Stocks Edge Lower After Dramatic Rally – Wall Street Journal, 4/22/2021
- U.S. stock slid Thursday as investors parsed through another batch of earnings and data on the labor market.
- The S&P 500 dropped 0.2% shortly after the opening bell.
- The technology-heavy Nasdaq Composite slipped 0.1%. The Dow Jones Industrial Average fell 0.4%.
- The declines come after stocks jumped on Wednesday, reversing losses from earlier in the week. Many investors remain upbeat about the outlook for shares, but are growing concerned that a surge in coronavirus cases globally could delay plans to reopen economic activity. India on Thursday reported the world’s biggest one-day rise in new infections.
- On the economic front, worker filings for jobless claims reached another Covid-19 low of 547,000 last week.
- The decline is a sign the labor market is strengthening.
- Bond yields steadied. The 10-year U.S. Treasury yield ticked down to 1.561% from 1.566% Wednesday.
- Yields, which move in the opposite direction to bond prices, have fallen from a high of 1.749% in late March.
- In overseas markets, shares of tech and utility companies led the Stoxx Europe 600 up 0.5%.
- The European Central Bank left its key interest rates and bond-buying programs unchanged, seeking to maintain support for governments and companies through a new round of coronavirus infections and restrictions.
- The euro edged down 0.1% to $1.2027.
- In Asia, chemical and pharmaceutical stocks helped Japan’s Nikkei 225 climb 2.4%. China’s Shanghai Composite Index ticked down 0.2%.
Covid-19 Live Updates: U.S. Cases Continue Downward Trend – Wall Street Journal, 4/22/2021
- Newly reported Covid-19 cases in the U.S. were up from a day earlier but continued their downward trend nationwide, as a new surge in Michigan rivals the state’s fall high.
- The U.S. reported 62,857 new cases for Wednesday, according to the latest data compiled by Johns Hopkins University. The number was up from 61,273 reported a day earlier, and down from 75,375 reported a week earlier.
- Michigan’s latest rise in new Covid-19 cases rivals highs reached during the prolonged fall surge. The state’s seven-day case average of newly reported cases remained above 7,000 for nearly two weeks, according to the Journal’s analysis of Johns Hopkins data, before falling slightly to 6,891 on Tuesday.
- The U.S. reported 842 deaths for Wednesday, according to Johns Hopkins data, down from a day-earlier 866 and a week-earlier 956, bringing the U.S. death toll to more than 569,400.
- The seven-day average number of daily vaccine doses administered remained at three million, according to data from the Centers for Disease Control and Prevention, with nearly 216 million shots administered out of the 277.9 million doses distributed.
AT&T’s Revenue Rises as Wireless Unit, HBO Add Customers – Wall Street Journal, 4/22/2021
- AT&T piled on more cellphone users, fiber-optic internet customers and HBO viewers during the first quarter, showing the media-and-telecom conglomerate’s focus on growth as the economy starts to roar back after a year of coronavirus-related pressure.
- Total revenue rose 2.7% to $43.9 billion.
- The WarnerMedia media unit’s first-quarter revenue rose 9.8% to $8.53 billion, helped by the return of college basketball on its cable-TV channels and growing revenue from HBO Max.
- The Dallas company reported 44.2 million domestic HBO and HBO Max subscribers, up from 41.5 million three months earlier, as its media division sought to gain on rivals like Netflix and Walt Disney.
- In the U.S. wireless business, AT&T’s core profit engine, the company added 595,000 postpaid phone subscribers, a highly valued category of customers who are billed for monthly service after-the-fact. The carrier also posted a net gain of 207,000 prepaid phone subscribers.
- The unit holding AT&T’s DirecTV satellite service ended the quarter with 620,000 fewer customers, excluding those still using AT&T TV Now.
- Overall, net income attributable to AT&T reached $7.55 billion, or $1.04 a share, up from $4.61 billion, or 63 cents a share, a year earlier.
- The company’s reported net debt jumped to about $169 billion, close to its level two years ago following the Time Warner buyout that turned AT&T into a media heavyweight.
Chipotle expects sales surge this quarter, builds on 17.2% first-quarter growth – Reuters, 4/22/2021
- Chipotle Mexican Grill on Wednesday said its comparable sales this quarter could grow by as much as 30% as rapid COVID-19 vaccinations encourage consumers to return to its restaurants that offer quick service in a casual dining space.
- Revenue rose 23.4% to $1.74 billion, matching analyst estimates, according to IBES data from Refinitiv.
- Digital sales surged nearly 134% in the first quarter and accounted for half of overall sales, the company said on Wednesday.
- Shares rose slightly in after hours trading after the burrito chain reported comparable sales rose 17.2% in the first quarter, helped by new menu items like quesadillas and consumers’ using federal pandemic relief funds to order tacos and salads online.
- While the company reiterated that it expects to open about 200 new restaurants in 2021, it continued to shy away from issuing full-year revenue and sales forecasts.
Southwest expects lower cash burn as vaccines drive leisure travel rebound – Reuters, 4/22/2021
- Southwest Airlines on Thursday posted a smaller-than-expected quarterly adjusted loss and forecast lower cash burn in the second quarter as rising vaccination rates and pent-up demand for leisure travel signal an “optimistic summer”.
- Total operating revenue fell 51.5% to $2.05 billion.
- Excluding items, the Dallas-based company reported a net loss of $1.02 billion, or $1.72 per share, in the first quarter ended March 31, compared with a net loss of $77 million, or 15 cents per share, a year earlier.
- Analysts on average had expected Southwest to report a loss of $1.85 per share and revenue $2.07 billion, according to IBES data from Refinitiv.
- The company said it was adding flights and expects second-quarter capacity to rise about 90% from a year earlier, but about 15% below 2019 levels, when air travel was not hit by the COVID-19 crisis.
- Southwest said it expects to achieve break-even average core cash flow or better by June.
American Airlines loss narrows as travel demand picks up – Reuters, 4/22/2021
- American Airlines Group reported a smaller quarterly loss on Thursday as rising vaccination rates prompted more people to opt for air travel.
- Total operating revenue fell 52.9% to $4.01 billion.
- The company posted a net loss of $1.25 billion, or $1.97 per share, for the quarter ended March 31, compared with a loss of $2.24 billion, or $5.26 per share, a year earlier.
- American Airlines ended the quarter with about $17.3 billion in available liquidity.
- Shares of the airline rose 3.2% to $21.66 in premarket trade as it said it reduced its cash burn rate to about $27 million a day in the first quarter, compared with $30 million in the previous quarter.
D.R. Horton raises full-year outlook as profit beats on strong home demand – Reuters, 4/22/2021
- D.R. Horton raised its full-year outlook for home deliveries and reported a better-than-expected quarterly profit, as strong housing demand and low mortgage rates boosted the top U.S. homebuilder’s sales.
- Revenue rose 43% to $6.45 billion.
- Deliveries jumped about 36% to 19,701 homes in the quarter.
- Home orders, an indicator of future revenue, jumped 35% to 27,059 in the second-quarter ended March 31, beating analysts’ average estimate of 23,239 homes, according to IBES data from Refinitiv.
- Net income attributable to the company rose to $929.5 million, or $2.53 per share, in the second quarter ended March 31, from $482.7 million, or $1.30 per share, a year earlier.
- D.R. Horton said it now expects full-year home deliveries between 82,500 and 84,500, up from 80,000 to 82,000 forecast previously.
Dow profit surges as prices for chemicals soar on Texas freeze – Reuters, 4/22/2021
- Dow’s current-quarter revenue forecast was more than $1 billion above expectations after the company crushed first-quarter estimates on surging prices for its chemicals from tighter supply following a winter freeze in Texas.
- Net sales of $11.88 billion topped estimates of $11.09 billion.
- Prices jumped 14% in the first quarter from the fourth, helped by gains in consumer packaging and polyurethanes, or flexible foam, used in furniture and bedding, as the supply squeeze came amid demand recovery in some of Dow’s end-markets.
- Adjusted net operating income of $1.36 per share, in the three months ended March 31, beat estimates of $1.14, according to Refinitiv IBES data.
- The company forecast second-quarter sales between $12.4 billion and $12.9 billion, compared with analysts’ average estimate of $11.25 billion, citing a recovery from winter storm Uri and robust demand.
Quest sees waning demand for COVID-19 tests, rebound in core U.S. business as pandemic subsides – Reuters, 4/22/2021
- Quest Diagnostics on Thursday reported a first-quarter profit that exceeded Wall Street expectations as a recovery in its non-COVID-19 businesses offset a slowdown in coronavirus testing.
- Net income attributable to the company rose to $469 million, or $3.46 per share, in the quarter, from $99 million, or 73 cents per share, a year earlier.
- Quest, which said it expects to launch an accelerated share repurchase of nearly $1.5 billion in the coming days, tightened its profit forecast range for the first half of 2021 to between $6.30 and $6.80 per share from $5.90 to $6.90, raising the midpoint by 15 cents. Its shares were up 1% at $131.32
Blackstone’s first-quarter earnings surge as it cashes out on assets – Reuters, 4/22/2021
- Blackstone Group, the world’s largest manager of alternative assets such as private equity and real estate, said on Thursday that its distributable earnings more than doubled in the first quarter to $1.2 billion as it cashed out on holdings.
- Total assets under management rose to $648.8 billion, from $618.6 billion in the previous quarter, driven by strong fundraising. It ended the quarter with $148.2 billion of unspent capital.
- Blackstone said its private equity portfolio appreciated 15.3% in the quarter, compared with an 5.8% rise in the benchmark S&P 500 stock index over the same period. Opportunistic and core real estate funds rose 5.3% and 3.2%, respectively.
- Blackstone reported distributable earnings per share of $96, surpassing the average Wall Street analyst estimate of 76 cents, according to financial data provider Refinitiv.
Apple, Google Come Under Fire at Senate Antitrust Hearing – Wall Street Journal, 4/22/2021
- Lawmakers and mobile app companies took aim at Apple and Alphabet’s Google in a hearing Wednesday focused on competition concerns about the companies’ power over their smartphone ecosystems.
- The hearing pitted executives from Apple and Google against familiar critics, including music streaming service Spotify Technology, online dating service provider Match Group and tracking-device maker Tile.
- “Apple abuses its dominant position as a gatekeeper to insulate itself from competition and disadvantage rival services such as Spotify,” said Horacio Gutierrez, Spotify’s chief legal officer. That hurts consumers through higher prices, less innovation and less choice, he said.
- Tile argued that Apple has taken other steps to unfairly disadvantage its service, and recently has announced plans to launch a competing product.
Ford Prolongs Shutdowns at Several U.S. Plants Due to Chip Shortage – Wall Street Journal, 4/22/2021
- Ford Motor is planning more downtime at five North American factories due to a global semiconductor shortage, further disrupting output of a popular sport-utility vehicle and the F-150 pickup truck, the company’s biggest moneymaker.
- The Dearborn, Mich., auto maker said Wednesday that factories in Chicago, suburban Detroit and Kansas City, Mo., will be idled for an additional two weeks, extending the closures through May 14. An SUV plant in Ontario will also take an extra week of downtime in early May.
- The latest shutdowns further curb production of the Explorer full-size SUV and Transit vans. Output of the F-150 also will remain limited.
U.S. existing home sales drop to seven-month low – Reuters, 4/22/2021
- U.S. home sales fell to a seven-month low in March, pulled down by an acute shortage of properties, which is boosting prices and making owning a house more expensive for some first-time buyers.
- Existing home sales dropped 3.7% to a seasonally adjusted annual rate of 6.01 million units last month, the lowest level since August 2020, the National Association of Realtors said on Thursday. Sales fell in all four regions.
- Home resales, which account for the bulk of U.S. home sales, increased 12.3% on a year-on-year basis, remaining well above their pre-pandemic level.
- There were 1.07 million previously owned homes on the market in March, up 3.9% compared to February. Supply plunged 28.2% from one year ago.
- At March’s sales pace, it would take 2.1 months to exhaust the current inventory, down from 3.3 months a year ago.
- First-time buyers accounted for 32% of sales in March, up from 31% in February and down from 34% in March 2020.
U.S. weekly jobless claims fall to new one-year low – Reuters, 4/22/2021
- The number of Americans filing new claims for unemployment benefits last week dropped to a fresh one-year low, suggesting layoffs were subsiding and strengthening expectations for another month of blockbuster job growth in April as a re-opening economy unleashes pent-up demand.
- But the labor market recovery has a long way to go, with the report from the Labor Department on Thursday showing at least 17.4 million people were collecting unemployment checks in early April, a sign that long-term joblessness was becoming entrenched.
- Initial claims for state unemployment benefits decreased 39,000 to a seasonally adjusted 547,000 for the week ended April 17, the lowest since mid-March 2020. Data for the prior week was revised to show 10,000 more applications received than previously reported.
- Including the PUA program, 699,798 people filed claims last week, squeaking below 700,000 for the first time since the pandemic started.
- The claims report showed the number of people receiving benefits after an initial week of aid decreased 34,000 to 3.674 million in the week ended April 10.
- About 5.6 million people were on extended benefits during the week ended April 3, up 447,704 from the prior week. Another 492,999 were on a state program for those who have exhausted their initial six months of aid, down 119,699 from the week before.
Pentagon Is $7.1 Billion Short on F-35 Operating Costs, GAO Says – Bloomberg, 4/22/2021
- The U.S. military is confronting a projected $7.1 billion shortfall in the cost of operating its F-35 jets during the years the fighter will be flying at maximum capacity compared with current long-range budget forecasts, according to a draft audit by Congress’s watchdog agency.
- The Air Force, Marines and Navy “collectively face annual multibillion-dollar gaps between the projected costs to sustain their respective F-35 fleets” starting in about 2036 and their “stated affordability goals,” Diana Maurer, a Government Accountability Office director, is informing two House Armed Services subcommittees Thursday in prepared remarks previewing what’s still a draft report.
- Maurers’s written testimony summarizes well-known current problems including flawed software and engine shortages while acknowledging some improvements in “mission-capable rates” for the planes.
- Overall, the F-35 program’s estimated sustainment costs have increased by more than $150 billion to what’s now an estimated $1.27 trillion over 66 years, and “these costs are already preventing the services from reaching their respective readiness objectives,” she said.
Iran Nuclear Deal Talks Advance as U.S. Offers Sanctions Relief – Wall Street Journal, 4/22/2021
- The Biden administration has signaled it is open to easing sanctions against critical elements of Iran’s economy, including oil and finance, helping narrow differences in nuclear talks, according to people familiar with the matter.
- Despite the progress, senior diplomats warned that weeks of difficult negotiations over the 2015 nuclear agreement lie ahead and progress remains fragile. Talks in Vienna are complicated by domestic politics in Washington and Tehran and by Iran’s refusal to meet directly with the U.S.
- Senior officials in Vienna this week wrapped up five days of talks, with delegations returning home before negotiations resume next week. People involved in the talks say progress has come as the U.S. laid out more clearly the contours of the sanctions relief it is prepared to provide.
EUROPE & WORLD
ECB Keeps Monetary Stimulus On Track Amid Recession Concerns – Wall Street Journal, 4/22/2021
- The European Central Bank kept its aggressive monetary stimulus unchanged on Thursday, seeking to support eurozone governments and businesses through a fresh wave of Covid-19 infections that likely tipped the bloc back into recession early this year.
- The resurgence of the virus and a sluggish rollout of vaccines have kept businesses shut across swaths of Europe this year, driving a divergence with the U.S. economy, which is benefiting from a hefty dose of government spending and speedier Covid-19 vaccinations.
- The ECB said in a statement that it would continue to buy eurozone debt under an emergency €1.85 trillion bond-buying program, equivalent to $2.2 trillion, through at least March 2022.
- It said it would buy those bonds at a “significantly higher pace” during the first months of this year, repeating a pledge made last month.
India Hits Global Record for Daily New Covid-19 Cases – Wall Street Journal, 4/22/2021
- India reported more than 314,000 new coronavirus cases, the world’s biggest ever single-day jump of new infections, as the country struggled to keep a surge of infections from overwhelming its healthcare system.
- Hospitals in New Delhi and other hard-hit cities have been turning away patients and running low on oxygen, beds and other medical supplies.
- The World Health Organization reported Tuesday that global Covid-19 infections continue to rise, with last week breaking records with the most new coronavirus cases logged in a seven-day period since the start of the pandemic. India accounted for 27.3% of those infections, with nearly triple the cases of the U.S.
- After Delhi’s lockdown, other states followed with tighter restrictions. Jharkhand imposed a weeklong lockdown starting Thursday, while India’s most populous state, Uttar Pradesh, has ordered a weekend lockdown.
SAP says new cloud package a hit, confirms outlook – Reuters, 4/22/2021
- Software group SAP said on Thursday its new all-in cloud package was proving to be a hit with its customers, as it confirmed its first-quarter results and recently raised guidance.
- As already reported, total revenue including SAP’s traditional mainstays of license sales and service revenues, rose by 2% in the first quarter at constant currency to 6.35 billion euros.
- Reported operating profit was depressed by executive share compensation, which SAP accounts for as a cash expense. After stripping out the effect of that, adjusted operating profit rose by 24% to 1.74 billion euros at constant currency.
- SAP confirmed its guidance after earlier this month nudging up expectations for cloud and software revenue to 23.4-23.8 billion euros ($28.15-$28.64 billion) this year, representing a rise of 1%-2% year on year.
- It also added 400 customers for S/4 HANA, its premium enterprise resource software platform, to bring the total to 16,400, of which 9,600 are live. Customer wins in the quarter included Google and Toshiba.
Coffee lovers and home bakers drive strongest Nestle quarter in a decade – Reuters, 4/22/2021
- Coffee drinkers, pet owners and home bakers helped to drive the biggest rise in quarterly sales at Nestle for 10 years, as the world’s biggest food group outshone Danone and set a high bar for Unilever.
- Organic sales leapt 7.7% in the first quarter versus 4.3% in the same period last year, easily beating a forecast for 3.3% growth in a company-compiled consensus and a 3.3% drop in sales posted by peer Danone this week. read more
- The Americas, and also Asia where the pandemic struck first last year, showed strong growth, while Europe saw a 4.4% rise.
- Coffee was the largest growth driver, with Nespresso portioned coffee up more than 17%, dairy almost 16% and petcare around 9%.
- Nestle’s ecommerce business also fared well in the first quarter, with sales up 40%, and its health science business benefitted as people bought more vitamins and supplements. Demand for fortified milks boosted dairy too.
- The maker of KitKat chocolate bars and Maggi soups confirmed its full-year guidance for higher organic sales growth, which strips out currency swings and acquisitions/divestments, than the 3.6% achieved last year.
Lagging rivals, Renault sales fall for fifth straight quarter – Reuters, 4/22/2021
- Renault’s sales fell for a fifth straight quarter as the French carmaker struggled to shrug off the fallout from the pandemic without a major presence in booming Chinese markets and a global shortage of electronic chips hit production.
- Shrinking inventories and other headwinds like unfavorable foreign exchange effects, meant overall revenue fell 1.1% to 10 billion euros ($12 billion) from a year earlier.
- Renault, which also makes Dacia and Lada cars and has a financing business, said sales were up 4.4% when stripping out currency and other effects.
- Car production fell by tens of thousands of vehicles in the first quarter as a result of the shortage, finance chief Clotilde Delbos told analysts.
- Delbos said electric and hybrid car models were likely to reach up to 15% of group sales in 2021, up from 10% last year.
Hyundai Q1 profit triples, to adjust May auto production due to chip shortage – Reuters, 4/22/2021
- Hyundai Motor posted a first-quarter profit that nearly tripled to its highest in four years as people bought its luxury cars, but warned it would have to adjust production again in May because of a chip shortage.
- Net profit surged 187% to 1.3 trillion won ($1.16 billion) from 463 billion a year earlier, when business slumped as countries shut down to limit the spread of the coronavirus.
- This was in line with an average Refinitiv SmartEstimate. Revenue rose 8.2% to 27.4 trillion won.
- Hyundai is expected to report net profit of 1.4 trillion won for the April-June period, up 536% from the corresponding period a year earlier, Refinitiv SmartEstimate showed.
- Henry VIII became king of England. (1509)
- The land rush in Oklahoma began when it was opened to settlers. (1889)
- Richard M. Nixon died of a stroke at the age of 81. (1994)