- Bridgette Randall
- 06 Dec, 2022
- New York City
European markets closed lower after the U.S. Fed-rate jitters rattled the market sentiment after recent data on monthly jobs, service sector growth and new goods orders supported the case for aggressive rate hike.
Market sentiment was weak on twin worries of a looming economic slowdown and rate hikes and worries that 4-decade high inflation may keep consumer spending in check.
Moreover, German factory orders declined in October on a weakness in domestic orders.
The European Central Bank chief economist Philip Lane said interest rates are still too low and rates have to be lifted several times to become sufficiently restrictive.
Lane also cautioned that the inflation in the eurozone is nearing a peak in an interview with Milano Finanza.
The yield on 10-year German Bunds eased to 1.79%, French bonds fell to 2.24%, the UK gilts declined to 3.08% and the Italian bonds decreased to 3.64%.
The euro edged lower to $1.042 and the British pound declined to $1.213.
Stock Market indexes Overview
The DAX index declined 0.5% to 14,343.19, the CAC-40 index fell 0.1% to 6,687.79 and the FTSE 100 index dropped 0.6% to 7,521.39.
Brent Crude at 11-month Low
Brent crude oil dropped for the second week and fell to a 11-month low, below the price before Russia's invasion of Ukraine in late February.
Brent crude closed down 2.5% to $79.81 a barrel and DUTCH TTF natural gas rose 2.8% to 138.49 euros per MWh.
German Factory Orders Fall
Germany's factory orders declined 0.8% in October from September when orders fell downwardly revised to 2.9% and declined 3.2% from a year ago. Export orders rose 2.5% and domestic orders fell 1.9%.
Russian Ruble Drop After Sanctions Kicked In
The Russian ruble falls to a two-month low below 63 against the U.S. dollar after the EU oil embargo kicked in.
Oil carried on tankers leaving Russian ports in Black Sea were held up on the Turkish side near the Bosphorus and Dardanelles straits to the Mediterranean, after Turkish controllers demanded insurance proof that complies with the recently imposed sanctions.
Tankers carrying oil to Kazakhstan and other countries face additional delays after the Turkish maritime authorities demanded higher coverage of protection & indemnity insurance that complied with the new rules under the EU sanction regime.
Europe Stock Movers
Phoenix Group Holdings PLC rose 3.1% to 614.49 pence after the UK-based retirement and savings plan operator lifted its target for incremental long term cash generation target.
Mondi Plc declined 4.6% to 1,468.84 pence after Credit Suisse lowered its view on the company's stock.
Resource sector stocks declined after commodities prices eased for the second week in a row.
Fresnillo PLC, Glencore PLC, BP Plc and TotalEnergies SE declined between 2% and 6%.
Rolls Royce Holding increased 3.5% to 93.81 pence.
Adidas, Infineon, Siemens Healthineers, SAP, Fresenius Medical Care and Continental AG declined between 2% and 4%.
- Scott Peters
- 06 Dec, 2022
- New York City
Signet Jewelers Ltd surged 18.7% to $68.61 after the retailer posted stronger-than-anticipated quarterly results.
Sales in the fiscal third quarter ending in October rose 2.9% to $1.58 billion from $1.53 billion a year ago.
Net income in the fiscal third quarter dropped to $28.8 million from $83.9 million and diluted earnings per share fell to 60 cents from $1.45 a year ago.
Total sales in North America increased 5.1% to $1.5 billion and same stores sales declined 7.6% from a year ago reflecting higher average transaction value but fewer number of transactions.
Operating Income
In the quarter, operating income was $48.4 million or 3.1% of sales, compared to $106.9 million, or 7.0% of sales a year ago.
Cash Declined
Cash and cash equivalents declined to $327.3 million from $1.2 billion a year ago reflecting share repurchases and inventory replenishment, as well as the acquisition of Diamonds Direct and Blue Nile.
The retailer also revised higher its non-GAAP operating margin to increase in double-digit, inclusive of the recent acquisition Blue Nile.
Dividend
The company declared a quarterly cash dividend on common shares of 20 cents a share for the fourth quarter of fiscal 2023, payable February 24, 2023 to shareholders of record on January 27, 2023.
Share Repurchase
The retailer in the quarter repurchased $20.2 million of its shares.
For the year-to-date, through December 2, the retailer repurchased approximately 5.6 million shares at an average cost of $70.28 a share or $393.0 million.
The purchase amount includes $20.2 million during the third quarter and $50 million from the completion of the accelerated share repurchase program from the fiscal 2022.
Approximately $570.3 million remains under the Company's multi-year authorization.
Guidance & Outlook
Total sales in the fourth quarter are estimated between $2.59 billion and $2.66 billion and adjusted non-GAAP operating income between $363 million and $404 million.
Sales in the fiscal year 2023 are estimated between $7.77 billion and $7.84 billion, adjusted non-GAAP operating income between $809 million and $850 million and adjusted diluted earnings per share between $11.40 and $12.0.
Capital Expenditure Plan
The company lowered its invest plan to $215 million in the current fiscal year after supply chain delays related to differentiated banner investment in stores.
- Scott Peters
- 06 Dec, 2022
- New York City
NRG Energy dropped 17.1% to $33.89 after the company said it plans to acquire Vivint Smart Home for $12 a share or $2.8 billion and assumption of $2.4 billion in debt net of cash.
Vivint soared 32.5% to $11.90.
NRG also said it plans to complete its remaining $360 million of its stock purchase under the $1.0 billion plan and use the excess free cash flow in 2023 to fund the acquisition and the related debt.
- Scott Peters
- 06 Dec, 2022
- New York City
AutoZone Inc declined 3.2% to $2,450.65 after the auto parts retailer reported better-than-expected quarterly results but inventories rose more-than-expected.
Revenue in the fiscal first quarter increased 8.6% to $4.0 billion and domestic same store sales increased 5.6%.
Net income in the fiscal first quarter plunged to $539.5 million from $555.2 million and diluted earnings per share declined to $27.45 from $25.69.
Net inventories, merchandise inventories less accounts payable, increased 17.6% to negative $249,000 from negative $207,000 a year ago.
BuzzFeed Inc declined 3.5% to $1.10 after the company announced its plan to eliminate 180 positions or cut 12% of its staff by the end of the first quarter.
The company blamed its recent woes on challenging macroeconomic conditions, ongoing shift to short-form and vertical video and recent acquisition of Complex Networks.
Gitlab Inc jumped 8.1% to $41.43 after the software developer said the fiscal third quarter loss narrowed to 33 cents from 62 cents a year ago and sales rose 69% to $113 million.
Herbalife Nutrition Ltd plunged 23.5% to $13.35 after the multi-level marketing company announced an offering of $250 million convertible senior notes due in 2028.
NRG Energy dropped 17.1% to $33.89 after the company said it plans to acquire Vivint Smart Home for $12 a share or $2.8 billion and assumption of $2.4 billion in debt net of cash.
Vivint soared 32.5% to $11.90.
NRG also said it plans to complete its remaining $360 million of its stock purchase under the $1.0 billion plan and use the excess free cash flow in 2023 to fund the acquisition and the related debt.
Signet Jewelers Ltd surged 18.7% to $68.61 after the retailer posted stronger-than-anticipated quarterly results.
Sales in the fiscal third quarter ending in October rose 2.9% to $1.58 billion from $1.53 billion a year ago.
Net income in the fiscal third quarter dropped to $28.8 million from $83.9 million and diluted earnings per share fell to 60 cents from $1.45 a year ago.
Total sales in North America increased 5.1% to $1.5 billion and same stores sales declined 7.6% from a year ago reflecting higher average transaction value but fewer number of transactions.
The retailer also revised higher its non-GAAP operating margin to increase in double-digit, inclusive of the recent acquisition Blue Nile.
Sumo Logic soared 11.4% to $8.03 after the cloud company said the fiscal third quarter sales rose 27% to $79 million and loss narrowed to $26.3 million or 22 cents from $30.8 million or 28 cents a year ago.
Textron Inc rose 4.9% to $73.40 after the company won a contract to provide advanced helicopters to the U.S. Army. The contract could be worth as much as $70 billion.
- Brian Turner
- 06 Dec, 2022
- New York City
The U.S. international trade deficit in goods and services was $78.2 billion in October, an increase of 19.9% from a year ago and 5.4% from September, BEA reported Tuesday.
Exports declined 0.7%, second monthly fall in a row, to $256.6 billion and imports increased 0.6%, the largest since June, to $334.6 billion on higher imports of automobiles, nuclear materials, travel and pharmaceutical preparations.
- Barry Adams
- 06 Dec, 2022
- New York City
Stocks on Wall Street struggled after rate hike worries resurfaced following fresh economic data suggesting that the U.S. economy and labor markets are stronger than anticipated.
Despite multiple rate hikes this year, the economy is still showing no signs of cooling and labor market conditions remain tight.
The debate rages on about the size of the rate increase at the next Fed's policy meeting, but the rate increases are likely to continue for several more meetings in 2023.
The Federal Reserve has reiterated its goal of bringing down the inflation to 2.0%, but inflation has hovered above 7.5% and the PCE Price index above 5%, the Fed's preferred measure of inflation.
The S&P 500 index dropped 1.7% to 3,931.46 and the Nasdaq Composite index declined 2.2% to 3,931.46.
Crude oil declined $2.23 to $74.63 a barrel and natural gas fell 15 cents to $5.42 a thermal unit.
The yield on 10-year Treasury notes fell to 4.37%, 10-yearTreasury notes dropped to 3.54% and 30-year Treasury bonds dropped to 3.56%.
International Trade Deficit Expands
The U.S. international trade deficit in goods and services was $78.2 billion in October, an increase of 19.9% from a year ago and 5.4% from September, BEA reported Tuesday.
Exports declined 0.7%, second monthly fall in a row, to $256.6 billion and imports increased 0.6%, the largest since June, to $334.6 billion on higher imports of automobiles, nuclear materials, travel and pharmaceutical preparations.
Stock Movers
BuzzFeed Inc declined 3.5% to $1.10 after the company announced its plan to eliminate 180 positions or cut 12% of its staff by the end of the first quarter.
The company blamed its recent woes on challenging macroeconomic conditions, ongoing shift to short-form and vertical video and recent acquisition of Complex Networks.
Textron Inc rose 4.9% to $73.40 after the company won a contract to provide advanced helicopters to the U.S. Army. The contract could be worth as much as $70 billion.
Signet Jewelers Ltd surged 18.7% to $68.61 after the retailer posted stronger-than-anticipated quarterly results.
Sales in the fiscal third quarter ending in October rose 2.9% to $1.58 billion from $1.53 billion a year ago.
Net income in the fiscal third quarter dropped to $28.8 million from $83.9 million and diluted earnings per share fell to 60 cents from $1.45 a year ago.
Total sales in North America increased 5.1% to $1.5 billion and same stores sales declined 7.6% from a year ago reflecting higher average transaction value but fewer number of transactions.
The retailer also revised higher its non-GAAP operating margin to increase in double-digit, inclusive of the recent acquisition Blue Nile.
NRG Energy dropped 17.1% to $33.89 after the company said it plans to acquire Vivint Smart Home for $12 a share or $2.8 billion and assumption of $2.4 billion in debt net of cash.
Vivint soared 32.5% to $11.90.
NRG also said it plans to complete its remaining $360 million of its stock purchase under the $1.0 billion plan and use the excess free cash flow in 2023 to fund the acquisition and the related debt.