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    • Breaking News
    Sep 18, 2024
    • The Federal Reserve lowered its key lending rate by 50 basis points, responding to the softening labor market and weakening inflation. 

      The rate-setting committee lowered the fed funds rate range to between 4.75% and 5.0%. 

      The committee also estimated that an additional 50 basis points are likely over the next two meetings before the end of the year, indicating that policymakers believe inflation has been tamed.

      “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent and judges that the risks to achieving its employment and inflation goals are roughly in balance,” noted the statement released by the Federal Open Market Committee. 

      The Federal Reserve lowered rates for the first time since March 2020 after holding rates at an elevated level for more than a year. 

       
      • Sep 17, 2024
      • Retail and food services sales increased 0.1% from the previous month in August as consumers showed resilience despite growing anxieties about the economic slowdown. 

        The sales data adjusted for seasonal and calendar effects but not for inflation. 

        The monthly growth slowed sharply from the revised 1.1% increase in the previous month. 

        On an annual basis, retail sales growth eased to 2.1%, a slowdown in growth for the third month in a row, the U.S. Commerce Department reported Tuesday.

        Retail trade sales were up 0.1% from July and up 2.0% from last year, and nonstore retail sales were up 7.8%, while sales at food services and drinking places were up 2.7%, respectively. 

        Sales at gasoline stores decreased 1.2% following the fall in gasoline prices, and electronics and appliance store sales eased 0.7%. 

        Meanwhile, retail sales excluding food services, auto dealers, building materials stores, and gas stations, which are used to calculate GDP, were up 0.3%, following an upwardly revised 0.4% rise in July.

        The Fed's lowering of inflation will only stoke inflationary forces in the months ahead, sending another ripple of higher prices.

         
        • Sep 11, 2024
        • Consumer price inflation in August slipped for the fifth month in a row to 2.5%, largely because of the weakness in energy prices, the Bureau of Labor Statistics reported Wednesday. 

          Energy costs declined 4% compared to a rise of 1% in the previous month, overshadowed by the increase in housing inflation to 5.2% from 5.1% in July. 

          On a monthly basis, inflation held steady at 0.2%, matching the rate in the previous month, driven by a 0.5% rise in shelter costs. 

          Core inflation, which excludes volatile food and energy prices, steadied at a three-year low of 3.2%, indicating slow progress in weakening well-anchored inflation. 

          After the inflation report, investors still held out for at least a 25 basis points rate cut next week. 

          Despite the widely anticipated rate cut, inflation is well-anchored in the economy, and rates are far from restrictive, as the U.S. economy is still adding jobs above the long-term average and GDP is expanding at a faster rate than 2%. 

          Moreover, an interest rate cut is not likely to alter the long-term structural issues with the economy, international trade competitiveness, widening inequality, and entrenched poverty. 

           
          • Aug 29, 2024
          • Semiconductor-related stocks were under pressure after Nvidia's current quarter sales outlook fell short of some analysts high expectations. 

            Nvidia, the leading artificial intelligence technology player, and dramatic transformation of the company have attracted worldwide attention, catapulting the company's valuation above one trillion only a few months ago. 

            The company's results are now viewed as a proxy for artificial intelligence spending by tech companies and provide critical support for the tech stock rally in 2024. 

            Nvidia said revenue in the fiscal second quarter ending in July soared 122% to $30 billion, net income advanced 168% to $16.6 billion from $6.2 billion, and earnings per share rose to 67 cents from 25 cents a year ago. 

            The company guided revenue in the current quarter of $32.5 billion, which fell short of some investors lofty expectations. 
            • Aug 15, 2024
            • Cisco Systems jumped 7.9% to $49.03, and the networking equipment maker reported better-than-expected fiscal fourth quarter results. 

              Revenue declined 10% to $13.6 billion from $15.2 billion, net income plunged 45% to $2.2 billion from $4.0 billion, and diluted earnings per share dropped to 54 cents from 97 cents a year ago. 

              For the full-year fiscal 2024, revenue dropped 6% to $53.8 billion from $57.0 billion, net income plunged 18% to $10.3 billion from $12.6 billion, and diluted earnings per share decreased to $2.54 from $3.07 a year ago. 

              Cisco declared a quarterly dividend of 40 cents per share payable on October 23 to shareholders on record on October 2. 

              The company guided fiscal 2025 first quarter revenue to fall between $13.65 billion and $13.85 billion and earnings per share between 35 cents and 42 cents. 

              The company also announced its plans to cut 7% of its global workforce. 
              • Walmart Inc. soared 8.8% to $74.70, and the discount retailer reported better-than-expected revenue and earnings in its latest quarter. The company lifted its annual estimate on the back of the strength in its first-half results. 

                Consolidated revenue in the second quarter increased 4.8% to $169.3 billion from $161.6 billion, net income plunged to $4.7 billion from $8.1 billion, and diluted earnings per share dropped to 56 cents from 97 cents a year ago. 

                Walmart U.S. sales increased by 4.1% to $115.3 billion from $110.9 billion, driven by comparable sales excluding fuel sales at stores rising by 4.2%, the number of transactions increasing by 3.6%, and the average ticket size advancing by 0.6%. 

                The retailer guided fiscal third-quarter sales of $159.4 billion, operating income of $6.2 billion, and adjusted earnings per share of 51 cents. 

                The retailer issued a cautious outlook for the second half, citing geopolitical tensions and upcoming U.S. elections, that could impact consumer sentiment. 
                • Retail and food services sales, adjusted for calendar and seasonal factors but not for inflation, increased from the previous month to 1.1% in July, the Bureau of Economic Analysis reported Thursday. 

                  Retail sales are closely watched to gauge the level and direction of consumer spending, which dictates about two-thirds of the gross domestic product. 

                  Retail and food services sales rose 2.7% from last year. 

                  Retail trade sales were up 1.1% from June and 2.6% from last year. 

                  Nonstore retailers were up 6.7% from last year, while food services and drinking places were up 3.4% from July 2023.

                  Retail and food services sales rose the most since January 2023, with sales at motor vehicles and parts dealers rising the most by 3.6%. 
                  • Aug 14, 2024
                  • Brinker International decreased 13.4% to $60.97, and the parent company of Chili's restaurant chain reported weaker-than-expected fiscal fourth quarter earnings. The company's annual guidance fell short of market expectations. 

                    Revenue in the quarter ending on June 26 increased to $1.2 billion from $1.1 billion, net income edged up to $57.3 million from $54.2 million, and diluted earnings per share expanded to $1.24 from $1.19 a year ago. 

                    Comparable restaurant sales increased by 13.5%, driven by a 14.8% increase at Chili's and a 2.5% increase at Maggiano's restaurant chains. 
                    • Kellanova surged 7.8% to $80.35 after the snack maker agreed to be acquired by Mars for $83.50 per share in cash, or a total consideration of $35.9 billion, including debt. 

                      The purchase price represents a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price and a premium of approximately 33% to Kellanova’s unaffected 52-week high as of August 2, 2024. 

                      The total consideration represents an acquisition multiple of 16.4 of adjusted operating earnings as of June 29.
                      • Consumer price inflation eased to 2.9% in July from 3.0% in June, and the measure of price increase dropped to the lowest level since March 2021, the Bureau of Labor Statistics reported Wednesday. 

                        Core inflation, which excludes food and energy prices, slowed for the fourth month in a row to 3.2%. 

                        On a monthly basis, CPI increased by 0.2%, and core inflation increased by 0.2% from 0.1% in the previous month. 

                        A softer inflation report followed the softer producer price inflation report on Tuesday, raising hopes that the Federal Reserve is more likely to lower rates after the September policy meeting. 

                        Investors are looking forward to the release of retail sales data on Thursday. 

                        Despite the cooling of inflation, prices are still rising from a higher base, and the price of homes, automobiles, food, consumer services, and energy products is still higher by between 50% and 100% from the pre-pandemic levels in 2019. 

                        Most consumers are still feeling stretched because wage gains have lagged inflation significantly over the last five years. 

                        The Federal Reserve's premature rate reduction will only fan inflationary forces and revive price increases at a faster pace in the fourth quarter and beyond, which could stoke another round of the inflation cycle.