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By Tom Westbrook SINGAPORE (Reuters) - The dollar slipped on Monday as investors kept up selling pressure, cutting bets on further dollar gains from rising U.S. rates, while turning hopeful that loosening lockdowns in China can help global growth and exporters' currencies. U.S equity futures bounced sharply in the Asia session and pulled the region's risk-sensitive currencies along for the ride, even as Asia's stockmarkets wobbled. [MKTS/GLOB] The Aussie rose 0.5% to $0.7091 and has lifted 3.8% in a week and a half. The kiwi rose 0.8% to $0.6458, a three-week high. [AUD/] "It's a reasonably positive start to the week," said National Australia Bank (OTC:NABZY)'s head of foreign exchange strategy, Ray Attrill. "The U.S. dollar looks, for the time being, to be losing upside momentum," he said, tracking a small rally in U.S. bonds that has driven yields lower in recent sessions. [US/] The euro and yen rose, with the Japanese currency up 0.4% to 127.35 per dollar and the euro up 0.2% at $1.0586 following last week's 1.5% gain on the dollar. The U.S. dollar index, up about 16% to a two-decade high over the 12 months to the middle of May, was down about 0.23% at 102.680 and has lost roughly 2% in a week. The safe-haven Swiss franc rose too, holding on to sharp gains made last week - its best since March 2020 - when it climbed from parity on the dollar to about 0.9716 per dollar. "The dollar may be carving out a peak, given Europe’s resilience to the energy shock and potential easing of lockdowns in China," said Commonwealth Bank of Australia (OTC:CMWAY) strategist Joe Capurso. "Given the type of policy support, we expect investment to rebound faster than consumer spending," he said. "Investment is mining commodity-intensive (and therefore) very positive for commodity currencies such as the Australian dollar and Canadian dollar, in addition to the yuan." CHINA HOPE Shanghai is edging out of lockdown and an unexpectedly big rate cut in China last week has been taken a signal that authorities are going to provide support to a recovery. The city of 25 million expects to lift its city-wide lockdown and return to more normal life from June 1. The yuan had its best week since late 2020 last week and firmed to 6.6844 per dollar on Monday. [CNY/] The Canadian dollar rose for a third straight week last week and was up about 0.4% to C$1.2800 per dollar on Monday. [CAD/] Sterling leapt nearly 2% last week on the back of stronger-than-expected retail data and markets' broader re-think on whether global central banks are really lagging much behind the Federal Reserve. It was last up 0.4% at $1.2546. [GBP/] Geopolitics are in focus in Asia this week as U.S. President Joe Biden tours the region, promoting greater U.S. economic engagement and seeking to push back against China's influence. He met Japan's Prime Minister Fumio Kishida on Monday ahead of meetings with the leaders of India and Australia in Tokyo this week. Australia elected a new government on Saturday, though the market reaction was muted as polls had predicted victory for the centre-left Labor Party and it is not expected to shift the direction or pace of interest rate rises. The Reserve Bank of New Zealand is expected to lift its benchmark cash rate by 50 basis points on Wednesday. U.S. Federal Reserve meeting minutes are also due on Wednesday. ======================================================== Currency bid prices at 0454 GMT Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.0590 $1.0569 +0.21% +0.00% +1.0595 +1.0559 Dollar/Yen 127.4050 127.9100 -0.45% +0.00% +128.0500 +127.2900 Euro/Yen 134.94 135.03 -0.07% +0.00% +135.4900 +134.6700 Dollar/Swiss 0.9717 0.9743 -0.26% +0.00% +0.9751 +0.9713 Sterling/Dollar 1.2545 1.2496 +0.40% +0.00% +1.2553 +1.2482 Dollar/Canadian 1.2801 1.2846 -0.36% +0.00% +1.2842 +1.2794 Aussie/Dollar 0.7090 0.7052 +0.54% +0.00% +0.7098 +0.7046 NZ Dollar/Dollar 0.6455 0.6410 +0.73% +0.00% +0.6467 +0.6400 All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ
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By Swati Verma (Reuters) - Gold fell more than 1% to its lowest in 3-1/2 months on Monday as elevated bond yields and overall strength in the dollar dampened bullion demand, even as riskier assets dropped after grim China economic data. A stronger dollar makes gold expensive for overseas buyers, while higher Treasury yields raise the opportunity cost of holding zero-yield bullion. Spot gold was down 0.2% to $1,807.64 per ounce as of 1311 GMT, after earlier hitting its lowest since Jan. 31 at $1,786.60. U.S. gold futures were little changed at $1,808.10. "Spot gold may not stray far from $1,800, suppressed by the might of King Dollar and elevated Treasury yields, while supported by the looming prospects of a recession," said Han Tan, chief market analyst at Exinity. Gold prices are down over 13% since scaling a near-record peak of $2,069.89 an ounce in March. [USD/] [US/] "Having now fallen through the psychologically important threshold of $1,800 an ounce and with the hawkish monetary policy more likely to strengthen than weaken, it is hard to see where gold can now find a short-term foothold," Rupert Rowling, market analyst at Kinesis Money, said in a note. The dollar consolidated near a two-decade peak while risk appetite took a hit after weak economic data from China highlighted fears about a slowdown. [MKTS/GLOB] Silver has found itself caught up in the broader sell-off in equities and gold, being punished for being an industrial metal at a time when growth forecasts are being trimmed, Rowling added. Spot silver gained 0.9% to $21.26 per ounce, after slumping to its lowest since July 2020 on Friday. Platinum rose 0.2% to $940.16 and palladium was up 1.2% to $1,966.80. Johnson Matthey (LON:JMAT) said a surplus in the platinum market should shrink this year and the palladium markets are likely to move back into deficit.
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By Natalia Zinets and Aleksandar Vasovic KYIV/MARIUPOL, Ukraine (Reuters) - Russian forces invaded Ukraine on Thursday in a massed assault by land, sea and air, the biggest attack by one state against another in Europe since World War Two. Missiles rained down. Ukraine reported columns of troops pouring across its borders from Russia and Belarus and landing on the coast from the Black and Azov seas. Ukrainian troops fought Russian forces along practically the entire border, and fierce fighting was taking place in the regions of Sumy, Kharkiv, Kherson, Odessa and at a military airport near Kyiv, an adviser to the presidential office said. Explosions were heard before dawn and throughout the morning in the capital Kyiv, a city of 3 million people. Gunfire rattled, sirens blared, and the highway out of the city choked with traffic as residents fled. The assault brought a calamitous end to weeks of fruitless diplomatic efforts by Western leaders to avert war, their worst fears about Russian President Vladimir Putin's ambitions realised. "Russia treacherously attacked our state in the morning, as Nazi Germany did in the WW2 years," tweeted Ukraine's President Volodymyr Zelenskiy. "Russia has embarked on a path of evil, but Ukraine is defending itself & won't give up its freedom no matter what Moscow thinks." Calling on Ukrainians to defend their country, he said arms would be given to anyone prepared to fight. He also urged Russians to take to the streets to protest against their government's actions. U.S. President Joe Biden called the Russian action an "unprovoked and unjustified attack". EU Commission chief Ursula von der Leyen said the bloc would impose a new round of sanctions that would hit Russia's economy severely. EU foreign affairs chief Josep Borrell said: "These are among the darkest hours of Europe since the Second World War." RUSSIAN BOMBING In an early-morning declaration of war, Putin said he had ordered "a special military operation" to protect people, including Russian citizens, subjected to "genocide" in Ukraine - an accusation the West calls baseless propaganda. "And for this we will strive for the demilitarisation and denazification of Ukraine," Putin said. "Russia cannot feel safe, develop, and exist with a constant threat emanating from the territory of modern Ukraine" He added: "All responsibility for bloodshed will be on the conscience of the ruling regime in Ukraine." A resident of Kharkiv, Ukraine's second biggest city and close to the Russian border, said windows in apartment blocks were shaking from constant blasts. Blasts could be heard in the southern port of Mariupol, near a frontline held by Russian-backed separatists. On a highway leading out, a Ukrainian armoured column thundered along the road, with soldiers atop turrets smiling and flashing victory signs to cars which honked their horns in support. Civilians in Mariupol packed bags: "We are going into hiding," a woman said. Ukrainian officials said Russian helicopters attacked Gostomel, a military airport near Kyiv, and Ukraine downed three of them. Ukrainian border officials said the Russians were trying to penetrate Kyiv region and the Zhytomyr region on the Belarusian border, and they were using Grad rockets. Initial unconfirmed reports of casualties included Ukrainian civilians killed by Russian bombardment and border guards defending the frontier. Regional authorities of Ukraine's southern Odessa region said 18 people were killed in a missile attack. At least six people were killed in Brovary, a town near Kyiv, authorities there said. Ukraine reported five people killed when one plane was shot down. Ukraine's military said it had destroyed four Russian tanks on a road near Kharkiv, killed 50 troops near a town in Luhansk region and downed six Russian warplanes in the east. Russia denied reports its aircraft or armoured vehicles had been destroyed. Russian-backed separatists claimed to have downed two Ukrainian planes. 'RUSSIA ALONE IS RESPONSIBLE' Even with a full-blown invasion under way, Putin's ultimate aim is obscure. He said he did not plan a military occupation, only to disarm Ukraine and purge it of nationalists. The outright annexation of such a vast hostile country could be beyond Russia's military capabilities. But if the aim is just to replace Zelenskiy's government, it is hard to see Ukrainians accepting any new leadership Russia might try to install. "I think we must fight all those who invade our country so strongly," said one man stuck in traffic trying to leave Kyiv. "I would hang every single one of them from bridges." Biden has ruled out sending U.S. troops to defend Ukraine, but Washington has reinforced NATO allies in the region with extra troops and planes. The West has pledged to impose severe sanctions. "Russia alone is responsible for the death and destruction this attack will bring, and the United States and its Allies and partners will respond in a united and decisive way," Biden said. Russia is one of the world's biggest energy producers, and both it and Ukraine are among the top exporters of grain. War and sanctions will disrupt economies around the world already facing a supply crisis as they emerge from the pandemic. Stocks and bond yields plunged; the dollar and gold soared. Brent oil surged past $100/barrel for the first time since 2014. [MKTS/GLOB] At least three major buyers of Russian oil said they had been denied letters of credit from Western banks, needed for shipments to go ahead. A democratic country of 44 million people, Ukraine is Europe's biggest country by area after Russia itself. It voted overwhelmingly for independence at the fall of the Soviet Union, and aims to join NATO and the European Union, aspirations that infuriate Moscow. Putin, who denied for months he was planning an invasion, has called Ukraine an artificial construct carved from Russia by its enemies, a characterisation Ukrainians see as an attempt to erase their more than 1,000-year-old history. While many Ukrainians, particularly in the east, speak Russian as a native language, virtually all identify as a separate nationality. 'WE'RE AFRAID' Queues of people waited to withdraw money and buy supplies of food and water in Kyiv. Cars stretched for dozens of kilometres (miles) on the highway leading from the capital west towards Poland, where Western countries have prepared for the likelihood of hundreds of thousands of refugees. "We're afraid of bombardments," said Oxana, trying to flee and stuck in her car with her three-year-old daughter on the backseat. "This is so scary." Three hours after Putin gave his order, Russia's defence ministry said it had taken out military infrastructure at Ukrainian air bases and degraded its air defences. Earlier, Ukrainian media reported that military command centres in Kyiv and Kharkiv had been struck by missiles, while Russian troops had landed at Odessa and Mariupol. Russia announced it was shutting all shipping in the Azov Sea. Russia controls the strait leading into the sea where Ukraine has ports including Mariupol. Ukraine appealed to Turkey to bar Russian ships from the straits connecting the Black Sea to the Mediterranean. In Russia, where state media have for weeks been airing footage of purported Ukrainian attacks that Western countries call crudely staged fakes, the broadcast regulator said all news outlets must cite only official Russian sources on Ukraine. An activist who called for anti-war demonstrations was detained.
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By Tom Westbrook SINGAPORE (Reuters) - The dollar bounced on Thursday after a Russian news report of mortar fire in eastern Ukraine jangled market nerves and sent investors in to safe havens. Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area, the RIA news agency said, a report later denied by Ukraine. Russia has massed more than 100,000 troops close to Ukraine's borders and the West has threatened Russia with new sanctions if it attacks. The euro fell as much as 0.4% as traders immediately saw risks of a wider war. But Ukraine's denial and the location of the reported attack within already contested territory calmed things and the euro last sat at $1.1354. The risk-sensitive Australian dollar lost as much as 0.6% before settling 0.2% lower at $0.7185. The safe-haven yen rose about 0.1% to 115.29 per dollar. "There is a lot of anxiety," said Bank of Singapore strategist Moh Siong Sim. "It's not clear whether it's some local event or something which could flare up...right now such headlines are keeping the markets a bit nervous." The Russian rouble, which has been sensitive to the prospect of war as sanctions loom on Russia, fell 0.7%. The standoff on Europe's eastern edge is one of the deepest crises in East-West relations for decades. Earlier in the day, a U.S. official said Russia was increasing troop numbers near its border with Ukraine rather than withdrawing, as Moscow claimed. The official, who spoke on condition of anonymity, also said Russia could "launch a false pretext at any moment" to justify an invasion, something Russia has dismissed. Safe-haven Treasuries rallied and U.S. stock futures fell with the mood, though the lack of clarity around the situation capped larger moves. [MKTS/GLOB] The U.S. dollar index was up 0.1% to 95.927. JAPAN DEFICIT Economic data also added some support to the dollar on Thursday, offsetting some overnight softness when minutes from the Federal Reserve's last meeting were less hawkish than some investors had expected. Data showed Japan ran its biggest trade deficit in a single month in eight years in January, and that follows Europe's trade gap widening in December as energy prices surge. Rates expectations held the kiwi and sterling steady. The New Zealand dollar was last flat at $0.6685 after touching a one-week high of $0.6703. A 25 basis point (bp) rate hike in New Zealand is fully priced for next week, with swaps trade pointing to a better-than-one-in-four chance of a 50 bps hike. March hike expectations are also holding sterling firm and it was last steady at $1.3580. Ahead on Thursday, speeches from Bank of Spain Governor Pablo Hernández de Cos and European Central Bank (ECB) chief economist Philip Lane at 0800 GMT and 1400 GMT, respectively, will be closely watched for clues on the ECB outlook. Federal Reserve Bank of St. Louis President James Bullard speaks at 1600 GMT and U.S. jobless claims and the Philadelphia Fed manufacturing survey are also due. ======================================================== Currency bid prices at 0649 GMT Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.1357 $1.1373 -0.14% -0.10% +1.1385 +1.1323 Dollar/Yen 115.3100 115.4550 -0.11% +0.27% +115.5300 +115.1450 Euro/Yen 130.96 131.30 -0.26% +0.49% +131.4900 +130.4200 Dollar/Swiss 0.9223 0.9222 -0.02% +1.08% +0.9229 +0.9215 Sterling/Dollar 1.3581 1.3583 -0.02% +0.41% +1.3597 +1.3557 Dollar/Canadian 1.2709 1.2694 +0.15% +0.55% +1.2734 +1.2680 Aussie/Dollar 0.7189 0.7197 -0.13% -1.12% +0.7215 +0.7151 NZ Dollar/Dollar 0.6686 0.6680 +0.10% -2.31% +0.6704 +0.6660 All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ
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By Marius Zaharia and Renju Jose HONG KONG/SYDNEY (Reuters) -Drugmaker Moderna (NASDAQ:MRNA)'s CEO set off fresh alarm bells in financial markets on Tuesday after he warned that COVID-19 vaccines were unlikely to be as effective against the Omicron variant as they have been against the Delta version. Crude oil futures shed more than a dollar, the Australian currency hit a year low, and Nikkei gave up gains as Stéphane Bancel's comments spurred fears that vaccine resistance could lead to more sickness and hospitalisations, prolonging the pandemic. [MKTS/GLOB][USD/][O/R] "There is no world, I think, where (the effectiveness) is the same level . . . we had with Delta," Moderna CEO Bancel told the Financial Times https://www.ft.com/content/27def1b9-b9c8-47a5-8e06-72e432e0838f in an interview. "I think it's going to be a material drop. I just don't know how much because we need to wait for the data. But all the scientists I've talked to . . . are like 'this is not going to be good'," Bancel said. Moderna did not reply to a Reuters' request for comment on the interview and on when it expects to have data on the effectiveness of its vaccine against Omicron, which the World Health Organization (WHO) says carries a "very high" risk https://www.reuters.com/business/healthcare-pharmaceuticals/omicron-poses-very-high-global-risk-countries-must-prepare-who-2021-11-29 of infection surges. Bancel had earlier said on CNBC https://www.reuters.com/article/idUSL4N2SK37Y that there should be more clarity on the efficacy of COVID-19 vaccines against Omicron in about two weeks, and that it could take months to begin shipping a vaccine that work against the new variant. The WHO and scientists https://www.reuters.com/business/healthcare-pharmaceuticals/how-fast-does-it-spread-scientists-ask-whether-omicron-can-outrun-delta-2021-11-29 have also said it could take days to several weeks to understand the level of severity of the variant and its potential to escape protection against immunity induced by vaccines. "Vaccination will likely still keep you out of the hospital," said John Wherry, director of the Penn Institute for Immunology in Philadelphia. The uncertainty about the new variant has triggered global alarm, with border closures casting a shadow over a nascent economic recovery from a two-year pandemic. News of its emergence wiped roughly $2 trillion off the value of global stocks on Friday, but some calm was restored this week as investors waited for more data on Omicron. Remarks by President Joe Biden that the United States would not reinstate lockdowns had also helped soothe markets before comments from the Moderna CEO spooked investors. Biden has called for wider vaccination, while the U.S. Centers for Disease Control and Prevention has urged everyone aged 18 years and older to get a booster shot. Britain too has expanded its COVID-19 booster programme amid Omicron fears. First reported on Nov. 24 from South Africa, Omicron has since spread to over a dozen countries. Japan, the world's third-largest economy, has confirmed its first case. HONG KONG EXPANDS CURBS Countries around the world have moved quickly to tighten border controls to prevent a recurrence of last year's strict lockdowns and steep economic downturns. Hong Kong has expanded a ban on entry for non-residents from several countries. It said non-residents from Angola, Ethiopia, Nigeria and Zambia would not be allowed to enter as of Nov. 30. Additionally, it said non-residents who have been to Austria, Australia, Belgium, Canada, the Czech Republic, Denmark, Germany, Israel and Italy in the past 21 days would not be allowed to enter the city from Dec. 2. The global financial hub, among the last places pursuing a zero-COVID strategy, has already banned non-residents arriving from South Africa, Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia and Zimbabwe. In Australia, five travellers tested positive for Omicron. Singapore's health ministry said two travellers from Johannesburg who tested positive for the variant in Sydney had transited through its Changi https://www.reuters.com/business/healthcare-pharmaceuticals/singapore-says-two-travellers-sydney-with-omicron-transited-changi-2021-11-30 airport. Australian authorities have also identified a sixth traveller who was most likely infected with the variant and had spent time in the community. Canberra delayed on Monday the reopening of the nation's borders for international students and skilled migrants, less than 36 hours before they were due to be allowed back in. "We're doing this out of an abundance of caution but our overwhelming view is that whilst (Omicron) is an emerging variant, it is a manageable variant," Federal Health Minister Greg Hunt said. The global curbs on travellers from southern Africa also raised concerns about vaccine inequality. "The people of Africa cannot be blamed for the immorally low level of vaccinations available in Africa – and they should not be penalized for identifying and sharing crucial science and health information with the world," U.N. Secretary-General Antonio Guterres said https://www.reuters.com/world/africa/un-chief-concerned-about-southern-africa-isolation-over-omicron-2021-11-29 in a statement. India, home to the world's largest vaccine maker, has approved supplies of COVID-19 vaccines to many African countries and said it stands ready to "expeditiously" send more. China too has pledged https://www.reuters.com/world/africa/chinas-xi-pledges-10-bln-credit-line-african-financial-institutions-2021-11-29 1 billion doses to the continent.
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By Aaron Sheldrick TOKYO (Reuters) -Oil prices rose on Tuesday, recouping earlier losses, as falling temperatures in China, the world's biggest energy consumer, revived concerns about its ability to meet heating demand needs amid power and coal shortages. Brent crude rose 24 cents, or 0.3%, to $84.57 a barrel by 0541 GMT after falling 0.6% on Monday. The contract is still up nearly 7% this month. U.S. West Texas Intermediate futures gained 35 cents, or 0.4%, to $82.79 a barrel, having risen 0.2% in the previous session and nearly 10% this month. Brent fell on Monday after China released growth figures that disappointed the market but with temperatures falling as the northern hemisphere winter approaches and heating demand increasing, prices of oil, coal and natural gas are likely to remain elevated, traders and analysts said. Colder weather has already started to grip China, with the temperature forecast to fall to near freezing in northern areas, according to AccuWeather.com. "Tightness in energy markets meant supply side issues remain prevalent and commodities prices remain supported," said an energy derivatives trader based in Singapore. Coal futures in China rose as much as 7.8% on Tuesday, while riskier assets like equities were also higher. The rising coal and natural gas prices in Asia are expected to cause some end-users to switch to lower-cost oil as an alternative. [MKTS/GLOB] However, the power crunch that is sending prices higher is also hurting Chinese economic growth, which fell to the lowest in a year, according to official data on Monday. China's daily crude oil processing rate also fell again last month to the lowest level since May last year. Helping keep a lid on prices, U.S. oil output is set to rise. Production in the largest shale formation in the U.S., the world's biggest oil producer, is expected to gain further next month, according to an official report.
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By Tom Westbrook and Donny Kwok HONG KONG (Reuters) - China Evergrande will sell a majority stake in its property management business for more than $5 billion, Chinese media said on Monday, a deal which would be the largest asset sale yet at the debt-laden property developer if it goes ahead. Once China's top-selling property group, Evergrande is facing what could be one of the country's largest-ever restructurings as the company is weighed down by debts of around $305 billion. Uncertainty over Evergrande's fate has unsettled financial markets worried about any fallout from its troubles. Evergrande on Monday said it requested a halt in the trading of its shares in Hong Kong pending an announcement about a major transaction. Evergrande Property Services Group, a spin-off listed last year, also requested a halt and said it referred to "a possible general offer for shares of the company." China's state-backed Global Times said Hopson Development was the buyer of a 51% stake in the property business for more than HK$40 billion ($5.1 billion), citing unspecified other media reports. Hopson also said it had suspended trading in its shares, pending an announcement related to a major acquisition of a Hong Kong-listed firm and a possible mandatory offer. Both Hopson and Evergrande did not respond to requests for comment on the Global Times report. Analysts said the possible deal signals the company is still working to meet its obligations. But it also rekindled broader concerns about the risk to China's property sector and economy if Evergrande is liquidated at low prices. "Selling an asset means they are still trying to raise cash to pay the bills," said OCBC analyst Ezien Hoo. "Looks like the property management unit is the easiest to dispose in the grand scheme of things." In August, Reuters had reported that Evergrande was in talks with state-owned and private companies to sell stakes in its electric vehicle and property management businesses, citing a source close to the matter. Beijing has also prodded government-owned firms and state-backed developers to purchase some of Evergrande's assets, people with knowledge of the matter told Reuters last week. Hopson stands in good stead compared with other property developers in China, owning more assets than liabilities and improving profit in the first half. Shares in Hopson, which has a market value of HK$60.4 billion ($7.8 billion), have jumped 40% so far this year and it was rated B+ by Fitch in June. Evergrande's property services business, which says it managed a total contracted floor area of 810 million square metres at the end of June, was also profitable in the first half of 2021, based on its financial statements. If the deal goes ahead at the price reported by the Global Times, it represents a roughly 17.5% discount to the Services' Group's December 2020 listing valuation. NERVOUSNESS With liabilities equal to 2% of China's gross domestic product, Evergrande has sparked concerns its troubles could spread through the global financial system. Nervousness has eased after China's central bank vowed to protect homebuyers' interests, but ramifications for China's economy has kept investors on edge. Monday's share trading suspension knocked the offshore yuan, which fell about 0.3% against the dollar, and weighed on the Hang Seng benchmark index. The possible deal activity lifted shares in Evergrande's electric vehicle unit by 29% but cast a pall over regional stocks and global markets. [MKTS/GLOB] "It is definitely a positive move towards solving Evergrande’s liquidity crisis and we expect more to come," said Gary Ng, senior economist Asia Pacific at Natixis. "However, having said that, offloading some assets may not be totally sufficient, the key for Evergrande is to get project construction going and to sell inventory." Shares in Evergrande have plunged 80% so far this year, while its bonds have held steady at distressed levels. The group said last month it had negotiated a settlement with some domestic bondholders and made a repayment on some wealth management products, largely held by Chinese retail investors. Holders of the company's $20 billion in offshore debt appear further back in the creditor queue and bondholders have said interest payments due in the past few weeks have failed to arrive. Evergrande faces deadlines on dollar bond coupon payments totalling $162.38 million in October. ($1 = 7.7868 Hong Kong dollars)
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By Anshuman Daga and Andrew Galbraith SINGAPORE/SHANGHAI (Reuters) - China Evergrande agreed to settle interest payments on a domestic bond on Wednesday, while the Chinese central bank injected cash into the banking system, soothing fears of imminent contagion from the debt-laden property developer. Evergrande, Asia's biggest junk bond issuer, is so entangled with China's broader economy that its fate has kept global stock and bond markets on tenterhooks as late debt payments could trigger so-called cross-defaults. Many financial institutions have exposure to Evergrande through direct loans and indirect holdings, while any defaults will also trigger sell-offs in the high-yield credit market. In an effort to reassure investors, the People's Bank of China's injected 90 billion yuan to the banking system, signalling support for markets as they braced for what is expected to be one of China's largest-ever debt restructurings. Evergrande is scrambling to avoid defaulting on a number of bonds with payments due this week and its main unit, Hengda Real Estate Group, said on Wednesday it had "resolved" one coupon payment due on Thursday on its Shenzhen-traded 5.8% September 2025 bond, via "private negotiations". It did not specify how much interest would be paid or when, nor did Hengda mention Evergrande's other pressing debts, leaving it unclear what this means for $83.5 billion in dollar bond interest payments due on Thursday. Evergrande did not immediately respond to questions about its deal or its intentions. But engagement with bondholders, a common way to avoid default, on top of chairman Hui Ka Yuan's vow this week that Evergrande would "walk out of its darkest moment," cheered investors and soothed markets more broadly. "These events seem to suggest that the company is taking control of the situation and is trying its best to work out a solution with creditors," Singapore-based Dexter Tan, a senior fixed income analyst at Bondsupermart.com, said. Evergrande, which epitomised the borrow-to-build business model and was once China's top-selling developer, also has a $47.5 million dollar-bond interest payment due next week. "We do not have a clearer picture as how Evergrande settled its onshore coupon," Singapore-based Chuanyo Zhou, a credit analyst at Lucror Analytics, said. "It doesn't look like a cash payment. It may still miss the coupon on offshore bonds due tomorrow." Evergrande's Hong Kong shares did not trade due to a public holiday but rose 40% in Frankfurt to 0.38 euros ($0.45). Its dollar bonds maturing next year and in 2024 remained below 30 cents on the dollar. In the wider market, the U.S. dollar slipped and S&P 500 futures rose in Asia and European trade. [MKTS/GLOB] BREAKDOWN Analysts have been downplaying the risk that a collapse threatens a "Lehman moment", or liquidity crunch, which freezes the financial system and spreads globally. Only some $20 billion of $305 billion outstanding debts is owed offshore, according to Refinitiv data. But the risk of failure remains high, particularly if offshore bondholders are less willing than those in China to cut deals, and the fallout has already begun to trigger tremors in the property market of the world's second-largest economy. "Developers there have long claimed that the success of their business is driven by the three carriages: high turnover, high gross profit, and high leverage," said Michael Pettis, a nonresident senior fellow at the Carnegie–Tsinghua Center for Global Policy, in a blog post. "But all of these proverbial carriages are breaking down as the effects of Evergrande's crisis spread." There is also mounting political pressure to act as the anger of retail investors with their savings sunk in Evergrande properties or wealth management products swells. Asked at a regular daily briefing on Wednesday whether China would take measures to intervene, foreign ministry spokesman Zhao Lijian only referred to the "responsible departments". Despite the risks, some funds have been increasing their positions in recent months. BlackRock (NYSE:BLK) and investment banks HSBC and UBS have been among the largest buyers of Evergrande's debt, Morningstar https://www.morningstar.hk/hk/news/215418/whos-buying-evergrandes-bonds.aspx?lang=en-hk data and a blog post showed. Other bondholders include UBS Asset Management and Amundi, Europe's largest asset manager. ($1 = 6.4665 Chinese yuan)($1 = 0.8524 euros)
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By Alex Lawler LONDON (Reuters) -Oil rose to around $73 a barrel on Friday, supported by growing signs of supply tightness in the United States as a result of Hurricane Ida and as U.S.-China trade hopes gave riskier assets a boost. About three quarters of the U.S. Gulf's offshore oil production, or about 1.4 million barrels per day, has remained halted since late August. That amount is roughly equal to what OPEC member Nigeria produces. "With the restart in offshore crude production lagging, the odds are that the Ida effect will still be felt in the coming weeks," said Stephen Brennock of oil broker PVM. Brent crude rose $1.57, or 2.2%, to $73.02 by 1330 GMT. U.S. West Texas Intermediate (WTI) crude added $1.58, or 2.3%, to $69.72. Oil and equity markets also got a boost from news of a call between U.S. President Joe Biden and his Chinese counterpart Xi Jinping. The call raised hopes for warmer relations and more global trade, analysts said. [MKTS/GLOB] "The Biden-Xi phone call has had the same effect on oil markets as it has on other asset classes," said Jeffrey Halley, analyst at brokerage OANDA. Brent was on track to end the week with a small gain and has rallied 41% this year, driven by supply cuts by the Organization of the Petroleum Exporting Countries and some demand recovery from the pandemic. On Thursday, both crude contracts had fallen more than 1% after China said it would release crude oil reserves https://www.reuters.com/business/energy/china-release-state-crude-oil-reserves-first-time-2021-09-09 via public auction to help ease high feedstock costs for refiners, a move described as a first. In focus next week will be revisions to the oil demand outlook for 2022 from OPEC and the International Energy Agency. OPEC will likely revise down its forecast on Monday, two OPEC+ sources said.
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Friday, August 13, 2021 Futures Up/Down % Last Dow 50.00 0.14% 35,452 S&P 500 3.25 0.07% 4,457 Nasdaq 3.50 0.02% 15,081 Following a third straight record close for the S&P 500 and Dow Jones Industrial Average, futures are again looking to push higher, building on the continued upward momentum. Volumes were very light on Thursday and market breadth was negative, but that didn’t stop major averages from climbing all day despite another rise in producer prices (PPI inflation data) as the S&P 500 recorded its 47th record close this year (on track to beat its record of 62 record highs registered in 2017). Volume on U.S. exchanges was just 8.38 billion shares, making it one of the slowest trading days of the year. The average for the full session over the last 20 trading days is around 9.5 billion shares. It’s also now been 323 calendar days since the S&P 500 last ended, on a closing basis, a decline of 5% or more from a record high (according to Reuters). In Asian markets, The Nikkei Index slid -37 points to dip back below the 28,000 level, the Shanghai Index dipped -8 points to 3,516 and the Hang Seng Index dropped -126 points to 26,391. In Europe, the German DAX is higher by 75 points to move above the 16,000 level, while the FTSE 100 is up over 25 points to 7,220. After a consolidation day, crypto assets are surging again this morning, on track for weekly highs for Bitcoin around $46,500, Ethereum up over $3,250 and Bitcoin cash ($BCH) up 5% around $640. In stock news, the FDA amended the emergency use authorizations granted for Pfizer ($PFE)/BioNTech ($BNTX) and Moderna ($MRNA) COVID-19 vaccines on Thursday, allowing their use as booster shots in certain immunocompromised individuals Market Closing Prices Yesterday The S&P 500 Index gained 13.13 points, or 0.30%, to 4,460.83 The Dow Jones Industrial Average edged higher 14.88 points, or 0.04%, to 35,499.85 The Nasdaq Composite jumped 51.13 points, or 0.35%, to 14,816.26 The Russell 2000 Index declined -6.27 points, or 0.28% to 2,244.07 Events Calendar for Today 8:30 AM ET Import/Export Prices MoM for July 10:00 AM ET University of Michigan Sentiment, Aug-P 1:00 PM EST Baker Hughes Weekly rig count data Earnings Calendar: Earnings Before the Open: CL, ME, VERO Other Key Events: Cowen 9th Annual Internet & Media Bus Tour (virtual), 8/9-8/13 Credit Suisse 4th Annual FinTech Conference (virtual), 8/11-8/13 Macro Up/Down Last Nymex -0.02 69.07 Brent 0.03 71.34 Gold 10.10 1,761.90 EUR/USD 0.0018 1.1748 JPY/USD -0.14 110.27 10-Year Note -0.025 1.342% Sector News Breakdown Consumer AirBnB ($ABNB) Q2 gross bookings $13.4B up 320% vs. est. $11.19B; saw strong demand for bookings in q2, achieving highest gross nights booked of any quarter; number of active listings grew in q2; active listings in non-urban destinations in Europe & N. America increased 8% from Q1 2021 to Q2; expect q3 rev to be co’s strongest qtrly rev on record and to deliver the highest adj Ebitda dollars and margin ever; expect GBV in q3 2021 to be well above 2019 levels, but below co saw in q2 due to impact of booking timing differences and cancellations DoorDash ($DASH) 2Q revs $1.2B vs est. $1.08B, qtrly total orders +69% to 345Mm, qtrly marketplace gov +70% to $10.5B; guides 3Q marketplace gov $9.3-9.8B with adj EBITDA $0-100Mm vs est. $44Mm; guides FY marketplace gov $39-40.5B w/ adj EBITDA $150-350Mm vs est. $213.5Mm JBS SA, the world’s largest meatpacker, said late Thursday it has proposed buying the remaining common shares in Pilgrim’s Pride (PPC) for $26.50 per share in order to delist its U.S.-based subsidiary, which represents a premium of about 17% to PPC’s last close PepsiCo Inc. ($PEP) and Boston Beer Co. (SAM) said they plan to partner on an alcoholic version of the Mountain Dew soft drink with the brand Hard Mtn Dew. The coming product is a nod to what the companies see as evolving tastes of drinkers, executives said Tuesday. Fiesta Restaurant ($FRGI) Q2 EP S0.11, in-line with ests; Q2 revs $91.2M, consensus $157.49M; Comp restaurant sales at Pollo Tropical increased 43.5%; comparable restaurant sales at Taco Cabana increased 15.6% Flowers Foods ($FLO) Q2 adj EPS $0.32 vs. est. $0.28; Q2 revs $1.02B vs. est. $1.01B; raises FY21 EPS view to $1.17-$1.22 from $1.10-$1.17 (est. $1.15), while narrows FY21 revenue view to $4.26B-$4.30B from $4.23B-$4.30B (est. $4.25B); Q2 adjusted EBITDA decreased 5.0% to $122.1M Luminar Technologies ($LAZR) 2Q adj EPS ($0.08) vs est. ($0.08) on revs $6.3Mm vs est. $6.32Mm; guides FY revs $30-33Mm vs est. $27.35Mm Mister Car Wash ($MCW) Q2 adj EPS $0.14 on revs $197.1M (vs. $101.9M last year); Q2 comp store sales increased 93% for the second quarter of 2021 compared to Q2 fiscal 2020; sees FY21 revenue net growth of about 30% and comparable stores sales growth of 29% to 33% Rush Street interactive ($RSI) Q2 adj EPS loss (-$0.04) vs. est. loss (-$0.12); Q2 revs $122.8M vs. est. $112.4M; boosts FY21 revenue view to $465M-$495M from $440M-$480M (est. $467.69M) Hall of Fame Resort & Entertainment (HOFV) Q2 revenue +39% to $2.4M, Q2 net income was $15.5M, Q2 Adj EBITDA loss ($5.6M) vs $1.3M YoY and Q2 cash balance, including restricted cash, of $73.7M vs $68.5M as of March 31, 2021 Energy, Industrials and Materials Kansas City Southern (KSU) says its board has determined that the latest unsolicited proposal from Canadian Pacific Railway (CP) does not constitute a superior proposal, and reaffirms its support of a merger with Canadian National Railway (CNI). Earlier this week, CP submitted a new $300 per share offer that values KSU at $31B. Under the terms of the CNI, KSU holders would receive $200 in cash and 1.129 CNI shares Boeing’s (BA) Starliner space capsule launch is facing delays of several months as it will likely need repairs, the WSJ reported Maxeon Solar (MAXN) 2Q EPS ($1.99) vs est. ($1.39) on revs $176Mm vs est. $181.1Mm; guides 3Q revs $220-240Mm vs est. $220Mm Hydrofarm Holdings (HYFM) Q2 adj EPS $0.30 vs. est. $0.20; Q2 sales $133.8M vs. est. $134.7M; sees FY sales up 45%-50% XL Fleet Corp. (XL) 2 EPS ($0.08) vs est. ($0.06) on revs $3.7M vs est. $4.4M; OEMs have pushed out the opening of new orders and extended lead times, indicating the shortage of its new commercial fleet vehicles will stretch into 2022 Financials com ($LZ) Q2 adj EPS $0.03 vs est. $0.02 on revs $150.4M vs est. $140.5M, gross margin 67% from 68% in Q1; sees Q3 revs $143M-$147M, FY revs $570M-$578M vs est. $564.36M, FY adj EBITDA $55M-$59M, says 2021 quarterly revenue growth rates are affected by the impact Covid-19 had on business formations in 2020 Rocket Companies ($RKT) Q2 adj EPS $0.46 vs. est. $0.49; Q2 revs $2.67B vs. est. $2.92B; Achieved record purchase closed loan origination volume, nearly doubling year-over-year; fourth consecutive quarter of meeting or exceeding guidance for closed loan, net rate lock volume, and gain on sale margins; generated $84 billion in mortgage origination closed loan volume and gain on sale margin of 2.78% SoFi Technologies ($SOFI) Q2 EPS ($0.48) vs est. ($0.06) on adj revenue $237.22M vs est. $218.6M, adj EBITDA $11.24M; Q2 total products 3.7M (+123% YoY), total members 2.6M (+113% YoY); sees Q3 adj net sales $245M-$255M vs est. $260.3M, adj EBITDA ($7M)-$3M; reaffirms FY guidance for adj net revs $980M and adj EBITDA $27M ZipRecruiter (Z$IP) Q2 net loss ($25.8M) adj EBITDA loss ($1.7M), sales $183M vs est. $160.4M; sees Q3 adj EBITDA $10M-$16M, sales $182-$188M vs est. $156M; raised FY forecast for sales to $651M-$665M from $580M-$600M (est. $595.3M); adj EBITDA to $30M-$38M from $20M-$28M Healthcare The FDA amended the emergency use authorizations granted for Pfizer ($PFE)/BioNTech ($BNTX) and Moderna ($MRNA) COVID-19 vaccines on Thursday, allowing their use as booster shots in certain immunocompromised individuals Acutus Medical ($AFIB) Q2 EPS loss (-$0.89) vs. est. loss (-$0.84); Q2 revs $4.71M vs. est. $4.15M; leaving its year guidance unchanged and projects revenue to range between $22.0 million and $30.0 million; said Q2 direct segments which grew nearly 45% sequentially as compared to the first quarter of 2021 Bio-Life Solutions ($BLFS) 2Q adj EPS $0.00 vs est. ($0.07) on revs $31.2Mm vs est. $27.6Mm; guides FY revs $108-117Mm vs est. $110.5Mm Co-Diagnostics ($CODX) 2Q revs $27.4Mm vs est. $20.8Mm; guides 3Q EPS $0.19-0.22 vs est. $0.22, sees 3Q revs $23-25Mm vs est. $18.1Mm Moderna ($MRNA) announced the publication of a new study showing that its COVID-19 vaccine led to durable antibody levels against newly detected COVID-19 variants. Seer Inc. ($SEER) 2Q EPS ($0.27) vs est. ($0.28) on revs $1.3Mm vs est. $787K Spectrum Pharma (SPPI) 2Q adj EPS ($0.25) vs est. ($0.26), ended qtr with cash, equivalents & marketable of $158.8Mm Technology, Media & Telecom Disney ($DIS) 3Q adj EPS $0.80 vs est. $0.55 on revs $17.02B vs est. $16.76B, qtr end Disney+ paid subs 116Mm, qtr end ESPN+ paid subs 14.9Mm, qtr end Hulu paid subs 42.8Mm; pleased with company’s trajectory amidst ongoing challenges of covid Globant S.A. ($GLOB) 2Q adj EPS $0.88 vs est. $0.84 on revs $305.3Mm vs est. $288.2Mm; guides 3Q adj EPS at least $0.92 vs est. $0.85, sees 3Q revs at least $325Mm vs est. $292.7Mm; guides FY adj EPS at least $3.58 vs est. $3.40 and revs at least $1.236B vs est. $1.145B Latch Inc. ($LTCH) Q2 loss ($40.1M) vs ($15M) loss YoY on revenue $9M vs est. $10.1M, adj EBITDA ($17.4M) from ($13.4M) YoY, total bookings $95.8M (+102% YoY), booked ARR $48.8M (+122% YoY); issued Q3 guidance for total bookings $55M-$90M, revenue $10M-$11M vs est. $14.79M, adj EBITDA ($32M)-($28M); now sees FY bookings $325-$340M and lowered its FY rev outlook to $38M-$42M from $47M-$51M vs est. $49.1M LiveXLive Media ($LIVX) Q1 EPS loss (-$0.12) vs. est. loss (-$0.06); Q1 revs up 269% to $38.8M vs. est. $28.03M; raises FY22 revenue view to $115M-$125M from $110M-$120M (est. $114.19M); Paid subscribers as of June 30, 2021 increased 32% to over 1,162,000, a net increase of approximately 285,000, as compared to 877,000 subscribers at June 30 Sierra Wireless ($SWIR) 2Q adj EPS ($0.03) vs est. ($0.15) on revs $132.8Mm vs est. $119.8Mm, says product demand remains very strong, limited production has resumed at Vietnam facility but experiencing production interruptions due to covid Viavi Solutions ($VIAV) Q4 adj EPS $0.22 vs. est. $0.19; Q4 revs $310.9M vs. est. $300.83M; sees Q1 adj EPS $0.20-$0.22 vs. est. $0.20; sees Q3 revs $303M-$317M vs. est. $309.01M Cricut ($CRCT) Q2 EPS $0.22 vs. est. $0.20; Q2 revs $334.49M vs. est. $319.08M; Connected machine revenue was $146.3 million, up 29.0% over Q2 2020; subscriptions revenue was $50.7 million, up 110.9% over Q2 2020; accessories and materials revenue was $137.5 million, up 40.4% over Q2 2020; gross margin was 39.0%, up from 31.1% over Q2 2020 ContextLogic (WISH) Q2 revs $656M vs. est. $722.9M; shares tumble over 20% after saying demand slowed and costs rose more than expected (downgraded ay Cowen and JPM)
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Wednesday, May 26, 2021 Futures Up/Down % Last Dow 77.00 0.22% 34,346 S&P 500 11.25 0.28% 4,197 Nasdaq 40.50 0.30% 13,697 U.S. stocks are looking slightly higher, coming off a day where stocks slipped following disappointing economic data that showed declining consumer confidence amid higher inflation fears and weaker housing news. Gold prices extend gains, topping the $1.900 an ounce level as Treasury yields continue to slide with the 10-year down at 1.56%. The reopen trade names such as airlines, cruise lines, restaurants and retailers have led markets higher the last few days along with a bounce in technology stocks, while early 2021 winners such as industrials, materials and energy have pared gains. Federal Reserve official’s day-after-day keep telling markets that rising inflation will prove to be largely transitory, which has helped push the dollar and Treasury yields lower. Crypto assets wild ride continues, with prices of Bitcoin and the likes finding solid footing this morning (Bitcoin above 40K). In Asian markets, The Nikkei Index rose 88 points to 28,642, the Shanghai Index rose 12 points to 3,593, and the Hang Seng Index jumped 255 points to 29,166. In Europe, the German DAX is down a few points to 15,455, while the FTSE 100 slipped about -10 points to 7,015. Market Closing Prices Yesterday The S&P 500 Index slipped -8.92 points, or 0.21%, to 4,188.13 The Dow Jones Industrial Average fell -81.52 points, or 0.24%, to 34,312.46 The Nasdaq Composite dipped -4.00 points, or 0.03%, to 13,657.17 The Russell 2000 Index declined -21.59 points, or 0.97% to 2,205.75 Events Calendar for Today 7:00 AM ET MBA Mortgage Applications Data 10:30 AM ET Weekly DOE Inventory Data Earnings Calendar: Earnings Before the Open: ANF, BBW, CMCO, DKS, PLAB, REX Earnings After the Close: AEO, APPS, CHNG, CVCO, DBI, ELF, HEI, MOD, NVDA, NXGN, OKTA, OOMA, PSTG, QADB, QMCO, SNOW, UHAL, WDAY, WSM, ZUO Other Key Events: Goldman Sachs TechNet Conference Asia Pacific 2021 (virtual), 5/24-5/28 JPMorgan Global technology, Media & Communications Conference (virtual), 5/24-5/26 UBS Global Healthcare Conference (virtual), 5/24-5/26 Microsoft Build Conference (virtual), 5/25-5/27 New Relic Future Stack Conference (virtual), 5/25-5/27 Truist Securities 22nd Annual Financial Services Conference (virtual), 5/25-5/26 UBS Global Oil & Gas Conference (virtual), 5/25-5/27 Wolfe Research Transport & Industrials Conference (virtual), 5/25-5/27 Macro Up/Down Last Nymex -0.12 65.95 Brent 0.07 68.72 Gold 8.45 1,907.70 EUR/USD -0.0014 1.2236 JPY/USD 0.12 108.90 10-Year Note +0.002 1.567% World News Iran has banned the energy-intensive mining of cryptocurrencies such as Bitcoin for nearly 4 months, President Hassan Rouhani said on Wednesday, as the country faces major power blackouts in many cities. Bank of Japan board member Hitoshi Suzuki said on Wednesday it was premature to consider an exit strategy for the central bank’s purchases of exchange-traded funds (ETF). However, he also said it was “undesirable” for the BOJ’s ETF holdings to keep increasing New Zealand’s central bank held interest rates on Wednesday but hinted at a hike as early as September next year Sector News Breakdown Consumer Nordstrom (JWN) Q1 EPS loss ($1.05) vs. est. loss ($0.57); company remains on pace to achieve annual sales, earnings and cash flow goals; Q1 sales rose 44% YoY to $2.92B vs. est. $2.9B; Q1 digital sales increased 28% YoY and represented 46% of total; reaffirmed revenue expectations for fiscal 2021; says balancing inventory levels with sales while managing receipt flows to mitigate potential supply chain disruptions Red Robin (RRGB) Q1 adj EPS loss (30c) vs. est. loss ($1.16); Q1 revs $318.7M vs. est. $310.4M; Q1 comp sales rose 10% over the same period in 2020, and decreased 12.8% compared to the same period in 2019; at the end of Q1, 55% of Company-owned restaurants had positive comparable restaurant revenue compared to 2019; says all company-owned units have re-opened with varying levels of capacity GSX Techedu (GOTU) posts Q1 loss of 5.20 yuan per share, compared to a profit of 0.76 yuan a year earlier; operating expenses triple from last year on increased marketing expenses and staff compensation Skyline Champion (SKY) 4Q adj EPS $0.61 vs. est. $0.38 on revs $447.6Mm vs. est. $384.4Mm Toll Brothers (TOL) 2Q EPS $1.01 vs. est. $0.80, home sales revs $1.84B, backlog $8.69B at qtr end; guides 3Q deliveries 2,675 units, sees FY deliveries 10,200-10,400 units; Q2 contracted homes were 3,487, up 85% from last year; Q2 backlog value was $8.69B, up 58% from last year; homes in backlog were 10,104, up 57% from last year Urban Outfitters (URBN) 1Q EPS $0.54 vs. est. $0.17 on sales $927Mm vs. est. $900Mm, retail comps +10% (+44% at free people, +9% at urban, +1% at Anthro), total inventory +17%; says cancelled or delayed many orders during the qtr to reduce inventory levels; Gross margin rose 130 bps during the quarter to 32.4% of sales; sees Q2 revenue up low teens percentage range Energy, Industrials and Materials The American Petroleum Institute (API) reported a weekly draw of 439K barrels of oil; showed a draw of 1.98M barrels, distillate inventories show a draw of 5.13M barrels and Cushing inventories show a draw of 1.15M barrels. Crown Holdings (CCK), Ardagh Group (ARD), and Ball Corp. (BLL) all downgraded to Market Perform from Outperform at BMO Capital following news that Can-Pack is building a second U.S. beverage can plant in Indiana; says Can-Pack’s “aggressive” expansion into the U.S., as well as a smaller entrance by Envases Universales raises fresh questions and suggests that heady expansion plans by the incumbents could be challenged Columbus McKinnon (CMCO) Q4 adj EPS 50c vs. est. 51c; Q4 revs $186.2M vs. est. $182.4M; sees Q1 revs $212M-$217M vs. est. $203.76M Heico (HEI) Q2 EPS $0.51 vs. est. $0.48; Q2 sales $466.7M vs. est. $443.1M; says cannot provide fiscal 2021 net sales and earnings guidance at this time; consolidated operating margin was 20.0% in the first six months of fiscal 2021, as compared to 22.5% in the first six months of fiscal 2020 ReneSola (SOL) Q1 EPS 1c vs. est. loss (2c); Q1 revs $22.8M vs. est. $19.04M; sees 2Q revs $19-22Mm and gr margin 36-39% vs. est. $23.2Mm and 31.5%; guides FY revs $90-100Mm vs. est. $98.5Mm, sees FY gr mgn over 25% vs. est. 27.8% July corn prices dropped over 5% on Tuesday to $6.20 3/4 per bushel and has now fallen 15% since May 7, when the contract maxed at $7.35 1/4 per bushel. Prices were pressured after the Department of Agriculture reported that U.S. farmers had planted 90% of their corn crops, above the five-year average of 80%. Financials Intuit Corp. (INTU) 3Q adj EPS $6.07 vs. est. $6.47 on revs $4.2B vs. est. $4.4B; guides 4Q adj EPS $1.55-1.60 vs. est. $0.34; guides FY revs $9.362-9.4B vs. est. $9.06B Bank of Montreal (BMO) reported a rise in Q2 profit amid higher revenue; bet income was C$1.3 billion in the quarter, compared with C$689 million a year ago; revenue rose to C$6.08 billion from C$5.26 billion; net efficiency ratio rose to 69.3% in the quarter, up from 64.4%, while return on equity rose to 10.2% from 5.5%. Dynamics Special Purpose Corp (DYNS) 20M share IPO priced at $10.00 Flywire (FLYW)44M share IPO priced at $24.00 Healthcare Agilent (A) Q2 adj EPS 97c vs. est. 83c; Q2 revs $1.525B vs. est. $1.4B; sees Q3 adj EPS 97c-99c above est. 91c; sees Q3 revs $1.51B-$1.54B, also above est. $1.42B; raises FY21 adj EPS view to $4.09-$4.14 from $3.80-$3.90 (est. $3.90); boosts FY21 revs view to $6.15B-$6.21B (est. $5.94B) Nabriva Therapeutics (NBRV) surges the co and Chinese partner Sinovant Sciences said Lefamulin met the main goal in treating Chinese adults with community acquired bacterial pneumonia in a late-stage study Travere Therapeutics (TVTX) provides a regulatory update for its Sparsentan program in focal segmental glomerulosclerosis (FSGS); said based upon the feedback from the U.S. FDA, the company said it no longer expects to submit for accelerated approval for FSGS in the U.S. during the second half of 2021. Larimar Therapeutics (LRMR) plunges over 40% after saying the FDA has placed a clinical hold on the CTI-1601 clinical program and that the company will not be closing a previously announced private placement financing Technology, Media & Telecom Zscaler (ZS) 3Q adj EPS $0.15 vs. est. $0.07 on revs $176.4Mm vs. est. $163.7Mm; guides 4Q adj EPS $0.08-0.09 vs. est. $0.10, sees 4Q revs $185-187Mm vs. est. $173.9Mm; Q3 Calculated billings grows 71% YoY to $225.0M and deferred revenue grows 65% YoY to $495.4M DoubleVerify Holdings (DV) Q1 EPS 4c on revs $67.6M; sees Q2 revs $72M-$74M (est. $69.5M) and FY21 revs $322M-$326M (est. $315.1M) LiveRamp Holdings (RAMP) 4Q adj EPS $0.04 vs. est. $0.02 on revs $119.18Mm vs. est. $116.14Mm; guides 1Q revs $112Mm vs. est. $112.9Mm; sees FY22 revs of up to $509Mm vs. est. $507.7Mm Elastic (ESTC) announced an expanded strategic partnership with Microsoft (MSFT) Apple (AAPL) is expected to outpace Samsung (SSNLF) as the largest buyer of AMOLED displays for smartphones in 2021, as new iPhones for the year are likely to adopt flexible AMOLED screens, pushing up the penetration of such displays in iPhone devices to around 80% – Digitimes Ambarella (AMBA), Lumentum (LITE) and ON Semiconductor (ON) announced two new joint reference designs that accelerate AIoT device deployment across verticals, building on the companies’ previous joint solution for contactless access systems Photronics (PLAB) Q2 EPS 17c (in-line w ests) and Q2 revs $159.8M vs. est. $158.27M; sees Q3 EPS 19c-25c vs. est. 21c; sees Q3 revs $162M-$172M vs. est. $168.1M Globant (GLOB)2M share Secondary priced at $214.00
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Tuesday, May 25, 2021 Futures Up/Down % Last Dow 72.00 0.21% 34,424 S&P 500 11.25 0.26% 4,204 Nasdaq 56.50 0.42% 13,692 Stock futures are looking higher, adding to yesterday’s gains as the yield on the 10-year slips back below 1.6%, easing inflation fears for a second straight day. Concerns over persistent inflation have softened the last few days with more Fed speakers just yesterday (Bullard, Bostic, Brainard) again all said prices will rise in coming months but all see it as transitory. Crypto currency volatility continues as well, with many (Bitcoin back under 37K, Ethereum) pulling back after yesterday’s rebound. On the agenda today (in a relatively quiet period for news with earnings winding down) attention turns to several housing data reports with Case-Shiller Home Price Index, FHFA House Price Index and New Home Sales, while consumer confidence figures will offer some insight into current business and employment conditions. In Asian markets, The Nikkei Index rose 189 points to 28,553, the Shanghai Index jumped 84 points to 3,581 and the Hang Seng Index surged 498 points to 28,910, In Europe, the German DAX is up about 110 points to 15,550, while the FTSE 100 is flat around 7,050. U.S. stocks surged all day on Monday, with both the S&P 500 and Nasdaq jumping more than 1% as a retreat in U.S. Treasury yields helped lift high multiple and mega cap technology stocks (AAPL, AMZN, FB, GOOGL) as fears about inflation took a back seat as investors again bought the dip after mixed stock reaction last week. Yields on the 10-year Treasury bond hit a two-week low, around 1.6%. Markets exhibited no concern on reports President’s Joe Biden’s infrastructure bill will likely be smaller than hoped as the two sides remain wide apart. Market Closing Prices Yesterday The S&P 500 Index jumped 41.19 points, or 0.99%, to 4,197.05 The Dow Jones Industrial Average rose 186.14 points, or 0.54%, to 34,393.98 The Nasdaq Composite spiked 190.18 points, or 1.41%, to 13,661.17 The Russell 2000 Index advanced 12.07 points, or 0.54% to 2,227.34 Events Calendar for Today 7:45 AM ET ICSC Weekly Retail Sales 8:55 AM ET Johnson/Redbook Weekly Sales 9:00 AM EST Monthly Home Prices MoM for March 9:00 AM EST S&P CaseShiller 20 City for March…est. 1.2% 10:00 AM EST Consumer Confidence for May…est. 119.4 10:00 AM EST New Home Sales MoM for April…est. 970K 10:00 AM EST Richmond Manufacturing Index for May…prior 17 4:30 PM ET API Weekly Inventory Data Earnings Calendar: Earnings Before the Open: $AZO, $CBRL, $CTRN, $DY, $IMBI, $VSAT Earnings After the Close: $A, $CSWC, $DV, $INTU, $JWN, $RAMP, $RRGB, $SKY, $TOL, $URBN, $ZS Other Key Events: Goldman Sachs TechNet Conference Asia Pacific 2021 (virtual), 5/24-5/28 JPMorgan Global technology, Media & Communications Conference (virtual), 5/24-5/26 UBS Global Healthcare Conference (virtual), 5/24-5/26 Jefferies IT Services Summit (virtual), 5/25 Microsoft Build Conference (virtual), 5/25-5/27 New Relic Future Stack Conference (virtual), 5/25-5/27 Truist Securities 22nd Annual Financial Services Conference (virtual), 5/25-5/26 UBS Global Oil & Gas Conference (virtual), 5/25-5/27 Wolfe Research Transport & Industrials Conference (virtual), 5/25-5/27 Macro Up/Down Last Nymex -0.43 65.62 Brent -0.30 68.16 Gold 1.15 1,882.20 EUR/USD 0.0041 1.2257 JPY/USD 0.16 108.91 10-Year Note -0.015 1.593% Sector News Breakdown Consumer Alaska Air ($ALK) sees Q2 total rev % change versus 2019 down about 32%-37%; plan to return to 100% of 2019 capacity by summer of 2022; sees Q2 passenger load factor about 70% to 75%; after summer of 2022 expect to return to growth rates that are similar to pre-pandemic levels America’s Car-Mart ($CRMT) Q4 EPS $6.19 vs. est. $2.80; Q4 revs $279.1M vs. est. $220.6M Azek ($AZEK) files to sell 15M shares of common stock Bally’s Corporation ($BALY) announced that it has entered the mobile sports betting market with the beta launch of its mobile sportsbook, Bally Bet, in Colorado Shake Shack ($SHAK) upgraded to Outperform from Neutral at Wedbush Lordstown Motors ($RIDE) slides 14%; reports Q1 operating loss $106.2M; said timeline to start of production in late-September 2021, which will be at limited capacity, remains on track; Q1 net loss of $125M, capex of $53M and cash of $587M on March 31, 2021; said expected year-end 2021 liquidity of between $50M-$75M in cash and cash equivalents (on March 17th, had said expects to end 2021 with $200M of cash on hand) Energy A quadrupling in the cost of polysilicon has pushed solar module prices up 18% YTD after plunging 90% over the previous decade, a reversal that threatens to delay projects and slow the uptake of solar power ($TAN) just as major governments increasingly support it in an effort to slow climate change, Bloomberg reports. PNM Resources Inc ($PNC): 2 additional parties filed motions to join merger stipulation before New Mexico public regulation commission; M-S-R Power and Los Alamos County request hearing examiner allow parties to join other 11 signatories supporting agreement Beam Global ($BEAM) 1Q EPS ($0.14) vs. est. ($0.17) on revs $1.372Mm vs. est. $1.8Mm Financials KE Holdings (BEKE) slips after Reuters reports China’s market regulator has begun an investigation into suspected anti-competitive practices by BEKE, which is backed by Chinese tec h behemoth Tencent Holdings (TCEHY) https://reut.rs/3yzY86B Coinbase (COIN) initiated with an Overweight and $371 tgt at JPMorgan as sees Coinbase occupying a key position in the U.S. market for transacting cryptocurrencies Ocwen Financial Corporation (OCN) said its wholly-owned subsidiary, PHH Mortgage Corporation, has entered into an agreement with AmeriHome Mortgage Company, LLC to purchase, in bulk, mortgage servicing rights with a total unpaid principal balance of approximately $48 billion Healthcare Canopy Growth ($CGC) upgraded to Buy from Hold at MKM Partners ahead of earnings as believes that after Q4 and through the reopening of Canadian economy, co will return to sequential growth and have better aligned its supply chain to capture demand opportunities eHealth ($EHTH) said in a regulatory filing that Derek Yung will resign as CFO and principal financial officer, effective June 11, to pursue an executive position at a company that is not a competitor of eHealth. Exelixis, Inc. ($EXEL) announced results from the metastatic castration-resistant prostate cancer ($CRPC) cohort 6 of COSMIC-021, the phase 1b trial of cabozantinib (CABOMETYX(R)) in combination with atezolizumab in patients with locally advanced or metastatic solid tumors iRhythm Technologies ($IRTC) received FDA’s 510K clearances for a new design of its flagship Zio monitor and its updated artificial intelligence (AI) capabilities The Joint Corp. ($JYNT) will replace Cubic Corp. ($CUB) in the S&P SmallCap 600 effective prior to the opening of trading on Thursday, May 27. Veritas Capital is acquiring Cubic in a deal expected to be completed soon pending final closing condition Petco ($WOOF) announces offering of 22M shares of Class A common stock for holders Oak Street Health Inc ($OSH) files for offering of up to 10.0M shares of common stock Scholar Rock’s ($SRRK) said its spinal muscular atrophy candidate apitegromab receives FDA Fast Track designation Industrials & Materials Aircraft leasing firm SMBC Aviation Capital has agreed to buy an additional 14 Boeing ($BA) 737 MAX aircraft with a low-cost carrier configuration, with deliveries due to begin later this year, it said on Tuesday. Carpenter Technology Corporation ($CRS) said it will increase base prices by 6% to 9% on new, non-contract orders across all specialty alloy products. Dycom ($DY) Q1 adj EPS loss (4c) vs. est. 6c; Q1 revs $727.5M vs. est. $752.1M; ended the quarter with cash and equivalents of $330.6M; sees Q2 revenue in-line to modestly lower, which is below est. $843.25M Air Transport Services Group, Inc. ($ATSG) announced that its leasing subsidiary Cargo Aircraft Management has committed to provide four additional Boeing 767-300 converted freighters to DHL Network Operations (USA), Inc. under the terms of stand-alone dry lease agreements Hydrofarm Holdings Group, Inc. ($HYFM) announced it has entered into an agreement to acquire House & Garden, Inc., Humboldt Wholesale, Inc., Allied Imports & Logistics, Inc., and South Coast Horticultural Supply, Inc. Nordson ($NSDN) Q2 EPS $2.12 vs. est. $1.64; Q2 sales $590M vs. est. $548M; sees FY EPS $7.20-$7.50 vs. est. $6.65 and sales up about 8%-10% GrafTech ($EAF) files to sell 20M shares of common stock for holders Rexford Industrial ($REXR) 9M share Spot Secondary priced at $55.60 Technology, Media & Telecom TrueCar ($TRUE) board increased maximum value of shares of stock that may be repurchased under its previously-announced share repurchase program to $150 mln Globant ($GLOB) announces offering of 1M common shares
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Globant is a digitally native company that helps organizations reinvent themselves to create a way forward and unleash their potential. It's the place where innovation, design and engineering meet scale.
CEO: Martin Migoya
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