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Tag: Retail

  • 5 Crucial Predictions For Retail in 2023

    5 Crucial Predictions For Retail in 2023

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    Opinions expressed by Entrepreneur contributors are their own.

    With 2023 here, retailers geared up to make the most of the festive season with discount deals, slashed prices, free deliveries, bonus packages and more. That said, there’s an elephant in the room this season — and that’s the uncertainty about the consumer market. Recent headlines about inflation have changed most shoppers’ buying habits this year. Compared to 2021, one in four Americans (22%) is spending less on gifts this year. Conversations on social media around inflation relating to holiday shopping have increased by 35%.

    Further complicating the issue was the disruption of global supply chains caused by the pandemic. Increased demand for items led to skyrocketing prices. With customers now less willing to pay higher prices for goods, retailers face a potential decline in revenue, sales and profit margins. Retailers looking to minimize the impact of inflation, changing customer behaviors and an unstable market on their business must employ strategies to create an engaging and immersive shopping experience.

    Here are five predictions to help you meet your customers’ needs — and keep your business competitive.

    Related: How Compliance is Exposing the Fragility of the Global Supply Chain

    1. Increased adoption of an omnichannel approach

    A seamless shopping experience is quickly becoming the order of the day as customers want the flexibility of combining shopping on their phones with shopping at brick-and-mortar locations. The recent Shopify report proves this, with 54% of consumers saying they’re likely to look at a product online and buy it in-store — and vice-versa.

    Sephora is an excellent example of a company already adopting this approach. Customers can visit the brand’s website to add products to their carts and visit the store to try on their items before buying.

    To take advantage of the omnichannel experience, retailers should create a social presence that retains the brand identity across multiple channels. This includes messaging, services, pricing and overall customer service.

    Doing this well can make it easier to understand and predict customer behavior. You can tailor your consumers’ experiences to match your marketing and sales needs.

    Related: Future Of Retail Is Omnichannel

    2. Hyperpersonalization will skyrocket

    With shoppers now spending cautiously, typical personalization tactics are becoming ineffective in driving sales. Gone are the days of generic marketing emails with automated first-name snippets.

    Now, customers want purchases to fit their needs which requires brands to make customers feel more connected to the brand — which can increase loyalty and retention. According to a McKinsey survey, 71% of customers expect companies to personalize their experience, and 76% are frustrated when they don’t find it. Creating hyper-specific recommendations based on customers’ browsing history, past purchases, location, gender and age — increases the likelihood of making more sales and generating 40% more revenue.

    3. AI redefines the shopping experience

    The introduction of DALLE-2, LensAI and, most recently — ChatGPT — has sparked discussions around their use in retail. ChatGPT is an AI with nearly accurate responses to user queries—which can be used for conversational commerce. For example, in terms of personalized recommendations, AI can accurately recommend products using customer data. This helps the customer make an informed decision, driving sales.

    Regarding customer service across different channels, AI can easily give users the same experience by providing support and assistance at a far larger scale. While artificial intelligence is already in play in most parts of the retail industry, its adoption in 2023 will redefine the entire shopping experience.

    Related: Princeton Student Builds ChatGPT Detection App to Fight AI Plagiarism

    4. Data privacy laws will become stricter

    The debate on data privacy will likely become more heated in the next year, with the European Union proposing stricter regulations via GDPR. Under GDPR, user consent plays a big role in collecting sensitive and non-sensitive data. This means retailers and advertisers need to be transparent in using user’s personal data and offer consumers the option to delete or erase their data.

    The problem with the GDPR: Advertisers need user data to serve targeted ads. Retailers need advertisers to market their goods. Now, with laws becoming stricter in collecting this data, advertising prices are expected to increase.

    5. A switch to organic marketing

    The recent rise in advertising costs has pushed most retailers over the edge. Why? The current ad space price is double (with some triple) what it used to be. This means retailers are paying more to reach the same audience—with no estimated profitability, sales or even revenue guarantee.

    As a result, many brands are now moving toward organic marketing and capitalizing on its benefits. SEO, social media, content marketing and influencer partnerships are all tactics to ramp up in 2023. Using organic marketing in retail is a strategic approach that can help you build trust and maintain long-term customer relationships.

    Looking ahead, retailers are facing ups and downs in the market. Finding ways to appeal to customers’ needs is vital to staying afloat — and profitable. The strategies we’ve highlighted here will help you along the way while preparing you for what’s to come.

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    Jacob Loveless

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  • 18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers

    18 stock picks in a ‘Goldilocks’ scenario for U.S. consumers

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    It may not have been a surprise to see the consumer discretionary sector of the S&P 500 get hammered last year amid talk of a looming recession while the Federal Reserve jacked up interest rates to push back against inflation.

    But the stock market always looks ahead. Following a decline of 19.4% for the S&P 500
    SPX,
    +0.42%
    in 2022 and a 37.6% drop for the benchmark index’s consumer discretionary sector, this may be the time to begin looking for bargains.

    And now, analysts at Jefferies have lifted the sector to a “bullish” rating.

    In a note to clients on Jan. 10, Jefferies’ global equity strategist, Sean Darby, wrote: “A Goldilocks scenario might be unfolding for the U.S. consumer — falling inflation but steady employment conditions.”

    He sees consumer confidence improving, in part because “households are still sitting on [about] $1.4 trillion of Covid savings.”

    Darby pointed to a list of 18 consumer discretionary stocks favored by Jefferies analysts that was published on Jan. 6. Those are listed below, along with three stocks in the sector the analysts rate “underperform.”

    The ratings of the Jefferies analysts for individual stocks is based on their 12-month outlooks for the companies, in keeping with Wall Street tradition.

    So we have added another list further down, showing which companies in the S&P 500 consumer discretionary sector are expected by analysts polled by FactSet to increase sales the most through 2024.

    The Jefferies 18

    Here are the 18 consumer discretionary stocks recommended by Jefferies analysts with “buy” ratings on Jan. 6, sorted by how much upside the firm sees for the shares from closing prices on Jan. 9:

    Company

    		 Ticker

    		 Jan. 9 price

    		 Jefferies price target

    		 Implied 12-month upside potential

    		 Three-year estimated sales CAGR through 2022

    		 Two-year estimated sales CAGR through 2024
    Topgolf Callaway Brands Corp.

    		 MODG,
    -0.22%         		$20.76

    		 $56

    		 170%

    		 32.8%

    		 10.0%
    Bloomin’ Brands Inc.

    		 BLMN,
    +3.87%         		$22.08

    		 $35

    		 59%

    		 2.4%

    		 3.7%
    Coty Inc. Class A

    		 COTY,
    +1.23%         		$9.38

    		 $14

    		 49%

    		 -7.1%

    		 3.7%
    MGM Resorts International

    		 MGM,
    +1.71%         		$37.64

    		 $56

    		 49%

    		 -0.1%

    		 6.6%
    Chewy Inc. Class A

    		 CHWY,
    +1.63%         		$40.13

    		 $57

    		 42%

    		 28.0%

    		 10.6%
    Planet Fitness Inc. Class A

    		 PLNT,
    +0.69%         		$82.36

    		 $115

    		 40%

    		 10.4%

    		 13.9%
    Molson Coors Beverage Co. Class B

    		 TAP,
    +0.67%         		$50.21

    		 $69

    		 37%

    		 0.5%

    		 1.4%
    Fox Factory Holding Corp.

    		 FOXF,
    +3.95%         		$99.90

    		 $135

    		 35%

    		 28.1%

    		 6.6%
    Hasbro Inc.

    		 HAS,
    +0.99%         		$63.70

    		 $85

    		 33%

    		 9.1%

    		 3.6%
    Hostess Brands Inc. Class A

    		 TWNK,
    +0.33%         		$23.10

    		 $30

    		 30%

    		 14.2%

    		 5.0%
    Lowe’s Cos. Inc.

    		 LOW,
    +0.08%         		$199.44

    		 $250

    		 25%

    		 10.6%

    		 -1.9%
    Walmart Inc.

    		 WMT,
    -0.27%         		$144.95

    		 $175

    		 21%

    		 4.9%

    		 3.3%
    Dollar General Corp.

    		 DG,
    -0.26%         		$241.05

    		 $285

    		 18%

    		 10.9%

    		 6.7%
    Church & Dwight Co. Inc.

    		 CHD,
    -1.17%         		$82.25

    		 $97

    		 18%

    		 7.0%

    		 4.6%
    McDonald’s Corp.

    		 MCD,
    +0.39%         		$267.25

    		 $315

    		 18%

    		 2.4%

    		 4.0%
    Estee Lauder Cos. Inc. Class A

    		 EL,
    +0.39%         		$261.63

    		 $304

    		 16%

    		 2.8%

    		 5.8%
    Mondelez International Inc. Class A

    		 MDLZ,
    -0.04%         		$67.24

    		 $75

    		 12%

    		 6.3%

    		 4.1%
    Tapestry Inc.

    		 TPR,
    +0.73%         		$41.25

    		 $45

    		 9%

    		 3.3%

    		 3.2%
    Sources: Jefferies, FactSet

    Click on the tickers for more information about the companies.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    The two right-most columns on the table show estimated compound annual growth rates (CAGR) for the companies over the past three calendar years and expected sales CAGR for two years through calendar 2024, based on the companies’ financial reports and consensus estimates among analysts polled by FactSet.

    (We used calendar-year numbers, some of which are estimated by FactSet for prior years, because some companies have fiscal years or even months that don’t match the calendar.)

    The stock pick with the highest 12-month upside potential, based on Jefferies’ price target, is Topgolf Callaway Brands Corp.
    MODG,
    -0.22%    .
    This company has the highest estimated three-year sales CAGR on the list, and has the third-highest projected sales CAGR through 2024, after Planet Fitness Inc.
    PLNT,
    +0.69%
    and Chewy Inc.
    CHWY,
    +1.63%    .

    On Jan. 6, the Jefferies analysts also listed three stocks in the sector they rated “underperform.” Here they are, sorted by how much the analysts expect the stocks to decline over the next 12 months:

    Company

    		 Ticker

    		 Jan. 9 price

    		 Jefferies price target

    		 Implied 12-month upside potential

    		 Three-year estimated sales CAGR through 2022

    		 Two-year estimated sales CAGR through 2024
    Lululemon Athletica Inc.

    		 LULU,
    +2.98%         		$298.66

    		 $200

    		 -33%

    		 26.3%

    		 14.6%
    Williams-Sonoma Inc.

    		 WSM,
    +1.75%         		$122.17

    		 $98

    		 -20%

    		 14.1%

    		 -0.3%
    Harley-Davidson Inc.

    		 HOG,
    +0.35%         		$43.25

    		 $39

    		 -10%

    		 -2.8%

    		 4.4%
    Sources: Jefferies, FactSet
    Screen of consumer discretionary sales growth

    A look head at which companies are expected to increase sales the most over the next two years might serve as a good starting point for your own research.

    Bear in mind that some of the companies in travel-related industries suffered declining sales for three years through 2022 because of the coronavirus pandemic. Some of those are on this new list of 20 stocks in the S&P 500 consumer discretionary sector expected to show the highest two-year sales CAGR through calendar 2024:

    Company

    		 Ticker

    		 Two-year estimated sales CAGR through 2024

    		 Three-year estimated sales CAGR through 2022

    		 Share “buy” ratings

    		 Jan. 9 price

    		 Consensus price target

    		 Implied 12-month upside potential
    Las Vegas Sands Corp.

    		 LVS,
    +1.59%         		59.2%

    		 -32.6%

    		 79%

    		 $52.78

    		 $53.53

    		 1%
    Norwegian Cruise Line Holdings Ltd.

    		 NCLH,
    +1.67%         		39.6%

    		 -9.3%

    		 44%

    		 $13.78

    		 $16.96

    		 23%
    Carnival Corp.

    		 CCL,
    +1.64%         		35.2%

    		 -14.7%

    		 30%

    		 $9.47

    		 $10.11

    		 7%
    Tesla Inc.

    		 TSLA,
    -1.83%         		34.3%

    		 49.7%

    		 64%

    		 $119.77

    		 $232.43

    		 94%
    Wynn Resorts Ltd.

    		 WYNN,
    +2.01%         		29.3%

    		 -17.5%

    		 53%

    		 $94.33

    		 $96.07

    		 2%
    Royal Caribbean Group

    		 RCL,
    +2.22%         		28.4%

    		 -6.8%

    		 53%

    		 $57.29

    		 $66.43

    		 16%
    Chipotle Mexican Grill Inc.

    		 CMG,
    -0.17%         		13.4%

    		 15.9%

    		 71%

    		 $1,446.74

    		 $1,778.81

    		 23%
    Amazon.com Inc.

    		 AMZN,
    +2.61%         		12.2%

    		 22.1%

    		 92%

    		 $87.36

    		 $133.76

    		 53%
    Booking Holdings Inc.

    		 BKNG,
    +0.37%         		11.9%

    		 3.9%

    		 63%

    		 $2,208.41

    		 $2,307.67

    		 4%
    Aptiv PLC

    		 APTV,
    +1.66%         		11.9%

    		 6.4%

    		 70%

    		 $97.98

    		 $117.23

    		 20%
    Starbucks Corp.

    		 SBUX,
    +1.28%         		11.2%

    		 7.2%

    		 42%

    		 $104.74

    		 $103.44

    		 -1%
    Etsy Inc.

    		 ETSY,
    +3.56%         		11.1%

    		 45.3%

    		 50%

    		 $120.99

    		 $124.04

    		 3%
    Hilton Worldwide Holdings Inc.

    		 HLT,
    +0.06%         		10.1%

    		 -2.9%

    		 38%

    		 $129.08

    		 $146.17

    		 13%
    Expedia Group Inc.

    		 EXPE,
    +0.39%         		9.0%

    		 -0.9%

    		 50%

    		 $93.77

    		 $125.65

    		 34%
    NIKE Inc. Class B

    		 NKE,
    +0.68%         		8.1%

    		 5.8%

    		 62%

    		 $124.85

    		 $126.15

    		 1%
    Marriott International Inc. Class A

    		 MAR,
    +0.47%         		7.5%

    		 -1.2%

    		 30%

    		 $152.53

    		 $172.81

    		 13%
    BorgWarner Inc.

    		 BWA,
    +1.82%         		7.1%

    		 15.3%

    		 53%

    		 $42.24

    		 $46.93

    		 11%
    Tractor Supply Co.

    		 TSCO,
    +1.06%         		6.8%

    		 19.0%

    		 61%

    		 $217.48

    		 $232.34

    		 7%
    Yum! Brands Inc.

    		 YUM,
    -0.76%         		6.7%

    		 6.4%

    		 47%

    		 $129.76

    		 $137.79

    		 6%
    Dollar General Corp.

    		 DG,
    -0.26%         		6.7%

    		 10.9%

    		 67%

    		 $241.05

    		 $267.54

    		 11%
    Source: FactSet

    Among the companies on this list that didn’t suffer sales declines from 2019 levels, Tesla Inc.
    TSLA,
    -1.83%
    is expected to achieve the highest two-year sales CAGR through 2022.

    Dollar General Corp.
    DG,
    -0.26%
    is the only company to appear on this list based on consensus sales growth estimates and the Jefferies recommended list.

    Don’t miss: These 15 Dividend Aristocrat stocks have been the best income builders

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  • China takes first steps to punish countries that imposed testing mandates for Chinese travelers

    China takes first steps to punish countries that imposed testing mandates for Chinese travelers

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    China on Tuesday suspended visas for South Koreans to enter the country for tourism or business in apparent retaliation for South Korea’s COVID-19 testing requirements for Chinese travelers, the Associated Press reported.

    No other details were given, although China has threatened to retaliate against countries that require travelers from China to show a negative result for a test taken within the previous 48 hours.

    That has not stopped about a dozen countries from following the U.S. in requiring Chinese travelers produce a test after China lifted most of its strict COVID-related restrictions for the first time since the start of the pandemic. The end of those restrictions has resulted in a surge of new cases.

    The World Health Organization and several nations have accused China of withholding data on its outbreak. The testing requirements are aimed at identifying potential virus variants carried by travelers.

    Separately on Tuesday, the head of the WHO for Europe said the surge of cases in China is not likely to have a big impact on Europe, although he cautioned against complacency.

    Hans Kluge told reporters it was “not unreasonable for countries to take precautionary measures to protect their populations” but called for such measures “to be rooted in science, to be proportionate and nondiscriminatory,” as AFP reported.

    Tens of thousands of people resumed travels in and out of China after the country lifted almost all of its border restrictions, ending three years of strict pandemic controls. Photo: Tyrone Siu/Reuters

    In the U.S., the seven-day average of new cases stood at 67,012 on Monday, according to a New York Times tracker. That’s up 2% from two weeks ago and below the recent peak of 70,508 on Christmas Eve.

    The daily average for hospitalizations was up 18% to 47,503. The average for deaths was 467, up 10% from two weeks ago. 

    Cases are currently rising in 21 states, along with Guam, Washington, D.C., and the U.S. Virgin Islands. They are led by Florida, where cases are up 90% from two weeks ago. On a per-capita basis, New York, New Jersey and Rhode Island are seeing the highest rates. New York has 37 cases per 100,000 people, New Jersey 35 and Rhode Island 31.

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • Thailand sent three cabinet ministers to welcome Chinese tourists with flowers and gifts as they arrived Monday at Bangkok’s Suvarnabhumi Airport after China relaxed travel restrictions, the AP reported. The high-profile event reflected the importance Thailand places on wooing Chinese travelers to help restore its pandemic-battered tourism industry. Before COVID, Chinese visitors accounted for about one-third of all arrivals.

    • Moderna Inc.
    MRNA,
    +3.10%
    is considering pricing its COVID vaccine at $110 to $130 per dose, the Wall Street Journal reported. That’s the same price range as mooted by Pfizer Inc.
    PFE,
    -1.59%
    and German partner BioNTech SE
    BNTX,
    +3.30%
    once their vaccine moves to the commercial market. For now, vaccines are being purchased and distributed by the U.S. government.

    Getting the flu can increase the risk of getting a second infection, such as strep throat. The Wall Street Journal’s Daniela Hernandez explains the science behind that, plus what it means for the rest of the winter and how we can protect ourselves from the tripledemic. Illustration: David Fang

    • India has detected the presence of all the COVID omicron subvariants in the community after testing more than 300 samples since late December, the health ministry said in a statement, Reuters reported. “No mortality or rise in transmission were reported in the areas where these variants were detected,” the ministry said.

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  • Bed Bath & Beyond’s Q3 earnings fall below estimates as loss widens and same-store sales fell 32%

    Bed Bath & Beyond’s Q3 earnings fall below estimates as loss widens and same-store sales fell 32%

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    Bed Bath & Beyond Inc.
    BBBY,
    +23.66%
    said Tuesday it had a net loss of $392.9 million, or $4.33 a share, for its fiscal third quarter to Nov. 26, wider than the loss of $276.4 million, or $2.78 a share, posted in the year-earlier period. The company’s adjusted loss per share came to $3.85, wider than the $2.61 FactSet consensus. Sales fell to $1.259 billion from $1.878 billion a year ago, also below the $1.314 billion FactSet consensus. Sales were hurt by a slump in same-store sales of 32%, wider than the FactSet consensus for a decline of 25.9%. The troubled retailer, which said last week it may have to file for bankruptcy, said it is exploring all strategic alternatives and will keep investors updated in a timely manner. “We want our customers to know that we hear them and are charging ahead every day to meet their needs,” CEO Sue Gove said in a statement. “Our entire organization is laser-focused on maximizing the value of our company by reconnecting with our customers and positioning Bed Bath & Beyond, buybuy BABY, and Harmon for long-term success.” The stock was flat premarket, but has fallen 88% in the last 12 months, while the S&P 500
    SPX,
    -0.08%
    has fallen 17%.

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  • Moderna, CureVac and Ocugen offer updates on COVID vaccines, while China cracks down on critics of government’s pandemic response

    Moderna, CureVac and Ocugen offer updates on COVID vaccines, while China cracks down on critics of government’s pandemic response

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    A flurry of announcements relating to COVID vaccines dominated headlines on the pandemic on Monday, with Moderna telling investors it expects to generate some $5 billion in sales in 2023.

    That’s down from $18.4 billion in sales in 2022. The company plans to boost spending on research and development to $4.5 billion this year, up from $3.3 billion in 2022.

    Moderna
    MRNA,
    +1.79%
    provided the update in advance of the company’s presentation at the annual J.P. Morgan Healthcare Conference in San Francisco.

    Separately, CureVac
    CVAC,
    +24.46%
     said preliminary data from its early stage trial for its COVID and seasonal flu shots had positive results to advance to the next stage of clinical testing.

    CureVac is developing the shots with GlaxoSmithKline
    GSK,
    -0.79%
     
    GSK,
    -0.75%    .
     CureVac said the shot was well tolerated, and that neutralizing antibodies were beginning at the lowest tested dose for younger adults. The seasonal flu shot was also well tolerated with an increase in antibodies compared to those from a flu vaccine comparator in younger adults, CureVac said.

    Ocugen announced positive results in a trial of its COVID vaccine Covaxin, which uses the same vero cell manufacturing platform that has been used in the production of polio vaccines for decades. The Phase 2/3 trial involved 491 U.S. adult participants who received two doses of Covaxin or placebo 28 days apart.

    “Covaxin, an inactivated virus vaccine adjuvanted with TLR7/8 agonist, has been demonstrated in clinical trials to generate a broader immune response against the whole virus covering important antigens such as S-protein, RBD, and N-protein; whereas currently approved vaccines in the U.S. target only S-protein antigen,” the company said in a statement.

    Chief Executive Dr. Shankar Musnuri said the company is hoping the vaccine will offer an option for those who are still hesitant to take an mRNA vaccine, which uses newer technology.

    U.S. cases were lower on Sunday, according to a New York Times tracker. The seven-day average of new cases stood at 67,246, down 1% from two weeks ago.

    The daily average for hospitalizations was up 18% at 47,500., the highest level since last March. The average for deaths was 509, up 19% from two weeks ago.

    Hospitalizations are becoming concerning, according to the Times trackers, with the Northeast seeing the highest per capita rates, along with the Southeast.

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • China has suspended or closed the social-media accounts of more than 1,000 critics of the government’s COVID response, as the country rolls back harsh anti-virus restrictions and gears up for the coming Lunar New Year holiday, the Associated Press reported. The popular Sina Weibo social media platform said it had addressed 12,854 violations including attacks on experts, scholars and medical workers and issued temporary or permanent bans on 1,120 accounts. The ruling Communist Party had largely relied on the medical community to justify its tough lockdowns, quarantine measures and mass testing, almost all of which it abruptly abandoned last month, leading to a surge in new cases that have stretched medical resources to their limits. The party allows no direct criticism and imposes strict limits on free speech.

    Tens of thousands of people resumed travels in and out of China on Sunday as the country lifted almost all of its border restrictions, ending three years of strict pandemic controls. Some travelers expressed relief to be reunited with their families. Photo: Tyrone Siu/Reuters

    • Pfizer’s
    PFE,
    -4.77%
    antiviral Paxlovid has not been included in the Chinese government’s national reimbursement list that would have allowed patients to get it at a cheaper price throughout the country, saying it was too expensive, the AP reported separately. Although it is supposed to be prescribed by medical professionals, that hasn’t stopped people from scrambling to purchase it on their own through any means at their disposal—including buying generic Indian versions of the drug through the internet, according to local media reports.

    • The union representing a group of nurses at a New York City hospital reached a tentative contract agreement with its management, but close to 9,000 nurses at several other major hospitals were still preparing to go on strike, the AP reported. The New York State Nurses Association and BronxCare Health System said Saturday that a tentative agreement had been reached; the union said it included pay raises every year of its three-year term as well as staffing increases. Another hospital, Flushing Hospital Medical Center, got to a tentative agreement with nurses on Friday evening.

    Here’s what the numbers say:

    The global tally of confirmed cases of COVID-19 topped 664.3 million on Monday, while the death toll rose above 6.7 million, according to data aggregated by Johns Hopkins University.

    The U.S. leads the world with 101.2 million cases and 1,096,523 fatalities.

    The Centers for Disease Control and Prevention’s tracker shows that 229.3 million people living in the U.S., equal to 69.1% of the total population, are fully vaccinated, meaning they have had their primary shots.

    So far, just 48.2 million Americans, equal to 15.4% of the overall population, have had the updated COVID booster that targets both the original virus and the omicron variants.

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  • SEC charges ex–McDonald’s CEO Easterbrook for making false statements relating to his 2019 ouster

    SEC charges ex–McDonald’s CEO Easterbrook for making false statements relating to his 2019 ouster

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    The Securities and Exchange Commission said Monday it has filed charges against Stephen J. Easterbrook, former chief executive of McDonald’s Corp., for making “false and misleading” statements to investors about the circumstances that led to his ouster in November 2019.

    The agency has also filed charges against McDonald’s for “shortcomings” in its public disclosures relating to Easterbrook’s severance agreement.

    McDonald’s
    MCD,
    -0.55%
    fired Easterbrook for exercising poor judgment and violating company policy by engaging in an inappropriate personal relationship with a McDonald’s employee. However, the separation agreement struck with the executive concluded that his termination was without cause, allowing him to retain substantial equity compensation that would have been forfeited in other circumstances.

    “In making this conclusion, McDonald’s exercised discretion that was not disclosed to investors,” the SEC said in a statement.

    In July 2020, McDonald’s discovered in an internal probe that Easterbrook had engaged in other, undisclosed relationships with employees. Those findings were not disclosed prior to Easterbrook’s termination, in the knowledge that they would influence the board’s decision making, according to the SEC.

    “When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders, who are entitled to transparency and fair dealing from executives,” said Gurbir S. Grewal, the SEC’s director of the division of enforcement. 

    The SEC is charging Easterbrook with violating anti-fraud provisions of the SEC Securities Act of 1933 and the Securities Exchange Act of 1934. Easterbrook has consented to a cease-and-desist order and five-year officer and director bar and a $400,000 civil penalty, without admitting to or denying the charges.

    McDonald’s is charged with violating section 14(a) of the Exchange Act and Exchange Act Rule 14a-3. The fast-food giant has consented to a cease-and-desist order, without admitting to or denying SEC findings. The SEC has opted not to fine the company, as it cooperated with the agency and clawed back compensation after its probe.

    The stock was slightly lower Monday in early trades.

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  • UPDATE: Lululemon stock slides premarket after yoga gear maker revises Q4 guidance

    UPDATE: Lululemon stock slides premarket after yoga gear maker revises Q4 guidance

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    Lululemon Athletica Inc.
    LULU,
    +1.02%
    revised its fourth-quarter guidance on Monday by raising its revenue guidance. tweaking its per-share earnings guidance to a tighter range and lowering margin guidance. The yoga wear company now expects revenue to range from $2.660 billion to $2.700 billion, up from prior guidance of $2.605 billion to $2.655 billion. It expects EPS of $4.22 to $4.27 compared with prior guidance of $4.20 to $4.30. The company expects gross margins to decline 90 basis points to 110 basis points, compared with prior guidance of a rise of 10 basis points to 20 basis points. “However, the company now expects that it will further leverage selling, general and administrative expenses 100-120 basis points compared to its previous expectation of 30-50 basis points of leverage,” the company said in a statement released ahead of an investor conference. Lululemon stock slid 12% premarket, and is down 7% in the last 12 months through Friday’s close, while the S&P 500
    SPX,
    +2.28%
    has fallen 17%. Under Armour stock
    UA,
    +3.70%
    and Nike Inc.
    NKE,
    +3.24%
    fell in sympathy, The former was down 2.6% premarket and Nike was down 1.5%.

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  • Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group

    Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group

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    Shares of Alibaba Group Holdings are higher following news that co-founder Jack Ma is ceding control of affiliate company Ant Group Co., potentially paving the way to revive plans for an initial public offering by the fintech giant.

    Alibaba’s Hong Kong-listed shares
    9988,
    +7.78%
    advanced as much as 8.3% in early trade Monday, widening its year-to-date gains to 27%. Shares are outperforming a 1.7% gain in the city’s broader Hang Seng Index
    HSI,
    +1.65%
    and helping lift the city’s tech index by 3.0%. Alibaba is a shareholder of Ant.

    Ant, which owns China’s most widely used digital-payment platform, Alipay, has been overhauling its operations amid a government crackdown that began with Beijing calling off the company’s plans for an IPO in late 2020. The new change of control, announced by Ant over the weekend, moves the company a step closer to restructuring.

    Alibaba added Sunday that its equity interest in Ant remains unchanged.

    Shares of Alibaba were last up 7.6%. Shares of unit Alibaba Health Information Technology Ltd.
    241,
    +7.27%
    were 8.0% higher.

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  • Jack Ma Cedes Control of Fintech Giant Ant Group

    Jack Ma Cedes Control of Fintech Giant Ant Group

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    Jack Ma Cedes Control of Fintech Giant Ant Group

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  • Bed, Bath, Beyond & Bankruptcy: Low Inventory Threatens Chain

    Bed, Bath, Beyond & Bankruptcy: Low Inventory Threatens Chain

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    Bed Bath & Beyond said in a filing with the Securities and Exchange Commission (SEC) on Thursday that it is doubtful it could continue operating the business — i.e., the company is staring down bankruptcy.


    Bloomberg / Contributor I Getty Images

    Bloomberg store closing sale in September.

    Based on “recurring losses and negative cash flow from operations… as well as current cash and liquidity projections, the Company has concluded that there is substantial doubt about the Company’s ability to continue,” it wrote in the filing.

    Still, the company is trying to get out of the hole.

    But according to Insider, there’s another problem: Inventory levels are low, with stock at 53% for the end of last month, compared to 61% at Kohl’s for example, per DataWeave, an e-commerce analytics company.

    This was due to Bed Bath & Beyond’s lack of credit to purchase inventory, said Bobby Griffin, an analyst at Raymond James, per Insider.

    It’s a vicious cycle — low inventory could mean lower sales.

    After 27 years of positive growth, Bed Bath & Beyond began to have problems in 2018, per a podcast from The Wall Street Journal. The chain was founded in 1971.

    A new CEO, Mark Tritton, who took over the chain in 2019, focused on “private label” brands made by the store itself and hurried a host of them to market. During the home goods boom of 2020, sales were up, seeming to advocate for his strategy.

    Then, later in 2021, sales began to tank. The products, as the podcast noted, were not well thought out nor of high quality. Tritton was pushed out in June.

    Bed Bath & Beyond now has some $3 billion in debt on its balance sheet as of March, per The New York Times, and is low on cash and time for new CEO, Sue Gove, to make large-scale changes.

    The company also announced in September it would cut 20% of jobs and close 150 stores. The holiday season didn’t provide hoped-for capital to rescue the business, one expert told the paper.

    “Before Christmas, there was just a glimmer of hope,” said Neil Saunders, managing director of GlobalData, per the outlet. But, he added, “things have just got worse.”

    The company in its preliminary quarterly data said it expected to report a $385.8 million loss for the quarter ending in November 2022.

    The company also had a meme stock moment, where renegade investors take on a stock that is not performing well and kick Wall Street in the process, in August 2022 and in 2021, but the company’s stock is way back down to earth, trading at just $1.31 a share Friday afternoon, compared to $13.80 around this time last year.

    And things in stores are not looking good, as Insider noted. The company has just 39% inventory availability in lighting and kitchen. The company also cited inventory issues as a reason it is considering bankruptcy in its SEC filing.

    Bankruptcy, however, could still mean the chain sticks around. The process often gives companies a chance to restructure.

    “What we’ve seen many times is that it ends up being a stay of execution,” Michael Baker, who studies retail at investment banking firm D.A. Davidson, told The New York Times.

    “Sometimes that works, but oftentimes you see an announcement of scaling back and having fewer stores, and then that’s followed by a complete liquidation,” he added.

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    Gabrielle Bienasz

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  • Macy’s stock slides as holiday lulls weigh on sales forecast and execs predict difficulties into 2023

    Macy’s stock slides as holiday lulls weigh on sales forecast and execs predict difficulties into 2023

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    Shares of department-store chain Macy’s Inc. slid 8% in after-hours trading on Friday after the retailer gave a more downbeat forecast on its fourth-quarter sales, with management citing big “lulls” in the holiday-shopping season and saying customers would likely feel the squeeze from inflation into next year.

    Executives said they expected those sales to land in the “low-end to mid-point” of prior expectations for between $8.161 billion to $8.401 billion. They said they expected adjusted earnings per share to be within its previously forecast range of $1.47 to $1.67.

    “Black Friday/Cyber Monday sales were in line with our expectations, while the week leading up to and following Christmas were ahead,” Macy’s
    M,
    +2.64%
    Chief Executive Jeff Gennette said in a statement. “However, the lulls of the non-peak holiday weeks were deeper than anticipated.”

    “Based on current macro-economic indicators and our proprietary credit card data,” he continued, “we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly.”

    Macy’s issued the sales and profit figures as Wall Street parses consumer behavior during the holiday season. Adobe on Thursday said online sales surpassed $210 billion and beat expectations. Costco Wholesale Corp., a day earlier, reported an increase in December sales, even though online sales fell.

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  • Costco stock rises as holiday sales gain even as online sales recede

    Costco stock rises as holiday sales gain even as online sales recede

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    Costco Wholesale Corp. shares ticked higher in the extended session Thursday after the warehouse club reported a rise in holiday sales from a year ago, even as online sales pulled back.

    Costco
    COST,
    -1.40%
    said December sales rose 7% to $23.8 billion, up from $22.24 billion a year ago.

    For the 18 weeks ending Jan. 1, sales rose 7.6% to $81.16 billion, up from $76.34 billion in the year-ago period.

    While same-store sales grew for each period, e-commerce sales declined. Total company same-store sales rose 5.5% for the month and 6.1% for the 18 weeks ending Jan. 1., while e-commerce sales declined 6.4% and 4.8%, respectively.

    Costco shares rose more than 2% after hours, following a 1.4% decline to close the regular session at $450.19.

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  • New England-Inspired Lifestyle Brand, Nantucket Whaler, Highlights Successes of Past Year and Looks Ahead to 2023

    New England-Inspired Lifestyle Brand, Nantucket Whaler, Highlights Successes of Past Year and Looks Ahead to 2023

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    Press Release
    –

    Jan 5, 2023 07:00 EST


    WEST PALM BEACH, Fla., January 5, 2023 (Newswire.com)
    –
    Nantucket Whaler, the classic American lifestyle brand inspired by exploration and Nantucket Island, turns to the new year with a proactive growth strategy, while building on the successes of 2022.

    Nantucket Whaler had a positive 2022 with the release of innovative products and collections, brand expansion and community involvement. These opportunities for the New England-inspired brand were achieved by reaching new fans and by the loyalty of current consumers. Some highlights include:

    • Making a landmark partnership with Canadian retail leader Grafton/Tip Top to expand internationally
    • Introducing the one-of-a-kind Sailcloth Collection, which adds reclaimed sailcloth patches to our most loved products
    • Launching both the Spring/Summer and Fall/Winter Collections with photoshoots to capture the nautical essence of Nantucket Whaler
    • Exhibiting at the nationally and internationally recognized PGA Tour’s Honda Classic Golf Tournament and the Palm Beach International Boat Show
    • Proudly supporting the Whale and Dolphin Conservation (WDC)

    “We are proud of the accomplishments Nantucket Whaler achieved in 2022 and are excited to continue sharing inspiration of the New England lifestyle through our authentic, nautical-inspired apparel,” said Chris Affolter, Vice President of Operations, Nantucket Whaler. “This past year, we grew our business through various new channels, and we look forward to reaching more consumers through our planned initiatives in 2023.”

    The Nantucket Whaler brand outfits those who have an adventurous spirit for exploration and independence with clothes that are durable, comfortable and timeless. Every piece of apparel is well-crafted and beautifully executed with each stitch inspired by the spirit of New England.

    About Nantucket Whaler

    Nantucket Whaler, a lifestyle brand, is inspired by exploration and island history dating back to 1837. The brand’s heritage is steeped in the mystique of Nantucket Island and the generations of people who built a life exploring the sea. Nantucket Whaler’s style translates the grit, strength, and endurance of those early nautical explorers into well-crafted clothes for modern consumers who embody those same core values. Visit nantucketwhaler.com.

    Source: Nantucket Whaler

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  • Amazon confirms more than 18,000 layoffs, far more than originally expected

    Amazon confirms more than 18,000 layoffs, far more than originally expected

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    Amazon.com Inc.’s
    AMZN,
    -0.79%
    layoffs will affect more than 18,000 employees, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.

    The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.

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  • As EU works to coordinate response to China’s COVID wave, Beijing and airlines are unhappy

    As EU works to coordinate response to China’s COVID wave, Beijing and airlines are unhappy

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    European Union officials were working Wednesday to coordinate a response to China’s current surge of COVID cases and were likely to agree on travel restrictions that may upset both Beijing and airlines.

    The Chinese government has already slammed the countries that have imposed a COVID test requirement on passengers from China and has threatened countermeasures if more are introduced, the Associated Press reported.  

    EU Commission spokesman Tim McPhie said Wednesday that most EU nations are in favor of testing prior to departure and are seeking an official position later in the day.

    There are concerns that China’s wave may allow for new, potentially more evasive and risky variants of the coronavirus to emerge, although so far, data are showing the variants circulating in China are already in Europe.

    See also: Isolated and humiliated, Russia is biggest geopolitical threat of 2023: Eurasia Group

    On Wednesday the International Air Transport Association, which represents some 300 airlines worldwide, lent its powerful voice to the protests.

    “It is extremely disappointing to see this knee-jerk reinstatement of measures that have proven ineffective over the last three years,” said IATA Director General Willie Walsh.

    “Research undertaken around the arrival of the omicron variant concluded that putting barriers in the way of travel made no difference to the peak spread of infections. At most, restrictions delayed that peak by a few days,” Walsh said.

    EU nations are also expected to agree to test wastewater from planes flying in from China to determine whether it contains variants that are not yet prevalent in Europe.

    As China reopens after nearly three years of isolation, the U.S. and several other countries will require travelers to show a negative COVID test. The Wall Street Journal explains why some pandemic restrictions are back and what they mean for people traveling to and from China. Photo: Nicola Marfisi/Avalon via ZUMA Press

    In the U.S., the seven-day average for new COVID cases has continued to fall and stood at 60,417 on Tuesday, according to a New York Times tracker. That’s down 10% from two weeks ago and below the recent peak of 70,508 on Christmas Eve.

    The daily average for hospitalizations was up 8% to 44,504. The average for deaths was 310, down 24% from two weeks ago.

    The New York Times tracker notes there is reason to believe current case and death counts could be artificially low, as the people who track those numbers take time off around the Christmas and New Year’s holidays. Hospitalization data are not typically affected by holiday reporting breaks.

    The number of patients with COVID in intensive-care units rose 11% in two weeks, to 5,350. Meanwhile, the test-positivity rate climbed to 16% and has increased by 25% over the past two weeks. Higher test-positivity rates suggest many new COVID cases are not being counted, as results of at-home testing may not be reported to case trackers. 

    Overall, cases are currently rising in 17 states, led by Mississippi, where they have climbed 78% from two weeks ago. Measured on a per-capita basis, New Jersey and New York are faring the worst, along with several southern states, including Virginia, Mississippi and South Carolina.

    Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

    Other COVID-19 news you should know about:

    • Shares of Lucira Health Inc.
    LHDX,
    -29.03%
    more than quadrupled Tuesday after it submitted an application for emergency-use authorization to the U.S. Food and Drug Administration for over-the-counter use of a molecular COVID-19 and flu test, Dow Jones Newswires reported. The test was granted emergency-use authorization for point-of-care use in a healthcare setting in November. The company now “intends to make the test broadly available to consumers both online as well as in pharmacies.”

    • Salesforce Inc.
    CRM,
    +3.57%
    has become the latest big tech player to say it hired too aggressively during the COVID pandemic; it is now planning to lay off about 10% of its workforce, MarketWatch’s Emily Bary reported. The company will also exit some real estate and cut back on office space, it disclosed in a filing with the Securities and Exchange Commission. The plan is aimed at reducing operating costs, boosting operating margins and driving “profitable growth.” “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” the company’s co-chief executive, Marc Benioff, said in a letter to employees that was also filed with the SEC. The company had 73,541 employees as of Jan. 31, 2022, according to its last annual filing with the SEC.

    Read: Here are the companies in the layoffs spotlight; Salesforce joins Intel, Google, HP, Amazon, Cisco

    The recent headlines about tech layoffs don’t seem to match broader economic indicators, which show a strong job market and a historically low unemployment rate. The Wall Street Journal’s Gunjan Banerji explains the disconnect. Illustration: Ali Larkin

    • Pfizer Inc.
    PFE,
    -2.20%
    has gone from being a COVID darling to a “show-me” launch story, according to Bank of America analysts, who downgraded the stock to neutral from buy on Wednesday, citing declining COVID revenues and uncertainty about how new products will perform. Analysts are expecting revenue from Pfizer’s COVID vaccine Comirnaty and its antiviral Paxlovid to decline by about $32 billion from 2022, wider than the consensus number of a decline of $25 billion. “While new launches can partially address the $17 billion LOE (loss of exclusivity) hole in 2025 to 2030, longer term growth is unclear,” the analysts wrote in a note to clients.

    Here’s what the numbers say:

    The global tally of confirmed cases of COVID-19 topped 666.8 million on Tuesday, while the death toll rose above 6.69 million, according to data aggregated by Johns Hopkins University.

    The U.S. leads the world with 100.8 million cases and 1,094,010 fatalities.

    The Centers for Disease Control and Prevention’s tracker shows that 229.1 million people living in the U.S., equal to 69% of the total population, are fully vaccinated, meaning they have had their primary shots.

    So far, just 47 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 15.1% of the overall population.

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  • Tesla stock wipes out three-day bounce, falls to lowest price in more than 2 years

    Tesla stock wipes out three-day bounce, falls to lowest price in more than 2 years

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    It has taken just one day for Tesla Inc.’s stock to erase the entire bounce it enjoyed over the last three days trading sessions of 2022, as disappointing deliveries data helped trigger the biggest selloff in more than two years.

    The stock’s
    TSLA,
    -12.24%
    Tuesday drop knocked the electric vehicle maker’s market capitalization to 15th on the list of most valuation S&P 500 index companies.

    On Tuesday, Tesla’s market cap fell below that of consumer products company Procter & Gamble Co.
    PG,
    +0.01%    ,
    with a current market cap of $359.18 billion, and was just below Nvidia Corp.
    NVDA,
    -2.05%
    at $352.15 billion, according to FactSet data. Tesla sat just above Chevron Corp.
    CVX,
    -3.06%    ,
    which was at $336.43 billion. (See list of S&P 500’s 20 most valuable companies as of Tuesday’s closing prices below.)

    Tesla’s stock took a $15.08, or 12.2% dive, to $108.10 on Tuesday, to lead the S&P 500’s
    SPX,
    -0.40%
    decliners, after the company reported over the weekend that fourth-quarter deliveries that came up short of expectations for the third quarter in a row. It suffered the biggest one-day decline since it plummeted 21.1% on Sept. 8, 2020, and closed at the lowest price since Aug. 13, 2020.

    Don’t miss: Tesla delivery-target miss shows ‘demand cracks clearly happening’ that mean ‘numbers could be materially reset’ for coming years, analysts write.

    With about 3.16 billion shares outstanding as of Oct. 18, the stock’s decline shaved about $47.62 billion off Tesla’s market cap, to bring it down to $341.35 billion. That’s a far cry from the peak market cap of $1.24 trillion reached exactly one-year ago.

    After the stock hit the deepest oversold reading in its history based on the widely followed Relative Strength Index momentum indicator on Dec. 27, following the longest losing streak in more than four years, it ran up $14.08, or 12.9%, over the past three days.

    If there’s a bright side to Tuesday’s stock selloff, it’s that even though the price fell below the Dec. 27 closing price, the RSI ended the day at 24.86, which is up from the Dec. 27 record low of 16.56.

    That could be a preliminary sign of what chart watchers call “bullish technical divergence,” which is when prices make lower lows while the RSI makes a higher low. It’s still rather early to make that determination, however, as the stock needs to start bouncing again to see if RSI bottoms above the previous low.

    Market caps of the Top 20 most valuable S&P 500 companies:

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  • AMD Stock Should Benefit From Next-Generation Computer Chips

    AMD Stock Should Benefit From Next-Generation Computer Chips

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    These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

    Advanced Micro Devices AMD-Nasdaq

    Buy (four stars out of five) • Price $64.52 on Dec. 23

    by CFRA

    Our Buy recommendation reflects our expectation for significant share gains on the central-processing-unit data-center side from the ramp-up of AMD’s next-generation EPYC processor, greater momentum for AMD’s graphics processing units, and our expectation for balance sheet improvement.

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  • COVID-related ICU patients rise to 5-month high above 5,000—are new cases really falling?

    COVID-related ICU patients rise to 5-month high above 5,000—are new cases really falling?

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    While many have been focused on the apparent explosion of COVID cases in China, and the lack of reliable data from China’s government, there are signs suggesting the U.S. situation is also getting worse even as case counts and deaths are falling.

    At first look, initial fears of another COVID surge in the U.S. over the holidays may be overblown. About a week after the year-end holiday gatherings began, the seven-day average of new COVID cases fell to a more than three-week low of 58,354 on Thursday, down 9% from two weeks ago and down 17% from a recent peak of 70,508 on Christmas Eve, according to a New York Times tracker.

    And the daily average for deaths fell has fallen to a three-week low of 355, and has dropped 5% in two weeks.

    But as the NYT tracker has been warning, case and death counts could be “artificially low” this week, as officials who track those numbers take vacation for the Christmas and New Year’s holidays. Therefore, hospitalization data, which is typically not affected by holidays, should remain more reliable.

    And by that measure, the numbers are getting worrisome.

    The daily average of hospitalizations rose to 41,620 on Thursday, up 3% from two weeks ago but also the highest number seen since mid-August.

    There are 29 states that have seen hospitalizations increase from two weeks ago, including 20 states that have seen double-digit percentage increases, led by South Carolina at 54%, West Virginia at 52% and Louisiana at 47%.

    The number of severe COVID cases is also seeing a troubling rise, the daily average of COVID-related patients in intensive care units (ICUs) climbed to 5,080 on Thursday. That’s up 10% from two weeks ago, and the most seen since July 30.


    The New York Times

    Another sign that the fall in case counts is artificial is that the test positivity rate has been rising, to a four-month high above 14% on Thursday, with 41 states seeing double-digit positivity rates.

    “Higher test positivity rates are a sign that many infections are not reported — even if they are tested at home. This results in a more severe undercount of cases,” the NYT tracker said.


    The New York Times

    Stay up to date on COVID news through MarketWatch’s daily “Coronavirus Update” column.

    Meanwhile in China, amid a “lack of adequate and transparent” data from China’s government, there is reason to believe the situation will still get a lot worse before it gets better.

    U.K. health firm Airfinity estimates that new daily COVID cases in China is currently running at about 1.8 million, based on data from China’s regional provinces, and on new-case trajectories from areas that also lifted zero-COVID policies, such as Hong Kong.

    That case number is expected to more than double, to about 3.7 million a day, in mid-January, Airfinity estimates, before another surge in March takes the number up to about 4.2 million per day.

    As a result of the concerns over surging case counts, Spain joined the growing number of countries that are requiring COVID tests for air passengers arriving from China, as the Associated Press reported. This comes after the European Union said Thursday that it is “assessing” the situation in China.

    The U.S. will also require those arriving from China to take a PCR test, starting Jan. 5, while Japan started requiring a test on Friday. Other countries requiring a test for air passengers from China include Italy, India and South Korea.

    The BBC reported that the U.K. was set to announce that travelers will need to show a negative COVID test before they board a plane from China.

    In other COVID news, China’s National Medical Products Administration has given emergency approval to Merck & Co. Inc.’s
    MRK,
    -0.33%
     COVID antiviral molnupiravir. That joins Pfizer Inc.’s
    PFE,
    -0.96%
    Paxlovid, which has already been approved for use in China. Merck’s stock, which fell 0.4% in afternoon trading Friday, has soared 44.0% in 2022, while the Dow Jones Industrial Average
    DJIA,
    -0.88%
    has lost 9.4%.

    Novavax Inc.
    NVAX,
    +0.21%
    said Friday that it has initiated a Phase 2 trial for its COVID-19-Influenza Combination (CIC) vaccine candidate in people aged 50 through 80. “We believe that like influenza, COVID-19 will also be seasonal moving forward, and that there is room in the market for new alternatives to provide better protection against the impact of influenza, particularly in older adults, and to explore the potential to combine this with protection from COVID,” said Chief Executive Stanley Erck. Novavax’s stock, which eased 0.3% Friday, has plunged 93.2% year to date while the S&P 500 index
    SPX,
    -1.03%
    has dropped 20.1%.

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  • These 20 stocks were the biggest losers of 2022

    These 20 stocks were the biggest losers of 2022

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    This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.

    Below is a list of the 20 stocks in the S&P 500
    SPX,
    -0.72%
    that have declined the most in 2022.

    First, here’s how the 11 sectors of the benchmark index have performed this year:

    S&P 500 sector

    		 2022 price change

    		 Forward P/E

    		 Forward P/E as of Dec. 31, 2021
    Energy

    		 57.8%

    		 9.6

    		 11.1
    Utilities

    		 -0.5%

    		 18.8

    		 20.4
    Consumer Staples

    		 -2.7%

    		 20.9

    		 21.8
    Healthcare

    		 -3.2%

    		 17.4

    		 17.2
    Industrials

    		 -6.7%

    		 18.0

    		 20.8
    Financials

    		 -12.1%

    		 11.7

    		 14.6
    Materials

    		 -13.4%

    		 15.6

    		 16.6
    Real Estate

    		-27.7%

    		 16.2

    		 24.2
    Information Technology

    		 -28.8%

    		 19.6

    		 28.1
    Consumer Discretionary

    		 -37.4%

    		 20.7

    		 33.2
    Communication Services

    		 -40.4%

    		 14.0

    		 20.8
    S&P 500

    		 -19.2%

    		 16.5

    		 21.4
    Source: FactSet

    The energy sector has been the only one to show a gain in 2022, and it has been a whopper, even as West Texas Intermediate crude oil
    CL.1,
    +0.41%
    has given up most of its gains from earlier in the year. Here’s why investors are still confident in the supply/demand setup for oil and energy stocks.

    Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc.
    TSLA,
    +0.70%
    and Amazon.com Inc.
    AMZN,
    -1.17%    ,
    which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc.
    META,
    -1.21%    ,
    along with Match Group Inc.
    MTCH,
    +0.50%    ,
    which is down 69% for 2022, and Netflix Inc.
    NFLX,
    -0.44%    ,
    which is down 52% this year.

    There have been many reasons easy to cite for Big Tech’s decline, such as a questionable change in strategy for Facebook’s holding company, Meta, as CEO Mark Zuckerberg has put so much of the company’s resources into developing a new world that most people don’t wish to enter, at least yet. Meta’s shares were down 64% for 2022 through Dec. 29.

    You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500
    SPX,
    -0.72%
    traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively. So Tesla no longer appears to be a very expensive stock, especially for a company that increased its vehicle deliveries by 42% in the third quarter from a year earlier.

    Analysts polled by FactSet expect Tesla’s stock to double during 2023. It nearly made this list of 20 EV stocks expected to rebound the most in 2023.

    The worst-performing S&P 500 stocks of 2022

    Here are the 20 stocks in the S&P 500 that fell the most for 2022 through the close on Dec. 29.

    Company

    		 Ticker

    		 2022 price change

    		 Forward P/E

    		 Forward P/E as of Dec. 32, 2021
    Generac Holdings Inc.

    		 GNRC,
    -0.84%         		-71.4%

    		 13.7

    		 30.2
    Match Group Inc.

    		 MTCH,
    +0.50%         		-68.9%

    		 20.1

    		 48.5
    Align Technology Inc.

    		 ALGN,
    -0.52%         		-67.7%

    		 27.4

    		 48.7
    Tesla Inc.

    		 TSLA,
    +0.70%         		-65.4%

    		 21.7

    		 120.3
    SVB Financial Group

    		 SIVB,
    -0.38%         		-65.4%

    		 10.8

    		 23.0
    Catalent Inc.

    		 CTLT,
    -0.40%         		-64.6%

    		 13.0

    		 32.5
    Meta Platforms Inc. Class A

    		 META,
    -1.21%         		-64.2%

    		 14.7

    		 23.5
    Signature Bank

    		 SBNY,
    -0.34%         		-64.1%

    		 6.2

    		 18.6
    PayPal Holdings Inc.

    		 PYPL,
    -0.01%         		-62.6%

    		 14.8

    		 36.0
    V.F. Corp.

    		 VFC,
    +0.15%         		-62.5%

    		 11.9

    		 20.4
    Warner Bros. Discovery Inc. Series A

    		 WBD,
    -1.64%         		-59.9%

    		 N/A

    		 7.5
    Carnival Corp.

    		 CCL,
    -0.23%         		-59.8%

    		 38.1

    		 N/A
    Stanley Black & Decker Inc.

    		 SWK,
    -0.42%         		-59.8%

    		 17.0

    		 15.9
    Lumen Technologies Inc.

    		 LUMN,
    -1.79%         		-57.8%

    		 7.7

    		 7.8
    Zebra Technologies Corp. Class A

    		 ZBRA,
    -0.44%         		-56.7%

    		 14.5

    		 30.1
    Dish Network Corp. Class A

    		 DISH,
    -0.96%         		-56.5%

    		 8.6

    		 10.9
    Caesars Entertainment Inc.

    		 CZR,
    +0.24%         		-55.7%

    		 51.4

    		 144.5
    Lincoln National Corp.

    		 LNC,
    +0.26%         		-55.1%

    		 3.4

    		 6.2
    Advanced Micro Devices Inc.

    		 AMD,
    -0.97%         		-55.0%

    		 17.8

    		 43.1
    Seagate Technology Holdings PLC

    		 STX,
    -0.55%         		-53.1%

    		 15.0

    		 12.4
    Source: FactSet

    Click on the tickers for more information about the companies.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Another way of measuring the biggest stock-market losers of 2022

    It is one thing to have a large decline based on the share price, but that doesn’t tell the entire story. How much of a decline have investors seen in the holdings of their shares during the year? The S&P 500’s total market capitalization declined to $31.66 trillion as of Dec. 28 (the most recent figure available) from $40.36 trillion at the end of 2021, according to FactSet.

    Shareholders of these companies have suffered the largest declines in market cap during 2022.

    Company

    		 Ticker

    		 2022 market capitalization change ($bil)

    		 2022 price change
    Apple Inc.

    		 AAPL,
    -0.63%         		-$851

    		 -27.0%
    Amazon.com Inc.

    		 AMZN,
    -1.17%         		-$832

    		 -49.5%
    Microsoft Corp.

    		 MSFT,
    -1.15%         		-$728

    		 -28.3%
    Tesla Inc.

    		 TSLA,
    +0.70%         		-$677

    		 -65.4%
    Meta Platforms Inc. Class A

    		 META,
    -1.21%         		-$465

    		 -64.2%
    Nvidia Corp.

    		 NVDA,
    -1.37%         		-$376

    		 -50.3%
    PayPal Holdings Inc.

    		 PYPL,
    -0.01%         		-$141

    		 -62.6%
    Netflix Inc.

    		 NFLX,
    -0.44%         		-$138

    		 -51.7%
    Walt Disney Co.

    		 DIS,
    -1.62%         		-$123

    		 -43.7%
    Salesforce Inc.

    		 CRM,
    -0.96%         		-$118

    		 -47.8%
    Source: FactSet

    So there is your surprise for today: Apple is this year’s biggest stock-market loser.

    Don’t miss: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

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  • China turns a corner on COVID as it lifts quarantines for foreigners

    China turns a corner on COVID as it lifts quarantines for foreigners

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    China has turned a corner in its zero-Covid policy, lifting quarantines for foreign travelers from early next year, but that has come with cost as cases are surging and hospitals are packed.

    The National Health Commission said over the weekend that it will drop the COVID-19 quarantine requirement for passengers arriving in China from abroad, starting Jan. 8. That was a major step in China’s lifting of the zero-COVID policy that have kept foreigners locked out, and its citizens locked in, for more than 2 1/2 years.

    “It feels like China has turned the corner,” said Colm Rafferty, chairman of the American Chamber of Commerce in China, in a statement, as the Associated Press reported.

    While many welcome the lifting of the zero-COVID policy, it has also triggered a surge in cases and has led to hospitals in many smaller cities and towns being overwhelmed. The jump in severe cases comes as China’s health authorities struggle to vaccinate the elderly, amid fears of potential side effects.

    In other China COVID news, China Meheco Group Co., which distributes Pfizer Inc.’s
    PFE,
    -1.35%
    Paxlovid COVID-19 vaccine in China, said over the weekend that Paxlovid can only be purchased at hospitals. That limits broader sales of the drug, including through e-commerce channels.

    Back in the U.S., the latest data showed that the daily average of new cases and deaths have slipped during the Christmas holiday weekend, while hospitalizations have leveled off.

    The seven-day average of new cases was 66,014 on Monday, according to a New York Times tracker. That’s down from 70,508 on Dec. 24, and down 1% from two weeks ago.

    However, case counts could be artificially low during as officials who track the numbers take vacation for the Christmas and New Year’s holidays. Also, rising test positivity rates suggest many new COVID cases are not reported, as many who test at home don’t report results to health officials.

    The daily-average test positivity rate climbed to a four-month high of 14% on Monday, up 14% from two weeks ago.

    COVID-related hospitalizations dipped to 40,156 on Monday from 40,969 on Saturday, but had ticked up 3% from two weeks ago. Meanwhile, COVID patients in intensive care units (ICUs) increased to a 4 1/2-month high of 4,931 on Monday, up 11% from two weeks ago.

    The daily average of deaths eased to 426 on Monday from 428 on Christmas Eve, and has declined 9% in two weeks.

    The number of Americans who have been fully vaccinated was 229.99 million, or 69% of the total population, according to the latest data from the Centers for Disease Control and Prevention, while only 14.6% of Americans have received the updated (bivalent) booster dose.

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