US FINANCIAL MARKET

U.S. Stocks Waver, Bonds Extend Selloff – Wall Street Journal, 4/8/2022

• U.S. stocks wobbled and government bonds extended their selloff Friday as investors assessed the latest signals about Federal Reserve policy and the war in Ukraine.
• The S&P 500, which dropped in early trading, was recently up 0.2%. The broad-market index closed up 0.4% on Thursday.
• The Nasdaq Composite declined 0.5%. The blue-chip Dow Jones Industrial Average reversed its early losses, and was recently up 0.7%.
• The yield on the benchmark 10-year Treasury note rose for a sixth consecutive day, notching a new three-year high before easing to 2.691%, compared with 2.654% on Thursday.
• Shorter-dated bond yields also advanced, with the 2-year yield rising to 2.493% from 2.462%.
• The war in Ukraine also continued to worry investors. Allegations of war crimes by Russian troops against civilians prompted a new round of sanctions from the U.S. and the European Union this week.
• The United Nations General Assembly voted to suspend Russia from its Human Rights Council.
• CrowdStrike shares rose 3.1% after the cybersecurity software developer said it received a key authorization to work with the Department of Defense.
• Overseas, the pan-continental Stoxx Europe 600 rose 0.8%. Banco BPM jumped 15% after Crédit Agricole said it took a 9.2% stake in the Italian lender. Shares of Crédit Agricole ticked up 0.2%.
• The ruble strengthened 1% against the dollar, trading at around 77 rubles to $1.
• The Russian central bank cut its key policy rate on Friday to 17% from 20%, in a sign that efforts to stabilize the country’s financial system are having an effect. Russian stocks declined 2.5%.
• The country’s benchmark MOEX stock index has lost more than 7% this week.
• In Asia, most major benchmarks closed up. The Shanghai Composite Index added 0.5% while Hong Kong’s Hang Seng Index rose 0.3%. Japan’s Nikkei 225 ticked up 0.4%.

‘Unprecedented’ Inflation Squeezes Slim Jim Maker Conagra – Wall Street Journal, 4/8/2022

• Conagra Brands said unprecedented inflation in ingredients and trucking is pushing the company to raise prices again.
• But so far, shoppers aren’t deterred.
• Sales rose about 5% to $2.91 billion, topping analysts’ expectations of $2.85 billion.
• For its fiscal third quarter, the company reported a quarterly profit of $218.4 million, down 22% from a year earlier.
• Adjusted for divestitures and other one-time items, earnings were 58 cents a share, matching expectations from analysts surveyed by FactSet.
• Partly because of its price increases, Conagra said it now expects sales growth of 4% for the fiscal year, up from its previous guidance of about 3%.
• Chief Financial Officer David Marberger said persistent inflation caused Conagra to lower its adjusted earnings expectations to $2.35 a share, from about $2.50 a share, for the fiscal year that ends in May.
• “The environment isn’t getting much easier in the near term,” said Chief Executive Sean Connolly. Conagra now expects inflation in the current quarter to be “an unprecedented 26%” higher than two years earlier, Mr. Connolly said. “There is no way we could’ve called the 26%,” he said.

U.S. bank earnings to decline in first quarter – Reuters, 4/8/2022

• Big U.S. banks are expected to show a sharp decline in first quarter earnings from a year ago, when they benefited from exceptionally strong dealmaking and trading, and funds set aside for loan losses being released.
• Net income for the six biggest U.S. banks will be down about 35% from a year earlier, according to analyst estimates from Refinitiv.
• Investment banking revenues stalled after the Russian invasion of Ukraine in late February.
• The quarter will be challenging for the biggest banks, according to analyst Christopher McGratty of Keefe, Bruyette & Woods.
• Estimated revenue declines of 36% in investment banking and 18% in trading are the biggest headwind, he said.
• Analysts expect pre-provision net revenue – which is not clouded by swings in loss reserves set during the pandemic – to decline more modestly than overall profits plunge.

Amazon Intends to Appeal Union Victory in New York – Wall Street Journal, 4/8/2022

• Amazon.com plans to appeal its loss last week to union organizers in New York, where workers voted to establish the company’s first U.S. union.
• In a filing, Amazon signaled that it would appeal because of actions taken by the union, as well as the National Labor Relations Board, before and during the election.
• Amazon said in the filing that union organizers threatened employees into voting in favor of the union. It also blamed the NLRB, claiming it suppressed voter turnout by how it set up the voting periods, causing long wait times.
• Amazon has also taken issue with recent complaints by the NLRB against Amazon, which the company has suggested had an improper influence on the votes of workers.

U.S. labor board official wants to end mandatory anti-union meetings – Reuters, 4/8/2022

• The top lawyer at the agency that enforces U.S. labor laws said on Thursday she will ask the National Labor Relations Board (NLRB) to prohibit businesses from requiring workers to attend meetings discouraging unionizing, which would eliminate a major tool employers use to counter union campaigns.
• Jennifer Abruzzo, general counsel of the NLRB, said in a memo that so-called captive audience meetings discourage employees from exercising their right to refrain from listening to anti-union messages, making them illegal under federal labor law.
• Abruzzo said that in a future case she will ask the five-member NLRB to overturn its own precedent going back to the 1940s that says captive audience meetings are legal.
• The general counsel acts as a prosecutor, filing complaints against businesses that are then heard by the board.

Google Bans Apps With Hidden Data-Harvesting Software – Wall Street Journal, 4/8/2022

• Google has yanked dozens of apps from its Google Play store after determining that they include a software element that surreptitiously harvests data.
• The Panamanian company that wrote the code, Measurement Systems S. de R.L., is linked through corporate records and web registrations to a Virginia defense contractor that does cyberintelligence, network-defense and intelligence-intercept work for U.S. national-security agencies.
• The code ran on millions of Android devices and has been found inside several Muslim prayer apps that have been downloaded more than 10 million times, as well as a highway-speed-trap detection app, a QR-code reading app and a number of other popular consumer apps, according to two researchers who discovered the behavior of the code in the course of auditing work they do searching for vulnerabilities in Android apps.
• Measurement Systems paid developers around the world to incorporate its code—known as a software development kit, or SDK—into their apps, developers said.
• Its presence allowed the Panamanian company to surreptitiously collect data from their users, according to Serge Egelman, a researcher at the International Computer Science Institute and the University of California, Berkeley, and Joel Reardon of the University of Calgary.

Food Prices Jump Most on Record as War Sparks Supply Chaos – Bloomberg, 4/8/2022

• Global food prices are surging at the fastest pace ever as the war in Ukraine chokes crop supplies, piling more inflationary pain on consumers and worsening a global hunger crisis.
• That’s sent food prices — which were already surging before the conflict started — to a record, with a United Nations’ index of world costs soaring another 13% last month.
• The FAO’s gauge of global prices has jumped about 75% since mid-2020, eclipsing levels seen in 2008 and 2011 that contributed to global food crises.
• Last month’s surge helped prices round out a seventh straight quarterly gain, the longest such run since 2008.
• The surging costs are spurring some countries to hold off on imports, seek new suppliers or draw down local stockpiles, though that won’t be a long-term fix, said Erin Collier, an economist at the UN’s Food and Agriculture Organization.

Early signs of cooling housing market seen in some U.S. cities, Redfin says – Reuters, 4/8/2022

• There are early signs of a cooldown in some of the hottest corners of the U.S. housing market, Redfin said in a report on Friday, a fresh indication that high house prices and rising mortgage rates are cutting into homebuyer demand.
• Among those early tells, according to Redfin: Google searches for “homes for sale” dropped by double digits in Baltimore, Boston, San Francisco and Los Angeles in the second week of March from a year earlier; tours of homes for sale in California were down 21% as of March 31 from the first week of 2022, data from ShowingTime shows.
• Redfin agents in San Francisco, Los Angeles, Washington DC, Boston and Seattle reported a drop in requests for homebuying help at the start of this year compared with last year, even as requests nationwide surged; and agents in California say they are seeing fewer offers on each home than previously.
• The U.S. housing market is still hot, however, even in cooling California cities. The average home in Los Angeles, for instance, is sold for 5% over its asking price, with a record share selling within a week of listing, Redfin said.