher to $1.06, the British pound edged higher to $1.20 and the Swiss franc to 93.48 U.S. cents. 

Brent crude oil decreased $1.05 to $84.77 a barrel and the Dutch TTF natural gas futures dropped Є2.14 to Є42.85 per MWh. 

Europe Movers 

Telecom Italia SpA increased 3% to €0.32 after Italian state investor CDP and Australia's private equity and asset management group Macquarie submitted a joint bid to acquire the company's fixed-network business. 

Eni SpA added 0.7% to €13.52 after the Italian company struck a deal with Abu Dhabi National Oil Company in deepening their ties in reducing emissions and producing clean energy. 

Clarkson PLC increased 5.5% to 3,485.0 pence after the U.K.-based shipping services provider reported a rise in 2022 earnings. 

Resource stocks traded lower after Brent crude declined 1.1% and natural gas dropped 4.8% and base metal prices fell around 1%.  

Glencore, Antofagasta and Anglo American declined between 1% and 3%. 

James Fisher & Sons plc declined 4.6% to  372.50 pence after the U.K.-based company agreed to sell its nuclear decommissioning business for nominal consideration and established a new intercompany credit agreement. 

Macy's Inc said revenue in the fourth quarter declined to $8.3 billion from $8.7 billion and net income fell to $508 million from $742 million and diluted earnings per share dropped to $1.83 from $2.44 a year ago. 

In the full-year 2022, revenue fell 0.1% to $24.5 billion and net income fell to $1.1 billion from $1.4 billion and diluted earnings per share decreased to $4.19 from $4.55 a year ago. 

Comparable store sales at the company owned stores fell 3.3% in the quarter and increased 0.3% in the full-year 2022.  

The number of active shoppers decreased 4% to 42.7 million at the Macy’s branded stores, increased 5% to 4.1 million at the Bloomingdale’s stores, and rose 12% to 662,000 at the Bluemercury stores from the previous year. 

Xponential Fitness, Inc said revenue in the fourth quarter increased to $71.3 million from $49.3 million and net loss shrank to $0.25 million from $14.7 million and diluted loss per share shrank to $1.13 from $2.45 a year ago. 

The company said North America quarterly average unit volume increased to $522,000 from $446,000 in the previous year. 

In the full-year 2022, revenue increased to $229.8 million from $185.9 million and the franchisor of boutique fitness brands swung to a profit of $2.9 million from a loss of $51.4 million and diluted loss per share was 87 cents from $2.85 a year ago. 

The company sold 1,026 franchise licenses and opened 511 new studios in 2022. 

Six Flags Entertainment Corp said revenue in the fourth quarter declined 12% to $280 million from $317 million and the company swung to a net income of $13 million from a loss of $2 million and diluted earnings per share was 16 cents compared to a loss of 2 cents in the previous year. 

Attendance in the park declined 30% to 4.1 million from 5.8 million and total spending per person increased 23% to $65.15, reflecting admission cost increase of 24% to $34.50 and in-park spending increase of 22% to $30.65. 

Revenue in the full-year 2022 declined 9% to $1.35 billion and net income attributable to stockholders declined 16% to $109 million from $130 million and diluted earnings per share dropped to $1.29 from $1.50 a year ago. 

Total attendance dropped 26% to 20.4 million from 27.7 million and total guest spending per person increased 22% to $63.93, reflecting a 25% increase in admissions to  $35.99 and 18% increase in in-park spending to $27.94. 

Victoria's Secret & Co said revenue in the fourth quarter decreased 7% to $2.02 billion from $2.2 billion and net income declined to $173 million from $246 million and diluted earnings per share fell to $2.10 from $2.70 a share. 

The company said net sales in the full-year 2022 declined 6% to $6.3 billion from $6.8 billion and net income fell to $348 million from $646 million and diluted earnings per share fell to $4.14 from $7.18 a year ago. 

The company repurchased 0.9 million shares for $36 million and completed its $250 million stock repurchase program and announced a new plan of $250 million through the end of fiscal year 2023. 

The retailer is forecasting first quarter 2023 net sales to decrease in the "mid-single digit range" compared to last year’s first quarter net sales of $1.484 billion and adjusted net income for the first quarter of 2023 is estimated to be in the range of $0.30 to $0.60 per diluted share.  

Nordstrom Inc said revenue in the fourth quarter decreased 4% to $4.2 billion and net income declined to $119 million from $200 million and diluted earnings per share fell to 74 cents from $1.23 a year ago. 

In the fourth quarter, Nordstrom banner sales declined 2.4% and Nordstrom Rack sales dropped 8.1% and online sales fell 13.1% from the previous year. 

Revenue in the full-year increased to $15.1 billion from $14.4 billion and net income rose to $245 million from $178 million or diluted earnings per share $1.51 from $1.10 in the previous year. 

The luxury retailer announced its plan to wind down its Canada operations and close 6 Nordstrom stores and 7 Nordstrom Rack stores. The wind-down is expected to decline annual sales by $400 million and improve EBIT by $35 million and the retailer estimated wind-down related pre-tax charge between $300 million and $350 million in the first quarter of 2023.  

The board of directors declared a quarterly cash dividend of $0.19 per share to be paid to shareholders of record on March 14 payable on March 29. During fiscal year 2022, the retailer repurchased 2.8 million shares of its common stock for $62 million under its existing $500 million share  repurchase program with $438 million still available. 

The Kroger Co said revenue in the fourth quarter increased to $34.8 billon from $33 billion and net income fell to $450 million from $566 million and diluted earnings per share declined to 62 cents from 76 cents a share. 

Revenue in the full-year 2022 increased to $148.3 billion from $137.9 billion and net income increased to $2.2 billion from $1.7 billion and diluted earnings per share rose to $3.06 from $2.17 in the previous year. 

Broadcom Inc said revenue in the fiscal year 2023 first quarter ended on January 29 increased 16% to $8.9 billion from $7.7 billion and net income increased 52% to $3.8 billion from $2.5 billion and diluted earnings per share rose to $8.80 from $5.50 in the previous year. 

The advanced chipmaker forecasted fiscal second quarter revenue of $8.7 billion and adjusted EBITDA of 65% of projected revenue. 

The company declared cash dividend of $4.60 a share payable on March 31 to shareholders on record on March 22. 

Burlington Stores said revenue in the fourth quarter increased 5% to $2.7 billion and comparable sales decreased 2%. Net income increased to $185 million from $122 million and diluted earnings per share rose to $2.83 from $1.80 a year ago. 

Revenue in the full-year 2022 decreased 7% to $8.7 billion from $9.3 billion and net income declined 44% to $230 million from $408.8 million and diluted earnings per share fell to $3.49 from $6.0 in the previous year. 

During the fourth quarter the company repurchased 275,029 shares of its common stock for $51 million and had $347 million remaining on its share repurchase program at the end of the period. 

The discount retailer guided total sales in the 53-week fiscal year to increase in the range of 12% to 14% including approximately 2% from the 53rd week, reversing a 7% decrease in the previous year. The retailer forecasted comparable store sales to increase in the range of 3% to 5%, on top of the 13% decrease in the previous year. 

Hibbett Inc said net sales for the 13-weeks ended on January 28 increased 19.6% to $458.3 million compared with $383.3 million in the previous year. 

Comparable store sales increased 14.3% and online comparable sales increased 21.4% from the previous year. In relation to the 13-weeks ended February 1, 2020, comparable store sales increased 32.6% and online sales grew 79.8%. Online sales represented 17.4% of total net sales for the fourth quarter compared to 17.1% in the previous year and 14.2% for the 13-weeks ended February 1, 2020.

Net income in the fourth quarter increased to $38.4 million from $17.7 million in the year ago and diluted earnings per share rose to $2.91 from $1.25 a year ago. 

Big Lots Inc said revenue in the fourth quarter decreased 10.9% to $1.5 billion and the retailer swung to a net loss of $12.5 million from $49.8 million a year ago. Diluted loss per share was 43 cents compared to a profit of $1.63 in the previous year. 

Comparable sales declined 13% adversely impacted by 130 basis points in furniture sales following product shortages resulting from the unexpected closure of United Furniture Industries, parent company of Lane. 

The company declared a quarterly dividend of 30 cents per share payable on March 31 to shareholders on record on March 17.  

Movers: Best Buy, Big Lots, Costco, Dell Technologies, Hibbett

Best Buy Co Inc increased 2.7% to $83.0 after the electronic retailer reported higher-than-expected holiday quarterly earnings but forecasted same store sales to fall in the current year. 

Best Buy Co, Inc said revenue in the fourth quarter decreased to $14.7 billion from $16.3 billion and net income declined $495 million from $626 million and diluted earnings per share dropped to $2.23 from $2.62 a year ago. 

Revenue in the full-year 2022 declined to $46.3 billion from $51.8 billion and net income fell to $1.4 billion from $2.5 billion and diluted earnings per share dropped to $6.29 from $9.84 a year ago.  

Domestic comparable sales in the fourth quarter declined 9.6% on top of 2.1% and domestic online sales fell 13.0% on top of 11.2% from a year ago. Domestic comparable sales in the fiscal year 2022 declined 9.9% from 10.4% increase and domestic online sales fell 13.5% on top of 12.0% fall in the previous year.   

The electronics retailer estimated revenue in the fiscal 2024 in the range between $43.8 billion from $45.2 billion and comparable sales to decline between 3.0% and 6.0%. 

Big Los, Inc increased 2.2% to $14.83 after the deep discount retailer swung to a quarterly loss but earnings were ahead of expectations. 

Big Lots said revenue in the fourth quarter decreased 10.9% to $1.5 billion and the retailer swung to a net loss of $12.5 million from $49.8 million a year ago. 

Diluted loss per share was 43 cents compared to a profit of $1.63 in the previous year. 

Comparable sales declined 13% adversely impacted by 130 basis points in furniture sales following product shortages resulting from the unexpected closure of United Furniture Industries, parent company of Lane. 

The company declared a quarterly dividend of 30 cents per share payable on March 31 to shareholders on record on March 17.  

Costco Wholesale decreased 3.2% to $470.51 after the membership-based retailer mixed quarterly results a day ago. 

Costco Wholesale said revenue in the fiscal second quarter ending on February 12 increased to $55.2 billion from $51.9 billion and  net income increased to $1.5 billion from $1.3 billion and diluted earnings per share rose to $3.30 from $2.92 a year ago. 

Comparable store sales at U.S. locations excluding gasoline increased 3.5% and adjusted for calendar shift rose 3.4% and overall comparable sales rose 3.5% and 5.0% respectively. 

Online sales in the quarter declined 11.2% and dropped 10.3% in the calendar adjusted period. 

Dell Technologies Inc increased 0.4% to $40.32 after the personal computer maker reported weaker-than-expected outlook. 

Dell Technologies said revenue in the fourth quarter declined 11% to $25 billion and net income in the fourth quarter increased to $614 million from $2 million and diluted earnings per share rose to 84 cents from a loss of 4 cents in the previous year. 

Revenue in the full-year 2022 increased 1% to $102.3 billion and net income plunged 51% to $2.4 billion from $5.7 billion and diluted earnings per share fell to  $3.24 from $6.26 a year ago. 

Hibbett Inc declined 1% to $69.85 after the sporting goods retailer reported revenues and earnings lower than expected. 

Hibbett Inc said net sales for the 13-weeks ended on January 28 increased 19.6% to $458.3 million compared with $383.3 million in the previous year. 

Comparable store sales increased 14.3% and online comparable sales increased 21.4% from the previous year.  

In relation to the 13-weeks ended February 1, 2020, comparable store sales increased 32.6% and online sales grew 79.8%. 

Online sales represented 17.4% of total net sales for the fourth quarter compared to 17.1% in the previous year and 14.2% for the 13-weeks ended February 1, 2020.

Net income in the fourth quarter increased to $38.4 million from $17.7 million in the year ago and diluted earnings per share rose to $2.91 from $1.25 a year ago. 

Europe Movers: Lufthansa, Pearson, Righmove, Schaeffler

Deutsche Lufthansa AG increased 6.4% to €10.49 after the German airline swung to a full-year operating profit and the airline forecasted additional improvement in 2023. 

Revenue in the financial year 2022 nearly doubled to €32.8 billion from €16.8 billion and net income improved to a profit of €791 million from a loss of €2.2 billion in the previous year. 

In total, the German airline transported 102 million passengers in 2022 compared to 47 million in the previous year. 

The seat load factor improved to 79.8% in 2022, 18.2 percentage points higher than 61.6% in the previous year. 

Lufthansa cargo revenue increased 21% from the previous year and jumped 136% from the pre-covid 2019 level to a record high after yield improved in all traffic regions. 

Schaeffler AG increased 1.1% to €7.09 after the German industrial products and bearings maker announced an acquisition. 

The company agreed to acquire 100% stake in Paris-based predictive maintenance solution provider Eco-Adapt SAS and the acquisition is expected to close int he first-half of 2023. 

Pearson Plc declined 3.2% to 891 pence after the UK-based test preparatory and higher education books publisher forecasted 2023 revenue growth in "low- to mid-single digit."

Revenue in the full-year 2022 increased 12% to £3,8 billion from £3.4 billion and  operating profit increased to £271 million from £183 million and diluted earnings per share £332.6mincreased to 32,8 pence from 23.5 pence in the previous year. 

Rightmove Plc declined 1.1% to 557.40 pence despite the company reporting an increase in operating profit and raising its final dividend payment. 

The largest online property platform operator in the UK increased its final dividend to 5.2 pence from 4.8 pence and total dividend to 8.5 pence from 4.8 pence a year ago. 

Revenue in the full-year 2022 increased 9% to  £332.6 million from £304.9 million and operating profit from continuing operations increased 6% to £245.4 million from £231.0 million. 

Total agent membership was flat in 2022 at 19,014 compared to 18,969 in 2021. 

Euro Are Wholesale Inflation Eased, German Exports Rebounded In January

Market indexes in Europe digested fresh economic data in the region and welcomed dovish comments from the U.S. Fed policymaker. 

Market indexes rebounded on Friday after Atlanta Fed President Raphael Bostic supported a smaller rate hike of 25 basis points after a day ago Fed Governor Christopher J. Waller supported 50 basis points rate increase if inflation fails to cool in comments to a group of bankers. 

The Euro Area producer price inflation eased in January after energy prices fell, Germany's exports rebounded in January on higher shipments to the U.S., France's industrial output declined for the first time in three months and Italy's GDP contracted marginally in the final quarter of 2022. 

Eurozone Wholesale Inflation Eased 

The Euro Area producer price inflation eased to 15.0% in January from 24.5% in December, data from Eurostat showed on Friday. 

Germany's Trade Surplus Expanded 

Germany's exports increased 2.1% in January after falling 6.3% in December, the Federal Statistical Office or Destatis reported on Friday. 

The decline in imports eased to 3.4% in January from 5.6% in December, resulting in an increase in trade surplus to Є16.7 billion from Є10.0 billion in the corresponding period.   

Italy's GDP Contracted In December Quarter 

Italy's economy contracted 0.1% in the final quarter 2022, reversing the revised 0.4% increase on a monthly basis, the statistical office ISTAT reported Friday. 

Consumer spending fell 1.6% but government spending rose 0.5% in the final quarter on a monthly basis. 

The final estimate of the GDP growth was inline with the preliminary estimate released on January 31.  

The GDP growth on an annual basis was revised to 1.4% increase from the previous estimate of 1.7% and slower from 2.5% increase in the third quarter ending in September. 

Indexes & Yields 

The DAX index increased 1.5% to 15,555.83, the CAC-40 index added 0.9% to 7,347.96 and the FTSE 100 index decreased 3.3 points to 7,347.96. 

The yield on 10-year German bunds inched lower to 2.72%, French bonds fell to 3.21%, UK gilts to 3.85% and Italian bonds to 4.56%. 

The euro edged lower to $1.06, the British pound eased to $1.19 and the Swiss franc to 93.86 cents. 

Brent crude oil added 5 cents to $84.81 a barrel and the Dutch natural gas futures fell Є1.34 to Є45.48 a MWh. 

Europe Movers 

Deutsche Lufthansa AG increased 6.4% to €10.49 after the German airline swung to a full-year operating profit and the airline forecasted additional improvement in 2023. 

Revenue in the financial year 2022 nearly doubled to €32.8 billion from €16.8 billion and net income improved to a profit of €791 million from a loss of €2.2 billion in the previous year. 

In total, the German airline transported 102 million passengers in 2022 compared to 47 million in the previous year. 

The seat load factor improved to 79.8% in 2022, 18.2 percentage points higher than 61.6% in the previous year. 

Lufthansa cargo revenue increased 21% from the previous year and jumped 136% from the pre-covid 2019 level to a record high after yield improved in all traffic regions. 

Schaeffler AG increased 1.1% to €7.09 after the German industrial products and bearings maker announced an acquisition. 

The company agreed to acquire 100% stake in Paris-based predictive maintenance solution provider Eco-Adapt SAS and the acquisition is expected to close int he first-half of 2023. 

Pearson Plc declined 3.2% to 891 pence after the UK-based test preparatory and higher education books publisher forecasted 2023 revenue growth in "low- to mid-single digit."

Revenue in the full-year 2022 increased 12% to £3,8 billion from £3.4 billion and  operating profit increased to £271 million from £183 million and diluted earnings per share £332.6mincreased to 32,8 pence from 23.5 pence in the previous year. 

Rightmove Plc declined 1.1% to 557.40 pence despite the company reporting an increase in operating profit and raising its final dividend payment. 

The largest online property platform operator in the UK increased its final dividend to 5.2 pence from 4.8 pence and total dividend to 8.5 pence from 4.8 pence a year ago. 

Revenue in the full-year 2022 increased 9% to  £332.6 million from £304.9 million and operating profit from continuing operations increased 6% to £245.4 million from £231.0 million. 

Total agent membership was flat in 2022 at 19,014 compared to 18,969 in 2021.