DAILY MARKET REPORTS
- President Donald Trump’s decision to exit from the Iran nuclear deal continued to ripple through global markets Wednesday, with investors sending oil prices and shares of energy companies higher.
- Mr. Trump said Tuesday that he planned to institute sanctions against Iran and that the U.S. would sanction any nation that helps Tehran pursue nuclear weapons, as well as U.S. and foreign companies and banks that continue to do business with the country.
- The S&P 500’s energy sector extended its recent gains, surging as U.S. crude oil rose 2.5% to $70.79 a barrel, around its highest level since November 2014.
- Walmart dropped after it acquired a controlling stake in Indian e-commerce firm Flipkart for about $16 billion, the U.S. retailer’s biggest foreign investment.
- Walt Disney dipped after reporting quarterly profit that topped Wall Street forecasts.
US FINANCIAL MARKET
Parks, ‘Black Panther’ propel Disney earnings past TV decline
- Walt Disney’s quarterly profit topped Wall Street forecasts on Tuesday as higher returns from its theme parks and film studio offset ongoing pressure on the television business from digital competition.
- The hit performance of “Black Panther” and an uptick in business at Disney’s parks and resorts drove overall revenue up 9% to $14.5 billion.
- Net income rose 23% to $2.94 billion.
- At the movie studio, profit hit $847 million thanks largely to the success of superhero movie “Black Panther.” The film has exceeded expectations with $1.3 billion in global ticket sales, making it the ninth-highest grossing film in movie history.
- The theme park unit reported net income of $954 million, up 27% as attendance and guest spending rose. Disney raised some single-day admission prices in February.
- In a bid to target harder-to-reach younger male viewers, Disney has lined up UFC fighting to be a cornerstone of ESPN Plus.
Game publisher EA’s first-quarter forecast misses estimates
- Electronic Arts forecast current-quarter revenue below Wall Street estimates on Tuesday, as the video-game publisher faces rising competition from free-to-play digital games “Fortnite” and “PlayerUnknown’s Battlegrounds”.
- On an adjusted basis, EA’s revenue was $1.26 billion for the reported quarter, beating estimates of $1.24 billion.
- Sales at EA’s high-margin digital business however rose 18% to $1.10 billion in the fourth quarter as more gamers bought their titles online instead of purchasing physical copies from retail stores.
- Net income rose to $607 million in the fourth quarter, from $566 million a year earlier.
- The company forecast first-quarter adjusted revenue of $780 million, below analysts’ average estimate of $795.9 million.
AB InBev Stumbles in U.S., but Sees Growth Elsewhere
- Anheuser-Busch InBev, which makes Budweiser, Bud Light and Stella Artois, said overall sales volume in North America fell 4.1% over the first three months of the year from a year earlier, due largely to declines in Bud Light and Budweiser.
- Revenue increased to $13.07 billion from $12.92 billion. Sales to wholesalers in the U.S. at AB InBev were down 4.4%, with revenue decreasing 2.5% in the first quarter.
- Net profit decreased to $1.02 billion from $1.40 billion. In the U.S., a rise in the price of hedging aluminum and increased freight costs led to margin contraction and a 5% decline in EBITDA.
Wendy’s North America same-store sales miss estimates
- Wendy’s reported lower-than-expected first-quarter sales at its established outlets in North America as the burger chain struggled to attract enough diners in a fiercely competitive restaurant industry.
- Revenue rose to $380.56 million from $285.82 million, beating analysts’ average estimate of $379.5 million.
- The company’s same-restaurant sales in North America rose 1.6% in the quarter. Analysts on average were expecting same-store sales to rise 1.8%.
- Net income fell to $20.16 million in the first quarter, from $22.34 million a year earlier.
Luxury fragrances drive Coty’s results beat
- Beauty products maker Coty posted better-than-expected quarterly results, selling more of a range of luxury perfumes which include Burberry and Gucci brands.
- Sales rose 9.4% to $2.22 billion, beating analysts’ estimate of $2.17 billion.
- Powered by strong growth in designer brands including Chloe and Tiffany, sales in its luxury beauty segment climbed 19% to $752.5 million in the third quarter.
- Net loss narrowed to $77 million, from a loss of $164.2 million a year earlier.
SunPower posts smaller first-quarter loss
- U.S solar company SunPower reported a smaller quarterly loss on Tuesday, on higher demand for solar modules in residential and commercial markets.
- The company said revenue rose to $391.89 million from $329.10 million.
- The company’s net loss narrowed to $115.97 million in the first quarter, from a loss of $219.73 million a year earlier.
Walmart agrees to a $16 billion deal to buy a majority stake in India’s Flipkart
- The U.S. retail giant announced that it would acquire an initial stake of roughly 77% in Flipkart. The remainder of the business will be held by existing investor.
- Walmart said in a statement that its long-term aim would be to support Flipkart’s transition into a publicly-listed subsidiary. The retailer said it expects India’s e-commerce market to grow at four times the rate of the overall retail industry.
- Flipkart has 100 million users signed up to its platform, according to the company’s website. India, which has a population of 1.3 billion, is seeing rapid growth in its digital economy with the emergence of e-commerce start-ups like Snapdeal and Paytm.
Google eases tech stress with app controls, table-booking assistant
- Google on Tuesday showed how its virtual assistant can now call restaurants and salons to book appointments, navigating complex conversations, as the Alphabet unit acknowledged that a technological onslaught was leaving users frazzled and needing a cure.
- The demonstrations at Google I/O, an annual event for creators of Google-compatible products, showed how big technology companies are positioning themselves for a lucrative artificial intelligence revolution while grappling with heightened scrutiny about their societal influence.
- Google showed how its email program can suggest sentences and how Google Assistant can call a salon or restaurant to make an appointment or reservation.
- A new tool in its Android software, which runs most of the world’s mobile phones, will notify users how much they are using apps and let them set limits for themselves and family members.
Fox to buy seven TV stations from Sinclair for about $910 million
- Twenty-First Century Fox said it agreed to buy seven television stations from Sinclair Broadcast Group for about $910 million.
- The company said the deal would grow Fox Television Stations’ coverage to nearly half of all U.S. households, and its market presence to 19 of the top 20, including the addition of key markets that align with Fox’s sports rights.
- The sales are to allow Sinclair to gain the regulatory approval it needs to seal its purchase of Tribune Media.
Two killed in Tesla car crash in Florida: police
- A Tesla car crashed and caught fire in Fort Lauderdale, Florida on Tuesday, killing two people, local police said on Wednesday.
- A third person in the Model S sedan was taken to a hospital, the Miami Herald reported late on Tuesday, adding it was not immediately clear what caused the wreck.
Oil Jumps After Trump’s Plan to Reinstate Sanctions on Iran
- Oil prices climbed to 3 1/2-year highs Wednesday after President Donald Trump pulled the U.S. out of the Iran nuclear pact, triggering renewed economic sanctions that could reduce the oil supply of an already increasingly tight market.
- Crude prices have swung wildly this week, as investors braced for Mr. Trump’s decision. Anticipation of the withdrawal had helped oil rise more than 10% over the past month.
- Iran’s total crude oil production stood at around 3.81 million barrels a day in March, with exports at 2.19 million barrels a day, according to the International Energy Agency’s latest monthly oil market report.
US ECONOMY & POLITIC
U.S. Producer Prices Edge Up 0.1% in April
- U.S. producer prices edged only slightly higher last month, a possible sign inflation pressures in the economy remain relatively modest.
- The producer-price index, a measure of the prices businesses charge for their goods and services, rose a seasonally adjusted 0.1% in April from a month earlier. Economists had forecast a 0.2% increase.
- From a year earlier, producer prices advanced 2.6% last month, the smallest annual increase since December.
- Producer energy prices rose 0.1% in April from March. Food prices fell 1.1%. Transportation and warehousing costs were up 0.6% on the month.
Trump Withdraws U.S. From Iran Accord
- The U.S. is exiting the Iranian nuclear accord, President Donald Trump said Tuesday, dismantling his predecessor’s most prominent foreign-policy initiative and bucking the appeals of some of America’s closest allies.
- Speaking in the Diplomatic Room of the White House, Mr. Trump delivered harsh words about the 2015 deal to curb and monitor Iran’s nuclear activity, calling it “horrible,” “one-sided” and “disastrous.”
- Administration officials said the Iran sanctions suspended under the agreement snapped immediately back into effect, meaning any new contracts and financial deals are banned.
- They said businesses and banks have either 90 or 180 days to wind down existing ties, depending on the particular type of transaction.
North Korea Releases Three U.S. Detainees
- North Korea released three U.S. citizens imprisoned for more than a year and allowed them to fly home with Secretary of State Mike Pompeo, removing a source of diplomatic friction between Washington and Pyongyang ahead of a summit between the leaders of the two adversaries.
- The three men— Kim Dong-chul, Tony Kim and Kim Hak-song—flew out of Pyongyang on Mr. Pompeo’s plane, according to a Twitter message Wednesday morning by President Donald Trump.
- The three Americans were all able to walk on the plane without assistance, according to a White House statement that said Mr. Trump regarded Mr. Kim’s decision as “a positive gesture of goodwill.”
Trump and GOP Leaders Notch Primary Victories
- West Virginia Attorney General Patrick Morrisey won his state’s Republican Senate primary Tuesday, an outcome welcomed by President Donald Trump and GOP leaders who warned that a victory by at least one of his rivals would have hurt their chances of defeating Democratic Sen. Joe Manchin.
Mike Braun Wins Indiana’s Republican Senate Primary
- Mike Braun, a former state legislator who campaigned as a new-to-politics businessman in the mold of President Donald Trump, won Indiana’s Republican Senate primary Tuesday.
EUROPE & WORLD
Vodafone challenges Deutsche Telekom with $21.8 billion Liberty deal
- Vodafone has agreed to pay $21.8 billion to buy Liberty Global’s assets in Germany and Eastern Europe to take the fight to rivals with a broader range of superfast cable TV, broadband and mobile services.
- The world’s second-largest mobile operator struck a deal with U.S. cable pioneer John Malone’s Liberty after years of on-off talks to become a European force to challenge the dominance of former monopolies such as Deutsche Telekom.
- The deal puts Vodafone back on the front foot in its European heartlands, where it is battling to be one of the few players with the scale to provide the full range of entertainment and communications services that consumers want.
France to do utmost to protect business interests in Iran
- France and its European allies will work hard to safeguard the interests of their businesses in Iran, a source at the office of French President Emmanuel Macron said on Wednesday, after the United States said it was re-imposing strict sanctions on Tehran.
- French exports to Iran doubled in 2017 to 1.5 billion euros ($1.78 billion), driven by the export of jets and aircraft parts, as well as automobile parts, according to customs data.
- Total trade between France and Iran hit a nine-year high last year of 3.8 billion euros.
- The United States will give a six-month wind down for energy-related sanctions, including banking and shipping of energy products, and a 90-day wind down for everything else including passenger aircraft, a U.S. State Department official said on Tuesday.
TODAY in HISTORY
- Mother’s Day became a public holiday. (1914)
- Explorers Richard E. Byrd and Floyd Bennett flew over the North Pole. (1926)
- The South African parliament chose Nelson Mandela as president. (1994)
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