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Intel Stock Slips as CFO Warns of Excess Data Center Chip Inventories
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Tag: Consumer Goods
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NIO, Moderna, Block, U.S. Steel, and More Stock Market Movers
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https://www.barrons.com/articles/stock-market-movers-8c0c7b23
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A 1-liter stein of beer at Munich’s famed Oktoberfest will cost nearly $15 this year
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When merry revelers from around the world lift their beer steins to mark the start of Oktoberfest in the Bavarian capital Munich, they might want to sip slowly, given they will now be paying €13.75 ($14.67) per liter.
That’s based on an analysis from a team at Berenberg, who provided this chart showing the soaring cost of beer at the Munich Oktoberfest compared with other consumer and food inflation measures:
The globally famed festival is due to kick off this Saturday. And while the cost keeps rising, the celebratory large glass of Bavarian beer —- served in a stoneware mug known as a Maß, or stein — often doesn’t seem to reach the required 1-liter mark once the foam has settled, notes Holger Schmieding, chief economist, who led the report.
“Do not even try to compare the price per liter to the cheap beer cans available at the discount retailers nearby. The difference might make some crave a stiffer drink to drown the financial pain,” he and his team said.
Citing data from German price statistics dating back to 1991, Berenberg’s economists said the price of an Oktoberfest beer has soared at an annual average rate of 3.9%, well above the annual 2% rise in inflation and the 1.8% rise paid for beer sold by retailers.
However, more recently the pain may have eased some. Schmieding said the price of that beer rise versus 2022 is just 4.2%, which is below the average food price rise of 9%. And German wages rose 6.6% on an annual basis in the second quarter of this year, meaning some might this year find those steins slightly little more affordable, once they get past the sticker shock.
The country has felt the fallout from Russia’s invasion of Ukraine and soaring energy and food prices, which propelled inflation to a postwar high of 7.9% in 2022. Wage earners are currently recouping some of lost purchasing power, but Schmieding and his team warn this won’t last.
“In a lagged response to lower headline inflation and the modest rise in unemployment that we project for the next two quarters, German wage gains will likely slow down to 4% yoy by the time of the next Oktoberfest in September
2024, and the less volatile rise in beer prices at the party will likely outpace inflation and wages again,” they wrote.The European Commission recently forecast that Germany, the bloc’s biggest economy, will be the only major one to see growth contract this year, with a forecast for gross domestic product to fall 0.4% in 2023. Weak industrial output has been a major factor in sluggish growth. Inflation for the EU bloc is expected to fall to 2.9% next year, slightly under the 2.8% previously forecast.
The European Central Bank on Thursday hiked its deposit rate by 25 basis points to an all-time high of 4% as it battles inflation for the region which it expects will average 5.6% this year, well above its 2% target.
Schmieding and the team say Germany, however, does not deserve the “sick man of Europe” title, which it last held in the 1990s, that some have slapped on it.
The country is, though, “nursing a collective hangover” after celebrating its “golden decade” between the global financial crisis and the pandemic onset too hard, with early retirement plans, expanded welfare benefits and too much dependence on Russian energy, they say.
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Arm Sets IPO Price at $51 a Share. The Stock Is Set to Open Higher.
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Arm is set to start trading today on the Nasdaq under the symbol ARM.
Chris Ratcliffe/Bloomberg
Arm Holdings
priced its initial public offering at $51 a share. That’s at the top of the expected range of $47 to $51, giving the chip design company a valuation of $54.5 billion on a f…[ad_2]
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Arm prices IPO at high end of range, raising $4.87 billion
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Arm Holding Ltd. priced its initial public offering at the high end of its expected range late Wednesday following intense interest.
The British chip-design company priced shares at $51, raising $4.87 billion, following earlier reports that Arm would be pricing its IPO at $52 a share. A source close to the deal confirmed to MarketWatch that $52 had been the expected price, but that it was reduced to $51. That puts the chip designer at just over a $52 billion valuation. Recently, Arm had stated a targeted range of $47 to $51.
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5 things to know about the new COVID-19 vaccine
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It may be time to get your COVID-19 vaccine again.
There’s a new booster that’s coming out to guard against the virus. The Centers for Disease Control and Prevention said Tuesday that it was recommending the vaccine, which is being produced in versions by Moderna
MRNA,
+3.18%
and Pfizer
PFE,
-0.20%
-BioNTech
BNTX,
-2.06% ,
for people 6 months of age and older.Here are answers to some common questions about the shot — and what you may need to know before you receive it.
Why are we seeing another booster?
Boosters are all about maintaining protection against the virus as new COVID-19 variants emerge. The CDC said: “The updated vaccines should work well against currently circulating variants of COVID-19, including BA.2.86, and continue to be the best way to protect yourself against severe disease.” The CDC also noted that “protection from COVID-19 vaccines and infection decline over time. An updated COVID-19 vaccine provides enhanced protection against the variants currently responsible for most hospitalizations in the United States.”
So, everyone who is 6 months or older should receive it?
That’s the CDC’s recommendation, but not everyone sees this booster as a firm requirement, depending on various medical and other factors.
Dr. Paul A. Offit, a pediatrician with the Children’s Hospital of Philadelphia who specializes in infectious diseases, told MarketWatch that the new vaccine is a must for some who are at higher risk for developing serious illness, such as people who are over 75, people who have certain health problems (including diabetes, obesity or chronic lung or heart disease) and people who are immune compromised.
And what about the others? Offit said it can be a case of “low risk, low reward.” Meaning there’s little harm in getting the booster and it may buy “a few months protection against mild disease,” Offit said. But he stops short of saying the booster is an absolute necessity for such people.
Still, CDC director Dr. Mandy K. Cohen counters such an argument. In a column for the New York Times, Cohen noted that all the members of her family, including her 9- and 11-year-old daughters, would be getting the booster. “Some viruses…change over time. This coronavirus is one of them. It finds ways to evade our immune systems by constantly evolving. That’s why our vaccines need to be updated to match the changed virus,” Cohen explained.
What if you recently had COVID? Or have just gotten the previous COVID booster?
Offit said you should wait at least two months — and possibly as long as four months — before receiving the new vaccine.
The CDC said, “You should get a COVID-19 vaccine even if you already had COVID-19,” adding “you may consider delaying your next vaccine by 3 months from when your [COVID] symptoms started or, if you had no symptoms, when you received a positive test.”
When and where can you get the new booster?
The CDC said the vaccine “will be available by the end of this week at most places you would normally go to get your vaccines.”
How much will it cost?
The new shots are expected to have list prices of $110 to $130, but the CDC said, “Most Americans can still get a COVID-19 vaccine for free.” That is, most health-insurance plans will cover the cost.
As for those without insurance, the CDC said there are still plenty of free options, including programs run by local health centers and health departments as well as pharmacies participating in the CDC’s Bridge Access Program. For more information about where to get the booster, go to Vaccines.gov.
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Howard Schultz steps down from Starbucks board of directors
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Starbucks Corp. on Wednesday said former Chief Executive Howard Schultz is stepping down from its board of directors, capping a nearly 40-year career during which the company grew from a handful of stores in Seattle into a global coffee chain.
Schultz’s retirement from the board, which ends his involvement in the company’s leadership, took effect Wednesday and was part of a planned transition, the coffee chain said. Schultz stepped down as Starbucks
SBUX,
+0.72%
chief executive in March.The company on Wednesday also said that it had elected Wei Zhang to its board of directors, effective Oct. 1. Zhang was most recently a senior adviser to Chinese e-commerce giant Alibaba Group
BABA,
-0.75%
and also held leadership positions at News Corp China and CNBC China.Shares of Starbucks were down 0.7% after hours on Wednesday.
Starbucks said Schultz “will now turn his attention with his wife, Sheri, to focus on a range of philanthropic and entrepreneurial investments to create greater opportunity, accessible to all.” The company noted that the two were co-founders of the Schultz Family Foundation in 1996, and of the emes project.
Although he was not technically the founder of the coffee chain, Schultz became the modern face of it. Schultz joined Starbucks in 1982 as its director of operations and marketing. After a brief hiatus from the company, he returned in 1987 as chief executive and bought the business with backing from local investors, according to a biography on the Starbucks website. The chain went public in 1992.
As the chain’s footprint expanded beyond the U.S., Schultz stepped down from the CEO role in 2000 but returned in 2008. He retired from Starbucks in 2018, then came back as interim chief executive and board member last year.
Over those years, Starbucks has banked on China for international growth — even as that country’s economy remains turbulent following the postpandemic reopening. It also added food and cold and customizable drinks to its menus and built out its mobile-ordering infrastructure.
The company has branded itself as a progressive employer and a supporter of social justice. But over the past two years, the company, and Schultz in particular, have faced criticism over the handling of employees who were trying to unionize. Union members have accused the chain of unfair labor practices, retaliation for organizing and delaying contract negotiations, leading to deeper scrutiny from lawmakers.
“We hope this is an opportunity for Starbucks to change course and leave their union-busting behind them,” Starbucks Workers United, the union representing those workers, said Wednesday in a tweet.
Still, even as inflation has eaten into consumer savings, Schultz said coffee has remained an “affordable luxury” for many customers. And Starbucks management said that younger, loyal consumers and customizable drinks would help sustain demand.
According to a filing on Wednesday, Schultz will still be connected to the company in other ways. Starbucks said it would amend Schultz’s retirement agreement from 2018 and continue to provide him and his spouse with security services.
“The security services will be provided for a period of 10 years and will be evaluated on an annual basis,” the filing said. “In recognition of Mr. Schultz’s leadership as the company’s founder and chairman emeritus, the company will also provide Mr. Schultz with the reimbursement of his monthly healthcare insurance premiums.”
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CDC recommends updated COVID shots for people 6 months of age and older
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The Centers for Disease Control and Prevention on Tuesday recommended updated COVID-19 vaccines for people 6 months of age and older.
Director Mandy Cohen late Tuesday backed the findings of CDC advisers, who voted 13-to-1 for approval earlier in the day. The updated vaccines from Moderna Inc.
MRNA,
-0.53%
and Pfizer Inc.
PFE,
+0.62%
-BioNTech
BNTX,
-1.97%
should become available later this week.“We have more tools than ever to prevent the worst outcomes from COVID-19,” Cohen said in a statement. “CDC is now recommending updated COVID-19 vaccination for everyone 6 months and older to better protect you and your loved ones.”
The move comes just one day after the U.S. Food and Drug Administration approved the updated shots from Moderna and Pfizer. The FDA approved single-dose vaccines for people 12 and older and authorized emergency use of new shots for children as young as 6 months.
The CDC recommendations Tuesday include some key changes from the recommendations that previously applied to the bivalent COVID vaccines. People age 65 and older were recommended to get a second bivalent dose, for example, but the CDC is not currently recommending two doses of the new shot for older adults. The CDC said it will monitor epidemiology and vaccine effectiveness to determine if additional doses are needed.
The recommendations come as the vaccines are transitioning from federal procurement and distribution to the commercial market. The new shots are expected to have list prices of $110 to $130 per dose. But the Affordable Care Act requires insurers to cover most vaccines recommended by the CDC advisory committee at no cost to plan enrollees, and people with Medicare and Medicaid also have no-cost access to the vaccines.
The CDC meeting Tuesday addressed some concerns about the accessibility and cost of the vaccines for people without health-insurance coverage. The CDC’s new Bridge Access program will provide free shots to uninsured people within days at retail pharmacies as well as local health centers, the CDC said. The agency had previously said that the free shots might not arrive in retail pharmacies until mid-October. The federal government’s vaccines.gov website will be updated later this week to list Bridge Access program sites, the CDC said.
Roughly 25 million to 30 million U.S. adults do not have health insurance. About 85% of people without coverage live within 5 miles of a Bridge Access program site, according to CDC data.
Under the Bridge Access program, CVS Health Corp.
CVS,
+2.57%
will administer doses in stores and Minute Clinics, the CDC said, and Walgreens Boots Alliance Inc.
WBA,
+1.35%
will offer doses in stores and at off-site events that target areas of low access and uptake. Healthcare-services company eTrueNorth is also working with the program to reach lower-access areas without other coverage under the program, the CDC said.[ad_2]
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These 6 Food Stocks Have Gotten Hit Hard. It’s Time to Chow Down.
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https://www.barrons.com/articles/6-beaten-down-food-stocks-buy-c93ad194
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Food stocks are worth a nibble after their worst showing relative to the
S&P 500
in …[ad_2]
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C3.ai, GameStop, UiPath, ChargePoint, Yext, BlackBerry, and More Stock Market Movers
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https://www.barrons.com/articles/stock-market-movers-3fac9192
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Nestle Sells Peanut-Allergy Treatment Business to Stallergenes Greer
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By Adria Calatayud
Nestle said it has sold its Palforzia peanut-allergy treatment business to biopharmaceutical company Stallergenes Greer.
The Swiss consumer-goods company said Monday that it will receive milestone payments and royalties from Stallergenes Greer. The deal was closed upon signing, Nestle said.
The sale allows Nestle’s health-science operations to focus on its core strengths and key growth drivers, the unit’s Chief Executive Greg Behar said.
Nestle last year said that it would conduct a strategic review of Palforzia after a slower-than-expected adoption by patients and healthcare professionals.
Write to Adria Calatayud at adria.calatayud@dowjones.com
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J&J Dividend Decision Shows Power of Free Cash Flow
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https://www.barrons.com/articles/johnson-and-johnson-stock-dividend-aristocrats-aa46e2db
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Johnson & Johnson
plans to maintain its quarterly dividend at $1.19 a share even after separating its
Kenvue
over-the-counter drug and pers…[ad_2]
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Pernod Ricard to Launch EUR800 Mln Buyback After Rise in Profit, Sales — Update
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By Maitane Sardon
Pernod Ricard plans to buy back up to EUR800 million ($874 million) in shares in fiscal 2024 after the company reported an increase in sales and profit for fiscal 2023.
The French drinks group said Thursday that organic sales for the year ended June 30 grew 13% on a reported basis to EUR12.14 billion, while net profit for the year rose to EUR2.28 billion from EUR2.03 billion in fiscal 2022.
Analysts had expected sales of EUR12.16 billion and net profit of EUR2.4 billion, according to a FactSet-compiled poll.
For the fourth quarter, sales rose to EUR2.63 billion from EUR2.30 billion a year earlier.
The company said sales in all regions increased thanks to pricing, with all spirits categories delivering strong growth.
Looking ahead, the company backed its fiscal 2023-25 medium-term financial target, including reaching the upper end of between 4% and 7% of net sales growth and a 50 to 60-basis-point increase in operating margin.
It proposed a dividend of EUR4.70, an increase of 14% compared with fiscal year 2022.
Write to Maitane Sardon at maitane.sardon@wsj.com
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Johnson & Johnson Maintains Dividend After Kenvue Spinout
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Johnson & Johnson
on Wednesday issued new financial guidance after spinning out the consumer-health company
Kenvue
While its earnings and sales projections were lowered on an absolute basis, the company is maintaining its dividend and expects to increase its revenue at a faster pace.[ad_2]
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Heineken is the latest Western corporate giant to exit Russia
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Beer giant Heineken N.V. is the latest Western company to exit Russia, announcing Friday the sale of its Russian operations to Arnest Group for one euro.
Under the terms of the deal, all of Heineken’s
HEIA,
+0.77%
remaining assets, including seven breweries in Russia, will transfer to the new owners, the beer giant said in a statement. The Russian Arnest Group has also taken over responsibility for Heineken’s 1,800 employees in Russia.Heineken began the process of exiting Russia in March 2022, following that country’s invasion of Ukraine. The company said it expects to incur a total cumulative loss of €300 million ($324.1 million) as a result of its exit.
“We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” Heineken CEO Dolf van den Brink said in a statement. “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”
A number of major Western corporations, including U.S. giants Apple Inc.
AAPL,
+1.26% ,
Alphabet Inc.
GOOGL,
+0.08% GOOG,
+0.21% ,
Amazon.com Inc.
AMZN,
+1.08% ,
International Business Machines Corp.
IBM,
+1.25%
and McDonald’s Corp.
MCD,
+0.79% ,
have left Russia in response to Moscow’s February 2022 invasion of Ukraine.Earlier this week, DP Eurasia, the master franchiser of the Domino’s Pizza Inc.
DPZ,
+0.49%
brand in Turkey, Russia, Azerbaijan and Georgia, also announced its exit from Russia.But Heineken is “no hero,” according to Mark Dixon, the founder of the Moral Rating Agency, an organization set up after the invasion of Ukraine to examine whether companies were carrying out their promises of exiting Russia. “It failed to leave Russia for a year and a half,” he told MarketWatch via email. “The explanation that it took longer than expected doesn’t hold water, because of course it’s difficult to find a buyer if you remain so long a pariah state.”
The Ukraine Solidarity Project said that Heineken’s move should increase the pressure on companies that remain in Russia, such as consumer-goods giant Unilever PLC
ULVR,
+0.44% .
“The point here is that major companies, like @Heineken, are and have taken loses of hundreds of millions and billions in leaving the Russian market. It is possible,” the Ukraine Solidarity Project tweeted Friday. “We’re sure @Unilever can do it, too.”Related: WeWork, Carl’s Jr., Unilever and Shell among companies slammed by Yale over operations in Russia
The Ukraine Solidarity Project recently launched a high-profile campaign urging Unilever to get out of Russia, using images of Ukrainian veterans injured in the war with Russia. Last month, activists from the Ukraine Solidarity Project held up a giant poster featuring the veterans outside Unilever’s London headquarters.
The Moral Rating Agency has also reiterated its calls for Unilever to end its Russian operations.
“We have always said we would keep our position in Russia under close review,” a Unilever spokesperson told MarketWatch earlier this month. The spokesperson also directed MarketWatch to a statement on the war in Ukraine that the company released in February 2023.
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Durable-goods orders rise for third month in a row — if Boeing is taken out of the equation
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The numbers: Orders for long-lasting goods rose in July for the third month in a row if recent ups and downs at Boeing are set aside, suggesting the struggling industrial side of the U.S. economy may have stabilized.
Durable-goods orders increased 0.5% in July if transportation — automobiles and planes — are excluded. Boeing
BA,
-3.16%
orders often seesaw in the summer months and distort the true condition of U.S. manufacturing.Headline orders, which include transportation, sank by 5.2% last month, the government said Thursday.
Economists polled by the Wall Street Journal had forecast a 4.1% drop in July following a 4.4% spike in June. The topsy-turvy results in the past two months are almost entirely due to Boeing.
A better measure of the health of U.S. manufacturing, known as core orders, edged up 0.1% in July. That figure omits defense and transportation and is a proxy for broader business investment.
Business investment is running slightly ahead of last year’s pace, but it has weakened considerably, and many manufacturers are treading water.
Key details: Orders for commercial planes soared 71% in June and sank 44% in July, explaining the wildly divergent headline numbers in the past two months.
Orders for new cars rose 0.8% in July.
The transportation segment is a large and volatile category that often exaggerates the ups and downs in manufacturing.
Outside the transportation sector, new orders rose in most major categories.
Business investment has tapered off since last year, however, and companies have become more cautious in the face of rising interest rates, still-high inflation and a shift in consumer spending toward services.
Durable goods are items like planes, cars, appliances and computers. Orders rise in an expanding economy and shrink in a contracting one.
Big picture: Maybe the industrial side of the economy has hit bottom, and maybe it hasn’t. Getting a clear picture might have to wait until interest rates stop rising.
Higher borrowing costs typically stunt the economy and discourage businesses from hiring, spending and investing.
Looking ahead: “Businesses are showing caution amidst the higher rate environment and what it means for demand down the line,” said economist Ali Jaffery at CIBC Economics.
Market reaction: The Dow Jones Industrial Average
DJIA,
+0.28%
and S&P 500
SPX,
+0.24%
were set to open mixed in Thursday trades.[ad_2]
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Foot Locker Slashes Its Outlook and Suspends Dividend. The Stock Sinks.
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Foot Locker
stock plunged on Wednesday as investors kicked around a bevy of bad news. The shoe and sportswear retailer missed expectations for second-quarter sales, slashed its full-year outlook again, and paused its dividend.[ad_2]
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U.S. banks and regional lenders slide across the board as S&P is latest to downgrade ratings
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U.S. banks and regional banks fell across the board on Tuesday, after S&P Global Ratings downgraded five smaller players after a review of risk related to funding, liquidity and asset quality with a focus on office commercial real estate.
Adding to the gloom, Republic First Bancorp. Inc.’s stock
FRBK,
-41.90%
tanked by 39%, after Nasdaq told the company that its stock would be delisted on Wednesday, after it failed to file its annual report in time.S&P’s move comes just days after Fitch Ratings analyst Christopher Wolfe reduced his operating environment score for U.S. banks to aa- from aa due to the unknown path of interest rate hikes and regulatory changes facing the sector.
And Moody’s Investors Service just two weeks ago upset investors when it downgraded some lenders and said it was reviewing ratings on bigger banks, including Bank of New York Mellon
BK,
-1.71% ,
State Street
STT,
-1.59%
and Northern Trust
NTRS,
-1.73% .For more, see: Bank asset quality, weaker profits spark Moody’s reviews and downgrades as it weighs potential 2024 recession
The S&P 500 Financials Sector has fallen for seven consecutive days, and is on pace for its longest losing streak since April 7, 2022, when it also fell for seven straight trading days.
Individual bank names are also performing poorly, with Goldman Sachs Group Inc.
GS,
-0.94%
and Citigroup Inc.
C,
-1.68%
down for 10 of the past 11 days and Charles Schwab Corp.
SCHW,
-4.84%
down 11 straight days.Goldman alone has fallen for seven straight days for a total loss of 6.3%. It’s the longest losing streak since Feb. 28, 2020, when it also fell for seven straight days as the pandemic was taking hold.
The KBW Nasdaq Regional Banking Index
KBWR
is down for 11 straight days. and the KBW Nasdaq Bank Index
BKX
is down for seven straight days.S&P downgraded Associated Banc. Corp.
ASB,
-4.20% ,
Comerica Inc.
CMA,
-3.82% ,
KeyCorp
KEY,
-3.58% ,
UMB Financial Corp.
UMBF,
-2.42%
% and Valley National Bancorp.
VLY,
-4.19%
by one notch and said the outlook on all five is stable.Read also: More challenges await U.S. banks but analysts think the worst may be over for the year
The rating agency affirmed ratings on Zions Bancorp
ZION,
-4.17%
and maintained a negative outlook, meaning it could downgrade them again in the near-term. And it affirmed ratings and a stable outlook on Synovus Financial Corp.
SNV,
-3.37%
and Truist Financial Corp.
TFC,
-1.36% “We reviewed these 10 banks because we identified them as having potential risks in multiple areas that could make them less resilient than similarly rated peers ,” S&P said in a statement.
“For instance, some that have seen greater deterioration in funding—-as indicated by sharply higher costs or substantial dependence on wholesale funding and brokered deposits—-may also have below-peer profitability, high unrealized losses on their assets, or meaningful exposure to CRE.”
The steep rise in interest rates orchestrated by the Federal Reserve over the past year has raised deposit costs as banks are now competing for savers seeking higher returns and that’s forced some to pay up on deposits and discourage their clients from heading to other institutions and instruments.
The sector has been skittish this year following the collapse of Silicon Valley Bank and other lenders that led to a run on deposits at a number of regional lenders.
However, S&P said about 90% of the banks it rates have stable outlooks and just 10% have negative ones. None have positive outlooks.
The widespread stable outlooks shows that stability in the U.S. banking sector has improved significantly in recent months.
S&P is expecting FDIC-backed banks in aggregate to earn a relatively healthy ROE of about 11% in 2023.
KeyCorp. and Comerica both fell more than 3% on the news. Of the two, KeyCorp. has more outstanding debt and its 10-year bonds widened by about 5 to 10 basis points, according to data solutions provider BondCliq Media Services.
As the following chart shows, the bonds have seen better selling on Wednesday with buyers emerging around midmorning.
KeyBank net customer flow (intraday). Source: BondCliQ Media Services
The next chart shows customer flow over the last 10 days.
Most active KeyBank issues with net customer flow (last 10 days). Source: BondCliQ Media Services
The next chart shows the outstanding debt of the downgraded banks, with KeyCorp. clearly the leader with almost $16 billion of bonds.
Outstanding S&P downgraded banks debt USD by maturity bucket. Source: BondCliQ Media Services
Don’t miss: Capital One confirms roughly $900 million sale of office loans as property sector wobbles
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Microsoft proposes Ubisoft license to win U.K. approval for Activision Blizzard buyout
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Microsoft will change the terms of its Activision Blizzard buyout offer in a new effort to win approval from the U.K. competition regulator.
The regulator, the Competition and Markets Authority, said Microsoft
MSFT,
+1.71%
will now license Activision’s global cloud streaming to Ubisoft Entertainment, for any game available now or in the next 15 years. Ubisoft, in its own release, highlighted the ability to stream the popular Call of Duty franchise.Financial terms were not released, but the regulator said Ubisoft will make a one-off payment and also agree a market-based wholesale pricing mechanism.
The license will be exclusive except in the European economic area. Ubisoft would have the ability to require Microsoft to provide versions of games on operating systems other than Windows, such as Linux.
Ubisoft shares
UBI,
+5.80%
jumped nearly 5% in opening Paris trade.The regulator now says it’s inviting comments on the structure of the new offer. “This is not a green light. We will carefully and objectively assess the details of the restructured deal and its impact on competition, including in light of third-party comments,” said the regulator’s CEO, Sarah Cardell.
Microsoft last year agreed to buy Activision Blizzard for $68.7 billion, or $95 per share. Activision stock
ATVI,
+0.28%
closed Monday at $90.72.In a blog post, Microsoft Vice Chair Brad Smith said it anticipates the CMA review processes can be completed before the 90-day extension in its acquisition agreement with Activision Blizzard expires on Oct.18. He also said the deal with Ubisoft was carefully structured not to interfere with an existing deal struck with European regulators.
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