Tech Shares Weigh on Major Indexes – Wall Street Journal, 5/10/2021
- Technology stocks tumbled Monday after ending last week with the S&P 500 and Dow Jones Industrial Average at fresh records.
- The S&P 500 ticked down 0.1%. The index on Friday closed at its 26th all-time high for this year.
- The Dow rose 0.6%, while the Nasdaq Composite fell 1.4%.
- Money managers are increasingly betting on sectors such as banking, travel and leisure that would benefit when the economy rebounds and more businesses reopen.
- Concerns that higher inflation may erode the value of future earnings is also likely to be driving investors away from technology stocks, investors said.
- In bond markets, the yield on the 10-year Treasury ticked up to 1.580%, from 1.576% Friday. In commodities, copper futures on CME Group’s Comex in New York notched a record, rising 1.9% to $4.84 a pound.
- Bets on a U.S.-led global economic rebound that would boost demand for metals used in manufacturing and construction has bolstered prices.
- In Asia, South Korea’s Kospi advanced 1.6%, and the Shanghai Composite Index added 0.3%.
- Japan’s Nikkei 225 rose by almost 0.6%.
- Australia’s S&P/ASX 200 closed 1.3% higher as mining stocks pulled the index to its first record since the onset of the Covid-19 pandemic.
Covid-19 Live Updates: Vaccinations Slow, but Coronavirus Cases Trend Down – Wall Street Journal, 5/10/2021
- The pace of Covid-19 vaccinations across the U.S. continued to slow, while infection levels trended lower and the White House signaled that guidelines on coronavirus restrictions and mask wearing could be eased soon.
- The U.S. reported more than 21,000 new coronavirus cases for Sunday, according to data compiled by Johns Hopkins that was published early Monday. The data may update later.
- Sunday’s tally was down from Saturday’s total of 34,493, and also lower than the 29,367 new cases reported a week earlier, according to Johns Hopkins data.
- The nation’s Covid-19 death toll rose to more than 581,700, with 240 new deaths reported on Sunday. About a third of states don’t report cases or deaths on the weekends.
- Meanwhile, an average of 2 million doses of Covid-19 vaccines have been administered each day over the past week, down slightly from levels earlier this month.
- Some 34.4% of the total U.S. population is now fully vaccinated, according to a Wall Street Journal analysis of data from the Centers for Disease Control and Prevention. Levels are higher among the elderly, with more than 71% of people age 65 or older fully vaccinated.
- On Sunday, Biden administration officials said that the U.S. is entering a new phase of the pandemic in which many vaccinated Americans can begin returning to normal activities and signaled that the federal government will further relax mask-wearing recommendations as more people get shots.
- Anthony Fauci, the government’s top infectious disease expert, said the CDC will update guidelines for social distancing and mask usage “almost in real time” as the percentage of the public that is vaccinated increases.
Marriott Points to Rising Demand Amid Covid-19 Vaccine Rollout – Wall Street Journal, 5/10/2021
- Marriott International swung to a loss for the first quarter, though it pointed to rising demand in the U.S. and Canada, its largest region, as Covid-19 vaccine rollouts accelerated.
- Revenue fell to $2.32 billion from $4.68 billion. Analysts polled by FactSet were looking for $2.38 billion.
- Comparable systemwide revenue per available room, a closely watched industry metric known as RevPAR, fell 46.3% to $45.68 world-wide from a year earlier. Occupancy fell 15.3 percentage points to 37.7%.
- In mainland China, occupancy reached 66% in March, almost the same as in March 2019 due to demand from both leisure and business travelers, Chief Executive Tony Capuano said.
- The hotel chain on Monday posted a net loss of $11 million, compared with a profit of $31 million in the same period last year. Adjusted earnings were 10 cents a share, ahead of Wall Street estimates.
Tyson Foods expects costs to hit profit as lifts revenue outlook – Reuters, 5/10/2021
- Meat producer Tyson Foods warned that rising costs would start to hit profit on Monday as it raised its full-year revenue forecast on higher prices and improving demand from reopening U.S. restaurants and hotels.
- Tyson said for the second quarter ended April 3, sales rose about 4% to $11.30 billion from a year earlier, exceeding forecasts from analysts, who were on average expecting $11.19 billion, IBES data from Refinitiv showed.
- Higher prices helped Tyson’s chicken segment post 4.6% sales growth, while pork rose 16.7%, even as volumes dropped.
- In beef, Tyson’s largest business, sales rose 1.7% from a year ago to $4 billion, as prices climbed 7.5% and volumes fell 5.8%.
- Net income attributable to Tyson increased to $476 million, or $1.30 per share, from $376 million, or $1.03 per share, a year earlier. Excluding items, Tyson earned $1.34 per share, compared with estimates of $1.12.
- Overall, Tyson said it expects fiscal 2021 revenue to reach $44 billion to $46 billion. Revenue had previously been forecast at the upper end of a $42 billion to $44 billion range.
Coty’s luxury brands return to growth as restrictions ease – Reuters, 5/10/2021
- Coty’s biggest business that includes brands such as Burberry perfumes and Gucci foundations returned to growth in the third quarter after a tumultuous 2020, while the cosmetics maker’s net loss narrowed sharply.
- Coty’s net revenue fell about 3% to $1.03 billion, in line with expectations, while the company broke even on profit.
- Sales at the company’s Prestige unit that makes Gucci lipstick and Philosophy skincare rose 6.5% to $600.6 million, the first rise in over a year.
- Still, restrictions in certain parts of Europe, including UK and France, imposed to curb surging virus cases hampered demand for the company’s products in the third quarter. Sales for the region fell 7.8%, while the Asia Pacific region, which includes China, rose nearly 28%.
- Net loss attributable to common stockholders was $18.5 million in the quarter ended March 31, compared with a loss of $271.6 million a year earlier.
U.S. and top fuel supplier work to secure pipelines stricken by cyberattack – Reuters, 5/10/2021
- The U.S. government and the top fuel pipeline operator in the United States on Monday worked to secure the network that transports nearly half of the East Coast’s fuel supplies, as the group suspected of a ransomware cyberattack that caused it to shutdown last week said it was just trying to make money.
- The attack on Colonial Pipeline is one of the most disruptive digital ransom schemes reported and the resulting shutdown has disrupted fuel supply across the eastern United States, triggering isolated sales restrictions at retail pumps and pushing benchmark gasoline prices to a three-year high.
- The southeastern United States would likely be the first to see price increases at retail pumps, and demand has already picked up as drivers fill their tanks. The southeast is the most dependent on the line and has fewer alternatives than states further north, and has seen prices spike during previous shutdowns.
- The pipeline system is the primary fuel artery from Gulf Coast refineries to Mid-Atlantic and southeast states.
- It moves over 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, supplying motorists and major airports.
Pentagon Weighs Ending JEDI Cloud Project Amid Amazon Court Fight – Wall Street Journal, 5/10/2021
- Pentagon officials are considering pulling the plug on the star-crossed JEDI cloud-computing project, which has been mired in litigation from Amazon.com and faces continuing criticism from lawmakers.
- The Joint Enterprise Defense Infrastructure contract was awarded to Microsoft in 2019 over Amazon, which has contested the award in court ever since.
- A federal judge last month refused the Pentagon’s motion to dismiss much of Amazon’s case.
- A few days later, Deputy Defense Secretary Kathleen Hicks said the department would review the project.
- Some lawmakers and government-contracting experts say JEDI should be scuttled because its single-vendor, winner-take-all approach is inappropriate and outmoded for mammoth enterprises like the Department of Defense.
- These people say the Pentagon should move to an increasingly popular approach to enterprise cloud-computing that includes multiple companies as participants. Spreading out the work also reduces the risk of legal challenges from excluded companies, they say.
Corn Is the Latest Commodity to Soar – Wall Street Journal, 5/10/2021
- America’s biggest cash crop has rarely been more expensive.
- Corn prices have risen 50% in 2021 and a bushel costs more than twice what it did a year ago.
- Corn has been one of the sharpest risers in the broad rally in raw materials that is prompting companies to boost prices for goods and fueling concern among investors that inflation could hobble the post-pandemic economic recovery.
- Bushels for delivery this month ended Friday at $7.73, the highest since 2012, when drought withered the Midwest crop and pushed prices to a record of $8.31.
- Lumber prices have shot to more than four times what is typical, pushing up home prices and obliterating renovation budgets. Copper, a cog of industry found throughout the home and in electronics, hit record prices Friday.
- Crude oil hasn’t cost so much since 2018 and soybeans are trading at their loftiest level since 2012.
Ford recalls 661,000 Explorer SUVs in North America – Reuters, 5/10/2021
- Ford Motor is recalling 661,000 Explorer sport utility vehicles in North America at the request of U.S. regulators because retention pins could loosen and allow roof rail covers to detach from the vehicle.
- The recall covers 2016 through 2019 model year vehicles. Dealers will install push-pins and replace any damaged rail clips and roof rail covers.
- A Ford spokeswoman said Sunday the automaker is not aware of any accidents or injuries related to this condition.
- The recall includes 620,483 vehicles in the United States, 36,419 in Canada and 4,260 in Mexico.
Chipotle raises average hourly wage, looks to hire 20,000 workers – Reuters, 5/10/2021
- Burrito chain Chipotle Mexican Grill said on Monday it plans to hire 20,000 more employees and will raise the average hourly wage to $15 by the end of June, as fast-food chains in the United States scramble to reopen dine-in services with the easing of pandemic curbs.
- Chipotle said it would offer a $200 employee referral bonus for crew members and $750 for apprentices or general managers.
- The starting wage ranges from $11-$18 and the latest average hourly wage increase will be $2, the company said.
- Several U.S. chains, including Taco Bell and McDonald’s, are adding benefits or running hiring events to lure applicants as people, flushed with stimulus checks, are wary of returning to work.
Evans Says Progress on Fed’s Goals Will Take ‘Quite Some Time’ – Bloomberg, 5/10/2021
- It will probably take “quite some time” for Federal Reserve officials to conclude the economy has made substantial progress following Friday’s disappointing jobs report, Chicago Fed President Charles Evans said.
- “I think we are going to have to see more strong employment numbers, and we’re going to have to see inflation,” Evans said Monday in a television interview on CNBC.
- “And it will be delicate. We’ll see transitory inflation that’s going to look like it’s — it is above 2%. Is it going to be relative prices, or is it something more sustainable?” Evans said. “So, I think it’s going to take quite some time for us to actually see it in the data, assess it.”
Infrastructure Talks Could Set Course of Biden Spending Plans – Wall Street Journal, 5/10/2021
- President Biden faces a crucial test this week of whether he can find any common ground with Republicans as he pushes trillions in spending on infrastructure, child care and education.
- On Wednesday, Mr. Biden will hold his first formal meeting since taking office with top congressional leaders: House Speaker Nancy Pelosi (D., Calif.), House Minority Leader Kevin McCarthy (R., Calif.), Senate Majority Leader Chuck Schumer (D., N.Y.) and Senate Minority Leader Mitch McConnell (R., Ky.).
- The meeting will touch on several topics, but is expected to focus in part on the president’s spending proposals, White House aides said.
- Mr. Biden is also planning to meet at the White House on Thursday with Sen. Shelley Moore Capito (R., W.Va.) and a group of Republican senators who have proposed a $568 billion infrastructure plan.
- That measure is a narrower alternative to Mr. Biden’s plan, which would spend $2.3 trillion over eight years on programs and services that go beyond physical infrastructure, among them home care for seniors and technology and manufacturing research.
U.S. unions lodge first Mexico labor grievance under new NAFTA – Reuters, 5/10/2021
- The AFL-CIO, the biggest U.S. labor federation, on Monday will file the first petition for the U.S. government to bring a labor complaint against Mexico under the trade deal that replaced the North American Free Trade Agreement, the union said.
- The AFL-CIO’s petition, which it shared with Reuters, states that workers at the auto parts plant Tridonex in Matamoros, a Mexican city on the border with Texas, were denied independent union representation in violation of the United States-Mexico-Canada Agreement (USMCA) that replaced NAFTA last year.
- Since the 1994 NAFTA, which had few enforcement tools for labor rules, wages in Mexico have stagnated and now rank as the lowest in the Organisation for Economic Cooperation and Development (OECD), a club of 37 industrialized nations.
- The AFL-CIO will send its petition to the U.S. Office of Trade and Labor Affairs, which has 30 days to review the claim and determine whether to bring the case to the Mexican government for further review.
EUROPE & WORLD
Jack Ma makes rare visit to Alibaba headquarters in Hangzhou – Reuters, 5/10/2021
- Alibaba founder Jack Ma, largely out of public view amid a regulatory clampdown on the group, made a rare visit to its Hangzhou campus on Monday during the e-commerce giant’s annual “Ali Day” staff and family event, company sources said.
- The billionaire has kept an extremely low profile since delivering a speech in October in Shanghai criticizing China’s financial regulators, which set off a chain of events that led to the shelving of what would have been a record $37 billion initial public offering of Alibaba’s affiliate Ant Group.
- On Monday, Ma was seen in an open-air campus shuttle bus with a number of Alibaba executives, according to a photograph taken by an employee at the event, viewed by Reuters.
- Wearing a blue T-shirt, white trousers and a pair of Chinese-style cloth shoes, Ma was smiling.
- Ma, who is based in Hangzhou, disappeared from public view for three months before surfacing in January, speaking to a group of teachers by video, which sent Alibaba shares surging, but has not made any other public appearances since then.
Cathay Pacific raises $650 million in first U.S. dollar bond in 25 years – Reuters, 5/10/2021
- Hong Kong’s Cathay Pacific has raised $650 million in its first U.S. dollar bond in 25 years, a term sheet seen by Reuters showed on Monday.
- The deal consisted of 5.25-year senior unsecured notes priced at 4.875%, the term sheet showed.
- The final pricing was 32.5 basis points cheaper than indicated by the deal’s book runners when launched earlier in Asia on Monday.
U.S. opens safety probe into 1.1 million Honda Accord vehicles – Reuters, 5/10/2021
- The U.S. National Highway Traffic Safety Administration (NHTSA) said Monday it was opening a formal safety probe into more than 1.1 million Honda Accord vehicles over sudden loss of steering control reports.
- The agency said the engineering analysis covers 2013 through 2015 models and said “under normal driving conditions, with no warning or input from the driver, the vehicle may veer or jerk out of its intended path of travel.” Honda did not immediately comment. NHTSA said it has 107 complaints and two injury incidents related to the issue.
- The agency said the petition alleged Honda vehicles “are experiencing a sudden loss of steering control as the vehicle veers from its intended path of travel.”
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