- Barry Adams
- 27 Sep, 2022
- New York City
Early morning momentum dissipated after two hours of trading and major averages struggled to climb back into positive territory.
The U.S. Treasury 10-year yield rose to a high not seen at least in a decade as investors adjust to more rate hikes at the next two remaining meetings of the Fed's policymakers.
Tech stocks led the gainers on the hopes that the recent sell-off was overdone.
The S&P 500 index decreased 0.3% to 3,697.26 and extended losses to the sixth day in a row and the Nasdaq Composite index added 0.2% to 10,820.59.
The S&P 500 index is down 24% and the Nasdaq Composite index is below 31.6% in the year so far.
Tesla, Amazon, Apple, Microsoft and Visa gained between 0.5% and 2%.
Energy complex stocks also gained after crude oil rebounded 2%.
Exxon Mobil, Chevron, Hess Corp and Schlumberger added between 1% and 2%.
Crude oil gained $1.87 or 1.8% to $78.57 and natural gas decreased 18 cents to $6.71 a thermal unit.
The yield on 2-year Treasury notes edged down to 4.30%, 10-year Treasury notes inched higher to 3.973% and 30-year bonds increased to 3.85%.
Home builders dropped at least 1% following the rise in bond yields on the worries that mortgage rates may reach as high as 7% in the first-half of 2023.
U.S. Stock Movers
Energy stocks traded higher after crude oil rebounded 2% from its nine-month low to $78.69 a barrel.
Exxon Mobil, Hess Corp, Schlumberger and BP plc gained between 1% and 2%.
Cracker Barrel Old Country Store, Inc rose 0.7% to $98.44 after the restaurant chain operator reported revenue in the fourth quarter ending on July 29th rose 5.9% to $830.4 million.
Comparable restaurant sales increased 6.1% and retail sales rose 3.0%.
Net income in the period decreased 8.0% to $33.4 million from $36.4 million a year ago.
For the fiscal year, revenue rose $3.3 billion from $2.8 billion a year ago and net income plunged 48% to $131.8 million from $254.5 million a year ago.
Hertz Global Holdings Inc increased 2.4% to $16.20 after the rental car company announced a partnership with BP Plc's electric vehicle charging unit to place thousands of charging stations to power the company's fleet.
Jabil Inc increased 1.2% to 56.86 after the electronics manufacturing services provider said revenue in the quarter ending in August increased to $9 billion from $7.4 billion a year ago.
Net income increased to $315 million from $175 million and diluted earnings per share rose to $2.25 from $1.75 a year ago.
The company guided fiscal first quarter 2023 revenue to increase 9% from a year ago in the range between $9 billion and $9.6 billion and diluted earnings per share between $1.65 and $2.05.
The company also announced a buyback plan of up to $1 billion of its own stock over the next two years.
United Natural Foods Inc dropped 1.8% to $37.77 after the food wholesaler said revenue in the fourth quarter ending in July rose 8.0% to $7.3 billion.
Net income decreased 9.3% to $39 million from $43 million and diluted earnings per share fell to 63 cents from 69 cents a year ago.
For the fiscal year 2022, net sales increased 7.3% to $28.9 billion and net income increased 66.4% to $248 million from $149 million or $4.07 from $2.48 a year ago.
New Home Sales Soar In August
Single-family new home sales in August rose unexpectedly, according to the latest report from the U.S. Commerce Department Tuesday.
Home sales soared 28.8% to an annual rate 685,000 from the revised rate of 5.6% decline to 532,000 in July.
Home sales rate has been steadily declining since hitting the high of 839,000 in December 2021 and dropped to a low of 532,000 in July, matching the March 2016 data.
Median home price in August was $436,800, a decline of 6.3% from $466.300 but 8.0% higher from $404,300 a year ago.
Last week, the National Association of Realtors said existing home sales declined for the seventh month in a row in August but the pace of decline eased to 0.4% to 4.8 million from the previous month's fall of 5.7% to 4.82 million in July.
U.S. Durable Orders Fall in August
Seasonally adjusted durable goods orders fell on a monthly basis 0.2% in August following the revised 0.1% decline in July, the U.S. Census Bureau reported Tuesday.
The new orders not adjusted for seasonal factors surged 10.9% from a year ago.
On a monthly basis, excluding transportation, new orders increased 0.2% and excluding defense, new orders decreased 0.9%.
Europe Battles Rising Inflation, Rates and Dollar
In Europe, benchmark indexes advanced after investors searched for beaten down stocks in financials and energy sectors.
The DAX index increased 0.6% to 12,299.50, the CAC-40 index added 0.7% to 5,810.25 and the FTSE 100 index inched higher 0.1% to 7,028.24.
European markets lacked direction as investors worried that rapid rise in interest rates may dip the economy into a recession without killing the high inflation.
Natural gas prices rebounded in Amsterdam trading and the TTF gas price futures for the immediate month delivery increased as much as 12% before cooling to 8.5% gain to 188.34 euros a megawatt hour.
Brent crude oil also rebounded 2.9% from a nine-month low to $86.56 a barrel.
The U.S. dollar paused its year-long advance and the euro traded at 96.25 cents and the British pound edged up to $1.77.
The British pound is expected to test its parity with the U.S. dollar and the euro in the coming weeks as the island nation struggles with rising cost of energy imports, falling government revenues and rising sovereign borrowing.
Currency traders are anticipating the pound to drop as low as 93 U.S. cents if the Bank of England fails to intervene and lift interest rates in an emergency meeting.
Asian Markets Rebound from Extended Losses
Asian markets closed higher in a cautious trading as indexes in Japan and China rebounded but in India and Australia edged lower.
The Nikkei 225 index increased 0.5% to 26,571.87, while the broader Topix closed 0.5% higher at 1,873.01.
The Bank of Japan carried out an unscheduled operation to curb currency speculation and control the rapid decline in yen and Finance Minister Sunichi Suzuki cautioned currency traders to avoid speculative bets.
The People's Bank of China injected more liquidity to financial system and dampen the rising stress in dollar-renminbi trades.
The central bank added $24.7 billion in the repo market ahead of the end of the quarter.
The Sensex index in India edged down for the fifth day in a row and fell 37.70 points or 0.07% to 57,107.52 and the Nifty index 8.90 points or 0.05% to 17,007.40.
The Indian economy is one of the few bright spots in the world, most developed economies are heading to a recession and emerging markets are battling sharp currency devaluations.
A mix of global economic slowdown and elevated inflation has kept investors on edge in India, despite the encouraging domestic economic scenario.
Moreover, India is expected to benefit as more companies look to relocate from China and diversify their manufacturing base.
The Shanghai Composite Index jumped 1.4% to 3,093.86, while Hong Kong's Hang Seng Index gained fractionally to close at 17,860.31.
- Barry Adams
- 27 Sep, 2022
- New York City
U.S. stocks lost early momentum and turned lower and the S&P 500 index dropped to a new 2022-low.
The S&P 500 index fell 0.6% to 3,631.13 and the Nasdaq Composite index dropped 0.4% to 10.767.54.
Energy stocks traded higher after crude oil rebounded 2.5% from its nine-month low to $78.69 a barrel.
Exxon Mobil, Hess Corp, Schlumberger and BP plc gained between 1% and 2%.
BlackBerry Limited increased 0.7% to $5.01 and the maker of telecom devices and software developer is scheduled to release earnings at 5:30 p.m. ET Tuesday.
Cal-Maine Foods Inc 1.3% to $60.48 ahead of the company's earnings release after the close of regular trading session today.
Cracker Barrel Old Country Store, Inc rose 0.7% to $98.44 after the restaurant chain operator reported revenue in the fourth quarter ending on July 29th rose 5.9% to $830.4 million.
Comparable restaurant sales increased 6.1% and retail sales rose 3.0%.
Net income in the period decreased 8.0% to $33.4 million from $36.4 million a year ago.
For the fiscal year, revenue rose $3.3 billion from $2.8 billion a year ago and net income plunged 48% to $131.8 million from $254.5 million a year ago.
Hertz Global Holdings Inc increased 2.4% to $16.20 after the rental car company announced a partnership with BP Plc's electric vehicle charging unit to place thousands of charging stations to power the company's fleet.
Jabil Inc increased 1.2% to 56.86 after the electronics manufacturing services provider said revenue in the quarter ending in August increased to $9 billion from $7.4 billion a year ago.
Net income increased to $315 million from $175 million and diluted earnings per share rose to $2.25 from $1.75 a year ago.
The company guided fiscal first quarter 2023 revenue to increase 9% from a year ago in the range between $9 billion and $9.6 billion and diluted earnings per share between $1.65 and $2.05.
The company also announced a buyback plan of up to $1 billion of its own stock over the next two years.
United Natural Foods Inc dropped 1.8% to $37.77 after the food wholesaler said revenue in the fourth quarter ending in July rose 8.0% to $7.3 billion.
Net income decreased 9.3% to $39 million from $43 million and diluted earnings per share fell to 63 cents from 69 cents a year ago.
For the fiscal year 2022, net sales increased 7.3% to $28.9 billion and net income increased 66.4% to $248 million from $149 million or $4.07 from $2.48 a year ago.
- Brian Turner
- 27 Sep, 2022
- New York City
Single-family new home sales in August rose unexpectedly, according to the latest report from the Commerce Department Tuesday.
Home sales soared 28.8% to 685,000 annual rate from the revised rate of 5.6% decline to 532,000 in July.
Home sales annual rate has been steadily declining since hitting the high of 839,000 in December 2021 and dropped to a low of 532,000 in July, matching the March 2016 data.
Median home price in August was $436,800, a decline of 6.3% from $466.300 but 8.0% higher from a year ago price of $404,300.
Last week, the National Association of Realtors said existing home sales declined for the seventh month in a row in August but the pace of decline eased to 0.4% to 4.8 million from the previous month fall of 5.7% to 4.82 million in July.
- Bridgette Randall
- 27 Sep, 2022
- Frankfurt
Benchmark indexes in Europe advanced after investors searched for beaten down stocks in financials and energy sectors.
The DAX index increased 0.6% to 12,299.50, the CAC-40 index added 0.7% to 5,810.25 and the FTSE 100 index inched higher 0.1% to 7,028.24.
European markets lacked direction as investors worried that rapid rise in interest rates may dip the economy into a recession without killing the high inflation.
Natural gas prices rebounded in Amsterdam trading and the TTF gas price futures for the immediate month delivery increased as much as 12% before cooling to 8.5% gain to 188.34 euros a megawatt hour.
Brent crude oil also rebounded 2.9% from a nine-month low to $86.56 a barrel.
The U.S. dollar paused its year-long advance and the euro traded at 96.25 cents and the British pound edged up to $1.77.
The British pound is expected to test its parity with the U.S. dollar and the euro in the coming weeks as the island nation struggles with rising cost of energy imports, falling government revenues and rising sovereign borrowing.
Currency traders are anticipating the pound to drop as low as 93 U.S. cents if the Bank of England fails to intervene and lift interest rates in an emergency meeting.
- Arjun Pandit
- 27 Sep, 2022
- Mumbai
Asian markets closed higher in a cautious trading as indexes in Japan and China rebounded but in India and Australia edged lower.
The Nikkei 225 index increased 0.5% to 26,571.87, while the broader Topix closed 0.5% higher at 1,873.01.
The Bank of Japan carried out an unscheduled operation to curb currency speculation and control the rapid decline in yen and Finance Minister Sunichi Suzuki cautioned currency traders to avoid speculative bets.
The People's Bank of China injected more liquidity to financial system and dampen the rising stress in dollar-renminbi trades.
The central bank added $24.7 billion in the repo market ahead of the end of the quarter.
The Sensex index in India edged down for the fifth day in a row and fell 37.70 points or 0.07% to 57,107.52 and the Nifty index 8.90 points or 0.05% to 17,007.40.
The Indian economy is one of the few bright spots in the world, most developed economies are heading to a recession and emerging markets are battling sharp currency devaluations.
A mix of global economic slowdown and elevated inflation has kept investors on edge in India, despite the encouraging domestic economic scenario.
Moreover, India is expected to benefit as more companies look to relocate from China and diversify their manufacturing base.
The Shanghai Composite Index jumped 1.4% to 3,093.86, while Hong Kong's Hang Seng Index gained fractionally to close at 17,860.31.
- Barry Adams
- 27 Sep, 2022
- New York City
Bargain hunters were out looking for stocks in early morning trading after major averages closed at their 2022 lows yesterday.
Tech stocks led the gainers on the hopes that the recent sell-off was overdone.
The S&P 500 index increased 1.2% to 3,697.26 and the Nasdaq Composite index added 1.6% to 10,959.26.
Tesla, Amazon, Apple, Microsoft and Visa gained between 1% and 3%.
Energy complex stocks also gained after crude oil rebounded 2%.
Exxon Mobil, Chevron, Hess Corp and Schlumberger added between 1% and 2%.
Crude oil gained $1.70 or 2.2% to $78.43 and natural gas decreased 15 cents to $6.75 a thermal unit.
The yield on 2-year Treasury notes edged down to 4.28%, 10-year Treasury notes declined to 3.91% and 30-year bonds fell to 3.77%.
Europe Battles Rising Inflation, Rates and Dollar
In Europe, benchmark indexes advanced after investors searched for beaten down stocks in financials and energy sectors.
The DAX index increased 0.6% to 12,299.50, the CAC-40 index added 0.7% to 5,810.25 and the FTSE 100 index inched higher 0.1% to 7,028.24.
European markets lacked direction as investors worried that rapid rise in interest rates may dip the economy into a recession without killing the high inflation.
Natural gas prices rebounded in Amsterdam trading and the TTF gas price futures for the immediate month delivery increased as much as 12% before cooling to 8.5% gain to 188.34 euros a megawatt hour.
Brent crude oil also rebounded 2.9% from a nine-month low to $86.56 a barrel.
The U.S. dollar paused its year-long advance and the euro traded at 96.25 cents and the British pound edged up to $1.77.
The British pound is expected to test its parity with the U.S. dollar and the euro in the coming weeks as the island nation struggles with rising cost of energy imports, falling government revenues and rising sovereign borrowing.
Currency traders are anticipating the pound to drop as low as 93 U.S. cents if the Bank of England fails to intervene and lift interest rates in an emergency meeting.
Asian Markets Rebound from Extended Losses
Asian markets closed higher in a cautious trading as indexes in Japan and China rebounded but in India and Australia edged lower.
The Nikkei 225 index increased 0.5% to 26,571.87, while the broader Topix closed 0.5% higher at 1,873.01.
The Bank of Japan carried out an unscheduled operation to curb currency speculation and control the rapid decline in yen and Finance Minister Sunichi Suzuki cautioned currency traders to avoid speculative bets.
The People's Bank of China injected more liquidity to financial system and dampen the rising stress in dollar-renminbi trades.
The central bank added $24.7 billion in the repo market ahead of the end of the quarter.
The Sensex index in India edged down for the fifth day in a row and fell 37.70 points or 0.07% to 57,107.52 and the Nifty index 8.90 points or 0.05% to 17,007.40.
The Indian economy is one of the few bright spots in the world, most developed economies are heading to a recession and emerging markets are battling sharp currency devaluations.
A mix of global economic slowdown and elevated inflation has kept investors on edge in India, despite the encouraging domestic economic scenario.
Moreover, India is expected to benefit as more companies look to relocate from China and diversify their manufacturing base.
The Shanghai Composite Index jumped 1.4% to 3,093.86, while Hong Kong's Hang Seng Index gained fractionally to close at 17,860.31.
- Barry Adams
- 26 Sep, 2022
- New York City
Stocks on Wall Street lacked direction in early trading and accelerated decline after two hours of trading.
Benchmark indexes dropped near the low of the session by 2:00 p.m. ET and after two failed rebound attempts sank in the final five minutes of trading.
The S&P 500 index declined 1.03% to 3,655.04 and the Nasdaq Composite index dropped 0.6% to 10,802.90.
On the first day of trading this week, after a week of more than 4% losses, investors shifted focus to the rising U.S. dollar, adding to the list of worries.
Crude oil accelerated in the fifth week, after dropping in the four previous weeks in a row, erased gains of 2022.
Crude oil fell $2.01 to $77.72 a barrel and natural gas rose 8 cents to $6.91 a thermal unit.
Coal edged down $435.20 a ton, up 140.4% in the year so far.
Crude oil dropped 20.5% in the month so far and up only 1.46% in 2022 after erasing this year's gains.
The yield on 2-year notes edged up to a new 14-year high of 4.32%, 10-year notes inched higher to 3.90% and 30-year bonds advanced to 3.72%.
Stock Movers
AMC Entertainment plunged 10.4% to $7.16 on the news that the movie theater chain operator is likely to sell 425 million units of its preferred shares.
Macy's Inc declined 3.3% to $15.19 and the retailer said the company plans to add 41,000 staff for the upcoming holiday season. The current hiring plan is consistent with the previous years, said the apparel retailer.
Last week, Target announced its plan to add as many as 100,000 seasonal staff in stores and supply chain facilities.
Retailer also said it plans to start its holiday sales as early as October 6 and continue till Dec 24, the longest holiday sale period.
Target Corporation declined 2.7% to $148.46.
Casino companies operating in China traded higher after Macau government said Mainland tour operators from China can resume casino visits from November 1.
Wynn Resorts, Limited jumped 12.7% to $67.24 and Las Vegas Sands Corp jumped 12.4% to $39.90.
China-based electric vehicle makers jumped after the government extended tax breaks for purchases.
Li Auto Inc jumped 6.4% to $26.59, Nio Inc added 1.0% to $17.82 and Xpeng Inc increased 5.6% to $14.48.
European Markets Lack Direction
Benchmark indexes in Europe lacked direction in early trading but traded marginally higher.
The DAX Index edged down 0.5% to 12,227.92, the CAC-40 index decreased 0.3% to 5769.39 and the FTSE 100 index was inched up 0.03% at 7.020.95.
The euro inched lower to 96.176 cents on the ongoing worries of high inflation and rate path and the British pound dropped to a new 4-decade low of $1.069 on the worries that the recently announced tax cuts may increase government deficit.
The yield on European bonds rose and Italian bod yields rose the most after the far-right party led coalition was ahead in the election.
Giorgia Meloni led Brothers of Italy and coalition partners are set to win a majority of seats in the Senate and form a government.
Italian bond yields rose to 4.52%, the highest since 2013 and spread with the German government bond yield widened to 235 basis points, approaching the record high of 250 basis points in 2020.
Meloni campaigned on a promise to renegotiate the terms of payments received from the European Union that could jeopardize or delay as much as 200 billion euros from Brussels.
The yield on the U.K. bonds rose to 4.25% from 3.15% last week and the German bund inched up to 2.09% and French bonds to 2.69%.
China Adjusts Rates, Allows Gradual Depreciation
The People's Bank of China set the renminbi rate below 7.00 for the first time since July 2020 and let the currency slide below the psychologically important range between 6.0 and 7.0.
The currency declined more after the central bank set the rate at 7.0298 but the tightly controlled currency dropped to 7.16, the level not seen since May 2008.
Most Chinese exporters are keeping the export revenues in foreign bank accounts and taking advantage of the rising rates in the U.S. and Europe and not converting to renminbi as rates are falling in China.
Asian Markets Drop
In Asia, popular averages declined following the Friday's losses in the U.S. and Europe.
The Nikkei index dropped 2.6% to 26,475.33, the Shanghai Composite index declined 1.2% to 3,051.41, the Sensex index plunged 1.6% to 57,145.32.
The dollar continued its advanced against all major currencies in Asia.
The yen dropped to a new 25-year low 144.23, the yuan eased to 7.14 and the Indian rupee eased to a new low of 81.43.
- Barry Adams
- 26 Sep, 2022
- New York City
Stocks on Wall Street lacked direction in early trading and accelerated decline after two hours of trading.
On the first of trading this week, after a week of losses totaling more than 4%, investors shifted focus to the rising U.S. dollar, adding to the list of worries.
The euro dropped to a new record low and the British pound dropped to a 4-decade low on the worries that the recently announced tax incentives will lead to a surge in government deficit and not lead to increase in productive capacity.
The S&P 500 index dropped 0.9% to 3,660.53 and the Nasdaq Composite index fell 0.4% to 10,381.90.
AMC Entertainment plunged 10.4% to $7.16 on the news that the movie theater chain operator is likely to sell 425 million units of its preferred shares.
Macy's Inc declined 3.3% to $15.19 and the retailer said the company plans to add 41,000 staff for the upcoming holiday season. The current hiring plan is consistent with the previous years, said the apparel retailer.
Last week, Target announced its plan to add as many as 100,000 seasonal staff in stores and supply chain facilities.
Retailer also said it plans to start its holiday sales as early as October 6 and continue till Dec 24, the longest holiday sale period.
Target Corporation declined 2.7% to $148.46.
Casino companies operating in China traded higher after Macau government said Mainland tour operators from China can resume casino visits from November 1.
Wynn Resorts, Limited jumped 12.7% to $67.24 and Las Vegas Sands Corp jumped 12.4% to $39.90.
China-based electric vehicle makers jumped after the government extended tax breaks for purchases.
Li Auto Inc jumped 6.4% to $26.59, Nio Inc added 1.0% to $17.82 and Xpeng Inc increased 5.6% to $14.48.
Estee Lauder Companies Inc jumped 1.6% to $232.62 and the company announced a licensing partnership with Balmain to launch Balmain Beauty in fall 2024.
LAVA Therapeutics NV soared 103% to $4.87 after the company said Seagen Inc has agreed to produce LAVA's solid tumor-targeting therapy.
As a part of the worldwide licensing agreement, LAVA will receive $50 million upfront payment and $650 million potential milestone-based and royalty payments.
- Bridgette Randall
- 26 Sep, 2022
- Frankfurt
Benchmark indexes in Europe lacked direction in early trading but traded marginally higher.
The DAX Index edged up 0.2% to 12,308.12, the CAC-40 index increased 0.3% to 5799.37 and the FTSE 100 index was nearly unchanged at 7.018.27.
The euro inched lower to 96.66 cents on the ongoing worries of high inflation and rate path and the British pound dropped to a new 4-decade low of $1.083 on the worries that the recently announced tax cuts may increase government deficit.
The yield on European bonds rose and Italian bod yields rose the most after the far-right party led coalition was ahead in the election.
Giorgia Meloni led Brothers of Italy and coalition partners are set to win a majority of seats in the Senate and form a government.
Italian bond yields rose to 4.5%, the highest since 2013 and spread with the German government bond yield widened to 235 basis points, approaching the record high of 250 basis points in 2020.
Meloni campaigned on a promise to renegotiate the terms of payments received from the European Union that could jeopardize or delay as much as 200 billion euros from Brussels.
Asian Markets Drop
In Asia, popular averages declined following Friday's losses in the U.S. and Europe.
The Nikkei index dropped 2.6% to 26,475.33, the Shanghai Composite index declined 1.2% to 3,051.41, the Sensex index plunged 1.6% to 57,145.32.
The dollar continued its advance against all major currencies in Asia.
The yen dropped to a new 25-year low 144.23, the yuan eased to 7.14 and the Indian rupee eased to a new low of 81.43
China Adjusts Rates, Allows Gradual Depreciation
The People's Bank of China set the renminbi rate below 7.00 for the first time since July 2020 and let the currency slide below the psychologically important range between 6.0 and 7.0.
The currency declined more after the central bank set the rate at 7.0298 but the tightly controlled currency dropped to 7.16, the level not seen since May 2008.
Most Chinese exporters are keeping the export revenues in foreign bank accounts and taking advantage of the rising rates in the U.S. and Europe and not converting to renminbi as rates are falling in China.
- Barry Adams
- 26 Sep, 2022
- New York City
Stocks on Wall Street opened higher after major averages fell more than 4% in the previous week.
Tech stocks led the gainers in early morning trading and widely held stocks including Apple, Microsoft, Amazon and Tesla jumped more than 2%.
Crude oil rose 73 cents to $79.42 a barrel and natural gas fell 24 cents to $6.58 a thermal unit.
The yield on 2-year notes edged up to a new 14-year high of 4.21%, 10-year notes inched higher to 3.77% and 30-year bonds advanced to 3.67%.
European Markets Lack Direction
Benchmark indexes in Europe lacked direction in early trading but traded marginally higher.
The DAX Index edged up 0.2% to 12,308.12, the CAC-40 index increased 0.3% to 5799.37 and the FTSE 100 index was nearly unchanged at 7.018.27.
The euro inched lower to 96.66 cents on the ongoing worries of high inflation and rate path and the British pound dropped to a new 4-decade low of $1.083 on the worries that the recently announced tax cuts may increase government deficit.
The yield on European bonds rose and Italian bod yields rose the most after the far-right party led coalition was ahead in the election.
Giorgia Meloni led Brothers of Italy and coalition partners are set to win a majority of seats in the Senate and form a government.
Italian bond yields rose to 4.5%, the highest since 2013 and spread with the German government bond yield widened to 235 basis points, approaching the record high of 250 basis points in 2020.
Meloni campaigned on a promise to renegotiate the terms of payments received from the European Union that could jeopardize or delay as much as 200 billion euros from Brussels.
Asian Markets Drop
In Asia, popular averages declined following the Friday's losses in the U.S. and Europe.
The Nikkei index dropped 2.6% to 26,475.33, the Shanghai Composite index declined 1.2% to 3,051.41, the Sensex index plunged 1.6% to 57,145.32.
The dollar continued its advanced against all major currencies in Asia.
The yen dropped to a new 25-year low 144.23, the yuan eased to 7.14 and the Indian rupee eased to a new low of 81.43
China Adjusts Rates, Allows Gradual Depreciation
The People's Bank of China set the renminbi rate below 7.00 for the first time since July 2020 and let the currency slide below the psychologically important range between 6.0 and 7.0.
The currency declined more after the central bank set the rate at 7.0298 but the tightly controlled currency dropped to 7.16, the level not seen since May 2008.
Most Chinese exporters are keeping the export revenues in foreign bank accounts and taking advantage of the rising rates in the U.S. and Europe and not converting to renminbi as rates are falling in China.
- Barry Adams
- 23 Sep, 2022
- New York City
The sell-off on Wall Street intensified as investors grudgingly adjust to the new reality of higher interest rates and slowing economies around the world.
Three back-to-back large-size rate hikes are still not effective in combating elevated inflation, forcing the central bank to continue lifting rates.
The Fed has revised rates higher five times over the last six months but those sharp increases are not denting the sky-high inflation so far.
Rates are blunt tools and have lagging effects on the economy, and investors are worried that the economy may dip into a recession before inflation begins to cool.
The S&P 500 index plunged 2.9% and the Nasdaq Composite index 2.7% and extended weekly loss to 5.8%.
The S&P 500 index is set to close at a new 2022 low and the Nasdaq is flirting with the lows last seen on June 16.
Stock Movers
The sell-off on Wall Street was wide and deep and several popular stocks traded at multi-year lows.
All eleven sectors declined and energy led with a plunge of 7%.
Visa, Master Card, Salesforce.com, Nike and AMD dropped to the lows last seen in 2020,
Walgreens Boots Alliance plunged to the low last seen in 2012, Intel traded near 2015 level, 3M at 2013 low and Warner Brothers Discovery at 2009 low.
Among the widely held stocks, Apple, Amazon, Alibaba, Goldman Sachs, Exxon Mobil, Baker Hughes and Caterpillar dropped between 4% and 5%.
Apple, Microsoft, Meta, Alphabet and IBM dropped between 1.5% and 2%.
Energy Prices Extend Weekly Losses
Crude oil declined $4.90 to $78.53 a barrel and natural gas fell 25 cents to $6.83 a thermal unit.
For the week, crude oil dropped 7.1% and natural gas plunged 12.2%.
The yield on 2-year Treasury notes rose to 4.22%, 10-year Treasury notes rose to 3.69% and 30-year bonds edged up to 3.61%.
Europe: Weekly Loss Between 3% and 6%
Markets in Europe plunged more than 2% as businesses are grappling with soaring energy costs, rising interest rates and weakening economy.
Moreover, the 2-decade high-dollar is also stoking fears of inflation.
The U.K. pound dropped to a new 4-decade low $1.11 after the government's mini-budget offered more tax breaks to businesses
The yield on the U.K. 10-year government bond rose to 3.78% after the government released its mini-budget indicating a rising budget deficit ahead of the difficult winter ahead.
The government's budget deficit is likely to expand further in the current and the next quarter on the rising cost of energy imports and the government shouldering most of the price increase.
A separate survey indicated a deepening slowdown in the private business sector.
The S&P Global/CIPS flash Composite Purchasing Managers' Index declined to 48.4 from 49.6 in August.
The flash composite indicator of manufacturing and services for Germany declined to 45.9 from 46.9 in August.
The flash estimate for the French service sector increased to 53.0 from 51.2 in August.
Any reading above 50 indicates expansion and below 50 a contraction.
The euro also dropped to a new 2-decade low of 97 cents against the resurgent dollar.
The DAX index dropped 1.8% to 12,306.76, the CAC-40 index declined 2.2% to 5,789.25 and the FTSE 100 index eased 1.97% to 7,019.61.
The Swiss Market Index declined 1.2% to 10,176.05 following the declines in Europe and on the worries that more rate hikes are likely to follow the recent rate hike.
For the week, the FTSE 100 index declined 3.1%, the DAX index fell 3.4%, the CAC-40 dropped 4.8% and the SMI decreased 4.2%.
The Russian index plunged nearly 13% in the week and Spain's benchmark index dropped 6% in the week.
Movers: Credit Suisse, EssilorLuxottica, SmithsGroup
EssilorLuxittica SA edged up 0.4% to 139.35 euros after the company launched a stock repurchase program to buy back up to 1.5 million of its shares between Sept 23, 2022 and March 31, 2023.
The program authorizes the company to buyback up to 10% of its share capital and not to exceed 200 euros a share price.
Smiths Group Plc closed up 1.1% to 1,486.0 pence after the engineering company posted mixed financial results.
Revenue in the fiscal year 2022 ending in July increased to 2.57 billion pounds from 2.4 billion pounds a year ago.
After-tax net income in the period from continuing operations declined to 13 million pounds from 157 million pounds a year ago.
Credit Suisse Group fell 12.3% to 4.08 Swiss francs on the news that the company is looking to shore up its balance sheet and searching for equity investors.
Asian Markets Fell On Global Recession Worries
Asian markets dropped as well on the worries that rising rates around the world will spark a global recession and taming elevated inflation may take another two years
The Nikkei 225 index declined 0.6%, the Hang Seng index dropped 1.2%, the Shanghai Composite fell 0.6% and the Sensex index eased 1.7%.
For the week, the Nikkei eased 2.6%, the Shanghai index declined 1.2%, the Sensex fell 1.3%, and the Hang Seng decreased 4.4%.
- Bridgette Randall
- 23 Sep, 2022
- Frankfurt
Market indexes in Europe accelerated declines on the final day of the week on the worries that the rising rates may dip the economy into a recession before cooling the inflation.
Markets in Europe plunged more than 2% as businesses are grappling with soaring energy costs, rising interest rates and weakening economy.
Moreover, the 2-decade high-dollar is also stoking fears of inflation.
The U.K. pound dropped to a new 4-decade low $1.11 after the government's mini-budget offered more tax breaks to businesses.
The yield on the U.K. 10-year government bond rose to 3.78% after the government released its mini-budget indicating a rising budget deficit ahead of the difficult winter ahead.
The government's budget deficit is likely to expand further in the current and the next quarter on the rising cost of energy imports and the government shouldering most of the price increase.
A separate survey indicated a deepening slowdown in the private business sector.
The S&P Global/CIPS flash Composite Purchasing Managers' Index declined to 48.4 from 49.6 in August.
The flash composite indicator of manufacturing and services for Germany declined to 45.9 from 46.9 in August.
The flash estimate for the French service sector increased to 53.0 from 51.2 in August.
Any reading above 50 indicates expansion and below 50 a contraction.
The euro also dropped to a new 2-decade low of 97 cents against the resurgent dollar.
The DAX index dropped 1.8% to 12,306.76, the CAC-40 index declined 2.2% to 5,789.25 and the FTSE 100 index eased 1.97% to 7,019.61.
The Swiss Market Index declined 1.2% to 10,176.05 following the declines in Europe and on the worries that more rate hikes are likely to follow the recent rate hike.
For the week, the FTSE 100 index declined 3.1%, the DAX index fell 3.4%, the CAC-40 dropped 4.8% and the SMI decreased 4.2%.
The Russian index plunged nearly 13% in the week and Spain's benchmark index dropped 6% in the week.
Movers: Credit Suisse, EssilorLuxottica, SmithsGroup
EssilorLuxittica SA edged up 0.4% to 139.35 euros after the company launched a stock repurchase program to buy back up to 1.5 million of its shares between Sept 23, 2022 and March 31, 2023.
The program authorizes the company to buyback up to 10% of its share capital and not to exceed 200 euros a share price.
Smiths Group Plc closed up 1.1% to 1,486.0 pence after the engineering company posted mixed financial results.
Revenue in the fiscal year 2022 ending in July increased to 2.57 billion pounds from 2.4 billion pounds a year ago.
After-tax net income in the period from continuing operations declined to 13 million pounds from 157 million pounds a year ago.
Credit Suisse Group fell 12.3% to 4.08 Swiss francs on the news that the company is looking to shore up its balance sheet and searching for equity investors.
Asian Markets Fell On Global Recession Worries
Asian markets dropped as well on the worries that rising rates around the world will spark a global recession and taming elevated inflation may take another two years
The Nikkei 225 index declined 0.6%, the Hang Seng index dropped 1.2%, the Shanghai Composite fell 0.6% and the Sensex index eased 1.7%.
For the week, the Nikkei eased 2.6%, the Shanghai index declined 1.2%, the Sensex fell 1.3%, and the Hang Seng decreased 4.4%.
- Barry Adams
- 23 Sep, 2022
- New York City
The sell-off on Wall Street intensified as investors are grudgingly adjusting to the new reality of higher interest rates and Fed's commitment to aggressively combat rapid price increases.
Three back-to-back large-size rate hikes are still not effective in combating elevated inflation, forcing the central bank to continue lifting rates.
The Fed has revised rates higher five times over the last six months but those sharp rate increases are not denting the sky-high inflation so far.
Rates are blunt tools and have a lagging effect on the economy, and investors are worried that the economy may dip into a recession before inflation begins to cool.
The S&P 500 dropped 1.4% and the Nasdaq Composite index 1.35%.
Crude oil declined $2.60 to $80.93 a barrel and natural gas fell 16 cents to $6.93 a thermal unit.
The yield on 2-year Treasury notes rose to 4.16%, 10-year Treasury notes rose to 3.71% and 30-year bonds edged up to 3.65%.
Markets in Europe plunged more than 2% as businesses grapple with soaring energy costs, rising interest rates and weakening economy.
Moreover, the 2-decade high-dollar is also stoking fears of inflation.
The U.K. pound dropped to a new 4-decade low $1.11 after the government's mini-budget offered more tax breaks to businesses.
The euro also dropped to a new 2-decade low of 97 cents against the resurgent dollar.
The DAX index dropped 2.1% to 12,285.72, the CAC-40 index declined 1.9% to 5,805.65 and the FTSE 100 index eased 1.9% to 7,022.41.
Asian markets dropped as well on the worries that rising rates around the world will spark a global recession and taming elevated inflation may take another two years
The Nikkei 225 index declined 0.6%, the Hang Seng index dropped 1.2%, the Shanghai Composite fell 0.6% and the Sensex index eased 1.7%.
- Barry Adams
- 22 Sep, 2022
- New York City
U.S. market averages declined for the third day in a row as recession worries resurfaced.
Three back-to-back large-size rate hikes have stoked fears of economic slowdown deepening to a recession and lasting longer than previously anticipated.
The Fed's five rate hikes over six months have not dented high inflation and investors are worried that the planned additional rate hikes may push the economy into a recession without appreciably taming inflation.
Following the footsteps of the U.S. Federal Reserve, central banks in Norway, U.K. and Switzerland also lifted key rates as policymakers intensified efforts to combat 4-decade high inflation and end the era of negative rates.
However, the Bank of Japan held its negative 0.1% rate and Turkey lowered its key repo rate by 1.0% to 12.0% despite the annual inflation raging at 80%.
The S&P 500 index fell 0.8% to 3,767.99 and the Nasdaq Composite index eased 1.4% to 11,066.81.
Crude oil advanced 55 cents to $83.41 a barrel and natural gas edged down56 cents to $7.21 a thermal unit.
The yields on U.S. Treasuries continued to advance as investors factor in future rate hikes as rate increases over the last six months are having a minimal impact on sky-high inflation.
The yield of 2-year Treasury notes inched up to 4.12%, 10-year notes increased to 3.71% and 30-year bonds rose to 3.64%.
Weekly Jobless Claims
Initial unemployment claims increased to 213,000 for the week ended Sept 17 and claims for the previous week were revised down to 210,000.
Movers: Accenture, Darden, FedEx, KB Home, Lennar, Steelcase
Accenture Plc edged down 1.2% after the information services company reported in-line revenues and earnings and increased its quarterly dividend and stock repurchase.
Darden, the parent of Olive Garden and Seasons 52, dropped 4.4% after the company reported revenue increase largely reflecting price increase and reiterated its fiscal year 2023 outlook.
FedEx Corporation increased 0.9% after the company announced fiscal cost savings between $2.2 billion and $2.27 billion and added that it plans to hike parcel delivery rates by 6.9%.
KB Home declined 5% after the company reported lower than expected quarterly revenues but net income rose after the company delivered 6% more homes.
Lennar Corp rose 1.9% after the home builder reported mixed quarterly results and net income increased at a slower pace of 4% despite the company delivering 13% more homes.
Steelcase Inc plunged 10% after the company said it plans to cut $20 million annual costs and lay off up to 180 salaried staff.
European Markets Drop On Future Rate Hike Worries
European markets opened lower and accelerated declines following the lower U.S. stocks after the Federal Reserve delivered its third large-size rate hike.
The Bank of England in a 3-way split decision lifted its rate and the Norges Bank revised its rate higher in a unanimous decision.
European markets are not only facing higher energy costs but also confronting positive real rates for the first time after more than a decade of negative rates.
Investors are worried that the central banks, despite the recent rate hikes and hawkish rhetoric, are lagging inflation by a wide margin.
Real rates are still very low and the euro zone and the UK are still operating at real negative rates.
The DAX index fell 1.4% to 12,593.40, the CAC-40 index dropped 0.8% to 5,981.60 and the FTSE 100 index declined 5.11 points or 0.07% to 7,232.54.
Switzerland Ends Negative Rate Era
The Swiss National Bank raised its key lending rate by 75 basis points and ended the era of negative rates prevailing since early 2015.
The central bank also forecasted rates are likely to go higher as inflation is hovering near a three-decade high.
The SNB lifted its inflation outlook to 3.0% from 2.8% for 2022, and to 2.4% from 1.9% in 2023 and to 1.7% from 1.6%in 2024.
Consumer inflation in August jumped 3.5%, record high since August 1993.
Bank of England Lifts Rates by 0.5%
The Bank of England lifted its key lending rate by 50 basis points as the central bank intensified its efforts to tame sky-high inflation.
The reference lending rate was revised to 2.25% from 1.75%, the seventh rate hike in a row lifted the rate to the highest not seen since November 2008.
The central bank lowered its third quarter economic growth estimate to a decline of 0.1% from the 0.4% growth estimated in August.
The Bank of England also lowered its inflation projection to 10% for the next few months before easing after the government issued the Energy Price guarantee .
Norway Signals Nearing Rate Peak
The Norges Bank of Norway lifted its reference rate by 50 basis points to 2.25%, the level last seen in 2011.
The central bank however said future rate hikes are likely to be "moderate" as the higher rates are having an impact on the economy.
The bank is likely to lift rates again at its next meeting in November and rates are likely to stay there for a while.
The rates are likely to stay near 3% through out the winter as high inflation is expected to persist for a while.
- Scott Peters
- 22 Sep, 2022
- New York City
Darden Restaurants, Inc dropped 4.4% to $125.65 after the parent of Olive Garden reported weaker than expected quarterly results and held out for higher price increases.
Consolidated same store sales increased 4.2% in its fiscal year 2023 first quarter ending on August 28, compared to 47.5% jump a year ago.
Revenue in the fiscal year first quarter increased 6.1% to $2.44 billion from $2.31 billion a year ago.
Net income declined $193 million from $230.9 million a year ago and diluted earnings per share declined to $1.56 from $1.75.
Same store sales at Olive Garden restaurants increased 2.3%, Longhorn Steakhouse rose 4.2% and the fine dining segment surged 7.6%.
Darden owns full-restaurants including Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's.
Segment Profit
Segment profit represents sales, less costs for food and beverage, restaurant labor, restaurant expenses and marketing expenses and excludes non-cash real estate related expenses.
Olive Garden restaurants revenue increased to $1.1 billion from $1.09 billion and segment profit declined $216.1 million from $253.3 million a year ago.
LongHorn Steakhouse revenue increased to $604.6 from $567.1 and segment profit dropped to $92 million from $107.5 million a year ago.
Fine Dining segment, which includes Seasons 52 and The Capital Grille, revenue jumped to $183.4 million from $168.8 million and segment profit declined to $30 million from $33.5 million a year ago.
Other businesses, including Cheddar's, Yard House, Bahama Breeze and Yard House, revenue jumped $527.4 million from $479.7 million and segment profit declined to $72.3 million from $84.8 million a year ago.
Dividend Outlook
The board of directors declared a quarterly cash dividend of $1.21 a share payable on November 1, 2022 to shareholders of record at the close of business on October 10, 2022.
Stock Repurchase
During the quarter, Darden repurchased approximately 1.7 million shares of its common stock for $199 million compared to $186 million repurchase a year ago.
As of the end of the fiscal first quarter, the company had approximately $912 million remaining under the current $1 billion repurchase authorization.
Reiterated Fiscal 2023 Outlook and Guidance
The company reiterated its fiscal year 2023 annual sales to fall in range of $10.2 billion and $10.4 billon and consolidated same store sale growth between 4% and 6%.
The company plans to open between 55 and 60 new restaurants and capital spending between $500 million and $550 million.
The company said "total inflation" meaning price increase across all brands to average 6% from 4% in the fiscal 2022.
The restaurant operator estimated net earnings per share from continuing operations between $7.40 and $8.0 on approximately 124 million weighted average diluted shares outstanding.