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Category: topSource: foxnewsMay 25th, 2021

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears

BTFD Arrives: Futures Rebound, Europe Surges While Asia Slumps On Evergrande Fears Even though China was closed for a second day, and even though the Evergrande drama is nowhere closer to a resolution with a bond default imminent and with Beijing mute on how it will resolve the potential "Lehman moment" even as rating agency S&P chimed in saying a default is likely and it does not expect China’s government “to provide any direct support” to the privately owned developer, overnight the BTFD crew emerged in full force, and ramped futures amid growing speculation that Beijing will rescue the troubled developer... Algos about to go on a rampage — zerohedge (@zerohedge) September 21, 2021 ... pushing spoos almost 100 points higher from their Monday lows, and European stock were solidly in the green - despite Asian stocks hitting a one-month low - as investors tried to shake off fears of contagion from a potential collapse of China’s Evergrande, although gains were capped by concerns the Federal Reserve could set out a timeline to taper its stimulus at its meeting tomorrow. The dollar dropped from a one-month high, Treasury yields rose and cryptos rebounded from yesterday's rout. To be sure, the "this is not a Lehman moment" crowed was out in full force, as indicated by this note from Mizuho analysts who wrote that “while street wisdom is that Evergrande is not a ‘Lehman risk’, it is by no stretch of the imagination any meaningful comfort. It could end up being China’s proverbial house of cards ... with cross-sector headwinds already felt in materials/commodities.” At 7:00 a.m. ET, S&P 500 e-minis were up 34.00 points, or 0.79% and Nasdaq 100 e-minis 110.25 points, or 0.73%, while futures tracking the Dow  jumped 0.97%, a day after the index tumbled 1.8% in its worst day since late-July,  suggesting a rebound in sentiment after concerns about contagion from China Evergrande Group’s upcoming default woes roiled markets Monday. Dip-buyers in the last hour of trading Monday helped the S&P 500 pare some losses, though the index still posted the biggest drop since May. The bounce also came after the S&P 500 dropped substantially below its 50-day moving average - which had served as a resilient floor for the index this year - on Monday, its first major breach in more than six months. Freeport-McMoRan mining stocks higher with a 3% jump, following a 3.2% plunge in the S&P mining index a day earlier as copper prices hit a one-month low. Interest rate-sensitive banking stocks also bounced, tracking a rise in Treasury yields. Here are some of the biggest U.S. movers today: U.S.-listed Chinese stocks start to recover from Monday’s slump in premarket trading as the global selloff moderates. Alibaba (BABA US), Baidu (BIDU US), Nio (NIO US), Tencent Music (TME US)and Bilibili (BILI US) are among the gainers Verrica Pharma (VRCA US) plunges 30% in premarket trading after failing to get FDA approval for VP-102 for the treatment of molluscum contagiosum ReWalk Robotics (RWLK US) shares jump 43% in U.S. premarket trading amid a spike in volume in the stock. Being discussed on StockTwits Aprea Therapeutics gains 21% in U.S. premarket trading after the company reported complete remission in a bladder cancer patient in Phase 1/2 clinical trial of eprenetapopt in combination with pembrolizumab Lennar (LEN US) shares fell 3% in Monday postmarket trading after the homebuilder forecast 4Q new orders below analysts’ consensus hurt by unprecedented supply chain challenges ConocoPhillips (COP US) ticks higher in U.S. premarket trading after it agreed to buy Shell’s  Permian Basin assets for $9.5 billion in cash, accelerating the consolidation of the largest U.S. oil patch SmileDirect (SDC US) slightly higher in premarket trading after it said on Monday that it plans to enter France with an initial location in Paris KAR Global (KAR US) shares fell 4.6% in post-market trading on Monday after the company withdrew is full-year financial outlook citing disruption caused by chip shortage Sportradar (SRAD US) shares jumped 4.5% in Monday postmarket trading, after the company said basketball legend Michael Jordan will serve as a special adviser to its board and also increase his investment in the sports betting and entertainment services provider, effective immediately Orbital Energy Group (OEG US) gained 6% postmarket Monday after a unit won a contract  to construct 1,910 miles of rural broadband network in Virginia. Terms were not disclosed “So much of this information is already known that we don’t think it will necessary set off a wave of problems,” John Bilton, head of global multi-asset strategy at JPMorgan Asset Management, said on Bloomberg TV. “I’m more concerned about knock-on sentiment at a time when investor sentiment is a bit fragile. But when we look at the fundamentals -- the general growth, and direction in the wider economy -- we still feel reasonably confident that the situation will right itself.” Aside from worries over Evergrande’s ability to make good on $300 billion of liabilities, investors are also positioning for the two-day Fed meeting starting Tuesday, where policy makers are expected to start laying the groundwork for paring stimulus.  Europe's Stoxx 600 index climbed more than 1%, rebounding from the biggest slump in two months, with energy companies leading the advance and all industry sectors in the green. Royal Dutch Shell rose after the company offered shareholders a payout from the sale of shale oil fields. Universal Music Group BV shares soared in their stock market debut after being spun off from Vivendi SE. European airlines other travel-related stocks rise for a second day following the U.S. decision to soon allow entry to most foreign air travelers as long as they’re fully vaccinated against Covid-19; British Airways parent IAG soars as much as 6.9%, extending Monday’s 11% jump. Here are some of the biggest European movers today: Stagecoach shares jump as much as 24% after the company confirmed it is in takeover talks with peer National Express. Shell climbs as much as 4.4% after selling its Permian Basin assets to ConocoPhillips for $9.5 billion. Bechtle gains as much as 4.3% after UBS initiated coverage at buy. Husqvarna tumbles as much as 9% after the company said it is suing Briggs & Stratton in the U.S. for failing to deliver sufficient lawn mower engines for the 2022 season. Kingfisher slides as much as 6.4% after the DIY retailer posted 1H results and forecast higher profits this fiscal year. The mood was decidedly more sour earlier in the session, when Asian stocks fell for a second day amid continued concerns over China’s property sector, with Japan leading regional declines as the market reopened after a holiday. The MSCI Asia Pacific Index was down 0.5%, headed for its lowest close since Aug. 30, with Alibaba and SoftBank the biggest drags. China Evergrande Group slid deeper in equity and credit markets Tuesday after S&P said the developer is on the brink of default. Markets in China, Taiwan and South Korea were closed for holidays. Worries over contagion risk from the Chinese developer’s debt problems and Beijing’s ongoing crackdowns, combined with concern over Federal Reserve tapering, sent global stocks tumbling Monday. The MSCI All-Country World Index fell 1.6%, the most since July 19. Japan’s stocks joined the selloff Tuesday as investor concerns grew over China’s real-estate sector as well as Federal Reserve tapering, with the Nikkei 225 sliding 2.2% - its biggest drop in three months, catching up with losses in global peers after a holiday - after a four-week rally boosted by expectations for favorable economic policies from a new government. Electronics makers were the biggest drag on the Topix, which declined 1.7%. SoftBank Group and Fast Retailing were the largest contributors to a 2.2% loss in the Nikkei 225. Japanese stocks with high China exposure including Toto and Nippon Paint also dropped. “The outsized reaction in global markets may be a function of having too many uncertainties bunched into this period,” Eugene Leow, a macro strategist at DBS Bank Ltd., wrote in a note. “It probably does not help that risk taking (especially in equities) has gone on for an extended period and may be vulnerable to a correction.” “The proportion of Japan’s exports to China is greater than those to the U.S. or Europe, making it sensitive to any slowdown worries in the Chinese economy,” said Hideyuki Ishiguro, a senior strategist at Nomura Asset Management in Tokyo. “The stock market has yet to fully price in the possibility of a bankruptcy by Evergrande Group.” The Nikkei 225 has been the best-performing major stock gauge in the world this month, up 6.2%, buoyed by expectations for favorable policies from a new government and an inflow of foreign cash. The Topix is up 5.3% so far in September. In FX, the Bloomberg Dollar Spot Index inched lower and the greenback fell versus most of its Group-of-10 peers as a selloff in global stocks over the past two sessions abated; the euro hovered while commodity currencies led by the Norwegian krone were the best performers amid an advance in crude oil prices. Sweden’s krona was little changed after the Riksbank steered clear of signaling any post-pandemic tightening, as it remains unconvinced that a recent surge in inflation will last. The pound bucked a three-day losing streak as global risk appetite revived, while investors look to Thursday’s Bank of England meeting for policy clues. The yen erased earlier gains as signs that risk appetite is stabilizing damped demand for haven assets. At the same time, losses were capped due to uncertainty over China’s handling of the Evergrande debt crisis. In rates, Treasuries were lower, although off worst levels of the day as U.S. stock futures recover around half of Monday’s losses while European equities trade with a strong bid tone. Yields are cheaper by up to 2.5bp across long-end of the curve, steepening 5s30s spread by 1.2bp; 10-year yields around 1.3226%, cheaper by 1.5bp on the day, lagging bunds and gilts by 1bp-2bp. The long-end of the curve lags ahead of $24b 20-year bond reopening. Treasury will auction $24b 20-year bonds in first reopening at 1pm ET; WI yield ~1.82% is below auction stops since January and ~3bp richer than last month’s new-issue result In commodities, crude futures rose, with the front month WTI up 1.5% near $71.50. Brent stalls near $75. Spot gold trades a narrow range near $1,765/oz. Base metals are mostly in the green with LME aluminum the best performer Looking at the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD publishes their Interim Economic Outlook. Market Snapshot S&P 500 futures up 1.0% to 4,392.75 STOXX Europe 600 up 1.1% to 459.10 MXAP down 0.5% to 200.25 MXAPJ up 0.2% to 640.31 Nikkei down 2.2% to 29,839.71 Topix down 1.7% to 2,064.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.2% to 3,613.97 Sensex up 0.4% to 58,751.30 Australia S&P/ASX 200 up 0.4% to 7,273.83 Kospi up 0.3% to 3,140.51 Brent Futures up 1.6% to $75.13/bbl Gold spot down 0.1% to $1,761.68 U.S. Dollar Index little changed at 93.19 German 10Y yield fell 5.0 bps to -0.304% Euro little changed at $1.1729 Top Overnight News from Bloomberg Lael Brainard is a leading candidate to be the Federal Reserve’s banking watchdog and is also being discussed for more prominent Biden administration appointments, including to replace Fed chairman Jerome Powell and, potentially, for Treasury secretary if Janet Yellen leaves Federal Reserve Chair Jerome Powell will this week face the challenge of convincing investors that plans to scale back asset purchases aren’t a runway to raising interest rates for the first time since 2018 ECB Vice President Luis de Guindos says there is “good news” with respect to the euro-area recovery after a strong development in the second and third quarter The ECB is likely to continue purchasing junk-rated Greek sovereign debt even after the pandemic crisis has passed, according to Governing Council member and Greek central bank chief Yannis Stournaras U.K. government borrowing was well below official forecasts in the first five months of the fiscal year, providing a fillip for Chancellor of the Exchequer Rishi Sunak as he prepares for a review of tax and spending next month U.K. Business Secretary Kwasi Kwarteng warned the next few days will be challenging as the energy crisis deepens, and meat producers struggle with a crunch in carbon dioxide supplies The U.K.’s green bond debut broke demand records for the nation’s debt as investors leaped on the long-anticipated sterling asset. The nation is offering a green bond maturing in 2033 via banks on Tuesday at 7.5 basis points over the June 2032 gilt. It has not given an exact size target for the sale, which has attracted a record of more than 90 billion pounds ($123 billion) in orders Germany cut planned debt sales in the fourth quarter by 4 billion euros ($4.7 billion), suggesting the surge in borrowing triggered by the coronavirus pandemic is receding Contagion from China Evergrande Group has started to engulf even safer debt in Asia, sparking the worst sustained selloff of the securities since April. Premiums on Asian investment-grade dollar bonds widened 2-3 basis points Tuesday, according to credit traders, after a jump of 3.4 basis points on Monday Swiss National Bank policy makers watching the effects of negative interest rates on the economy are worrying about the real-estate bubble that their policy is helping to foster Global central banks need to set out clear strategies for coping with inflation risks as the world economy experiences faster-than-expected cost increases amid an uneven recovery from the pandemic, the OECD said A quick look at global markets courtesy of Newsquawk Asian equities traded cautiously following the recent downbeat global risk appetite due to Evergrande contagion concerns which resulted in the worst day for Wall Street since May, with the region also contending with holiday-thinned conditions due to the ongoing closures in China, South Korea and Taiwan. ASX 200 (+0.2%) was indecisive with a rebound in the mining-related sectors counterbalanced by underperformance in utilities, financials and tech, while there were also reports that the Byron Bay area in New South Wales will be subject to a seven-day lockdown from this evening. Nikkei 225 (-1.8%) was heavily pressured and relinquished the 30k status as it played catch up to the contagion downturn on return from the extended weekend with recent detrimental currency inflows also contributing to the losses for exporters. Hang Seng (-0.3%) was choppy amid the continued absence of mainland participants with markets second-guessing whether Chinese authorities will intervene in the event of an Evergrande collapse, while shares in the world’s most indebted developer fluctuated and wiped out an early rebound, although affiliate Evergrande Property Services and other property names fared better after Sun Hung Kai disputed reports of China pressuring Hong Kong developers and with Guangzhou R&F Properties boosted by reports major shareholders pledged funds in the Co. which is also selling key assets to Country Garden. Finally, 10yr JGBs were higher amid the underperformance in Japanese stocks and with the Japan Securities Dealers Association recently noting that global funds purchased the most ultra-long Japanese bonds since 2014, although upside was limited amid softer demand at the enhanced liquidity auction for 2yr-20yr maturities and with the BoJ kickstarting its two-day policy meeting. Top Asian News Richest Banker Says Evergrande Is China’s ‘Lehman Moment’ Hong Kong Tycoons, Casino Giants Find Respite in Stock Rebound Taliban Add More Male Ministers, Say Will Include Women Later Asian Stocks Drop to Lowest Level This Month; Japan Leads Losses European equities (Stoxx 600 +1.1%) trade on a firmer footing attempting to recoup some of yesterday’s losses with not much in the way of incremental newsflow driving the upside. Despite the attempt to claw back some of the prior session’s lost ground, the Stoxx 600 is still lower by around 1.6% on the week. The Asia-Pac session was one characterised by caution and regional market closures with China remaining away from market. Focus remains on whether Evergrande will meet USD 83mln in interest payments due on Thursday and what actions Chinese authorities could take to limit the contagion from the company in the event of further troubles. Stateside, futures are also on a firmer footing with some slight outperformance in the RTY (+1.2%) vs. peers (ES +0.8%). Again, there is not much in the way of fresh positivity driving the upside and instead gains are likely more a by-product of dip-buying; attention for the US is set to become increasingly geared towards tomorrow’s FOMC policy announcement. Sectors in Europe are firmer across the board with outperformance in Oil & Gas names amid a recovery in the crude complex and gains in Shell (+4.4%) after news that the Co. is to sell its Permian Basin assets to ConocoPhillips (COP) for USD 9.5bln in cash. Other outperforming sectors include Tech, Insurance and Basic Resources. IAG (+4.1%) and Deutsche Lufthansa (+3.8%) both sit at the top of the Stoxx 600 as the Co.’s continue to enjoy the fallout from yesterday’s decision by the US to allow travel from vaccinated EU and UK passengers. Swatch (-0.7%) is lagging in the luxury space following a downgrade at RBC, whilst data showed Swiss watch exports were +11.5% Y/Y in August (prev. 29.1%). Finally, National Express (+7.7%) is reportedly considering a takeover of Stagecoach (+21.4%), which is valued at around GBP 370mln. Top European News U.K. Warns of Challenging Few Days as Energy Crisis Deepens Germany Trims Planned Debt Sales as Pandemic Impact Recedes U.K.’s Green Bond Debut Draws Record Demand of $123 Billion Goldman Plans $1.5 Billion Petershill Partners IPO in London In FX, all the signs are constructive for a classic turnaround Tuesday when it comes to Loonie fortunes as broad risk sentiment improves markedly, WTI consolidates within a firm range around Usd 71/brl compared to yesterday’s sub-Usd 70 low and incoming results from Canada’s general election indicate victory for the incumbent Liberal party that will secure a 3rd term for PM Trudeau. Hence, it’s better the devil you know as such and Usd/Cad retreated further from its stop-induced spike to just pips short of 1.2900 to probe 1.2750 at one stage before bouncing ahead of new house price data for August. Conversely, the Swedish Krona seems somewhat reluctant to get carried away with the much better market mood after the latest Riksbank policy meeting only acknowledged significantly stronger than expected inflation data in passing, and the repo rate path remained rooted to zero percent for the full forecast horizon as a consequence. However, Eur/Sek has slipped back to test 10.1600 bids/support following an initial upturn to almost 10.1800, irrespective of a rise in unemployment. NOK/AUD/NZD - No such qualms for the Norwegian Crown as Brent hovers near the top of a Usd 75.18-74.20/brl band and the Norges Bank is widely, if not universally tipped to become the first major Central Bank to shift into tightening mode on Thursday, with Eur/Nok hugging the base of a 10.1700-10.2430 range. Elsewhere, the Aussie and Kiwi look relieved rather than rejuvenated in their own right given dovish RBA minutes, a deterioration in Westpac’s NZ consumer sentiment and near reversal in credit card spending from 6.9% y/y in July to -6.3% last month. Instead, Aud/Usd and Nzd/Usd have rebounded amidst the recovery in risk appetite that has undermined their US rival to top 0.7380 and 0.7050 respectively at best. GBP/CHF/EUR/JPY/DXY - Sterling is latching on to the ongoing Dollar retracement and more supportive backdrop elsewhere to pare losses under 1.3700, while the Franc continues its revival to 0.9250 or so and almost 1.0850 against the Euro even though the SNB is bound to check its stride at the upcoming policy review, and the single currency is also forming a firmer base above 1.1700 vs the Buck. Indeed, the collective reprieve in all components of the Greenback basket, bar the Yen on diminished safe-haven demand, has pushed the index down to 93.116 from 93.277 at the earlier apex, and Monday’s elevated 93.455 perch, while Usd/Jpy is straddling 109.50 and flanked by decent option expiry interest either side. On that note, 1.4 bn resides at the 109.00 strike and 1.1 bn between 109.60-70, while there is 1.6 bn in Usd/Cad bang on 1.2800. EM - Some respite across the board in wake of yesterday’s mauling at the hands of risk-off positioning in favour of the Usd, while the Czk has also been underpinned by more hawkish CNB commentary as Holub echoes the Governor by advocating a 50 bp hike at the end of September and a further 25-50 bp in November. In commodities, WTI and Brent are firmer in the European morning post gains in excess of 1.0%, though the benchmarks are off highs after an early foray saw Brent Nov’21 eclipse USD 75.00/bbl, for instance. While there has been newsflow for the complex, mainly from various energy ministers, there hasn’t been much explicitly for crude to change the dial; thus, the benchmarks are seemingly moving in tandem with broader risk sentiment (see equities). In terms of the energy commentary, the Qatar minister said they are not thinking of re-joining OPEC+ while the UAE minister spoke on the gas situation. On this, reports in Russian press suggests that Russia might allow Rosneft to supply 10bcm of gas to Europe per year under an agency agreement with Gazprom “as an experiment”, developments to this will be closely eyed for any indication that it could serve to ease the current gas situation. Looking ahead, we have the weekly private inventory report which is expected to post a headline draw of 2.4mln and draws, albeit of a smaller magnitude, are expected for distillate and gasoline as well. Moving to metals, spot gold is marginally firmer while silver outperforms with base-metals picking up across the board from the poor performance seen yesterday that, for instance, saw LME copper below the USD 9k mark. Note, the action is more of a steadying from yesterday’s downside performance than any notable upside, with the likes of copper well within Monday’s parameters. US Event Calendar 8:30am: Aug. Building Permits MoM, est. -1.8%, prior 2.6%, revised 2.3% 8:30am: Aug. Housing Starts MoM, est. 1.0%, prior -7.0% 8:30am: Aug. Building Permits, est. 1.6m, prior 1.64m, revised 1.63m 8:30am: Aug. Housing Starts, est. 1.55m, prior 1.53m 8:30am: 2Q Current Account Balance, est. -$190.8b, prior -$195.7b DB's Jim Reid concludes the overnight wrap Global markets slumped across the board yesterday in what was one of the worst days of the year as an array of concerns about the outlook gathered pace. The crisis at Evergrande and in the Chinese real estate sector was the catalyst most people were talking about, but truth be told, the market rout we’re seeing is reflecting a wider set of risks than just Chinese property, and comes after increasing questions have been asked about whether current valuations could still be justified, with talk of a potential correction picking up. Remember that 68% of respondents to my survey last week (link here) thought they’d be at least a 5% correction in equity markets before year end. So this has been front and centre of people’s mind even if the catalyst hasn’t been clear. We’ve all known about Evergrande’s woes and how big it was for a while but it wasn’t until Friday’s story of the Chinese regulatory crackdown extending into property that crystallised the story into having wider implications. As I noted in my chart of the day yesterday link here Chinese USD HY had been widening aggressively over the last couple of months but IG has been pretty rock solid. There were still no domestic signs of contagion by close of business Friday. However as it stands, there will likely be by the reopening post holidays tomorrow which reflects how quickly the story has evolved even without much new news. Before we get to the latest on this, note that we’ve still got a bumper couple of weeks on the calendar to get through, including the Fed decision tomorrow, which comes just as a potential government shutdown and debt ceiling fight are coming into view, alongside big debates on how much spending the Democrats will actually manage to pass. There has been some respite overnight with S&P 500 futures +0.58% higher and 10y UST yields up +1.5bps to 1.327%. Crude oil prices are also up c. 1%. On Evergrande, S&P Global Ratings has said that the company is on the brink of default and that it’s failure is unlikely to result in a scenario where China will be compelled to step in. The report added that they see China stepping in only if “there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy.” The Hang Seng (-0.32%) is lower but the Hang Seng Properties index is up (+1.59%) and bouncing off the 5 plus year lows it hit yesterday. Elsewhere the ASX (+0.30%) and India’s Nifty (+0.35%) have also advanced. Chinese and South Korean markets are closed for a holiday but the Nikkei has reopened and is -1.80% and catching down to yesterday’s global move. Looking at yesterday’s moves in more depth, the gathering storm clouds saw the S&P 500 shed -1.70% in its worst day since May 12, with cyclical industries leading the declines and with just 10% of S&P 500 index members gaining. There was a late rally at the end of the US trading session that saw equity indices bounce off their lows, with the S&P 500 (-2.87%) and NASDAQ (-3.42%) both looking like they were going to register their worst days since October 2020 and late-February 2021 respectively. However, yesterday was still the 5th worst day for the S&P 500 in 2021. Reflecting the risk-off tone, small caps suffered in particular with the Russell 2000 falling -2.44%, whilst tech stocks were another underperformer as the NASDAQ lost -2.19% and the FANG+ index of 10 megacap tech firms saw an even bigger -3.16% decline. For Europe it was much the same story, with the STOXX 600 (-1.67%) and other bourses including the DAX (-2.31%) seeing significant losses amidst the cyclical underperformance. It was the STOXX 600’s worst performance since mid-July and the 6th worst day of the year overall. Unsurprisingly, there was also a significant spike in volatility, with the VIX index climbing +4.9pts to 25.7 – its highest closing level since mid-May – after trading above 28.0pts midday. In line with the broader risk-off move, especially sovereign bonds rallied strongly as investors downgraded their assessment of the economic outlook and moved to price out the chances of near-term rate hikes. By the close of trade, yields on 10yr Treasuries had fallen -5.1bps to 1.311%, with lower inflation breakevens (-4.1bps) leading the bulk of the declines. Meanwhile in Europe, yields on 10yr bunds (-4.0bps), OATs (-2.6bps) and BTPs (-0.9bps) similarly fell back, although there was a widening in spreads between core and periphery as investors turned more cautious. Elsewhere, commodities took a hit as concerns grew about the economic outlook, with Bloomberg’s Commodity Spot Index (-1.53%) losing ground for a third consecutive session. That said, European natural gas prices (+15.69%) were the massive exception once again, with the latest surge taking them above the peak from last Wednesday, and thus bringing the price gains since the start of August to +84.80%. Here in the UK, Business Secretary Kwarteng said that he didn’t expect an emergency regarding the energy supply, but also said that the government wouldn’t bail out failed companies. Meanwhile, EU transport and energy ministers are set to meet from tomorrow for an informal meeting, at which the massive spike in prices are likely to be discussed. Overnight, we have the first projections of the Canadian federal election with CBC News projecting that the Liberals will win enough seats to form a government for the third time albeit likely a minority government. With the counting still underway, Liberals are currently projected to win 156 seats while Conservatives are projected to win 120 seats. Both the parties are currently projected to win a seat less than last time. The Canadian dollar is up +0.44% overnight as the results remove some election uncertainty. Turning to the pandemic, the main news yesterday was that the US is set to relax its travel rules for foreign arrivals. President Biden announced the move yesterday, mandating that all adult visitors show proof of vaccination before entering the country. Airline stocks outperformed strongly in response, with the S&P 500 airlines (+1.55%) being one of the few industry groups that actually advanced yesterday. Otherwise, we heard from Pfizer and BioNTech that their vaccine trials on 5-11 year olds had successfully produced an antibody response among that age group. The dose was just a third of that used in those aged 12 and above, and they said they planned to share the data with regulators “as soon as possible”. Furthermore, they said that trials for the younger cohorts (2-5 and 6m-2) are expected as soon as Q4. In Germany, there are just 5 days left until the election now, and the last Insa poll before the vote showed a slight tightening in the race, with the centre-left SPD down a point to 25%, whilst the CDU/CSU bloc were up 1.5 points to 22%. Noticeably, that would also put the race back within the +/- 2.5% margin of error. The Greens were unchanged in third place on 15%. Staying with politics and shifting back to the US, there was news last night that Congressional Democratic leaders are looking to tie the suspension of the US debt ceiling vote to the spending bill that is due by the end of this month. If the spending bill is not enacted it would trigger a government shutdown, and if the debt ceiling is not raised it would cause defaults on federal payments as soon as October. Senate Majority Leader Schumer said the House will pass a spending bill that will fund the government through December 3rd and that the “legislation to avoid a government shutdown will also include a suspension of the debt limit through December 2022.” Republicans may balk at the second measure, given that it would take the issue off the table until after the 2022 midterm elections in November of that year. There wasn’t a great deal of data out yesterday, though German producer price inflation rose to +12.0% in August (vs. +11.1% expected), marking the fastest pace since December 1974. Separately in the US, the NAHB’s housing market index unexpectedly rose to 76 in September (vs. 75 expected), the first monthly increase since April. To the day ahead now, and data releases include US housing starts and building permits for August, along with the UK public finances for September. From central banks, we’ll hear from ECB Vice President de Guindos. Otherwise, the General Debate will begin at the UN General Assembly, and the OECD will be publishing their Interim Economic Outlook. Tyler Durden Tue, 09/21/2021 - 07:45.....»»

Category: blogSource: zerohedgeSep 21st, 2021

Existing-Home Sales Retreat in August

Existing-home sales backed up in August, after two consecutive months of increases, according to the National Association of REALTORS® (NAR). Each of the four major U.S. regions experienced declines on both a MoM and YoY basis. Total existing-home sales decreased by 2.0% from July to a seasonally adjusted annual rate of 5.88 million in August. […] The post Existing-Home Sales Retreat in August appeared first on RISMedia. Existing-home sales backed up in August, after two consecutive months of increases, according to the National Association of REALTORS® (NAR). Each of the four major U.S. regions experienced declines on both a MoM and YoY basis. Total existing-home sales decreased by 2.0% from July to a seasonally adjusted annual rate of 5.88 million in August. Year-over-year, sales dropped 1.5% from last year (5.97 million in August 2020). Single-family home sales decreased to a seasonally adjusted annual rate of 5.19 million in August, down 1.9% from 5.29 million in July and down 2.8% from last year. Existing condo and co-op sales recorded at a seasonally adjusted annual rate of 690,000 units in August, down 2.8% from 710,000 in July but up 9.5% from last year. By Region: Midwest Existing-Home Sales: 1.37 million (-2.1% YoY) Median Price: $272,200 (+10.5% YoY) Northeast Existing-Home Sales: 730,000 (-2.7% YoY) Median Price: $407,800 (+16.8% YoY) South Existing-Home Sales: 2.55 million (-0.8% YoY) Median Price: $303,200 (+12.8% YoY) West Existing-Home Sales: 1.23 million (-1.6% YoY) Median Price: $507,900 (+11.4% YoY) What the industry is saying: “Sales slipped a bit in August as prices rose nationwide. Although there was a decline in home purchases, potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory. High home prices make for an unbalanced market, but prices would normalize with more supply. Securing a home is still a major challenge for many prospective buyers. A number of potential buyers have merely paused their search, but their desire and need for a home remain.” — Lawrence Yun, Chief Economist, NAR “We will continue working with federal policymakers and stakeholders from across the industry in an effort to increase housing supply and ensure the American Dream of homeownership remains accessible to as many people as possible.” — Charlie Oppler, President, NAR “While housing activity has clearly cooled from its frenzy during the midst of the pandemic, home sales remain well-above the pre-pandemic pace and the median sales price continues to grow, albeit at a slower pace. A still-large number of young households are driving housing market activity, and leveraging the boost in purchasing power provided by low mortgage rates. Despite this, rising home prices mean that today’s buyers are spending larger shares of their paychecks to buy the typical home, and that trend could eventually cause some buyers to put home searches on hold, especially if mortgage rates begin to rise in response to expected tapering of asset purchases by the Fed later this year. “Those who continue their home searches in the cooler months ahead are likely to be pleasantly surprised. Not only do we expect to see the usual seasonal respite from the competitiveness of the spring and summer home-buying season—making early fall the best time to buy a home—the return of sellers to the housing market driven by the improving economy and diminishing health risks could accentuate this trend. “Additionally, recent construction figures show that builders continued to ramp up production in August and their outlook remained high in September, even as supply-chain challenges continue. These modest improvements are welcome, but haven’t changed the big-picture state: there are not enough homes for sale. Despite the recent improvement, single-family construction would still need to double to close the gap with household formation that accumulated over the last decade within the next five to six years.” — Danielle Hale, Chief Economist, realtor.com® “Moving into the fall we continue to expect to see year-over-year declines in home sales related primarily to a return to normal seasonal patterns. This is a result of the base-effect created by the abnormal surge in home sales we saw in late Q3 and Q4 of 2020. The economy has continued to strengthen despite the recent surge in the Delta variant and we see the fundamentals behind housing demand remain strong looking at the rest of 2021 and into 2022. “Home prices remain our primary source of concern as affordability becomes an increasing challenge, particularly for first time homebuyers who have not had the opportunity to benefit from the wealth created from recent surges in home equity. We expect that the Federal Reserve will likely give further indication on timing this week on reductions in Mortgage Backed Securities purchases. “In multiple meetings, the Fed has pointed to trends in home prices as potential justification for reducing asset purchases, implying the upward pressure on mortgage rates would be useful in helping slow the pace of home price appreciation. Overall we think home sales will remain strong going into next year, but we should see inventory levels continue to slowly trend toward more normal levels and home price appreciation begin to slow over time.” — Ruben Gonzalez, Chief Economist, Keller Williams  For more information, please visit www.nar.realtor. The post Existing-Home Sales Retreat in August appeared first on RISMedia......»»

Category: realestateSource: rismedia22 hr. 26 min. ago

Packaging Corporation (PKG) Bets on E-commerce Demand, Costs High

Surge in packaging demand will continue to support Packaging Corporation's (PKG) results and negate the impact of weak paper demand due to digitization. Packaging Corporation of America PKG is poised to benefit from the ongoing demand strength in its packaging segment backed by e-commerce, and rising requirements for meat, fruit and vegetables, processed food, beverages, medicine and other consumer products. This will help offset the impact of inflated material costs, labor shortage and supply chain issues currently plaguing the industry. However, lower paper consumption due to the impact of the pandemic and increased digitization remains a woe.Packaging & E-Commerce Demand to Boost RevenuesDemand in the Packaging segment, which accounts for 89% of Packaging Corporation’s revenues, continues to be strong. Packaging products are essential for the distribution of food, beverage and pharmaceutical products. Hence, the Packaging segment continues to benefit from the elevated demand for meat, fruit and vegetables, processed food, beverages, medicine and other consumer products owing to the coronavirus crisis.Both containerboard and corrugated products demand remains very strong across most of the company’s end markets. It set a new all-time quarterly record for total box shipments and a second-quarter record for shipments per day in the second quarter of 2021. This momentum is expected to continue through the balance of the year.Rising e-commerce sales have increased the importance of packaging since the products need to be delivered in the best of conditions to the consumer. Further, with consumers forced to stay at home amid the coronavirus crisis, the consequent surge in e-commerce demand is working in favor of Packaging Corporation and other packaging solution providers.Strong Balance Sheet Bodes WellOver 2016-2020, Packaging Corporation’s debt has declined at a CAGR of 1%, while its cash flow has witnessed a CAGR of 46% in the same time frame. The company’s liquidity as of Jun 30, 2021 was close to $1.5 billion. Its total debt to total capital ratio has gone down over the past few quarters and was 0.42 as of Jun 30, 2021 — much lower than the industry’s 0.68. Its times interest earned ratio was at 9.7 at the end of second-quarter 2021, higher than the industry’s 6.2. The company maintains a balanced approach toward capital allocation in order to boost growth and maximize returns for shareholders.Weak Paper Demand Remains a WoeThe pandemic has impacted paper consumption in schools, offices and businesses, thus straining paper demand. Also, the paper segment competes with electronic data transmission, e-readers and electronic document storage alternatives. Increasing preference for these alternatives will continue to have an adverse effect on traditional print media and paper usage, and lower demand for communication papers. This remains a headwind for the paper segment.High Costs to Dent MarginsThe company is encountering some material and chemical availability issues, a tight labor market, and various freight and logistics challenges. Higher operating costs, and escalating freight and logistic costs due to historically high load to truck ratios, driver shortages and increases in fuel costs remain headwinds for the balance of the year. Energy costs will spike on higher seasonal usage, while wood costs in the southern mills are expected to go up on account of wet weather, low inventory and high demand.Price PerformanceImage Source: Zacks Investment ResearchThe company’s stock has gained 32.5% in the past year compared with the industry’s growth of 28.4%.Zacks Rank & Stocks to ConsiderPackaging Corporation currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the Industrial Products sector include Encore Wire Corporation WIRE, Lincoln Electric Holdings, Inc. LECO and Deere & Company DE. While Encore Wire and Lincoln Electric sport a Zacks Rank #1 (Strong Buy), Deere carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. The company’s shares have gained 93% in a year.Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. In a year’s time, the stock has appreciated 49%.Deere has an estimated earnings growth rate of 117.5% for fiscal 2021. The company’s shares have rallied 57% over the past year. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Packaging Corporation of America (PKG): Free Stock Analysis Report Deere & Company (DE): Free Stock Analysis Report Lincoln Electric Holdings, Inc. (LECO): Free Stock Analysis Report Encore Wire Corporation (WIRE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 22nd, 2021

Futures Bounce On Evergrande Reprieve With Fed Looming

Futures Bounce On Evergrande Reprieve With Fed Looming Despite today's looming hawkish FOMC meeting in which Powell is widely expected to unveil that tapering is set to begin as soon as November and where the Fed's dot plot may signal one rate hike in 2022, futures climbed as investor concerns over China's Evergrande eased after the property developer negotiated a domestic bond payment deal. Commodities rallied while the dollar was steady. Contracts on the S&P 500 and Nasdaq 100 flipped from losses to gains as China’s central bank boosted liquidity when it injected a gross 120BN in yuan, the most since January... ... and investors mulled a vaguely-worded statement from the troubled developer about an interest payment.  S&P 500 E-minis were up 23.0 points, or 0.53%, at 7:30 a.m. ET. Dow E-minis were up 199 points, or 0.60%, and Nasdaq 100 E-minis were up 44.00 points, or 0.29%. Among individual stocks, Fedex fell 5.8% after the delivery company cut its profit outlook on higher costs and stalled growth in shipments. Morgan Stanley says it sees the company’s 1Q issues getting “tougher from here.” Commodity-linked oil and metal stocks led gains in premarket trade, while a slight rise in Treasury yields supported major banks. However, most sectors were nursing steep losses in recent sessions. Here are some of the biggest U.S. movers: Adobe (ADBE US) down 3.1% after 3Q update disappointed the high expectations of investors, though the broader picture still looks solid, Morgan Stanley said in a note Freeport McMoRan (FCX US), Cleveland- Cliffs (CLF US), Alcoa (AA US) and U.S. Steel (X US) up 2%-3% premarket, following the path of global peers as iron ore prices in China rallied Aethlon Medical (AEMD US) and Exela Technologies (XELAU US) advance along with other retail traders’ favorites in the U.S. premarket session. Aethlon jumps 21%; Exela up 8.3% Other so-called meme stocks also rise: ContextLogic +1%; Clover Health +0.9%; Naked Brand +0.9%; AMC +0.5% ReWalk Robotics slumps 18% in U.S. premarket trading, a day after nearly doubling in value Stitch Fix (SFIX US) rises 15.7% in light volume after the personal styling company’s 4Q profit and sales blew past analysts’ expectations Hyatt Hotels (H US) seen opening lower after the company launches a seven-million-share stock offering Summit Therapeutics (SMMT US) shares fell as much as 17% in Tuesday extended trading after it said the FDA doesn’t agree with the change to the primary endpoint that has been implemented in the ongoing Phase III Ri-CoDIFy studies when combining the studies Marin Software (MRIN US) surged more than 75% Tuesday postmarket after signing a new revenue-sharing agreement with Google to develop its enterprise technology platforms and software products The S&P 500 had fallen for 10 of the past 12 sessions since hitting a record high, as fears of an Evergrande default exacerbated seasonally weak trends and saw investors pull out of stocks trading at lofty valuations. The Nasdaq fell the least among its peers in recent sessions, as investors pivoted back into big technology names that had proven resilient through the pandemic. Focus now turns to the Fed's decision, due at 2 p.m. ET where officials are expected to signal a start to scaling down monthly bond purchases (see our preview here).  The Fed meeting comes after a period of market volatility stoked by Evergrande’s woes. China’s wider property-sector curbs are also feeding into concerns about a slowdown in the economic recovery from the pandemic. “Chair Jerome Powell could hint at the tapering approaching shortly,” said Sébastien Barbé, a strategist at Credit Agricole CIB. “However, given the current uncertainty factors (China property market, Covid, pace of global slowdown), the Fed should remain cautious when it comes to withdrawing liquidity support.” Meanwhile, confirming what Ray Dalio said that the taper will just bring more QE, Governing Council member Madis Muller said the  European Central Bank may boost its regular asset purchases once the pandemic-era emergency stimulus comes to an end. “Dovish signals could unwind some of the greenback’s gains while offering relief to stock markets,” Han Tan, chief market analyst at Exinity Group, wrote in emailed comments. A “hawkish shift would jolt markets, potentially pushing Treasury yields and the dollar past the upper bound of recent ranges, while gold and equities would sell off hunting down the next levels of support.” China avoided a major selloff as trading resumed following a holiday, after the country’s central bank boosted its injection of short-term cash into the financial system. MSCI’s Asia-Pacific index declined for a third day, dragged lower by Japan. Stocks were also higher in Europe. Basic resources - which bounced from a seven month low - and energy were among the leading gainers in the Stoxx Europe 600 index as commodity prices steadied after Beijing moved to contain fears of a spiraling debt crisis. Entain Plc rose more than 7%, extending Tuesday’s gain as it confirmed it received a takeover proposal from DraftKings Inc. Peer Flutter Entertainment Plc climbed after settling a legal dispute.  Here are some of the biggest European movers today: Entain shares jump as much as 11% after DraftKings Inc. offered to acquire the U.K. gambling company for about $22.4 billion. Vivendi rises as much as 3.1% in Paris, after Tuesday’s spinoff of Universal Music Group. Legrand climbs as much as 2.1% after Exane BNP Paribas upgrades to outperform and raises PT to a Street-high of EU135. Orpea shares falls as much as 2.9%, after delivering 1H results that Jefferies (buy) says were a “touch” below consensus. Bechtle slides as much as 5.1% after Metzler downgrades to hold from buy, saying persistent supply chain problems seem to be weighing on growth. Sopra Steria drops as much as 4.1% after Stifel initiates coverage with a sell, citing caution on company’s M&A strategy Despite the Evergrande announcement, Asian stocks headed for their longest losing streak in more than a month amid continued China-related concerns, with traders also eying policy decisions from major central banks. The MSCI Asia Pacific Index dropped as much as 0.7% in its third day of declines, with TSMC and Keyence the biggest drags. China’s CSI 300 tumbled as much as 1.9% as the local market reopened following a two-day holiday. However, the gauge came off lows after an Evergrande unit said it will make a bond interest payment and as China’s central bank boosted liquidity.  Taiwan’s equity benchmark led losses in Asia on Wednesday, dragged by TSMC after a two-day holiday, while markets in Hong Kong and South Korea were closed. Key stock gauges in Australia, Indonesia and Vietnam rose “A liquidity injection from the People’s Bank of China accompanied the Evergrande announcement, which only served to bolster sentiment further,” according to DailyFX’s Thomas Westwater and Daniel Dubrovsky. “For now, it appears that market-wide contagion risk linked to a potential Evergrande collapse is off the table.” Japanese equities fell for a second day amid global concern over China’s real-estate sector, as the Bank of Japan held its key stimulus tools in place while flagging pressures on the economy. Electronics makers were the biggest drag on the Topix, which declined 1%. Daikin and Fanuc were the largest contributors to a 0.7% loss in the Nikkei 225. The BOJ had been expected to maintain its policy levers ahead of next week’s key ruling party election. Traders are keenly awaiting the Federal Reserve’s decision due later for clues on the U.S. central banks plan for tapering stimulus. “Markets for some time have been convinced that the BOJ has reached the end of the line on normalization and will remain in a holding pattern on policy until at least April 2023 when Governor Kuroda is scheduled to leave,” UOB economist Alvin Liew wrote in a note. “Attention for the BOJ will now likely shift to dealing with the long-term climate change issues.” In the despotic lockdown regime that is Australia, the S&P/ASX 200 index rose 0.3% to close at 7,296.90, reversing an early decline in a rally led by mining and energy stocks. Banks closed lower for the fourth day in a row. Champion Iron was among the top performers after it was upgraded at Citi. IAG was among the worst performers after an earthquake caused damage to buildings in Melbourne. In New Zealand, the S&P/NZX 50 index rose 0.3% to 13,215.80 In FX, commodity currencies rallied as concerns about China Evergrande Group’s debt troubles eased as China’s central bank boosted liquidity and investors reviewed a statement from the troubled developer about an interest payment. Overnight implied volatility on the pound climbed to the highest since March ahead of Bank of England’s meeting on Thursday. The British pound weakened after Business Secretary Kwasi Kwarteng warnedthat people should prepare for longer-term high energy prices amid a natural-gas shortage that sent power costs soaring. Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices. Overnight volatility in the euro rises above 10% for the first time since July ahead of the Federal Reserve’s monetary policy decision announcement. The Aussie jumped as much as 0.5% as iron-ore prices rebounded. Spot surged through option-related selling at 0.7240 before topping out near 0.7265 strikes expiring Wednesday, according to Asia- based FX traders.  Elsewhere, the yen weakened and commodity-linked currencies such as the Australian dollar pushed higher. In rates, the dollar weakened against most of its Group-of-10 peers. Treasury futures were under modest pressure in early U.S. trading, leaving yields cheaper by ~1.5bp from belly to long-end of the curve. The 10-year yield was at ~1.336% steepening the 2s10s curve by ~1bp as the front-end was little changed. Improved risk appetite weighed; with stock futures have recovering much of Tuesday’s losses as Evergrande concerns subside. Focal point for Wednesday’s session is FOMC rate decision at 2pm ET.   FOMC is expected to suggest it will start scaling back asset purchases later this year, while its quarterly summary of economic projections reveals policy makers’ expectations for the fed funds target in coming years in the dot-plot update; eurodollar positions have emerged recently that anticipate a hawkish shift Bitcoin dropped briefly below $40,000 for the first time since August amid rising criticism from regulators, before rallying as the mood in global markets improved. In commodities, Iron ore halted its collapse and metals steadied. Oil advanced for a second day. Bitcoin slid below $40,000 for the first time since early August before rebounding back above $42,000.   To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Market Snapshot S&P 500 futures up 0.4% to 4,362.25 STOXX Europe 600 up 0.5% to 461.19 MXAP down 0.7% to 199.29 MXAPJ down 0.4% to 638.39 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.4% to 3,628.49 Sensex little changed at 59,046.84 Australia S&P/ASX 200 up 0.3% to 7,296.94 Kospi up 0.3% to 3,140.51 Brent Futures up 1.5% to $75.47/bbl Gold spot up 0.0% to $1,775.15 U.S. Dollar Index little changed at 93.26 German 10Y yield rose 0.6 bps to -0.319% Euro little changed at $1.1725 Top Overnight News from Bloomberg What would it take to knock the U.S. recovery off course and send Federal Reserve policy makers back to the drawing board? Not much — and there are plenty of candidates to deliver the blow The European Central Bank will discuss boosting its regular asset purchases once the pandemic-era emergency stimulus comes to an end, but any such increase is uncertain, Governing Council member Madis Muller said Investors seeking hints about how Beijing plans to deal with China Evergrande Group’s debt crisis are training their cross hairs on the central bank’s liquidity management A quick look at global markets courtesy of Newsquawk Asian equity markets traded mixed as caution lingered ahead of upcoming risk events including the FOMC, with participants also digesting the latest Evergrande developments and China’s return to the market from the Mid-Autumn Festival. ASX 200 (+0.3%) was positive with the index led higher by the energy sector after a rebound in oil prices and as tech also outperformed, but with gains capped by weakness in the largest-weighted financials sector including Westpac which was forced to scrap the sale of its Pacific businesses after failing to secure regulatory approval. Nikkei 225 (-0.7%) was subdued amid the lack of fireworks from the BoJ announcement to keep policy settings unchanged and ahead of the upcoming holiday closure with the index only briefly supported by favourable currency outflows. Shanghai Comp. (+0.4%) was initially pressured on return from the long-weekend and with Hong Kong markets closed, but pared losses with risk appetite supported by news that Evergrande’s main unit Hengda Real Estate will make coupon payments due tomorrow, although other sources noted this is referring to the onshore bond payments valued around USD 36mln and that there was no mention of the offshore bond payments valued at USD 83.5mln which are also due tomorrow. Meanwhile, the PBoC facilitated liquidity through a CNY 120bln injection and provided no surprises in keeping its 1-year and 5-year Loan Prime Rates unchanged for the 17th consecutive month at 3.85% and 4.65%, respectively. Finally, 10yr JGBs were flat amid the absence of any major surprises from the BoJ policy announcement and following the choppy trade in T-notes which were briefly pressured in a knee-jerk reaction to the news that Evergrande’s unit will satisfy its coupon obligations tomorrow, but then faded most of the losses as cautiousness prevailed. Top Asian News Gold Steady as Traders Await Outcome of Fed Policy Meeting Evergrande Filing on Yuan Bond Interest Leaves Analysts Guessing Singapore Category E COE Price Rises to Highest Since April 2014 Asian Stocks Fall for Third Day as Focus Turns to Central Banks European equities (Stoxx 600 +0.5%) trade on a firmer footing in the wake of an encouraging APAC handover. Focus overnight was on the return of Chinese participants from the Mid-Autumn Festival and news that Evergrande’s main unit, Hengda Real Estate will make coupon payments due tomorrow; however, we await indication as to whether they will meet Thursday’s offshore payment deadline as well. Furthermore, the PBoC facilitated liquidity through a CNY 120bln injection whilst keeping its 1-year and 5-year Loan Prime Rates unchanged (as expected). Note, despite gaining yesterday and today, thus far, the Stoxx 600 is still lower to the tune of 0.7% on the week. Stateside, futures are also trading on a firmer footing ahead of today’s FOMC policy announcement, at which, market participants will be eyeing any clues for when the taper will begin and digesting the latest dot plot forecasts. Furthermore, the US House voted to pass the bill to fund the government through to December 3rd and suspend the debt limit to end-2022, although this will likely be blocked by Senate Republicans. Back to Europe, sectors are mostly firmer with outperformance in Basic Resources and Oil & Gas amid upside in the metals and energy complex. Elsewhere, Travel & Leisure is faring well amid further upside in Entain (+6.1%) with the Co. noting it rejected an earlier approach from DraftKings at GBP 25/shr with the new offer standing at GBP 28/shr. Additionally for the sector, Flutter Entertainment (+4.1%) are trading higher after settling the legal dispute between the Co. and Commonwealth of Kentucky. Elsewhere, in terms of deal flow, Iliad announced that it is to acquire UPC Poland for around USD 1.8bln. Top European News Energy Cost Spike Gets on EU Ministers’ Green Deal Agenda Travel Startup HomeToGo Gains in Frankfurt Debut After SPAC Deal London Stock Exchange to Shut Down CurveGlobal Exchange EU Banks Expected to Add Capital for Climate Risk, EBA Says In FX, trade remains volatile as this week’s deluge of global Central Bank policy meetings continues to unfold amidst fluctuations in broad risk sentiment from relatively pronounced aversion at various stages to a measured and cautious pick-up in appetite more recently. Hence, the tide is currently turning in favour of activity, cyclical and commodity currencies, albeit tentatively in the run up to the Fed, with the Kiwi and Aussie trying to regroup on the 0.7000 handle and 0.7350 axis against their US counterpart, and the latter also striving to shrug off negative domestic impulses like a further decline below zero in Westpac’s leading index and an earthquake near Melbourne. Next up for Nzd/Usd and Aud/Usd, beyond the FOMC, trade data and preliminary PMIs respectively. DXY/CHF/EUR/CAD - Notwithstanding the overall improvement in market tone noted above, or another major change in mood and direction, the Dollar index appears to have found a base just ahead of 93.000 and ceiling a similar distance away from 93.500, as it meanders inside those extremes awaiting US existing home sales that are scheduled for release before the main Fed events (policy statement, SEP and post-meeting press conference from chair Powell). Indeed, the Franc, Euro and Loonie have all recoiled into tighter bands vs the Greenback, between 0.9250-26, 1.1739-17 and 1.2831-1.2770, but with the former still retaining an underlying bid more evident in the Eur/Chf cross that is consolidating under 1.0850 and will undoubtedly be acknowledged by the SNB tomorrow. Meanwhile, Eur/Usd has hardly reacted to latest ECB commentary from Muller underpinning that the APP is likely to be boosted once the PEPP envelope is closed, though Usd/Cad is eyeing a firm rebound in oil prices in conjunction with hefty option expiry interest at the 1.2750 strike (1.8 bn) that may prevent the headline pair from revisiting w-t-d lows not far beneath the half round number. GBP/JPY - The major laggards, as Sterling slips slightly further beneath 1.3650 against the Buck to a fresh weekly low and Eur/Gbp rebounds from circa 0.8574 to top 0.8600 on FOMC day and T-1 to super BoE Thursday. Elsewhere, the Yen has lost momentum after peaking around 109.12 and still not garnering sufficient impetus to test 109.00 via an unchanged BoJ in terms of all policy settings and guidance, as Governor Kuroda trotted out the no hesitation to loosen the reins if required line for the umpteenth time. However, Usd/Jpy is holding around 109.61 and some distance from 1.1 bn option expiries rolling off between 109.85-110.00 at the NY cut. SCANDI/EM - Brent’s revival to Usd 75.50+/brl from sub-Usd 73.50 only yesterday has given the Nok another fillip pending confirmation of a Norges Bank hike tomorrow, while the Zar has regained some poise with the aid of firmer than forecast SA headline and core CPI alongside a degree of retracement following Wednesday’s breakdown of talks on a pay deal for engineering workers that prompted the union to call a strike from early October. Similarly, the Cnh and Cny by default have regrouped amidst reports that the CCP is finalising details to restructure Evergrande into 3 separate entities under a plan that will see the Chinese Government take control. In commodities, WTI and Brent are firmer this morning though once again fresh newsflow for the complex has been relatively slim and largely consisting of gas-related commentary; as such, the benchmarks are taking their cue from the broader risk tone (see equity section). The improvement in sentiment today has brought WTI and Brent back in proximity to being unchanged on the week so far as a whole; however, the complex will be dictated directly by the EIA weekly inventory first and then indirectly, but perhaps more pertinently, by today’s FOMC. On the weekly inventories, last nights private release was a larger than expected draw for the headline and distillate components, though the Cushing draw was beneath expectations; for today, consensus is a headline draw pf 2.44mln. Moving to metals where the return of China has seen a resurgence for base metals with LME copper posting upside of nearly 3.0%, for instance. Albeit there is no fresh newsflow for the complex as such, so it remains to be seen how lasting this resurgence will be. Finally, spot gold and silver are firmer but with the magnitude once again favouring silver over the yellow metal. US Event Calendar 10am: Aug. Existing Home Sales MoM, est. -1.7%, prior 2.0% 2pm: Sept. FOMC Rate Decision (Lower Boun, est. 0%, prior 0% DB's Jim Reid concludes the overnight wrap All eyes firmly on China this morning as it reopens following a 2-day holiday. As expected the indices there have opened lower but the scale of the declines are being softened by the PBoC increasing its short term cash injections into the economy. They’ve added a net CNY 90bn into the system. On Evergrande, we’ve also seen some positive headlines as the property developers’ main unit Hengda Real Estate Group has said that it will make coupon payment for an onshore bond tomorrow. However, the exchange filing said that the interest payment “has been resolved via negotiations with bondholders off the clearing house”. This is all a bit vague and doesn’t mention the dollar bond at this stage. Meanwhile, Bloomberg has reported that Chinese authorities have begun to lay the groundwork for a potential restructuring that could be one of the country’s biggest, assembling accounting and legal experts to examine the finances of the group. All this follows news from Bloomberg yesterday that Evergrande missed interest payments that had been due on Monday to at least two banks. In terms of markets the CSI (-1.11%), Shanghai Comp (-0.29%) and Shenzhen Comp (-0.53%) are all lower but have pared back deeper losses from the open. We did a flash poll in the CoTD yesterday (link here) and after over 700 responses in a couple of hours we found only 8% who we thought Evergrande would still be impacting financial markets significantly in a month’s time. 24% thought it would be slightly impacting. The other 68% thought limited or no impact. So the world is relatively relaxed about contagion risk for now. The bigger risk might be the knock on impact of weaker Chinese growth. So that’s one to watch even if you’re sanguine on the systemic threat. Craig Nicol in my credit team did a good note yesterday (link here) looking at the contagion risk to the broader HY market. I thought he summed it up nicely as to why we all need to care one way or another in saying that “Evergrande is the largest corporate, in the largest sector, of the second largest economy in the world”. For context AT&T is the largest corporate borrower in the US market and VW the largest in Europe. Turning back to other Asian markets now and the Nikkei (-0.65%) is down but the Hang Seng (+0.51%) and Asx (+0.58%) are up. South Korean markets continue to remain closed for a holiday. Elsewhere, yields on 10y USTs are trading flattish while futures on the S&P 500 are up +0.10% and those on the Stoxx 50 are up +0.21%. Crude oil prices are also up c.+1% this morning. In other news, the Bank of Japan policy announcement overnight was a non-event as the central bank maintained its yield curve target while keeping the policy rate and asset purchases plan unchanged. The central bank also unveiled more details of its green lending program and said that it would immediately start accepting applications and would begin making the loans in December. The relatively calm Asian session follows a stabilisation in markets yesterday following their rout on Monday as investors looked forward to the outcome of the Fed’s meeting later today. That said, it was hardly a resounding performance, with the S&P 500 unable to hold on to its intraday gains and ending just worse than unchanged after the -1.70% decline the previous day as investors remained vigilant as to the array of risks that continue to pile up on the horizon. One of these is in US politics and legislators seem no closer to resolving the various issues surrounding a potential government shutdown at the end of the month, along with a potential debt ceiling crisis in October, which is another flashing alert on the dashboard for investors that’s further contributing to weaker sentiment right now. Looking ahead now, today’s main highlight will be the latest Federal Reserve decision along with Chair Powell’s subsequent press conference, with the policy decision out at 19:00 London time. Markets have been on edge for any clues about when the Fed might begin to taper asset purchases, but concern about tapering actually being announced at this meeting has dissipated over recent weeks, particularly after the most recent nonfarm payrolls in August came in at just +235k, and the monthly CPI print also came in beneath consensus expectations for the first time since November. In terms of what to expect, our US economists write in their preview (link here) that they see the statement adopting Chair Powell’s language that a reduction in the pace of asset purchases is appropriate “this year”, so long as the economy remains on track. They see Powell maintaining optionality about the exact timing of that announcement, but they think that the message will effectively be that the bar to pushing the announcement beyond November is relatively high in the absence of any material downside surprises. This meeting also sees the release of the FOMC’s latest economic projections and the dot plot, where they expect there’ll be an upward drift in the dots that raises the number of rate hikes in 2023 to 3, followed by another 3 increases in 2024. Back to yesterday, and as mentioned US equity markets fell for a second straight day after being unable to hold on to earlier gains, with the S&P 500 slightly lower (-0.08%). High-growth industries outperformed with biotech (+0.38%) and semiconductors (+0.18%) leading the NASDAQ (+0.22%) slightly higher, however the Dow Jones (-0.15%) also struggled. Europe saw a much stronger performance though as much of the US decline came after Europe had closed. The STOXX 600 gained +1.00% to erase most of Monday’s losses, with almost every sector in the index ending the day in positive territory. With risk sentiment improving for much of the day yesterday, US Treasuries sold off slightly and by the close of trade yields on 10yr Treasuries were up +1.2bps to 1.3226%, thanks to a +1.8bps increase in real yields. However, sovereign bonds in Europe told a different story as yields on 10yr bunds (-0.3bps), OATs (-0.3bps) and BTPs (-1.9bps) moved lower. Other safe havens including gold (+0.59%) and silver (+1.02%) also benefited, but this wasn’t reflected across commodities more broadly, with Bloomberg’s Commodity Spot Index (-0.30%) losing ground for a 4th consecutive session. Democratic Party leaders plan to vote on the Senate-approved $500bn bipartisan infrastructure bill next Monday, even with no resolution to the $3.5tr budget reconciliation measure that encompasses the remainder of the Biden Administration’s economic agenda. Democrats continue to work on the reconciliation measure but have turned their attention to the debt ceiling and government funding bills.Congress has fewer than two weeks before the current budget expires – on Oct 1 – to fund the government and raise the debt ceiling. Republicans yesterday noted that the Democrats could raise the ceiling on their own through the reconciliation process, with many saying that they would not be offering their support to any funding bill. Democrats continue to push for a bipartisan bill to raise the debt ceiling, pointing to their votes during the Trump administration. If Democrats are forced to tie the debt ceiling and funding bills to budget reconciliation, it could limit how much of the $3.5 trillion bill survives the last minute negotiations between progressives and moderates. More to come over the next 10 days. Staying on the US, there was an important announcement in President Biden’s speech at the UN General Assembly, as he said that he would work with Congress to double US funding to poorer nations to deal with climate change. That comes as UK Prime Minister Johnson (with the UK hosting the COP26 summit in less than 6 weeks’ time) has been lobbying other world leaders to find the $100bn per year that developed economies pledged by 2020 to support developing countries as they reduce their emissions and deal with climate change. In Germany, there are just 4 days to go now until the federal election, and a Forsa poll out yesterday showed a slight narrowing in the race, with the centre-left SPD remaining on 25%, but the CDU/CSU gained a point on last week to 22%, which puts them within the +/- 2.5 point margin of error. That narrowing has been seen in Politico’s Poll of Polls as well, with the race having tightened from a 5-point SPD lead over the CDU/CSU last week to a 3-point one now. Turning to the pandemic, Johnson & Johnson reported that their booster shot given 8 weeks after the first offered 100% protection against severe disease, 94% protection against symptomatic Covid in the US, and 75% against symptomatic Covid globally. Speaking of boosters, Bloomberg reported that the FDA was expected to decide as soon as today on a recommendation for Pfizer’s booster vaccine. That follows an FDA advisory panel rejecting a booster for all adults last Friday, restricting the recommendation to those over-65 and other high-risk categories. Staying with the US and vaccines, President Biden announced that the US was ordering 500mn doses of the Pfizer vaccine to be exported to the rest of the world. On the data front, there were some strong US housing releases for August, with housing starts up by an annualised 1.615m (vs. 1.55m expected), and building permits up by 1.728m (vs. 1.6m expected). Separately, the OECD released their Interim Economic Outlook, which saw them upgrade their inflation expectations for the G20 this year to +3.7% (up +0.2ppts from May) and for 2022 to +3.9% (up +0.5ppts from May). Their global growth forecast saw little change at +5.7% in 2021 (down a tenth) and +4.5% for 2022 (up a tenth). To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Tyler Durden Wed, 09/22/2021 - 08:05.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

RAVE Restaurant Group, Inc. Reports Fourth Quarter Financial Results

DALLAS, Sept. 21, 2021 /PRNewswire/ -- RAVE Restaurant Group, Inc. (NASDAQ:RAVE) today reported financial results for the fourth quarter ended June 27, 2021. Fourth Quarter Highlights: The Company recorded net income of $926 thousand for the fourth quarter of fiscal 2021 compared to net income of $31 thousand for the same period of the prior year. Income before taxes was $892 thousand for the fourth quarter of fiscal 2021 compared to net income before taxes of $32 thousand for the same period of the prior year. Total revenue increased by $0.8 million to $2.4 million for the fourth quarter of fiscal 2021 compared to the same period of the prior year. Pizza Inn domestic comparable store retail sales increased 63% in the fourth quarter of fiscal 2021 compared to the same period of the prior year. Pie Five comparable store retail sales increased 36% in the fourth quarter of fiscal 2021 compared to the same period of the prior year. On a fully diluted basis, net income increased $0.05 per share to $0.05 per share for the fourth quarter of fiscal 2021 compared to net income of $0.00 per share for the same period of the prior year. Cash and cash equivalents increased $1.8 million during the fourth quarter of fiscal 2021 to $8.3 million at June 27, 2021. Pizza Inn domestic unit count finished at 135. Pizza Inn international unit count finished at 32. Pie Five domestic unit count finished at 33. Annual Highlights: Net income improved by $5.7 million to $1.5 million in fiscal 2021 compared to a net loss of $4.2 million in fiscal 2020. Net income before tax improved by $1.7 million to $1.5 million in fiscal 2021 compared to a loss of $0.2 million in fiscal 2020. Adjusted EBITDA of $2.0 million for fiscal 2021 was a $1.4 million increase from the prior year. On a fully diluted basis, the Company reported net income of $0.09 per share in fiscal 2021 compared to a net loss of $0.28 per share in the prior year. RAVE total domestic comparable store retail sales decreased 2.0% for the 52 weeks ended June 27, 2021 compared to the same period of the prior year. Pizza Inn domestic comparable store retail sales decreased 1.0% for the 52 weeks ended June 27, 2021 compared to the same period of the prior year. Pie Five comparable store retail sales decreased 6.2% for the 52 weeks ended June 27, 2021 compared to the same period of the prior year. Total consolidated revenue decreased by $1.4 million in fiscal 2021 to $8.6 million. Both fiscal 2021 and fiscal 2020 contained 52 weeks. Cash and cash equivalents increased $5.4 million in fiscal 2021 to $8.3 million. "We are pleased that the heroic efforts of our franchisees and team members have resulted in our fifth consecutive quarter of profitability. Our maniacal focus on cost control and relentless consumer-facing innovation is paying off with improving sales and consistent earnings despite the pandemic and the latest variant," said Brandon Solano, Chief Executive Officer of RAVE Restaurant Group. "Our fourth quarter net income of $.9M marks the fifth consecutive quarter of positive income, showing sequential improvement each quarter, in a pandemic, while running a buffet brand. This is RAVE's best streak of positive income in nearly a decade. While our fourth quarter income includes a one-time PPP loan forgiveness, we are generating positive operating income, have limited leverage and hold more than $8M in cash." "In Q4 we capitalized on the category's hottest trend of stuffed crust by elevating the experience and introducing Pie Five's Parmesan Crunch Stuffed Crust pizza with a trial-driving value offer. Earlier in the year we introduced our Panzano Pan pizza as well as our Impossible Tuscan meatball," said Solano. "Pie Five now offers three significant innovations a majority of our fast casual pizza competitors do not: pan pizza, plant-based meat pizza and stuffed crust. We will continue to focus on driving same store sales with innovation and strong operations." "Pizza Inn's core product significantly improved this year with our new garlic butter crust, transition to house-shredded 100% whole-milk mozzarella and our classic house-made dough. This month we introduced our House Pan Pizza with a campaign to highlight the differences between our house-made dough and Pizza Hut's frozen dough and frozen cheese. We have significant innovation in our pipeline and can't wait to share them with our customers," said Solano. "The financial results for fiscal 2021 underscore the tremendous efforts by our team at RAVE to advance our turnaround despite the many challenges facing the restaurant industry," said Clint Fendley, Chief Financial Officer of RAVE Restaurant Group, Inc. "We increased our cash from operations by $1.8 million and our cash and cash equivalents by $5.4 million, reduced our debt, and posted one of the best years of profitability for RAVE in a decade. We look forward to 2022 as we continue to invest in both brands in order to ignite growth in future periods." Non-GAAP Financial Measures The Company's financial statements are prepared in accordance with United States generally accepted accounting principles ("GAAP"). However, the Company also presents and discusses certain non-GAAP financial measures that it believes are useful to investors as measures of operating performance. Management may also use such non-GAAP financial measures in evaluating the effectiveness of business strategies and for planning and budgeting purposes. However, these non-GAAP financial measures should not be viewed as an alternative or substitute for its financial statements prepared in accordance with generally accepted accounting principles.  The Company considers EBITDA and Adjusted EBITDA to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and other parties interested in our industry. The Company believes that EBITDA is helpful to investors in evaluating its results of operations without the impact of expenses affected by financing methods, accounting methods and the tax environment. The Company believes that Adjusted EBITDA provides additional useful information to investors by excluding non-operational or non-recurring expenses to provide a measure of operating performance that is more comparable from period to period. Management also uses these non-GAAP financial measures for evaluating operating performance, assessing the effectiveness of business strategies, projecting future capital needs, budgeting and other planning purposes. "EBITDA" represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, stock compensation expense, severance, gain/loss sale of assets, costs related to impairment and other lease charges, franchise default and closed store revenue/expense, and closed and non-operating store costs. A reconciliation of these non-GAAP financial measures to net income is included with the accompanying financial statements.  Note Regarding Forward Looking Statements Certain statements in this press release, other than historical information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbors created thereby. These forward-looking statements are based on current expectations that involve numerous risks, uncertainties and assumptions. Assumptions relating to these forward-looking statements involve judgments with respect to, among other things, future economic, competitive and market conditions, regulatory framework and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of RAVE Restaurant Group, Inc. Although the assumptions underlying these forward-looking statements are believed to be reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that any forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in these forward-looking statements, the inclusion of such information should not be regarded as a representation that the objectives and plans of RAVE Restaurant Group, Inc. will be achieved.  About RAVE Restaurant Group, Inc. Founded in 1958, Dallas-based RAVE Restaurant Group (NASDAQ:RAVE) owns, operates, franchises and/or licenses 200 Pie Five Pizza Co. and Pizza Inn restaurants and Pizza Inn Express kiosks domestically and internationally. Pizza Inn is an international chain featuring freshly made pizzas, along with salads, pastas, and desserts. Pie Five Pizza Co. is a leader in the rapidly growing fast-casual pizza space. Pizza Inn Express, or PIE, is developing unique opportunities to provide freshly made pizza from non-traditional outlets. The Company's common stock is listed on the Nasdaq Capital Market under the symbol "RAVE". For more information, please visit www.raverg.com. Contact:Investor RelationsRAVE Restaurant Group, Inc.469-384-5000   RAVE RESTAURANT GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Twelve Months Ended June 27, 2021 June 28, 2020 June 27, 2021 June 28, 2020 REVENUES: $ 2,379 $ 1,617 $ 8,593 $ 10,028 COSTS AND EXPENSES: Cost of sales 35 86 264 439 General and administrative expenses 1,186 920 4,710 5,503 Franchise expenses 612 487 2,394 3,051 Gain on sale of assets 146 (31) (10) (24) Impairment of long-lived assets and other lease charges - 44 21 880 Bad debt expense 103 14 121 53 Interest expense 23 20 92 95 Depreciation and amortization expense 39 45 167 186 Total costs and expenses 2,144 1,585 7,759 10,183 OTHER INCOME: - - - - Gain on forgiveness of PPP loan (657) - (657) - Total other income (657) - (657) -.....»»

Category: earningsSource: benzingaSep 21st, 2021

Cracker Barrel Reports Fourth Quarter And Full Year Fiscal 2021 Results And Declares Quarterly Dividend

LEBANON, Tenn., Sept. 21, 2021 /PRNewswire/ -- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the fourth quarter of fiscal 2021 ended July 30, 2021. Fourth Quarter Fiscal 2021 Highlights Total revenue in the fourth quarter of $784.4 million was approximately flat compared to the fourth quarter of fiscal 2019 total revenue of $787.1 million. Compared to the fourth quarter of fiscal 20191, comparable store restaurant sales decreased 6.8% and comparable store retail sales increased 18.2%. Comparable store off-premise restaurant sales grew 108.6% compared to the fourth quarter of 20191 and represented approximately 19% of restaurant sales. GAAP operating income in the fourth quarter was $62.7 million, or 8.0% of total revenue, and adjusted2 operating income was $65.9 million, or 8.4% of total revenue. GAAP net income was $36.4 million, or 4.6% of total revenue. EBITDA was $93.5 million, or 11.9% of total revenue, which represented a 30 basis point sequential improvement compared to fiscal 2021 third quarter EBITDA margin. GAAP earnings per diluted share were $1.53, and adjusted2 earnings per diluted share were $2.25. The Company announced that its Board of Directors declared a regular quarterly dividend of $1.30 per share and authorized share repurchases up to $100 million of the Company's outstanding common stock. Commenting on the fourth quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "Despite the well-known headwinds that the industry continues to face with respect to staffing, commodity and wage inflation, and the resurgence of the pandemic, we were pleased that our fourth quarter profitability continued to trend positively from the third quarter and that our off-premise sales, retail business, and Maple Street Biscuit Company concept continued to outperform.  In addition to these strengths, our impressive field and home office support teams delivered on multiple fronts throughout the year, including cost-savings, the introduction of our new dinner menu and the continued roll-out of beer and wine to our stores, and helped ensure our continued recovery in 2021.  I'm confident that these and other initiatives position us well for 2022 despite the uncertain environment." Fourth Quarter Fiscal 2021 Results RevenueThe Company reported total revenue of $784.4 million for the fourth quarter of fiscal 2021, representing an increase of 58.4% compared to the fourth quarter of fiscal 2020, and a decrease of 0.3% compared to the fourth quarter of 2019.   Cracker Barrel comparable store restaurant and retail sales compared to the fourth quarter of fiscal 20191 and versus the fourth quarter of fiscal 2020 were as follows: Versus FY19Comparable Period1 Versus FY20 Comparable Period Fourth Quarter Ended7/30/21 Fourth Quarter Ended7/30/21 Comparable restaurant sales -6.8% 53.5% Comparable retail sales 18.2% 74.8% Operating IncomeGAAP operating income in the fourth quarter was $62.7 million, or 8.0% of total revenue. Excluding the approximately $3.2 million in non-cash amortization related to the gains on the previously disclosed sale and leaseback transactions adjusted2 operating income for the fourth quarter was $65.9 million, or 8.4% of total revenue. Net Income, EBITDA and Earnings per Diluted Share GAAP net income in the fourth quarter was $36.4 million, or 4.6% of total revenue, and EBITDA was $93.5 million, or 11.9% of total revenue. GAAP earnings per diluted share were $1.53, and adjusted2 earnings per diluted share were $2.25. Convertible Debt OfferingAs previously disclosed, during the fourth quarter the Company completed the private offering of $300 million of 0.625% convertible senior notes due 2026, which generated net proceeds of approximately $291 million. The Company used approximately $30 million net, of the proceeds to fund the cost of entering into certain convertible note hedging transactions to minimize the risk of potential future dilution from the offering. The remainder of the proceeds were used to pay down debt under the Company's revolving credit facility. The Company ended the fourth quarter with approximately $327 million in total debt. The Company also paid approximately $18 million to terminate the interest rate swaps that it had been using to hedge interest rate risk on the debt outstanding under the Company's revolving credit facility. We anticipate this action will result in savings on interest expense over the next two years. In connection with the offering, the Company also repurchased $35 million of its common stock. Quarterly Dividend and Share Repurchase AuthorizationThe Company's Board of Directors declared a quarterly dividend to common shareholders of $1.30 per share, payable on November 9, 2021 to shareholders of record on October 22, 2021. This dividend represents a return to the Company's pre-pandemic quarterly dividend level. Additionally, the Board of Directors authorized share repurchases up to $100 million of the Company's outstanding common stock. Fiscal 2021 ResultsRevenueThe Company reported total revenue of $2.81 billion for fiscal 2021, representing an increase of 11.8% compared to fiscal 2020 and a decrease of 8.2% compared to fiscal 2019. Comparable store restaurant sales for fiscal 2021 increased 8.4% compared to fiscal 2020, including a 5.3% increase in store traffic and a 3.1% increase in average check. Comparable store retail sales for fiscal 2021 increased 20.9% compared to fiscal 2020. Operating IncomeGAAP operating income in fiscal 2021 was $366.7 million, or 13.0% of total revenue, compared to $103.6 million, or 4.1% of total revenue, in fiscal 2020. Adjusted2 operating income for fiscal 2021 was $166.8 million. Net Income, EBITDA and Earnings per Diluted Share GAAP net income was $254.5 million, or 9.0% of total revenue, and EBITDA was $488.0 million, or 17.3% of total revenue, in fiscal 2021. Adjusted2 EBITDA was $275.4 million, or 9.8% of total revenue. GAAP earnings per diluted share were $10.71, and adjusted2 earnings per diluted share were $5.14. Fiscal 2022 OutlookAs a result of the ongoing business impact and significant uncertainty created by the COVID-19 pandemic, including the nationwide increase in infections and responsive public health restrictions brought about by the rise of the "Delta variant" of the virus, the Company is not providing its customary annual earnings guidance for fiscal 2022 at this time. For the full fiscal year 2022, the Company expects: Commodity and wage inflation in the mid-to-high single digits; Capital expenditures of approximately $120 million; An effective tax rate of approximately 18%; and The opening of three new Cracker Barrel locations and 15 new Maple Street Biscuit Company locations. The Company reminds investors that its outlook for fiscal 2022 reflects a number of assumptions, many of which are outside the Company's control.  1 For the purpose of comparing to fiscal 2019, comparable stores are defined as restaurants open a full 30 months before the beginning of the applicable period.2 For Non-GAAP reconciliations, please refer to the Reconciliation of GAAP-basis operating results to non-GAAP operating results section of this release. Fiscal 2021 Fourth Quarter Conference CallAs previously announced, the live broadcast of Cracker Barrel's quarterly conference call will be available to the public on-line at investor.crackerbarrel.com today beginning at 11:00 a.m. (ET). The on-line replay will be available at 2:00 p.m. (ET) and continue through October 5, 2021. About Cracker Barrel Old Country Store®Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) provides a caring and friendly home-away-from-home experience while offering guests high-quality homestyle food to enjoy in-store or to-go and unique shopping — all at a fair price. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Maple Street Biscuit Company. For more information about the Company, visit crackerbarrel.com. CBRL-F Except for specific historical information, certain of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. These, and similar statements are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause the actual performance of Cracker Barrel Old Country Store, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking information is subject to completion of our financial procedures for Q4 FY 2021 and is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "trends," "assumptions," "target," "guidance," "outlook," "opportunity," "future," "plans," "goals," "objectives," "expectations," "near-term," "long-term," "projection," "may," "will," "would," "could," "expect," "intend," "estimate," "anticipate," "believe," "potential," "regular," "should," "projects," "forecasts," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology and include the expected effects of COVID-19 on our business, financial condition and results of operations and of operational improvement initiatives, such as new menu items and retail offerings. Factors which could materially affect actual results include, but are not limited to: risks and uncertainties associated with the COVID-19 pandemic, including the duration of the COVID-19 pandemic and its ultimate impact on our business, levels of consumer confidence in the safety of dine-in restaurants, restrictions (including occupancy restrictions) imposed by governmental authorities, the effectiveness of cost saving measures undertaken throughout our operations, disruptions to our operations as a result of the spread of COVID-19 in our workforce, and our level of indebtedness, or constraints on our expenditures, ability to service our debt obligations or make cash distributions to our shareholders or cash management generally, brought on by additional borrowing necessitated by the COVID-19 pandemic; general or regional economic weakness, business and societal conditions, and weather on sales and customer travel; discretionary income or personal expenditure activity of our customers; information technology-related incidents, including data privacy and information security breaches, whether as a result of infrastructure failures, employee or vendor errors, or actions of third parties; our ability to identify, acquire and sell successful new lines of retail merchandise and new menu items at our restaurants; our ability to sustain or the effects of plans intended to improve operational or marketing execution and performance; uncertain performance of acquired businesses, strategic investments and other initiatives that we may pursue now or in the future; changes in or implementation of additional governmental or regulatory rules, regulations and interpretations affecting tax, wage and hour matters, health and safety, pensions, insurance or other undeterminable areas; the effects of plans intended to promote or protect our brands and products; commodity price increases; the ability of and cost to us to recruit, train, and retain qualified hourly and management employees; the effects of increased competition at our locations on sales and on labor recruiting, cost, and retention; workers' compensation, group health and utility price changes; consumer behavior based on negative publicity or changes in consumer health or dietary trends or safety aspects of our food or products or those of the restaurant industry in general, including concerns about outbreaks of infectious disease, as well as the possible effects of such events on the price or availability of ingredients used in our restaurants; the effects of our indebtedness, including under our credit facility and our convertible senior notes, and associated restrictions on our financial and operating flexibility and ability to execute or pursue our operating plans and objectives; changes in interest rates, increases in borrowed capital or capital market conditions affecting our financing costs and ability to refinance all or portions of our indebtedness; the effects of dilution of our existing stockholders' ownership interest that may ensue from any conversions of our convertible senior notes or the related warrants issued in connection with our convertible note hedging transactions; the effects of business trends on the outlook for individual restaurant locations and the effect on the carrying value of those locations; our ability to retain key personnel; the availability and cost of suitable sites for restaurant development and our ability to identify those sites; our ability to enter successfully into new geographic markets that may be less familiar to us; changes in land, building materials and construction costs; the actual results of pending, future or threatened litigation or governmental investigations and the costs and effects of negative publicity or our ability to manage the impact of social media associated with these activities; economic or psychological effects of natural disasters or unforeseen events such as terrorist acts, social unrest or war and the military or government responses to such events; disruptions to our restaurant or retail supply chain, including as a result of COVID-19; changes in foreign exchange rates affecting our future retail inventory purchases; the impact of activist shareholders; our reliance on limited distribution facilities and certain significant vendors; implementation of new or changes in interpretation of existing accounting principles generally accepted in the United States of America ("GAAP"); and other factors described from time to time in our filings with the Securities and Exchange Commission, press releases, and other communications. Any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which made. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.   CRACKER BARREL OLD COUNTRY STORE, INC. CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) (In thousands, except share and per share amounts, percentages and ratios)    Fourth Quarter Ended   Twelve Months Ended Percentage Percentage 7/30/21 7/31/20 Change 7/30/21 7/31/20 Change Total revenue $784,405 $495,065 58% $2,821,444 $2,522,792 12% Cost of goods sold, exclusive of depreciation and rent 235,754 150,778 56 865,261 779,937 11 Labor and other related expenses 268,702 187,785 43 983,120 924,994 6 Other store operating expenses 180,333 141,267 28 676,301 614,733 10 General and administrative expenses 36,948 40,950 (10) 147,825 146,975 1 Gain on sale and leaseback transactions 0 (69,954) (100) (217,722) (69,954) 211 Impairment 0 4,160 (100) 0 22,496 (100) Operating income 62,668 40,079 56 366,659 103,611 254 Interest expense 24,964 9,944 151 56,108 22,327 151 Income before income taxes 37,704 30,135 25 310,551 81,284 282 Provision for income taxes (income tax benefit) 1,341 5,069 (74) 56,038 (28,683) 295 Loss from unconsolidated subsidiary 0 0 0 (142,442) Net income (loss) $36,363 $25,066 45.....»»

Category: earningsSource: benzingaSep 21st, 2021

Here"s How NIKE (NKE) is Positioned Ahead of Q1 Earnings

Continued digital growth, return of sports activity, the reopening of stores and wholesale business strength are expected to have aided NIKE (NKE) in Q1. Supply-chain disruptions might have hurt. NIKE Inc. NKE is slated to release first-quarter fiscal 2022 results on Sep 23. The leading sports apparel retailer is likely to have witnessed sales and earnings growth in the quarter under review. Strong digital momentum across all regions has been aiding the company’s top line.The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $12.56 billion, suggesting an 18.5% increase from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for the company’s earnings for the fiscal first quarter is pegged at $1.12 per share, suggesting growth of 17.9% from the year-ago reported figure. Earnings estimates for the fiscal first quarter have moved up by a penny in the past 30 days.In the last reported quarter, the company delivered an earnings surprise of 82.4%. Its bottom line has beat the consensus estimate by 56%, on average, over the trailing four quarters.NIKE, Inc. Price and EPS Surprise  NIKE, Inc. price-eps-surprise | NIKE, Inc. QuoteKey Factors to NoteNIKE has been benefiting from the return of sports activity, the reopening of stores, wholesale business strength and digital growth, owing to permanent shifts toward digital and health & wellness. Strong customer connections through compelling brand experiences across NIKE Jordan and Converse, product innovation, and expanding digital advantage have been key drivers.NIKE’s efficient digital ecosystem, which comprises its online site as well as commercial and activity apps, has become the primary channel to engage and serve customers. This has been aiding digital sales growth for the past few quarters. Even as stores reopen, the company is likely to have witnessed strong digital trends in the fiscal first quarter, demonstrating the strength of its brands and investments made over the past several years to improve digital consumer experiences.Higher full-price product margins, owing to the geographic mix and favorable digital mix, are expected to have aided the gross margin in the to-be-reported quarter. The company is likely to have benefited from the anniversary of last year’s higher costs, including lower factory cancellation charges, lower inventory obsolescence reserves and a favorable rate impact of supply-chain fixed costs on a higher volume of wholesale shipments.However, the company is expected to have witnessed higher SG&A expenses, owing to higher operating overhead and demand-creating expenses, driven by the return of sporting activities and events as the effects of the pandemic fade away. Spends related to sporting events, consistent store-operating schedules and investments against its largest opportunities are expected to have resulted in higher SG&A expenses.The company’s fiscal first-quarter revenues are expected to have reflected continued impacts of the adverse market dynamics in Greater China due to boycotts related to the reports of forced labor in Xinjiang. On its last reported quarter’s earnings call, management noted that the slowdown trends in China continued into June. However, it noted that revenue trends slightly improved from the decline witnessed in May. The persistence of softness in China sales is expected to have weighed on the company’s overall revenues.NIKE has been facing increased uncertainty from manufacturing disruptions in Vietnam due to a new wave of COVID-19 outbreaks in the region. This has resulted in almost zero production from its Vietnam factories in the past two months. NIKE has about 51% of footwear and 30% of apparel units (43% of total units) in Vietnam.The company is also expected to have witnessed supply-chain disruptions due to congestion at ports, freight inefficiencies, displacements in the container market, and higher freight costs, which have been impacting the whole industry. This is likely to have caused short supplies as well as higher freight expenses in the to-be-reported quarter.Zacks ModelOur proven model does not conclusively predict an earnings beat for NIKE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.NIKE has a Zacks Rank #2 but an Earnings ESP of -2.24%.Stocks Poised to Beat Earnings EstimatesHere are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:Crocs, Inc. CROX has an Earnings ESP of +1.20% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.Boyd Gaming Corporation BYD has an Earnings ESP of +5.42% and it presently flaunts a Zacks Rank #1.Rent-A-Center, Inc. RCII has an Earnings ESP of +1.12% and it currently sports a Zacks Rank #1. Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report RentACenter, Inc. (RCII): Free Stock Analysis Report Boyd Gaming Corporation (BYD): Free Stock Analysis Report Crocs, Inc. (CROX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Invest in These 3 Funds as Retail Sales Rebound in August

Retail sales surged in August as Americans resumed spending on services that were avoided at the onset of the pandemic. Americans continue to splurge despite the spread of the Delta variant in August, pushing retail sales up by 0.7%, after a downwardly revised decline of 1.8% in July. The U.S. Census Bureau reported on Sep 16 that retail and food services sales are now 15% higher than the same period last year.Clothing and clothing accessories stores witnessed a 38.8% rise in sales, with sales advancing in almost every major retail category. In fact, retails sales were much stronger in August, on a 1.8% rise, excluding auto sales. A shortage of new cars and trucks due to chip scarcity continues to plague the market, affecting sales at auto dealers.Meanwhile, high inflation continues to bother consumers, curtailing consumers’ current spending when compared to spring. However, Americans are comfortably spending on services they avoided during the pandemic like dining out, hotel rentals, movies and theater tickets, airfare, etc, compared to the year-ago period. Although rise in new coronavirus cases slowed demand for the aforementioned services and sales at restaurants were flat last month.Sales across groceries, home centers, gas stations and home furnishings stores continued to rise last month, while sales of big-box electronics retailers, especially those selling hobby items and sports equipment, slipped.August’s retail sales not only outpaced the consensus estimate of a 0.9% decline but also highlighted that Americans are willing to spend and have an appetite for big budget vacations as well as new cars and trucks. Additionally, the University of Michigan on Sep 17 reported that its preliminary reading for the index of consumer sentiment rebounded to 71 in September, after a steep decline of nearly 9 points in August.With the holiday season approaching, Americans are expected to continue to spend elaborately, especially on clothes, electronics and jewelry. Per Mastercard SpendingPulse forecast, holiday retail sales are expected to rise 7.4% from a year earlier. Bain and Deloitte also forecast sales growth between 7% and 9%.Big brands like Walmart have already started hiring freight handlers and lift drivers for the holiday season and beyond, and plan to hire 20,000 supply chain employees. Home Depot has reported the selling out of Halloween decorations, which were released early this year. This signals at higher sales of Christmas decorations this year. 3 Fund PicksGiven the rebound in retail sales in August, we are optimistic that the trend will continue for the rest of the year, especially during the holiday season. Hence, we have shortlisted three mutual funds that are poised to grow and carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy). Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5000.We expect these funds to outperform peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).Fidelity Select Retailing Portfolio FSRPX fund aims for capital appreciation. This non-diversified fund invests a large portion of its assets in the common stock of companies engaged in merchandising finished goods and services, primarily to individual consumers.This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FSRPX has returned nearly 21% and nearly 23% over the past three and five-year period, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.FSRPX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.73%, which is below the category average of 0.79%.Fidelity Select Leisure Portfolio FDLSX fund aims for capital appreciation. This non-diversified fund invests majority of assets in common stocks of companies, principally engaged in the design, production, or distribution of goods or services in the leisure industries.This Zacks Sector-Other product has a history of positive total returns for more than 10 years. Specifically, FDLSX has three and five-year return of 16.6% and 16.5%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.FDLSX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.77%, which is below the category average of 0.79%.Fidelity Select Consumer Staples Portfolio FDFAX fund aims for capital growth. It invests majority of assets in securities of companies primarily engaged in manufacturing, marketing or distribution of consumer staples products. The non-diversified fund invests in both U.S. and non-U.S. issuers.This Zacks sector – Other product has a history of positive total returns for more than 10 years. Specifically, FDFAX has returned 12.7% and 7.6% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.FDFAX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.75% versus the category average of 0.76%.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.Get it free >> Breakout Biotech Stocks with Triple-Digit Profit Potential The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases. Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.See these 7 breakthrough stocks now>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSRPX): Fund Analysis Report Get Your Free (FDFAX): Fund Analysis Report Get Your Free (FDLSX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacksSep 21st, 2021

NASDAQ Higher for Fifth Straight Day as Stocks Rally in Final Hour

NASDAQ Higher for Fifth Straight Day as Stocks Rally in Final Hour Thankfully, there was no repeat of last Thursday’s brutality in today’s session, as stocks rallied into the close and now have a great chance to post their third positive week in the past four. The NASDAQ stretched its winning streak to five days after advancing 0.33% (or about 32 points) to 9943.05. The S&P also inched out an advance of 0.06% to 3115.34. The Dow couldn’t follow its counterparts onto positive ground, but it did cut the day’s losses to only about 39 points from approximately 270 points earlier. The index was off 0.15% to 26,080.10. That’s quite the improvement from last Thursday’s plunge of 6.9%, or 1861 points! Stocks remain concerned about the increase in coronavirus cases in several states and China as these places try to reopen and get back to normal. However, we’re not seeing the frantic rush to the exits like earlier in the year. At the moment, the market is more concerned about losing momentum on the reopenings than the virus itself. Since its Thursday, we received the weekly jobless claims. The good news is that the downward trajectory of the past two-and-a-half months continued, as the nearly 1.51 million claims were lower than the previous week’s 1.54 million. But that’s still an ugly number and marks only a small improvement. Plus, it fell short of expectations at only 1.3 million claims. It’s especially frustrating because we’ve been getting some good economic numbers of late, including last month’s surprise employment situation report and the sharp rise in retail sales from earlier this week. Still, the market remains hopeful that we’ve seen the worst of this pandemic and that we’re in the beginning stages of a vibrant recovery. It also hopes that we can have a strong finish to the week tomorrow. The NASDAQ, which hasn’t seen a negative close in the past five days, is up 3.7% for the week heading into Friday. Meanwhile, the S&P and Dow are up 2.4% and 1.9%, respectively. Today's Portfolio Highlights: Counterstrike: Buyers finally stepped in and pushed Spotify (SPOT) to all-time highs, which gave Jeremy a perfect opportunity to sell half of this successful position and pocket a 39.2% return in a little over a month. But this stock isn’t done. The editor is holding onto the other half because SPOT seems poised to hit $260. The portfolio also sold half of the volatile Teladoc (TDOC) position for an 8.9% return in a little under two months. Meanwhile, Jeremy also doubled down on natural and organic foods company United Natural Foods (UNFI). Shares dropped after an EPS shortfall in its most recent report, but the stock is still a Zacks Rank #1 (Strong Buy). In fact, a deeper dive shows a company that has plenty of positives. Therefore, this could be a classic counterstrike situation with a stock that’s set to bounceback after an unnecessary dip. The editor originally added UNFI with a small 5% allocation in late May… and he added another 5% on Thursday. Read the full write-up for more on all of today’s moves. By the way, SPOT was one of the best performers today with a gain of 12.7%, while Zscaler (ZS) also made the top five with a rise of 6.5%. Technology Innovators: Taking profits is part of having a successful portfolio, so Brian decided to cash in three of his best positions on Thursday since no one knows what’s around the next corner. He sold ACM Research (ACMR) for a 73.5% return in two months, Elastic N.V. (ESTC) for a 43% profit in less than two months and Cirrus Logic (CRUS) for 20% in about 10 months. But the editor also added today. He picked up EVO Payments (EVOP), a Zacks Rank #2 (Buy) payments service provider for merchants. The company has a great earnings history with four straight beats and an average surprise of 31% over that time. Make sure to read the complete commentary for specifics on all of today’s moves. Surprise Trader: A nice move higher today from portfolio position Commercial Metals Company (CMC, +5.6%) has Dave looking to add another infrastructure name. Therefore, he picked up Schnitzer Steel (SCHN), which is one of the largest metal recycling businesses in the country. The company beat by more than 29% in its last report and should be going to the plate again next week if history is any guide, though there still isn’t a confirmed date. Nevertheless, SCHN has an Earnings ESP of 17.65% for the upcoming release, while next year’s EPS growth is slated at 435%. SCHN was added on Thursday with a 12.5% allocation. The editor also decided to sell the rest of Covetrus (CVET) for a solid 62.3% return in a little over a month. See the full report for more on today’s moves. Commodity Innovators: We’re still waiting for the oil recovery, but Jeremy isn’t going to just sit back and twiddle his thumbs in the interim. Instead, he bought one of the largest energy companies in the world on Thursday to take advantage of the bounce back. Exxon Mobil (XOM) is a $200 billion company and it pays a nice 7% dividend, which means the portfolio will be making money while it waits. Shares of XOM have found support at the 50-day after pulling back more about 15% from its highs. Obviously, you can consider this a long-term play. The editor also shed some underperformers today by selling United States Natural Gas ETF (UNG) and Teucrium Wheat ETF (WEAT). Read the full write-up for more. Home Run Investor: Rising coronavirus cases in certain parts of the country may explain why shares of online marketplace Fiverr International (FVRR) have surged. In fact, it’s jumped so high that Brian thinks its time to take the profits. Therefore, FVRR was sold on Thursday for an impressive 178.7% return in only two-and-a-half months! And while he’s in a selling mood, the editor also got out of SpartanNash (SPTN) for a slight gain and DSP Group (DSPG) for a slight loss. Now there are several open positions in the portfolio, so get ready for more buying in the days ahead. Healthcare Innovators: With the market refusing to selloff despite being overbought, Kevin doesn’t want to wait around anymore with Alnylam Pharmaceuticals (ALNY). This development-stage biopharmaceutical company is focused on the development of novel therapeutics based on RNA interference, which puts it at the forefront of groundbreaking science. The portfolio already pulled a 68% return from ALNY earlier this year. Some analysts are cautious about its valuation right now, but Kevin thinks the risks are a bit over-rated and decided this was a good spot to enter. The editor also started a small position in Anavex Life Sciences (AVXL), an emerging biopharma name that targets treatments for cancer and neurological diseases. Now this one IS considered to be highly speculative, especially since its too small for coverage from major Wall Street research houses. However, it’s a Zacks Rank #2 (Buy) and is making progress with some innovative products in its pipeline. Get all the specifics on these new buys in the full write-up. One more thing, this portfolio had a top performer in the session as a solid biotech space helped Editas Medicine (EDIT) rise 8.6%. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P Retakes 3700 while NASDAQ Hits Another New Record

S&P Retakes 3700 while NASDAQ Hits Another New Record The market may still be waiting for a stimulus package at the moment, but it had enough energy on Wednesday to recapture a milestone and set a new record. The S&P closed above 3700 for only the second time in history today. The index rose 0.18% to 3701.17, which put it a little more than a point away from a new record. It was last above 3700 on Tuesday, December 8. Meanwhile, the NASDAQ climbed 0.50% (or about 63 points) to a new closing high of 12,658.19, but the Dow slipped 0.15% (or about 45 points) to 30,154.54. The Fed – and its unprecedented support for this economy – isn’t going anywhere. In addition to keeping rates unchanged as was widely expected, the Committee will continue its asset purchase program unabated until its goals are met. And you can bet that rates will stay at historic lows for the next several years. Meanwhile, the market is cautiously optimistic that Capitol Hill is finally on course for a relief package. In recent days, we’ve seen the proposal split into two separate bills that should be easier to pass. Also, the major players in both houses of Congress have been talking and seem encouraged that something will actually get done. This would be a great time to make it happen, as rising coronavirus cases are leading to renewed restrictions across the country. Such measures are being felt in the economic data. We got another example just today when retail sales for November were down 1.1%, which was worse than expected and marked a second straight monthly decline. And let’s not forget that the jobs data for November (released earlier this month) was quite sluggish with only 245K jobs being added instead of around 450K as expected. So the economic recovery is certainly slowing down, but a nice stimulus deal could keep it going while we wait for the vaccines to do their job... Today's Portfolio Highlights: Income Investor: Investment bankers like Goldman Sachs (GS) are handling this pandemic better than most other banks. Shares of the company surged 74% since the coronavirus lows, which easily outperformed the S&P. In addition, GS had a “blowout” third quarter and is diversifying for the future through initiatives like consumer banking. And yet, GS is still “just too cheap to ignore”, according to Maddy. Shares trade at 10x trailing 12-month earnings, compared to the finance market’s 18x. And its dividend currently yields just under 2.1% on an annual basis with a payout ratio at 21%, so there’ll be no problem covering payouts or planned increases moving forward. To recap: GS has market-leading positions, a diversifying revenue stream, top-tier profit levels and a solid dividend. And despite all that, it remains at “bargain basement levels”. No wonder the editor added the stock on Wednesday. Learn a lot more about this new addition in the complete commentary. Home Run Investor: Next year could be pretty strong for a name like Sterling Construction (STRL), which is a leading heavy civil construction company that specializes in the building and reconstruction of transportation and water infrastructure projects. In other words, it would be a big beneficiary of any federal infrastructure plans. The past two quarters included large earnings surprises, while rising estimates have lifted STRL to a Zacks Rank #1 (Strong Buy). If this stock sees some margin expansion, Brian thinks it would move sharply higher. In addition to adding STRL, the editor also sold The Andersons (ANDE) after slipping to a Zacks Rank #4 (Sell). The agriculture company still brought the portfolio a return of approximately 10.2% in two months. Read the full write-up for more on today’s moves. In other news, this portfolio had a top performer on Wednesday as Dynatrace (DT) rose 8.3%. Counterstrike: This portfolio’s patience with Turtle Beach (HEAR) paid off on Wednesday, as the audio technology company was sold for a return of about 38%. Jeremy first bought the stock on July 13 and then added to it on August 17. The long awaited-for spike finally came and lifted HEAR to the top performer in the portfolio. Also today, the editor bought beverage company National Beverage Corp. (FIZZ) with a 7% allocation and added onto e-commerce service provider Overstock.com (OSTK) with a 6% allocation. FIZZ, which made 22% for the portfolio last month, had a nice pullback recently and seems set to move higher. Meanwhile, OSTK, which was first bought on November 24, has moved higher in the past couple of days and prompted Jeremy to make a bigger commitment. Read the complete commentary for a lot more about today’s moves. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Big Banks Beat Expectations to Begin Earnings Season

Big Banks Beat Expectations to Begin Earnings Season Stocks spiked this morning after earnings season unofficially began with a trio of strong quarterly reports from big banks. However, the major indices ended mixed on Wednesday with two coming off intraday highs and the NASDAQ plunging by about 1%. The big story of the session was quarterly reports from JPMorgan (JPM, -1.87%), Goldman Sachs (GS, +2.34%) and Wells Fargo (WFC, +5.53%). Each of these banking behemoths beat on both the top and bottom lines. In fact, JPM crushed the Zacks Consensus Earnings Estimate by 47.5%, while GS beat by 90% and WFC surprised by 52.2%. That’s a nice start to an earnings season with some lofty expectations, including earnings growth of more than 20% and revenue growth of about 5.6%. It was also encouraging that Wall Street responded well to two of those reports, suggesting that finicky investors were impressed by what they saw. Given these strong reports from big banks, the Dow managed to stay in the green on Wednesday even as its counterparts slipped into negative territory. It gained 0.16% (or about 53 points) to 33,730.89. However, it pulled back from an intraday high earlier in the session after soaring by approximately 200 points. The S&P momentarily reached a new high on Wednesday as well, which wasn’t too hard since it was at a record when the opening bell rang. But it declined as the day continued and finished lower by 0.41% to 4124.66. A rough day for tech fought against the strong earnings reports, which impacted the S&P but really shellacked the NASDAQ. The tech-heavy index dropped 0.99% (or about 138 points) to 13,857.84. For a moment, the NASDAQ joined its counterparts in the morning rally and briefly crossed 14K again, but finished with a loss that pretty much takes out Tuesday’s 1.05% advance. All of the FAANGs were lower, especially losses of more than 2% for Facebook (FB) and Netflix (NFLX), as well as dips of nearly 2% for Amazon (AMZN) and Apple (AAPL). Meanwhile, Tesla (TSLA) was off almost 4% and Microsoft (MSFT) dipped over 1%. The other big story of the day was Coinbase (COIN) going public through a direct listing, which soared to nearly $430 this morning. In other words, it had a more than $100 billion valuation for a while, but then things calmed down and it closed at $328. “This is a landmark moment for the crypto space and a huge success story,” said Dan Laboe in today’s Headline Trader. “Coinbase is the first crypto company IP, and its massive initial valuation reflects the excitement in the market about this technology.” Speaking of excitement, we’re at the start of earnings season and some of the big names reporting tomorrow include Bank of America (BAC) and Citigroup (C), among dozens of others. And let’s not forget that Taiwan Semiconductor (TSM) goes to the plate on Thursday as well. Today's Portfolio Highlights: Headline Trader: These big banks reporting this week will have to deliver fantastic results to see positive price action... and that’s exactly what financial giant Goldman Sachs (GS) did this morning. In fact, Dan called the report “unbelievable”. Earnings soared 500% year over year and beat the Zacks Consensus Estimate by 90%, while sales jumped 159% year over year. The top line also beat our expectations by 48%. Despite soaring 55% over the past six months to new highs, the editor still thinks GS is a “tremendous” buying opportunity with a price target poised to jump. The company has been a very adept deal maker amid this unprecedented pandemic, and has been taking full advantage of market volatility that is primed to return in the coming months. It has a bunch of big deals and market action all set for the rest of 2021. Dan is a big fan of GS, especially after today’s report, and so he added the stock on Wednesday. Make sure to read his complete commentary for tons of information on this new pick. Surprise Trader: Earnings season has finally begun, so its about to get a whole lot busier for this portfolio. On Wednesday, Dave went to the transportation – truck industry to pick up Landstar Systems (LSTR), a Zacks Rank #2 (Buy) provider of integrated transportation management solutions. The company has beaten the Zacks Consensus Estimate for three consecutive quarters now, and has a positive Earnings ESP for the quarter coming after the bell on Wednesday, April 21. The editor added LSTR today with a 12.5% allocation, while also selling Golden Entertainment (GDEN) for a 15.1% return in just a little over a month. Read the complete commentary for more on today’s moves. Blockchain Innovators: "The excitement today surrounded the IPO of cryptocurrency exchange Coinbase. Trading under the ticker COIN, Coinbase's direct listing price of $250 gave it a valuation of $65 billion. Compare that to the CME Group's $74 billion valuation and you see just how big this crypto game has become. If you think that's a starry-eyed valuation, think again. CME Group is set to post about $1.2 billion in revenue this upcoming quarter, while Coinbase posted $1.8 billion in revenue last quarter. "That $250 never printed as the stock opened up for trading this afternoon at $381. It spiked up to $430 in the first few minutes before rolling over and spending the next few hours searching lower for a bid. That bid finally came back in down at $310, with the stock eventually ticking up to $328. That puts the company at an $85 billion valuation on the first day of trading. "A great start to earnings season with financials having a good day. An exciting IPO in Coinbase helped create a buzz in the market. From here on out, it is a sprint as earnings season is underway. Early on, it is all about the financials, which could continue to help the small caps along. For now, it is a very good sign." -- Dave Bartosiak Have a Great Evening, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

S&P Hits Record Close as Tech Earnings Continue to Impress

S&P Hits Record Close as Tech Earnings Continue to Impress There's no stopping Big Tech's strong quarterly results, which allowed the S&P to finish at a new closing high on Thursday after stocks drifted upward in the back half of the session. The index rose 0.68% to 4211.47. This month has now seen the S&P’s first close above 4,000 (April 1), first close above 4100 (April 9) and now the first close above 4200 (today). Meanwhile, the Dow advanced 0.71% (or just about 240 points) to 34,060.36 and the NASDAQ increased 0.22% (or around 31 points) to 14,082.55. FAANG Week has been awfully strong… even if the market doesn’t always respond positively. Case in point, Apple (AAPL) couldn’t escape the post-earnings blues. The company’s first quarter report last night was stellar with earnings beating the Zacks Consensus Estimate by 40% and sales surging nearly 54%. iPhone sales jumped more than 65%! And yet shares were down 0.07% today. Go figure! Fortunately, Facebook (FB) went against the grain. The social media pioneer surged 7.3% on Thursday after its own epic first-quarter report yesterday that included a positive earnings surprise of 40% and revenue growth of 48%. It’s enjoying an increase in ad revenue with the economy getting back on track. And now we’ve got e-commerce giant Amazon (AMZN) reporting after the bell today… and concluding a week of strong FAANG reports. The company beat the Zacks Consensus Estimate by nearly 62%, while revenue surged 44% to $108.5 billion. Shares of AMZN are up approximately 3.5% afterhours, as of this writing. In other news on Thursday, jobless claims reached 553,000 last week, which was below 600K for a third straight print. Also, Q1 GDP increased 6.4%, which fell short of expectations as well but showed a strong start to the year. Both of these results suggest the economy is ready to take off as the pandemic recedes. The major indices go into Friday’s session with slight gains for the week. The S&P is out front with an advance of about 0.7% over the four days, but the Dow is only up around 16 points. Stocks are coming off a modestly lower week that saw all the major indices snap winning streaks. However, the monthly gains heading into the final day of April are much more substantial with the S&P and NASDAQ each up by about 6%. Friday will be the quietest day of the week for earnings, but we’ll still be hearing from ExxonMobil (XOM), Chevron (CVX), AbbVie (ABBV) and Astrazeneca (AZN), among dozens of others. Today's Portfolio Highlights: Insider Trader: For the first time in the history of this service, Tracey noticed some insider trading at Chipotle (CMG). A director bought 230 shares in mid-March and then another director bought 673 shares last week. With CMG trading at approximately $1500, that second purchase comes to more than a million dollars! It’s bullish to see insiders buy when the stock is trading near all-time highs. Therefore, the editor added this quick-casual Mexican food chain on Thursday with a 10% allocation. Meanwhile, a strong quarterly report is no guarantee of a rise in the stock. So Tracey decided to sell half of Avis Budget (CAR) for a more than 43% return in less than two months. Obviously, this car rental staple has been very hot of late, but it reports on Monday and the editor thinks the good news is priced in. Read the full write-up for more on today’s moves.   Surprise Trader: The semiconductor – discretes space is in the Top 9% of the Zacks Industry Rank, so that’s a good place for today’s addition. Dave added Vishay Intertechnology (VSH), a global manufacturer and supplier of semiconductors and passive components. Over the past four quarters, the company has beaten the Zacks Consensus Estimate three times and matched once. It now has a positive Earnings ESP of 5.2% for the quarter coming before the bell on Tuesday, May 4. Rising earnings estimates have made the stock a Zacks Rank #1 (Strong Buy). The editor added VSH on Thursday with a 12.5% allocation, while also selling Landstar (LSTR) for a breakeven result. Read the full write-up for more. Stocks Under $10: The best-performing stock among all ZU names on Thursday was Extreme Networks (EXTR), which soared 12.35% a day after reporting fiscal third-quarter results. The maker of network infrastructure equipment beat the Zacks Consensus Estimate by more than 23% yesterday, while revenues of $253.4 million topped our expectations by more than 3.5%. The top and bottom lines both improved on a year-over-year basis as well. By the way, this portfolio also had the second best performer today as MRC Global (MRC) rose 8.9%. Income Investor: "And there was an update from the Fed on Wednesday. The central bank said that it would continue to hold interest rates near zero, but Jerome Powell commented that he's seeing some signs of 'froth' in the market. "I think this is something many of us have noticed recently, and wondered: how much higher can this market climb? "Just today, the S&P hit another record thanks to investor optimism surrounding the big-name earnings reports. "We'll likely see some choppiness in the near-term, especially as the market grapples with improving economic growth and earnings growth on one hand and rising interest rates and the potential for higher taxes on the other. "But it's still unclear if any volatility will be temporary or a more permanent fixture, which is why I'm glad at how diverse Income Investor is, since one of the simplest ways to protect your investment portfolio is diversification." -- Maddy Johnson All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Tech Outperforms Again Amid Light Trading

Tech Outperforms Again Amid Light Trading We had another low volume session on Wednesday as investors amble their way toward the Memorial Day weekend, but at least this time we managed to have slight gains rather than slight losses. Interestingly, the NASDAQ has now outperformed its counterparts for three consecutive days. The tech-heavy index rose 0.59% (or about 80 points) to 13,738. The NASDAQ finally broke a four-week losing streak last Friday and is now up nearly 2% as we pass the halfway mark of this week. Of course, its still down by more than 1.5% for the month with two sessions left.   The S&P was up 0.19% today to 4195.99, while the Dow barely stayed positive with a rise of 0.03% (or around 10 points) to 34,323.05. “Very slow trading day with low volumes and a tight range. This market has seldom been boring, but today it was very boring due to lack of movement,” said Jeremy Mullin in Counterstrike. The major indices were all down slightly yesterday amid light trading and some moderately disappointing results for consumer confidence and new home sales. One of the last major reports of this earnings season came after the bell today when graphics chip pioneer NVIDIA (NVDA) announced better-than-expected fiscal first quarter results. Specifically, it beat the Zacks Consensus Estimate by 11.6% while sales soared 84% from last year. Furthermore, gaming revenue jumped 106% while data center revenue increased 79%, which were both records for a company that makes chips used in gaming and cryptocurrency mining. Shares of NVDA are down slightly afterhours, as of this writing, which isn’t too bad for an earnings season that rarely rewarded strong reports. Of course, the final days of earnings season are all about the retailers, and we saw some pretty good performances despite the market’s stubborn nature. For example, Dick’s Sporting Goods (DKS) soared by 16.9% today after a strong report before the market opened! Abercrombie & Fitch (ANF, +7.8%) reported at the same time, while Williams-Sonoma (WSM) went to the plate after the close today and is actually up afterhours. And Urban Outfitters (URBN) jumped approximately 10% in its first session after last night’s report. The big release tomorrow will be salesforce.com (CRM) after the close, as well as retailers like Costco (COST), Dollar General (DG) and Best Buy (BBY), among others. Today's Portfolio Highlights: Income Investor: It’s going to be difficult for a consumer foods giant like General Mills (GIS) to match last year’s pandemic-related surge, so Maddy sold the name on Wednesday for a more than 41% return. The move freed up space for two new additions. First of all, Procter & Gamble (PG) should be able to hold up pretty well post-Covid due to its market share, cash flow and growth potential. The maker of Tide laundry detergent, Bounty paper towels and Luvs diapers reported strong third-quarter results. It also enjoys surging cash and is considered a “Dividend King” that just hiked its payout by 10%. The other buy is swanky furniture company Ethan Allen Interiors (ETH), which has bounced back nicely from the shutdown and is now benefiting from a hot housing market. The editor considers it a “real bargain right now” and appreciates its strong cash flow and dividend yield of 3.6%. Read the full write-up for a lot more on all of today’s moves. Home Run Investor: Good growth is hard to find these days, but Brian thinks that Smith & Wesson Brands (SWBI) has it. This firearms company had topline growth of 54% in its most recent quarter with analysts expecting even more moving forward. In fact, they expect growth of 392% this year! SWBI has topped the Zacks Consensus Estimate in each of the past four quarters with an average beat of 48% in that time. Rising earnings estimates have made SWBI a Zacks Rank #1 (Strong Buy). The editor made some room for this new addition by selling the underperforming Hillenbrand (HI) position for a slight loss. Learn more about all of today’s moves in the complete commentary. Insider Trader: Consumers are still focused on the home, which was exemplified when The Container Store (TCS) recently reported fiscal fourth-quarter sales that soared 30% year over year. Nevertheless, shares are down 11% in the past month. The move lower prompted the company’s new CEO to buy more than 20,000 shares last week. Tracey knows a “confidence buy” when she sees one. The insider is sending a signal that he “still believes”, despite the recent pullback. Well, so does our editor, who sold half of Chipotle (CMG) on Wednesday to make room for TCS. She added the stock with a 4.5% allocation, which is smaller than a normal position because there isn’t much cash left in the portfolio. Read the full write-up for more on today’s action.    Surprise Trader: For the past four quarters, NetApp (NTAP) has beaten the Zacks Consensus Estimate and amassed an average surprise of approximately 38%. The company will be going for five-in-a-row after the bell on Wednesday, June 2. This Zacks Rank #2 (Buy) provides enterprise storage as well as data management software and hardware products and services. NTAP has a positive Earnings ESP of 2.77% for the upcoming report. Dave added the stock on Wednesday with a 12.5% allocation, while also selling Nautilus Group (NLS) for a more than 4% return in three weeks. Read the complete commentary for more on today’s moves. By the way, the portfolio's Guess (GES) position was one of the big movers today with an advance of 7.7%. Marijuana Innovators: Shares of Hydrofarm Holdings Group (HYFM) soared after going public in December 2020. Dave didn’t think it was a good value at the time, but his opinion has changed after a recent pullback and some savvy deal-making. The editor added this distributor and manufacturer of hydroponics equipment and supplies on Wednesday. Read the full write-up for a lot more on this new buy. In other news, this portfolio had a top performer today with Tilray (TLRY) rising 7.8%. Value Investor: The portfolio wants more exposure to the consumer and needs something from the auto manufacturing space. Tracey accomplished both goals on Wednesday by added General Motors (GM), an auto giant that “has really turned around during the pandemic”. It has all the classic valuation characteristics, while earnings are expected to rise 8% this year and 24% next year. With the consumer feeling good about the economy and the GDP expected to soar in the second half, the editor is confident that auto sales will be solid this year and into next. Shares of GM are down 39% year to date, which means it has plenty of ground to recover and then some. Get more specifics on this new addition in the full write up. Until Tomorrow, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

Stocks Come Off Lows While Waiting for Jobs Report

Stocks Come Off Lows While Waiting for Jobs Report SPECIAL ALERT: Remember, we need your input to make next week’s new Zacks Ultimate Strategy Session episode the best it can be. There are two ways you can participate: 1) Zacks Mailbag: In this regular segment, Kevin Matras answers your questions ranging from current market conditions, general investing wisdom, usage of the Zacks Rank or any resources of Zacks.com and more. Pretty much anything goes. 2) Portfolio Makeover: Sheraz Mian and Kevin Cook review a customer portfolio to give feedback for improvement. No need to send us personal information such as dollar value of holdings. Simply email us with all of the tickers you own. Just make sure to email your submissions for either one, or both, by tomorrow morning, June 4. Email now to mailbag@zacks.com. The major indices were all in the red on Thursday, but they came well off the morning lows amid solid economic data released today and before the big monthly jobs report scheduled for tomorrow. A potential compromise on the corporate tax rate also helped the rebound. The Dow’s five-day winning streak has come to an end, but it was still the best-performing index with a loss of only 0.07% (or about 23 points) to 34,577.04. It had been off by more than 250 points earlier in the session. The S&P also had a nice comeback and finished lower by 0.36% to 4192.85. Unfortunately, the NASDAQ didn’t have quite as dramatic a bounce as tech lagged once again. The index slipped by 1.03% (or nearly 142 points) to 13,614.51. Tomorrow’s Government Employment Situation report may be the biggest jobs report of the month… but it’s far from the only one. We had two other such releases on Thursday and they were both noteworthy. The ADP employment report showed that private payrolls added an impressive 978,000 jobs in May, squashing expectations of less than 700K and the previous month’s downwardly-revised total of 654K. As you’d expect in an economy that’s finally reopening, the leisure & hospitality space is making up some lost ground by adding more than 400K jobs. But there’s more. Jobless claims reached another pandemic milestone by moving under 400K at 385,000, which was slightly better than expectations and marked a fifth straight decline. Meanwhile, ISM Services jumped to 64 in May, which is far into expansion territory above 50. The print was better than April’s 62.7 and expectations at just over 63. Ironically (but not surprisingly) these strong reports were probably a big factor in the market’s morning malaise. After tomorrow’s jobs report, the market’s obsession will switch to the next Fed meeting scheduled for June 15-16. These strong results provide even more fuel to nervous investors’ concerns that the Committee may have to change policy sooner than expected. The market fortunately simmered down as the day progressed. And it got a big boost from a news report that the Biden Administration may offer a 15% tax floor instead of hiking the corporate tax rate to 28%. It’ll be interested to see where this goes in the coming weeks as Washington attempts to pass an infrastructure bill. Well… here we go! The jobs report comes out tomorrow. We probably won’t have anything nearly as dramatic as last month’s miss of approximately 700K, but it does have the potential to be a market mover.  As of this moment, the Dow is up slightly in this abbreviated week heading into Friday, while the other two major indices are in the red. Today's Portfolio Highlights: Home Run Investor: It’s time to get more exposure to the oil patch as crude prices continue to climb, so Brian added PDC Energy (PDCE) on Thursday. This independent upstream operator explores for, develops and produces natural gas, crude oil and natural gas liquids. The company has beaten the Zacks Consensus Estimate in each of the last four quarters and amassed an average surprise of 79% in that time. Rising earnings estimates have made PDCE a Zacks Rank #1 (Strong Buy). Looking forward, analysts are calling for topline growth of 24% this year and 11% next year. In order to make room for PDCE, the editor decided to sell MarineMax (HZO) after a sharp pullback, which protects a 42% profit in less than seven months. Read the full write-up for more on all of today’s moves. Counterstrike: Business is picking up for Ulta Beauty (ULTA), which recently reported a 113% positive surprise and raised its fiscal 2021 guidance. The stock just filled its post-earnings gap today but Jeremy thinks it will hold support and continue its move upwards. This Zacks Rank #1 (Strong Buy) is an obvious reopening play, so the editor added it on Thursday with a small 4% allocation. If the selling continues but the support levels hold, he’ll add more of ULTA. Read the full write-up for the specifics on this move. Headline Trader: The first quarter report from Goldman Sachs (GS) was so “unbelievable” that Dan wasted no time and added this financial giant on the same day of its release. And why shouldn’t he? The company beat the Zacks Consensus Estimate by 90% and grew sales by nearly 160% year over year. That was back in mid April. Now, GS is nearing the editor’s Fibonacci-derived price target around $391 and the relative strength index has reached overbought territory. He thinks this is a great time to “scale out” of the stock, so half of the position was sold on Thursday for a more than 16% return in less than two months. Dan is leaving the other half in the portfolio as he still thinks GS has upside potential. Read more in the full write-up. All the Best, Jim Giaquinto Recommendations from Zacks' Private Portfolios: Believe it or not, this article is not available on the Zacks.com website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>  Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2021

A ketchup shortage in the US is causing prices to spike - and it could get harder to find ketchup packets at restaurants

An increase in take-out orders has caused ketchup sales to spike. At the onset of the pandemic, sale.....»»

Category: worldSource: nytApr 6th, 2021

Coming off LouVino, Home Run Burger sales, this M&A firm sees opportunity in Louisville"s restaurants

Following the sales of several local restaurants, a Louisville-based mergers and acquisitions firm has a positive perspective about the resurgence of the city's restaurant industry post-pandemic. But its partners aren't just looking at trends and p.....»»

Category: topSource: bizjournalsJan 26th, 2021

Nordstrom (JWN) Down 8.5% Since Last Earnings Report: Can It Rebound?

Nordstrom (JWN) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. A month has gone by since the last earnings report for Nordstrom (JWN). Shares have lost about 8.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Nordstrom due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Nordstrom Tops Earnings & Revenue Q2 Estimates, Ups ViewNordstrom reported impressive second-quarter fiscal 2021 results, wherein the top and bottom lines rose on a year-over-year basis. Results gained from solid demand, better inventory, stringent cost-cutting actions as well as improved sales trends in Nordstrom and Nordstrom Rack across regions and categories. Enhanced customer engagement, improved merchandise assortment and robust performance in the anniversary sale also contributed to quarterly growth. The company witnessed strength in shoes, apparel and accessories on a sequential basis with active, home and designer categories getting back to pre-pandemic level. Management lifted 2021 view.It remains focused on closer-to-you strategy which aims to link stores and services to expedite deliveries, expanding online offerings and adding cheaper merchandise at its Rack off-price stores, to improve customers shopping experience.Nordstrom posted adjusted earnings of 49 cents per share, which came ahead of the year-ago quarter’s loss of $1.62. The figure surpassed the Zacks Consensus Estimate of 26 cents.Total revenues surged 96.4% year over year to $3,657 million and beat the Zacks Consensus Estimate of $3,382 million. The company’s revenues represented a 700-bps sequential improvement from the first quarter of fiscal 2021, marking the fourth straight quarter of sequential top-line growth. However, net sales skyrocketed 101% year over year to $3,565 million while the metric declined 6% from second-quarter fiscal 2019. Credit Card net revenues grew 9.5% to $92 million.The company witnessed sturdy sales in the Anniversary event, with 1% growth from second-quarter fiscal 2019. The uptick can be attributable to improved traffic and sales, both in stores and online, stemming from positive customer response, trendy products and expanded capabilities, including convenient pick-up options at Nordstrom and Nordstrom Rack stores. The final week of the event fell in third-quarter fiscal 2021, which adversely impacted the top line by roughly 200 basis points (bps) compared with second-quarter fiscal 2019.In second-quarter fiscal 2021, net sales for the Nordstrom brand skyrocketed 127% year over year to $2,417 million. Sales for the Nordstrom Rack brand rose 61% year over year to $1,148 million. Nordstrom’s sales improved 800 bps sequentially, whereas Nordstrom Rack sales rose 500 bps. However, sales for Nordstrom and Nordstrom Rack brands reflected declines of 5% and 8% from second-quarter fiscal 2019, respectively.Momentum in the digital business continued to aid the top line. Digital sales advanced 30% year over year and 24% from the second quarter of fiscal 2019. The digital business witnessed gains from improved traffic across both Nordstrom and Nordstrom Rack. In the fiscal second quarter, digital sales represented 40% of net sales compared with 61% in the year-ago quarter. The company also completed the integration of Rack.com onto Nordstrom.com, thus, offering a better customer experience.  Nordstrom's gross profit margin expanded 1,370 bps year over year to 35% in the reported quarter. This substantial growth resulted from lower markdowns and leverage from higher net sales. However, gross margin remained flat as compared with second-quarter fiscal 2019 as lower markdowns somewhat offset drab sales. Ending inventory grew 13% from second-quarter fiscal 2019, owing to the timing shift of the anniversary sale and efforts to improve the supply chain and advanced sales trends.Selling, general and administrative (“SG&A”) expenses, as a percentage of sales, declined 1,350 bps year over year to 33% in the fiscal second quarter. The SG&A decline was mainly driven by leverage on higher sales and the continued benefit of permanently reducing overhead costs by 15%. SG&A expenses also gained from the absence of $250 million in charges associated with the impacts of COVID-19 in fiscal 2020. However, SG&A expenses increased 170 bps from second-quarter fiscal 2019 due to higher COVID-related labor and freight costs.Earnings before interest and taxes (“EBIT”) of $151 million reflected significant growth from a loss of $370 million in the year-ago quarter. The increase was mainly the result of higher sales volume and expanded merchandise margins. EBIT declined by $65 million from second-quarter fiscal 2019 due to higher freight, labor costs and drab sales volume, offset by gains from the resetting of cost structures in 2020.Other FinancialsNordstrom ended second-quarter fiscal 2021 with a strong balance sheet. Available liquidity as of Jul 31, 2021, was $1.3 billion, including $487 million of cash and cash equivalents. It had long-term debt (net of current liabilities) of $2,849 million and total shareholders’ equity of $268 million. As of Jul 31, 2021, the company used $545 million of net cash for operating activities and spent $217 million as capital expenditure.Fiscal 2021 OutlookDriven by solid quarterly results, management raised the fiscal 2021 view. The company anticipates revenue growth of 35%, up from the earlier mentioned 25%. It expects an EBIT margin of 3-3.5% compared with the previously mentioned 3%. Nordstrom forecast sales improvement in the third and fourth quarters of fiscal 2021 on a sequential basis.EBIT margin is likely to rise further, with gross margin improvement in the fiscal fourth quarter, driven by better inventory management and lower promotions. SG&A costs are expected to be higher in the second half of fiscal 2021 due to higher freight and labor costs.How Have Estimates Been Moving Since Then?It turns out, fresh estimates flatlined during the past month.VGM ScoresCurrently, Nordstrom has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookNordstrom has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Nordstrom, Inc. (JWN): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacks27 min. ago

What"s in the Offing for Micron Technology"s (MU) Q4 Earnings?

Micron's (MU) Q4 results likely to reflect benefits from significant memory chip demand from data-center operators and PC manufacturers amid the pandemic-induced work-and-learn-from-home wave. Micron Technology MU is scheduled to report fourth-quarter fiscal 2021 results on Sep 28.The company projects fiscal fourth-quarter adjusted earnings to be $2.30 (+/- 10 cents) per share. The Zacks Consensus Estimate for the quarterly earnings is pinned at $2.31 per share, having been revised upward by 16 cents over the past 90 days. The consensus mark indicates a 113.9% surge from the year-ago quarter.Meanwhile, Micron estimates revenues to be $8.2 billion (+/- $200 million). The consensus mark for revenues is currently pegged at $8.19 billion, suggesting a 35.3% increase from the year-earlier period.The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 7.7%.Let’s see how things have shaped up prior to this announcement.Micron Technology, Inc. Price and EPS Surprise Micron Technology, Inc. price-eps-surprise | Micron Technology, Inc. QuoteFactors to ConsiderThe stay-at-home situation has spurred significant chip demand from PC manufacturers and data-center operators, which is anticipated to have driven Micron’s fiscal fourth-quarter earnings. The global quarantine situation has fueled significant demand for PCs and notebooks, with the surge in workers and students working and learning from homes.The remote-working and online-learning trend amid the coronavirus crisis has also stoked demand for cloud storage. Furthermore, lockdowns have fueled the usage of online and e-commerce services globally, compelling data-center operators to enhance their capacities in order to accommodate the demand spike for cloud services. All these factors are likely to have aided Micron’s top line during the quarter under review.A solid uptick in the DRAM bit shipments for the cloud, graphics, PC and notebook, 5G and automotive markets is anticipated to have been a positive during the quarter to be reported.Nonetheless, Micron’s heavy dependence on China is a headwind due to the ongoing tit-for-tat trade spat between the United States and China. Restrictions on exports to Huawei might have hurt top-line growth of the memory chip maker.Additionally, a higher mix of lower-margin NAND, coupled with low memory prices and minimal decline in manufacturing costs, is expected to have strained margins.Furthermore, higher prequalification and labor expenses are likely to have negatively impacted Micron’s fourth-quarter bottom-line performance. During the fiscal second-quarter conference call, the company noted that it expects a rise in operating expenses during the second half of fiscal 2021 due to the higher prequalification and labor expenses.Moreover, operating expenses are expected to have flared up during the fiscal fourth quarter due to the resumption of the previously-delayed fiscal 2021 salary hikes in the fiscal third quarter. This might have hurt the company’s margins and profitability during the quarter under review.What Our Model SaysOur proven model does not conclusively predict an earnings beat for Micron this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.Micron currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%.Stocks With Favorable CombinationsHere are some companies, which, per our model, have the right combination of elements to post earnings beats in their upcoming releases:Alcoa AA has an Earnings ESP of +33.55% and sports a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.McCormick & Company MKC has an Earnings ESP of +0.28% and currently carries a Zacks Rank of 3.CarMax KMX has an Earnings ESP of +0.18% and holds a Zacks Rank of 3, currently. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alcoa Corp. (AA): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report CarMax, Inc. (KMX): Free Stock Analysis Report McCormick & Company, Incorporated (MKC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks1 hr. 42 min. ago

The Estee Lauder Companies (EL) Gains on Skin Care, Online Strength

The Estee Lauder Companies (EL) is implementing new technology and digital experiences to boost growth. Also, the company's Skin Care portfolio is performing well. The Estee Lauder Companies Inc. EL appears well placed, courtesy of strength in its Skin Care business and online operations. The company is on track with effective cost-saving efforts. However, some pandemic-led intermittent shutdowns are roadblocks for the company.Let’s delve deeper.What’s Working Well?The Estee Lauder Companies has a strong online business and expects the same to be a major growth engine for the upcoming years. The company has been implementing new technology and digital experiences including online booking for each store appointment, omni-channel loyalty programs and high touch mobile services. These initiatives and the company’s digital-first mindset have been boosting online sales. During fiscal 2021, sales of the company’s products via all online channels rallied 34%, contributing 28% to overall sales.Image Source: Zacks Investment ResearchThe Estee Lauder Companies’ Skin Care portfolio has been performing well for a while now. During fourth-quarter fiscal 2021, the Skin Care category’s sales were up 47% year over year. The company expects to keep witnessing solid growth in the Skin Care category during fiscal 2022. Management, in its last earnings call, stated that it is optimistic about three recently-launched Skin Care innovations —  Estee Lauder new Advanced Night Repair Eye Matrix, La Mer The Hydrating Infused Emulsion and Clinique Smart Clinical Repair Wrinkle Correcting Serum. In May 2021, The Estee Lauder Companies took another step to expand its Skin Care business when it concluded the first phase of raising its ownership stake in DECIEM Beauty Group Inc. ("DECIEM").Apart from these, uncertainties related to COVID-19 led management to implement stringent cost-curtailment practices. The Estee Lauder Companies, which shares space with Coty Inc. COTY, has been benefiting from cost-saving initiatives like the Leading Beauty Forward as well as the post-COVID business acceleration program. During the fiscal fourth quarter, the company’s gross profit came in at $2,950 million, up 77%. Gross margin increased to 74.9% from 68.4% reported in the year-ago quarter.Roadblocks on the WayWhile most brick-and-mortar retail stores that sell The Estee Lauder Companies’ products (company and customer operated) remained operational — especially in China and the United States — during much of the fiscal fourth quarter, there were intermittent shutdowns in the rest of the world. Many retail stores were temporarily shut at some point in the quarter across the U.K., Continental Europe, Canada, most of Latin America and the Asia/Pacific region (except China) due to the resurgence of COVID-19 infections.In places where stores were open, traffic was lower than pre-pandemic levels. Additionally, international travel has been majorly restricted worldwide due to government regulations and consumer health concerns. Such restrictions have been negatively impacting consumer traffic in most travel retail locations. The company continues to see soft demand for makeup products compared with pre-pandemic levels, thanks to lesser makeup usage occasions and mask-wearing mandates.That being said, we believe that focus toward the aforementioned growth endeavors are likely to help The Estee Lauder Companies stay afloat amid the hurdles. Shares of this Zacks Rank #3 (Hold) company have increased 19.7% so far this year compared with the industry’s growth of 12.1%.Top 2 Cosmetics PickHelen of Troy Limited HELE, currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 28.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Nu Skin Enterprises, Inc. NUS, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 15.7%, on average. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Estee Lauder Companies Inc. (EL): Free Stock Analysis Report Helen of Troy Limited (HELE): Free Stock Analysis Report Nu Skin Enterprises, Inc. (NUS): Free Stock Analysis Report Coty Inc. (COTY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacks1 hr. 42 min. ago

Futures Rise On Taper, Evergrande Optimism

Futures Rise On Taper, Evergrande Optimism US index futures jumped overnight even as the Fed confirmed that a November tapering was now guaranteed and would be completed by mid-2022 with one rate hike now on deck, while maintaining the possibility to extend stimulus if necessitated by the economy. Sentiment got an additional boost from a strong showing of Evergrande stock - which closed up 17% - during the Chinese session, which peaked just after Bloomberg reported that China told Evergrande to avoid a near-term dollar bond default and which suggested that the "government wants to avoid an imminent collapse of the developer" however that quickly reversed when the WSJ reported, just one hour later, that China was making preparations for Evergrande's demise, and although that hammered stocks, the report explicitly noted that a worst-case scenario for Evergrande would mean a partial or full nationalization as "local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should Evergrande fail to manage its affairs in an orderly fashion." In other words, both reports are bullish: either foreign creditors are made whole (no default) as per BBG or the situation deteriorates and Evergrande is nationalized ("SOEs step in") as per WSJ. According to Bloomberg, confidence is building that markets can ride out a pullback in Fed stimulus, unlike 2013 when the taper tantrum triggered large losses in bonds and equities. "Investors are betting that the economic and profit recovery will be strong enough to outweigh a reduction in asset purchases, while ultra-low rates will continue to support riskier assets even as concerns linger about contagion from China’s real-estate woes." That's one view: the other is that the Fed has so broken the market's discounting ability we won't know just how bad tapering will get until it actually begins. “The Fed has got to be pleased that their communication on the longer way to tapering has avoided the dreaded fear of the tantrum,” Jeffrey Rosenberg, senior portfolio manager for systematic fixed income at BlackRock Inc., said on Bloomberg Television. “This is a very good outcome for the Fed in terms of signaling their intent to give the market information well ahead of the tapering decision.” Then there is the question of Evergrande: “With regards to Evergrande, all those people who are waiting for a Lehman moment in China will probably have to wait another turn,” said Ken Peng, an investment strategist at Citi Private Bank Asia Pacific. “So I wouldn’t treat this as completely bad, but there are definitely a lot of risks on the horizon.” In any case, today's action is a continuation of the best day in two months for both the Dow and the S&P which staged a strong recovery from two-month lows hit earlier in the week, and as of 745am ET, S&P 500 E-minis were up 25.25 points, or 0.6%, Dow E-minis were up 202 points, or 0.59%, while Nasdaq 100 E-minis were up 92.0 points, or 0.60%. In the premarket, electric vehicle startup Lucid Group rose 3.1% in U.S. premarket trading. PAVmed (PVM US) jumps 11% after its Lucid Diagnostics unit announced plans to list on the Global Market of the Nasdaq Stock Market.  Here are some of the biggest movers today: U.S.-listed Chinese stocks rise in premarket trading as fears of contagion from China Evergrande Group’s debt crisis ease. Blackberry (BB US) shares rise 8.7% in premarket after co.’s 2Q adjusted revenue beat the average of analysts’ estimates Eargo (EAR US) falls 57% in Thursday premarket after the hearing aid company revealed it was the target of a Justice Department criminal probe and withdrew its forecasts for the year Amplitude Healthcare Acquisition (AMHC US) doubled in U.S. premarket trading after the SPAC’s shareholders approved the previously announced business combination with Jasper Therapeutics Steelcase (SCS US) fell 4.8% Wednesday postmarket after the office products company reported revenue for the second quarter that missed the average analyst estimate Vertex Energy Inc. (VTNR US) gained 2.1% premarket after saying the planned acquisition of a refinery in Mobile, Alabama from Royal DutVTNR US Equitych Shell Plc is on schedule Synlogic (SYBX US) shares declined 9.7% premarket after it launched a stock offering launched without disclosing a size HB Fuller (FUL US) climbed 2.7% in postmarket trading after third quarter sales beat even the highest analyst estimate Europe's Stoxx 600 index rose 0.9%, lifted by carmakers, tech stocks and utilities, which helped it recover losses sparked earlier in the week by concerns about Evergrande and China’s crackdown on its property sector. The gauge held its gain after surveys of purchasing managers showed business activity in the euro area lost momentum and slowed broadly in September after demand peaked over the summer and supply-chain bottlenecks hurt services and manufacturers. Euro Area Composite PMI (September, Flash): 56.1, consensus 58.5, last 59.0. Euro Area Manufacturing PMI (September, Flash): 58.7, consensus 60.3, last 61.4. Euro Area Services PMI (September, Flash): 56.3, consensus 58.5, last 59.0. Germany Composite PMI (September, Flash): 55.3, consensus 59.2, last 60.0. France Composite PMI (September, Flash): 55.1, consensus 55.7, last 55.9. UK Composite PMI (September, Flash): 54.1, consensus 54.6, last 54.8. Commenting on Europe's PMIs, Goldman said that the Euro area composite PMI declined by 2.9pt to 56.1 in September, well below consensus expectations. The softening was broad-based across countries but primarily led by Germany. The peripheral composite flash PMI also weakened significantly in September but remain very high by historical standards (-2.4pt to 57.5). Across sectors, the September composite decline was also broad-based, with manufacturing output softening (-3.3pt to 55.6) to a similar extent as services (-2.7pt to 56.3). Supply-side issues and upward cost and price pressures continued to be widely reported. Expectations of future output growth declined by less than spot output on the back of delta variant worries and supply issues, remaining far above historically average levels. Earlier in the session, Asian stocks rose for the first time in four sessions, as Hong Kong helped lead a rally on hopes that troubled property firm China Evergrande Group will make progress on debt repayment. The MSCI Asia Pacific Index climbed as much as 0.5%, with Tencent and Meituan providing the biggest boosts. The Hang Seng jumped as much as 2.5%, led by real estate stocks as Evergrande surged more than 30%. Hong Kong shares later pared their gains. Asian markets were also cheered by gains in U.S. stocks overnight even as the Federal Reserve said it may begin scaling back stimulus this year. A $17 billion net liquidity injection from the People’s Bank of China also provided a lift, while the Fed and Bank of Japan downplayed Evergrande risks in comments accompanying policy decisions Wednesday. Evergrande’s stock closed 18% higher in Hong Kong, in a delayed reaction to news a unit of the developer had negotiated interest payments on yuan notes. A coupon payment on its 2022 dollar bond is due on Thursday “Investors are perhaps reassessing the tail risk of a disorderly fallout from Evergrande’s credit issues,” said Chetan Seth, a strategist at Nomura. “However, I am not sure if the fundamental issue around its sustainable deleveraging has been addressed. I suspect markets will likely remain quite volatile until we have some definite direction from authorities on the eventual resolution of Evergrande’s debt problems.” Stocks rose in most markets, with Australia, Taiwan, Singapore and India also among the day’s big winners. South Korea’s benchmark was the lone decliner, while Japan was closed for a holiday In rates, Treasuries were off session lows, with the 10Y trading a 1.34%, but remained under pressure in early U.S. session led by intermediate sectors, where 5Y yield touched highest since July 2. Wednesday’s dramatic yield-curve flattening move unleashed by Fed communications continued, compressing 5s30s spread to 93.8bp, lowest since May 2020. UK 10-year yield climbed 3.4bp to session high 0.833% following BOE rate decision (7-2 vote to keep bond-buying target unchanged); bunds outperformed slightly. Peripheral spreads tighten with long-end Italy outperforming. In FX, the Bloomberg Dollar Spot Index reversed an earlier gain and dropped 0.3% as the dollar weakened against all of its Group-of-10 peers apart from the yen amid a more positive sentiment. CAD, NOK and SEK are the strongest performers in G-10, JPY the laggard.  The euro and the pound briefly pared gains after weaker-than-forecast German and British PMIs. The pound rebounded from an eight-month low amid a return of global risk appetite as investors assessed whether the Bank of England will follow the Federal Reserve’s hawkish tone later Thursday. The yield differential between 10-year German and Italian debt narrowed to its tightest since April. Norway’s krone advanced after Norges Bank raised its policy rate in line with expectations and signaled a faster pace of tightening over the coming years. The franc whipsawed as the Swiss National Bank kept its policy rate and deposit rate at record lows, as expected, and reiterated its pledge to wage currency market interventions. The yen fell as a unit of China Evergrande said it had reached an agreement with bond holders over an interest payment, reducing demand for haven assets. Turkey’s lira slumped toa record low against the dollar after the central bank unexpectedly cut interest rates. In commodities, crude futures drifted lower after a rangebound Asia session. WTI was 0.25% lower, trading near $72; Brent dips into the red, so far holding above $76. Spot gold adds $3.5, gentle reversing Asia’s losses to trade near $1,771/oz. Base metals are well bid with LME aluminum leading gains. Bitcoin steadied just below $44,000. Looking at the day ahead, we get the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Market Snapshot S&P 500 futures up 0.7% to 4,413.75 STOXX Europe 600 up 1.1% to 468.32 MXAP up 0.5% to 200.57 MXAPJ up 0.9% to 645.76 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 1.2% to 24,510.98 Shanghai Composite up 0.4% to 3,642.22 Sensex up 1.4% to 59,728.37 Australia S&P/ASX 200 up 1.0% to 7,370.22 Kospi down 0.4% to 3,127.58 German 10Y yield fell 5.6 bps to -0.306% Euro up 0.4% to $1.1728 Brent Futures up 0.3% to $76.39/bbl Gold spot up 0.0% to $1,768.25 U.S. Dollar Index down 0.33% to 93.16 Top Overnight News from Bloomberg Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds China’s central bank net-injected the most short- term liquidity in eight months into the financial system, with markets roiled by concerns over China Evergrande Group’s debt crisis Europe’s worst energy crisis in decades could drag deep into the cold months as Russia is unlikely to boost shipments until at least November Business activity in the euro area “markedly” lost momentum in September after demand peaked over the summer and supply chain bottlenecks hurt both services and manufacturers. Surveys of purchasing managers by IHS Markit showed growth in both sectors slowing more than expected, bringing overall activity to a five-month low. Input costs, meanwhile, surged to the highest in 21 years, according to the report The U.K. private sector had its weakest month since the height of the winter lockdown and inflation pressures escalated in September, adding to evidence that the recovery is running into significant headwinds, IHS Markit said The U.K.’s record- breaking debut green bond sale has given debt chief Robert Stheeman conviction on the benefits of an environmental borrowing program. The 10 billion-pound ($13.7 billion) deal this week was the biggest-ever ethical bond sale and the country is already planning another offering next month A more detailed look at global markets courtesy of Newsquaw Asian equity markets traded mostly positive as the region took its cue from the gains in US with the improved global sentiment spurred by some easing of Evergrande concerns and with stocks also unfazed by the marginally more hawkish than anticipated FOMC announcement (detailed above). ASX 200 (+1.0%) was underpinned by outperformance in the commodity-related sectors and strength in defensives, which have more than atoned for the losses in tech and financials, as well as helped markets overlook the record daily COVID-19 infections in Victoria state. Hang Seng (+0.7%) and Shanghai Comp. (+0.6%) were also positive after another respectable liquidity operation by the PBoC and with some relief in Evergrande shares which saw early gains of more than 30% after recent reports suggested a potential restructuring by China’s government and with the Co. Chairman noting that the top priority is to help wealth investors redeem their products, although the majority of the Evergrande gains were then pared and unit China Evergrande New Energy Vehicle fully retraced the initial double-digit advances. KOSPI (-0.5%) was the laggard as it played catch up to the recent losses on its first trading day of the week and amid concerns that COVID cases could surge following the holiday period, while Japanese markets were closed in observance of the Autumnal Equinox Day. China Pumps $17 Billion Into System Amid Evergrande Concerns China Stocks From Property to Tech Jump on Evergrande Respite Philippines Holds Key Rate to Spur Growth Amid Higher Prices Taiwan’s Trade Deal Application Sets Up Showdown With China Top Asian News European equities (Stoxx 600 +0.9%) trade on the front-foot and have extended gains since the cash open with the Stoxx 600 now higher on the week after Monday’s heavy losses. From a macro perspective, price action in Europe has been undeterred by a slowdown in Eurozone PMIs which saw the composite metric slip to 56.1 from 59.0 (exp. 58.5) with IHS Markit noting “an unwelcome combination of sharply slower economic growth and steeply rising prices.” Instead, stocks in the region have taken the cue from a firmer US and Asia-Pac handover with performance in Chinese markets aided by further liquidity injections by the PBoC. Some positivity has also been observed on the Evergrande front amid mounting expectations of a potential restructuring at the company. That said, at the time of writing, it remains unclear what the company’s intentions are for repaying its USD 83.5mln onshore coupon payment. Note, ING highlights that “missing that payment today would still leave a 30-day grace period before this is registered as a default”. The most recent reports via WSJ indicate that Chinese authorities are asking local governments to begin preparations for the potential downfall of Evergrande; however, the article highlights that this is a last resort and Beijing is reluctant to step in. Nonetheless, this article has taken the shine off the mornings risk appetite, though we do remain firmer on the session. Stateside, as the dust settles on yesterday’s FOMC announcement, futures are firmer with outperformance in the RTY (+0.8% vs. ES +0.7%). Sectors in Europe are higher across the board with outperformance in Tech and Autos with the latter aided by gains in Faurecia (+4.6%) who sit at the top of the Stoxx 600 after making an unsurprising cut to its guidance, which will at least provide some clarity on the Co.’s near-term future; in sympathy, Valeo (+6.6) is also a notable gainer in the region. To the downside, Entain (+2.6%) sit at the foot of the Stoxx 600 after recent strong gains with the latest newsflow surrounding the Co. noting that MGM Resorts is considering different methods to acquire control of the BetMGM online gambling business JV, following the DraftKings offer for Entain, according to sources. The agreement between Entain and MGM gives MGM the ability to block any deal with competing businesses; MGM officials believe this grants the leverage to take full control of BetMGM without spending much. Top European News BOE Confronts Rising Prices, Slower Growth: Decision Guide La Banque Postale Eyes Retail, Asset Management M&A in Europe Activist Bluebell Raises Pressure on Glaxo CEO Walmsley Norway Delivers Rate Lift-Off With Next Hike Set for December In FX, not much bang for the Buck even though the FOMC matched the most hawkish market expectations and Fed chair Powell arguably went further by concluding in the post-meeting press conference that substantial progress on the lagging labour front is all but done. Hence, assuming the economy remains on course, tapering could start as soon as November and be completed my the middle of 2022, though he continued to play down tightening prospects irrespective of the more hawkish trajectory implied by the latest SEP dot plots that are now skewed towards at least one hike next year and a cumulative seven over the forecast horizon. However, the Greenback only managed to grind out marginally higher highs overnight, with the index reaching 93.526 vs 93.517 at best yesterday before retreating quite sharply and quickly to 93.138 in advance of jobless claims and Markit’s flash PMIs. CAD/NZD/AUD - The Loonie is leading the comeback charge in major circles and only partially assisted by WTI keeping a firm bid mostly beyond Usd 72/brl, and Usd/Cad may remain contained within 1.2796-50 ahead of Canadian retail sales given decent option expiry interest nearby and protecting the downside (1 bn between 1.2650-65 and 2.7 bn from 1.2620-00). Meanwhile, the Kiwi has secured a firmer grip on the 0.7000 handle to test 0.7050 pre-NZ trade and the Aussie is looking much more comfortable beyond 0.7250 amidst signs of improvement in the flash PMIs, albeit with the services and composite headline indices still some way short of the 50.0 mark. NOK/GBP/EUR/CHF - All firmer, and the Norwegian Crown outperforming following confirmation of the start of rate normalisation by the Norges Bank that also underscored another 25 bp hike in December and further tightening via a loftier rate path. Eur/Nok encountered some support around 10.1000 for a while, but is now below, while the Pound has rebounded against the Dollar and Euro in the run up to the BoE at midday. Cable is back up around 1.3770 and Eur/Gbp circa 0.8580 as Eur/Usd hovers in the low 1.1700 area eyeing multiple and a couple of huge option expiries (at the 1.1700 strike in 4.1 bn, 1.1730 in 1 bn, 1.1745-55 totalling 2.7 bn and 1.8 bn from 1.1790-1.1800). Note, Eurozone and UK flash PMIs did not live up to their name, but hardly impacted. Elsewhere, the Franc is lagging either side of 0.9250 vs the Buck and 1.0835 against the Euro on the back of a dovish SNB Quarterly Review that retained a high Chf valuation and necessity to maintain NIRP, with only minor change in the ordering of the language surrounding intervention. JPY - The Yen is struggling to keep its head afloat of 110.00 vs the Greenback as Treasury yields rebound and risk sentiment remains bullish pre-Japanese CPI and in thinner trading conditions due to the Autumn Equinox holiday. In commodities, WTI and Brent have been choppy throughout the morning in-spite of the broadly constructive risk appetite. Benchmarks spent much of the morning in proximity to the unchanged mark but the most recent Evergrande developments, via WSJ, have dampened sentiment and sent WTI and Brent back into negative territory for the session and printing incremental fresh lows at the time of publication. Back to crude, newsflow has once again centred around energy ministry commentary with Iraq making clear that oil exports will continue to increase. Elsewhere, gas remains at the forefront of focus particularly in the UK/Europe but developments today have been somewhat incremental. On the subject, Citi writes that Asia and Europe Nat. Gas prices could reach USD 100/MMBtu of USD 580/BOE in the winter, under their tail-risk scenario. For metals, its very much a case of more of the same with base-metals supportive, albeit off-best given Evergrande, after a robust APAC session post-FOMC. Given the gas issues, desks highlight that some companies are being forced to suspend/reduce production of items such as steel in Asian/European markets, a narrative that could become pertinent for broader prices if the situation continues. Elsewhere, spot gold and silver are both modestly firmer but remain well within the range of yesterday’s session and are yet to recovery from the pressure seen in wake of the FOMC. US Event Calendar 8:30am: Sept. Initial Jobless Claims, est. 320,000, prior 332,000; Continuing Claims, est. 2.6m, prior 2.67m 8:30am: Aug. Chicago Fed Nat Activity Index, est. 0.50, prior 0.53 9:45am: Sept. Markit US Composite PMI, prior 55.4 9:45am: Sept. Markit US Services PMI, est. 54.9, prior 55.1 9:45am: Sept. Markit US Manufacturing PMI, est. 61.0, prior 61.1 11am: Sept. Kansas City Fed Manf. Activity, est. 25, prior 29 12pm: 2Q US Household Change in Net Wor, prior $5t DB's Jim Reid concludes the overnight wrap My wife was at a parents event at school last night so I had to read three lots of bedtime stories just as the Fed were announcing their policy decision. Peppa Pig, Biff and Kipper, and somebody called Wonder Kid were interspersed with Powell’s press conference live on my phone. It’s fair to say the kids weren’t that impressed by the dot plot and just wanted to join them up. The twins (just turned 4) got their first reading book homework this week and it was a bit sad that one of them was deemed ready to have one with words whereas the other one only pictures. The latter was very upset and cried that his brother had words and he didn’t. That should create even more competitive tension! Back to the dots and yesterday’s Fed meeting was on the hawkish side in terms of the dots and also in terms of Powell’s confidence that the taper could be complete by mid-2022. Powell said that the Fed could begin tapering bond purchases as soon as the November FOMC meeting, in line with our US economists’ forecasts. He left some room for uncertainty, saying they would taper only “If the economy continues to progress broadly in line with expectations, and also the overall situation is appropriate for this.” However he made clear that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff.” The quarterly “dot plot” showed that the 18 FOMC officials were split on whether to start raising rates next year or not. In June, the median dot indicated no rate increases until 2023, but now 6 members see a 25bps raise next year and 3 members see two such hikes. Their inflation forecasts were also revised up and DB’s Matt Luzzetti writes in his FOMC review (link here) that “If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022.” Markets took the overall meeting very much in its stride with the biggest impact probably being a yield curve flattening even if US 10yr Treasury yields traded in just over a 4bp range yesterday and finishing -2.2bps lower at 1.301%. The 5y30y curve flattened -6.7bps to 95.6bps, its flattest level since August 2020, while the 2y10y curve was -4.2bps flatter. So the market seems to believe the more hawkish the Fed gets the more likely they’ll control inflation and/or choke the recovery. The puzzle is that even if the dots are correct, real Fed funds should still be negative and very accommodative historically for all of the forecasting period. As such the market has a very dim view of the ability of the economy to withstand rate hikes or alternatively that the QE technicals are overpowering everything at the moment. In equities, the S&P 500 was up nearly +1.0% 15 minutes prior to the Fed, and then rallied a further 0.5% in the immediate aftermath before a late dip look it back to +0.95%. The late dip meant that the S&P still has not seen a 1% up day since July 23. The index’s rise was driven by cyclicals in particular with energy (+3.17%), semiconductors (-2.20%), and banks (+2.13%) leading the way. Asian markets are mostly trading higher this morning with the Hang Seng (+0.69%), Shanghai Comp (+0.58%), ASX (+1.03%) and India’s Nifty (+0.81%) all up. The Kospi (-0.36%) is trading lower though and is still catching up from the early week holidays. Japan’s markets are closed for a holiday today. Futures on the S&P 500 are up +0.25% while those on the Stoxx 50 are up +0.49%. There is no new news on the Evergrande debt crisis however markets participants are likely to pay attention to whether the group is able to make interest rate payment on its 5 year dollar note today after the group had said yesterday that it resolved a domestic bond coupon by negotiations which was also due today. As we highlighted in our CoTD flash poll conducted earlier this week, market participants are not too worried about a wider fallout from the Evergrande crisis and even the Hang Seng Properties index is up +3.93% this morning and is largely back at the levels before the big Monday sell-off of -6.69%. Overnight we have received flash PMIs for Australia which improved as parts of the country have eased the coronavirus restrictions. The services reading came in at 44.9 (vs. 42.9 last month) and the manufacturing print was even stronger at 57.3 (vs. 52.0 last month). Japan’s flash PMIs will be out tomorrow due to today’s holiday. Ahead of the Fed, markets had continued to rebound from their declines earlier in the week, with Europe’s STOXX 600 gaining +0.99% to narrowly put the index in positive territory for the week. This continues the theme of a relative outperformance among European equities compared to the US, with the STOXX 600 having outpaced the S&P 500 for 5 consecutive sessions now, though obviously by a slim margin yesterday. Sovereign bonds in Europe also posted gains, with yields on 10yr bunds (-0.7bps), OATs (-1.0bps) and BTPs (-3.2bps) all moving lower. Furthermore, there was another tightening in peripheral spreads, with the gap in Italian 10yr yields over bunds falling to 98.8bps yesterday, less than half a basis point away from its tightest level since early April. Moving to fiscal and with Democrats seemingly unable to pass the $3.5 trillion Biden budget plan by Monday, when the House is set to vote on the bipartisan infrastructure bill, Republican leadership is calling on their members to vote against the bipartisan bill in hopes of delaying the process further. While the there is still a high likelihood the measure will eventually get passed, time is becoming a factor. Congress now has just over a week to get a government funding bill through both chambers of congress as well as raise the debt ceiling by next month. Republicans have told Democrats to do the latter in a partisan manner and include it in the reconciliation process which could mean that a significant portion of the Biden economic agenda – mostly encapsulated in the $3.5 trillion over 10 year budget – may have to be cut down to get the entire Democratic caucus on board. Looking ahead, an event to watch out for today will be the Bank of England’s policy decision at 12:00 London time, where our economists write (link here) that they expect no change in the policy settings. However, they do expect a reaffirmation of the BoE’s updated forward guidance that some tightening will be needed over the next few years to keep inflation in check, even if it’s too early to expect a further hawkish pivot at this stage. Staying on the UK, two further energy suppliers (Avro Energy and Green Supplier) ceased trading yesterday amidst the surge in gas prices, with the two supplying 2.9% of domestic customers between them. We have actually seen a modest fall in European natural gas prices over the last couple of days, with the benchmark future down -4.81% since its close on Monday, although it’s worth noting that still leaves them up +75.90% since the start of August alone. There wasn’t much data to speak of yesterday, though US existing home sales fell to an annualised rate of 5.88 in August (vs. 5.89m expected). Separately, the European Commission’s advance consumer confidence reading for the Euro Area unexpectedly rose to -4.0 in September (vs. -5.9 expected). To the day ahead now, the data highlights include the September flash PMIs from around the world, while in the US there’s the weekly initial jobless claims, the Chicago Fed’s national activity index for August, and the Kansas City fed’s manufacturing activity index for September. From central banks, there’ll be a monetary policy decision from the Bank of England, while the ECB will be publishing their Economic Bulletin and the ECB’s Elderson will also speak. From emerging markets, there’ll also be monetary policy decisions from the Central Bank of Turkey and the South African Reserve Bank. Finally in Germany, there’s an election debate with the lead candidates from the Bundestag parties. Tyler Durden Thu, 09/23/2021 - 08:13.....»»

Category: blogSource: zerohedge1 hr. 42 min. ago