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  • Anand Sheth
  • 14 Oct, 2022
  • New York City

Albertsons Companies declined 7.4% to $26.50 on news that the company has agreed to be acquired by Kroger for $24.6 billion or $34.10 a share. 

Albertsons owns and operates 2,200 stores in 34 states and Washington D.C. with 290,000 employees. 

Albertsons store network spans 22 brands including Acme, Safeway and Tom Thumb.  

Kroger Co declined 7.7% to $43.99. 

Kroger owns and operates 2,800 stores in 35 states with 420,000 employees. 

Kroger operates a portfolio of 25 store brands including West Coast-based Ralphs and Fred Meyer.   

The acquisition is most likely to draw antitrust scrutiny from regulators as Kroger looks to expand its network and strengthen its position in a market dominated by Walmart and Amazon.  

  • Barry Adams
  • 14 Oct, 2022
  • New York City

Stocks on Wall Street struggled a day after posting a sharp advance as investors digested the implication of a slight decline in consumer price inflation. 

In Thursday's trading, the latest inflation reports sparked two diverging reactions from stock and bond markets. 

Stock investors hoped that the slight cooling of consumer inflation may be followed by weaker inflation data in the months ahead while bond investors focused on the elevated inflation rate above 8% and surmised that the Fed will continue its aggressive rate hike campaign. 

In Friday's trading, stocks accelerated declines after retail sales in September were flat from August, U.S. Census Bureau reported Friday.  

Retail sales in the month were unchanged from the previous month, below the expectations of at least 0.2% rise, as retail sales for motor vehicles and parts, building materials and electronics and gasoline stores fell. 

Groceries stores sales were up, only supported by a rise in prices. 

The retail sales data are not adjusted for inflation, indicating that consumer spending declined across most categories of goods. 

The yield on Treasuries extended gains to new 14-year highs while major stock averages erased most of Thursday's gains and sank deeper in the year so far. 

The S&P 500 index fell 2.4% to 3,583.08 and the Nasdaq Composite index dropped 3.08% to 10,321.39.

For the week, the S&P 500 declined 1.5% and the Nasdaq Composite index dropped 3.1%.  

Crude oil fell $3.35 to $85.72 a barrel and natural gas dropped 28 cents to $6.45 a thermal unit. 

The yield on 2-year Treasury notes inched higher to 4.50%, 10-year Treasury notes to 4.02% and 30-year bonds to 3.99%. 

 

U.S. Stock Movers 

Albertsons Companies declined 7.4% to $26.50 on news that the company has agreed to be acquired by Kroger for $24.6 billion or $34.10 a share. 

Albertsons owns and operates 2,200 stores in 34 states and Washington D.C. with 290,000 employees. 

Albertsons store network spans 22 brands including Acme, Safeway and Tom Thumb.  

Kroger Co declined 7.7% to $43.99. 

Kroger owns and operates 2,800 stores in 35 states with 420,000 employees. 

Kroger operates a portfolio of 25 store brands including West Coast-based Ralphs and Fred Meyer.   

The acquisition is most likely to draw antitrust scrutiny from regulators as Kroger looks to expand its network and strengthen its position in a market dominated by Walmart and Amazon.  

Beyond Meat Inc dropped 7.8% to $13.64 after the company said it plans to reduce its workforce by 200 employees or 19% of its workforce and take one-time charge of $4 million in the fourth quarter of 2022. 

 The company also guided its third quarter sales to decline 23% to $82 million and fourth quarter sales are estimated to fall between $400 million and $425 million, a decrease between 9% and 14%. 

The food company had previously guided full-year 2022 net revenues in the range of $470 million to $520 million.

Citigroup Inc added 0.8% to $43.30 after the global bank said revenues rose in rising interest rates but earnings fell 25% on weak investment banking revenues and the company increased credit loss provisions. 

Revenues increased 6% to $18.5 billion from $17.4 billion a year ago, primarily on the gain in sale of its consumer business in the Philippines.

Without the transaction, revenue declined 1%  as higher interest income was more than offset by non-interest income decline. 

Net income fell 25% to $3.5 billion from $4.6 billion and earnings per share declined to $1.63 from $2.15 a year ago.  

JPMorgan Chase & Co increased 2.4% to $111.79 after the company said net revenue in the third quarter rose 10% to $32.7 billion. 

Net income plunged 17% to $9.7 billion from $11.7 billion and diluted earnings per share dropped to $3.12 from $3.74 a year ago. 

Net income declined as the bank took credit loss provisions ahead of the expected economic slowdown. 

Net income decline was driven by a net credit reserve build of $808 million compared to a net reserve release of $2.1 billion in the prior year. 

The current quarter included net investment securities losses of $959 million resulting in a decrease of $729 million in after-tax net income. 

Morgan Stanley fell 5.3% to $75.08 after the investment bank reported third quarter revenues declined to $13 billion from $14.8 billion a year ago. 

Net income in the period fell to $2.6 billion from $3.7 billion and diluted earnings per share dropped to $1.47 from $1.98 a year ago. 

Investment banking revenues in the quarter plunged 55% to $1.27 billion from $2.85 billion a year ago. 

Fee-based asset inflow in its wealth management unit declined to $16.7 billion from $70.6 billion and fee-based client assets declined to $1.3 trillion from $1.75 trillion a year ago. 

 

European Markets Log Weekly Advance, Hungary Hikes Rates to 25% 

European indexes trimmed morning gains following the market weakness in New York.

The elevated U.S. inflation report on Thursday sparked a rally in New York and Europe but stocks turned lower after the U.S. consumer spending was flat in September. 

Retail sales in the month were unchanged from the previous month, below the expectations of at least 0.2% rise, as retail sales for motor vehicles and parts, building materials and electronics and gasoline stores fell. 

Groceries stores sales were up, only supported by a rise in prices. 

The retail sales data are not adjusted for inflation, indicating that consumer spending declined across most categories of goods. 

The FTSE index increased 0.6% to 6,893.77, the DAX index jumped 0.7% to 12,437.81 and CAC-40 index advanced 0.90% to 5,931.93.

For the week, the FTSE 100 index decreased 1.9%, the DAX gained 1.3% and the CAC-40 index added 1.0%. 

 

UK Pound Weakens On Government U Turn and Minister Change 

UK Prime Minister Liz Truss fired finance minister Kwasi Kwarteng and reversed corporate tax cuts announced in the mini-budget last month.

Truss doubled down on her growth policies but said corporate tax cut will remain at 29% and reversed the earlier proposal to lower it to 19%.

The U-turn on the unfunded tax reduction proposal is expected to calm volatile Gilt market but questions remain how the government will fund its energy subsidies to households and other measures that are expected to cost the treasury 45 billion pounds. 

Truss announced the appointment of Jeremy Hunt replacing finance minister Kwasi Kwarteng only after five weeks in office. 

The Bank of England is set to end its long-term bond purchase program today, an emergency measure in support of the orderly functioning of the bond market and provide a rare rebalancing opportunity to pension fund managers.

The euro fell 0.5% to 97.24 U.S. cents and the British pound dropped 1% to $1.118.

The yield on 10-year UK bonds increased to 4.21%, German bunds rose to 2.308%, French bonds to 2.908% and Italian bonds to 4.74%.

 

Big Rate Hike in Hungary 

The Hungarian Forint advanced more than 2% and traded near 429 against the dollar after the National Bank of Hungary lifted its overnight collateral lending rate by 950 basis points to 25% in an emergency meeting on Friday.

The central bank lifted rates by a large amount in support of the falling forint and said that the bank will provide foreign currency for energy imports from its reserves.

Hungary, like many countries in Europe, is battling sky-high energy price driven inflation. Consumer price inflation in September surged above 20.0% for the first time since 1996.

The NBH has lifted rates at every policy meeting since June to combat high inflation above its target range between 2% and 4%. 

 

Europe Stock Movers 

TomTom NV dropped 11.7% to

  • Scott Peters
  • 14 Oct, 2022
  • New York City

Albertsons Companies declined 7.4% to $26.50 on news that the company has agreed to be acquired by Kroger for $24.6 billion or $34.10 a share. 

Albertsons owns and operates 2,200 stores in 34 states and Washington D.C. with 290,000 employees. 

Albertsons store network spans 22 brands including Acme, Safeway and Tom Thumb.  

Kroger Co declined 7.7% to $43.99. 

Kroger owns and operates 2,800 stores in 35 states with 420,000 employees. 

Kroger operates a portfolio of 25 store brands including West Coast-based Ralphs and Fred Meyer.   

The acquisition is most likely to draw antitrust scrutiny from regulators as Kroger looks to expand its network and strengthen its position in a market dominated by Walmart and Amazon.  

Beyond Meat Inc dropped 7.8% to $13.64 after the company said it plans to reduce its workforce by 200 employees or 19% of its workforce and take one-time charge of $4 million in the fourth quarter of 2022. 

 The company also guided its third quarter sales to decline 23% to $82 million and fourth quarter sales are estimated to fall between $400 million and $425 million, a decrease between 9% and 14%. 

The food company had previously guided full-year 2022 net revenues in the range of $470 million to $520 million.

Citigroup Inc added 0.8% to $43.30 after the global bank said revenues rose in rising interest rates but earnings fell 25% on weak investment banking revenues and the company increased credit loss provisions. 

Revenues increased 6% to $18.5 billion from $17.4 billion a year ago, primarily on the gain in sale of its consumer business in the Philippines.

Without the transaction, revenue declined 1%  as higher interest income was more than offset by non-interest income decline. 

Net income fell 25% to $3.5 billion from $4.6 billion and earnings per share declined to $1.63 from $2.15 a year ago.  

JPMorgan Chase & Co increased 2.4% to $111.79 after the company said net revenue in the third quarter rose 10% to $32.7 billion. 

Net income plunged 17% to $9.7 billion from $11.7 billion and diluted earnings per share dropped to $3.12 from $3.74 a year ago. 

Net income declined as the bank took credit loss provisions ahead of the expected economic slowdown. 

Net income decline was driven by a net credit reserve build of $808 million compared to a net reserve release of $2.1 billion in the prior year. 

The current quarter included net investment securities losses of $959 million resulting in a decrease of $729 million in after-tax net income. 

Morgan Stanley fell 5.3% to $75.08 after the investment bank reported third quarter revenues declined to $13 billion from $14.8 billion a year ago. 

Net income in the period fell to $2.6 billion from $3.7 billion and diluted earnings per share dropped to $1.47 from $1.98 a year ago. 

Investment banking revenues in the quarter plunged 55% to $1.27 billion from $2.85 billion a year ago. 

Fee-based asset inflow in its wealth management unit declined to $16.7 billion from $70.6 billion and fee-based client assets declined to $1.3 trillion from $1.75 trillion a year ago. 

Nutanix Inc soared 23.4% to $26.14 on the news that the company is looking to find a merger partner or go private. 

The news was first reported by the Wall Street Journal. 

PNC Financial Services Group fell 1.6% to $149.04 after the company said revenue in the third quarter increased 8% to $5.5 billion from $5.2 billion a year ago. 

Net income in the period increased 10% to $1.64 billion from $1.49 billion and diluted earnings per share rose to $3.78 from $3.30 a year ago. 

Loans in the quarter increased 3% to $313 billion from $291.3 billion and total deposits rose to $439.2 billion from $454.4 billion a year ago. 

Total nonperforming loans increased 1% to $2.1 billion  as lower consumer nonperforming loans  were more than offset by higher commercial nonperforming loans.

US Bancorp rose 3.5% to $42.73 after the company said third quarter net interest income increased 7.4% to $6.3 billion from $5.9 billion a year ago. 

Net income fell 10.7% to $1.8 billion from $2.03 billion and diluted earnings per share declined to $1.16 from $1.30 a year ago. 

Pretax income before the provision for credit losses and excluding MUFG Union Bank merger and integration-related charges increased 11.0% compared with a year ago. 

The net interest margin increased to 2.83% in the current quarter from 2.53% in the third quarter of 2021 primarily due to the impact of higher rates on earning assets, partially offset by deposit pricing and short-term borrowing costs

Wells Fargo & Co increased 2.9% to $43.53 after the company said third quarter revenues increased 4% to $19.5 billion from $18.8 billion a year ago. 

Net income in the quarter dropped on higher credit loss provision of $784 million compared to addition of $1.4 billion in the prior year's period. 

Net income declined 31% to $3.5 billion from $5.1 billion and diluted earnings per share fell to 85 cents from $1.17 a year ago. 

Lower mortgage activities and lower revenues from securitization activities dragged non-interest income by 25%. 

  • Bridgette Randall
  • 14 Oct, 2022
  • Frankfurt

Danone SA gained 0.6% to

  • Bridgette Randall
  • 14 Oct, 2022
  • Frankfurt

European indexes trimmed morning gains following the market weakness in New York.

The elevated U.S. inflation report on Thursday sparked a rally in New York and Europe but stocks turned lower after the U.S. consumer spending was flat in September. 

Retail sales in the month were unchanged from the previous month, below the expectations of at least 0.2% rise, as retail sales for motor vehicles and parts, building materials and electronics and gasoline stores fell. 

Groceries stores sales were up, only supported by a rise in prices. 

The retail sales data are not adjusted for inflation, indicating that consumer spending declined across most categories of goods. 

The FTSE index increased 0.6% to 6,893.77, the DAX index jumped 0.7% to 12,437.81 and CAC-40 index advanced 0.90% to 5,931.93.

For the week, the FTSE 100 index decreased 1.9%, the DAX gained 1.3% and the CAC-40 index added 1.0%. 

 

UK Pound Weakens On Government U Turn and Minister Change 

UK Prime Minister Liz Truss fired finance minister Kwasi Kwarteng and reversed corporate tax cuts announced in the mini-budget last month.

Truss doubled down on her growth policies but said corporate tax cut will remain at 29% and reversed the earlier proposal to lower it to 19%.

The U-turn on the unfunded tax reduction proposal is expected to calm volatile Gilt market but questions remain how the government will fund its energy subsidies to households and other measures that are expected to cost the treasury 45 billion pounds. 

Truss announced the appointment of Jeremy Hunt replacing finance minister Kwasi Kwarteng only after five weeks in office. 

The Bank of England is set to end its long-term bond purchase program today, an emergency measure in support of the orderly functioning of the bond market and provide a rare rebalancing opportunity to pension fund managers.

The euro fell 0.5% to 97.24 U.S. cents and the British pound dropped 1% to $1.118.

The yield on 10-year UK bonds increased to 4.21%, German bunds rose to 2.308%, French bonds to 2.908% and Italian bonds to 4.74%.

 

Big Rate Hike in Hungary 

The Hungarian Forint advanced more than 2% and traded near 429 against the dollar after the National Bank of Hungary lifted its overnight collateral lending rate by 950 basis points to 25% in an emergency meeting on Friday.

The central bank lifted rates by a large amount in support of the falling forint and said that the bank will provide foreign currency for energy imports from its reserves.

Hungary, like many countries in Europe, is battling sky-high energy price driven inflation. Consumer price inflation in September surged above 20.0% for the first time since 1996.

The NBH has lifted rates at every policy meeting since June to combat high inflation above its target range between 2% and 4%. 

 

Stock Movers 

TomTom NV dropped 11.7% to

  • Barry Adams
  • 14 Oct, 2022
  • New York City

Stocks on Wall Street struggled a day after a sharp advance as investors digested the implication of a slight decline in consumer price inflation. 

The latest inflation reports sparked two diverging reactions from stock and bond markets. 

Stock investors hoped that the slight cooling of consumer inflation may be followed by weaker inflation data in the months ahead while bond investors focused on the elevated inflation rate above 8% and surmised that the Fed will continue its aggressive rate hike campaign. 

Stocks reversed 3% decline and closed up more than 2% and Treasury yields advanced in Thursday's trading. 

The yield on Treasuries extended gains on Friday while major stock averages erased most of Thursday's gains. 

The S&P 500 index fell 0.5% to 3,649.28 and the Nasdaq Composite index dropped 1.20% to 10,521.51. 

Crude oil fell $2.65 to $86.52 a barrel and natural gas dropped 28 cents to $6.45 a thermal unit. 

The yield on 2-year Treasury notes inched lower to 4.45%, 10-year Treasury notes to 3.96% and 30-year bonds to 3.96%. 

  

European Markets Trim Gains, UK Government's Tax U-Turn 

European markets trimmed morning gains following the weakness in New York trading. 

The FTSE index increased 0.6% to 6,893.77, the DAX index jumped 1.7% to 12,571.05 and CAC-40 index advanced 2.04% to 5,999.03. 

UK Prime Minister Liz Truss fired finance minister Kwasi Kwarteng and reversed corporate tax cuts announced in the mini-budget last month. 

Truss doubled down on her growth policies but said corporate tax cut will remain at 29% and reversed the earlier proposal to lower it to 19%. 

The U-turn on the unfunded tax reduction proposal is expected to calm volatile Gilt market but questions remain how the government will fund its energy subsidies to households. 

The Bank of England is set to end its long-term bond purchase program today, an emergency measure in support of the orderly functioning of the bond market and provide a rare rebalancing opportunity to pension fund managers. 

The euro fell 0.5% to 97.24 U.S. cents and the British pound dropped 1% to $1.118. 

The yield on 10-year UK bonds increased to 4.21%, German bunds rose to 2.308%, French bonds to 2.908% and Italian bonds to 4.74%. 

The Hungarian Forint advanced more than 2% and traded near 429 against the dollar after the National Bank of Hungary lifted its overnight collateral lending rate by 950 basis points to 25% in an emergency meeting on Friday.

The central bank lifted rates by a large amount in support of the falling forint and said that the bank will provide foreign currency for energy imports from its reserves. 

 

Asian Markets Advance Following Gains in New York 

Markets in Asia jumped following Thursday's advance in New York. 

The Japanese yen dropped to a new 24-year low of 148.23 against the dollar and the rupee held stable near record low of 82.22. 

Consumer price inflation accelerated at the fastest pace in more than two years but wholesale prices eased, according to the data released by the statistics bureau. 

Consumer prices rose 2.8% in September from 2.5% in August but wholesale price growth moderated to 0.9% on falling commodities prices and a change in comparison base. 

The Nikkei 225 average soared 3.2% to 27,090.76, the Hang Seng index increased 1.2% to 16,587.69 and the Sensex index gained 1.2% to 57,919.97. 

Benchmark indexes in India jumped led by a rise in IT sector after Infosys and MindTree reported better-than-expected earnings. 

   

  • Scott Peters
  • 13 Oct, 2022
  • New York City

Domino's Pizza Inc sizzled 9.8% to $331.42 after the company said revenue in its latest quarter increased 7.1% to $1.07 billion.

 Net income declined to $100.5 million from $120.4 million a year ago. 

Revenue increase was largely driven by 4.1% price hike at the company owned stores and similar increases charged to stores owned by franchisees. 

Same store sales at U.S. locations increased 2.0%, driven by 2.2% increase in franchised stores offset by 1.9% decline at company owned stores. 

Same store sales at international locations declined 1.8%, excluding foreign currency impact. 

Total global retail sales fell 1.6%, driven by 4.1% increase at the U.S. locations offset by 6.8% decline at international locations. 

Diluted earnings per share fell to $2.79 from $3.24 a year ago. 

 

Outlook and Guidance 

The company lifted its estimate of the negative impact of changes in foreign currency exchange rates on royalty revenues in the range between $29 million and $31 million from $22 million and $26 million. 

The company plans to cut its capital expenditure to $100 million from the previous estimate of $120 million. 

General and administrative expenses the current year are estimated to fall between $415 million and $420 million from the previous estimate between $420 million and $428 million.  

The company reiterated its price increase outlook for the current year across all products between 13% and 15%. 

 

Free Cash Flow 

Net cash provided by operating activities was $330.2 million during the three fiscal quarters of 2022 and the company invested $50.5 million in capital expenditures in the period. 

Free cash flow was approximately $279.6 million during the three fiscal quarters of 2022.  

 

Liquidity and Long Term Debt

Long term debt at the end of the quarter was $5.2 billion. 

At the end of the quarter as of September 11, 2022, the company had $114.8 million of unrestricted cash and cash equivalents. 

The borrowing capacity available at the end of the quarter was $35.8 million under its 2021 Variable Funding Notes, net of $120.0 million of outstanding  borrowings and letters of credit issued of $44.2 million.

Subsequent to the end of the third quarter, the company repaid $60.0 million of its outstanding borrowings under its 2021 Variable Funding Notes and entered into the 2022 Variable Funding Notes facility which provides for an additional $120.0 million of borrowing capacity. 

 

Stock Repurchase and Dividend 

During the third quarter of 2022, the company repurchased and retired 490,789 shares of common stock for a total of $196.1 million. 

As of September 11, 2022, the Company had a total remaining authorized amount for share repurchases of $410.4 million. 

On October 11, 2022, the Board of Directors declared a $1.10 per share  quarterly dividend to shareholders of record as of December 15, 2022 to be paid on December 30,  2022. 

 

Store Network 

During the quarter, the company owned stores increase by one to 402 and franchisee added 23 increasing the count to 6,241, totaling U.S. stores to 6,643. 

In the third quarter, International stores increased 201 to 12,876.  

In the quarter, the net store increased 225 to 19,519. 

 

  • Scott Peters
  • 13 Oct, 2022
  • New York City

Taiwan Semiconductor Manufacturing Co Ltd closed up 4.8% to $67.21 after the company said third quarter revenues increased 35.9% from a year ago and 11.4% from the previous quarter to $20.23 billion.

Consolidated revenue increased 47.9% to NT$613.14 billion, net income jumped 79.7%to NT$280.87 billion and  diluted earnings per share surged 79.8% to NT$10.83 or $1.79 per ADR unit.

Gross margin in the quarter was 60.4%, operating margin was 50.6% and net profit margin was 45.8%.

In the third quarter, shipments of 5-nanometer accounted for 28% of total wafer revenue; 7- nanometer accounted for 26%.

Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 54% of total wafer revenue, the statement from the company noted. 

The company said it plans to cut its capital expenditure to $36 billion from the previous estimate of $40 billion reflecting weak demand for smartphones and personal computers.  

The company also confirmed its plan to expand its Nanjing, China facility after it secured one-year U.S. extension to ship equipment 

U.S. tightened its technology export controls to China, thwarting the second largest economy's tech ambitions.    

TSMC's China sales declined to about 10% in 2021 from 17% in 2020, and the latest restrictions are likely to push sales below 7% of 2023 sales. 

Despite the waiver, TSMC will not be able to support its Chinese customers and provide chips to clients like Nvidia and Advanced Micro Devices selling high end chips in China. 

  • Barry Adams
  • 13 Oct, 2022
  • New York City

Stocks staged a stunning reversal after benchmark indexes rebounded from the morning's 3% decline to close up more than 2%.  

Major averages dropped as much as 3% to new 2022 lows in the first thirty minutes of trading but managed to recover losses and trade in positive territory. 

Benchmark indexes rebounded after banks and energy complex stocks advanced and tech stocks reversed earlier losses.

Goldman Sachs jumped 4%, JPMorgan soared 5.5%, Apple, Visa and Microsoft increased between 3% and 3.5%. 

The S&P 500 increased 2.6% to 3,669.91 and the Nasdaq Composite index added 2.2% to 10,649.15. 

Crude oil rose $1.80 to $89.06 a barrel and natural gas increased 26 cents to $6.70 a thermal unit.  

 

Inflation Stays Elevated In September 

Consumer prices rose at a faster pace in September, reflecting deeply entrenched inflation expectations in the services driven economy. 

The Consumer Price Index increased 0.4% in September on a seasonally adjusted basis, after rising 0.1% in August, the Bureau of Labor Statistics reported today. 

Prices rose 8.2% from a year ago on a seasonally unadjusted basis, the slowest increase in seven months, compared to 8.3% in August.  

Core index, excluding food and energy, rose 0.6% in September, matching the monthly rise in the previous month. 

On an annual basis, core rate increased 6.6% from a year ago, a new four-decade high highlighting elevated inflation pressures.   

The elevated inflation provides another signal for the Fed to continue its campaign of big rate hikes. 

The Federal Reserve is widely expected to lift interest rates by 75 basis points at its next policy meeting ending on November 2. 

There is no progress on inflation despite the Federal Reserve lifting rates five times in the last seven months.   

The yield on 2-year Treasury notes inched higher to 4.47%,  10-year Treasury notes increased to 3.95% and 30-year Treasury bonds edged up to 3.94%. 

 

US Stock Movers 

Albertsons Companies Inc soared 11.9% to $28.73 after CNBC and Bloomberg suggested that the retailer is likely to strike a merger deal with Kroger as early as this week.  

Both companies did not return calls to confirm the news. 

Victoria's Secret & Company sparkled 6.2% to $34.46 after the apparel retailer guided its latest quarterly earnings is likely to be near the high end of the range. 

Third quarter operating earnings are expected to be near the high end of the range between $10 million and $40 million and diluted earnings per share between breakeven and 25 cents a share. 

The revised operating income and earnings guidance is based on the estimated net sales decline in the high single digit range, as previously stated. 

Walgreens Boots Alliance Inc burped up 5.9% to $33.82 after the pharmaceutical retailer said revenue in the fiscal fourth quarter ending in August declined to $32.4 billion from $34.3 billion a year ago. 

The retailer swung to a net loss of $415 million from $627 million and diluted earnings per share to a loss of 48 cents from 72 cents a year ago. 

Walgreens guided fiscal 2023 adjusted earnings per share between $4.45 and $4.65. 

 

Sharp Reversal In European Indexes  

European indexes closed up after a wild day that saw indexes plunging as much as 1.5%, after the release of the U.S. consumer inflation data. 

Geopolitical tensions stayed high after Russia intensified its bombing campaign in Ukraine. 

The market decline was sharp and brief after energy and resource stocks led the rebound in the region following the rise in New York. 

The UK bond market turmoil continued after reports suggested that the government is likely to reverse most of the tax proposals. 

The expectations of tax reversal supported a rally in the UK gilt market and also lifted the British pound for the second day in a row. 

 

German Inflation Jumped to 10%

Consumer price inflation accelerated to 10.0% in September from 7.9% in August, according to final data reported by Destatis on Thursday. 

Excluding food and energy prices, inflation increased to 4.6%. 

Energy prices surged 43.9% and food prices rose 18.7% from a year ago and the ending of 9-euro tickets and a fuel discount fueled the price surge in September. 

Goods prices jumped 17.2% and services prices gained 3.6% in the month.   

 

Volatile Markets Closed Higher 

The DAX index increased 1.5% to 12,355.58, the CAC-40 index added 1.04% to 5,879.19 and the FTSE 100 index advanced 0.4% to 6,850.27. 

The Swiss benchmark SMI added 0.3% or 28.58 to 10,227.92 after volatile trading. 

The euro edged up 0.8% to 97.78 U.S. cents and the pound jumped 2.2% to $1.135. 

 

Europe Stock Movers

Oxford Instruments Plc gained 7.7% to 1,854.0 pence after the high-tech company sounded optimistic about first-half results. 

Banks in Switzerland closed up following the surge in the sector across Europe ahead of earnings. 

Credit Suisse jumped 6.5% and UBS Group increased 3.5%. 

Suedzucker AG closed down 2.7% to

  • Scott Peters
  • 13 Oct, 2022
  • New York City

Benchmark indexes soared nearly 3% and rebounded from the 3% decline at the opening after investors surmised consumer price inflation has peaked. 

The Consumer Price Index accelerated on a monthly basis to 0.4% in September but eased to 8.2% from an annual basis, the Department of Labor reported Thursday. 

Applied Materials, Inc increased 4.1% to  $79.10 and the chip equipment maker lowered its revenue fiscal fourth quarter ending in October after the U.S. placed additional restrictions on sales to China.  

The revenue is estimated at $6.4 billion with a $250 million band compared to the previous estimate of $6.65 billion with a $400 million band. 

The company also lowered its adjusted earnings per share estimate in the range between $1.54 and $1.78 from the previous estimate of $1.82 and $2.18. 

Albertsons Companies Inc soared 11.9% to $28.73 after CNBC and Bloomberg suggested that the retailer is likely to strike a merger deal with Kroger as early as this week.  

Both companies did not return calls to confirm the news. 

Delta Air Lines, Inc scaled higher 4.4% to  $30.50 after the company reported record third quarter revenues on the sustained recovery in both leisure and business travel. 

Revenue in the third quarter increased to $13.98 billion, 11% higher than $12.56 billion in the similar quarter in 2019. 

Net income in the quarter was $696 million or $1.08 diluted earnings per share compared to $1.5 billion and $2.31 in the quarter in 2019. 

The airline guided December quarter revenue to rise between 5% and 9% compared to a similar period in 2019 and earnings per share between $1.0 and $1.25. 

Domino's Pizza Inc sizzled 9.8% to $331.42 after the company said revenue in its latest quarter increased 7.1% to $1.07 billion and net income declined to $100.5 million from $120.4 million a year ago. 

Revenue increase was largely driven by 4.1% price hike at the company owned stores and similar increases charged to stores owned by franchisees. 

Diluted earnings per share fell to $2.79 from $3.24 a year ago. 

The company lifted its estimate of the negative impact of changes in foreign currency exchange rates on royalty revenues in the range between $29 million and $31 million from $22 million and $26 million. 

Progressive Corp fell 0.3% to $121.02 and the insurance company said net premium written in the quarter ending in September increased 5% to $13.02 billion. 

Net income in the quarter increased 5% to $124.5 million from $118.1 million and earnings per share rose to 20 cents from 19 cents a year ago. 

Taiwan Semiconductor Manufacturing Co Ltd tripped up 4.8% to $67.21 after the company said third quarter revenues increased 35.9% from a year ago and 11.4% from the previous quarter to $20.23 billion. 

Consolidated revenue increased 47.9% to NT$613.14 billion, net income jumped 79.7%to NT$280.87 billion and  diluted earnings per share surged 79.8% to NT$10.83 or $1.79 per ADR unit.

Gross margin in the quarter was 60.4%, operating margin was 50.6% and net profit margin was 45.8%. 

In the third quarter, shipments of 5-nanometer accounted for 28% of total wafer revenue; 7- nanometer accounted for 26%. 

Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 54% of total wafer revenue, the statement from the company noted. 

Victoria's Secret & Company sparkled 6.2% to $34.46 after the apparel retailer guided its latest quarterly earnings is likely to be near the high end of the range. 

Third quarter operating earnings are expected to be near the high end of the range between $10 million and $40 million and diluted earnings per share between breakeven and 25 cents a share. 

The revised operating income and earnings guidance is based on the estimated net sales decline in the high single digit range, as previously stated. 

Walgreens Boots Alliance Inc burped up 5.9% to $33.82 after the pharmaceutical retailer said revenue in the fiscal fourth quarter ending in August declined to $32.4 billion from $34.3 billion a year ago. 

The retailer swung to a net loss of $415 million from $627 million and diluted earnings per share to a loss of 48 cents from 72 cents a year ago. 

Walgreens guided fiscal 2023 adjusted earnings per share between $4.45 and $4.65. 

  • Bridgette Randall
  • 13 Oct, 2022
  • Frankfurt

European indexes closed up after a wild day that saw indexes plunging as much as 1.5%, after the release of the U.S. consumer inflation data. 

Geopolitical tensions stayed high after Russia intensified its bombing campaign in Ukraine. 

The market decline was sharp and brief after energy and resource stocks led the rebound in the region following the rise in New York. 

The UK bond market turmoil continued after reports suggested that the government is likely to reverse most of the tax proposals. 

The expectations of tax reversal supported a rally in the UK gilt market and also lifted the British pound for the second day in a row. 

German Inflation Jumped to 10%

Consumer price inflation accelerated to 10.0% in September from 7.9% in August, according to final data reported by Destatis on Thursday. 

Excluding food and energy prices, inflation increased to 4.6%. 

Energy prices surged 43.9% and food prices rose 18.7% from a year ago and the ending of 9-euro tickets and a fuel discount fueled the price surge in September. 

Goods prices jumped 17.2% and services prices gained 3.6% in the month.   

Volatile Markets Closed Higher 

The DAX index increased 1.5% to 12,355.58, the CAC-40 index added 1.04% to 5,879.19 and the FTSE 100 index advanced 0.4% to 6,850.27. 

The Swiss benchmark SMI added 0.3% or 28.58 to 10,227.92 after volatile trading. 

The euro edged up 0.8% to 97.78 U.S. cents and the pound jumped 2.2% to $1.135. 

Stock Movers

Oxford Instruments Plc gained 7.7% to 1,854.0 pence after the high-tech company sounded optimistic about first-half results. 

Banks in Switzerland closed up following the surge in the sector across Europe ahead of earnings. 

Credit Suisse jumped 6.5% and UBS Group increased 3.5%. 

Suedzucker AG closed down 2.7% to

  • Barry Adams
  • 13 Oct, 2022
  • New York City

Stocks opened sharply lower and bond yields soared after the release of September's consumer inflation data.  

Major averaged dropped as much as 3% in the first thirty minutes of trading but managed to recover losses and trade in positive territory. 

Benchmark indexes rebounded after energy complex stocks advanced and tech stocks reversed earlier losses. 

Consumer prices rose at a faster pace in September, reflecting quickly entrenching inflation expectations deep in the services driven economy. 

The Consumer Price Index increased 0.4% in September on a seasonally adjusted basis, after rising 0.1% in August, the Bureau of Labor Statistics reported today. 

Prices rose 8.2% from a year ago on a seasonally unadjusted basis, the lowest increase in seven months, compared to 8.3% in August.  

Core index, excluding food and energy, rose 0.6% in September, matching the monthly rise in the previous month. 

On an annual basis, core rate increased 6.6% from a year ago, a new four-decade high highlighting elevated inflation pressures.   

The elevated inflation provides another signal for the Fed to continue its campaign of large-sized rate increase. 

The Federal Reserve is expected to lift interest rates by 75 basis points at its next policy meeting ending on November 2. 

There is no progress on inflation despite the Federal Reserve lifting rates five times in the last seven months.   

The yield on 2-year Treasury notes inched higher to 4.44%,  10-year Treasury notes increased to 3.97% and 30-year Treasury bonds edged up to 3.93%. 

The S&P 500 increased 1.4% to 3,631.96 and the Nasdaq Composite index added 1.1% to 10,559.84. 

Crude oil rose 97 cents to $88.96 a barrel and natural gas increased 16 cents to $6.60 a thermal unit.  

 

UK Gilt and Pound Turmoil Continues 

European markets traded higher in the early trading and briefly plunged more than 1.5% after the release of the U.S. consumer inflation data. 

Geopolitical tensions stayed high after Russia enlarged its bombing campaign in Ukraine. 

The market decline was sharp and brief after energy and resource stocks led the rebound in the region following the rise in New York. 

The UK bond market turmoil continued after reports suggested that the government is likely to reverse most of the tax proposals. 

The tax reversal supported a rally in the UK gilt market and also lifted the British pound for the second day in a row. 

The DAX index increased 1.4% to 12,339.21, the CAC-40 index added 0.6% to 5,850.72 and the FTSE 100 index advanced 0.4% to 6,850.27. 

 The Swiss benchmark SMI fell 8.51 to 10,199.32 after trading in tight range. 

The euro edged up 0.8% to 97.78 U.S. cents and the pound jumped 2.2% to $1.135. 

Oxford Instruments Plc gained 7.7% to 1,854.0 pence after the high-tech company sounded optimistic about first-half results. 

 

Asian Markets Retreat 

Asian markets retreated ahead of the release of the U.S. consumer price inflation data that may impact rate-path in several countries in the region. 

The Nikkei 225 average declined 0.6% or 159.41 to  26,237.42, the Hang Seng index dropped 1.87% or 311.92 to 16,389.11 and the Sensex index fell 0.7% or 390.58 to 57,235.33. 

The Japanese yen traded near a 24-year low of 146.99 and Japanese wholesale prices rose the most in five months in September, the Bank of Japan reported today. 

The producer price index increased 0.7% from August and jumped 9.7% from a year ago, the preliminary data showed.  

 

  • Brian Turner
  • 13 Oct, 2022
  • New York City

Consumer prices rose at a faster pace in September, reflecting quickly entrenching inflation expectations deep in the services driven economy. 

The Consumer Price Index increased 0.4% in September on a seasonally adjusted basis, after rising 0.1% in August, the Bureau of Labor Statistics reported today. 

Prices rose 8.2% from a year ago on a seasonally unadjusted basis. 

Large increases in housing, food and medical care indexes were partially offset by a 4.9% decline in gasoline index. 

Core index, excluding food and energy, rose 0.6% in September, matching the monthly rise in the previous month. 

The elevated inflation provides another signal for the Fed to continue its campaign of large-sized rate increase. 

The Federal Reserve is expected to lift interest rates by 75 basis points at its next policy meeting ending on November 2. 

There is no progress on inflation despite the Federal Reserve lifting rates five times in the last seven months.   

  • Barry Adams
  • 12 Oct, 2022
  • New York City

Volatile stocks flirted with flat-line and fell in the final thirty minutes of trading ahead of the widely anticipated consumer price inflation report on Thursday. 

In choppy trading, major averages wavered after wholesale inflation in September increased 0.4% on a monthly basis, the first increase in three months. 

The S&P 500 and the Nasdaq Composite indexes fell to new 2022 lows and investors digested the Federal Reserve's September minutes of meeting. 

The policy makers generally sounded hawkish but one comment offered a glimmer of hope that the Fed may slow or pause rate hikes if additional tightening leads to " significant adverse effects on the economic outlook."

The S&P 500 index fell 0.3% or 11.81 to 3,577.03 and the Nasdaq Composite decreased 0.08% or 9.09 to 10,417.10.  

Crude oil declined $2.34 to $87.01 a barrel and natural gas fell 14 cents to $6.44 a thermal unit. 

The yield on 2-year Treasury notes edged down to 4.29%, 10-year Treasury notes decreased to 3.89% and 30-year bonds eased to 3.88%. 

 

Wholesale Inflation Stays Elevated 

The producer price index increased 0.4% in September from the previous month and rose 8.5% from a year ago, the Bureau of Labor Statistics reported Wednesday. 

The wholesale inflation on an annual basis fell to 8.5% from 8.7% in August. 

Much of the inflation in the month was driven by 0.4% rise in service costs and travel and accommodation services jumped 6.4%. 

Cost of goods rose 0.4% driven by a 15.7% jump in the index for fresh and dry vegetables. 

The wholesale inflation, excluding food, energy and trade services increased 0.4% from August and jumped 5.6% from a year ago. 

The elevated producer price is likely to provide another reason for the Fed to continue its large-sized rate hike at its next meeting scheduled in three weeks. 

Closely watched consumer price index is scheduled to be released on Thursday. 

The Federal Reserve has raised rates five times in the last six months yet there is no progress on inflation. 

The Fed is widely expected to lift rates by 75 basis points at the next policy meeting ending on November 2. 

 

Stock Movers

PepsiCo, Inc gained 3.8% to $169.0 after the snack and beverage maker reported revenue in the third quarter increased 8% to $21.97 billion and net income rose 22% to $2.7 billion. 

The better-than-expected increase in sales was driven mostly by price increase in snacks business of as much as 20% and 2% decline in volume and flat volumes in its beverage unit and about 4% rise in prices.

El Pollo Loco, Inc increased 14.2% to $10.38 after the company announced a special dividend of $1.50 a share and stock repurchase program of $20 million. 

The special dividend is payable on November 9, 2022 to shareholders of record at the close of business on October 24, 2022.

Diamondback Energy Inc increased 1.4% to $141.35 after the company agreed to acquire FireBird Energy for $1.6 billion in cash and stock. 

The company said it has agreed to purchase all leasehold interest in 75,000 contiguous acres and related assets of FireBird in exchange for 5.86 million shares of its common stock and $775 million cash.

Knowbe4 Inc increased 12.6% to $24.32 on the report that the company is close to finalizing a deal with Vista Equity to go private for $4.5 billion. 

The news was first reported by the Wall Street Journal. 

 

European Markets Extend Losses to 6th Day 

European markets traded lower as investors reacted to mixed economic data in the region and corporate news. 

Industrial output across the euro zone increased 1.5% in August from July, Eurostat reported Wednesday. 

Output of factories, mines and utilities jumped 2.5% from a year ago. 

A separate report showed the UK's GDP unexpectedly declined in August on weak services and industrial output.  

GDP shrank 0.3% in August on a monthly basis after rising revised 0.1% in July. On a yearly basis, GDP growth slowed to 2.0% after a revised 3.5% increase in July, the Office for National Statistics reported Wednesday.   

The DAX index fell 0.4% to 12,172.26, the CAC-40 index dropped 0.3% to 5,818.47 and the FTSE 100 index fell 0.9% to 6,826.15. 

The euro declined to 97.07 U.S. cents and the British pound edged down to $1.109. 

The Swiss franc traded down to 99.71 U.S. cents. 

Koninklijke Philips NV dropped 12.3% to

  • Scott Peters
  • 12 Oct, 2022
  • New York City

Diamondback Energy Inc increased 1.4% to $141.35 after the company agreed to acquire FireBird Energy for $1.6 billion in cash and stock. 

The company said it has agreed to purchase all leasehold interest in 75,000 contiguous acres and related assets of FireBird in exchange for 5.86 million shares of its common stock and $775 million cash.

The Midland, Texas based company is focused on exploring and developing energy fields in the Permian Basin in West Texas. 

The purchase adds oil fields that are adjacent to the current fields owned by the company and the purchase is expected to add inventory of oil and gas at the current rate of production. 

The independent oil and natural gas company estimated the transaction to be immediately accretive in 2023 and 2024 financial metrics including cash flow per share, free cash flow per share and net asset value per share. 

The company expects the acquisition to close in the fourth quarter 2022. 

The crude oil production, at the time of closing, of 17 million barrels of oil per day is expected to increase to average 19 million in 2023.