Month: February 2016

Wall St cues: Super Bowl is market share play for Coke & Pepsi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Coca-Cola Co, PepsiCo and other consumer-facing companies spending big bucks to advertise during Sunday’s Super Bowl football extravaganza will be making a play for more market share to offset a slow economy and less overseas revenue.

In the year since the last Super Bowl, shares of companies selling everyday consumer products like food and cleaning supplies have outperformed most other sectors, partly because they are seen as relatively safe bets in world of growing macroeconomic worries.

But even that sector is vulnerable. Coca-Cola and PepsiCo are set to report December-quarter results on Tuesday and Thursday, respectively. Wall Street expects lower revenue and net income than a year ago for both, according to Thomson Reuters data.

They and other US multinationals, including Super Bowl advertisers Anheuser-Busch InBev and Colgate-Palmolive, have been clipped by a strong dollar that is cutting into revenues in Latin America and Asia. They also face lackluster demand in the United States, where money saved from low gasoline prices has failed to fuel a long-awaited lift in spending at stores.

Tepid economic growth has pushed companies to spend more on marketing in a bid to steal rivals’ customers. That increase is reflected in pricing for Super Bowl ads, up 76 percent over the past decade, according to market research firm Kantar Media.

More than 100 million viewers in the United States and millions more around the world are expected to view Sunday’s Super Bowl in Santa Clara, California.

Many familiar consumer brands are also struggling with the trend toward healthier foods and reduced loyalty to decades-old brands.

“Smaller niche brands are popular, they’re cooler among the millennials and the incumbents are challenged,” said Bernstein analyst Ali Dibadj. Larger brands “have to get the consumer to think the brand is worth something and that’s why, in our opinion, they have to advertise more.”

Coca-Cola and Pepsi are expanding their lineups of healthier drinks and snacks to appeal to changing tastes, while Anheuser-Busch is playing defense to growing numbers of small, local breweries catering to a thirst for premium, craft beers.

Exencial Wealth Advisors is waiting to see how successful Coca-Cola and PepsiCo are at rebalancing their businesses before investing in them, said David Yepez, an investment analyst at the firm, which oversees USD 1.4 billion.

The S&P consumer staples sector is expected to see first-quarter earnings fall 0.7 percent, pulled down by a 12.5-percent drop at Wal-Mart Stores, according to Thomson Reuters I/B/E/S. That compares to a 3.6 percent drop, on average, in earnings for S&P 500 companies.

Boston Beer Co, which sells Sam Adams and beer brands from regional breweries, is Morningstar analyst Adam Fleck’s top stock pick. It trades around 23 times expected earnings, compared to 25 for Anheuser-Busch InBev, according to Thomson Reuters data. The company reports results Feb. 18.

“While SAM’s long-term growth rate will inevitably decline, the company should grow its top line faster than the typical beverage company and also has quite a bit of room to increase its profitability over time,” Fleck said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why traders are betting on a big bounce for metals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The metals are getting more precious.

Gold and silver hit multimonth highs Thursday, as industrial metal copper rose to the highest level since the beginning of the year. This as the dollar continued to lose value against other major currencies.

Notably, it is a move that is strongly counter to the trend seen over the past few years, whereby metals prices have fallen mightily as the dollar has soared.

“We’re seeing a massive short-covering rally right now, that’s all it is,” commented David Seaburg, head of equity sales trading at Cowen and Co., in a Thursday “Trading Nation” interview.

Read More: The surprising new case for gold

“You’re going to have an opportunity here, maybe for the next month or two, to make some money here near term on the upside” for metals, and to the downside for the dollar.

Still, Seaburg warned that given the macroeconomic environment, “it is a structural short still; you lay them back out, they’re going to go a lot lower.”

However, Larry McDonald of Societe Generale sees the same trade as potentially having more room to run.

It is because the market is starting to price in less tightening from the Federal Reserve that “you’re seeing a major reversal in gold miners and commodities,” McDonald said Thursday on “Trading Nation.” This because the dollar’s rise has largely been driven by expectations the Fed would raise rates even as other central banks’ policies were still in stimulus mode.

“We’re probably in the mid-to-early innings of this game right now,” the macro strategist said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Negative rates in US? Here’s why it could happen

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Less than two months after the Fed enacted its first rate hike in more than nine years, market talk already has turned to whether the central bank’s future may not be more hikes, but rather negative rates.

Intensifying recession fears, volatile financial markets and moves toward negative rates by other central banks have triggered speculation over whether the Fed may have to reverse course on its tightening policy.

Negative rates in the US would be a highly unusual move. However, several high-ranking Fed officials, including Chair Janet Yellen, Vice Chair Stanley Fischer and New York Fed President Bill Dudley all have indicated the move would be something they would have to examine should financial conditions tighten and threats to economic growth increase.

Read More: Gross: ‘Shades of 2007’ as central banks flunk

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia markets fall; Nikkei down 1%, ASX down 0.5%, Kospi flat

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Asian markets came under pressure on Friday with major indexes trading down, despite a positive finish on Wall Street overnight.

Down Under, Australia’s ASX 200 was down 0.52 percent, weighed by losses in the energy and financial sectors, down 1.37 and 0.71 percent respectively.

In Japan, the Nikkei extended losses, appearing set for a five-day losing streak, with the index falling 1.03 percent on the back of a stronger yen. The dollar-yen pair fell to the 116-level, trading at 116.85 after market open; earlier this week, the pair was trading above 120.

Evan Lucas, market strategist at spreadbetter IG, said in a morning note, “[The BOJ’s] negative rates have done nothing to slow the appreciation of the Japanese yen since last week. (BOJ Governor Haruhiko) Kuroda and Co.’s attempts to drive export competitiveness and more investment diversification from Japan in the current environment is a tough ask.”

Japanese exporters were mostly down, with Toyota, Nissan and Honda seeing early losses between 2.30 and 3.83 percent.

Across the Korean Strait, the Kospi initially opened down 0.28 percent before retracing losses to trade flat.

Mining stocks in Australia were mostly in positive territory, with Rio Tinto and BHP Billiton gaining 2.06 and 2.39 percent, respectively, boosted by upticks in commodity prices this week.

Shares of Nikon surged 7.47 percent after reports said the company reported a 28 percent increase in its net profit for April-December period.

Toshiba shares fell 5.64 percent as the company projected a bigger-than-expected loss in the middle of mounting restructuring costs, following a USD 1.3 billion account scandal last year.

In Korea, Kakao shares were down 1.19 percent after the technology company reported a net profit of 10 billion won (USD 8.4 million) in the fourth quarter.

With earnings season under way in the region, companies that are set to announce their results today include Nippon Telegraph, Toyota and Sumitomo.

Oil prices remained volatile overnight, after see-sawing between declines and gains of 5 to 8 percent this week. US crude futures were down 56 cents, or 1.7 percent, at USD 31.71 a barrel in the US session, while globally traded Brent slipped 58 cents, or 1.6 percent, to USD 34.46.

Energy plays were mixed, with Australia’s Santos down 1.27 percent and Woodside Petroleum falling 0.77 percent. In Japan, Inpex traded up 2.47 percent, while South Korea’s S-Oil gained 0.72 percent.

Also on investors’ radar is the recent move on the dollar index (DXY), where the dollar is weighted against a basket of currencies.

“The US dollar basket has lost 3.2 percent since the close on Friday and 2.3 percent in two days, with Wednesday being the worst single day in DXY in seven years,” said Lucas.

He added, “The 36 percent increase in the U.S. dollar in 12 months is clearly putting a strain on US economic growth; US competitiveness has been squeezed and the Fed is isolated as the only central bank to be ‘normalizing’ monetary policy.”

Loretta Mester, president of the Cleveland Federal Reserve, said overnight that volatility in financial markets as well as deflationary pressures from the plunge in energy prices shouldn’t keep the US central bank from raising rates. Mester is a voting member of the Federal Open Market Committee’s policy panel.

Major indexes on Wall Street closed up, with the Dow Jones industrial average gaining 79.92 points, or 0.49 percent, to 16,416.5. TheS&P 500 was up 2.92 points, or 0.15 percent, at 1,915.45, while the Nasdaq composite was higher by 5.32 points, or 0.12 percent, at 4,509.56.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sharp to accept Foxconn’s over $5.9 bn offer: Sources

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Federal Reserve will only hike 3 times this year: Goldman

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks mostly higher, Hang Seng up 1.8%, Shanghai up 1%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Most Asian markets traded up on Thursday, following a mostly higher finish on Wall Street overnight.

Australia’s ASX 200 traded higher by 1.61 percent, with the energy sector retracing losses from Wednesday’s session, up by 4.35 percent.

Japan’s Nikkei 225 extended losses to trade 0.16 percent lower, but off early lows. Across the Korean Strait, the Kospi was up 0.94 percent.

Chinese markets opened the session in positive territory, with Hong Kong’s Hang Seng index gaining 1.79 percent. The Shanghai composite was up 1.03 percent, while the smaller Shenzhen composite gained 1.30 percent.

Chris Weston, chief market strategist at spreadbetter IG, wrote in a morning note that Asian equities excluding Japan will likely be supported today with follow-through buying. For the Nikkei, Weston said it would likely be sold on the strength of the Japanese yen.

The dollar slipped 1.65 percent overnight against a basket of currencies as weak US economic data suggested a March interest rate hike from the data-dependent Federal Reserve was unlikely. The ISM non-manufacturing index’s January reading came in at 53.5, below the expected 55.1 and the lowest reading since December 2013.

Weston said, though, that dollar had been “taken to the cleaners” even before the release of US data.

“The selling in the USD has been ferocious. It’s been one way and whether it was driven by oil selling, liquidity, a full re-pricing of U.S. rate hikes, or some more mysterious theme, the USD selling has resonated in markets,” he said.

Australian resources stocks were also trading mostly positive, with Rio Tinto and BHP Billiton gaining 6.51 and 6.38 percent respectively.

Toshiba shares retraced some early losses of as much as 5.59 percent to trade down 1.50 percent. The company said it is looking into whether to deepen its full-year loss forecast. The company is set to report its earnings later in the day. Japanese news media Kyodo News and the Nikkei reported that the company will downgrade its net loss projection to over 600 billion yen (USD 5.1 billion), from the current forecast of 550 billion yen in losses, for the year ending March 31.

The dollar-yen pair traded 0.14 percent higher at 118.06. Japanese export stocks were mixed with shares of Toyota down 1.51 percent, while Sharp was up 2.19 percent. A stronger yen is usually a negative for exporters as it trims their overseas revenue when converted back to local currency.

Oil prices continued their upward trend from overnight during Asian hours with US crude futures rising 1.21 percent to USD 32.67 a barrel, following an 8 percent increase during US hours. Global benchmark Brent was up 1.06 percent at USD 35.41 a barrel after gaining 7.1 percent overnight.

Most energy plays across the board saw rebounds, with shares of Santos up 10.11 percent, Oil Search up 5.56 percent, Hong Kong-listed CNOOC gaining 5.93 percent and Inpex, which is set to report earnings today, gaining 1.69 percent.

But oversupply remains and with no signs of imminent production cuts from OPEC, Weston said volatility in crude could easily see prices gaining or declining by 5-10 percent in the Asian session on Thursday.

Major indexes in the US finished mixed, with the Dow Jones industrial average gaining 183.12 points, or 1.13 percent, to 16,336.6. The S&P 500 was up 9.5 points, or 0.5 percent, at 1,912.53, while the Nasdaq composite slipped 12.71 points, or 0.28 percent, to 4,504.24.

On the earnings front, major brands across the region are expected to release data, including Sharp, Tata Steel, and Singapore Airlines.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

BOJ’s Haruhiko Kuroda says can ease more, devise new tools

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Bank of Japan Governor Haruhiko Kuroda said on Wednesday the central bank can expand asset purchases further or cut interest rates deeper into negative territory if needed to hit its 2 percent inflationtarget.

“If we judge that existing measures in the toolkit are not enough to achieve (our) goal, what we have to do is to devise new tools,” Kuroda said in a speech at a seminar.

“I am convinced that there is not limit to measures for monetary easing,” he said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China services activity climbs to 6-month high in January

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Asia stocks follow US in sharp sell-off

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Asian stocks traded sharply lower on Wednesday, after Wall Street sold off as much as 2 percent overnight amid a plunge in oil prices.

Japan’s Nikkei 225 dropped 3.66 percent, while the Topix fell 3.46 percent. Across the Korean Strait, the Kospi slumped 1.11 percent in morning trade.

Australia’s ASX 200 traded down 1.91 percent, with all sectors in the red. The energy sector was down 3.30 percent, while financials and materials saw losses of 1.91 and 2.78 percent, respectively.

Chinese markets opened firmly down, with the Shanghai composite lower by 1.09 percent and the smaller Shenzhen composite falling 1.11 percent. Hong Kong’s Hang Seng index declined 3.32 percent, while Taiwan’s Taiex was down 0.89 percent.

Santos drops 7 percent as oil declines further

Two consecutive sessions of declines in overnight oil prices have erased most of last week’s four-day gain, and was partly responsible for the drop in equities.

During Asian trade, West Texas Intermediate (WTI) futures fell 1.47 percent to $29.44 a barrel, after dropping 5.5 percent in US trading hours. Global benchmark Brent futures for April delivery slipped 1.25 percent to USD 32.31, following a 5.23 percent decline overnight.

Evan Lucas, market strategist at spreadbetter IG, said in a morning note that the “supply side will continue to cause price spikes on ‘possible coordination’ [between OPEC and Russia] rather than actual action. Remember – talk is cheap.”

Oil got a boost last week on comments from Russia that OPEC’s largest producer, Saudi Arabia, was considering a 5 percent production cut.

Energy plays were broadly negative across the board. In Australia, Santos lost 7.19 percent, Oil Search was down 2.04 percent and Woodside Petroleum shed 4.04 percent.

Japan’s Inpex fell 2.79 percent and Japan Petroleum declined 4.57 percent while South Korea’s S-Oil was down 2.26 percent.

NAB, one of Australia’s so-called Big Four banks, was one of the biggest losers on the ASX, down 5.55 percent, after reports the bank had set a final offer price for its Clydesdale and Yorkshire Banks initial public offering in the United Kingdom at 100 pence (USD 1.44) a share.

Most mining stocks were down, with BHP Billiton losing as much as 4.56 percent.

The Aussie dollar-US dollar pair slipped 0.41 percent, trading at 0.7010.

Japanese exporters were mostly down, with major names such as Toyota, Nissan and Honda losing between 4.93 and 5.9 percent. The dollar-yen pair traded 0.13 percent down at 119.78; a stronger yen is a negative for export stocks as it reduces overseas revenue when converted to local currency.

Shares of Nintendo, however, was up by 0.38 percent; earlier, the stock gains more than 1 percent. The storied video game-maker released its third fiscal quarter earnings after market close on Tuesday, revealing a 36 percent on-year fall in net profit to 29.1 billion yen (USD 241.3 million), down from 45.2 billion, after a lack of high-profile game titles hit sales.

Nomura shares tumble 12 percent

Nomura shares tumbled 12.40 percent after reports said the company’s net profit for the October-December quarter fell 49 percent on-year to 35.4 billion yen.

In South Korea, blue chip stocks were mostly down, with Samsung Electronics losing 1.04 percent and Posco down by 1.42 percent. Kepco, on the other hand, saw gains of 0.19 percent.

Investors will watch for stimulus expected to be unveiled by the South Korean government on Wednesday, as cooling inflation and falling export numbers threaten growth. South Korea’s January inflation was up by only 0.8 percent on-year, slightly lower than market expectations. In December, by comparison, the consumer price index rose 1.3 percent.

Over on Wall Street

On Wall Street, the Dow Jones industrial average closed down 295.64 points, or 1.80 percent, at 16,153.54, while the S&P 500 was down 36.35 points, or 1.87 percent, at 1,903.03. The Nasdaq composite slipped 103.42 points, or 2.24 percent, to 4,516.95.

In China, the Caixin January services purchasing managers’ index (PMI) is due.

It’s also the middle of Asia’s earnings season, with a number of notable companies releasing their figures later in the day, including Panasonic, Denso, Hitachi, Lenovo and South Korea’s Shinhan Financial Group.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow