- Barry Adams
- 07 Mar, 2023
- New York City
Major indexes accelerated decline in the afternoon after worries of larger interest rate hike at the next policy meeting resurfaced.
The uptick in Treasury yields came together with a weakness in high-growth and tech stocks after the Federal Reserve chairman delivered a hawkish sentiment in his prepared remarks for lawmakers.
The yields on the U.S. Treasury notes maturing between three months and two years traded above 5% for the first time since 2007.
Federal Reserve chairman Jerome Powell said the central bank is ready to increase rates faster if incoming data supported the case in his testimony to the U.S. Senate Banking, Housing and Urban Affairs Committee Tuesday morning.
Moreover, Powell added that the terminal rates are likely to be higher than previously estimated.
Chairman Powell noted that latest economic data have been stronger-than-anticipated and to bring down inflation to 2% and restore price stability will require raising rates to restrictive levels.
At the Fed's policy meeting in February, the committee raised the target range for federal funds by 25 basis points to between 4.5% and 4.75%, the highest level since 2007.
Chairman Powell's comments suggested that the central bank may increase rates by a larger amount than last month's 25 basis points at its next two-day policy meeting ending on March 22.
The talk of faster rate hikes and higher terminal rates spooked investors and tech stocks accelerated the decline in the afternoon.
U.S. Indexes & Yields
The S&P 500 index decreased 1.5% to 3,986.41 and the Nasdaq Composite index fell 1.3% to 11,530.33.
The yield on 2-year Treasury notes inched higher to 5.02%, 10-year Treasury notes inched higher to 3.96% and 30-year Treasury bonds edged higher to 3.87%.
Crude oil fell $3.19 to $77.27 a barrel and natural gas prices fell 9 cents to $2.66 a thermal unit.
U.S. Stock Movers
Dick's Sporting Goods Inc increased 9.2% to $144.28 after the specialty retailer reported higher-than-expected sales in the holiday period.
Profit in the fourth quarter declined 32% despite sales rising 7.3% in the period, hurt by lower gross margin.
Net sales in the quarter rose 7.3% to $3.60 billion from $3.35 billion in the previous year and comparable store sales rose 5.3%.
Net income fell to $235.6 million or $2.60 per share from $346.1 million or $3.16 per share in the prior-year quarter.
Excluding items, adjusted income decreased to $2.93 per share from $3.64 a year ago.
JetBlue Airways Corporation declined 0.2% to $8.39 and the Justice Department sued the company to block its proposed takeover of the discount airline Spirit Airlines.
Rivian Automotive Inc plunged 12% to $15.02 after the electric vehicle maker said it plans to offer $1.3 billion convertible debt amid growing demand slump.
The electric vehicle maker lost $6.8 billion in 2022 and after supply chain issues negatively impacted production.
Meta Platforms Inc increased 1% to $186.33 after a Bloomberg report said that the parent of Facebook is planning to layoff thousands of employees as early as this week.
European Markets Trade Near One-year Highs
Stocks in Europe lacked direction and investors reacted to local earnings and awaited commentary from the U.S. Federal Reserve chairman Jerome Powell.
France's benchmark index advanced to a new record high and Germany's index traded at a new one-year high after energy prices eased for the third week in a row.
German factory orders unexpectedly rose and the UK's home prices rose at the fastest pace in eight months.
German Factory Orders Unexpectedly Rose In January
German factory orders rose unexpectedly in January driven by demand from international customers.
German factory orders increased 1.0% in January from the revised 3.4% in December, the Federal Statistical Office or Destatis said Tuesday.
Manufacturing new orders on an annual basis declined at a faster rate of 10.9% in January after dropping 9.9% in December.
UK Home Prices Increased at 8-month High Rate
Home prices in the UK rose at a faster pace in February underpinned by the improving confidence and resilient labor markets.
Despite the cost of living crisis, home prices rose 1.1% in February after rising 0.2% in January, S&P Global and Halifax said in a report released Tuesday.
Home prices rose for the second month in a row and jumped at the fastest pace since June 2022.
The average home price increased to £285,476 in February compared to £282,360 in January.
Europe Indexes & Yields
The DAX index increased 0.2% to 15,678.50, the CAC-40 index added 0.2% to 7,387.18 and the FTSE 100 index advanced 0.3% to 7,949.76.
The yield on 10-year German Bunds edged down to 2.66%, French bonds to 3.15%, the UK gilts to 3.78% and Italian bonds to 4.45%.
The euro hovered near $1.065, the British pound inched lower to $1.19 and the Swiss franc to 93.36 cents.
Brent crude oil eased 56 cents to $85.56 a barrel and the Dutch TTF natural gas edged up to Є42.05 per MWh.
Europe Stock Movers
Schaeffler AG fell 7.3% to €6.84 after the Germany-based bearings maker reported a decline in financial year 2022 profit and issued a cautious outlook for 2023.
The company also trimmed its dividend.
Henkel AG declined 2.2% to €67.70 after the German chemical and consumer goods company reported a 13.7% decline in its adjusted operating earnings in 2022.
HelloFresh SE decreased 6.9% to €21.16 after the meal-kit maker estimated lower-than-expected core profit in 2023.
Ashtead Group plc increased 3.3% to 5,936.0 pence after the UK-based equipment rental company said annual results are likely to surpass its own estimate.
Zalando SE increased 3.4% to €40.15 after the online marketplace operator said it plans to focus on improving its operating margins and eliminate unnecessary costs.
John Wood Group Plc increased 14.3% to 221.80 pence after the UK-based engineering company said it is likely to reject the latest buyout proposal from the private equity group Apollo Global Management.
Greggs Plc declined 0.7% to 2,732.0 pence after the bakery and fast food chain said that the company is facing inflationary cost pressures.
- Scott Peters
- 07 Mar, 2023
- New York City
Dick's Sporting Goods Inc increased 9.2% to $144.28 after the specialty retailer reported higher-than-expected sales in the holiday period.
Profit in the fourth quarter declined 32% despite sales rising 7.3% in the period, hurt by lower gross margin.
Net sales in the quarter rose 7.3% to $3.60 billion from $3.35 billion in the previous year and comparable store sales rose 5.3%.
Net income fell to $235.6 million or $2.60 per share from $346.1 million or $3.16 per share in the prior-year quarter.
Excluding items, adjusted income decreased to $2.93 per share from $3.64 a year ago.
Gaia, Inc soared 24.5% to $3.28 after the alternative video content producer and streamer swung to a net loss in its latest quarter.
Gaia, Inc said revenue in the fourth quarter declined 6%to $19.6 million from $20.8 million and video content publishing company swung to a net loss of $0.9 million from a profit of $2.1 million and diluted earnings per share was ($0.04) compared to 11 cents a year ago.
In 2022, revenue increased 3% to $82.0 million from $79.6 million and the company swung to a loss of $3.1 million from a profit of $3.7 million and diluted income per share fell to ($0.15) from 19 cents a year ago.
The member count as of December 31, 2022 was 759,000.
Intrepid Potash, Inc declined 1.7% to $31.62 after the agrochemicals maker said a decline in earnings after higher potash costs forced farmers to restrict purchases.
Intrepid Potash, Inc said revenue in the fourth quarter increased to $43.7 million from $38.8 million and net income fell to $3.98 million from $223.8 million and diluted earnings per share fell to 30 cents from $16.66 a year ago.
Potash production in the quarter increased to !06 tons from 86 tons and sales volume fell to 50 tons from 61 tons a year ago. Average potash net realized sales price per ton increased to 693 from 504 a year ago.
Revenue in the full-year 2022 rose to $337.5 million from $270.3 million and net income fell to $72.2 million from $249.8 million and diluted earnings per share fell to $5.37 from $18.66 in the previous year.
In the full-year 2022, potash production volume in tons fell to 270 from 287, sales volume in tons declined to 222 from 331 and average potash realized net sales price per ton rose to $713 from $353 a year ago.
JetBlue Airways Corporation declined 0.2% to $8.39 and the Justice Department sued the company to block its proposed takeover of the discount airline Spirit Airlines.
Meta Platforms Inc increased 1% to $186.33 after a Bloomberg report said that the parent of Facebook is planning to layoff thousands of employees as early as this week.
Rivian Automotive Inc plunged 12% to $15.02 after the electric vehicle maker said it plans to offer $1.3 billion convertible debt amid growing demand slump.
The electric vehicle maker lost $6.8 billion in 2022 and after supply chain issues negatively impacted production.
ThredUp Inc soared 69.8% to $2.75 after the online apparel and accessories resale platform operator reported better-than-expected revenue. The company also highlighted cost cutting steps to reach profitability.
ThredUp Inc said revenue in the fourth quarter decreased 2% to $71.3 million and net loss attributable to stockholders was $19.5 million compared to $17.9 million and diluted loss per share increased to 19 cents from 18 cents a year ago.
The resale platform operator said active buyers decreased 2% to 1.7 million and orders fell 8% to 1.5 million from the previous quarter.
In 2022, revenue increased to $288.3 million from $251.8 million and net loss expanded to $92.3 million from $63.2 million and diluted loss per share rose to 92 cents from 82 cents a year ago.
Orders in the full-year increased 22% to 6.5 million from 5.3 million in the previous year.
WW International Inc soared 42.5% to $5.52 after the the company reported an acquisition of telehealth services provider Sequence.
The company agreed to pay $132 million for the purchase of Sequence in three stages.
Since its launch in late 2021, Sequence has grown into an approximately $25 million annual revenue run-rate business serving approximately 24,000 members as of February.
Formerly known as Weight Watchers said revenue in the fourth quarter declined 18.8% to $223.9 million from $275 million in the previous year.
The company swung to a net loss of $32.5 million from a profit of $29.0 million and diluted earnings per share was ($0.46) compared to 42 cents a year ago.
- Bridgette Randall
- 07 Mar, 2023
- Frankfurt
Schaeffler AG fell 7.3% to €6.84 after the Germany-based bearings maker reported a decline in financial year 2022 profit and issued a cautious outlook for 2023.
The company also trimmed its dividend.
Henkel AG declined 2.2% to €67.70 after the German chemical and consumer goods company reported a 13.7% decline in its adjusted operating earnings in 2022.
HelloFresh SE decreased 6.9% to €21.16 after the meal-kit maker estimated lower-than-expected core profit in 2023.
Ashtead Group plc increased 3.3% to 5,936.0 pence after the UK-based equipment rental company said annual results are likely to surpass its own estimate.
Zalando SE increased 3.4% to €40.15 after the online marketplace operator said it plans to focus on improving its operating margins and eliminate unnecessary costs.
John Wood Group Plc increased 14.3% to 221.80 pence after the UK-based engineering company said it is likely to reject the latest buyout proposal from the private equity group Apollo Global Management.
Greggs Plc declined 0.7% to 2,732.0 pence after the bakery and fast food chain said that the company is facing inflationary cost pressures.
- Brian Turner
- 07 Mar, 2023
- New York City
Federal Reserve chairman Jerome Powell said the central bank is ready to increase rates faster if incoming data supported the case.
Moreover, Powell added that the terminal rates are likely to be higher than previously estimated.
Chairman Powell noted that latest economic data have been stronger-than-anticipated and to bring down inflation to 2% and restore price stability will require raising rates to restrictive levels.
At the Fed's policy meeting in February, the committee raised the target range for federal funds by 25 basis points to between 4.5% and 4.75%, the highest level since 2007.
Powell highlighted the difficulties in bringing down inflation to the long-run rate of 2%.
"We are seeing the effects of our policy actions on demand in the most interest-sensitive sectors of the economy. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.
In light of the cumulative tightening of monetary policy and the lags with which monetary policy affects economic activity and inflation," noted Powell in his prepared remarks.
The talk of faster rate hikes and higher terminal rates spooked investors and tech stocks accelerated the decline in early trading.
- Barry Adams
- 07 Mar, 2023
- New York City
The uptick in Treasury yields came together with a weakness in high-growth and tech stocks after the Federal Reserve chairman delivered a hawkish sentiment in his prepared remarks for lawmakers.
Federal Reserve chairman Jerome Powell said the central bank is ready to increase rates faster if incoming data supported the case.
Moreover, Powell added that the terminal rates are likely to be higher than previously estimated.
Chairman Powell noted that latest economic data have been stronger-than-anticipated and to bring down inflation to 2% and restore price stability will require raising rates to restrictive levels.
At the Fed's policy meeting in February, the committee raised the target range for federal funds by 25 basis points to between 4.5% and 4.75%, the highest level since 2007.
The talk of faster rate hikes and higher terminal rates spooked investors and tech stocks accelerated the decline in early trading.
Indexes & Yields
The S&P 500 index decreased 0.6% to 4,023.25 and the Nasdaq Composite index fell 0.6% to 11,602.35.
The yield on 2-year Treasury notes inched higher to 4.96%, 10-year Treasury notes inched higher to 3.98% and 30-year Treasury bonds edged higher to 3.90%.
Crude oil fell 94 cents to $79.54 a barrel and natural gas prices increased 5 cents to $2.63 a thermal unit.
U.S. Stock Movers
Dick's Sporting Goods Inc increased 9.2% to $144.28 after the specialty retailer reported higher-than-expected sales in the holiday period.
Profit in the fourth quarter declined 32% despite sales rising 7.3% in the period, hurt by lower gross margin.
Net sales in the quarter rose 7.3% to $3.60 billion from $3.35 billion in the previous year and comparable store sales rose 5.3%.
Net income fell to $235.6 million or $2.60 per share from $346.1 million or $3.16 per share in the prior-year quarter.
Excluding items, adjusted income decreased to $2.93 per share from $3.64 a year ago.
JetBlue Airways Corporation declined 0.2% to $8.39 and the Justice Department sued the company to block its proposed takeover of the discount airline Spirit Airlines.
Rivian Automotive Inc plunged 12% to $15.02 after the electric vehicle maker said it plans to offer $1.3 billion convertible debt amid growing demand slump.
The electric vehicle maker lost $6.8 billion in 2022 and after supply chain issues negatively impacted production.
Meta Platforms Inc increased 1% to $186.33 after a Bloomberg report said that the parent of Facebook is planning to layoff thousands of employees as early as this week.
- Bridgette Randall
- 07 Mar, 2023
- Frankfurt
Stocks in Europe lacked direction and investors reacted to local earnings and awaited commentary from the U.S. Federal Reserve chairman Jerome Powell.
France's benchmark index advanced to a new record high and Germany's index traded at a new one-year high after energy prices eased for the third week in a row.
German factory orders unexpectedly rose and the UK's home prices rose at the fastest pace in eight months.
German Factory Orders Unexpectedly Rose In January
German factory orders rose unexpectedly in January driven by demand from international customers.
German factory orders increased 1.0% in January from the revised 3.4% in December, the Federal Statistical Office or Destatis said Tuesday.
Manufacturing new orders on an annual basis declined at a faster rate of 10.9% in January after dropping 9.9% in December.
UK Home Prices Increased at 8-month High Rate
Home prices in the UK rose at a faster pace in February underpinned by the improving confidence and resilient labor markets.
Despite the cost of living crisis, home prices rose 1.1% in February after rising 0.2% in January, S&P Global and Halifax said in a report released Tuesday.
Home prices rose for the second month in a row and jumped at the fastest pace since June 2022.
The average home price increased to £285,476 in February compared to £282,360 in January.
Indexes & Yields
The DAX index increased 0.2% to 15,678.50, the CAC-40 index added 0.2% to 7,387.18 and the FTSE 100 index advanced 0.3% to 7,949.76.
The yield on 10-year German Bunds edged down to 2.66%, French bonds to 3.15%, the UK gilts to 3.78% and Italian bonds to 4.45%.
The euro hovered near $1.065, the British pound inched lower to $1.19 and the Swiss franc to 93.36 cents.
Brent crude oil eased 56 cents to $85.56 a barrel and the Dutch TTF natural gas edged up to Є42.05 per MWh.
Europe Stock Movers
Schaeffler AG fell 7.3% to €6.84 after the Germany-based bearings maker reported a decline in financial year 2022 profit and issued a cautious outlook for 2023.
The company also trimmed its dividend.
Henkel AG declined 2.2% to €67.70 after the German chemical and consumer goods company reported a 13.7% decline in its adjusted operating earnings in 2022.
HelloFresh SE decreased 6.9% to €21.16 after the meal-kit maker estimated lower-than-expected core profit in 2023.
Ashtead Group plc increased 3.3% to 5,936.0 pence after the UK-based equipment rental company said annual results are likely to surpass its own estimate.
Zalando SE increased 3.4% to €40.15 after the online marketplace operator said it plans to focus on improving its operating margins and eliminate unnecessary costs.
John Wood Group Plc increased 14.3% to 221.80 pence after the UK-based engineering company said it is likely to reject the latest buyout proposal from the private equity group Apollo Global Management.
Greggs Plc declined 0.7% to 2,732.0 pence after the bakery and fast food chain said that the company is facing inflationary cost pressures.