- 30 Dec, 2022
- Barry Adams
- 30 Dec, 2022
- New York City
Benchmark indexes declined on the final trading day of 2022 and indexes posted the worst annual losses since 2008.
The Federal Reserve dominated market sentiment in 2022 and seven rate hikes in the year crushed growth stocks, dragged down indexes and halted three year advances.
The pace of rate hikes and the nature of economic slowdown are expected to dominate market sentiment in the first quarter of 2023.
Moreover, investors are worried that the current market valuations do not reflect higher rates and weakening earnings trends.
Stocks are not expected to rebound until the Fed pivots or a recession arrives and supply chain disruptions ease.
Worries of China virus flare-up are added to the growing list of headwinds faced by global markets.
U.S. scientists and Center for Disease Control and Prevention are also closely watching the rapidly spreading mutation omicron XBB.1.5.
Viruses in the XBB omicron family are highly immune evasive and strains with multiple variants have potential to render Covid-19 vaccine and omicron booster less effective and bind better to cells.
China Virus Flare-up Worries
Caution prevailed in trading on the global economic slowdown worries and the rapid spread of Covid-virous in China.
Covid infections are rapidly spreading in China and in the next two weeks the pace of spread is expected to accelerate as people begin to travel back to the countryside ahead of the Lunar New Year.
At least 250 million or 25 crore people are expected to travel from fifty largest cities to reunite with their families in villages.
Moreover, Chinese citizens will be permitted to travel to foreign destinations in the next two weeks as well, stoking fears of worldwide spread of the virus and spawning new variants.
U.S. Indexes In Review
Benchmark indexes dropped after multiple rate hikes raised the prospect of economic slowdown and the indexes fell the most since 2008 when the S&P 500 fell 38.5%.
The S&P 500 index declined 0.3% to 3,839.50 and the Nasdaq Composite index dropped 0.1% to 10,466.48.
In 2022 the S&P 500 index fell 20% through Thursday and the Nasdaq Composite index dropped 33.9%.
Crude oil increased $2.18 to $80.58 a barrel and natural gas eased 12 cents to $4.48 a thermal unit.
For 2022, crude oil increased 7.6% and scaled back from the high above $119 a barrel on March 8 and dropped to the low of $71.18 on December 9.
The yield on 2-year Treasury notes increased to 4.48%, 10-year Treasury notes edged higher to 3.88% and 30-year Treasury bonds inched up to 3.97%.
European Markets Post Worst Losses Since 2018
European markets closed down on the final trading day of 2022 with lingering worries of economic slowdown and the negative impact of future rate hikes dominating market sentiment.
The rapid spread of Covid virus in China and the rising potential of global spread of the virus also hovered the market sentiment.
Energy crisis in the region and the European Central Bank actions dominated market sentiment in 2022.
With war in Ukraine far from over, energy prices soared multi-fold and natural gas prices surged to record highs and uncertainty about the supply chain are not likely to go away in 2023.
The DAX index fell 1.1% to 13,923.59, the CAC-40 index decreased 1.1% to 6,502.49 and the FTSE 100 index dropped 0.8% to 7,451.74.
In 2022, the DAX index declined 13.1%, the CAC-40 index fell 10%, the Swiss benchmark SMI index dropped 17.1% and the FTSE 100 index eased 0.7%.
The DAX index and the CAC-40 index posted their worst decline since 2018 and the SMI index fell the most since 2008.
Among the most active European bourse, Turkey index was the lone gainer with a surge of 185.9% after inflation hovered near 86%.
Most European markets posted double-digit losses in 2018 after political turmoil in the U.S. and the U.S.' imposition of tariff on China imports and central banks hiking rates.
In 2018, the U.S. Federal Reserve raised its key lending rate to 2.4% from 1.4% in four equal increments.
Asian Markets Closed Down In 2022
Asian market indexes closed higher on the final trading day of 2022.
The Nikkei index was nearly unchanged and closed at 26,094.50 and fell 11% in 2022. The Nikkei posted its first annual decline in four years.
The Shanghai Composite index increased 0.5% to close at 3,089.26 and dropped 15% in 2022. The index fell in 2022 after advancing in the previous two years.
The Hang Seng index advanced 0.2% to 19,781.41 and fell 15% in 2022 and extended annual losses for the third year in a row.
The Hang Seng index has fallen about 30% in the last three years.
- Bridgette Randall
- 30 Dec, 2022
- Frankfurt
European markets closed down on the final trading day of 2022 with lingering worries of economic slowdown and the negative impact of future rate hikes dominating market sentiment.
The rapid spread of Covid virus in China and the rising potential of global spread of the virus also hovered the market sentiment.
Energy crisis in the region and the European Central Bank actions dominated market sentiment in 2022.
With war in Ukraine far from over, energy prices soared multi-fold and natural gas prices surged to record highs and uncertainty about the supply chain are not likely to go away in 2023.
The DAX index fell 1.1% to 13,923.59, the CAC-40 index decreased 1.1% to 6,502.49 and the FTSE 100 index dropped 0.8% to 7,451.74.
In 2022, the DAX index declined 13.1%, the CAC-40 index fell 10%, the Swiss benchmark SMI index dropped 17.1% and the FTSE 100 index eased 0.7%.
The DAX index and the CAC-40 index posted their worst decline since 2018 and the SMI index fell the most since 2008.
Among the most active European bourse, Turkey index was the lone gainer with a surge of 185.9% after inflation hovered near 86%.
Most European markets posted double-digit losses in 2018 after political turmoil in the U.S. and the U.S.' imposition of tariff on China imports and central banks hiking rates.
In 2018, the U.S. Federal Reserve raised its key lending rate to 2.4% from 1.4% in four equal increments.
Spain's Consumer Price Index Eased In December
Consumer price index, a measure of inflation, eased to 5.8% in December from 6.8% in the previous month, according to the flash estimate released by the National Statistics Institute in Madrid on Friday.
The inflation measure on a monthly basis increased to 0.3% after falling 0.1% in the previous month.
The annual pace of core inflation, which excludes unprocessed food and energy, accelerated to 6.9% from 6.3% in the previous month.
On a monthly basis, the core rate of inflation accelerated to 0.8% in December from 0.7% in November.
- Barry Adams
- 29 Dec, 2022
- New York City
Stocks retained upward bias and investors stepped up to search for bargains in beaten down tech stocks.
Apple, Microsoft, Alphabet, Meta Platforms, Amazon and Netflix soared between 3% and 5%.
Crude oil prices rebounded from the 2% drop on lingering worries that the end of zero-Covid policy in China may lead to the spread of highly infectious viruses around the world and spark another economic slowdown.
Tensions were high after Italian health authorities found about half the passengers on two flights from Chia to Milan tested positive for Covid. on Wednesday.
Italian authorities imposed mandatory testing for all arrivals from China on Thursday and the U.S. also imposed all passengers arriving directly from China to provide proof of a negative Covid test.
Investors also reviewed the rise in weekly jobless claims and the continuing claims rose to the level last seen in February.
Indexes In Review
Tech stocks led the rebound on Wall Street and supported the advance in the S&P 500 index and the Nasdaq Composite.
Investors set aside the worries of higher rates and earnings shortfall and stepped up to buy high growth stocks and search for bargains in the beaten down tech and energy stocks.
Early in the week market indexes traded lower on the looming recession and earnings slowdown worries but
The S&P 500 index increased 1.8% to 3,849.28 and the Nasdaq Composite index rose 2.6% to 10,478.09.
Crude oil declined 60 cents to $78.35 a barrel and natural gas eased 9 cents to $4.58 a thermal unit.
The yield on 2-year Treasury notes declined to 4.36%, 10-year Treasury notes eased to 3.82% and 30-year Treasury bonds edged lower to 3.92%.
Weekly Jobless Claims
Seasonally adjusted Initial jobless claims rose 9,000 to 225,000 in the week ending on December 25 and four-week average was little changed at 221,000, according to the latest data from the Department of Labor.
The previous week's average was revised down by 500 from 221,750 to 221,250.
Continuing claims increased to 1.71 million in the week ending on December 17th, the highest level since February.
U.S. Stock Movers
Tech stocks rally lifted Apple Inc 3.1% to $129.96 and Tesla Inc 8.8% to $122.65.
General Electric Company increased 0.6% to $82.46 and the spinoff GE HealthCare Technologies will be added to the S&P 500 index after it begins trading as a separate company on January 4.
Vornado Realty and RXO will be reassigned to different indexes after the GE HealthCare addition.
Vornado Realty Trust advanced 1.9% to $21.30 after the real estate company was assigned from the S&P 500 index to the S&P MidCap 400 index.
RXO Inc soared 6.4% to $17.40 after the logistics company will be moved to the S&P 600 index from the S&P 400 MidCap Index.
Lockheed Martin increased 0.6% to $486.28 after the largest defense contractor's Sikorsky unit said it plans to challenge the recent U.S. Army $1.3 billion contract award to Textron.
Textron Inc advanced 1.0% to $70.61.
Southwest Airlines Co increased 3.4% to $33.30 and the discount carrier remained in focus after the company canceled thousands of flights over the holiday weekend and struggled to resume its normal schedule.
Cal-Maine Foods Inc plunged 11.9% to $54.75 after the egg producer's quarterly results were below analysts' expectations.
The company has been struggling with egg production after the recent outbreak of avian flu and the egg company said there were no positive tests for avian flu at its manufacturing facilities.
The USDA division of Animal and Plant Health Inspection Service reported on December 27, 2022, that approximately 43.3 million commercial layer hens and 1.0 million pullets have been "depopulated" due to HPAI or avian flu this year.
Revenue in the fiscal second quarter ending in November soared 110% to $801.7 million from a year ago after egg prices soared.
Net income in the quarter rose to $198.6 million from $1.2 million and diluted earnings per share increased to $4.07 from 2 cents a share a year ago.
European Markets Rebounded Following Advances In New York
European markets rebounded from morning losses after sentiment improved and investors overlooked rate worries and rapid rise of infections in China.
Benchmark indexes in Germany, France and the U.K. recovered from morning weakness after investors shifted focus to earnings optimism for the current quarter and holiday sales.
Euro Area Money Supply Growth Eased
The European Central Bank said growth in money supply to the private sector and banks eased in November.
The broad money supply M3 increase slowed to 4.8% in November from 5.1% in October.
The narrower gauge Ma1 money supply slowed to 2.4% from 3.8% in the previous month.
Italy to Test All Arrivals from China
Investors were on the edge after the easing of zero-Covid policy in China and opening of borders is likely to spread Covid-variant infections around the world.
The Chinese government has stopped releasing infection data as of last week and more Chinese are traveling to international destinations.
The U.S. said Chinese visitors will require proof of a negative test and Italy said it would also test all passengers arriving directly from China.
- Bridgette Randall
- 29 Dec, 2022
- Frankfurt
European markets rebounded from morning losses after sentiment improved and investors overlooked rate worries and rapid rise of infections in China.
Benchmark indexes in Germany, France and the U.K. recovered from morning weakness after investors shifted focus to earnings optimism for the current quarter and holiday sales.
Euro Area Money Supply Growth Eased
The European Central Bank said growth in money supply to the private sector and banks eased in November.
The broad money supply M3 increase slowed to 4.8% in November from 5.1% in October.
The narrower gauge Ma1 money supply slowed to 2.4% from 3.8% in the previous month.
Italy to Test All Arrivals from China
Investors were on the edge after the easing of zero-Covid policy in China and opening of borders is likely to spread Covid-variant infections around the world.
The Chinese government has stopped releasing infection data as of last week and more Chinese are traveling to international destinations.
The U.S. said Chinese visitors will require proof of a negative test and Italy said it would also test all passengers arriving directly from China.
- Scott Peters
- 29 Dec, 2022
- New York City
Cal-Maine Foods Inc plunged after the egg producer's quarterly results were below analysts' expectations, despite a sharp jump in revenue.
The company has been struggling with egg production after the recent outbreak of avian flu and the egg company said there were no positive tests for avian flu at its manufacturing facilities.
The USDA division of Animal and Plant Health Inspection Service reported on December 27, 2022, that approximately 43.3 million commercial layer hens and 1.0 million pullets have been "depopulated" due to HPAI or avian flu this year.
Revenue in the fiscal second quarter ending in November soared 110% to $801.7 million from a year ago after egg prices soared.
Net income in the quarter rose to $198.6 million from $1.2 million and diluted earnings per share increased to $4.07 from 2 cents a share a year ago.
Average selling price of a dozen-eggs box increased to $2.70 from $1.36 a year ago, reflecting a surge in feed cost to 68.5 cents from 52.9 cents per dozen eggs.
Shift to Cage-free Eggs
In the fiscal second quarter 2023, total dozens sold increased 5.4% to 284.1 million from 269.6 million in the year ago, driven by strong sales volumes in the specialty eggs category.
Conventional egg volumes sold fell 2.2% from a year ago, while specialty egg volumes sold increased by 24.1%.
Specialty egg sales increase was positively impacted by the surge in conventional egg prices.
Conventional egg prices are higher than specialty egg prices for the third quarter in a row, an abnormal trend on a historical basis.
Specialty egg demand was further supported by the implementation of cage-free mandates in California and Massachusetts from January 1, 2022, and more retailers shifting to selling more cage-free products.
More retailers are looking to sell only cage-free eggs from as early as 2026 and the company has made substantial investments to transform its facilities.
The sales of cage-free eggs represented approximately 18.2% of shell egg revenues compared to 22.4% in the quarter a year ago and cage-free dozens sold increased 47.4% from a year ago.
Hen Shortage to Last In 2023
The U.S. layer hen flock inventory is not expected to rebound to 328 million, five-year average in February, till the end of 2023, according to LEAP Market Analytics data quoted in the earnings release.
Layer hen numbers reported by the USDA as of December 1, 2022, were 308 million, a decrease of 5.8% compared with the layer hen inventory a year ago.
However, the USDA also reported that the hatch from July 2022 through November 2022 increased 5.8% as compared with the prior-year period.
Dividend Declaration
For the fiscal second quarter, the company declared a dividend of $1.35 a share to stockholders on record of Jan 25, 2023 and payable on February 9, 2023.
Stock Price
Cal-Maine dropped 14.5% to $53.35 after the release of earnings but the stock has surged 41% in 2022 and advanced 20.5% in the last five years of trading.
- Brian Turner
- 29 Dec, 2022
- New York City
Seasonally adjusted Initial jobless claims rose 9,000 to 225,000 in the week ending on December 25 and four-week average was little changed at 221,000, according to the latest data from the Department of Labor.
The previous week's average was revised down by 500 from 221,750 to 221,250.
Continuing claims increased to 1.71 million in the week ending on December 17th, the highest level since February.
- Scott Peters
- 29 Dec, 2022
- New York City
Tech stocks rally lifted Apple Inc 3.1% to $129.96 and Tesla Inc 8.8% to $122.65.
General Electric Company increased 0.6% to $82.46 and the spinoff GE HealthCare Technologies will be added to the S&P 500 index after it begins trading as a separate company on January 4.
Vornado Realty and RXO will be reassigned to different indexes after the GE HealthCare addition.
Vornado Realty Trust advanced 1.9% to $21.30 after the real estate company was assigned from the S&P 500 index to the S&P MidCap 400 index.
RXO Inc soared 6.4% to $17.40 after the logistics company will be moved to the S&P 600 index from the S&P 400 MidCap Index.
Lockheed Martin increased 0.6% to $486.28 after the largest defense contractor's Sikorsky unit said it plans to challenge the recent U.S. Army $1.3 billion contract award to Textron.
Textron Inc advanced 1.0% to $70.61.
Southwest Airlines Co increased 3.4% to $33.30 and the discount carrier remained in focus after the company canceled thousands of flights over the holiday weekend and struggled to resume its normal schedule.
Cal-Maine Foods Inc plunged 11.9% to $54.75 after the egg producer's quarterly results were below analysts' expectations.
The company has been struggling with egg production after the recent outbreak of avian flu and the egg company said there were no positive tests for avian flu at its manufacturing facilities.
The USDA division of Animal and Plant Health Inspection Service reported on December 27, 2022, that approximately 43.3 million commercial layer hens and 1.0 million pullets have been "depopulated" due to HPAI or avian flu this year.
Revenue in the fiscal second quarter ending in November soared 110% to $801.7 million from a year ago after egg prices soared.
Net income in the quarter rose to $198.6 million from $1.2 million and diluted earnings per share increased to $4.07 from 2 cents a share a year ago.
- Barry Adams
- 29 Dec, 2022
- New York City
Major averages on Wall Street staged a turnaround and tech stocks led the advance.
Crude oil prices dropped 2% on the worries that the end of zero-Covid policy in China may lead to the spread of highly infectious viruses around the world and spark another economic slowdown.
Investors also reviewed the rise in weekly jobless claims and continuing claims rose to the level last seen in February.
Indexes In Review
Tech stocks led the rebound on Wall Street and supported the advance in the S&P 500 index and the Nasdaq Composite.
Investors set aside the worries of higher rates and earnings shortfall and stepped up to buy high growth stocks and search for bargains in the beaten down tech and energy stocks.
Early in the week market indexes traded lower on the looming recession and earnings slowdown worries but
The S&P 500 index increased 1.6% to 3,842.70 and the Nasdaq Composite index rose 2.6% to 10,473.57.
Crude oil declined 2.2% to $77.19 a barrel and natural gas eased 18 cents to $4.50 a thermal unit.
The yield on 2-year Treasury notes declined to 4.37%, 10-year Treasury notes eased to 3.86% and 30-year Treasury bonds edged lower to 3.94%.
Weekly Jobless Claims
Seasonally adjusted Initial jobless claims rose 9,000 to 225,000 in the week ending on December 25 and four-week average was little changed at 221,000, according to the latest data from the Department of Labor.
The previous week's average was revised down by 500 from 221,750 to 221,250.
Continuing claims increased to 1.71 million in the week ending on December 17th, the highest level since February.
U.S. Stock Movers
Tech stocks rally lifted Apple Inc 3.1% to $129.96 and Tesla Inc 8.8% to $122.65.
General Electric Company increased 0.6% to $82.46 and the spinoff GE HealthCare Technologies will be added to the S&P 500 index after it begins trading as a separate company on January 4.
Vornado Realty and RXO will be reassigned to different indexes after the GE HealthCare addition.
Vornado Realty Trust advanced 1.9% to $21.30 after the real estate company was assigned from the S&P 500 index to the S&P MidCap 400 index.
RXO Inc soared 6.4% to $17.40 after the logistics company will be moved to the S&P 600 index from the S&P 400 MidCap Index.
Lockheed Martin increased 0.6% to $486.28 after the largest defense contractor's Sikorsky unit said it plans to challenge the recent U.S. Army $1.3 billion contract award to Textron.
Textron Inc advanced 1.0% to $70.61.
Southwest Airlines Co increased 3.4% to $33.30 and the discount carrier remained in focus after the company canceled thousands of flights over the holiday weekend and struggled to resume its normal schedule.
Cal-Maine Foods Inc plunged 11.9% to $54.75 after the egg producer's quarterly results were below analysts' expectations.
The company has been struggling with egg production after the recent outbreak of avian flu and the egg company said there were no positive tests for avian flu at its manufacturing facilities.
The USDA division of Animal and Plant Health Inspection Service reported on December 27, 2022, that approximately 43.3 million commercial layer hens and 1.0 million pullets have been "depopulated" due to HPAI or avian flu this year.
Revenue in the fiscal second quarter ending in November soared 110% to $801.7 million from a year ago after egg prices soared.
Net income in the quarter rose to $198.6 million from $1.2 million and diluted earnings per share increased to $4.07 from 2 cents a share a year ago.