- Barry Adams
- 17 May, 2022
- New York City
U.S. stocks recoiled higher on Tuesday after bargain hunters searched for stocks in tech and energy sectors.
The S&P 500 index increased 2.03% to 4,088.85 and the Nasdaq Composite index surged 2.76% to 11,984.52.
The stocks rebounded after weeks of losses and the teach-heavy Nasdaq index deep in bear territory. For the year, the S&P 500 index is still down 15% and the Nasdaq is down 25% after dropping as much as 28% two weeks ago.
Airlines traded higher after United revised higher its second quarter outlook and said more passengers are flying and paying more than previously estimated.
United Airlines jumped 7.8% to $46.95, Delta Air gained 6.5% to $40.68, and Southwest Airlines increased 4.4% to $45.06. American Airlines Group jumped 7.7% to $17.83.
Futures of crude oil declined 2% to $111.97 a barrel and the yield on 10-year U.S. Treasury notes edged higher to 2.988%.
Citigroup and Paramount Global gained after Warren Buffet controlled Berkshire Hathaway reported stakes in the companies.
On the economic front, the advance estimate of retail and food services sales adjusted for seasonal factors but not adjusted for price increased 0.9% in April from the previous month and jumped 8.2% from April 2021.
The data released by the U.S. Census Bureau showed grocery store sales declined 0.1% in April from the previous month but rose 8.1% from a year ago.
However the latest earnings from Home Depot and Walmart presented two contrasting snapshots of the economy.
Walmart sales struggled reflecting the struggles of its customer base and the retail giant also suffered from supply chain disruptions and customer shifting to basic food purchases and trimming down on the higher margin apparel and electronics.
Walmart declined 11.4% to $131.35.
Home Depot reported stronger sales in the later quarter and lifted outlook for the full-year but also reported a decline in number of transactions.
Home Depot Inc rose 1.7% to $300.95.
Investors also noted recent comments from the Federal Chairman Jerome Powell during a Wall Street Journal conference.
Powell stressed that the central bank is committed to fighting inflation and ready to act to bring the "financial conditions are in appropriate place, we see inflation coming down."
European markets traded higher after bargain hunters revved up buying in large and mid cap stocks.
The DAX index gained 1.5% to 14,185.12, the CAC-40 index advanced 1.3% to 6,430.19, and the FTSE 100 index gained 0.7% to 7,518.36.
Investors cheered the latest jobs reports from France and the U.K.
French unemployment rate in the first quarter declined to 7.3%, the lowest in 14 years and the U.K. jobless rate fell to 3.7% in the period, the lowest since 1974.
Eurozone growth in the first quarter increased 0.3% from the previous quarter matching rate in the fourth quarter, according to the data released by the Eurostat.
Asian markets advanced after China authorities suggested Covid-19 restrictions may be eased as early as June.
The Nikkei 225 index in Tokyo increased 0.4% to 26,695.75, the Hang Seng Index in Hong Kong advanced 3.3% to 20,602.52, and the ASX 200 index in Sydney added 0.3% to 7,112.50.
The Sensex index gained 2.54% or 1,344.63 to 54,318 and the Nifty index advanced 2.6% or 417.00 to 16,259.50.
- Scott Peters
- 17 May, 2022
- New York City
Walmart Inc reported sales in the first quarter fiscal year 2023 ending in April increased 2.4% to $141.6 billion and net income declined 25% to $2.1 billion.
Diluted earnings per share declined 23.7% to 74 cents from 97 cents a year ago.
Sales rose 2.6% on a constant currency basis.
Walmart U.S. sales increased 4% to $96.9 billion and comparable sales increase declined to 3% after rising at 6% in the previous year's period.
Walmart U.S. comparable store sales increased 3% from a year ago and rose 9% on a two-year basis and e-commerce sales rose 1% and 38% respectively.
Average ticket sales declined to 3% from 6% increase in the prior year's quarter but the number of transactions were flat in the quarter compared to 3.2% decline in the prior year's period.
Also consumers bought fewer items at the time of purchase.
The retail chain executives in a conference call after the earnings release said customers are prioritizing food over other items as rising inflation dent consumer budgets.
Rising fuel and food prices created "more pressure on margin mix and operating costs," said CEO Doug McMillion.
Also inventories surged nearly 33% after the retailer ordered more items to beat the inflation but some supplies arrived late and also cool weather affected sales of landscaping and pool products.
The tone of executives in the call was less comforting than during the previous quarter's call.
On the conference call, Walmart noted consumers are more likely to trade down on meat and dairy purchases after the recent surge in prices.
Grocery sales in the quarter at the U.S. locations rose in low double-digits and general merchandise sales declined in low double-digits.
Operating income at the U.S. locations plunged 18.2% to $4.5 billion from a year ago.
Sales at international locations declined 13% to $23.8 billion and fell 11.6% to $24.1 billion. Operating income fell 35.3% or 33.7% in constant currency to $0.8 billion.
Net sales at stores located in China increased 7.2% on 4.4% comparable sales rise, in Mexico rose 10.4% on 9.2% comparable sales increase, and in Canada jumped 6.9% on 7.7% comparable sales growth.
Sam's Club, the discount membership warehouse, sales increased 17.5% to $19.6 billion and comparable sales increased 10.2% from a year ago and jumped 17.4% on a two-year basis.
Gross margin declined to 2.2% due to higher discounting caused by inventory delays and higher supply chain costs.
Membership revenues increased 10.5% and number of transactions increased 102%.
Comparable sales growth picked up to 10.2% from 7.2% in the quarter a year ago.
The company declared a dividend of $2.40 a share, lower than $2.20 in the previous quarter.
Long term debt has been on the decline and dropped to $32.1 billion from $34.8 billion at the end of the previous quarter and from $40.3 billion at the end of the quarter a year ago.
The company paid out $4 billion to shareholders through $1.5 billion in dividends and $2.4 billion of stock repurchase.
Guidance and Outlook
The retail chain lifted consolidated sales outlook for the fiscal year 2023 to an increase of 4% in constant currency from the previous estimate of 3%.
Comparable sales at the U.S. locations are now estimated to increase 3.5% form the previous estimate of 3%.
Earnings per share are now estimated to decline 1% from the previous estimate of an increase in mid-single digits.
In the second quarter, sales are expected to rise 5% and comparable sales at U.S. locations excluding fuel are expected to increase between 4% and 5%.
Earnings per share in the quarter are expected to increase "flat to slightly" from the previous estimate of an increase in low to single-mid digits.
Company and Stock
Walmart Inc generated $573 billion in sales in fiscal year 2022, operates 10,500 retail stores and e-commerce platforms in 24 countries, and employs 2.3 million associates worldwide.
Walmart stock declined 11.4% to $131.20 after the release of earnings and has declined 9.3% in the year so far.
- Scott Peters
- 17 May, 2022
- New York City
Home Depot Inc said first quarter sales increased 3.8% to $38.9 billion and net income rose 2.1% to $4.2 billion from a year ago.
Diluted earnings per share increased 6.2% to $4.11 from $3.87 a year ago.
Customer transactions in the quarter declined 8.2% to 410.7 million and average transaction size increased 11.4% to $91.72. Sales per retail square foot increased 2.7% to $621.99.
Comparable sales in the first quarter increased 2.1% and at the U.S. locations rose 1.7%.
Guidance and Outlook
The company revised annual sales and comparable sales growth to 3% from the previous estimate of "slightly positive," operating margin of 15.4% compared to flat in the previous guidance of 13.8%, net interest expense of $1.6 billion from $1.5 billion in the previous estimate, and tax rate of 24.6% matching the previous outlook.
Diluted earnings per share are expected to increase in mid-single digits from the previous estimate of an increase in low-single digits.
Company and Stock
At the end of the first quarter, Home Depot operated a total of 2,316 retail stores in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.
Home Depot employs approximately 500,000 associates.
Home Depot stock increased 0.5% to $297.36 and for the year so far the stock has declined 27.21%.
The company has paid a dividend for the 140th quarter in a row and increased the dividend 15% at the end of the December quarter to $1.90 a share equating to $7.90 for the full-year.
- Barry Adams
- 17 May, 2022
- New York City
Citigroup increased 6.6% to $50.63 after Warren Buffett controlled Berkshire Hathaway in a regulatory filing revealed a stake of $3 billion in the bank.
Wells Fargo, JPMorgan, PNC Financial Services gained more than 2%.
Berkshire Hathaway Chairman Buffett criticized investment bankers for turning the stock market into a casino during the latest and previous annual general meeting of shareholders but at the same time continues to invest in banks and investment brokerage companies.
Fluor Corp fell 4.8% to $25.84 after the government agency canceled its 10-year contract to manage nuclear weapons production sites.
The National Nuclear Security Administration canceled a 10-year $28 billion controversial contract to take "voluntary corrective action" and to assess the alleged conflict of interests.
The Department of Energy's agency awarded the contract in November 2021 and terminated the management and operations contract of Y-12 National Security Complex in Tennessee and Pantex Plant in Texas.
Bechtel and BWXT led teams filed complaints with the Government Accountability Office and alleged conflicts of interests and appearance of bidding process improprieties.
Home Depot gained 0.2% to $296.71 after the home improvement retailer reported first quarter revenues increased 3.8% to $39 billion and net income rose slightly to $4.2 billion from $4.1 billion a year ago.
Comparable same store sales at the U.S. locations increased 1.7%.
The retailer lifted annual sales growth outlook to 3% and diluted earnings per share to increase in "mid-single digits."
Take Two Interactive advanced 9.2% to $120.99 after the company reported fiscal fourth quarter revenues increased 4% to $3.5 billion and net income dropped nearly 50% to $110.1 million.
The online revenues or digital bookings increased 9% from a year ago to $833.3 million.
United Airlines Holdings increased 5.9% to $46.09 after the company in a regulatory filing said "the demand environment has continued to improve, resulting in a higher unit revenue outlook for the second quarter 2022. The price of oil has also continued to increase, resulting in a higher expected fuel price for the second quarter 2022."
The airline said average cost of fuel per gallon is now expected at $4.03 from the previous estimate of $3.43 a gallon in the second quarter.
Total available revenues per seat mile is expected to increase between 23% and 25% from the previous estimate of 17% compared to 2019.
Walmart Inc declined 8.2% to $136.15 after the retail giant said first quarter revenues increased 2.4% from a year ago to $141.6 billion and net income declined 24.8% to $2.1 billion.
The retailer also guided full-year fiscal year earnings per share to decline 1% compared to previous guidance of an increase in mid-single digits and in the second quarter increase "flat to slightly" from the previous estimate of increase in "low to single digits."
- Barry Adams
- 17 May, 2022
- New York City
U.S. stocks advance after three days of stable prices and the rising prospects of easing restrictions in Shanghai.
The S&P 500 index increased 1.5% to 4,068.33 and the Nasdaq Composite index soared 2.08% to 11,905. 57.
U.S. stocks jumped after three days of lackluster trading and traders looked for bargains in tech stocks.
Federal Reserve Chairman Jerome Powell is scheduled to deliver his comments on the central bank's plan to tackle rising inflation at a Wall Street Journal conference at 2 p.m. ET.
The advance estimate of retail and food services sales adjusted for seasonal factors but not adjusted for price increased 0.9% in April from the previous month and jumped 8.2% from April 2021.
Retail and food services sales in April were $677.7 billion.
The March retail sales were revised higher to 0.7% from the previous month and 1.4% from a year ago.
April retail trade sales increased 0.7% from March and increased 6.7% from a year ago. Gasoline sales jumped 36.9% from a year ago and food services and drinking places sales increased 19.8% from a year ago.
Walmart Stores reported weaker than expected quarterly results and lowered outlook for the year.
Home Depot jumped 5% after the home improvement retailer reported strong quarterly sales and earnings and the company lifted 2022 annual sales outlook to 3% increase and lifted earnings growth in the mid-single digits.
Bank stocks advance after Warren Buffett controlled Berkshire Hathaway increased its stake in Citigroup by $3 billion.
Other banks including JPMorgan Chase, and Wells Fargo traded higher on the Buffett's investment.
European markets traded higher after bargain hunters revved up buying in large and mid cap stocks.
The DAX index gained 1.6% to 14,191.32, the CAC-40 index advanced 1.3% to 6,432.77, and the FTSE 100 index gained 0.8% to 7,526.46.
Investors cheered the latest jobs reports from France and the U.K.
French unemployment rate in the first quarter declined to 7.3%, the lowest in 14 years and the U.K. jobless rate fell to 3.7% in the period, the lowest since 1974.
Eurozone growth in the first quarter increased 0.3% from the previous quarter matching rate in the fourth quarter, according to the data released by the Eurostat.
Asian markets advanced after China authorities suggested Covid-19 restrictions may be eased as early as June.
The Nikkei 225 index in Tokyo increased 0.4% to 26,695.75, the Hang Seng Index in Hong Kong advanced 3.3% to 20,602.52, and the ASX 200 index in Sydney added 0.3% to 7,112.50.
The Sensex index gained 2.54% or 1,344.63 to 54,318 and the Nifty index advanced 2.6% or 417.00 to 16,259.50.
Shanghai hit the zero Covid-19 transmission for three days in a row raising the prospect of gradual lockdown easing as early as June, according to local reports quoting local authorities.
The Nikkei index advanced for the third day in a row but gains were muted on the lingering worries of Fed rate uncertainties and elevated worldwide food and energy prices.
Inpex gained 3.5% and Japan Petroleum advanced 3.6%.
Asahi Holdings declined 11% and Dentsu fell 6% on weaker than expected financial results.
Tech stocks in Hong Kong led the surge. Alibaba Group soared 7.03% to HK$90.55, Tencent Holdings jumped 5% to HK$368.40, and JD.com added 7.04% to HK$214.80.
- Brian Turner
- 17 May, 2022
- New York City
The advance estimate of retail and food services sales adjusted for seasonal factors but not adjusted for price increased 0.9% in April from the previous month and jumped 8.2% from April 2021.
Retail and food services sales in April were $677.7 billion.
The March retail sales were revised higher to 0.7% from the previous month and to 1.4% from a year ago.
April retail trade sales increased 0.7% from March and increased 6.7% from a year ago.
Gasoline sales jumped 36.9% from a year ago and food services and drinking places sales increased 19.8% from a year ago.
Gasoline sales decreased 2.7% from March after the fuel cost eased and food services and drinking places sales increased 2% in the period.
Grocery store sales declined 0.1% in April from the previous month but rose 8.1% from a year ago.
Retail sales increased for the fourth month in a row and the reported data are not adjusted for price increases.
- Arjun Pandit
- 17 May, 2022
- Mumbai
Asian markets advanced after China authorities suggested Covid-19 restrictions may be eased as early as June.
The Nikkei 225 index in Tokyo increased 0.4% to 26,695.75, the Hang Seng Index in Hong Kong advanced 3.3% to 20,602.52, and the ASX 200 index in Sydney added 0.3% to 7,112.50.
The Sensex index gained 2.54% or 1,344.63 to 54,318 and the Nifty index advanced 2.6% or 417.00 to 16,259.50.
Shanghai hit the zero Covid-19 transmission for three days in a row raising the prospect of gradual lockdown easing as early as June, according to local reports quoting local authorities.
The Nikkei index advanced for the third day in a row but gains were muted on the lingering worries of Fed rate uncertainties and elevated worldwide food and energy prices.
Inpex gained 3.5% and Japan Petroleum advanced 3.6%.
Asahi Holdings declined 11% and Dentsu fell 6% on weaker than expected financial results.
Tech stocks in Hong Kong led the surge. Alibaba Group soared 7.03% to HK$90.55, Tencent Holdings jumped 5% to HK$368.40, and JD.com added 7.04% to HK$214.80.
India's wholesale price index in April surged 15.08% in April after rising at 14.55% in March, the data released by the Ministry of Commerce and Industry showed.
The February inflation increase was revised lower to 13,43% from the previous estimate of 13.11%.
Wholesale prices in April 2021 rose 10.74%.
Life Insurance Company of India listed its share at 867.20 rupees on the Bombay Stock Exchange, a discount of 8.6% from its issue price of 949 rupees.
LIC closed at 875.45 in trading on the BSE and the largest insurance company's public offering raised $2.75 billion.
Bargain hunting lifted manufacturing stocks in Korea and the Kospi index advanced 0.9% to 2,620.44.
Samsung Electronics, SK Hynix, and LG Energy Solution gained more than 2%.
The Australian market advance was tepid after the May RBA minutes of meeting showed that the rate hikes are likely at the next meeting in June.
James Hardie declined more than 3% after the fiber cement maker reported weaker-than-expected annual results.
- Barry Adams
- 16 May, 2022
- New York City
U.S. stocks struggled in choppy trading as traders took opposite bets for rising recession prospects and hunted bargains in beaten down sectors.
The S&P 500 index declined 0.4% to 4,008.03 and the Nasdaq Composite index fell 1.2% to 11,662.79.
Crude oil advanced 3% to $113.94 a barrel and the yield on 10-year U.S. Treasury notes edged down to 2.884%.
The indexes opened lower and managed to cross the flat-line in the fifth attempt in the late afternoon but the gains evaporated after sellers overwhelmed buyers in the final hour of trading.
In choppy trading, investors debated the onset of global slowdown after China reported April retail sales fell 11% and industrial production contracted.
Moreover, the euro zone growth estimate was lowered in the current and the next year by the European Commission and Germany reported record wholesale price surge since the record keeping began in 1962.
However the economic worries did not stop companies from launching takeover offers.
JetBlue launched a tender offer to acquire Spirit Airlines thwarting its merger plan with Frontier Group.
India's Adani Group agreed to acquire for $10.5 billion stakes in cement companies controlled by Switzerland-based Holcim Limited.
Carlyle Group agreed to buy the defense contractor ManTech for $4.2 billion.
European markets traded lower after the European Commission lowered economic growth estimate in the current year to 2.7% from the previous forecast of 4.0% in March and revised lower to 2.3% from 2.7% in 2023.
Separately, the German statistics agency showed that wholesale inflation perked up to 23.8% in April from 22.6% in March, record increase since 1962 when record keeping began.
In European trading, the DAX index declined 0.5% to 13,937.77, the CAC-40 index fell 0.2% to 6,348.92, and the FTSE 100 index gained 0.25% to 7,436.98.
- Barry Adams
- 16 May, 2022
- New York City
JetBlue took its offer to acquire Spirit Airlines directly to shareholders after the ultra discount carrier rejected its offer for the second time as the low fair takeover saga dragged to the fifth month.
The revised JetBlue's proposal offers $30 a share in cash or values Spirit Airlines for $3 billion.
Spirit agreed to merge with the rival ultra low fare carrier Frontier in a $2.6 billion deal in January and shareholders are expected to vote on the deal on June 10.
Two carriers also have complimentary route networks and the former chief executive of Spirit now runs Frontier.
In April, JetBlue offered $33 a share or $3.3 billion to acquire Spirit but Spirit's board of directors rejected the deal on the worries that the U.S. Department of Justice was unlikely to approve the offer and the deal carried a substantial completion risk.
JetBlue has been pursuing Spirit for a long time and airlines are struggling with pilot shortage exacerbated by Covid-19 pandemic induced layoffs and fewer pilots trained and licensed in the last two years.
The merger of Spirit with either airline will create the fifth largest airline and about 80% of the market is controlled by American Airlines, Delta, United, and Southwest.
In stock trading, Spirit Airlines gained 13.3% to $19.22, JetBlue declined 4.7% to $9.58, and Frontier Group rose 7.4% to $9.37.
The deal structure may change since Frontier stock has fallen from above $14 price when the deal was first agreed in January at $25.83 for each Spirit share.
- Barry Adams
- 16 May, 2022
- New York City
ManTech International jumped 15.2% to $94.39 after the defense contractor agreed to be acquired by Carlyle Group for $4.2 billion.
The all-cash offer of $96 a share represents 32% premium to $72.82 a share before the first media report indicating an impending offer or 17% to the closing price of $81.97 on May 13, 2022.
ManTech is headquartered in Herndon, Virginia and employs about 9,800 people and expects to generate 2022 revenues of $2.65 billon.
The defense contractor's portfolio of services include full-spectrum cyber security, intelligent systems engineering, advanced data analytics, and secure mission and enterprise IT, according to an investor presentation by the company.
The company has a backlog of $10.3 billion of orders and $6 billion of proposals in the pipeline at the end of March 2022.
In 2021, the company reported $2.55 billion in revenues and net income of $137 million or $3.37 a share.
- Barry Adams
- 16 May, 2022
- New York City
Carvana Inc jumped 8.8% to $41.40 after the user-car retailer stated in a regulatory filing that the company plans to cut costs and expects to be profitable in 2023 on a core earnings basis.
E-commerce and Internet linked stocks were on the defensive after tech stocks extend losses to the eighth week.
Shopify declined 10% to $360.74, GitLab Inc fell 8.5% to $40.74, Sprout Social Inc fell 7.4% to $46.56, and Twilio Inc declined 7.5% to $102.44.
ManTech International jumped 15.2% to $94.39 after the defense contractor agreed to be acquired by Carlyle Group for $4.2 billion.
The all-cash offer of $96 a share represents 32% premium to $72.82 a share before the first media report indicating an impending offer or 17% to the closing price of $81.97 on May 13, 2022
Rivian Automotive Inc fell 3.3% to $25.82 after Ford Motor Company sold additional 7 million shares according to a regulatory filing with the SEC.
Last week, the automaker sold 8 million shares for $188 million after the initial public offering lock up expired on May 9th.
After the completion of two sales, Ford's stake in Rivian is 9.8%.
Spirit Airlines jumped 11% to $18.88 after JetBlue launched a hostile takeover offer for $30 a share.
Spirit shareholder meeting is scheduled on June 10 to vote on its merger plan with Frontier.
Frontier Group Holdings increased 5.9% to $9.23.
Twitter Inc declined 4.7% to $38.76 on growing speculation that the billionaire investor Elon Musk may not follow through with his offer to takeover the company.
Warby Parker Inc declined 1.8% to $17.11 after the company reported unexpected quarterly loss and revenues fell short of analysts' expectations.
- Arjun Pandit
- 16 May, 2022
- New York City
Adani Group plans to acquire stakes in two cement companies held by Switzerland-based Holcim Limited for as much as $10.5 billion.
The deal has been in the works for two months and attracted offers from the largest cement maker UltraTech and Jindal Group of companies.
Gautam Adani, India's richest man, controlled Adani Enterprises and related companies plan to offer $6.4 billion in cash for the 63.1% stake in Ambuja Cements Ltd and 54.5% stake in ACC Limited.
The remaining stakes will be purchased through the open offers meeting the regulatory requirements of local stock exchanges.
Ambuja Cements jumped 2.3% to 367 rupees, below the offer price of 385 rupees and ACC gained 3.8% to 2,192.50 rupees below the offer price of 2,300 rupees.
With the acquisition. Adani Group will vault to the second largest cement producer in India.
Ambuja and ACC with the combined cement production capacity of 70 million tons will lag only the largest maker UltraTech with 120 million ton annual capacity.
Holcim first acquired its stake in Ambuja Cement in January 2006 and later increased its stake in a complex transaction involving ACC Limited in 2013.
At the time of acquisition, Gujarat Ambuja was the largest cement maker with 33 million tons of annual capacity ahead of the Aditya Birla Group controlled UltraTech Cement.
- Barry Adams
- 16 May, 2022
- New York City
U.S. market indexes fell as investors faced the prospect of global slowdown and stubbornly high inflation.
The S&P 500 index fell 0.1% to 4,014.50 and the Nasdaq Composite index declined 0.2% to 12,349.30.
The Fed's lagging response to surging inflation and the growing possibilities of an economic slowdown have dampened the market sentiment around the world.
With the elevated U.S. inflation and stubbornly high international energy prices after the U.S. and Europe placed sanctions on Russia, interest rates are significantly lagging the consumer prices.
With no end in sight for war in Europe, crude oil prices are trading above $110 a barrel and wheat prices soared 6% to $12.48 a bushel and extended year-to-date gain to 61%.
The latest surge came after India restricted wheat exports on the worries that the elevated energy prices are stoking domestic food prices.
On the earnings front, Home Depot, Target, and Walmart Stores are scheduled to release earnings this week.
Spirit Airlines jumped 18% after JetBlue launched a hostile takeover offer for $30 a share. Spirit shareholder meeting is scheduled on June 10 to vote on its merger plan with Frontier.
Twitter Inc declined more than 2% on growing speculation that the billionaire investor Elon Musk may not follow through with his offer to takeover the company.
Warby Parker declined nearly 4% after the company reported unexpected quarterly loss and revenues fell short of analysts' expectations.
Carvana Inc jumped more than 10% after the user-car retailer stated in a regulatory filing that the company plans to cut costs and expects to be profitable in 2023 on core earnings basis.
European markets traded lower after the European Commission lowered euro zone economic growth estimate in the current year to 2.7% from the previous forecast of 4.0% in March and revised lower to 2.3% from 2.7% in 2023.
Separately, the German statistics agency showed that wholesale inflation perked up to 23.8% in April from 22.6% in March, record increase since 1962 when record keeping began.
In European trading, the DAX index declined 0.5% to 13,937.77, the CAC-40 index fell 0.2% to 6,348.92, and the FTSE 100 index gained 0.25% to 7,436.98.
- Arjun Pandit
- 16 May, 2022
- New York City
Asian markets traded with a downward bias after the latest economic data from China and Japan underwhelmed investors.
The Nikkei index increased 0.5% to 26,547.05, the Hang Seng Index added 0.3% to 19,950.21, and the SSE Index in Shanghai declined 0.3% to 3,073.75.
The Kospi index in Korea fell 0.3% to 2,596.58.
April retail sales and industrial production data were significantly weaker than expected in China.
Retail sales declined 11.1%, twice the level expected, from a year ago and industrial output declined 2.9% contrary to the expectation of an expansion, the National Bureau of Statistics said today.
Central bank also left its key rate unchanged but lowered mortgage rates for the first time home buyer.
In Japan, the producer price index jumped 10.0% in April after rising at the upwardly revised 9.7% in March, the Bank of Japan said today.
Stocks in Mumbai gained for the first time in seven days in cautious trading after Asian and European markets were muted.
The Sensex index gained 180.22 or 0.2% to 52,973.84 and the Nifty index advanced 60.85 or 0.4% to 15,842.30.
Cement stocks were in focus after Adani Group won the auction to acquire Switzerland-based Holcim Limited's stake in Ambuja and ACC for $10 billion.
The deal was in works for more than two months and attracted bids from several large conglomerates in India.
Holcim has been divesting its cement holdings and shifting the business mix to higher value added products including concrete aggregates.
Ambuja Cement added 2.3% to 367.40 rupees and ACC advanced 3.8% to 2,192 rupees.
- Arjun Pandit
- 14 May, 2022
- New York City
Late Friday evening the government banned the export of wheat citing falling inventories and production and rising domestic prices.
Food Secretary Sudhanshu Pandey and Commerce Secretary B V R Subrahmanyam jointly addressed a press conference and said that the unregulated export often leads to hoarding.
The minsters were quick to add that no ban is "in perpetuity" and the government will review the ban if domestic conditions improve.
India exported about 1.4 million tons of wheat in April but the rising food prices and falling crop production changed the government's mind this week.
Wheat production is likely to fall at least 5% below the 111 million tons target level and spot prices have surged as much as 20% above the 20,150 rupees or $270 a ton fixed-price set by the government.
"Wheat production is expected to decline in the current year to 105 million tons but there is no dramatic fall in production," Food Secretary Pandey noted.
The Indian government had set the wheat export target of 10 million tons this year after exporting 7.5 million tons in the financial year ending in March 2022.
About half of India's exports were sent to the neighboring-country Bangladesh.
The recent heat wave across the nation has dramatically changed agriculture conditions in the Northern region where most of the wheat is produced.
Temperatures have reached above 45 degrees centigrade, 5 degrees above the normal in the last five weeks.
International wheat price has surged to $480 a ton, significantly higher than the domestic price below $300 a ton set by the government.
India is the second largest wheat producer in the world with a production of 110 million ton.
China, the largest wheat producer, exported about 10 million tons of wheat of the 134 million tons of production in 2021.
Russia, the third largest wheat producer, exported about 37 million tons of the 85 million tons according to the data available from the World Trade Organization.
Ukraine exported 20 million tons of the 25 million tons of wheat production in 2021, according to the government statistics.
Australia and the United States each exports about 2.7 million tons of wheat.
Russia's invasion of Ukraine and the Western nations' sanctions on Russia removed a significant amount wheat available for importers.
At least six nations have put restrictions or ban on wheat exports including Philippines, Argentina, Kazakhstan, Turkey, Bulgaria, and Hungary.