U.S. Stock Indexes Slide as Tech Shares Retreat – Wall Street Journal, 5/4/2021
- U.S. stocks fell in morning trading Tuesday, as technology stocks weighed on major indexes.
- The S&P 500 slid 1.2%. The benchmark advanced 0.3% on Monday, despite declines in giant technology stocks.
- The technology-heavy Nasdaq Composite fell 2.3%. The Dow Jones Industrial Average declines 0.8%, or 270 points.
- The improving economic picture is encouraging some investors to step up bets on companies that stand to benefit the most from the recovery. That is leading to a rally in energy and banking stocks, while technology shares have slowed their gains.
- Demand for U.S. imported goods reached a record high in March, further expanding the trade deficit, the Commerce Department said Tuesday. The foreign-trade gap in goods and services expanded 5.6% from the prior month to a seasonally adjusted $74.4 billion in March.
- U.S. government bond yields declined for a third consecutive day. The 10-year Treasury yield edged down to 1.583%, from 1.606% on Monday. Bond yields fall when prices rise.
- Brent crude, the international oil benchmark, rose 1.8% to $68.79 a barrel on optimism about recovering demand in the U.S. and Europe.
- Overseas, the pan-continental Stoxx Europe 600 retreated 0.6%. In Hong Kong, the Hang Seng Index rose 0.7%. Markets in Japan and mainland China were closed for public holidays.
Covid-19 Live Updates: New U.S. Cases Continue Overall Downward Trend – Wall Street Journal, 5/4/2021
- Newly reported Covid-19 cases in the U.S. were up from a day earlier but continued their overall downward trend, as more states rolled back virus-related restrictions.
- There were more than 50,000 new cases reported in the U.S. for Monday, according to data compiled by Johns Hopkins University and published early Tuesday morning Eastern time.
- That was up from 29,367 a day earlier but down from 56,696 a week earlier. About a third of states don’t report cases on weekends.
- More than 40% of adults in the U.S. have now been fully vaccinated, the Centers for Disease Control and Prevention reported. But the average number of vaccine doses administered each day is declining.
- An average of 2.3 million doses were administered each day in the U.S. over the past week, according to a Wall Street Journal analysis of CDC data, down from 2.8 million at the same time last week.
- There were 483 deaths initially reported for Monday, according to Johns Hopkins data, up from 325 a day earlier but down from 476 reported a week earlier. The U.S. death toll is now at more than 577,500.
- In Florida, Republican Gov. Ron DeSantis said he was immediately suspending any Covid-19 related emergency orders, including those issued by localities.
- Connecticut previously ended many capacity restrictions and said in April that it would end all restrictions on businesses beginning May 19, except for indoor masking requirements.
CVS Health earnings top estimates as Covid vaccinations, testing boost drugstore sales – CNBC, 5/4/2021
- CVS Health on Tuesday reported a strong first quarter and raised its full-year forecast, as customers came to its stores for Covid-19 vaccinations, tests and prescriptions.
- Revenue rose to $69.1 billion from $66.8 billion a year earlier. That outpaced analysts’ expectations of $68.39 billion.
- Same-store sales across its pharmacy and front store combined were up just 0.4% compared with growth of 9% a year earlier.
- Same-store sales for the front store fell 11.4%.
- The health-care company and drugstore chain reported net income of $2.22 billion, or $1.68 per share, up from $2.01 billion, or $1.53 per share, a year earlier.
- CVS has administered over 23 million Covid tests and over 17 million vaccines through April, CEO Karen Lynch said on an earnings call. She said those services have helped the drugstore chain attract customers, too.
- Among those new to CVS who got Covid testing, she said it had about a 9% conversion rate filling a new prescription at its pharmacy.
- The company raised its guidance for the year. It said it expects 2021 earnings will range between $6.24 and $6.36 per share, and after adjustments between $7.56 and $7.68 per share.
- It reiterated that its full-year cash flow from operations is projected to range from $12 billion to $12.5 billion.
Pfizer’s Covid-19 Vaccine Lifts Quarterly Results – Wall Street Journal, 5/4/2021
- Pfizer significantly increased revenue projections from its Covid-19 vaccine for the year, as sales from the shot over the first three months of 2021 lifted the company to a stronger quarterly profit.
- Total revenue for the first quarter came in at $14.58 billion, climbing 45% year over year.
- Stripped of one-time items, Pfizer’s adjusted profit in the quarter was 93 cents a share.
- Analysts surveyed by FactSet had been forecasting an adjusted profit of 78 cents a share on sales of $13.62 billion.
- Pfizer said Tuesday that its vaccine, the most widely distributed of the three that have been authorized for use in the U.S., contributed revenue of $3.5 billion in the first three months of 2021 as the U.S. vaccination campaign kicked into high gear.
- Over the course of the full year, Pfizer now expects the vaccine to generate $26 billion in sales.
- It had previously forecast $15 billion in sales from the vaccine.
- Higher vaccine sales boosted Pfizer’s outlook for the full year.
- The company now expects total revenue of $70.5 billion to $72.5 billion in 2021, with an adjusted profit of $3.55 to $3.65 a share.
- Pfizer’s previous revenue forecast had guided for sales of $59.4 billion to $61.4 billion, with an adjusted profit of $3.10 to $3.20 a share.
DuPont raises 2021 forecast on robust demand from chip, auto makers – Reuters, 5/4/2021
- Industrial materials maker DuPont raised its full-year profit and revenue forecasts and breezed past first-quarter expectations on Tuesday, boosted by demand from chip companies as well as a recovery in automobile markets.
- Adjusted earnings per share of 91 cents for the first quarter beat estimates of 76 cents, while sales of $4 billion surpassed the $3.85 billion estimated by analysts, according to Refinitiv IBES.
- DuPont, once part of the erstwhile chemical giant DowDuPont, now expects net sales between $15.70 billion and $15.90 billion and adjusted earnings per share in the range of $3.60 to $3.75 for the year ended December 2021.
- It had previously forecast sales between $15.40 billion and $15.60 billion on earnings of $3.30 to $3.45 per share.
- Still, the company warned of a $300 million hit in the year from escalating raw material, logistics costs and supply constraints of key raw materials.
- It said the impact from the costs was only about $20 million in the first quarter, but expects them to rise to about $90 million in the second and to carry through the next couple of quarters.
Under Armour raises annual forecast as reopening of economies lifts demand – Reuters, 5/4/2021
- Under Armour raised its expectations for annual profit and sales on Tuesday, after reporting a 35% jump in revenue as the reopening of economies in the United States and Asia fueled demand for the company’s sports shoes and apparel.
- Under Armour’s first-quarter net revenue rose to $1.26 billion, beating estimates of $1.13 billion, according to IBES data from Refinitiv.
- The rollout of COVID-19 vaccines and new rounds of government stimulus lifted consumer confidence for discretionary spending this year, helping Under Armour post a 32% increase in quarterly revenue from North America.
- Revenue from the company’s international segment surged 58%.
- The company earned 16 cents per share, on an adjusted basis, beating estimates of 3 cents per share.
- It expects full-year revenue to rise by a high-teens percentage, compared with a previous outlook of a high single-digit percentage increase. The company forecast second-quarter revenue to rise about 70% after store closures hammered sales a year ago.
U.S. car rental firm Avis Budget tops revenue estimates as demand recovers – Reuters, 5/4/2021
- U.S. rental car company Avis Budget Group topped Wall Street estimates for first-quarter revenue on Monday, as more people started traveling again after getting vaccinated against COVID-19.
- Total revenue fell 22% to $1.37 billion, beating estimates of $1.29 billion, according to Refinitiv IBES data.
- Revenues recovered sequentially in the quarter, with revenue per day increasing 12% in the Americas, driven by improving demand.
- Americas, the company’s largest market, posted a 14% fall in revenue to $1.08 billion versus last year, while revenue from its international segment fell 41%.
- Net loss came in at $170 million, or $2.43 per share, in the quarter ended March 31, compared with a loss of $158 million, or $2.16 per share, last year.
OPEC Keeps Crude Production Steady Before Planned Increases – Bloomberg, 5/4/2021
- OPEC kept crude production steady in April, ahead of a planned revival of supplies scheduled to begin this month.
- The Organization of Petroleum Exporting Countries pumped an average of 25.27 million barrels a day last month, about 50,000 a day less than in March, according to a Bloomberg survey.
- A setback for Libyan exports was largely offset by further increases from Iran.
- The group and its allies — which slashed production when the pandemic struck last year — are gradually restoring about a quarter of their halted supplies over the next three months, to satisfy a recovery in global demand.
- They will phase in just over 2 million barrels a day through to July, beginning with 600,000 a day this month.
- Still, the survey shows OPEC maintained its discipline while waiting for the demand rebound to kick in. Saudi Arabia, the group’s biggest member, continued to make extra cutbacks in April, pumping 8.11 million barrels a day.
GOP Lawmakers Urge Probe of Amazon’s Pursuit of Pentagon Contract – Wall Street Journal, 5/4/2021
- Two Republican lawmakers are pressing the attorney general to investigate potential anticompetitive behavior by Amazon.com Inc. in its pursuit of a major government cloud-computing contract, according to letters reviewed by The Wall Street Journal.
- Sen. Mike Lee (R., Utah) and Rep. Ken Buck (R., Colo.) urged Attorney General Merrick Garland to open up an investigation into the Joint Enterprise Defense Infrastructure procurement process in a joint letter on Monday evening.
- Amazon was one of a number of technology companies that competed for the Department of Defense’s 10-year, $10 billion cloud-computing contract, but ultimately lost to rival Microsoft Corp.
- The letter says Amazon might have violated antitrust laws and federal conflict-of-interest laws. “We are concerned that Amazon may have attempted to monopolize one or more markets relating to government and/or commercial cloud computing services by improperly influencing the Joint Enterprise Defense Infrastructure procurement process,” the letter says.
Amazon to Get Exclusive NFL Rights a Year Earlier Than Expected – Wall Street Journal, 5/4/2021
- Amazon.com will take over exclusive video rights for “Thursday Night Football” starting in the 2022-23 season, a year earlier than anticipated, the company and the National Football League said Monday.
- Initially, Amazon’s deal with the NFL called for the tech giant to begin streaming games in the 2023-24 season.
- Current rights holder Fox agreed to exit its existing deal for the package a season early.
- Terms, including the cost of acquiring the additional year of rights, weren’t disclosed.
- In March, Amazon signed a 10-year deal with the NFL to stream 15 games per season on its Prime Video platform.
- The average annual rights fee is around $1.2 billion and that is the price tag for the additional season, people familiar with the matter said.
Consumer Demand Drove U.S. Imports to Record High in March – Wall Street Journal, 5/4/2021
- Consumers and a fresh round of stimulus money pushed demand for U.S. imported goods to a record high in March, further expanding the trade deficit.
- The foreign-trade gap in goods and services expanded 5.6% from the prior month to a seasonally adjusted $74.4 billion in March, the Commerce Department said Tuesday.
- Imports rose 6.3% to $274.5 billion for the month, fueled by higher shipments of items including toys, furniture, cellphones, automobiles and semiconductors.
- Exports rose 6.6% to $200 billion in March, following a one-month decline in February, as supply-chain disruptions caused by winter weather eased.
- In March, the U.S. deficit in trade in goods with China, the largest U.S. trading partner, widened sharply to $36.9 billion from $30.2 billion in February. Imports from China surged 19% to $48.3 billion, while exports to the country rose 8.6% to $11.3 billion.
Treasury Expects to Borrow $1.3 Trillion Over Second Half of Fiscal 2021 – Wall Street Journal, 5/4/202
- The U.S. plans to borrow nearly $1.3 trillion over the next two quarters as federal spending picks up following the Covid-19 relief package enacted in March, the Treasury Department said Monday.
- That would bring total borrowing for the fiscal year ending Sept. 30 to $2.3 trillion, compared with $4 trillion in the last fiscal year, when the pandemic plunged the U.S. into a recession that drove deficits to record highs.
- The Treasury estimated the government would borrow $463 billion during the current quarter, nearly five times as much as the $95 billion it estimated previously, before Congress passed the $1.9 trillion relief bill.
- The Treasury also estimated net marketable borrowing would total $821 billion from July through September, assuming Congress agrees to suspend the federal borrowing limit on Aug. 1.
Corn Tops $7 a Bushel for First Time Since 2013 on Supply Worry – Bloomberg, 5/4/2021
- Corn futures surged above $7 a bushel for the first time in more than eight years as lack of rainfall in Brazil added to supply concerns.
- Corn climbed as much as 3.5% to $7.0325 a bushel on the Chicago Board of Trade, the highest since March 2013.
- Soybeans and wheat also both rose.
- China has been buying massive amounts of American soybeans and corn to rebuild the world’s largest hog herd.
- That’s helping lift prices just as dry weather hits crop yields in South America and Europe.
U.S. factory orders rebound in March; business spending on equipment strong – Reuters, 5/4/2021
- New orders for U.S.-made goods rebounded in March and business spending on equipment was stronger than initially estimated, boosted by robust domestic demand, though momentum could slow because of bottlenecks in the supply chain.
- The Commerce Department said on Tuesday that factory orders increased 1.1% in March after falling 0.5% in February.
- Orders rose 6.6% on a year-on-year basis.
- Factory goods orders in March were boosted by strong demand for machinery, motor vehicles, fabricated and primary metal products. But orders for electrical equipment, appliances and components decreased.
- Unfilled orders at factories rose 0.4% after surging 0.9% in February.
- The Commerce Department also reported that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, jumped 1.2% in March instead of increasing 0.9% as reported last month.
- Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, rose 1.6%. They were previously reported to have rebounded 1.3% in March.
EUROPE & WORLD
Saudi Aramco beats quarterly profit forecast, maintains dividend – Reuters, 5/4/2021
- State-run oil producer Saudi Aramco beat analysts’ forecasts on Tuesday with a 30% rise in first-quarter net profit and maintained its dividend payout, helped by strong oil prices.
- Aramco average total hydrocarbon production came in at 11.5 million barrels per day of oil equivalent in the first quarter of 2021. That includes 8.6 million barrels per day of crude oil.
- Net income rose to $21.7 billion for the quarter to March 31 from $16.7 billion a year earlier.
- Aramco was expected to post net profit of $19.48 billion, according to an average of estimates by five analysts.
- Aramco declared a dividend of $18.8 billion for the first quarter, to be paid in the second quarter, in line with company guidance of a $75 billion dividend for this year.
- Saudi Crown Prince Mohammed has said more Aramco shares could be sold in the next year or two, including to international investors. He has said the kingdom was in talks to sell 1% to a leading global energy company.
Qiagen 1st-quarter profit tops expectations on growth in non-COVID-19 products – Reuters, 5/4/2021
- U.S.-German genetic testing company Qiagen reported slightly better-than-expected quarterly earnings on Monday as sales growth in its non-coronavirus products added to high demand for COVID-19 tests.
- The company said first-quarter adjusted earnings rose to 65 cents per share on a currency-adjusted basis, beating the 63 cents on average forecast by analysts in a Vara Research poll, as research laboratories around the world have returned to work and clinical labs moved beyond COVID-19 testing.
- Qiagen also confirmed its 2021 forecast for adjusted earnings of $2.42 to $2.46 per share and net sales growth of 18% to 20% at constant exchange rates.
Chipmaker TSMC eyeing expansion of planned Arizona plant -sources – Reuters, 5/4/2021
- Taiwan Semiconductor Manufacturing Co, is planning to build several more chipmaking factories in the U.S. state of Arizona beyond the one currently planned, three people familiar with the matter told Reuters.
- TSMC, the world’s largest contract chipmaker, announced in May 2020 it would build a $12 billion factory in Arizona, an apparent win by the Trump administration in its push to wrestle global tech supply chains back from China.
- TSMC is setting up a 12-inch wafer fabrication plant in Phoenix, and the facility is expected to start volume production in 2024, Taiwan’s investment commission of the ministry of economic affairs, which approved the investment, said in December.
- Three sources familiar with the matter, speaking on condition of anonymity as they were not authorized to speak to the media, told Reuters that up to five additional fabs for Arizona are being planned.
- Peter Minuit landed in Manhattan, which he later bought for $24 worth of cloth and brass buttons. (1626)
- Public Enemy Number One, Al Capone, was jailed for tax evasion. (1932)
- Four Kent State University students were shot down by National Guard members during an anti-Vietnam War demonstration. (1970)
- The Unabomber, Ted Kaczynski, was sentenced to four life terms plus 30 years for his series of bombings that killed three and injured 23. (1998)