Follow us on Facebook

Recent Tweets

Categories

Subscribe to Our Blog | Newsletter

Please complete to receive our insights and newsletters.

Daily Market Report | May 18, 2021

Tech Shares Edge Up After Falling on Inflation Worries – Wall Street Journal, 5/18/2021

  • U.S. stocks hovered near the flatline Tuesday, while technology shares inched higher and were poised for a modest rebound.
  • The S&P 500 slipped 0.2% shortly after the opening bell. The Dow Jones Industrial Average declined 0.3%. The Nasdaq Composite gained 0.3%, putting technology shares on course to pare some recent losses.
  • While tech stocks have taken the biggest hit from rising inflation concerns, some investors see the recent retreat as an opportunity to buy fast-growing companies.
  • In morning trading, AT&T dropped 6.8%, extending its losses following a deal with Discovery to merge their media assets into a new, publicly traded business.
  • Macy’s added 1.5% after reporting first-quarter earnings that beat expectations. Walmart advanced 3.9% after the retailer lifted its guidance for the year. Home Depot fell 0.2% after surpassing earnings expectations.
  • The yield on the 10-year Treasury note rose to 1.656% from 1.639% Monday. Bond yields rise as prices fall.
  • Overseas, the Stoxx Europe 600 edged up 0.3%. The U.K.’s FTSE 100 gained 0.1% after data showed the U.K.’s unemployment rate edged lower in April.
  • Most major Asian indexes closed higher. Japan’s Nikkei 225 gained 2.1%, while in Hong Kong, the Hang Seng Index rose 1.4%. Taiwan’s Taiex jumped 5.2%. In mainland China, the Shanghai Composite Index edged up 0.3%.

Covid-19 Live Updates: Average Daily U.S. Cases Continue Decline – Wall Street Journal, 5/18/2021

  • Newly reported Covid-19 cases in the U.S. rose from a day earlier, as did deaths, but the average daily figures continued to decline, as more states and businesses dropped mask requirements for the vaccinated.
  • There were more than 53,000 new cases reported in the country for Monday, according to data compiled by Johns Hopkins University and published early Tuesday Eastern Daylight Time. It was higher than the 16,864 a day earlier and 36,898 a week earlier. About a third of states don’t report cases or deaths on the weekends.
  • There were 401 deaths reported for Monday, according to Johns Hopkins, up from 271 a day earlier but down from 404 a week earlier. Monday’s number might be updated.
  • The average number of vaccine doses administered each day during the past week fell slightly. It was most recently 1.8 million, according to a Journal analysis of data from the Centers for Disease Control and Prevention. That was down from 2.1 million a week earlier.
  • With 274.4 million vaccine doses administered, about 37% of the U.S. population has been fully vaccinated and more than 47% has received at least one dose, CDC data show.
  • New York and Illinois said Monday that they would adopt new federal guidelines on masking and social distancing for fully vaccinated people, while California will wait until next month to make the switch, as state leaders continue to grapple with a quickly changing pandemic picture.
  • CVS Health. and Target joined other large retailers in dropping mask requirements for vaccinated shoppers. Walmart and Costco Wholesale said last week that they would do so.
  • New Jersey schools will be required to reopen full-time, in-person this fall, without remote learning as an option, as infection rates plunge and as more residents become vaccinated against the coronavirus, state officials said.

Walmart Sales Rise at Slower Rate as Pandemic Wanes – Wall Street Journal, 5/18/2021

  • Walmart’s sales continued to rise during the spring quarter though at a slower pace than earlier in the Covid-19 outbreak, as some consumers returned to more typical shopping patterns as the pandemic wanes.
  • Overall, Walmart’s global revenue rose 2.7% to $138.3 billion in the April-ended quarter.
  • Comparable sales, those from U.S. stores and digital channels operating for at least 12 months, rose 6% in the quarter ended April 30 compared with the same period last year.
  • U.S. e-commerce sales rose 37%. It was the slowest online growth for Walmart since the coronavirus outbreak in early 2020 upended the retail landscape.
  • Sales of nonfood items jumped more than 20% in the quarter, aided by government stimulus checks as customers splurged on recreation, home improvement and apparel items, the company said.
  • Grocery sales fell compared with the same quarter last year when shoppers hoarded some goods such as food and toilet paper, but the retail behemoth gained grocery share versus last year, Walmart said.
  • Net income decreased 32% to $2.7 billion, including losses on its sale of its U.K. and Japanese units and adjustments to the value of its stake in Chinese e-commerce company JD.com Inc.
  • On Tuesday, Walmart raised its forecasts for operating profit for the current fiscal year and said it expects U.S. comparable-sales growth to stay around a previously stated range of a low-single digits percentage.

Home Depot Sales Surge, Extending Growth During Pandemic – Wall Street Journal, 5/18/2021

  • Home Depot extended a streak of robust year-over-year sales growth in the February-through-April quarter as a rise in demand that began with the coronavirus pandemic continued into 2021.
  • Sales for the Atlanta-based home-improvement retailer climbed to $37.5 billion in the three months ended May 2, from $28.26 billion in last year’s fiscal first quarter.
  • On a comparable-store basis, the company’s sales rose 31%, including a 30% climb in the U.S.
  • In the latest quarter, Home Depot’s tally of customer transactions rose to 447.2 million, from 374.8 million a year earlier. The average ticket rose to $82.37, from $74.70 in last year’s first quarter.
  • Home Depot’s profit rose to $4.15 billion, or $3.86 a share, from $2.25 billion, or $2.08 a share, a year earlier.

Macy’s boosts forecasts as vaccines encourage in-store shopping – Reuters, 5/18/2021

  • U.S. department chain Macy’s on Tuesday raised its annual sales and profit forecasts, as speedy vaccinations encourage Americans to return to its stores to upgrade their wardrobes after being stuck at home for more than a year.
  • The New York-based retailer’s shares gained about 2% after a surprise first-quarter profit and comparable sales that beat Wall Street estimates.
  • The company earned 39 cents per share on an adjusted basis, compared with expectations of a 41-cent loss, according to IBES data from Refinitiv.
  • Macy’s forecast adjusted earnings per share between $1.71 and $2.12 for 2021, compared with its earlier outlook of 40 cents to 90 cents.
  • It expects sales between $21.73 billion and $22.23 billion, much higher than the $19.75 billion to $20.75 billion it forecast earlier.

Brent Oil Climbs to $70 a Barrel as Reopenings Boost Demand – Bloomberg, 5/18/2021

  • Brent crude topped $70 a barrel in London for the first time since mid-March amid signs that recovering consumption has whittled away a glut of oil that built up last year at the height of the Covid-19 pandemic.
  • Brent rose 0.9% to $70.08 a barrel in London, while U.S. crude futures neared $67 a barrel. The global benchmark hasn’t had a prolonged period above $70 since 2019.
  • Last week, the International Energy Agency said surplus stockpiles that were built up during the pandemic have cleared.

Kodak Says New York Attorney General Has Threatened Lawsuit – Wall Street Journal, 5/18/2021

  • Eastman Kodak on Monday said the New York attorney general has threatened to sue the company and its chief executive over a series of stock purchases made by the executive ahead of a planned $765 million deal with the U.S. government to produce drug ingredients.
  • The lawsuit would be based on alleged violations of New York state’s Martin Act, according to a disclosure filed with the Securities and Exchange Commission.
  • New York’s Martin Act grants wide powers. It doesn’t require prosecutors to prove there was intent or that there were victims of an alleged fraud, something other agencies, including the SEC, have to prove.
  • The disclosure from Kodak said the alleged violations were in connection with CEO Jim Continenza’s purchase of 46,737 shares of the company’s stock on June 23.

Bosch CEO: chip supply could remain tight until 2022 – Reuters, 5/18/2021

  • The supply of crucial semiconductors to the car sector could remain tight until 2022, the chief executive of the world’s largest automotive supplier, Robert Bosch GmbH, told German newspaper Frankfurter Allgemeine Zeitung.
  • “There are difficult months ahead of us, and the situation could remain tense until 2022,” Volkmar Denner told the paper, marking the latest sector heavyweight to warn of a prolonged shortage of chips.
  • Volkswagen boss Herbert Diess earlier this month said Europe’s top carmaker was in “crisis mode” over an ongoing lack of badly needed automotive chips, adding the impact of the shortage would intensify and hit profits in the second quarter.

IBM to acquire Salesforce partner Waeg – Reuters, 5/18/2021

  • IBM said on Tuesday it would buy Waeg, a consulting partner for Salesforce, in a deal that will extend its range of services and support its hybrid cloud and artificial intelligence strategy.
  • The deal to acquire Waeg, which is based in Brussels and serves clients across Europe, complements IBM’s acquisition in January of 7Summits, a U.S. consultancy that specialises in Salesforce’s customer management software.
  • “Waeg’s strength in Salesforce consulting services will be key to creating intelligent workflows that allow our clients to keep pace with changing customer and employee needs and expectations,” Mark Foster, senior vice president of IBM Services and Global Business Services, said.

Gamestop, AMC short sellers sit on nearly $1 billion loss – Ortex – Reuters, 5/18/2021

  • Investors are estimated to have lost $930 million on their short positions in meme stocks GameStop and AMC Entertainment over the last five trading days, data from financial analytics firm Ortex showed on Tuesday.
  • Shares in GameStop, which was at the heart of the so-called “stonks” retail trading mania earlier this year, have risen by a third in the last one week, while shares in cinema operator AMC are up 39%.
  • Yesterday alone, short-sellers lost over $200 million each in both of those stocks, Ortex data shows. GameStop closed 13% higher at $180.6, the highest level since April 30.
  • Ortex said short interest in AMC is currently estimated to be 18.3% of freefloat and in GME it is estimated at 21.8% of freefloat.

U.S. Housing Starts Trail Estimate, Hinting at Supply Chain Woes – Bloomberg, 5/18/2021

  • U.S. housing starts fell by more than forecast in April, suggesting that supply-chain constraints and rising materials costs continue to hold builders back.
  • Residential starts decreased 9.5% in April to a 1.57 million annualized rate, according to government data released Tuesday. The median estimate in a Bloomberg survey called for a 1.7 million pace.
  • Backlogs continued to mount as the number of homes authorized for construction but not yet started rose 5% from the prior month, the data showed. Applications to build, a gauge of future construction, rose 0.3% to an annualized 1.76 million, exceeding the pace of starts.
  • Single-family starts fell 13.4% in April to an annualized 1.09 million. Overall, construction declined in the Midwest and the South, while it rose in the Northeast and the West.

Pandemic Hit Less-Educated Workers Hardest, Fed Survey Shows – Wall Street Journal, 5/18/2021

  • The economic fallout from the coronavirus pandemic was concentrated among minorities, women and workers who hadn’t finished high school, according to a new survey from the Federal Reserve.
  • Three-fourths of U.S. adults reported doing at least OK financially in November 2020, a share that was unchanged from previous years, the Fed said Monday.
  • Among adults with less than a high-school diploma, 45% reported doing at least OK financially, down from 54% in 2019. Among those with a bachelor’s degree or higher, the percentage rose to 89% from 88%, the Fed said in its annual Survey of Household Economics and Decisionmaking, which polls more than 11,000 individuals.
  • The share of adults who received unemployment income jumped to 14% in 2020 from 2% in 2019.

U.S. Senate Republicans readying new infrastructure proposal – Reuters, 5/18/2021

  • U.S. Republicans are expected to unveil a new infrastructure proposal as early as Tuesday as optimism grows about a possible bipartisan deal that would cover a fraction of President Joe Biden’s $2.3 trillion infrastructure plan.
  • Senator Shelley Moore Capito, who is leading the Republican infrastructure drive, told reporters on Monday that she expected Republicans to unveil a new counter-proposal to Biden’s sweeping plan sometime early this week.
  • She offered no details. But Republicans including Senate Minority Leader Mitch McConnell have signaled a willingness to consider a proposal closer to $600 billion, while a bipartisan group of senators has discussed a package of roughly $1 trillion.

EUROPE & WORLD

Euro zone recession confirmed at start of 2021 – Reuters, 5/18/2021

  • The euro zone economy declined by 0.6% in the first quarter of 2021, data showed on Tuesday to confirm a technical recession, as gross domestic product contracted in all larger countries except France.
  • The European Union’s statistics office Eurostat said GDP in the 19 countries sharing the euro fell 0.6% quarter-on-quarter in the Jan-March period, for a 1.8% year-on-year fall.
  • Together with the GDP decline in the fourth quarter of 2020, of 0.7% in the quarter and 4.9% from a year earlier, the euro zone was in its second technical recession since the COVID-19 pandemic began.
  • The economies of Germany, Italy, Spain and the Netherlands all contracted. France’s grew by 0.4% quarter-on-quarter.

Japan’s Recovery From Pandemic Slows – Wall Street Journal, 5/18/2021

  • Japan’s economy shrank in the first quarter of 2021 amid a resurgence of Covid-19 infections, but is expected to return to growth as soon as the current quarter with help from manufacturing exports.
  • The world’s third-largest economy after the U.S. and China contracted an annualized 5.1% in the January-March quarter after growing in the latter half of 2020.
  • Private spending was down 1.4% from the previous quarter.
  • Capital expenditures also declined 1.4% after strong growth in the previous quarter.

China’s Baidu beats quarterly revenue estimates on cloud, AI boost – Reuters, 5/18/2021

  • China’s Baidu Inc reported quarterly revenue on Tuesday that beat Wall Street estimates, as the company beefed up its cloud and artificial intelligence services to fend off competition in the online advertising sector.
  • The company, which obtained a secondary listing in Hong Kong in March, said total revenue rose 25% to 28.13 billion yuan ($4.38 billion) in the first quarter, boosted partly by the 70% year-on-year growth of its non-advertising revenue, which includes the cloud and artificial intelligence businesses.
  • Baidu’s online ad revenue hit 16.3 billion yuan, a 27% increase compared with the same period a year earlier, when Baidu swung to an operating loss due to COVID-19 lockdowns.
  • Baidu’s non-ad revenue can exceed its ad revenue within Baidu Core in the next three years, said Baidu chairman and chief executive Robin Li in a conference call. The company’s ad revenue contributed around 80% of Baidu Core’s over the quarter.

Tencent Music says facing increased China scrutiny, is committed to laws – Reuters, 5/18/2021

  • Tencent Music Entertainment confirmed on Tuesday it is facing heightened scrutiny from Chinese regulators, adding it was “actively co-operating” with them and is committed to complying with all laws “including those related to anti-trust”.
  • Revenue rose 24% to 7.82 billion yuan, while analysts were expecting 7.73 billion yuan, according to IBES data from Refinitiv.
  • Although paying users for its music platform jumped, monthly active users (MAUs) for both music and social entertainment platforms declined by 6.4% and 14.2%, respectively.
  • Profit attributable to equity holders of Tencent Music rose to 926 million yuan ($143.94 million) in the quarter from 887 million yuan a year earlier.

Ryanair posts record annual loss, hopes to break even this year – Reuters, 5/18/2021

  • Ryanair reported a record annual loss on Monday and said it would at best break even in the coming year as it navigates huge uncertainty around the lifting of COVID-19 restrictions and how much travel-starved passengers will pay for summer flights.
  • The airline reported a record annual after-tax loss of 815 million euros ($989 million) in its financial year to March 31, slightly better than the forecast loss of 834 million euros in a company poll of analysts.
  • Ryanair flew 27.5 million passengers to the end of March down from 149 million the previous year. O’Leary said his current estimate is that the airline would fly between 80 and 100 million in the year to March 31, 2022.
  • Europe’s largest discount airline said the pandemic had made the 12 months to the end of March the most challenging in its history, forcing it to slash capacity by 80% and shed 1,000 jobs.

Jaguar Land Rover Owner Swings to Profit as China Sales Jump – Bloomberg, 5/18/2021

  • Jaguar Land Rover’s Indian owner reported a pretax profit in the three months through March as a recovery in Chinese demand lifted sales of the automaker’s luxury sports cars and SUVs.
  • Tata Motors posted fourth-quarter earnings of 57 billion rupees ($23 million) before tax and one-time items on Tuesday, rebounding from a loss of 65 billion rupees a year earlier. Revenue soared 42% and exceeded estimates.
  • The group booked a 1.5 billion-pound ($2.1 billion) charge initially flagged in February related to JLR’s shift to electric models, though its net loss still narrowed.
  • Tata said its own operations will show a “relatively weak” performance in the current quarter as the Covid-19 outbreak hampers production and commodity prices increase. It expects a gradual improvement later in the year.

SK Hynix seeks talks to buy Korea-based chip contract manufacturer – media – Reuters, 5/18/2021

  • SK Hynix, the world’s second-largest memory chip maker, has requested talks to acquire South Korea-based Key Foundry, a chip contract manufacturer, a South Korean newspaper reported on Monday.
  • SK Hynix has expressed intention to negotiate for the full acquisition of the 8-inch wafer foundry, Korea Economic Daily reported on Monday citing unnamed sources in the tech and investment banking industries.
  • SK Hynix said that it is considering various measures to expand its foundry business, but nothing has been finalised. A spokesperson for Key Foundry could not be immediately reached.
  • Key Foundry has a chip manufacturing capacity of 82,000 8-inch wafers per month, and is the only pure-play foundry in Korea, with the ability to make chips for applications in the consumer, communications, computing, automotive and industrial industries, according to its website.

Jeep Maker Stellantis Teams Up With Foxconn on In-Car Software – Wall Street Journal, 5/18/2021

  • Jeep and Chrysler maker Stellantis is joining forces with iPhone assembler Foxconn Technology Group in a new collaboration aimed at accelerating the development of in-car software.
  • The world’s third-largest car company by sales said Tuesday that the 50-50 joint venture, dubbed Mobile Drive, would focus on technology used in vehicle dashboard systems and other connected services.
  • The companies said the JV, which will be based in the Netherlands and sell its software to other car makers, would combine Stellantis’s expertise in vehicle design and engineering with Foxconn’s know-how in software and consumer electronics.
  • The companies didn’t disclose how much they planned to invest in the JV but said it would have 250 engineers, mostly based in Asia.

Factmonster – TODAY in HISTORY

  • Napoleon Bonaparte was proclaimed Emperor of France by the French Senate. (1804)
  • The Supreme Court affirmed racial segregation in Plessy v. Ferguson as “separate but equal.” (1896)
  • Israeli troops withdrew from the Gaza strip after three decades of occupation and Palestinians took over. (1994)

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Historical performance is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. Any economic forecasts set forth may not develop as predicted.

All company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Material presented is excerpts derived from third party content and you may need a subscription to access the full the content. The views and opinions expressed are those of the authors and do not necessarily reflect the views of Pence Wealth Management or LPL Financial.

Prior to making any investment decision please consult your financial advisor regarding your specific situation.

Share This Post!