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https://www.barrons.com/articles/stock-market-movers-8c0c7b23
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,
and Pfizer
PFE,
-BioNTech
BNTX,
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.
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.”
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.
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.”
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.”
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.
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,
and Pfizer Inc.
PFE,
-BioNTech
BNTX,
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,
will administer doses in stores and Minute Clinics, the CDC said, and Walgreens Boots Alliance Inc.
WBA,
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.
The World Health Organization has upgraded COVID-19 variant EG.5 to a variant of interest, or VOI, from a variant under monitoring, or VUM, as it continues to become more prevalent around the world.
The variant — which has been nicknamed Eris by some media, following the Greek-alphabet designation used for other variants — has been found in 51 countries, with most sequences, 30.6%, stemming from China, said the WHO.
Other countries that have submitted at least 100 sequences to a central database include the U.S., the Republic of Korea, Japan, Canada, Australia, Singapore, the United Kingdom, France, Portugal and Spain, the WHO said in a statement.
Eris is a descendent lineage of XBB.1.9.2, which is an omicron subvariant. It was first detected on Feb. 17 and designated as a VUM on July 19.
Its latest designation means it’s more prevalent than it was, has a growth advantage over earlier variants and merits closer monitoring and tracking.
Here’s what you need to know about Eris.
The strain is increasing in global prevalence, accounting for 17.4% of cases sequenced in the week through July 23, up from 7.6% four weeks earlier. The WHO has been tracking COVID data on a 28-day basis, largely because countries have cut back on testing and surveillance as they emerge from the pandemic, meaning the agency has far less data than it did during the pandemic.
Eris has become dominant in the U.S., according to projections made by the Centers for Disease Control and Prevention, although a shortage of data is hampering the agency’s efforts to surveil the illness.
The CDC said last week it was unable to publish its “nowcast” projections, which it releases every two weeks, for where EG.5 and other variants are circulating for every region, because it did not have enough sequences to update the estimates.
“Because nowcast is modeled data, we need a certain number of sequences to accurately predict proportions in the present,” CDC representative Kathleen Conley told MarketWatch.
“For some regions, we have limited numbers of sequences available and therefore are not displaying nowcast estimates in those regions, though those regions are still being used in the aggregated national nowcast,” she said.
It is estimated that EG.5, an omicron subvariant, accounted for 17.3% of COVID cases in the U.S. in the two-week period through Aug. 5. That was up from an estimated 11.9% in the previous period and was more than any other variant.
For more, see: New Eris COVID variant is dominant in the U.S., but a shortage of data is making it hard to track
The public-health risk is deemed to be low at the global level, lining up with the risk posed by XBB.1.16 and other currently circulating VOIs, according to the WHO statement. But it’s likely more infectious.
“While EG.5 has shown increased prevalence, growth advantage, and immune escape properties, there have been no reported changes in disease severity to date,” said the WHO.
That growth advantage and immune-escape properties mean Eris may cause a rise in case incidence over time and become dominant in some countries or even the world, according to the WHO.
The Eris variant causes the same symptoms as seen with other strains of COVID, such as sore throat, runny nose, cough, congestion, fever, fatigue, body aches and a possible loss of taste or smell.
Like earlier strains of COVID, the best protection is to be vaccinated with any of the vaccines developed by Pfizer Inc.
PFE,
and German partner BioNTech SE
BNTX,
Moderna Inc.
MRNA,
or Novavax Inc.
NVAX,
The vaccines that will be made available in the fall will be designed to protect against all subvariants of XBB, including Eris.
Online retail giant Amazon.com Inc.’s
AMZN,
second-quarter results and third-quarter forecast sales last week were a bet that more consumers would start buying more things, but Wall Street’s expectations for the third quarter overall have only grown dimmer.
With most of the 500 companies that make up the S&P 500 Index
SPX
already through the second-quarter earnings reporting season, slightly more than normal have reported per-share profit that beat Wall Street’s estimates, according to FactSet.
For the third quarter though, analysts now expect a mere 0.2% increase in per-share profit growth overall, according to a FactSet report on Friday, or slightly lower than the 0.4% growth that was expected for the third quarter on June 30,
And with some two months still left in the third quarter, and with that forecast likely to come down as the period progresses, Wall Street’s profit expectations are getting ever closer to turning negative.
Wall Street analysts overall still expect a bigger rebound for the fourth quarter, the FactSet report said. And they expect 2023 overall to eke out a per-share profit gain of 0.8%.
Worries of a U.S. recession emerging at some point during the back half of this year have started to fade at least a little after many economists fixated on the possibility earlier this year when the Federal Reserve was raising interest rates to combat a jump in inflation in 2022 . Some analysts now say savings fatigue could prompt more shoppers to splurge this year, after relentlessly tightening their budgets due to rising prices.
Federal Reserve Chair Jerome Powell last month said policymakers at the central bank had also shucked off their worries of a downturn.
See: Fed no longer foresees a U.S. recession — and other things we learned from Powell’s press conference
“The staff now has a noticeable slowdown in growth starting later this year in the forecast. But given the resilience of the economy recently, they are no longer forecasting a recession,” he said last month.
Not everyone is convinced that a downturn has vanished from the horizon though. Sheraz Mian, director of research at Zacks, told MarketWatch last month that more bearish analysts had kept pushing out their recession forecasts, after being defied by the actual, and more positive, economic data. Some economists continue to push out those forecasts.
“We still expect a recession, but now we are looking for it to begin in Q1 2024 rather than Q3 2023,” Thomas Simons, U.S. economist at Jefferies, said in a research note on Friday.
He said that interest rate hikes from the Federal Reserve were only just starting to affect customer behavior. Households were trying to rebuild their savings, after spending through whatever they had built up during the pandemic. Student-loan payments were returning, he said, and corporate margins were thinning.
“Corporate profit margins are narrowing, and businesses will look to cut costs through layoffs,” he said.
Among S&P 500 index companies, 34 report results during the week ahead, including one from the Dow Jones Industrial Average, according to FactSet.
Results from Walt Disney Co.
DIS,
will likely gobble up more media attention, but earnings from Paramount Global Inc
PARA,
— which oversees CBS, Showtime, Comedy Central and other channels — will offer more detail about how studios are positioning themselves with Hollywood actors on strike. Lions Gate Entertainment Corp.
LGF.A,
also reports.
Results from Tyson Foods Inc.
TSN,
will give investors and customers a brief look at the state of the grocery aisle where higher food prices over the past year have strained spending on other things. Beyond Meat Inc.
BYND,
which also reports during the week, will be hoping new product launches of plant-based meat-like alternatives can overtake analyst skepticism, amid competition with fake meat and real meat alike.
Elsewhere, ride-hailing platform Lyft Inc.
LYFT,
online dating service Bumble Inc.
BMBL,
and video-game maker Take-Two Interactive Software Inc.
TTWO,
also report during the week. And Canadian pot producer Canopy Growth Corp.
CGC,
will get another chance to pick up the pieces, after over-expanding and now trying to hold onto its cash.
Disney drama: One way or another, people on both coasts are mad at Disney
DIS,
Chief Executive Bob Iger right now, as his company prepares to report quarterly results on Wednesday. Shares of Disney are down slightly this year. The company is currently fighting with Florida Gov. Ron DeSantis, who is trying to stamp out Disney World’s self-governing privileges after the company criticized the state’s restrictions on classroom discussion of gender identity. When Iger accused striking actors and writers in Hollywood of not being “realistic,” the actors and writers shot back, noting his hefty executive compensation plan.
While the friction in Florida hasn’t hurt Disney’s parks attendance, the Hollywood shutdown has threatened Disney’s massive film and TV show operations, as Disney+ subscribers fall and investors more aggressively seek profits from studios’ streaming operations. Elsewhere, Rich Greenfield, an analyst at LightShed Partners, said “Pixar and Disney Animation have not had a breakout hit that impacted children’s play patterns and both Marvel and Lucasfilm feel increasingly tired from overuse.”
The sense is growing that more time is needed for Iger to fix Disney’s problems. On Wednesday, analysts may get a deeper sense of how much more, with the chance of more drama between Disney and its home state and the writers and actors the company depends on.
UPS and the Teamsters deal: United Parcel Service Inc. reports quarterly results on Tuesday, as rank-and-file Teamsters vote on a tentative labor agreement struck with the package deliverer in an effort to avert a strike. The deal, if approved, would raise worker pay and give the economy and businesses a breather, after threats of strikes or work stoppages at the nation’s ports and railways were averted over the past year.
Local Teamsters unions have voted overwhelmingly to at least endorse the agreement, between UPS
UPS,
and the Teamsters union, which represents 340,000 UPS workers, but not everyone was happy with the deal. Some part-timers felt the Teamsters could have used their leverage to wrest more from UPS, following a profit windfall at the company. And investors have held out for more detail from UPS executives themselves on what the deal might mean for the bottom line and for shipping prices.
Analysts will be dissecting the impact of the agreement as shipping demand lags, trucking company Yellow Corp.
YELL,
reportedly shuts down and FedEx Corp.
FDX,
tries to slash costs.
China-Founded Rivals Ramp Up War for American Shoppers
Summer… it’s startin’ to drag a bit, no? Don’t get me wrong: I love having my bean home with me. But by the end of a week, where I’m not only trying to work from home but give him a great summer, saying “I’m pooped” is the understatement of the year!
I’ve stumbled upon a few good ideas of fun things to do this summer that you haven’t thought of… they’ll keep your kids busy, active, and away from screens (and out of your hair). If you’re starting to loathe summer, these ideas should help…
The reading caterpillar. I wanted to ensure my son kept up on his book and reading time this summer. So, in addition to getting him his very own library card at the start of summer and scheduling weekly trips there, we created a caterpillar on his bedroom door. I cut out a little paper head and taped it to the top of his door, as well as a whole bunch of coloured circles for his body – each time he reads a book he gets to add a circle. He’s loving the challenge of seeing how long he can make the caterpillar (and getting in tons of book time too!).
STEM building activities. STEM learning is a curriculum based on the idea of educating students in four specific disciplines — science, technology, engineering and mathematics — in an interdisciplinary and applied approach. In other words, finding new, creative ways to teach our children to learn. My most recent fave STEM activity: a container of toothpicks and either Playdoh or mini marshmallows. By using the little marshmallows or small blobs of rolled up Playdoh, and affixing them to the toothpick ends, you can build and make all sorts of cool structures.
Dinosaur egg excavation. Why is it that kids are obsessed with eggs? Toys that come in eggs, chocolate eggs, etc. So I put a few dinosaurs into some regular-sized balloons, filled them with water and froze them. Then, I cut away the balloon and TA DA: dinosaur eggs. Now arm your kid with a mallet or hammer and protective eye gear, and see if they can get the dinosaurs out!
LEGO challenge. Make a list of some inspiring LEGO ideas (build a catapult, build a zipline, build your initials/name, build a robot) and gave em a bin of LEGOS. You’re welcome.
Water droplet races. Roll out some wax paper and give your kids some eye droppers, a straw and a small bowl of coloured water each. Have them put a droplet of water on the wax paper and then “move it” by blowing at it through the straw. You can give each child a different colour of water and they can race.
Make bubble wands using pipe cleaners. Configure all kinds of shapes. Decorate the handles with beads.
Make magic wands. Buy short wooden dowels at the dollar store and decorate with Washi tape, coloured electrical tape, stickers, paint, markers, glitter and more. Affix long strands of ribbon from the end to make it “magical.”
Create your own comic books. Gather up those spare comic books, old reading books, magazines, newspapers, stickers, etc. and have your kid turn them into his/her own comic book. Have the siblings work on one together.
Make your own dream-catchers. Take a paper plate and use a hole puncher to punch a circular pattern around the interior of the plate. Have your child thread yarn through in his/her own pattern. Use feathers, beads and other decorations to personalize it.
Water pistol painting. Fill a few dollar store water guns with coloured water, and have them blast away at paper or a canvas.
A full-time work-from-home mom, Jennifer Cox (our “Supermom in Training”) loves dabbling in healthy cooking, craft projects, family outings, and more, sharing with readers everything she knows about being an (almost) superhero mommy.
Meta Platforms Inc. launched Threads, its rival to Twitter, a day early Wednesday.
“Let’s do this. Welcome to Threads,” Meta Chief Executive Mark Zuckerberg posted on the new app.
The text-based app, a spinoff of Meta’s META Instagram, had been set to launch Thursday morning, but instead went live for users in the U.S. and more than 100 other…
Meta’s Twitter-rival Threads launches tomorrow: What we know so far
Nike Inc. on Thursday reported fourth-quarter profit that came up short of Wall Street’s expectations, with price cuts weighing on results amid weaker demand for sneakers and clothing.
Nike
NKE,
reported fourth-quarter net income of $1.03 billion, or 66 cents a share, down from $1.44 billion, or 90 cents a share, in the same quarter last year. Revenue rose 5% to $12.83 billion, compared with $12.23 billion in the prior-year quarter.
Analysts polled by FactSet expected Nike to report adjusted earnings of 68 cents a share, on $12.58 billion in sales.
Nike said gross margins slipped 140 basis points to 43.6%, dragged by “higher product input costs and elevated freight and logistics costs, higher markdowns and continued unfavorable changes in net foreign currency exchange rates.”
Shares were up 0.3% after hours on Thursday.
Heading into the earnings, Wall Street had questions about Nike’s stockpiles of unsold shoes and clothing, and what it might take to clear them, as consumers still find themselves stretching their budgets to buy more essential goods like groceries.
Nike’s broader plans to sell more shoes and clothes directly — either through its own e-commerce platform or its own physical stores. But recent plans to start selling again in Macy’s Inc.
M,
and Designer Brands Inc.’s
DBI,
DSW shoe stores have raised questions over whether the athletic-gear maker is rethinking that strategy. Analysts were also focused on demand in China, whose re-opening from COVID-19 shutdowns remains in flux.
Shares of Nike have risen 9.6% over the past 12 months. By comparison, the S&P 500 Index
SPX,
has risen 15% over that period.
Are stores getting more desperate to sell sneakers? Fourth-quarter results from Nike Inc. on Thursday will probably provide part of the answer.
Even as its some of its basketball shoes still put up double-digit sales gains — like those named after NBA icons LeBron James, Luka Doncic and Giannis Antetokounmpo — the athletic-gear maker, like its rivals, has faced weaker consumer demand overall. With customers forced to spend more money on necessities over the past year, they’ve had less to spend on new shoes.
In March, Nike
NKE,
executives said that the demand backdrop remained “promotional” — one in which anyone selling sneakers and clothing was cutting prices more aggressively to attract customers. But ahead of Thursday’s results, some analysts also wondered whether the stalling demand has forced bigger changes to the way management thinks about its broader turn away from retailers — a core piece of its sales strategy.
Nike over recent years has embarked on a plan to rely less on shoe retailers for sales and more on sales made directly to customers through its own stores and online. But recently, it decided to start selling clothing again at Macy’s
M,
and shoes again at DSW, the shoe-store chain run by Designer Brands Inc.
DBI,
— this after ending partnerships with both retailers over the past two years.
The return to traditional retail has raised questions about whether Nike is looking to more aggressively clear product it’s had trouble selling, and whether management is re-evaluating the company’s go-it-alone sales strategy overall.
“The big question on our minds heading into [Nike’s] quarter is what is going on with the [direct-to-consumer] pivot?” Quo Vadis analyst John Zolidis said in a note on Monday. “Reopening Macy’s and DSW seems odd in context of previous dismissive statements about undifferentiated retail.”
He continued: “Further, neither of these retailers has a customer that correlates strongly with [Nike’s] highest-value segments. The easiest explanation is that [Nike] overestimated the dollars it could recapture from closed wholesale accounts and now has too much inventory it needs to clear.”
Earnings: Analysts polled by FactSet expect Nike to earn 68 cents a share, down from 90 cents in the same quarter a year ago. Contributors to Estimize — a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others — expect earnings per share of 75 cents.
Revenue: Analysts polled by FactSet expect $12.58 billion in sales for Nike. Forecasts from Estimize call for sales of $12.72 billion.
Stock price: Nike’s stock is only up 1.3% over the past 12 months. Shares got hit in September, after company executives warned of further price-cutting from rivals due to weaker demand. The stock rebounded later but gave up some gains in May. The stock was up 2% on Monday.
Nike in March said demand for product sold at full pricing remained solid. Still, sneaker chain Foot Locker Inc.
FL,
recently cut its outlook. Lots of Vans shoes are running at a discount, one analyst said last month, as the skater-centric brand competes with casual fare from the likes of Adidas
ADS,
and others.
Other analysts were also wondering about Nike’s return to Macy’s and DSW. But not everyone believed the move was a sign of deeper problems.
“Investors are worried that this is a reversal in Nike’s shift from wholesale to [direct-to-consumer], but we don’t think the strategy is broken,” BofA analyst Lorraine Hutchinson said in a research note on Wednesday. “We expect to hear an explanation of these moves on the [conference] call rather than an about-face on its focus on reducing undifferentiated wholesale.”
Still, the company faced concerns about sales abroad. Zolidis also said markets were increasingly worried about growth in China, whose recovery from pandemic lockdowns has stumbled.
“Our recent conversations with companies in China suggest that trends are mixed,” Zolidis said. “The consumer is more value oriented, and job uncertainty is higher.”
Brussels is finalizing a law to legalize new gene-editing technologies for crops across the European Union.
The EU’s ultra-restrictive GMO regulation, which predates newer technologies, sets extremely high hurdles for growing genetically engineered crops and allows EU countries to ban them even after they have been proven to be safe.
The new law aims to cut red tape and allow easier market access for plants grown with “new genomic techniques” (NGTs), such as CRISPR-Cas9, which target specific genes without necessarily introducing genetic material from outside the breeders’ gene pool.
The rules are being pushed by multinationals such as Bayer, Syngenta and Corteva, which together control the lion’s share of the plant breeding sector, as well as a host of smaller companies, scientists and farmers’ groups such as Copa-Cogeca.
They argue that the EU risks falling behind the rest of the world in using new crops with special traits that can make them more nutritious, efficient and better adapted to a changing climate.
Pitted against them are green lawmakers, environmental advocacy groups, organic and small farmers, and more than 400,000 EU citizens who have signed a petition against deregulating what they call “new GMOs.”
These groups say the rules will further tighten the grip of the handful of multinationals, allowing them to claim patents on crops that could have been obtained through conventional breeding methods, while threatening non-GM and organic production. They also argue that because NGTs have only been around for just over a decade, questions remain about their safety.
According to a leaked draft, EU countries will no longer be able to ban the cultivation of NGT crops.
The law simplifies rules even more for a sub-group of NGT crops that are deemed equivalent to crops obtained by traditional breeding techniques. The obligation to label foods as “GMO” will no longer apply to these “conventional-like” plants, and they won’t be subject to risk assessment by food safety regulators.
An earlier draft of the law had a carve-out for crops engineered to tolerate herbicides — which would still have been subject to the stricter GMO rules. However, a newer draft no longer makes such a distinction.
The European Commission is due to unveil the proposed law on gene-edited crops on Wednesday, as part of the latest package of measures under its Green Deal environment and sustainability agenda. This will include a new law on soil health, revisions of the food waste and textiles aspects in the EU Waste Framework Directive, and legislation on seeds and other plant and forest reproductive material.
Bartosz Brzezinski and Jakob Hanke Vela
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That’s the practice by many S&P 500 food and consumer companies of raising prices to protect what a new report calls their “cushioned corporate profits,” and it has enabled them to boost margins through the current inflationary period.
Companies including Kimberly-Clark Corp.
KMB,
PepsiCo Inc.
PEP,
General Mills Inc.
GIS,
and Tyson Foods Inc.
TSN,
have on recent earnings calls touted their ability to raise prices, earning tidy profits and rewarding their shareholders as they go, according to the report from Accountable.US, a liberal-leaning consumer-advocacy group.
And they have signaled their intention to continue to take “price actions” even as the Federal Reserve has hiked interest rates an unprecedented 10 times in an effort to tame inflation.
“Higher interest rates haven’t stopped S&P companies, especially in the big food industry, from raising consumer prices despite reporting billions in extra net earnings and over a trillion dollars in new giveaways to wealthy investors,” said Liz Zelnick, director of economic security and corporate power at Accountable.US.
“Corporate greed is a stubborn thing and requires serious action from Congress. The Fed has not seen an adequate return on its investment in a policy that has already created fissures in the economy that could lead to recession. It’s just not worth it,” she said.
Now read: Skip, pause or hike? A guide to what is expected from the Fed on Wednesday.
Accountable.US is not alone in calling out price hikes on essentials including food. Walmart Inc.
WMT,
is also unhappy with packaged-food companies that have steadily raised prices in dry grocery and consumable goods, according to a recent report from research company CFRA.
“Given Walmart’s enormous bargaining power over its suppliers, we expect the retail giant to push back on further price increases from its packaged-food suppliers,” he said. That is expected to hurt margins, especially if volume growth does not recover.
May inflation data released Tuesday found that food prices were up 0.2% from April, after remaining flat for the previous two months. Food prices are up 6.7% over the last year. The food-at-home index is up 5.8% over the last year, while the index for cereals and bakery products is up 10.7%.
Food prices started to rise about two years ago, when supply-chain issues and higher fuel and commodity prices led companies to pass some of those costs on to customers.
But companies appear determined to raise prices even more, despite a decline in shipping and gas costs. Gasoline was down 5.6% in May from April and fuel oil fell 7.7%, according to consumer-price-index figures.
Also read: U.S. inflation slows again, CPI shows, and might keep Fed on sidelines
Kimberly-Clark executives told analysts on its recent earnings call that the company is able to “rapidly implement broad pricing actions” and acknowledged that “pricing has continued to be a big driver behind our top-line growth.”
The company’s first-quarter earnings topped expectations and it raised guidance for the full year. That’s after it raised prices by 10% for a second straight quarter, driving margins wider by 340 basis points.
Shareholders were rewarded to the tune of $425 million during the quarter, the Accountable.US report notes.
PepsiCo Chief Executive Ramon Laguarta told analysts on that company’s recent earnings call that most of its price increases are behind it.
However, he said, “obviously, there are some markets, highly inflationary markets around the world, where we might have to take additional pricing. If you think about Argentina, Turkey, Egypt — those kinds of markets where the currencies are suffering. But the majority of our pricing is already done,” he said, according to a FactSet transcript.
PepsiCo’s 2022 earnings rose 16.9% to nearly $9 billion, and it spent more than $7.6 billion on stock buybacks and dividends, with the former up 1,313% from 2021.
General Mills, meanwhile, bragged about “getting smart about how we look at pricing” on its recent call. The parent of brands including Cheerios, Nature Valley, Blue Buffalo pet products and Pillsbury raised its fiscal 2023 guidance in February.
And Tyson executives touted the “significant pricing power of our portfolio with a year-over-year increase of 7.6%.” Tyson’s latest quarter included a surprise loss, as it was hit by weak demand for meat, along with plant closures and job cuts.
For more, see: Tyson Foods stock slides after meat producer swings to surprise loss
But Tyson had net income of over $3.2 billion in 2022, up from $3 billion in 2021, and it rewarded shareholders with $1.35 billion in buybacks and dividends.
For Accountable.US, it’s more compelling evidence that the Fed’s rate-hike strategy “has failed to root out one of the main drivers of inflation and should give the [Federal Open Market Committee] pause before lifting rates again this week to the detriment of jobs and the economy.”
The Consumer Staples Select Sector SPDR exchange-traded fund
XLP,
has fallen 1.6% to date in 2023, while the SPDR S&P Retail ETF
XRT,
has gained 4.6%. The S&P 500
SPX,
has gained 13% in the same period.
Whether the kiddos are headed for a day by the water or running around the playground, Miles the Label has parents and kids ready for the summer heat.
Not only are their looks fashionable but keep the kids comfortable during hot and sunny days. Their swimwear offers UPF50+ sun protection and day clothes made from breathable, eco-friendly materials including organic cotton, soft and stretchy jersey, lightweight linen, and 100% recycled polyester. These clothes were made for soaking up the sun and rolling in the grass.
And the Miles the Label’s design philosophy is to make clothes that kids can actually play in and wear year after year or pass them down to their siblings/friends. Now that’s a trend us parents can get on board with! Check out their first-ever swimwear collection, as well as their summer capsules including À La Mode and Rink and Roll.
– Jennifer Cox
U.S. stock futures were inching higher Thursday as traders contemplated the latest Fed decision, more banking sector stress, and Apple’s impending results.
On Wednesday, the Dow Jones Industrial Average
DJIA,
fell 270 points, or 0.8%, to 33414, the S&P 500
SPX,
declined 29 points, or 0.7%, to 4091, and the Nasdaq Composite
COMP,
dropped 55 points, or 0.46%, to 12025.
Results from Apple
AAPL,
the market’s biggest company, which are due after the closing bell on Thursday, will move into sharper focus as the session progresses.
But before that investors must contend with disappointment over the Federal Reserve’s policy stance and renewed fretting about the U.S. regional banking sector that have delivered volatile trading over the past 24 hours and left stock-index futures struggling to rally.
The S&P 500 slid 0.7% on Wednesday after the Fed again raised interest rates and irked some traders by seeming equivocal on whether the implied pause in monetary tightening meant the cycle of rate hikes were at an end and cuts could come soon.
“As widely expected, the Federal Reserve raised interest rates by a further 0.25%, which of itself was not market moving. Of rather more interest was the implication that the rate hiking cycle had now ended, even though the Fed remains poised to act again if necessary,” said Richard Hunter, head of markets at Interactive Investor.
“At the same time, the Fed dampened expectations for any interest rate reductions in the immediate future, contrary to investor hopes that some kind of easing may follow before the end of the year, depending on the severity of any potential recession,” he added.
Traders will also be keeping an eye out for any surprises when the European Central Bank delivers its policy decision at 2:15 p.m. Central European time (8:15 a.m. Eastern).
Then, late on Wednesday, just hours after Fed Chair Jay Powell said that the banking sector was “sound and resilient” shares in PacWest Bancorp
PACW,
plunged 50% in after-hours trading after reports the struggling regional bank’s executives were weighing a possible sale.
Stock index futures dived further in response on fears of continued turmoil in the financial sector. But though they have managed to recover much of those secondary losses the febrile action signals a nervous market, analysts noted.
“It looks like more trouble is brewing for the U.S. banking sector, on the contrary to what Powell said yesterday,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
Other company results due on Thursday include Moderna
MRNA,
Peloton
PTON,
Kellogg
K,
before the opening bell rings, followed by Lyft
LYFT,
and Shopify
SHOP,
after the close.
U.S. economic updates set for release on Thursday include weekly initial jobless claims; first quarter productivity and unit labor costs; and the March trade deficit. All are due at 8:30 a.m. Eastern.
There is currently no dispute over who wears the crown of world’s wealthiest person. It isn’t Tesla Chief Executive Elon Musk.
The net worth of Bernard Arnault, the founder and chairman and chief executive officer of LVMH Moet-Hennessy Louis Vuitton SE
MC,
stood at $210 billion as of Thursday, according to the Bloomberg Billionaire Index. That makes him the world’s richest person by that marker, with an increasingly comfortable lead over Tesla’s
TSLA,
Musk, who also leads SpaceX and Twitter and whose wealth stands at $180 billion. At times the two have been in a neck-and-neck race for that top spot.
LVMH shares closed at a record €883 on Thursday, helping lift the French CAC-40
PX1,
to an all-time high. That followed forecast-beating first-quarter sales from the luxury giant, thanks to returning China shoppers as COVID-19 restrictions eased, and rebounding international travel that drove duty-free sales. Up 7% so far this week, LVMH shares rose another 0.5% on Friday to €888.70.
The stock surge padded Arnault’s fortune by $11.6 billion on Thursday, the second-biggest single-day gain ever for him and a fresh record fortune, according to Bloomberg. Musk didn’t do badly.
He increased his wealth by $3.83 billion on Thursday, before Tesla and U.S. equities
SPX,
generally retreated a bit on Friday.
Read: Who is Bernard Arnault, the world’s richest person after surpassing Elon Musk?
LVMH owns jewelers Bulgari and Tiffany, alongside fashion houses Louis Vuitton and Dior. Results released late Wednesday showed the luxury standard-bearer beating expectations across every division, led by fashion and leather goods, the latter of which is significant, Berenberg analysts observed.
“As the most profitable division, this also bodes well for margin development,” said Berenberg analyst Graham Renwick, in a note to clients on Friday.
“This performance sets the standard for [first quarter] luxury reporting and gives encouragement on China’s recovery from pandemic disruption. Overall, we think these results continue to demonstrate LVMH’s strong momentum and best-in-class execution — again reaffirming its high quality and strong track record, which we believe investors are favoring in this uncertain macro environment,” said Renwick, who reiterated a buy rating on LVMH’s stock and lifted his share-price target to €960.
The luxury sector got another confidence boost on Friday, as Hermès International SCA
RMS,
revealed sales momentum in the first quarter, driven by a bump in tourism and new stores. The maker of the legendary Birkin handbag saw a 23% annual increase in first-quarter sales and backed “ambitious” organic revenue-growth targets.
Luxury stocks have seen an impressive rebound in 2023, after a weak 2022 — LVMH shares fell 6% in 2022 as travel restrictions in China and overall economic worries weighed on shoppers.
LVMH shares are up 30% so far in 2023, with Hermès up 36% and Christian Dior SE
CDI,
and Gucci owner Kering SA
KER,
up 26% and 21%, respectively.
As for Musk, his wealth is divided among his businesses. While Tesla accounts for $76 billion, Bloomberg estimates his share of SpaceX is worth $49 billion, and his share of Tesla is worth nearly $10 billion. He paid $44 billion for Twitter last year, after an attempt to wriggle out of the deal, and its current valuation is a matter of much speculation. Musk has fired thousands of employees and claimed this week that a return to profitability is now just around the corner.
Tesla is slated to report quarterly results next week, and some analysts aren’t optimistic due to persistent price cuts of its models.
Moderna Inc. said Tuesday it’s working to develop its first bacterial vaccine to protect against Lyme disease, the tick-borne illness that causes a range of painful symptoms, including fever, headaches, fatigue, joint pain and rash.
The biotech
MRNA,
whose first product to be approved by the U.S. Food and Drug Administration was its mRNA-based COVID vaccine, said it has two candidates in development to address Lyme disease, named mRNA-1982 and mRNA-1975.
It announced the news at its fourth Vaccine Day, where it offered a full update on its clinical pipeline, which includes vaccines to protect against flu and respiratory syncytial virus, or RSV, as well as HIV, Epstein-Barr virus and herpes simplex virus, among others.
There are about 120,000 cases of Lyme disease in the U.S. and Europe every year, creating a “significant quality of life burden,” the company said in a statement. Rising temperatures are helping the disease spread more easily, and it is difficult to diagnose, because the symptoms are similar to those of many other diseases. It most seriously affects children below the age of 15 and older adults.
“Older adults appear to have higher odds of unfavorable treatment response as compared with younger patients, and neurologic manifestations are more common at presentation for this older adult population,” said the statement.
The mRNA-1982 candidate is designed to create antibodies for Borrelia burgdorferi, the pathogen that causes almost all Lyme disease in the U.S., while mRNA-1975 is designed to elicit antibodies specific to the four major Borrelia species that cause the disease in the U.S. and Europe.
Other new candidates in Moderna’s pipeline include mRNA-1405 and mRNA-1403, which aim to address the enteric virus norovirus. Norovirus is highly contagious and is the leading cause of diarrheal disease globally, Moderna said. It’s associated with about 18% of all such illnesses worldwide and causes about 200,000 deaths every year.
Overall, Moderna is expecting to launch six major vaccine products in the next few years, all of them with large addressable markets.
The company expects the annual global endemic market for COVID boosters alone to be worth about $15 billion.
It has dosed the first participant in a late-stage trial of its next-generation, refrigerator-stable COVID-19 vaccine candidate, mRNA-1283. The vaccine “has demonstrated encouraging results in multiple clinical studies,” the company said.
See now: Moderna CEO defends price increase for COVID vaccine to Congress
A separate trial of a flu vaccine called mRNA-1010 fared less well, however.
That trial “did not accrue sufficient cases at the interim efficacy analysis to declare early success in the Phase 3 Northern Hemisphere efficacy trial and the independent DSMB recommended continuation of efficacy follow-up,” the company said.
The company expects the market for respiratory-product sales to range from $8 billion to $15 billion by 2027 and for operating profit that year to range from $4 billion to $9 billion.
The stock was down 4% Tuesday and has fallen 15% in the year to date, while the S&P 500
SPX,
has gained 7%.
See also: Moderna’s stock slides as earnings fall short of estimates amid steep decline in COVID-vaccine sales
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Data on the U.S. consumer and housing market, plus several notable earnings reports, will be this week’s highlights. Barring any surprises, federal financial regulators’ Congressional testimony will be the main event on the banking front.
On Wednesday, Fed Vice Chair for Supervision Michael Barr and Federal Deposit Insurance Corp. Chairman Martin Gruenberg are scheduled to testify before the House Financial Services Committee. They’ll discuss the collapses of Silicon Valley Bank and Signature Bank and efforts to maintain confidence in the U.S. banking system.
