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Coronavirus boosts U.S. layoffs; job openings fall

Layoffs in the United States jumped to a record high in March, while the number of people voluntarily quitting their jobs dropped to a 4-1/2-year low as the novel coronavirus crisis rapidly changed labor market dynamics......»»

Category: topSource: reutersMay 15th, 2020

Futures Rise Boosted By JNJ Split As Treasuries, Dollar Slide

Futures Rise Boosted By JNJ Split As Treasuries, Dollar Slide U.S. equity index futures were slightly up at the end of a volatile week, trading in a narrow 20 point range for the second day in a row, while Treasuries resumed declines in response to the recent shock inflation data from the world’s largest economies. Contracts on the three main U.S. gauges were higher, with Johnson & Johnson rising in premarket trading after saying it will split into two companies, while tech stocks again led gains at the end of a week scarred by deepening concerns over prolonged inflation. All the major U.S. indexes were set for a more than 1% weekly drop, their first since the week ended Oct. 1, as hot inflation numbers sapped investor sentiment and halted an earnings-driven streak of record closing highs. At 7:15 a.m. ET, Dow e-minis were up 106 points, or 0.3%, S&P 500 e-minis were up 8.5 points, or 0.18%, and Nasdaq 100 e-minis were up 40.25points, or 0.25%. The same bullish sentiment that lifted US futures pushed European shares up as luxury shares gained after Cartier owner Richemont posted better-than-forecast earnings, offsetting a drop in travel stocks. Asian shares also climbed, helped by a rally in Japan. At the same time, Treasuries resumed a selloff after a trading holiday Thursday, with this week’s shock US inflation figures still reverberating through the bond market. Five-year notes led losses on concern the price pressure will force the Federal Reserve to raise rates earlier than anticipated. A gauge of the yield curve flattened to the least since March 2020. While global stocks are set for their first weekly drop since early October, their swings have been muted compared with the gyrations in the bond market. Investor focus on a strong earnings season has tempered worries about higher inflation. “Inflation could remain elevated in the coming months, and each inflation release that comes in above expectations has the potential to cause volatility in rate and equity markets, but we still don’t expect inflation to derail the equity rally,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note. In US premarket trading, Johnson & Johnson jumped 4.7% in premarket trading after the drugmaker said it is planning to break up into two companies focused on its consumer health division and the large pharmaceuticals unit. Shares of the GAMMA giga techs (fka as FAAMG) also inched up. Tesla’s boss Elon Musk sold even more shares of the electric car maker, regulatory filings showed, after offloading about $5 billion worth of stock following a poll he posted on Twitter. The sale news naturally pushed TSLA stock price higher.  A gauge of U.S.-listed Chinese stocks jumped more than 5%, helped by Alibaba’s blowout Singles’ Day shopping festival and a report that Didi is getting ready to relaunch its apps. Rivian shares gain as much as 5% in U.S. premarket trading, extending the surge for the EV maker seen since its IPO this week which has sent its market value over $100b. Rivian trading at $122.99 in at 5am in New York, compared to IPO price of $78 Rising price pressures across the globe have been a top concern for market participants, with focus now shifting towards how consumer spending would fare as the holiday shopping season approaches. “The risk-on trading stance remains,” said Pierre Veyret, a technical analyst at ActivTrades in London. “However, markets are likely to remain volatile as investors will need to have more clues on where both the economy and monetary policies are going.” In Europe, gains for consumer and retail stocks balanced out declines for mining and energy companies. The Stoxx Europe 600 Index fluctuated as Bank of America strategists predicted a fall of at least 10% for the continent’s equities by early next year. Here are some of the biggest European movers today: Richemont shares jump as much as 9.8% to a record high, with analysts seeing scope for earnings estimates to be upgraded after the company reported first-half results that Citigroup described as “stellar.” Peer Swatch also bounced. Renault shares gain as much as 4.6% after Morgan Stanley upgraded the French automaker to overweight, saying it should have a stronger 2022 if it can raise production levels from a currently low base. Deutsche Telekom rises as much as 3% with analysts highlighting a good revenue performance and upgraded earnings and cash flow guidance as key positives from its earnings. Intertrust shares surge as much as 40% after the trust and corporate-services firm entered talks to be acquired by private-equity firm CVC. AstraZeneca falls as much as 5.9% after the drugmaker’s 3Q results missed estimates, with analysts noting a big miss for cancer drug Tagrisso. Wise shares sink as much as 8.8% after the money-transfer company won’t be added to an MSCI index in the latest rejig as some investors had expected. JDE Peet’s, Atos and Investor AB also all moved after the MSCI review. Fortum shares decline as much as 3.6% after the Finnish utility’s 3Q sales missed estimates. Uniper, in which Fortum owns a 75% stake, also slid after Fortum said it stopped share purchases in the German group in July owing to high prices. Avon Protection plummet as much as 44% after it warned of testing failures for some body-armor plates ordered by the U.S. military. SimCorp shares drop as much as 7.1% after the financial software and services company’s 3Q earnings, with Handelsbanken calling the quarter “weak,” and saying it raises doubts for the 2022 outlook Earlier in the session, Asia’s regional benchmark advanced, on track for a second day of gains, after sales in the Singles’ Day shopping festival boosted optimism. The MSCI Asia Pacific Index rose as much as 0.9%, with materials and communication stocks driving the benchmark. Tencent climbed 1.6%, after it bought a Japanese game studio and sold HengTen Networks shares. JD.com gained 5.2% after it received record Singles’ Day orders. Adding to sentiment were the mandate for China’s President Xi Jinping to potentially rule for life, which may mean policy continuity and fewer regulatory surprises and Goldman Sachs’ upgrade of offshore China stocks. A report that Didi Global is getting ready to relaunch apps in China further fueled optimism. “Investors are hoping that greenshoots of a loosening of reforms are upon us,” said Justin Tang head of Asian research at United First Partners. It’s clear “tech shares got a little boost from Singles’ Day and the anointing of Xi as forever leader.” JD.com Shines in Muted Singles Day After Sales Beat: Street Wrap South Korea and Japan benchmarks posted the top gains in the region. Australia’s shares also advanced, boosted by mining stocks. Japanese equities also rose, following gains in U.S. peers, erasing virtually all of their losses from earlier in the week. Electronics makers and telecoms were the biggest boosts to the Topix, which gained 1.3%. All 33 industry groups were in the green except energy products. Tokyo Electron and SoftBank Group were the largest contributors to a 1.1% rise in the Nikkei 225. The yen has weakened more than 1% against the dollar since Tuesday. “It’s a favorable environment for risk-taking thanks to China,” said Shogo Maekawa, a strategist at JP Morgan Asset Management in Tokyo, referring to Evergrande’s latest interest payment. Rising U.S. yields and a weaker yen “may serve as a trigger for foreign investors to re-evaluate Japanese equities and shift their focus to stocks here.” Indian stocks also rose, snapping three sessions of declines, boosted by gains in software exporter Infosys. The S&P BSE Sensex climbed 1.3% to 60,686.69 to a two-week high and completed a second successive week of gains with a 1% advance. The NSE Nifty 50 Index increased 1.3% on Friday. All 19 sub-indexes compiled by BSE Ltd. rose, led by a measure of technology companies. In earnings, of the 45 Nifty 50 companies that have announced results so far, 29 have either met or exceeded consensus analyst expectations, 15 have missed estimates, while one couldn’t be compared. Oil & Natural Gas Corp. and Coal India are among those scheduled to announce results today.  Expectations of the U.S. Fed raising interest rates earlier than expected after a surge in inflation weighed on most emerging markets this week. In India, consumer prices probably quickened for the first time in five months in October, according to economists in a Bloomberg survey. The data will be released on Friday after market hours.   In FX, the Bloomberg Dollar Spot Index was little changed, even as the dollar added to gains versus most its Group-of-10 peers, and Treasury yields rose across the curve on concern that rising U.S. inflation would warrant earlier rate hikes. The euro hovered around a more than a one-year low of $1.1450. The pound extended an Asia session advance and was the best performer among G-10 peers; the currency still heads for a third week of losses, having touched its lowest level since Christmas and options suggest the move may have legs to follow. Australian and New Zealand dollars are headed for back-to-back weekly declines as rising Treasury yields stoke further demand for the greenback; A 60% drop in the price of iron ore signals a blow to the Australian government’s efforts to stabilize the fiscal position following massive spending to support the economy through the coronavirus pandemic.Meanwhile, the ruble extended its losses, tracking a decline in Brent crude, as tensions flared up between Russia and Western nations over energy supplies and migrants. The currency tumbled as much as 1.1% to 72.4375 per dollar after the U.S. sounded out its EU allies that Russia may invade Ukraine. That made the ruble the worst performing currency in emerging markets.  In rates, Treasuries were off session lows, but cheaper by 2bp-3bp across belly of the curve which underperforms as reopened cash market catches up with Thursday’s slide in futures. Treasury 10-year yields around 1.566%, cheaper by 2bp on the day, while 5-year topped at 1.262% in early Asia session; curve is flatter amid belly-led losses, with 5s30s spread tighter by ~1bp on the day after touching 63.7bp, lowest since March 2020. On the 2s5s30s fly, belly cheapened 3.5bp on the day, re-testing 2018 levels that were highest since 2008. Bunds advanced, led by the front end, while Italian bonds slid across the curve, pushing the 10-year yield above 1% for the first time since Nov. 4, as money markets held on to aggressive ECB rate-hike bets. The Asia session was relatively calm, while during the European morning, Italian bonds lagged as futures continue to price in aggressive ECB policy. Treasury options activity in U.S. session has included downside protection on 5-year sector, where yields reached YTD high.     In commodities, crude futures dip to lowest levels for the week: WTI drops 1.4% before finding support near $80, Brent dips 1% back onto a $81-handle. Spot gold drifts lower near $1,852/oz. Base metals are mixed: LME aluminum, nickel and tin post modest gains, copper and zinc lag. Looking at the day ahead, data releases from the US include the University of Michigan’s preliminary consumer sentiment index for November, as well as the JOLTS job openings for September. In the Euro Area, there’ll also be industrial production for September. From central banks, we’ll hear from New York Fed President Williams, ECB Chief Economist Lane, and the BoE’s Haskel. Market Snapshot S&P 500 futures little changed at 4,646.50 STOXX Europe 600 little changed at 485.18 MXAP up 0.8% to 199.85 MXAPJ up 0.6% to 653.35 Nikkei up 1.1% to 29,609.97 Topix up 1.3% to 2,040.60 Hang Seng Index up 0.3% to 25,327.97 Shanghai Composite up 0.2% to 3,539.10 Sensex up 1.3% to 60,697.82 Australia S&P/ASX 200 up 0.8% to 7,443.05 Kospi up 1.5% to 2,968.80 Brent Futures down 1.3% to $81.83/bbl Gold spot down 0.5% to $1,853.43 U.S. Dollar Index little changed at 95.20 German 10Y yield little changed at -0.23% Euro little changed at $1.1441 Top Overnight News From Bloomberg Inflation is soaring across the euro area, but it’s also diverging by the most in years in a further complication for the European Central Bank’s ongoing pandemic stimulus The White House is debating whether to act immediately to try to lower U.S. energy prices or hold off on dramatic measures in the hope markets settle, as President Joe Biden’s concern about inflation runs up against climate, trade and foreign policy considerations Reports U.S. is concerned that Russia may be planning to invade Ukraine are “empty and unfounded efforts to exacerbate tensions,” Kremlin spokesman Dmitry Peskov says on conference call Financial problems faced by institutions like China Evergrande Group are “controllable” and spillovers from the nation’s markets to the rest of the world are limited, a former central bank adviser said Hapag-Lloyd AG warned that a crunch in global container shipments could persist into next year, with labor negotiations, environmental pressures and disruptive weather combining to hamper goods flows Japan’s government plans to compile an economic stimulus package of more than 40 trillion yen ($350 billion) in fiscal spending, according to the Nikkei newspaper President Xi Jinping appeared more certain than ever to rule China well into the current decade, as senior Communist Party officials declared that the country had reached a new “historical starting point” under his leadership Italian President Sergio Mattarella tried to quash speculation that he could stay on for a second term, leaving Prime Minister Mario Draghi as the top contender for the role early next year A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded mostly higher heading into the weekend as the region attempted to build on the somewhat mixed performance stateside, where price action was contained amid Veterans Day and with US equity futures also slightly picking up from the quasi-holiday conditions. ASX 200 (+0.8%) was lifted in which mining stocks and the tech industry spearheaded the broad gains across sectors aside from healthcare as Ramsay Health Care remained pressured after it recently announced a near-40% decline in Q1 net profit. Nikkei 225 (+1.1%) was underpinned with Japanese exporters benefitting from recent favourable currency flows and with the biggest stock movers influenced by a deluge of earnings. Hang Seng (+0.3%) and Shanghai Comp. (+0.2%) were indecisive with Hong Kong tech stocks encouraged after e-commerce retailers Alibaba and JD.com posted record Singles Day sales, despite a deceleration in revenue growth from the shopping festival to its slowest annual pace since its conception in 2009 amid a toned-down event due to Beijing’s tech crackdown and emphasis on common prosperity. Conversely, mainland bourses were indecisive following a neutral liquidity operation by the PBoC and after US President Biden recently signed the Secure Equipment Act which prevents companies deemed as security threats from receiving new equipment licences from US regulators, which comes ahead of Monday’s potential Biden-Xi virtual meeting. Finally, 10yr JGBs were lower due to a lack of momentum from US treasuries as cash bond markets were closed for the federal holiday, with demand for JGBs also hampered by the gains in stocks and lack of BoJ purchases in the government debt market. Top European News Macron and Draghi Have Plans to Fill the Void Left by Merkel Johnson Burns Through Political Capital Built Up With Tory MPs JPMorgan Hires Zahn as Head of DACH Equity Capital Markets Hapag-Lloyd CEO Says Global Shipping Crunch Could Extend in 2022 European equities (Stoxx 600 -0.1%) have seen a relatively directionless start to the session with the Stoxx 600 set to close the week out with modest gains of around 0.4%. Macro updates have been particularly sparse thus far with today’s data docket also relatively light (highlights include US JOLTS and Uni. of Michigan sentiment). The handover from the APAC region was a predominantly positive one as Japanese equities benefited from favourable currency dynamics and Chinese markets focused on the fallout from Singles Day which saw record sales for Alibaba and JD.com. Stateside, futures are also relatively directionless (ES -0.1%) ahead of aforementioned US data points and Fedspeak from NY Fed President Williams (voter), who will be speaking on heterogeneity in macroeconomics. The latest BofA Flow Show revealed USD 7.3bln of inflows for US equities, whilst tech stocks saw outflows of USD 1.6bln; the largest outflow since June. In Europe, equities saw their largest outflows in seven weeks with USD 1.7bln of selling. In a separate note, BofA projects 10+% of downside by early next year for European stocks amid weakening growth momentum and rising bond yields. Sectors in Europe are mixed with outperformance seen in Personal & Household Goods with Richemont (+8.6%) shares boosted following better-than-expected Q3 results. LVMH (+1.4%) also gained at the open following reports that the Co. could consider opening duty-free stores in China. Telecom names are firmer with Deutsche Telekom (+2.6%) one of the best performers in the DAX after posting solid results and raising guidance. To the downside, commodity-exposed names are lagging peers with Basic Resources and Oil & Gas names hampered by price action in their underlying markets. FTSE-100 heavyweight AstraZeneca (-4.4%) sits at the foot of the index after Q3 profits fell short of expectations. Finally, Renault (+4.3%) is the best performer in the CAC after being upgraded to overweight from equalweight at Morgan Stanley with MS expecting the Co. to have a better year next year. Top Asian News JPMorgan Japan Stocks Downgrade Shows Doubts Before Stimulus Japan Stimulus Package to Top 40 Trillion Yen, Nikkei Reports Hon Hai Warns Chip Shortage Will Outweigh IPhone Boost to Sales AirAsia X Gets Over 95% Support From Creditors for Revamp In FX, it would be far too premature to suggest that the Buck’s winning streak is over, but having rallied so far in relatively short order some consolidation is hardly surprising, especially on a Friday in between a semi US market holiday and the weekend. Hence, the index is hovering just above 95.000 within a 95.078-266 range after a minor extension from yesterday’s peak to set a new 2021 best, and the Dollar is on a more mixed footing vs basket components plus other G10 and EM counterparts, awaiting the return of those not in on Veteran’s Day, JOLTS, preliminary Michigan sentiment and Fed’s Williams for some fresh or additional impetus and direction. GBP/CAD - The Pound and Loonie are flanking the major ranks even though the latest retreat in Brent and WTI is pretty uniform from a change on the day in Usd terms perspective, so it seems like Sterling is getting a boost from a downturn in the Eur/Gbp cross ahead of the UK-EU showdown on Brexit and Article 16, while Usd/Cad remains bullish on technical impulses before the BoC’s Q3 Senior Loan Officer Survey. Cable has bounced from just over 1.3350 to retest 1.3400 with Eur/Gbp probing 0.8550 to the downside, but Usd/Cad is probing 1.2600 irrespective of the Greenback stalling. AUD/JPY - Both fractionally firmer as the Buck takes another breather, though the Aussie is also deriving some traction from favourable Aud/Nzd tailwinds again. Aud/Usd has pared losses sub-0.7300 as the cross hovers around 1.0400, while Usd/Jpy has retreated from around 114.30 towards 1.9 bn option expiries at the 114.00 strike amidst reports that the Japanese Government's economic stimulus package will increase to Yen 40+ tn in fiscal spending, according to the Nikkei citing sources. EUR/NZD/CHF - The Euro is still hanging in following its close below a key technical level for a second consecutive session and fall further from the psychological 1.1500 mark, especially as better than forecast Eurozone ip has not prompted any upside, However, option expiry interest at 1.1450 (1.2 bn) may keep Eur/Usd afloat if only until the NY cut. Similarly, the Kiwi has not gleaned anything via a decent pick-up in NZ’s manufacturing PMI as Nzd/Usd clings to 0.7000+ status and the Franc remains under 0.9200 regardless of an acceleration in Swiss import and producer prices. SCANDI/EM - More transitory inflation remarks from Riksbank Governor Ingves are not helping the Sek fend off another dip through 10.0000 vs the Eur. but the Nok is getting protection from weaker oil prices via unusually large option expiries spanning the same big figure given 1.2 bn at 9.7500, 1.7 bn on the round number and 1 bn at 10.2000. Conversely, the Rub is underperforming as tensions rise around the Russian/Ukraine border and the Kremlin aims blame at the feet of the US alongside NATO, while the Try only just survived the latest assault on 10.00000 against the Usd in wake of below forecast Turkish ip and CBRT survey-based CPI projections for year end rising again. Elsewhere, the Mxn is softer following confirmation of a 25 bp Banxico hike on the basis that the verdict was not unanimous and some were looking for +50 bp, but the Zar retains an underlying bid after Thursday’s supportive SA MTBS and with Eskom reporting no load shedding at present, while the Cnh and Cny are holding gains in advance of the virtual Chinese/US Presidential meeting scheduled for Monday. In commodities, WTI and Brent are pressured in the European morning, experiencing more pronounced downside after a gradual decline occurred in APAC hours. However, the magnitude of today’s performance is comparably minimal when placed against that seen earlier in the week and particularly on Wednesday; in-spite of the earlier pronounced movements, benchmarks are currently set to end the week with losses of less than USD 1.00/bbl – albeit the range is in excess of USD 5.00/bbl. Newsflow this morning has been minimal and thus yesterday’s themes remain in-focus where a firmer USD likely continues to factor but more specifically COVID-19 concerns, with Germany’s Spahn on the wires, and geopolitics via Russia drawing attention. On the latter, tensions are becoming increasingly inflamed as the US said they are concerned that Russia could attack Ukraine and in response Russia said they are not a threat to anyone, but, says US military activity is aggressive and a threat. Moving to metals, spot gold and silver are softer on the session, but remain notably firmer on the week given the CPI-induced move. On this, UBS highlights the risk of additional inflation strength next year which could stoke further gold demand. Elsewhere, base metals are, broadly speaking, marginally softer given tentative APAC performance and the aforementioned COVID concerns, particularly those pertinent for China. In terms of associated bank commentary, SocGen looks for copper to average USD 9.2k/T and USD 8.0k/T in 2021 and 2022 respectively. US Event Calendar 10am: Sept. JOLTs Job Openings, est. 10.3m, prior 10.4m 10am: Nov. U. of Mich. 1 Yr Inflation, est. 4.9%, prior 4.8%; 5-10 Yr Inflation, prior 2.9% 10am: Nov. U. of Mich. Sentiment, est. 72.5, prior 71.7; Current Conditions, est. 77.2, prior 77.7; Expectations, est. 68.8, prior 67.9 DB's Henry Allen concludes the overnight wrap there wasn’t much to speak of in markets yesterday as US bond markets were closed for Veterans Day and investors elsewhere continued to digest the bumper CPI print from the previous session. We did see a bit of residual concern at the prospect of a faster tightening in monetary policy, and implied rates on Eurodollar futures continued to climb, gaining between +4bps and +8bps on contracts maturing through 2023. However, on the whole equities were relatively unfazed on both sides of the Atlantic, and the S&P 500 (+0.06%) stabilised after 2 successive declines thanks to a bounceback among the more cyclical sectors. Looking at those moves in more depth, interest-sensitive tech stocks were a big outperformer yesterday as both the NASDSAQ (+0.52%) and the FANG+ index (+0.98%) of megacap tech stocks moved higher. Material stocks in the S&P (+0.85%) were another sectoral winner, and the VIX index of volatility (-1.07pts) ticked down from its 4-week high on Wednesday. In Europe, the advance was even more prominent, where the STOXX 600 (+0.32%), the DAX (+0.10%) and the CAC 40 (+0.20%) all reached fresh records. Indeed, for the STOXX 600, that now marks the 13th advance in the last 15 sessions, with the index having risen by over +6% in the space of a month. As mentioned, it was a quieter day for sovereign bond markets with the US not trading, but the sell-off continued in Europe as yields on 10yr bunds (+1.7bps), OATs (+1.4bps) and BTPs (+2.7bps) all moved higher. We didn’t get any fresh news on the Fed officials either given the US holiday, but a Washington Post article yesterday said that officials from the White House had stayed in touch with Governor Brainard since her meeting with President Biden last week, albeit still emphasising that no final decision had yet been made. Separately, Bloomberg reported that senior Biden advisors did not view the recent trading scandal at the Federal Reserve as disqualifying Chair Powell. US Treasury markets have reopened overnight, with 10yr yields following their European counterparts higher, moving up +1.4bps to 1.563%. That’s been driven by a +2.4bps rise in the real yield, though 10yr real yields still remain close to their all-time lows since TIPS started trading back in 1997. Otherwise in Asia, markets are mostly trading higher with the KOSPI (+1.48%), Nikkei (+1.07%) and Hang Seng (+0.22%) all advancing, though the Shanghai Composite (-0.01%) is basically unchanged whilst the CSI (-0.31%) is trading lower. Data showed further signs of inflationary pressures in the region, with South Korea’s import price index up +35.8% in October on a year-on-year basis, the highest since 2008. Elsewhere in India, Prime Minister Modi is expected to announce an opening up of the sovereign bond market to retail investors today, which comes amidst rising inflation concerns as well. Looking ahead, futures are indicating a positive start in the US and Europe with those on the S&P 500 (+0.16%) and the DAX (+0.15%) pointing higher. Turning to the geopolitical scene, it was reported by Bloomberg that US officials had briefed their counterparts in the EU about a potential Russian invasion of Ukraine. It follows a build-up in Russian forces near the Ukrainian border that have been reported more widely, and echoes a similar situation back in the spring. The Russian ruble weakened -0.57% against the US dollar yesterday in response, with the declines occurring after the report came out. This comes amidst a number of broader tensions in the region, and natural gas prices in Europe were up +6.66% yesterday after Belarus’ President Lukashenko threatened to cut the transit of gas if the EU placed additional sanctions on his regime. Meanwhile on Brexit, there were potential signs of compromise in the dispute over Northern Ireland, with the Telegraph reporting that the EU was prepared to improve its offer when it came to reducing customs checks. However, the report also said that this would be contingent on the UK ending its demands to remove the European Court of Justice’s role in overseeing the agreement. There has been growing speculation in recent days that the UK could be about to trigger Article 16 of the Northern Ireland Protocol, which allows either side to take unilateral safeguard measures if the deal was causing serious issues. This would risk EU retaliation that could in theory even led to a suspension of the entire trade deal agreed last year, which is an option that has been talked up in recent weeks. For those wanting further reading on the issue, DB’s FX strategist Shreyas Gopal put out a note on Tuesday (link here) looking at the issues surrounding Article 16 and its implications for sterling. Another important thing to keep an eye on over the coming weeks will be any further signs of deterioration in the Covid-19 situation. Cases have been ticking up at the global level for around 4 weeks now, and a number of European countries (including Germany) have seen a major surge over the last few days. In the Netherlands, they actually set a record for the entire pandemic yesterday, and Prime Minister Rutte is due to hold a press conference today where it’s been speculated he’ll announce fresh restrictions. Separately in Austria, Chancellor Schallenberg said that a lockdown for the unvaccinated was “probably unavoidable”, and said that “I don’t see why two-thirds should lose their freedom because one-third is dithering”. On the data front, the only major release was the UK’s Q3 GDP reading yesterday, which surprised on the downside with growth of +1.3% (vs. +1.5% expected), even though Covid-19 restrictions were much easier in Q3 relative to Q2. To be fair, the monthly reading for September did surprise on the upside, with growth of +0.6% (vs. +0.4% expected), but it came as July and August saw downward revisions. On a monthly basis, the September reading meant the UK economy was just -0.6% beneath its pre-pandemic size in February 2020. To the day ahead now, and data releases from the US include the University of Michigan’s preliminary consumer sentiment index for November, as well as the JOLTS job openings for September. In the Euro Area, there’ll also be industrial production for September. From central banks, we’ll hear from New York Fed President Williams, ECB Chief Economist Lane, and the BoE’s Haskel. Tyler Durden Fri, 11/12/2021 - 07:48.....»»

Category: blogSource: zerohedgeNov 12th, 2021

Off-Premise Business Model Aids Darden (DRI), High Costs Ail

Darden (DRI) focuses on the Back-to-Basics initiative to drive growth. However, inflationary pressures are a concern. Darden Restaurants, Inc. DRI will likely benefit from the off-premise business model, technological enhancements and Cheddar’s business. Also, the emphasis on the Back-to-Basics initiative bodes well. However, a decline in traffic (from pre-pandemic levels) and inflationary pressures are a concern.Let’s discuss the factors highlighting why investors should retain the stock for the time being.Factors Driving GrowthDarden continues to benefit from its robust off-premise sales. During first-quarter fiscal 2023, off-premise sales contributed more than 24% to total sales at Olive Garden, 14% at LongHorn and 13% at Cheddar's Scratch Kitchen. The company has been benefiting from technological enhancements regarding online ordering and To Go capacity management. Given the solid feedback on account of enhanced customer experience and reduced friction, the company expects off-premise sales to remain high for some time.To reduce friction and enhance consumers’ convenience in the digital platform, Darden initiated streamlining the order pickup process and payment methods. Backed by these initiatives, online ordering increased sharply. It is also witnessing a sharp increase in To Go sales. During first-quarter fiscal 2023, 62% of all off-premise sales were placed digitally. The improvements in the business model are likely to reinforce its ability to boost restaurant value across its brands.Darden’s acquisition of the small restaurant chain, Cheddar's Scratch Kitchen (Cheddar's), in April 2017 added an undisputed casual dining value to its portfolio of differentiated brands. The acquisition also helped Darden enhance its scale. Management made significant operational readjustments to the brand, which is expected to reap long-term benefits. Apart from making progress with integrating Cheddar’s, the company seems to gain more confidence in its outcome. The company considers that Cheddar has significant prospects for long-term growth. Also, it added that it anticipates restaurant-level margins to be well in the high teens when Cheddar’s reaches 100% of the pre-COVID sales. For fiscal 2023, the company anticipates a year-over-year increase in Cheddar restaurant openings.The company emphasizes on Back-to-Basics operating philosophy to drive growth. This involves a focus on culinary innovation and execution, attentive service, guest engagement and integrated marketing efforts. It is also working to simplify kitchen systems, improve staffing levels and operational excellence to enhance the guest experience, enable menu customizations and make smarter promotional investments. The operational readjustments are likely to drive the company’s performance in the future.ConcernsImage Source: Zacks Investment ResearchShares of Darden have declined 19.6% so far this year compared with the industry’s 17.9% fall. The dismal performance was primarily caused by the coronavirus crisis. Although most dining services are open, traffic is still low compared with pre-pandemic levels. The company intends to monitor the situation regularly to gauge the impacts of COVID-19.The company has been persistently shouldering increased expenses, which are denting margins. In the fiscal first quarter, total operating costs and expenses increased 8.7% year over year to $2,201.9 million. This escalation was primarily due to a rise in food and beverage costs (driven by commodities inflation of 15%), restaurant expenses (owing to supply chain challenges and utilities inflation of 16%) and labor costs (owing to labor inflation of 7.5%). For fiscal 2023, the company expects total inflation of 6%, commodities inflation of approximately 7% and total restaurant labor inflation of 8%, including hourly wage inflation.Zacks Rank & Key PicksDarden currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some better-ranked stocks in the Zacks Retail-Wholesale sector are Tecnoglass Inc. TGLS, Cracker Barrel Old Country Store, Inc. CBRL and Potbelly Corporation PBPB.Tecnoglass sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 24.4%, on average. Shares of the company have increased 10.2% in the past three months.The Zacks Consensus Estimate for Tecnoglass 2022 sales and earnings per share (EPS) suggests growth of 28.2% and 47.7%, respectively, from the year-ago period’s levels.Cracker Barrel carries a Zacks Rank #2 (Buy). Cracker Barrel has a long-term earnings growth of 6.9%. Shares of the company have increased 14.2% in the past three months.The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 16.3% and 15.4%, respectively, from the year-ago period’s levels.Potbelly carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 22.2%, on average. Shares of the company have declined 18.8% in the past three months.The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 17.5% and 100%, respectively, from the year-ago period’s levels. Just Released: Zacks Unveils the Top 5 EV Stocks for 2022 For several months now, electric vehicles have been disrupting the $82 billion automotive industry. And that disruption is only getting bigger thanks to sky-high gas prices. Even titans in the financial industry including George Soros, Jeff Bezos, and Ray Dalio have invested in this unstoppable wave. You don't want to be sitting on your hands while EV stocks break out and climb to new highs. In a new free report, Zacks is revealing the top 5 EV stocks for investors. Next year, don't look back on today wishing you had taken advantage of this opportunity.>>Send me my free report revealing the top 5 EV stocksWant 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 Cracker Barrel Old Country Store, Inc. (CBRL): Free Stock Analysis Report Darden Restaurants, Inc. (DRI): Free Stock Analysis Report Potbelly Corporation (PBPB): Free Stock Analysis Report Tecnoglass Inc. (TGLS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 27th, 2022

There’s a ‘very high likelihood’ of a growth recession as the Fed’s inflation fight ramps up, Powell says. It means the end of the Great Resignation and fewer raises at work.

The Fed is poised to keep raising interest rates well into 2023. "Times are going to get tougher from here," strategist Seema Shah said. Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve, Wednesday, May 4, 2022 in Washington.Alex Brandon/AP Photo The Fed is poised to keep raising interest rates into 2023, putting more pressure on the already slowing economy. There's a 'very high likelihood' the US faces a period of below-trend growth, Fed Chair Jerome Powell said. The economic pain is still better than letting inflation stay near four-decade highs, he added. The US economy can still win the fight against inflation, but workers will probably take some hefty blows along the way.The Federal Reserve raised interest rates again on Wednesday, hiking its benchmark rate by three-quarters of a percentage point for the third time since June. The increase extends the Fed's aggressive efforts to cool demand and drag inflation lower, and policymakers' latest economic projections signal the larger-than-usual rate hikes will continue into 2023 and beyond.Yet those very same projections paint a bleak picture for the future of the US economy that could mean a "growth recession" is coming in the next year. Federal Open Market Committee officials see the economy growing just 0.2% through 2022, down from the June projection of a 1.7% gain. Growth in 2023 and 2024 was also revised lower.The Fed officials' projected unemployment rate, meanwhile, was increased to 3.8% for 2022 and 4.4% for the following two years. Should the estimates prove correct, that would translate to roughly 1.3 million lost jobs over the next 15 months.There's a "very high likelihood" that the US faces a period of below-trend economic growth, Fed Chair Jerome Powell said in a Wednesday press conference. The chair later added that "higher interest rates, slower growth, and a softening labor market" are all part of the economic pain Americans are likely to feel as the Fed moves to slow inflation.Powell's words "should be translated as central bank speak for 'recession,'" Seema Shah, chief global strategist at Principal Global Investors, said. The central bank's latest projections spell out a years-long period of economic weakness. Higher rates will rein in demand for workers, leading to widespread layoffs and smaller raises. Subpar economic growth will bite into companies' growth forecasts and stock prices. And as rates climb to the highest levels since 2007, prices for mortgages, car loans, and credit card debt will soar."With the new rate projections, the Fed is engineering a hard landing – a soft landing is almost out of the question," Shah said. "Times are going to get tougher from here." A so-called soft landing is the ideal ending for an inflationary spell. Price growth would cool down without a rise in unemployment or a significant slowdown in overall growth. That ship has sailed, and with inflation proving harder to cool than expected, a hard landing is now the most likely scenario.Weakening the labor market is one of the aims of the Fed's tightening in the first place. The workforce remains extremely imbalanced, with job openings currently doubling the number of available workers. The gap opened the door for Americans to quit at record rates through 2022, a trend which has since been deemed the Great Resignation. Higher rates stand to curb labor demand, and as job openings fall, workers will likely lose confidence in their ability to quit and find jobs elsewhere. There's only been "modest evidence" that the labor market is balancing out, the chair said. Since inflation remains so high and the labor market so tight, restrictive interest rates will need to be in place "for some time," he added.To be sure, persistently high inflation poses a large risk to the US economy. Soaring prices have already eaten away at workers' wage gains despite most experiencing historically strong pay growth this year. Letting inflation stay near four-decade highs would mean "far greater pain later on," Powell said.Still, the prevailing message from the Fed's latest press conference was clear. Winning the war on inflation will be difficult, and the path forward will push the economy to the very brink of a self-induced recession.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 21st, 2022

The "scariest economic paper of 2022" predicts big layoffs over the next 2 years as the fight against inflation gets more intense

Projections of a rising unemployment rate through 2024 to fight inflation is a "painful outlook" for US job seekers, says economist Jason Furman. Furman says that the US would need an average unemployment rate of about 6.5% in 2023 and 2024.Evan Vucci/Associated Press Rising interest rates combat inflation by encouraging companies to cut expenses — often at the cost of jobs. An economist who served under Obama predicts a 6.5% average unemployment rate to reach desired inflation levels. That would reverse the current trend in which companies are scrambling to hire workers, not fire them.  Inflation in the US looks like it's peaked, but we're not out of the woods yet. The fight to bring down surging price growth could mean a rough two years for job seekers — a hard pivot from the power they've enjoyed during the Great Resignation.That's according to a new paper from the Brookings Institution, which predicts that a high unemployment rate will be necessary to combat inflation. Inflation is typically inversely tied to unemployment. The rule goes: when unemployment drops, inflation rises, and when unemployment is high, inflation goes down.Currently, the Federal Reserve predicts the national unemployment rate will reach 4.1% in 2024, but the Brookings team argues that the Fed will need to push it "far higher" in order to bring inflation down to its 2% target, which it wanted for the end of 2024. "We find that this unemployment path returns inflation to near the Fed's target only under optimistic assumptions," the researchers write in the paper. "Under less benign assumptions about these factors, the inflation rate remains well above target unless unemployment rises by more than the Fed projects." Because of this outlook, Jason Furman, former chairman of the White House Council of Economic Advisers under President Obama, called this "the scariest economic paper of 2022." He wrote in an op-ed for the Wall Street Journal this week that, based on Brookings' findings, the Fed will need to be aggressive about raising rates even if unemployment continues to rise. Running his own calculations, Furman says that the US would need an average unemployment rate of about 6.5% in 2023 and 2024 to hit its 2% inflation rate target. In August, the unemployment rate was about 3.7%, according to the Bureau of Labor Statistics. And depending on the labor market, he said, or other factors related to supply, "the outlook could be more painful." Among a few suggestions for the Fed, Furman says it should lower its expectations for the economy, such as aiming for a 3% inflation rate over a 2% one. "While fighting inflation should be the central bank's only focus today, at some point the Fed should reassess the meaning of victory in that struggle," he said. Job losses may be necessary to lower inflationFurman's 6.5% projection is based on the assumption that, in addition to the Fed's aggressive fight against inflation, the labor market will also cool slightly on its own, with job openings falling to two-thirds their number from before the pandemic. He also assumes that inflation expectations will revert to where they were pre-COVID, and that the price of gas will continue to fall. What that 6.5% means is that the next year and a half will feature many layoffs, in addition to continued price hikes and expensive borrowing.That's a necessary burden, economists and the Fed say."While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Fed Chair Jerome Powell said during August 26 remarks. "But a failure to restore price stability would mean far greater pain."That would reverse the trend the labor market has seen during the pandemic, Insider's Ben Winck reported this month. The most recent data from the Bureau of Labor Statistics shows that job openings still exceed available workers by two-to-one, extending a trend of extreme imbalance in the job market. In the recent past, Americans have been dealing with high inflation while seeing high wage increases, even if those increases aren't quite keeping up with inflation for most people. The next challenge will be dealing with the reverse scenario, as companies look to shed employees, rather than hire them. Read the original article on Business Insider.....»»

Category: personnelSource: nytSep 9th, 2022

Record company profits might be hurting your wallet — and helping your job security

US corporations reported record profits in the 2nd quarter. It might be one reason layoffs are at record lows despite recession fears. Costco WholesaleDominic Lipinski - PA Images / Contributor / Getty Images US corporations reported record profits in the 2nd quarter. At the same time, consumers have been faced with the rising prices. Layoffs remain near historic lows — this could continue as long as companies' profits remain intact. Many US corporations are thriving as consumers continue to struggle with inflation — but there could be a bright side for the millions of Americans who value job security.While companies have raised wages to attract workers and faced rising expenses, many have managed to pass these costs onto consumers with higher prices and protect their profits. In the second quarter of 2022, business profitability rose to 15.5% to roughly $2 trillion, the highest level since 1950, according to a Bloomberg analysis of a recent Commerce Department report. But while wage growth has slowed in recent months while prices continue to rise, high corporate profits are not an entirely raw deal for Americans. That's because they're likely translating to fewer layoffs, despite recession fears.With profits continuing to roll in, many businesses have had little reason to cut costs and let workers go. Layoffs held flat at roughly 1.4 million in July, not far off from the two-decade low of 1.2 million in April. The unemployment rate ticked up slightly in August to 3.7% but remains near a 50 year-low. Initial jobless claims have risen slightly as well after reaching a 52-year low in March, but they've remained low relative to historic norms. Many companies are still looking to bolster their workforces as well — evidenced by job openings that remain near record-highs. But this all could change quickly if the economic tides turn. "There's obviously less urgency for businesses to enact cost-saving measures such as layoffs when they have a financial buffer of recent profitability," Aaron Terrazas, the chief economist at Glassdoor, told Insider via email. "But I suspect most CFOs are taking Wayne Gretzy's advice to skate where the puck is headed, not where it's been. They're looking at accumulated liabilities in terms of higher wages, and weaker consumer pricing power down the line."Falling profits could lead to layoffsDespite inflation easing slightly in July, high prices could be here to stay for a while."Prices are unlikely to come down quickly." Michael Hewson, chief market analyst at CMC Markets, told Insider in August, citing raw materials and energy as costs that are likely to remain "stickier than most people realize."While profits may be strong right now, a slowing economy would inevitably bring some pain for corporations. If this happens, Americans could find the script flipped — an economy with easing prices but uncomfortably high layoffs as business performance weakens and cost-cutting ensues. While surging energy prices, supply chain constraints, and perhaps even some corporate price gouging have contributed to companies' high prices and profits, the strength of the American consumer — aided by their pandemic savings — has also worked to keep prices elevated. But if inflation depletes these savings and spending falters, prices — and corporate profits — could fall, and Americans could lose some of the job security the labor shortage has provided them."Consumer empathy is wearing thin," said Terrazas. "So I suspect many companies are doubtful of their ability to continue passing along costs forward."The best of both worldsAs American consumers receive wages that largely aren't keeping pace with inflation, many are likely wondering why they can't have the best of both worlds — an economy where unemployment remains low but prices return to more modest levels.Well, this is exactly what the Federal Reserve — which strives for maximum employment and price stability — is trying to achieve. With inflation elevated, the Fed is raising interest rates in an effort to bring down high prices. It's hoping to achieve a soft — or "softish" landing — where slowing growth doesn't turn into a recession. Sticking the landing is expected to be difficult, however, with many experts predicting some form of a recession in 2023. "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Federal Reserve Chair Jerome Powell said recently. "These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain."Read the original article on Business Insider.....»»

Category: personnelSource: nytSep 2nd, 2022

August Payrolls Preview: "Sweet Spot Is 0-100K... Negative Print And Stocks Will Soar"

August Payrolls Preview: "Sweet Spot Is 0-100K... Negative Print And Stocks Will Soar" While there is a wide range of forecasts for tomorrow's payrolls print (see below), the median Street consensus expects the rate of payrolls growth to resume cooling in August, following a blowout month in July. The jobless rate is expected to hold steady, and there will be focus on the rate of participation after a decline last month. Average hourly earnings metrics will be a key focus to help gauge how surging consumer prices are translating into second-round effects and the wage-price spiral; some gauges suggest that the rate of pay rises is now exceeding the Fed’s preferred measures or inflation. As Newsquawk notes, the Fed is yet to show signs that it is relenting in its fight against inflation, and is expected to keep tightening policy to put a lid on prices, even if that means stunting economic growth, although a big jobs drop will promptly force Powell to reverse once the Karen Liz Warrens of Congress start calling him every 5 minutes. Markets currently expect a 75bps rate hike at the September 21st FOMC, but officials have been suggesting that the CPI data due on September 13th could provide a more influential steer. Here are the key median forecasts summarized: +298K headline print (Goldman at +350k) vs +528k prior, even though the Household Survey has shown far weaker numbers and there is a non trivial chance we may get a 100k or lower print if the Establishment Survey catches down (as we explained here) Unemployment rate of 3.5% (GIR 3.4%, prior 3.5%), Average Hourly Earnings 0.4% vs 0.5% prior and 5.3% Y/Y. Goldman writes, that August seasonal factors have evolved favorably in recent years, and the bank's forecast assumes positive residual seasonality worth roughly +150k (mom sa). In terms of market reaction, as Goldman trader John Flood writes, "we are still in a bad is good and vice versa set up for US stocks as Fed has made it clear that they want to see some froth exit the labor market in tandem with cooling inflation: i) Strong print here will clearly make 75bps much more likely on 9/21; ii) Inline print of 300k(ish) will keep pressure on this tape...anything close to last month’s shocking print of 528k would lead to real risk unwind into the wknd (I think at least a 200bp sell off). iii) Sweet spot for stocks tomorrow is a 0 – 100k headline reading...should get a 100+bp rally for S&P in this scenario after this recent drawdown. If we happen to get a negative number an even sharper rally", and the pivot will be right back on the Q1 calendar. What do others think? Here is a snapshot of tomorrow's payrolls forecast by bank (higher to lower): Pantheon 400k BNPP 375k Wells 375k TD 370k GS 350k MS 350k BofA 325k Citi 305k Credit Suisse 300k DB 300k HSBC 300k JPM 300k SocGen 300k UBS 300k Nomura 290k StanChart 275k Jefferies 270k Evercore 250k ING 250k Mizuho 250k Natwest 200k Pictet 160k Some more observations on what to expect tomorrow, courtesy of Newsquawk: Headline to resume cooling: After a blowout jobs report in July, where almost all measures surprised to the upside, analysts are expecting the cooling in payroll growth to resume in August, with the consensus view looking for 300k nonfarm payrolls to be added; this would be lower than the prior 528k, the 3-month average of 437k, the 6-month average of 465k, and the 12-month average of 512k. This week, the White House said it was expecting the rate of payroll additions to “cool off a bit” into a “more stable and steady” growth rate as the economy “transitions”. Fed officials have also been talking about how some cooling of the labor market would be welcomed, as alluded to in its recent meeting minutes. The ADP's new gauge of its National Employment also alludes to this theme, and reported that 132k private payrolls were added to the economy in August, against expectations for 288k (July's reading was stated as 270k), although analysts have still expressed some scepticism around the data series. Unemployment Rate Seen Steady: The jobless rate is expected to remain at the post-pandemic low of 3.5% (which was also the level of unemployment seen in February 2020, before the impact of the pandemic began hitting the labour market). The decline in the participation rate in July may have contributed to the fall in unemployment (this was perhaps the only ‘blip’ in last months’ data), but other gauges of the labour market (the July JOLTs figures, for instance) continue to allude to extremely tight conditions. NOTE: the Fed’s June forecasts (which will be updated at the September 21st FOMC) projected that the jobless rate will tick up to 3.7% by the end of this year, rising to 3.9% in 2023, before again rising to 4.1% in 2024, above the Fed’s longer-run estimate of 4.0%. Policy Implications: Money markets are currently suggesting that there is a greater chance that the FOMC will raise interest rates by 75bps at the September 21st meeting rather than a smaller 50bps increment. The Fed has said that its policy on rate changes is data-dependent. This will be the final jobs report before the September confab, but there is still the US CPI report, due September 13th, that could influence officials’ view; indeed, Fed’s Mester, who votes on policy this year, said she’d be basing her decision on the inflation data, not the jobs report. That could mean that any market reaction to the data would be subject to revision based on the incoming CPI metrics. That said, the average hourly earnings measures will still provide some insight on how inflation dynamics are feeding through into second-round effects. Wage Inflation: The wages metrics will be looked at by traders to gauge how surging (and broadening) consumer prices are translating into second-round effects; the consensus looks for average hourly earnings of +0.4% M/M in August, easing from the +0.5% pace in July, but the annual rate is still expected to climb by one-tenth of a percentage point to 5.3% Y/Y, while average workweek hours are seen unchanged at 34.6hrs. The ADP’s revamped National Employment Report said that the median change in annual pay was running at a rate of +7.6% Y/Y for job-stayers, and +16.1% Y/Y for those who had switched jobs – those rates are higher than the current level of average hourly earnings in July, as well as both the rate of headline and core PCE prices, the Fed’s preferred gauges of inflation (which were respectively 6.3% Y/Y and 4.6% Y/Y in the latest data for July). Fed officials have been emphasizing that the fight against inflation is not complete, refusing to overread into some nascent signs that the surge in consumer prices is peaking; many believe that the central bank will be comfortable in firing another large rate rise, particularly if other growth dynamics continue to hold up in Q3. Arguing for a better-than-expected report (from Goldman): Seasonal Factors: According to Goldman, the August seasonal factors have evolved favorably in recent years, with an August month-over-month hurdle for private payrolls of -315k in 2021 and -326k in 2020 compared to -54k in 2019 and -126k in 2017 (which unlike 2019 was also a 4-week August payroll). The BLS seasonal factors appear to be overfitting to the reopening-related job surges in June and July of both 2020 and 2021. Goldman's forecast assumes positive residual seasonality worth roughly +150k (mom sa). This compares to a seasonality headwind of around 100k in the previous report. Big Data. High-frequency data on the labor market were generally strong in August, with increases across all four measures  tracked. Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—remained elevated, edging down by 0.2pt to +36.6. JOLTS job openings surprised to the upside, increasing by 199k in July to 11.2mn to a very elevated level. Arguing for a worse-than-expected report: August slowdown effect. Payrolls have exhibited a tendency toward weak August first prints, which may reflect a recurring seasonal bias in the first vintages of the data. August job growth has decelerated in 8 of the last 10 years relative to the first-print July reading, with an average slowdown of 167k (and by 40k during the pre-pandemic decade, 2010-2019). Softness in the first vintage also tends to manifest in many of the same industries—including manufacturing, professional services, retail, and information. However, consensus may already reflect this tendency with its 230k forecasted deceleration. ADP. Private sector employment in the ADP report increased by 132k in August, below expectations for 325k. The ADP data adopted a new methodology in August, and while the updated series shows a strong correlation with BLS private payrolls over the full sample (+0.90 since 2010, mom sa), the relationship has broken down over the last year (correlation = -0.04), as shown in Exhibit 3. The ADP measure has also understated private payroll growth by 97k on average over the last year, including by 203k in July (+268k vs. +471k in the official measure). Employer surveys. The employment components of business surveys generally decreased in August. Our services survey employment tracker decreased by 0.3pt to 53.2 and our manufacturing survey employment tracker decreased by 0.6pt to 54.6. Job cuts. Announced layoffs reported by Challenger, Gray & Christmas rebounded 8.1% month-over-month in August, after decreasing 15.1% in July (SA by GS). Last but certainly not least, after touting for months the strong employment numbers as a way to deflect criticism of soaring inflation, the White House on Tuesday warned that the numbers released later this week by the Labor Department will likely show a job markets that is “cooling off.” White House press secretary Karine Jean-Pierre said the slower hiring pace is a sign that the economy is “in transition.” “It is going through a transition from the historic economic growth that we saw last year to a more stable and steady growth and that is kind of important to note,” she told reporters aboard Air Force One. “We are expecting job numbers to cool off a bit as we are going into transition. We are expecting job numbers to not be at the high growth rate,” she Pierre continued. But will they be low enough to turn negative and send futures limit up... Tyler Durden Thu, 09/01/2022 - 22:21.....»»

Category: personnelSource: nytSep 2nd, 2022

Oxford: Owner of Tommy Bahama and Lilly Pulitzer Reports Record Second Quarter Earnings, Raises Full Year Guidance

Second quarter sales increased 11% Record second quarter GAAP EPS of $3.49 and adjusted EPS of $3.61 Raises full-year sales and EPS guidance Repurchased $30 million of stock in the second quarter ATLANTA, Sept. 01, 2022 (GLOBE NEWSWIRE) -- Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its fiscal 2022 second quarter ended July 30th, 2022. Consolidated net sales in the second quarter of fiscal 2022 increased 11% to $363 million compared to $329 million in the second quarter of fiscal 2021. Earnings per share (EPS) on a GAAP basis increased to $3.49 compared to $3.05 in the second quarter of fiscal 2021. On an adjusted basis, EPS increased to $3.61 compared to $3.24 in the second quarter of fiscal 2021. Tom Chubb, Chairman and CEO, commented, "We are extremely pleased to be reporting record earnings for the sixth consecutive quarter. The strength of our brands, our products and our customer experiences fueled 14% comparable direct-to-consumer sales growth and expansion of our already robust gross margin. Favorable market conditions during the quarter included the continued return of the consumer to physical retail, the return to in-person work and social events, the growth in year-round population in many of our strongest markets and the rebound in leisure travel. All of these factors, which play to the strength of our portfolio of brands, continue unabated and augur well for the balance of the year." Mr. Chubb concluded, "Outstanding results like these are only possible through the effort of outstanding people and we have a team that is second to none. We are grateful to each and every one of our associates for all that they do on behalf of our customers, our communities and in turn our shareholders." Second Quarter of Fiscal 2022 versus Fiscal 2021 Net Sales by Operating Group Second Quarter ($ in millions)   2022   2021 % Change Tommy Bahama $ 244.0 $ 208.8 17 % Lilly Pulitzer   88.7   87.3 2 % Emerging Brands   29.9   22.8 31 % Lanier Apparel (exited)   0.0   8.5 nm Other   0.9   1.2 nm Total Company $ 363.4 $ 328.7 11 % Full-price DTC comp sales increased 14% versus the second quarter of fiscal 2021. Full-price retail sales of $135 million were 14% higher than the second quarter of fiscal 2021. Full price e-commerce sales grew 13% to $119 million compared to the second quarter of fiscal 2021.  Outlet sales were $19 million, an 8% increase versus the second quarter of 2021.   Restaurant sales grew 6% to $27 million compared to the second quarter of fiscal 2021.   Wholesale sales of $63 million were 17% higher than the second quarter of fiscal 2021, excluding $8 million of prior-period sales related to Lanier Apparel, driven by stronger orders this year.   Gross margin increased to 63.9% compared to 63.8% in the second quarter of fiscal 2021. On an adjusted basis, gross margin increased to 64.6% compared to 64.3% in the second quarter of fiscal 2021. These gross margin increases were despite a 50 basis points increase in freight costs.   SG&A was $163 million compared to $146 million in the second quarter of fiscal 2021, increasing primarily due to higher employment costs, advertising costs and other expenses to support sales growth.   Royalties and other operating income increased by 34% to $6 million with growth in royalties in both Tommy Bahama and Lilly Pulitzer.   Operating income increased to $75 million, or 20.7% of sales, compared to $68 million, or 20.7% of sales, in the second quarter of fiscal 2021. On an adjusted basis, operating income increased to $78 million, or 21.5% of sales, compared to $72 million, or 22.0% of sales, in the second quarter of fiscal 2021.   The effective tax rate in the second quarter of fiscal 2022 was 24.6% versus 24.1% in the prior year. Balance Sheet and Liquidity Inventory increased $58 million on a LIFO basis and $71 million, or 53%, on a FIFO basis compared to the end of the second quarter of fiscal 2021. Inventory balances at July 30, 2022 represent a more normalized level after inventory levels were lower than optimal throughout fiscal 2021 when a stronger than expected rebound in consumer demand outpaced inventory purchases. Also, the inventory increase reflects: (i) the early receipt of an incremental $27 million of fall inventory to mitigate supply chain delays or disruptions, (ii) anticipated sales increases in the second half of fiscal 2022 and (iii) higher product costs. Compared to the end of the second quarter of fiscal 2019, on a FIFO basis inventory decreased by 3% while the sales for the first half of fiscal 2022 were 23% higher than the first half of fiscal 2019. As of July 30, 2022, the Company had a strong liquidity position with $186 million of cash, cash equivalents and short-term investments versus $180 million at the end of the second quarter of fiscal 2021. The increase in cash and short-term investments was driven by strong operating cash flows which exceeded capital expenditures, share repurchases and dividend payments. The Company had no borrowings outstanding under its revolving credit agreement during either the second quarter of fiscal 2022 or fiscal 2021. Dividend and Share Repurchase The Board of Directors declared a quarterly cash dividend of $0.55 per share. The dividend is payable on October 28, 2022 to shareholders of record as of the close of business on October 14, 2022. The Company has paid dividends every quarter since it became publicly owned in 1960. To date, the Company has repurchased approximately 970,000 shares, or over 5% of total shares outstanding, for $86 million at an average price of $89 per share under its December 7, 2021 $150 million share repurchase authorization and associated $100 million 10b5-1 trading plan. This consists of $8 million in the fourth quarter of 2021, $43 million in the first quarter of 2022, $30 million in the second quarter of 2022 and $5 million subsequent to quarter-end. Outlook For fiscal 2022, the Company raised its previously issued guidance. The Company now expects net sales in a range of $1.300 billion to $1.325 billion as compared to net sales of $1.142 billion in fiscal 2021. In fiscal 2022, GAAP EPS is expected to be between $9.68 and $9.93. Adjusted EPS is expected to be between $9.85 and $10.10. This compares to GAAP EPS of $7.78 and adjusted EPS of $7.99 in fiscal 2021. The Company initiated its guidance for the third quarter of fiscal 2022, ending on October 29, 2022. The Company expects net sales to be between $270 million and $280 million compared to net sales of $248 million in the third quarter of fiscal 2021, which included $4 million of Lanier Apparel sales. Both GAAP and adjusted EPS are expected to be in a range of $0.90 to $1.05 in the third quarter. This compares with EPS of $1.54 on a GAAP basis and $1.19 on an adjusted basis in the third quarter of fiscal 2021. The Company's third quarter remains its smallest sales and earnings quarter due to the seasonality of its direct-to-consumer operations. The Company's effective tax rate is expected to be between 24% and 25% for fiscal 2022. Capital expenditures in fiscal 2022 are expected to be approximately $50 million, primarily reflecting investments in information technology initiatives, the development of new direct to consumer locations, including construction of a new Marlin Bar opening in 2023 in Palm Beach Gardens, and remodeling existing stores. Capital expenditures were $32 million in fiscal 2021. Conference Call The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live web cast of the conference call will be available on the Company's website at www.oxfordinc.com. A replay of the call will be available through September 15, 2022 by dialing (412) 317-6671 access code 13732205. About Oxford Oxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama®, Lilly Pulitzer®, Southern Tide®, The Beaufort Bonnet Company® and Duck Head® lifestyle brands. Oxford's stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford's website at www.oxfordinc.com. Basis of Presentation All per share information is presented on a diluted basis. Non-GAAP Financial Information The Company reports its consolidated financial statements in accordance with generally accepted accounting principles (GAAP).  To supplement these consolidated financial results, management believes that a presentation and discussion of certain financial measures on an adjusted basis, which exclude certain non-operating or discrete gains, charges or other items, may provide a more meaningful basis on which investors may compare the Company's ongoing results of operations between periods.  These measures include adjusted earnings, adjusted earnings per share, adjusted gross profit, adjusted gross margin, adjusted SG&A, and adjusted operating income, among others. Management uses these non-GAAP financial measures in making financial, operational, and planning decisions to evaluate the Company's ongoing performance. Management also uses these adjusted financial measures to discuss its business with investment and other financial institutions, its board of directors and others.  Reconciliations of these adjusted measures to the most directly comparable financial measures calculated in accordance with GAAP are presented in tables included at the end of this release. Safe Harbor This press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which typically are not historical in nature. We intend for all forward-looking statements contained herein, in our press releases or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, the impact of the coronavirus (COVID-19) pandemic on our business, operations and financial results, including due to uncertainties about scope and duration, supply chain disruptions, future store closures or other operating restrictions or the impact on consumer traffic, any or all of which may also affect many of the following risks; demand for our products, which may be impacted by competitive conditions and/or evolving consumer shopping patterns; macroeconomic factors that may impact consumer discretionary spending and pricing levels for apparel and related products, many of which may be impacted by current inflationary pressures; supply chain disruptions, including the potential lack of inventory to support demand for our products, which may be impacted by capacity constraints, closed factories, and cost and availability of freight deliveries; costs and availability of labor; costs of products as well as the raw materials used in those products; energy costs; our ability to be more hyper-digital and respond to rapidly changing consumer expectations; the ability of business partners, including suppliers, vendors, licensees and landlords, to meet their obligations to us and/or continue our business relationship to the same degree in light of current or future staffing shortages, liquidity challenges and/or bankruptcy filings; retention of and disciplined execution by key management and other critical personnel; cybersecurity breaches and ransomware attacks, as well as our and our third party vendors' ability to properly collect, use, manage and secure business, consumer and employee data; changes in international, federal or state tax, trade and other laws and regulations, including the potential imposition of additional duties; the timing of shipments requested by our wholesale customers; weather; fluctuations and volatility in global financial markets; the timing and cost of retail store and food and beverage location openings and remodels, technology implementations and other capital expenditures; acquisition activities, including our ability to timely recognize expected synergies from acquisitions; expected outcomes of pending or potential litigation and regulatory actions; the increased consumer, employee and regulatory focus on climate change and environmental, social and governance issues; access to capital and/or credit markets; factors that could affect our consolidated effective tax rate; and geopolitical risks, including those related to the war between Russia and Ukraine. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I. Item 1A. Risk Factors contained in our Annual Report on Form 10-K for Fiscal 2021, and those described from time to time in our future reports filed with the SEC. We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Contact: Jevon Strasser                                                         E-mail: InvestorRelations@oxfordinc.com                 Oxford Industries, Inc.   Consolidated Balance Sheets   (in thousands, except par amounts)   (unaudited)          July 30,   July 31,       2022   2021   ASSETS               Current Assets               Cash and cash equivalents   $ 31,269     $ 180,389     Short-term investments     154,754       —     Receivables, net     50,757       48,522     Inventories, net     135,483       77,330     Income tax receivable     19,743       18,085     Prepaid expenses and other current assets     29,242       24,720     Total Current Assets   $ 421,248     $ 349,046     Property and equipment, net     150,887       157,380     Intangible assets, net     154,853       155,747     Goodwill     23,861       23,897     Operating lease assets     179,217       212,217     Other assets, net     27,136       33,462     Total Assets   $ 957,202     $ 931,749                     LIABILITIES AND SHAREHOLDERS' EQUITY                Current Liabilities               Accounts payable   $ 76,974     $ 62,116     Accrued compensation     28,779       34,027     Current portion of operating lease liabilities     53,119       58,523     Accrued expenses and other liabilities     63,768       65,518     Total Current Liabilities   $ 222,640     $ 220,184     Long-term debt     —       —     Non-current portion of operating lease liabilities     180,092       215,434     Other non-current liabilities     19,200       21,389     Deferred income taxes     1,254       1,043     Shareholders' Equity               Common stock, $1.00 par value per share     15,960       16,895     Additional paid-in capital     166,139       158,083     Retained earnings     355,037       302,456     Accumulated other comprehensive loss     (3,120 )     (3,735 )   Total Shareholders' Equity   $ 534,016     $ 473,699     Total Liabilities and Shareholders' Equity   $ 957,202     $ 931,749     Oxford Industries, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited)        Second Quarter      First Half     Fiscal 2022   Fiscal 2021   Fiscal 2022   Fiscal 2021 Net sales   $ 363,430   $ 328,672   $ 716,011   $ 594,434 Cost of goods sold     131,281     119,046     257,485     218,223 Gross profit   $ 232,149   $ 209,626   $ 458,526   $ 376,211 SG&A     163,135     146,367     320,547     283,492 Royalties and other operating income     6,357     4,737     13,370     10,170 Operating income   $ 75,371   $ 67,996   $ 151,349   $ 102,889 Interest expense, net     274     211     516     463 Earnings before income taxes   $ 75,097   $ 67,785   $ 150,833   $ 102,426 Income tax expense     18,485     16,325     36,813     22,498 Net earnings   $ 56,612   $ 51,460   $ 114,020   $ 79,928                           Net earnings per share:                           Basic   $ 3.56   $ 3.09   $ 7.07   $ 4.81 Diluted   $ 3.49   $ 3.05   $ 6.94   $ 4.75 Weighted average shares outstanding:                          Basic     15,919     16,637     16,118     16,615 Diluted     16,238     16,859     16,430     16,825 Dividends declared per share   $ 0.55   $ 0.42   $ 1.10   $ 0.79 Oxford Industries, Inc. Consolidated Statements of Cash Flows (in thousands) (unaudited)     First Half     Fiscal 2022      Fiscal 2021 Cash Flows From Operating Activities:             Net earnings   $ 114,020     $ 79,928   Adjustments to reconcile net earnings to cash flows from operating activities:             Depreciation     20,358       18,935   Amortization of intangible assets     454       440   Equity compensation expense     5,252       3,901   Amortization of deferred financing costs     172       172   Deferred income taxes     (1,657 )     2,231   Changes in operating assets and liabilities, net of acquisitions and dispositions:              Receivables, net     (16,218 )     (16,617 ) Inventories, net     (17,867 )    .....»»

Category: earningsSource: benzingaSep 1st, 2022

3 Hotels & Motels Stocks to Buy in a Prospering Industry

Although the hotel occupancy rate is improving, it is below the pre-pandemic level. However, stocks like MAR, H and VAC are likely to benefit from a gradually improving occupancy and RevPAR. The Zacks Hotels and Motels industry is gradually coming out of the woods, courtesy of rising demand. Although occupancy is improving, it remains below the pre-pandemic level. However, people are feeling more optimistic and confident about the prospect of traveling again. To capitalize on this bullish sentiment, hotel operators are increasingly focusing on a number of initiatives to meet the needs of their customers as they return to hotels. The industry exhibited resilience on the back of cost-saving initiatives and digital enhancements. Hotel owners continue to focus on maintaining a balance between maximizing hotel profitability and driving guest satisfaction. The industry is benefiting from an increase in ADR and RevPAR. The industry players, namely Marriott International, Inc. MAR, Hyatt Hotels Corporation H and Marriott Vacations Worldwide Corporation VAC, have been gaining from the prevailing scenario so far.Industry DescriptionThe Zacks Hotels and Motels industry comprises companies that own, lease, manage, develop and franchise hotels. Some vacation ownership and exchange companies are also part of this industry. Several industry participants own, develop and operate resorts. Some companies develop lodges, villages and mobile accommodations, which include modular, skid-mounted accommodation and central amenities that provide long-term and temporary workforce accommodations. Some industry players develop, market, sell, and manage vacation ownership and associated products. A few hoteliers provide studios, one-bedroom suites and accommodations to mid-market business and personal travelers.4 Trends Shaping the Future of Hotels & Motels IndustryStrong RevPAR & ADR Driving Growth: Although occupancy is improving, it is below the pre-pandemic level. The industry is benefiting from robust ADR and RevPAR. Per STR, occupancy for the month ended July, came in at 69.6%, down 5.4% from the July 2019 level. However, ADR and RevPAR increased 17.5% and 11.2% to $159.08 and $110.73, respectively. The uptrend was driven by solid leisure demand in the United States. Easing COVID-19 restrictions, the rise in vaccination rates and an improving business activity added to the upside. Hotel demands in 2022 are likely to be driven by leisure travelers from Europe and the Asia-Pacific.Digitalization to Aid Growth: Hotel owners continue to focus on maintaining a balance between maximizing hotel profitability and boosting guest satisfaction. To this end, hoteliers leveraged technologies like mobile and web check-in as well as the mobile key. The hoteliers also increased the use of these digital tools to strengthen infrastructure, grow online package sales, enable self-service bookings, make real-time offerings and enhance the overall customer experience. This apart, an emphasis on pricing optimization and merchandising capabilities will likely enable the hoteliers to capture an additional market share.Initiatives to Attract Customers: Firstly, hoteliers are committed to comprehensive processes for cleaning, disinfection and infectious disease prevention. To this end, they instated a trained hygiene and well-being leader responsible for a clean and safe environment for staff and guests. Secondly, the companies are making concerted efforts to enhance the contactless experience and leveraging technologies, such as mobile and web check-in as well as the mobile key. The industry players resorted to streamlining operations with efficient management levels, benefits of which are likely to stay even after the pandemic dies down.High Costs Remain a Woe: Steep costs remain a concern for the industry participants. Since the coronavirus pandemic continues to impact the global travel industry, hoteliers are constantly focusing on cost-saving measures to counter the crisis. Some of the industry players discontinued share repurchases and suspended dividends in a bid to improve liquidity.Zacks Industry Rank Indicates Bright ProspectsThe Zacks Hotels and Motels industry is grouped within the broader sector.The group's Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates sunny near-term prospects. The Zacks Hotels and Motels industry currently carries a Zacks Industry Rank #44, which places it in the top 17% of the 252 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry's position in the top 50% of the Zacks-ranked industries is the result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group's earnings growth potential. Since Mar 31, 2022, the industry's earnings estimates for 2022 have increased 16.3%.Before we present a few stocks you may want to keep an eye on, let's look at the industry's recent stock-market performance and the valuation picture.Industry Outperforms S&P 500 & SectorThe Zacks Hotels and Motels industry has outperformed both the Zacks S&P 500 composite and its own sector in the past year.Over this period, the industry has gained 3.1% against the sector's decline of 35.1% and the Zacks S&P 500 composite’s fall of 6.9%.Hotels & Motels Industry's ValuationOn the basis of the forward 12-month EV/EBITDA, a commonly used multiple for valuing Hotels and Motels stocks, the industry is currently trading at 19.69X compared with the S&P 500's 20.08X. Meanwhile, it is also above the sector's trailing 12-month EV/EBITDA ratio of 12.94X.Over the last five years, the industry has traded as high as 23.74X and as low as 9.77X, with the median being at 13.68X, as the chart below shows.3 Hotels & Motels Stocks to Watch forMarriott: Marriott is a leading worldwide hospitality company focused on lodging management and franchising. MAR is consistently trying to expand its presence worldwide and capitalize on demand for hotels in the international markets. Moving ahead, MAR plans to significantly expand its global portfolio of luxury and lifestyle brands. At the end of second-quarter 2022, its development pipeline totaled nearly 2,942 hotels, with approximately 495,000 rooms. Nearly 203,300 rooms were under construction. During the quarter, MAR added 97 properties (16,917 rooms) to its worldwide lodging portfolio. In 2022, it anticipates net room growth in the 3-3.5% range.Marriott currently carries a Zacks Rank #2 (Buy). In the past 60 days, the Zacks Consensus Estimate for 2022 earnings has been revised 6.8% upward. The Zacks Consensus Estimate for MAR's 2022 sales and earnings per share suggests growth of 46.1% and 101.3%, respectively, from the corresponding year-ago period’s figures. The stock has rallied 15.4% over the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Price and Consensus: MARHyatt: H has been benefiting from solid leisure transient demand, easing travel restrictions and ramping up airline capacity. Also, a focus on hotel openings and acquisition initiatives bodes well. Hyatt is o consistently trying to expand its presence worldwide and has expansion plans in the Asia-Pacific region, Europe, Africa, the Middle East and Latin America.Hyatt currently carries a Zacks Rank of 2. In the past seven days, the Zacks Consensus Estimate for 2022 earnings has been revised 50% upward. The Zacks Consensus Estimate for H’s 2022 sales and earnings per share suggests growth of 89.1% and 110.9%, respectively, from the comparable year-ago period’s tallies. The stock has rallied 20.5% over the past year.Price and Consensus: HMarriott Vacations Worldwide: VAC has been witnessing improvement in occupancy rates, highlighting people’s willingness to go on vacations. During the second quarter of 2022, Marriott Vacations reported solid occupancies with respect to its Aqua-Aston business. VAC reported year-over-year growth in occupancies and RevPAR.Marriott Vacations currently sports a Zacks Rank #1. In the past seven days, the Zacks Consensus Estimate for 2022 earnings has been revised 1.1% upward. The Zacks Consensus Estimate for VAC’s 2022 sales and earnings per share suggests growth of 19.7% and 131.4%, respectively, from the corresponding year-ago period’s actuals. The stock has declined 5.1% over the past year.Price and Consensus: VAC  Zacks' Top Picks to Cash in on Electric Vehicles Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investorsSee 5 EV Stocks With Extreme Upside Potential >>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 Marriott International, Inc. (MAR): Free Stock Analysis Report Hyatt Hotels Corporation (H): Free Stock Analysis Report Marriot Vacations Worldwide Corporation (VAC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 23rd, 2022

Futures Rise In Morbid Volumes With All Eyes On 50% Fib Retracement Level

Futures Rise In Morbid Volumes With All Eyes On 50% Fib Retracement Level European stocks and US futures rallied on the last day of the week, however traded well off session highs in extremely low-volume trading and tracked the sudden drop in oil, as investors pressed bets that easing inflation will allow the Fed to pivot to less aggressive rate hiking (if not ease outright). S&P 500 and Nasdaq 100 contracts rose about 0.3%, with both underlying indexes set to post their longest sequence of weekly gains since November. Treasury yields were steady at 2.87% and the US dollar rose but was set for the worst week since May. Crude oil fell, reducing its biggest weekly gain in about four months. Gold headed for a fourth weekly gain and Bitcoin was summarily smacked down below the $24,000 level yet again as crypto bears fight to preserve the upper hand. For the second day in a row an attempt to void the bear market rally narrative by pushing spoos above the 50% fib retracement level is being defended by bears, with futures trading at 4222, or right on top of the critical level, which also doubles as the 100DMA. If broken through it could lead to substantial upside gains as even more bears throw in the towel. In premarket trading, Alibaba led a premarket decline in US-listed China stocks after some of the nation’s largest state-owned companies announced plans to delist from American exchanges. Bank stocks traded higher, set to gain for a fourth straight day as investors continue to pile into stocks amid signs that inflation is cooling. In corporate news, Huobi Group founder Leon Li is in talks with a clutch of investors to sell his majority stake in the crypto-exchange at a valuation of as much as $3 billion. Here are some of the other notable premarket movers: Rivian (RIVN US) shares fall 1.4% in premarket trading after the electric vehicle-maker forecast a bigger adjusted Ebitda loss for the full year than previously expected. Expensify (EXFY US) shares fall 14% in premarket trading after the software company’s second-quarter revenue missed the average analyst estimate. Toast (TOST US) shares soar 15% in premarket trading after the company boosted its revenue guidance for the full year and beat analyst estimates. Chinese stocks in US slip in premarket trading after China Life Insurance (LFC US), PetroChina (PTR US) and Sinopec (SNP US) announced plans to delist American depository shares from the NYSE. Ciena (CIEN US) gains 2.9% in premarket trading as Morgan Stanley upgrades its rating on to overweight with strong quarters seen ahead for the telecoms and networking equipment firm. Co-Diagnostics (CODX US) shares plunge as much as 40% in US premarket trading, after the molecular diagnostics firm flagged lower volumes for its Covid-19 test. Olo (OLO US) falls 31% in premarket trading, after the restaurant delivery platform cut revenue guidance. Phunware (PHUN US) falls almost 7% in premarket trading after the enterprise cloud platform posted revenue and Ebitda that missed the average estimate. Poshmark (POSH US) gave a weaker-than- expected quarterly revenue forecast as the online marketplace for second-hand goods sees sales growth being held back by macro pressures. The stock fell about 5% in postmarket trading on Thursday. SmartRent’s (SMRT US) lowered full-year guidance represents a more attainable earnings outlook for the smart-home automation company, Cantor Fitzgerald said. Shares fell 16% in postmarket trading. Traders pared back bets on Fed rate hikes after a report on Thursday showed US producer prices fell in July from a month earlier for the first time in over two years. That added to Wednesday’s data on slower increases in consumer prices to provide signs of cooling but still troubling inflation. Swaps referencing the Fed’s September meeting point to some uncertainty over whether a half-point or another 75 basis-point rate hike is on the cards. Working hard to prevent stocks from rising even more, in the latest US central banker comments, San Francisco Fed President Mary Daly said inflation is too high, adding she anticipates more restrictive monetary policy in 2023. Her baseline is a half-point September hike but she’s open to another 75 basis-point move if necessary, Daly said in a Bloomberg Television interview. “The macroeconomic environment may be starting to improve a little bit, with a peak in US CPI calling into question the need to hike rates aggressively,” economists at Rand Merchant Bank in Johannesburg said. “Inflation is still high and the Fed will still need to increase rates, but the situation is not as bad as many had feared.” European stocks erased early gains as energy stocks fell with crude oil futures and investors weighed the impact of recent macroeconomic data on central bank policy. The Stoxx Europe 600 index fell 0.1% by 12:03 p.m. in London after gaining as much as 0.5% earlier. Health care giant GSK Plc was among outperformers, trimming a rout this week that was driven by worries about Zantac litigation, with some analysts suggesting the selloff may have been extreme. Elsewhere, travel and leisure was lifted by gains for Flutter Entertainment Plc following earnings, while consumer staples and miners declined. The region’s main stocks benchmark has risen about 10% since early July, with gains this week spurred by softer-than-expected US inflation data. Still, many investors are skeptical over the impact the report will have on monetary policy. “We’re having another moment where the market is not listening to central banks,” said Tatjana Greil Castro, co-head of public markets at Muzinich & Co. “Marginally, investors are very reluctant to sell anything and want to buy,” she told Bloomberg Television. Paradoxically, at the same time, data from Bank of America showed outflows from European equity funds continued for a 26th week at $4.8 billion. The recent bounce for the region’s benchmark is likely to fizzle out in the absence of a pickup in economic growth, BofA’s strategists said. Here are the biggest European movers: Flutter shares rise as much as much as 13% after the gambling firm reported 1H earnings that beat estimates. The strong update was led by the US and Australia, according to Goodbody. GSK shares rise as much as 5% after its worst two-day rout on Zantac litigation worries. In response to the selloff on Zantac, GSK downplayed cancer risks from ranitidine and said it will vigorously defend all claims. Sanofi, also caught up in the Zantac-related selloff, rises as much as 3.2%, while Haleon edges up as much as 2%. Telecom Italia gains as much as 9.1% following a Bloomberg News report that Italy’s far-right Brothers of Italy party is promoting a plan to take the phone company private and sell off its in a bid to cut its debt pile by more than half. Nexi shares surge as much as 7.4% amid a Reuters report that the payment firm has received several unsolicited approaches from private equity firms, including Silver Lake, to take the company private. Boozt shares rise as much as 18%, the most since October 2020, with DNB (buy) highlighting a strong beat on the bottom line for the Swedish ecommerce retailer. Argenx shares rise as much as 3.7% after KBC reiterates its buy recommendation, saying the biotech is executing on schedule after yesterday’s European approval for Vyvgart, and with regulatory filing submitted in China. Kingfisher shares drop as much as 4.2% after UBS cut its recommendation on the stock to sell from neutral, citing a softening outlook for the UK do-it-yourself (DIY) and do-it-for- me (DIFM) categories. 888 Holdings shares drop as much as 16%, the most since February 2015, after the gambling company reported results and forecast 2H revenue will be in line with 1H. Galenica shares fall as much as 2.5%, with Credit Suisse recommending staying put due to “demanding” valuation. Asian stocks rose to a two-month high as Japan lifted the region higher in a catch-up rally, with traders digesting another downside surprise in US inflation. The MSCI Asia Pacific Index rose as much as 0.7%, poised for a third day of gains. Japan’s Topix Index added 2% after traders returned from a holiday, while markets in the rest of the region were mixed. Chinese shares fluctuated in a narrow range. Concerns on US inflation eased further after an unexpected month-on-month fall in July’s producer price index, which came a day after slower-than-expected US consumer prices. Stocks were initially strong overnight, before the rally faltered on concerns it may have gone to far. Gains in Asia were more modest on Friday, following hawkish commentary from a Fed speaker.  Some optimism has emerged across Asia this week as traders bet on slower interest-rate increases by the Fed amid easing price pressures. The regional stock benchmark headed for a fourth weekly gain, the longest streak since January 2021. Still, the gauge is down more than 15% this year, trailing other equity benchmarks in the US and Europe. “Clearly in the last month and a half, people sort of moved from that inflationary fear to the Goldilocks scenario. And I think that gives a bit of time for reflection,” Joshua Crabb, head of Asia Pacific equities at Robeco, said in a Bloomberg TV interview. The current earnings season is critical because “we’re also gonna see how much demand destruction that inflation is gonna put forward.” Australia's S&P/ASX 200 index fell 0.5% to close at 7,032.50, dragged by losses in mining and health shares. Still, the benchmark climbed 0.2% for the week in its fourth straight week of gains.  The materials sub-gauge contributed most to the gauge’s decline on Friday after iron ore fell, as a report showed stockpiles of the steel-making ingredient are still rising. In New Zealand, the S&P/NZX 50 index fell 0.3% to 11,730.52. The nation’s food prices surged 7.4% from a year earlier in July, the largest increase in four months, according to data released by Statistics New Zealand Indian stocks clocked their longest stretch of weekly gains since the middle of January as a pickup in foreign buying pushed key indexes higher.  The S&P BSE Sensex rose 0.2% to 59,462.78 in Mumbai, taking its weekly gains to almost 2%. This was the fourth week of advance for the key index. The NSE Nifty 50 Index also climbed 0.2% on Friday. Of the 30 stocks in the Sensex, half fell and the rest climbed. Reliance Industries offered the biggest boost to the key gauge.  Thirteen of 19 sectoral sub-indexes compiled by BSE Ltd. rose, led by a gauge of oil and gas companies.  Foreign investors have bought a net $3.2 billion of Indian shares since the end of June through Aug. 10. That’s after dumping about $33 billion in the previous nine months as concerns over the Federal Reserve’s aggressive tightening boosted the dollar and spurred outflows from emerging market assets. “FPIs flows were positive this week. With results season coming towards a close, market focus will shift towards macro factors that includes inflation, central bank rate action, oil prices and recession concerns in key economies globally,” Shrikant Chouhan, head of equity research at Kotak Securities wrote in a note. In FX, Bloomberg dollar spot index is in a holding pattern, up about 0.1%. NZD and AUD are the strongest performers in G-10 FX, SEK and GBP underperform. The Swedish krona led losses after weaker-than-expected inflation data, with the pound also lagging after stronger-than-expected data showed the UK economy shrank in the second quarter. The yen also underperformed. The Canadian dollar and Norwegian krone led gains, with NOK/SEK hitting the highest since April In rates, Treasuries were slightly richer across the curve with gains led by long-end, although futures remain near bottom of Thursday’s range. Curve mildly flatter, but spreads broadly hold Thursday’s steepening move. Gilts underperform after raft of UK data including 2Q GDP which contracted less than expected. US yields richer by as much as 4bp across long-end of the curve with 5s30s spreads steeper by more than 2bp on the day; 10-year yields around 2.865%, richer by 2bp on the day and outperforming bunds, gilts by 3.5bp and 5.5bp in the sector. Gilts underperform bunds and Treasuries, trading about 3-4bps higher across the yield curve after UK 2Q GDP contracted less than expected, with traders raising BOE tightening bets. German 10-year yield briefly rose above 1%, now up about 2bps to 0.99%. Peripheral spreads widen to Germany. Treasuries 10-year yield down 1 bps to 2.87%. In commodities, WTI crude is trading slightly lower at ~$94, within Thursday’s range, and gold is down close to $3 at ~$1,787 Looking to the day ahead now, and data releases include the UK’s GDP reading for Q2, Euro Area industrial production for June, and in the US there’s the University of Michigan’s preliminary consumer sentiment index for August. Market Snapshot S&P 500 futures up 0.6% to 4,234.25 STOXX Europe 600 up 0.4% to 442.02 MXAP up 0.6% to 163.27 MXAPJ up 0.2% to 531.44 Nikkei up 2.6% to 28,546.98 Topix up 2.0% to 1,973.18 Hang Seng Index up 0.5% to 20,175.62 Shanghai Composite down 0.1% to 3,276.89 Sensex up 0.3% to 59,482.94 Australia S&P/ASX 200 down 0.5% to 7,032.51 Kospi up 0.2% to 2,527.94 German 10Y yield little changed at 1.00% Euro down 0.2% to $1.0295 Brent Futures up 0.3% to $99.90/bbl Brent Futures up 0.3% to $99.87/bbl Gold spot down 0.1% to $1,787.09 U.S. Dollar Index up 0.25% to 105.35 Top Overnight News from Bloomberg Three of China’s largest state-owned companies announced plans to delist from US exchanges as the two countries struggle to come to an agreement allowing American regulators to inspect audits of Chinese businesses The cooler inflation reading for July is welcome news and may mean it’s appropriate for the Federal Reserve to slow its interest-rate increase to 50 basis points at its September meeting, but the fight against fast price growth is far from over, San Francisco Fed President Mary Daly said. China may be ready to curb some of the excess liquidity sloshing in the banking system as it turns its focus to mitigating risks in the financial industry. In the fight against pandemic inflation, Latin America led the world into a new age of tight money. Eighteen months later, there’s not much sign that being first in will help the region to become first out The UK economy shrank in the second quarter for the first time since the pandemic, driven by a decline in spending by households and on fighting the coronavirus A more detailed look at global markets courtesy of Newsquawk Asia-Pc stocks were mixed following a similar indecisive lead from Wall Street where stocks and treasuries faded the initial gains from the softer-than-expected PPI data, although Japan outperformed on return from holiday. ASX 200 was dragged lower by losses across nearly all sectors including the top-weighted financial industry despite the confirmation of a return to profit for IAG, while energy bucked the trend after a recent rebound in oil. Nikkei 225 notched firm gains as it played catch-up to global peers and took its first opportunity to react to the softer inflationary signals from the US, while Softbank was among the top performers as it expects to gain USD 34bln from reducing its stake in Alibaba. Hang Seng and Shanghai Comp were both subdued in early trade amid weakness in property stocks and ongoing COVID-related headwinds, although the Hong Kong benchmark gradually recovered with earnings releases also in the limelight. Top Asian News Japanese PM Kishida plans to hold a meeting on August 15th to address rising goods prices, wages and daily life, while he called for additional measures on dealing with rising food and energy prices, according to Reuters. Jardine Matheson Slumps 9.6% as MSCI Cuts Co. Weight in Indexes Baltic States Abandon East European Cooperation With China Gold Set for Fourth Weekly Gain on Signs Fed to Ease Rate Hikes Asian Gas Prices Rally on Rush by Japan to Secure Winter Supply European bourses are firmer, but action has been relatively contained with newsflow slim, Euro Stoxx 50 +0.2%; however, benchmarks waned alongside US futures following China ADS updates. Currently, ES +0.4% but similarly off best levels amid Chinese stocks announcing intentions to delist their ADSs and reports that Germany is being looked at as a banking base. China Life (2628 HK), PetroChina (857 HK), Sinopec (386 HK) plan to delist ADSs from NYSE; last trading day for China Life expected to be on or after 1st September. Subsequently, China's Securities Regulator says it is normal within capital markets for companies to list and delist. Chinese brokers are reportedly looking at Germany as a banking base amid tensions with the US, via Bloomberg citing sources. SMIC (0981 HK) CEO says increasing geopolitical tensions, elevated inflation and a cyclical downturn in demand for chips has resulted in "some panic" within the industry, via FT. Huawei - H1 2022 (CNY): Revenue -5.9% Y/Y to 301.6bln. Net Profit 15.08bln (prev. 31.39bln Y/Y). Device Business Revenue -25.3% Y/Y. 2022 will probably be the most challenging year historically for our devices business Chinese and Hong Kong regulators are to announce adjustments to the trading calendar for the stock connect Top European News Union Leaders Kick Off Rallies Across UK in Living Cost Protest Baltic States Abandon East European Cooperation With China Swedish Core Inflation Surge Fuels Bets of Faster Rate Hikes JPMorgan Strategists Say US 2Q Earnings Fall 3% Excluding Energy Ukraine Latest: Putin’s Economy in Focus; More Grain on the Move FX DXY attempts to recover from its post-CPI lows as it eyes yesterday’s 105.46 high. EUR, JPY, and GBP are under pressure from the firmer Dollar; EUR/USD eyes some notable OpEx for the NY cut. The non-US Dollars are resilient this morning on the back of the general risk tone across stocks and the rise in commodities. Fleeting SEK upside was seen in wake of inflation data, with the metrics being in-line/below expectations. Fixed Income Core benchmarks are little changed overall on the session and particularly when compared to price action seen earlier in the week. Further pressure seen following the Gilt open in wake of UK GDP metrics. USTs in-fitting with peers and the yield curve, currently, does not exhibit any overt bias Commodities WTI and Brent hold an upside bias in Europe amid the broader risk tone. Spot gold is relatively uneventful as the firming Dollar keeps the yellow metal capped under USD 1,800/oz. Base metals markets are relatively mixed with the market breadth shallow, although LME copper extends on gains above USD 8k/t. US Event Calendar 08:30: July Import Price Index YoY, est. 9.4%, prior 10.7%; MoM, est. -0.9%, prior 0.2% July Export Price Index YoY, prior 18.2%; MoM, est. -1.0%, prior 0.7% 10:00: Aug. U. of Mich. Sentiment, est. 52.5, prior 51.5 Aug. U. of Mich. Current Conditions, est. 57.8, prior 58.1 Aug. U. of Mich. Expectations, est. 48.5, prior 47.3 Aug. U. of Mich. 1 Yr Inflation, est. 5.1%, prior 5.2%; 5-10 Yr Inflation, est. 2.8%, prior 2.9% DB's Jim Reid concludes the overnight wrap This will be the last EMR from me for a couple of weeks as I'm off on holiday. We're going to Cornwall rather than our usual France trip this summer as transporting a child in a wheelchair around a beach was seen as mildly easier than doing the same up and down a mountain. Hopefully this time next year we'll be back in the invigorating mountain air. If you're reading this having originated from Cornwall please don't take offence! However I've never liked beach holidays and I think I'm too old to change my mind. The kids on the other hand can't contain their excitement. So expect me to spend most of my time in an uncomfortable wetsuit trying desperately to ensure that they don't get washed away. Give me the stress of payrolls or CPI any day over that. I'll be gazing longingly from the sea at the golf course next door. Life's been quite a beach for markets of late but the last 24 hours have been a bit strange, as a second successive weaker-than-expected US inflation reading (PPI) actually left longer dated yields notably higher than where they were before the better than expected CPI on Wednesday, and at one point they were +23bps above where they were immediately after the first of these two dovish prints. The S&P 500 also reversed earlier gains of more than +1% to finish lower at -0.07%. Maybe we shouldn't read too much into summer illiquidity but the moves have been a bit all over the place of late. While the combination of below-expectations inflation and worsening labour data (see below) initially drove a dovish-Fed interpretation, the price action reverted throughout the day, and we closed with still around even odds between a 50bp or 75bp hike at the September FOMC meeting (61.8bps implied). When it came to Treasuries, despite the selloff, there was a decent amount of curve steepening, with the 2yr yield climbing +0.4bps whilst the 10yr yield rose by +10.6bps to 2.89%, the highest since July 20th. This helped the 2s10s curve to see its biggest daily steepening move in over 3 months and closing at -33bps, but still having closed inverted 29 for days running. 30yr Treasuries (+14.2bps) hit the highest since July 8 after receiving a lukewarm reception at auction. Maybe the longer end yield rises actually reflect a view that the Fed will be less likely to need to choke the recovery off now inflation is cooling. So maybe yields would have been lower this week with stronger inflation prints? Or is that just the silly season getting to me? To add to the ups and downs, this morning in Asia, 10yr UST yields (-2.73 bps) are edging lower, trading at 2.86% with the 2yr yield down -1.86 bps at 3.20% thus flattening the curve a tad as we go to press. Over in equities, the S&P 500 (-0.07%) was marginally lower last night after increasing more than +1% in the New York morning. Small caps were a big outperformer, with the Russell 2000 index up by +0.31% to reach its highest level since April as the near-term growth outlook still looks OK, whereas the NASDAQ bore the brunt of the gradual duration selloff throughout the day, falling -0.58%. Overnight, contracts on the S&P 500 (+0.14%) and NASDAQ 100 (+0.22%) are moving slightly higher again. In terms of the details of that inflation print, US producer prices fell by -0.5% in July, which was some way beneath expectations for a +0.2% rise, and marks the biggest monthly decline since April 2020 when the economy was experiencing Covid lockdowns. As with the CPI release the previous day, the PPI was dragged down by a sharp fall in energy prices, which fell by -9.0% on the month, and that helped the annual headline measure fall from +11.3% in June down to +9.8% in July. Even if you just looked at core PPI however, the reading was still softer than expected, with the monthly gain excluding food and energy at +0.2% (vs. +0.4% expected), which sent the annual gain down to +7.6%. The prospect that the Fed would be more cautious in hiking rates was given a slight bit of extra support thanks to additional signs that the labour market was softening. The weekly initial jobless claims for the week through August 6 came in at 262k (vs. 265k expected), which is their highest level since November, and the smoother 4-week moving average also rose to a post-November high of 252k. Continuing claims climbed to 1428k, above expectations. Recall, our US economics team has showed that once the 4-week average of continuing claims increases 11% over recent lows near-term recession alarms start sounding. We’re at 1399k on the 4-week moving average on claims, still a reasonable distance from this 11% increase of 1465k. Overall, although the weekly claims data is slowly getting worse, it's still happening in a sea of huge job openings and generally big job growth. Perhaps the labour market is behaving slightly different from usual in that you can have both big job openings but claims edging up because of a sudden skills mismatch post Covid. If so it makes traditional clues to the future direction of the economy more difficult to decipher. For us the US jobs market is still healthy for now. I suspect it won't be in 12 months time but that's a story for another day. For Europe, the newsflow continued to be much more downbeat than in the US of late, as concerns mounted across the continent about the energy situation this winter. Natural gas futures rose a further +1.34% yesterday to €208 per megawatt-hour, putting them at their highest levels since early March just after Russia’s invasion of Ukraine began. Power prices also soared to fresh records, with German prices for next year up +5.24% to €449 per megawatt-hour, whilst French prices were up +6.62% to €615 per megawatt-hour. Governments are coming under increasing pressure to do something about this, and German Chancellor Scholz said yesterday that there would be further relief measures for consumers. Growing concerns about an imminent recession meant that European equities also had a lacklustre day, with the STOXX 600 only up +0.06%. Sovereign bonds also lost ground, with yields on 10yr bunds (+8.2bps), OATs (+8.3bps) and BTPs (+3.8bps) all moving higher on the day, although gilts were the biggest underperformer on this side of the Atlantic with yields up by +10.8bps. Asian equity markets are relatively quiet this morning with the exception of the Nikkei (+2.37%) which is surging and catching-up up after a holiday on Thursday, whilst the Hang Seng (+0.09%), the Shanghai Composite (+0.16%), the CSI (+0.08%) and the Kospi (+0.02%) are all edging up. Elsewhere, the San Francisco Fed President Mary Daly in her overnight remarks indicated that a 50 bps interest rate hike in September “makes sense” following two back-to-back 75-basis-point hikes in June and July given recent economic data including on inflation. However, she added that she is open for a bigger rate hike if the data showed it was needed. To the day ahead now, and data releases include the UK’s GDP reading for Q2, Euro Area industrial production for June, and in the US there’s the University of Michigan’s preliminary consumer sentiment index for August. Tyler Durden Fri, 08/12/2022 - 08:08.....»»

Category: dealsSource: nytAug 12th, 2022

What Happens When Work Doesn"t Pay

What Happens When Work Doesn't Pay Authored by MN Gordon via EconomicPrism.com, Now there comes a time In every man’s life, Where decisions have to be made Whether to toil, to labor, Or just plain piss Your days away, away, away! – Caught in a Jar, Dropkick Murphys Flat Out Wrong Jobs data reported this week by the Bureau of Labor Statistics show that, as of the last business day of June, there are 10.7 million job openings.  Hence, according to the numbers, there are many more available jobs than willing workers. At the same time, the U.S. unemployment rate’s just 3.6 percent – near a five-decade low.  So, by the numbers, the economy is at full employment and still overflowing with jobs to be filled. The U.S. economy couldn’t possibly be in a recession, given this robust and healthy jobs market, could it? Not in the eyes of Treasury Secretary Janet Yellen, who recently stated the economy isn’t in a recession because, “job creation is continuing, household finances remain strong, consumers are spending and businesses are growing.” Quite frankly, Yellen is flat out wrong.  Remember, the jobs numbers are only as good as the data that goes into them.  And with a scratch below the surface, it quickly becomes clear that the jobs numbers are not a sign of economic strength.  But rather, of economic sickness. Anyone who doesn’t work for the Biden administration can see the economy’s in a recession.  GDP data alone shows the economy contracted in both the first and second quarter of 2022.  The technical definition for a recession has long been understood to be two consecutive quarters of declining GDP.  So, by definition, the economy is in recession. We’ll have more on the deficiencies of the U.S. employment situation in just a moment.  But first, let’s take a look at some real-time anecdotal evidence that jobs are the next shoe to drop. In fact, when it comes to tech jobs, the freefall is gaining momentum.  For some young programmers, it’s an exhilarating ride… Should You Be Here? On a June 30 remote meeting, for example, Mark Zuckerberg announced he wanted to remove Meta (i.e. Facebook) employees who are “coasting” or low performers.  “Realistically, there are probably a bunch of people at the company who shouldn’t be here,” he remarked. Many of Zuckerberg’s employees thought this was a real hoot.  New meme’s soon appeared on Workplace, including: “Coast, Coasters, Me,” a play on Meta’s recently introduced “Meta, Metamates, Me” mantra. Other enterprising employees created posters for the walls at Meta’s headquarters asking, “Should you be here?” in bold, all-caps red letters.  “Look at this dude coasting,” wrote one employee above a picture of Zuckerberg hydrofoiling on a lake while holding the American flag. Who knew the threat of pink slips could be so much fun? Yet it’s not just Meta that’s looking to rid itself of coasters.  The Mercury News recently provided a partial cross section of the tech employment drop.  Here we further synthesize it for you: Amazon, via attrition, now has 100,000 fewer employees than in the previous quarter.  Carvana Co., an online used car retailer, laid off 2,500 people in May, about 12 percent of its workforce. Coinbase Global Inc., a crypto exchange, told employees it was cutting 18 percent of staff in June to prepare for an economic downturn.  Gemini Trust Co., a cryptocurrency exchange founded by Bitcoin billionaires Cameron and Tyler Winklevoss, the Harvard twins Zuckerburg rolled, announced a 10 percent staff reduction in June.  OpenSea, an NFT exchange, laid off 20 percent of its staff on July 14, due to an unprecedented “crypto winter.” Compass Inc., a real estate brokerage platform, is eliminating about 10 percent of its staff.  Redfin Corp., another real estate brokerage, cut 8 percent of its staff in June. GoPuff, a grocery delivery app, is laying off 10 percent of its workforce and closing dozens of warehouses.  Netflix Inc., the streaming service pioneer, has already had several rounds of layoffs.  In the process, it has racked up $70 million in expenses from severances while losing an additional 970,000 subscribers. A Very Sick Jobs Market Indeed, things have turned ugly for the once highflying tech sector.  But what about the employment situation in general? Are the jobs numbers as positive as they appear?  Is this really an indicator of a strong economy, as Yellen claims?  Or is it pointing to a greater sickness? David Haggith, publisher and editor-in-chief of The Great Recession Blog recently answered these questions, and more: “Today’s job situation has nothing at all to do with a booming economy.  All those jobs are sitting there open because NO ONE WANTS THEM.  The people who once filled jobs like that don’t want to work.  That is not the sign of a strong jobs market.  It is the sign of a very sick job market.  What it means is that the labor market is no longer able or willing to supply labor.  That’s called “broken.”   “It means production cannot increase, except by expensive automation, which takes time.  If production cannot increase because labor does not fill the roles needed to make production increase, then gross domestic product cannot increase.  If GDP doesn’t increase but actually goes down due to a labor shortage, we have a word for that: “recession.” “What you are really seeing is deep signs of stagflation.  Production is down because labor supply is way down.  Besides not being able to get parts and materials due to Covid- and sanction-related supply chain breakage, manufacturers also cannot get workers.  That means gross domestic production HAS to fall.  That means prices are likely to rise more due to scarcity.  That is a recession by definition, and when it happens when prices are rising anyway because of scarcity worldwide, then you have a stagflationary recession. “The bottom line there is that, if workers don’t return to work, the ratio of producers to consumers will remain seriously deficient, which means there will not be enough goods or services for all of us who want to consume them, forcing prices to remain high, even as the economy shrinks….” What Happens When Work Doesn’t Pay You see what’s going on here, don’t you? Government induced economic lockdowns taught low income wage earners an important lesson.  In today’s economy, work doesn’t pay.  As a result, more and more workers are choosing to piss their days away, over toil and labor. Contrary to what Yellen says, the jobs numbers are signaling a weak economy.  The low employment rate and the abundance of job openings is actually driving consumer price inflation higher.  What’s more, the economy’s now tilted in such a way that will make the weeks and months ahead exceedingly difficult. The solution to high prices, of course, is high prices.  High prices encourage increased production.  High prices also reduce demand. In a healthy economy, one that’s not operating under extreme levels of government intervention, supply and demand mismatches soon come into balance.  And high prices moderate. But in an economy that’s been crippled by extreme fiscal profligacy and monetary madness, high prices cannot be efficiently dealt with.  In today’s case, businesses cannot find the workers they need to increase the supply of goods and services.  So as the economy contracts, consumer prices remain high. Unfortunately, at this point, the only solution to high consumer prices is a severe 1930s-style Great Depression.  A garden variety recession won’t cut it. A decade of high unemployment, declining GDP, and a dearth of good paying jobs will be needed to eventually stop inflation.  And to get there, the Fed will need to increase the federal funds rate by several hundred additional basis points. We expect mass public and private defaults and bankruptcies, and a brutal stock and bond bear market, before the Fed is done. *  *  * This is a dangerous time.  The challenges investors are facing are massive.  And the stakes are high.  For this reason, I’ve dedicated the past 6-months to researching and identifying simple, practical steps everyday Americans can take to protect their wealth and financial privacy.  The findings of my work are documented in the Financial First Aid Kit.  If you’d like to find out more about this important and unique publication, and how to acquire a copy, stop by here today!] Tyler Durden Sat, 08/06/2022 - 13:30.....»»

Category: dealsSource: nytAug 6th, 2022

The 2022 job market is like the Wild West. Here are 5 ways employees can manage their careers right now.

Recession fears, layoffs, and hiring freezes may make it seem like navigating your career is harder than ever before, but it's still possible. In 2022 work-from-home became a codified practice for some companies.Morsa Images/Getty Images Some signs point to a recession, while others indicate a stable job market.  These opposing conditions have left job seekers scratching their heads. Insider compiled a collection of career advice from career coaches, economists, and more. In 2022, the world of work has become the Wild West.Technology giants have laid off thousands of employees, inflation has soared, and, in the second quarter, the US gross domestic product decreased 0.9% — all signs that a recession may be coming. At the same time, consultancies, travel businesses, and healthcare companies have continued to hire, and the unemployment rate remained stable at 3.6% in June, according to the latest data from the US Bureau of Labor Statistics.This whirlwind comes on the heels of a chaotic 2021, when employees' heads were spinning from vaccine mandates, work-from-home policies, and mass resignations.To help employees navigate the wacky world of the workplace, Insider compiled a collection of career advice. Whether you're trying to make sense of the job market, fearing layoffs at your company, or hunting for a new gig, here are the pieces of advice career coaches, economists, psychologists, and more have to offer. If you don't understand what's happening in the job market right now ...urbazon/Getty ImagesAmerica has entered a "precession," a phrase Insider coined and previously defined as "an awkward, confusing phase in which some economic indicators seem to portend a recession, while others suggest things could turn out to be OK."While tech companies are being hit hard by the precession, education, consultancy, and nonprofit companies are more likely to boomerang back from this downturn.The social and economic turmoil causing this precession has left many Americans feeling stressed about their physical, emotional, and financial health. This is why Insider spoke with business executives, hiring managers, career coaches, and economists to learn more about the job market and give suggestions to readers on how to navigate it. Read more: Layoffs, inflation, and stock market swings have Americans nervous. Here's a guide to managing your career in an uncertain economy.12 career counselors reveal the industries where hiring is still hot for new college grads — even as layoffs mountThe steps that some companies took to react to the abortion decision could prove useful for crafting other policies If you like your job but want more from it ...Eugene Mymrin/Getty ImagesDespite bleak headlines, not everyone is unhappy in their role or fearing for their job. If you're lucky enough to fall into this category, then you may also be one of the many workers planning on asking for a raise this year.Securing a raise means doing more than coasting — workers need to be mindful of how their colleagues perceive them and communicative with members of their team. This year, remote employees are working while traveling and logging on for nontraditional hours, which means they have to double down on efforts to stay in the loop with work.Here's how managers and career coaches say employees can do this and land a promotion.Read more:Almost 50% of employees work while on vacation. Here's how to take advantage of remote-work policies while being a good employee. 4 tips to landing a raise, even during a recession Don't let your reputation be the reason you don't get the job or promotion. Career experts explain what to do.If you're laid off ...Getty ImagesNearly 62,000 technology workers — including those from companies such as Coinbase and Twitter — have been laid off in 2022, according to the tech-industry-layoffs tracker Layoffs.FYI.Simultaneously, in a survey of 1,004 working US adults in June by the staffing-solutions firm Insight Global, 78% of respondents said they were scared of losing their jobs in the next recession.But rest assured, layoffs do not usually come out of nowhere, Eli Joseph, a professor at the Columbia University School of Professional Studies and the author of "The Perfect Rejection Resume," previously told Insider.And even if they do, Insider has compiled advice from top career experts on how to move forward in your career after being laid off.Read more:Don't underestimate your exit interview. Career experts share the 6 most common questions and how to answer them. 5 steps to take if you lose your job, from leveraging social media connections to building a network 4 ways to overcome the stigma of layoffs and find a new job in today's economy If you decide you want to job hop ...EmirMemedovski/Getty ImagesThis year, the US job market witnessed record quit rates, particularly in the retail, food-services, and hospitality industries. Job seekers are taking advantage of high wages and job openings. In a tightening market, candidates need to put their best foot forward, develop a personal brand, and ace interviews. But in your haste to leave, be wary that you're not overlooking red flags. In a recent survey, 72% of Gen Z respondents who just started a new job said they felt regret because the role or company was not what they believed it would be. Here is how to find a new job in this fluctuating economy. Read more:Should you change jobs with the market and economy in turmoil? Here's how to decide as decades-high inflation makes employers rethink their strategies. Here are 5 tips for job hunting in a slower economic environment — even a recession How to build an unforgettable personal brand that will help you switch careers, land your dream job, or snag a promotion, according to marketing experts Job seekers are accepting offers only to find the reality is nothing like the recruiter sold them. Here's how to make sure it doesn't happen to you.  If you're looking for something new ...Freelance worker working from the van while taking a road trip.MStudioImages/Getty ImagesFor some, a traditional 9-to-5 role will lead to burnout, feelings of discontent, and job insecurity. Last year, 15.5 million Americans took the leap and became digital nomads — working remotely from far-off places in the world. Meanwhile, some Americans have opted to take on two jobs at a time, balancing corporate calendars that increase their earnings and experience. Whether you're looking to work less or more, Insider has advice on how to make the most of your unconventional career.Read more:I worked 2 full-time corporate jobs for 4 months. Here's how I turned them into a promotion and higher salary The digital-nomad lifestyle is more accessible than ever. Here's how to become someone who can work from anywhere. Burned out and want to quit your job? Try being a slacker first, a career expert says.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 4th, 2022

Economic Report: Hiring slowdown? U.S. seen adding just 258,000 jobs in July

Scattered reports of layoffs, declining job openings and a softening economy all point to a slowdown in hiring. And that's why the number of new jobs created in July is forecast to fall to the lowest level in 19 months......»»

Category: topSource: marketwatchAug 3rd, 2022

"Miserable" German Retail Sales Crash The Most On Record As Europe Slumps Into Recession

"Miserable" German Retail Sales Crash The Most On Record As Europe Slumps Into Recession While it is now largely consensus that Europe is sliding into a recession, if not already in one, few were prepared for today's retail sales print from Germany which was shocking: according to Destatis, the German national statistics office, German retail sales fell at the largest annual rate since records began in 1994, highlighting the scale of the economic collapse facing the eurozone’s largest economy. Retail sales volumes dropped 9.8% in June (unadjusted) compared with the same month last year. That said, while German retail sales volumes fell significantly, consumers reduced their overall spending by a much smaller amount, an annual drop of only 0.8 per cent, due to inflation’s impact on purchasing power. Still, Monday’s figures disappointed investors, with the 1.6% fall in sequential volumes between May and June much worse than the 0.2% expansion forecast by economists polled by Reuters. The fall in retail spending also reflects a shift in spending back to services - not included in retail sales - after the boom in demand for goods that occurred during the early quarters of the coronavirus pandemic, when restaurants, bars and entertainment venues were often closed. According to Claus Vistesen, Pantheon Macroeconomics chief eurozone economist, the figures were “miserable” and mainly due to the impact of soaring prices on consumer spending. Inflation in Germany is at a multi-decade high of 8.5%. The german retail sales deflator is going haywire. Inflation-adjusted sales slumped by nearly 4% q/q in Q2, down 0.6% in nominal terms. pic.twitter.com/3cOTKBWM9T — Claus Vistesen (@ClausVistesen) August 1, 2022 Vistesen noted that the retail sales decline could lead to a downward revision of last week’s figure for German gross domestic product, which was a flash estimate and is often subject to change. The plunge in retail sales follows news on Friday that German economic growth stagnated between the first and second quarters, and an update of business and consumer confidence which is now at its lowest level since the early months of the pandemic. Translation: recession. Indeed, while the eurozone economy as a whole grew 0.7% between the first and second quarters, analysts now almost uniformly expect the region to enter a downturn in the coming months as the impact of Russia’s full-scale invasion of Ukraine on energy markets and confidence bites Chris Williamson, chief business economist at S&P Global Market Intelligence, said manufacturing activity in Germany and elsewhere was “sinking into an increasingly steep downturn, adding to the region’s recession risks”. The closely watched purchasing managers’ indices for eurozone manufacturing, also out on Monday, showed factory activity was now slipping across the eurozone. And just in case the recession case wasn't strong enough, Germany's manufacturing PMI dropped below the crucial 50 level, confirming a contraction, for the first time in two years. Across the region, new orders fell — a sign that conditions are likely to remain tough in the coming months. The biggest risk facing the region is that tensions with Moscow worsen, triggering Russia to reduce — or halt — gas flows to the EU. Economists believe this would trigger a major recession across the bloc. Paradoxically, and similar to the US, even as Europe slumps into a deep recession, its labor market remains surprisingly strong. Although here too cracks are appearing: labor data also released on Monday showed that in June the number of unemployed people rose in the eurozone for the first time in 14 months, the FT reported. While the region’s labor market remains one relatively bright spot and the joblessness rate remained unchanged at a record low of 6.6 per cent, the absolute figure of those looking for work was up by 25,000 to almost 11 million. Needless to say as a full-blown recession grips Europe and as millions of workers lose their jobs in the next few months, the distinct choice between fighting inflation or fighting an economic collapse and mass layoffs, will make life for central banks much more difficult. It's also why the ECB's rate hiking cycle will end just a few months after it started in late July, in a mirror image to what happened the last time when the ECB hiked in 2011 only to reverse a few short months later... Tyler Durden Tue, 08/02/2022 - 02:45.....»»

Category: dealsSource: nytAug 2nd, 2022

Former US Treasury Secretary Larry Summers pegs recession likelihood at 75% chance

Summers was influential in convincing Democratic Sen. Joe Manchin of West Virginia to support the new climate and healthcare bill. Lawrence Summers, then Director of President Barack Obama's National Economic Council, participates in a question-and-answer session during a luncheon with the Economic Club of Washington at the J.W. Marriott April 9, 2009 in Washington, DC.Chip Somodevilla/Getty Images Former Treasury Secretary Larry Summers gave a recession probability 3-in-4 odds.  "We essentially don't have soft landings from high rates of inflation and low rates of unemployment," he said on Andrew Sullivan's podcast.   But he also offered a scenario in which his predictions might be wrong.  The US has a 75% chance of facing a recession in the next two years, says Former Treasury Secretary Lawrence Summers. The idea of having a "soft landing" from inflation — meaning a modest economic pullback — would be "the triumph of hope over experience," Summer said in an interview with conservative newsletter writer Andrew Sullivan on "The Dishcast" podcast."We essentially don't have soft landings from high rates of inflation and low rates of unemployment," Summers, a Harvard University professor, said in the podcast, which posted Friday.Summers, who was Treasury secretary under the Clinton administration and also advised former President Barack Obama, predicted a "quite significant chance" that there would be a recession. "The market is now judging that interest rates are likely to fall between 2023 and 2024 in a quite significant way, which is a sign that markets are expecting that there will be a recession," he said. "And I think historically we just haven't brought down substantial rates of inflation without a recession."The comments come as a preliminary estimate from last week found that US gross domestic product contracted by 1.6% in the first quarter and shrank by 0.9% in the second quarter. Having two consecutive quarters of contraction meets a commonly used definition of a recession, though it's not the full definition set forth by the National Bureau of Economic Research.It's up to NBER to officially rule when the US is in a downturn and the body isn't likely to do so for months. Its definition "involves a significant decline in economic activity that is spread across the economy and lasts more than a few months."Some of these factors include sustained declines in new jobs, consumer spending, manufacturing, and personal income. Treasury Secretary Janet Yellen said during a press conference Thursday that the US was in a state of transition, not recession. A recession would include massive layoffs and business closures, among other factors, she said."When you look at the economy, job creation is continuing, household finances remain strong, consumers are spending and businesses are growing," Yellen said. Summers supports the new bill Democrats are working onSummers has for the last year been vocal about inflation increasing the likelihood of a recession.  He warned in 2021 that Democrats needed to pare back their $1.9 trillion coronavirus rescue package, saying the spending would lead to inflation.The latest numbers, from June, found inflation rose to a 9.1% year-over-year pace. The Federal Reserve Bank of San Francisco found that the stimulus may have raised inflation by about 3 percentage points by the end of 2021, though among other factors contributing to inflation are extraordinarily strong demand and lingering supply-chain issues. Since the comments on inflation, Summers has become a leading expert in influencing Democratic Sen. Joe Manchin of West Virginia to support new legislation on climate, healthcare, and taxes. A framework of the bill — called the Inflation Reduction Act — was released last week. Summers was among those who convinced Manchin that the bill would help cool rising prices rather than raise the national debt and worsen inflation.Summers appeared to plug the Inflation Reduction Act as part of "The Dishcast" interview. He predicted that raising taxes, as well as reducing the costs of pharmaceuticals and tariffs, would help lower consumer costs. "If we are able to do some of those things, I think we could make the Fed's job easier and raise the prospect of a soft landing," he said. "But I do think this is a difficult problem of management and I also think it would be a mistake to think this is all about the skill of management."The future prices of oil added some uncertainty to the predictions, he said, though he noted that the oil market has said prices would decline substantially over the next year. Summers left open the possibility that he could be wrong on inflation, saying "there's a reason I said 75% not 95%." It could be that "this will just sort of just fade away and that the economy will have a gentle glide path to slower growth without a major increase in unemployment," he said."I'm not saying that's for sure not going to happen," he added, "but it seems to me that is a much less frequent pattern in the United States and other countries than is the alternative."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 1st, 2022

Job Listings Starting To Trend Lower

Job Listings Starting To Trend Lower By Alyce Andres, Bloomberg Markets Live commentator and reporter Online data show companies are putting the brakes on job listings for a third month (see "Fed Mission Accomplished: Real-Time Indicators Show The Labor Market Just Cratered"). It may be a sign that the Fed rate hikes partly aimed at cooling wage inflation amid a red-hot job market are starting to work. In the economics world, three in a row can make a trend. Active job listings in the US dropped 2.8% in June, according to LinkUp data. That’s on top of 4.2% and 3.1% decreases in May and April, according to the firm. LinkUp is a global job-market data and analytics firm in the online jobs space. Declines in job listings were seen nationwide, with 94% of states seeing a decline in help wanted ads. Deleted job listings rose 6.9%, according to LinkUp data released Tuesday. Companies typically decrease hiring to maintain revenues and profitability. After that, layoffs become a risk. The JOLTS report, once a sleepy indicator, is very much in the hot seat now. It rose in importance after Fed Chairman Powell said last fall it is a labor-market gauge that policy makers watch closely. Jobs openings fell in April and May, and another decline in June could mean a trend is also under way in the JOLTS data. Tyler Durden Thu, 07/21/2022 - 14:05.....»»

Category: blogSource: zerohedgeJul 21st, 2022

Hilton (HLT) on Expansion Spree, Unveils New Hotel in Califorinia

Hilton (HLT) boosts its presence on the West Coast with the opening of Conrad Los Angeles in California. In a bid to expand its presence in the West Coast, Hilton Worldwide Holdings Inc. HLT recently announced the opening of its luxury hotel - Conrad Los Angeles, in California. This marks the first Conrad Hotels & Resorts property in the region. Earlier, the company expanded the brand’s footprint with openings in Las Vegas, Tulum, Sardinia and Nashville.Located at The Grand LA (in downtown Los Angeles), the 305-room luxury hotel will have amenities like spas, swimming pools, culinary venues and a rooftop terrace. Moreover, the hotel is covered by Hilton's guest-loyalty program —  Hilton Honors — offering members flexible payment options, access to member rates, the ability to earn and redeem points and other exclusive benefits.Concerning the opening, Danny Hughes, executive vice president and president, Americas, Hilton, stated, " This is a monumental occasion as we open the doors to this incredible property amid downtown Los Angeles' development boom and we are looking forward to offering guests an unrivaled, luxury hospitality experience in this sought-after destination."Focus on ExpansionHilton has been consistently trying to expand its presence in the hospitality industry. During first-quarter 2022, Hilton opened 76 new hotels. It also achieved net unit growth of nearly 7,800 rooms. During the quarter, the company expanded its presence in the Asia Pacific region by opening the Hilton Singapore Orchard. Also, it boosted its development pipeline with two international deals under its Curio Collection (by Hilton brand), including the Royal Palm Galapagos (in Ecuador) and the Palacio Bellas Artes San Sebastian (Spain).The company emphasized the expansion of its luxury portfolio with the signings of the Waldorf Astoria Sydney, the Conrad Austin Hotel & Residences, and Canopy Properties in Cannes and Downtown Nashville. Also, it remains optimistic on the back of new development and conversion opportunities. For 2022, the company expects net unit growth to be nearly 5%.In the past year, shares of the company have declined 10.9% compared with the industry’s fall of 13.2%.Image Source: Zacks Investment ResearchZacks Rank and Stocks to ConsiderCurrently, Hilton carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.Some better-ranked stocks in the Zacks Consumer Discretionary sector are Bluegreen Vacations Holding Corporation BVH, Caleres, Inc. CAL and MGM Resorts International MGM.Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 47% in the past year.The Zacks Consensus Estimate for BVH’s current financial year sales and earnings per share (EPS) indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.Caleres sports a Zacks Rank #1. CAL has a trailing four-quarter earnings surprise of 62.9%, on average. Shares of the company have gained 3.1% in the past year.The Zacks Consensus Estimate for CAL’s current financial year sales and EPS suggests growth of 4.8% and 0.7%, respectively, from the year-ago period’s levels.MGM Resorts sports a Zacks Rank #1. MGM has a trailing four-quarter earnings surprise of 212.5%, on average. Shares of the company have declined 26.7% in the past year.The Zacks Consensus Estimate for MGM’s current financial year sales and EPS suggests growth of 28.1% and 240.3%, respectively, from the year-ago period’s reported levels. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 MGM Resorts International (MGM): Free Stock Analysis Report Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report Caleres, Inc. (CAL): Free Stock Analysis Report Bluegreen Vacations Holding Corporation (BVH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJul 7th, 2022

Forget Micron (MU), Buy These 3 Cybersecurity Stocks Instead

Increasing requirement for privileged access security on the back of digital transformation and cloud migration strategies is likely to fuel demand for cybersecurity solutions offered by PANW, CRWD and QLYS. Micron Technology MU shares have plunged 42.4% year to date (YTD), making it one of the most beaten-down stocks in the broader market sell-off witnessed by the U.S. equity market so far this year.Though the majority of the tech stocks have seen a drastic fall in their YTD share prices amid the broader market sell-off, the major concern for Micron is weakening demand for its memory chips. During its recently concluded third-quarter fiscal 2022 earnings conference call, the company stated that consumer spending has softened, resulting in the weakening of the memory chip demand from the smartphone and personal computer end markets.The scenario would lead to dim financial performances in the next few quarters for Micron. The company’s fourth-quarter revenue guidance of $7.2 billion (+/- $400 million) suggests a year-over-year decline of approximately 13%. Similarly, the adjusted earnings projection of $1.63 per share (+/-20 cents) indicates a year-over-year decline of about 33%.Historically, the financial performances of chip-making companies have been a key barometer for the broader stock market and economy. Therefore, the grim sales and profit outlook by Micron has sparked worries that the United States is potentially heading for a recession.In such a scenario, it is prudent for near-term investors to avoid this Zacks Rank #5 (Strong Sell) stock and instead focus on three top-ranked cybersecurity stocks — Palo Alto Networks PANW, CrowdStrike CRWD and Qualys QLYS.Why Invest in Cybersecurity Stocks?Cybersecurity stocks have remained more resilient amid the broader market sell-off this year so far as organizations continue spending more on protecting themselves from rising cyberattack threats.Increasing requirement for privileged access security on the back of digital transformation and cloud migration strategies is also fueling the demand for cybersecurity solutions. The COVID-19 pandemic has further increased cyber onslaughts as businesses of all sizes are transitioning their operations to various online platforms.From education to entertainment, working to shopping, and even healthcare has gone virtual, causing high technology percolation in everyday lives. This puts not only businesses but also schools, hospitals and other organizations at the receiving end of online assaults.While public institutions and large companies have always been the target of hackers, smaller organizations with lower security standards are also on their radars.Further, the advent of 5G will enable other devices to connect to the Internet, thereby expanding the scope of Internet of Things (IoT) and artificial intelligence (AI). While IoT and AI will simplify things, they will also aggravate the rate of cybercrime with increased reliance on technology.A report by Fortune Business Insights stated that the global cybersecurity market is expected to reach $376.32 billion by 2029 from a projected $155.83 billion in 2022, exhibiting a CAGR of 13.4% from 2022 to 2029.Considering the aforementioned factors, it is therefore advisable to invest in cybersecurity stocks in the near term. We have taken the help of the Zacks Stock Screener to shortlist the abovementioned three cybersecurity stocks that are incredible for investments. These stocks carry a Zacks Rank #1 (Strong Buy) or #2 (Buy).Also, the stocks have a Growth Score of A or B. Per Zacks’ proprietary methodology, stocks with such a favorable combination offer solid investment opportunities.3 Cybersecurity Stocks to Bet OnPalo Alto Networks: The company currently carries a Zacks Rank #2 and has a Growth Score of B. It is benefiting from increased adoption of its next-generation security platforms, driven by a rise in remote working policy among top-notch companies. The cyber security firm continues to win back-to-back deals for offering unique cyber safety solutions, which block attacks or malicious content. You can see the complete list of today’s Zacks #1 Rank stocks here.The company's current subscription-based model is aiding it in generating stable revenues while expanding margins. Palo Alto's subscription-based services like AutoFocus, Aperture, Traps, WildFire and Virtual are not only witnessing solid growth but also bolstering the customer base. These might help the cybersecurity firm to improve both the top and the bottom lines.The Zacks Consensus Estimate for fourth-quarter fiscal 2022 earnings has been revised upward by 7 cents to $2.28 per share over the past 60 days. The consensus mark for fiscal 2022 earnings has been revised upward by 18 cents to $7.45 per share.Palo Alto Networks, Inc. Price and Consensus Palo Alto Networks, Inc. price-consensus-chart | Palo Alto Networks, Inc. QuoteCrowdStrike: It is a leader in next-generation endpoint protection, threat intelligence and cyberattack response services. The company is benefiting from the rising demand for cyber-security solutions owing to a slew of data breaches and the increasing necessity for security and networking products amid the pandemic-led remote working trend.Continued digital transformation and cloud-migration strategies adopted by organizations are key growth drivers. CrowdStrike’s portfolio strength, mainly the Falcon platform’s 10 cloud modules, boosts its competitive edge and helps add users. Additionally, strategic acquisitions, like that of Humio and Preempt, are expected to drive growth.CrowdStrike carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for CRWD’s third-quarter fiscal 2023 earnings has improved by 3 cents to 29 cents per share over the past 30 days. For fiscal 2023, the consensus mark for earnings has been revised upward by 10 cents to $1.23 per share over the past 30 days.CrowdStrike Price and Consensus CrowdStrike price-consensus-chart | CrowdStrike QuoteQualys: The company offers cloud security and compliance solutions that enable organizations to identify security risks to their information technology infrastructures, thus helping protect their IT systems and applications from cyber-attacks.Qualys is gaining from the surging demand for security and networking products amid the coronavirus crisis as a massive global workforce is working remotely. Accelerated digital transformations by organizations are also fueling demand for the company’s cloud-based security solutions.QLYS currently carries a Zacks Rank #2 and has a Growth Score of A. The Zacks Consensus Estimate for third-quarter 2022 earnings has been revised upward by 4 cents to 74 cents per share over the past 60 days. The consensus mark for 2022 earnings has been revised upward by 25 cents to $3.15 per share.Qualys, Inc. Price and Consensus Qualys, Inc. price-consensus-chart | Qualys, Inc. Quote Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>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 Micron Technology, Inc. (MU): Free Stock Analysis Report Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report Qualys, Inc. (QLYS): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJul 5th, 2022

The Great Crash Of 2022

The Great Crash Of 2022 Authored by Kristoffer Mousten Hansen via The Mises Institute, We are now well past the corona crisis of 2020, and most of the restrictions around the world have been repealed or loosened. However, the long-term consequences of arbitrary and destructive corona policies are still with us—in fact, we are now in the middle of the inevitable economic crisis. Proclaiming the great crash and economic crisis of 2022 is at this point not especially prescient or insightful, as commentators have been predicting it for months. The cause is still somewhat obscure, as financial and economic journalism still focuses on whatever the Federal Reserve announces. But the importance of the Fed’s moves is greatly exaggerated. The Fed cannot set interest rates at will; it cannot generate a boom or a recession at will. It can only print money and create the illusion of greater prosperity, but ultimately, reality reasserts itself. The real driver of the present crisis is monetary inflation. Back in 2020, I (along with many others) pointed out the role of inflationary monetary policy in the corona crisis. While consumer price inflation is now the most apparent consequence, the real damage occurred in the capital structure of the economy. This is the cause of the present crisis. A Business Cycle, of Sorts While to most people the most obvious consequence of the corona inflation was the transfer payments they received from the government, the real action occurred in the business sector. Through various schemes, newly created money was channeled to the productive sector from the Fed via the Treasury. The result was a classic business cycle of unsustainable expansion ending in inevitable depression. The immediate effect of the inflow of easy money was twofold. First, it hid some of the economic distortions that lockdowns and other restrictions caused. Since they received government funds to make up for lost revenue and to cover higher costs, businessmen maintained production lines that really should have been shut down or altered in some way due to lockdowns. Second, easy money induced capitalists to make new, unsound investments, as they thought the extra money meant greater capital availability. These investments were unsound not because the government quickly turned off the money spigot again: they were unsound because the real resources were not there; people had not saved more to make them available. The supply of complementary factors of production had not increased, or not as much as suggested by the increase in money available for investment. As the businesses expanded and increased demand for these complementary factors, their prices therefore rose. To keep the boom going, businesses have started to borrow more money in the market, driving up interest rates. But there is no cheap credit to be had at this point, since there haven’t been additional infusions of cheap money since the initial inflation of 2020, so interest rates are quickly rising. This is the real explanation of the inversion of the yield curve: businesses are scrambling for funding as they find themselves in a liquidity shortage, since their input prices are rising above their revenues. It’s not the market front-running the Federal Reserve or any other fancy expectations-based cause: interest rates rise because businesses are short on capital. The following chart shows the increase in producer prices compared to consumer prices—an increase of almost 40 percent since the beginning of 2020 is clearly unsustainable. That consumer prices have not increased as much is a clear indication that we’re dealing with a business boom and that businesses can’t expect future revenues that will cover their elevated costs. Nor are we simply seeing oil price increases due to disruptions in supply. Oil and energy commodities complement virtually all production processes, so inflation-induced investment will lead to an early rise in oil and energy prices. Figure 1: Producer and Consumer Price Indices, January 2019–May 2022 Eventually, interest rates will be bid too high, and businessmen will have to abandon their investments. Many will throw inventories on the market at almost any price to fund their liabilities, cut back their workforces, and likely go bankrupt. This appears to be happening already, as CNBC is reporting many layoffs in tech companies. A likely consequence of this bust will be a banking crisis: as the share of nonperforming loans increases, bank revenues will dry up, and banks may find themselves unable to meet their own obligations. A crisis could develop, leading to what has been called “secondary deflation”: the contraction of the money supply as deposits in bankrupt banks simply evaporate. While that is a consummation devoutly to be wished, it is unlikely, to put it mildly, that the Federal Reserve will let things get to that point. This neatly brings us to a central question: What is the central bank doing right now? The Contractionary Fed Surprising as it sounds, the Fed really is pursuing a tightening policy. Not necessarily the one they officially announced—they are not, in fact, reducing their balance sheet, but an extremely tight policy nonetheless. It is worth pointing out that the Fed is really a one-trick pony: all it can do is create money, either directly or indirectly by giving banks the reserves necessary for bank credit expansion. All the stuff about setting interest rates is secondary, if not irrelevant: the market always and everywhere sets interest rates. Central banks can only influence interest rates by, you guessed it, printing money. Figure 2: M2 (billions of dollars), January 2019–April 2022 While the Fed was very inflationary back in 2020 as figures 2 and 3 show, it has since reversed course and become not only conservative, but outright contractionary. That is, not only has the growth rate slowed down, but there was a real, if small, fall in the quantity of money in early 2022. Figure 3: M2 (percent change), January 2019–April 2022 This contraction is not immediately evident if we only look at the Fed’s overall balance sheet, because since March 2021, the Fed has aggressively increased the amount of reverse repurchase agreements (reverse repos) they hold (or owe, technically). In a reverse repo transaction, the Fed temporarily sells a bond to a bank (just as they temporarily buy a bond from a bank in a repo transaction). This sucks reserves from the system, just as repos add reserves to the system. From virtually zero in March 2021, the amount of reverse repos has increased to $2,421.6 billion as of June 15, reducing the amount of available reserves by the same amount. The Fed balance sheet has not shrunk due to simple accounting: the bond underlying the repo transaction is still recorded on the Fed balance sheet. Banks, meanwhile, benefit from this transaction even though their reserves are temporarily reduced, earning a practically risk-free 0.8 percent (the Fed increased the award rate on reverse repos to 1.55 percent on June 15 and will likely increase it in the near future as the market rate keeps rising). Figure 4: Reverse Repurchase Agreements, March 2021–June 2022 Whatever this is, it’s not a policy that will feed inflation—in fact, inflation really will be transitory if the Fed continues its present policy. This is somewhat ironic, as the Fed has increased its holdings of inflation-indexed bonds, suggesting its economists themselves do not believe the transitory narrative. Of course, it’s possible that the Fed may simply be gearing up for the next round of inflationary policy. What is certain is that the Fed is now neutralizing its previous inflation. The great 2020 inflation went first to the US Treasury account at the Fed and then to the government’s favored clients. As the government drew down its account, money went to the banks and was deposited at the Fed as reserves. At this point, the inflation could have accelerated. The banks were already flush with reserves and could have extended credit on top of the tidal wave of additional reserves flowing into them. This would likely have happened as the market rate of interest started rising, if not earlier, but by sucking banks’ reserves out the Fed is limiting banks’ inflationary potential. Credit expansion is still possible, as the banks maintain a historically elevated reserves-deposits ratio of around 20 percent and have since 2020 been liberated from any kind of legal reserve requirement. But by reducing the reserves in the system, the Fed is effectively preventing this development. After peaking at over 23 percent, the reserve ratio has steadily declined since September 2021, hitting 19 percent in April, as shown in figure 5. Since reverse repo transactions have continued in May and June, the monetary contraction seen in the first quarter is likely ongoing, although we will have to wait for more recent money supply figures to confirm this. Figure 5: Banks’ Reserve Ratio, May 2020–April 2022 What Happens Now? Whatever happens next, one thing is clear: the crisis is already upon us. Stock market declines and financial market chaos are really epiphenomena, headline capturing though they may be. The damage has already been done. And while I’ve here focused on the covid era, we were already heading for crisis in 2019—the coronavirus just provided an excuse for one last gigantic inflationary binge. This means that it’s not simply the malinvestments of the last two years that needs to be cleared out—it’s the accumulated capital destruction of the last fifteen years that’s now becoming apparent. How much capital was wasted in tech start-ups that had no chance of ever turning a profit? As this piece in The Atlantic points out, enormous amounts of capital were poured into technology projects aimed at the hip urban millennial lifestyle—and now that they cannot cover operating costs with endless infusions of venture capital, prices are spiking and companies are laying off workers. The boom in construction is also at an end, as demand for housing is unlikely to remain elevated as mortgage rates rise. In all likelihood, the Fed is not going to stay the course. Pressure from finance and from government is likely to force it back into inflation, but this inflation can’t prevent the bust. As Ludwig von Mises pointed out, you can’t paper over the economic crisis with yet another infusion of paper money; the crisis will play out, whatever the central bank decides to do. What the Fed can do is continue funding the government and bailing out the financial system when they come under pressure. Both will be very inflationary. We should not celebrate the Fed for refraining from inflating the money supply at the moment—after all, its previous recklessness caused the problems to begin with—but let’s hope the Fed stays the course for now. The longer a new round of inflation is delayed, the more radical will the purge of malinvestment and clown-world finance be. High inflation is also possible, perhaps even more likely, given the political pressures. In that case, Weimar, here we come! Tyler Durden Sat, 06/25/2022 - 15:30.....»»

Category: personnelSource: nytJun 25th, 2022

Hilton (HLT) Banks on Loyalty Program, Dismal RevPAR Hurts

Hilton (HLT) focuses on accelerating business transient and group bookings to drive growth. However, a decline in RevPAR from pre-pandemic levels is a concern. Hilton Worldwide Holdings Inc. HLT will likely benefit from its loyalty program, luxury development initiatives and hotel conversion opportunities. Also, sequential improvements in RevPAR in terms of corporate transient and group businesses bode well. However, a decline in revenue per available room (RevPAR) from the pre-pandemic levels is a headwind.Let’s delve deeper.Growth CatalystsOne of the largest loyalty programs, Hilton Honors, created an extremely valuable asset for the company. Innovations such as the Hilton Honors app continue to drive the program’s growth. As of Mar 31, 2022, the loyalty program had more than 133 million members. With membership levels increasing 15% on a year-over-year basis (as of first-quarter 2022), the company continues to outline opportunities to engage its Honors members through enhanced partnerships and points redemption offerings. Hilton intends to focus on new opportunities to drive customer engagement to reach pre-pandemic levels.Hilton continues to focus on its luxury development strategy to drive growth. During first-quarter 2022, the company made solid progress related to the Canopy brands. The company announced the opening of two new lifestyle hotels, including the Canopy by Hilton Boston Downtown and the Canopy by Hilton New Orleans Downtown. Backed by the strong openings, the company witnessed a sequential (and year over year) increase in its portfolio. HLT stated that it has 410,000 rooms in its development pipeline. Apart from this, the company emphasized on expanding its luxury and lifestyle portfolio with the signings of the Waldorf Astoria Sydney, the Conrad Austin Hotel & Residences and Canopy Properties in Cannes and Downtown Nashville. Going forward, the company remains optimistic about achieving a net unit growth of 5% in 2022 and anticipates recording 6-7% unit growth in the upcoming periods.The company is focusing on hotel conversion opportunities to mitigate the impact of construction delays caused by the pandemic. During the first quarter of 2022, conversion signings were up 15% year over year and contributed nearly 20% to overall signings. During the quarter, the company signed conversion deals with Curio and Tapestry brands, covering destinations like the Galapagos Islands, San Sebastian, Spain, Maui and Sonoma County, California. The company stated progress related to the DoubleTree expansion with new conversion properties across France, Germany and the Netherlands. The company expects positive development trends to continue on the back of new development and conversion opportunities.Shares of Hilton have declined 11.2% in the past year compared with the industry’s fall of 16.2%. The company benefitted from a rise in leisure demand coupled with a sequential improvement in RevPAR in terms of corporate transient and group businesses. During the first-quarter earnings call, the company stated to have witnessed positive development trends in April, with RevPAR tracking at roughly 95% of 2019 levels. Given the positive momentum coupled with attributes such as a strong job market, pent-up demand and easing of travel restrictions, the company expects to reach 2019 system-wide RevPAR levels during the third quarter of 2022. Also, it remains optimistic in terms of leisure RevPAR to exceed 2019 peak levels in 2022.Image Source: Zacks Investment ResearchConcernsThe coronavirus crisis has materially impacted the company’s operations during first-quarter 2022. During the quarter, the company’s performance was affected by Omicron-related demand pressures (in January and February). Travel restrictions and reimposed lockdowns in China added to the downside. Although most properties have lifted or eased restrictions, RevPar is still lagging behind pre-pandemic levels. In 2022, the company expects RevPAR to decline 5-9% from 2019 levels. We believe that the emergence of the new COVID-19 variants is likely to create volatility in demand.Zacks Rank & Key PicksHilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Some better-ranked stocks in the Zacks Consumer Discretionary sector are Civeo Corporation CVEO, Funko, Inc. FNKO and Bluegreen Vacations Holding Corporation BVH.Civeo sports a Zacks Rank #1 at present. The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have soared 38.4% in the past year.The Zacks Consensus Estimate for CVEO’s 2022 sales and EPS suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.Funko sports a Zacks Rank #1 at present. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have increased 7.5% in the past year.The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.Bluegreen Vacations flaunts a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has surged 38.6% in the past year.The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention. See them 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 Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report Civeo Corporation (CVEO): Free Stock Analysis Report Funko, Inc. (FNKO): Free Stock Analysis Report Bluegreen Vacations Holding Corporation (BVH): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 24th, 2022

Oil & Gas Stock Roundup: Equinor"s Discovery, Shell"s Jackdaw Approval in Focus

Apart from Equinor (EQNR) and Shell (SHEL), Tullow Oil (TUWOY), Devon Energy (DVN) and Northern Oil & Gas (NOG) hog the limelight during the week. It was a week when both oil and natural gas prices settled higher.On the news front, Norwegian energy behemoth Equinor ASA EQNR made a hydrocarbon discovery in the Barents Sea, while London-based peer Shell plc SHEL was given a thumbs up to go ahead with the Jackdaw gas-condensate field in the U.K. Developments associated with Tullow Oil TUWOY, Devon Energy DVN and Northern Oil & Gas NOG also made it to the headlines.Overall, it was a good seven-day period for the sector. West Texas Intermediate (WTI) crude futures gained 1.5% to close at $120.67 per barrel, while natural gas prices increased 3.8% to end at $8.85 per million British thermal units (MMBtu). In particular, the oil market managed to maintain its forward momentum from the previous six weeks.Coming back to the week ended Jun 10, the positive oil price action could be attributed to growing fuel demand during the summer driving season in the United States. The Energy Information Administration’s ("EIA") latest report showed another drawdown in gasoline stockpiles — the tenth in as many weeks — that further pointed to strained market fundamentals and propped up prices. As it is, the uptick reflected concerns about supplies from Russia, which is one of the world's largest producers of the commodity.Natural gas notched a healthy weekly gain, too, buoyed by a spike in load demand to run air conditioners, lower domestic output and strong LNG shipments.Recap of the Week’s Most-Important Stories1. Stavanger, Norway-headquartered integrated major Equinor made an oil discovery in the Skavl Sto 7220/8-3 exploration well, situated at the Johan Castberg field in the Barents Sea. This is the company’s second hydrocarbon discovery in recent weeks near the Johan Castberg area. The 7220/8-3 well was drilled 5 kilometers southwest of the 7220/8-1 discovery well on the Johan Castberg field and 210 kilometers northwest of Hammerfest.In March 2022, EQNR was awarded a drilling permit by the Norwegian authorities for the 7220/8-3 well in production license 532. This Zacks Rank #2 (Buy) company is the operator of the production license 532, which was awarded in the 20th licensing round in 2009. Var Energi ASA and Petoro are the other license holders.You can see the complete list of today’s Zacks #1 Rank stocks here.Notably, this is the 13th exploration well drilled in production license 532. Using the Transocean Enabler semi-submersible drilling rig, the well was drilled 352 meters below the water surface. It will be permanently plugged and abandoned now. (Equinor Makes New Oil Discovery in Johan Castberg Field)2.   Europe’s largest oil company Shell recently got the necessary regulatory approvals to go ahead with its revised plan to develop the Jackdaw gas-condensate field in the U.K. Central North Sea. Shell can invest about $500 million in the project, with the output anticipated to start in the second half of 2025. The Jackdaw field, at its peak, has the capacity to produce approximately 6.5% of Britain's total gas output.Both watchdogs — the North Sea Transition Authority (“NSTA”) and the Offshore Petroleum Regulator for Environment & Decommissioning — gave the go-ahead to Shell. This announcement came after NSTA disallowed the company’s initial plan last year and asked for a tieback of Jackdaw to its offshore Shearwater processing center.The regulatory approval for Jackdaw comes at a time when the U.K. government is pushing to augment domestic energy production as it looks to find substitutes for Russian imports following Moscow’s military actions in Ukraine. Currently, the production in the North Sea caters to less than 40% of the United Kingdom’s gas demands, with the rest procured from imports. (Shell Receives Regulatory Nod to Develop Jackdaw Field)3   U.K.-based, West Africa-focused Tullow Oil agreed to take over its British competitor — Capricorn Energy — in an all-stock deal worth around 656.9 million pounds ($826.7 million). This deal will lead to the creation of an Africa-focused energy firm with a market value of more than £1.4 billion.As part of the all-stock deal, Capricorn shareholders will receive 3.8068 Tullow shares for each share they own and have a 47% stake in the merged group, which will be headed by Tullow’s chief executive officer, Rahul Dhir.The combined entity will own 1 billion barrels of resources across Africa and is expected to produce around 100,000 barrels of oil equivalent per day. However, by 2025, the output is anticipated to reach 120,000 barrels a day. (Tullow Oil to Acquire Rival Capricorn for $827 Million)4   U.S. upstream operator Devon Energy announced that it has entered into a definitive agreement to acquire leasehold interest and related assets of RimRock Oil and Gas, LP, in Williston Basin for $865 million. This acquisition is expected to close in the third quarter of 2022, after necessary approvals.This acquisition will expand Devon’s Williston Basin acreage by 38,000 acres to 123,000 acres. RimRock will add nearly 15,000 barrels of oil equivalents (Boe) per day to DVN’s Williston Basin production, taking volumes to 63,000 Boe per day. Production volumes are expected to increase to 20,000 Boe per day next year. About 78% of the current production from RimRock Oil and Gas is oil.This Williston deal will add more than 100 economic undrilled inventory locations, assisting Devon to maintain its high-margin production and strong cash flow for several years. (Devon to Buy RimRock Oil and Gas, Expand in Williston)5.   Minnetonka, MN-based independent energy explorer, Northern Oil & Gas, recently declared that it has signed an acquisition agreement to take over high oil-cut assets in the Williston Basin. The initial consideration, which is worth around $170 million in cash, is subject to closing adjustments.The acquired properties are mainly situated in Dunn, McKenzie and Williams Counties in North Dakota and include about 3,500 acres, 9.2 net producing wells, 2.6 net wells in-process and 14.9 net engineered economic undeveloped locations. These assets are operated by Marathon Oil, Continental Resources and ConocoPhillips. However, Northern Oil owns an existing stake in roughly 50% of the takeover property value.The company anticipates spending around $15 million in capital expenditure after the deal is expected to be closed in August 2022. (Northern to Snap Up Williston Basin Assets for $170M)Price PerformanceThe following table shows the price movement of some major oil and gas players over the past week and during the last six months.Company    Last Week    Last 6 MonthsXOM                   +1.4%                 +63%CVX                    -1.2%                 +51.4%COP                   -1.1%                 +64.5%OXY                    -9%                     +118.5%SLB    -               0.5%                   +58.3%RIG                     +4.5%                 +55.6%VLO                    +3.8%                 +106%MPC                   +2.6%                  +75.3%While oil was green for the week, stocks were not so much. In fact, the Energy Select Sector SPDR — a popular way to track energy companies — edged down 0.9% last week. But over the past six months, the sector tracker has increased 51.1%.What’s Next in the Energy World?Oil prices breached the $120 mark last week, primarily reaffirming the view that the OPEC+ decision to produce more of the commodity will fall short of compensating for the output loss from Russia and demand boosts from the summer driving season, plus the potential return of consumption in China. The elevated crude prices, surging demand for motor fuels and the effect of the Russian invasion of Ukraine have also resulted in gasoline and diesel prices reaching record highs.Amid this backdrop, market participants will closely track the regular releases to look for further guidance on the direction of prices. In this context, the U.S. government’s statistics on oil and natural gas — one of the few solid indicators that come out regularly — will be on energy traders' radar. Data on rig count from the oilfield service firm Baker Hughes, which is a pointer to the trends in U.S. crude production, is closely followed too. News related to the ongoing Russia-Ukraine geopolitical conflict and the potential demand loss from fresh coronavirus curbs in China will be the other factors that will dictate the near-term price movement for oil.  Special Report: The Top 5 IPOs for Your Portfolio Today, you have a chance to get in on the ground floor of one of the best investment opportunities of the year. As the world continues to benefit from an ever-evolving internet, a handful of innovative tech companies are on the brink of reaping immense rewards - and you can put yourself in a position to cash in. One is set to disrupt the online communication industry. Brilliantly designed for creating online communities, this stock is poised to explode when made public. With the strength of our economy and record amounts of cash flooding into IPOs, you don’t want to miss this opportunity.>>See Zacks’ Hottest IPOs NowWant 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 Devon Energy Corporation (DVN): Free Stock Analysis Report Tullow Oil PLC (TUWOY): Free Stock Analysis Report Northern Oil and Gas, Inc. (NOG): Free Stock Analysis Report Equinor ASA (EQNR): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 16th, 2022