REUTERS
"Wall Street stocks finish higher as investors focus on Fed moves"
By Chibuike Oguh
April 29, 2024
Summary
* Tesla gains after clearing self-driving hurdles in China
* Apple rises after report of talks with OpenAI
* Domino's Pizza beats sales expectations, shares up
* Indexes up: Dow up 0.38%, S&P up 0.32%, Nasdaq up 0.35%
NEW YORK, April 29 (Reuters) - U.S. stocks ended higher on Monday, with sharp gains for Tesla and Apple leading the way, as investors looked toward what the Federal Reserve would say about the interest rate outlook after its policy meeting this week.
Traders expected the Fed to keep rates unchanged while striking a hawkish tone.
Tesla shares surged 15.3%, after the electric vehicle maker made progress in securing regulatory approval to launch its advanced driver-assistance program in China, its second-largest market after the U.S.
Apple gained 2.5% following a report that the iPhone maker had renewed discussions with OpenAI about using the startup's generative artificial intelligence (AI) technology.
Bernstein upgraded Apple's stock to "outperform".
Other megacap stocks finished lower including Alphabet, Meta Platforms, and Microsoft.
Nvidia closed higher after paring early losses.
Nine out of 11 S&P 500 sectors ended higher led by stocks in consumer discretionary, utilities, real estates, materials and industrials.
Equities in communication services and financials were the biggest losers.
"The bigger question than rates, because they're not going to cut this week, is how hawkish they're going to speak because they've already been pretty hawkish," said Thomas Hayes, chairman at hedge fund Great Hill Capital in New York.
Money markets are pricing in about 35 basis points (bps) of interest rate cuts this year, down from about 150 bps seen at the beginning of the year, according to LSEG.
The Dow Jones Industrial Average rose 146.43 points, or 0.38%, to 38,386.09, the S&P 500 gained 16.21 points, or 0.32%, to 5,116.17 and the Nasdaq Composite gained 55.18 points, or 0.35%, to 15,983.08.
Shares of Domino's Pizza jumped 5.6% after topping expectations for first-quarter same-store sales.
Of the 233 companies in the S&P 500 that have reported quarterly earnings, 78.1% surpassed analyst expectations, compared with a long-term average of 67%, according to LSEG data.
Paramount Global gained 2.9% after a report that the Redstone family and Skydance Media CEO David Ellison have made concessions to make a potential change in control of the streaming firm more appealing for other investors.
"The overall momentum is still to the upside and it's an important week, with a ton of earnings, the Fed on Wednesday and nonfarm payrolls on Friday, and the path of least resistance is higher," said Bill Strazzullo, chief market strategist at Bell Curve Trading in Boston.
Meanwhile, the Japanese yen jumped against the dollar on Monday, with traders citing yen-buying intervention by authorities trying to support a currency languishing at levels last seen over three decades ago.
Advancing issues outnumbered decliners by a 2.72-to-1 ratio on the NYSE.
On the Nasdaq, 2,615 stocks rose and 1,604 fell as advancing issues outnumbered decliners by a 1.63-to-1 ratio.
The S&P 500 posted 20 new 52-week highs and one new low while the Nasdaq recorded 80 new highs and 69 new lows.
Volume on U.S. exchanges was 9.98 billion shares, compared with the 11 billion average for the full session over the last 20 trading days.
Reporting by Chibuike Oguh in New York; additional reporting by Shristi Achar A and Johann M Cherian in Bengaluru; Editing by David Gregorio
https://www.reuters.com/markets/us/futu ... 024-04-29/
THE DAILY NEWS
Re: THE DAILY NEWS
REUTERS
"US Treasury to borrow $243 billion in Q2, higher than January forecast"
By Alden Bentley
April 29, 2024
April 29 (Reuters) - The U.S. Treasury said on Monday it expects to borrow $243 billion in the second quarter, $41 billion more than the January estimate largely due to lower cash receipts, partially offset by a higher cash balance at the beginning of the quarter.
The second-quarter financing estimate assumes a cash balance of $750 billion at the end of June, the Treasury said in a statement.
Attention now turns to Wednesday when the Treasury will detail its borrowing plans and auction sizes of various maturities.
With yields near the highest in months, the market has been highly attuned to the supply of Treasuries as concerns mount over rapidly rising U.S. debt.
The Federal Open Market Committee is expected to keep its benchmark rate unchanged on Wednesday at the end of its two-day meeting.
Speculation is growing that the Federal Reserve will not pivot to easing rates until late this year, given the U.S. economic strength and inflation that is stuck above its target rate of 2%.
At the same time, the Fed is expected to soon taper its quantitative tightening program, in which it lets bonds it bought during the pandemic to mature without replacing them on its balance sheet.
That will affect how much cash the Treasury needs to raise via Treasury bills.
Treasury officials said on Monday the borrowing estimates assumed no change to the Fed's current $60 billion per month roll-off of Treasuries.
The Treasury also announced it expects to borrow $847 billion in the third quarter, as it projects a cash balance of $850 billion at the end of September.
It also said in the first quarter the Treasury borrowed $748 billion in net marketable debt.
It ended the first quarter with a cash balance of $775 billion.
The Treasury explained that the end-March cash balance was $12 billion below the January forecast because higher cash receipts and lower outlays were partially offset by a $25 billion higher ending cash balance.
Reporting by Alden Bentley; Editing by Richard Chang
https://www.reuters.com/markets/us/us-t ... 024-04-29/
"US Treasury to borrow $243 billion in Q2, higher than January forecast"
By Alden Bentley
April 29, 2024
April 29 (Reuters) - The U.S. Treasury said on Monday it expects to borrow $243 billion in the second quarter, $41 billion more than the January estimate largely due to lower cash receipts, partially offset by a higher cash balance at the beginning of the quarter.
The second-quarter financing estimate assumes a cash balance of $750 billion at the end of June, the Treasury said in a statement.
Attention now turns to Wednesday when the Treasury will detail its borrowing plans and auction sizes of various maturities.
With yields near the highest in months, the market has been highly attuned to the supply of Treasuries as concerns mount over rapidly rising U.S. debt.
The Federal Open Market Committee is expected to keep its benchmark rate unchanged on Wednesday at the end of its two-day meeting.
Speculation is growing that the Federal Reserve will not pivot to easing rates until late this year, given the U.S. economic strength and inflation that is stuck above its target rate of 2%.
At the same time, the Fed is expected to soon taper its quantitative tightening program, in which it lets bonds it bought during the pandemic to mature without replacing them on its balance sheet.
That will affect how much cash the Treasury needs to raise via Treasury bills.
Treasury officials said on Monday the borrowing estimates assumed no change to the Fed's current $60 billion per month roll-off of Treasuries.
The Treasury also announced it expects to borrow $847 billion in the third quarter, as it projects a cash balance of $850 billion at the end of September.
It also said in the first quarter the Treasury borrowed $748 billion in net marketable debt.
It ended the first quarter with a cash balance of $775 billion.
The Treasury explained that the end-March cash balance was $12 billion below the January forecast because higher cash receipts and lower outlays were partially offset by a $25 billion higher ending cash balance.
Reporting by Alden Bentley; Editing by Richard Chang
https://www.reuters.com/markets/us/us-t ... 024-04-29/
Re: THE DAILY NEWS
REUTERS
"U.S. chip bans not meant to hobble China's growth, Blinken says"
By Stephen Nellis
April 26, 2024
April 26 (Reuters) - U.S. export controls on sending advanced computing chips to China are not meant to hold back China's economy or technological development, Secretary of State Antony Blinken said during an interview with National Public Radio on Friday.
Since 2022, U.S. officials have imposed sweeping controls on which computing chips can be exported to China, cutting off some sales from Nvidia, Advanced Micro Devices and Intel, among others.
Those controls followed earlier bans on shipping chips to Huawei Technologies.
But U.S. officials have granted at least two U.S. companies - Intel and Qualcomm - licenses to keep shipping chips to Huawei, which is using an Intel chip to power a new laptop model.
Two Republican lawmakers earlier this week criticized the exemption for Intel, but in the interview with NPR, Blinken highlighted the device as a sign the U.S. was not trying to hobble China.
"I saw that Huawei just put out a new laptop that it boasted was AI capable, that uses an Intel chip," Blinken told NPR host Steve Inskeep while visiting Beijing.
"I think it demonstrates that what we're focused on is only the most sensitive technology that could pose a threat to our security."
"We're not focused on cutting off trade, or for that matter containing or holding back China."
Intel and Qualcomm's licenses to sell to Huawei were granted during President Donald Trump's administration and have remained in place under President Joe Biden.
Those companies' direct competitors, AMD and MediaTek, have not received similar exemptions, and neither the Trump nor Biden administrations have explained why.
Reporting by Stephen Nellis in San Francisco; Editing by Sandra Maler
https://www.reuters.com/technology/us-c ... 024-04-26/
"U.S. chip bans not meant to hobble China's growth, Blinken says"
By Stephen Nellis
April 26, 2024
April 26 (Reuters) - U.S. export controls on sending advanced computing chips to China are not meant to hold back China's economy or technological development, Secretary of State Antony Blinken said during an interview with National Public Radio on Friday.
Since 2022, U.S. officials have imposed sweeping controls on which computing chips can be exported to China, cutting off some sales from Nvidia, Advanced Micro Devices and Intel, among others.
Those controls followed earlier bans on shipping chips to Huawei Technologies.
But U.S. officials have granted at least two U.S. companies - Intel and Qualcomm - licenses to keep shipping chips to Huawei, which is using an Intel chip to power a new laptop model.
Two Republican lawmakers earlier this week criticized the exemption for Intel, but in the interview with NPR, Blinken highlighted the device as a sign the U.S. was not trying to hobble China.
"I saw that Huawei just put out a new laptop that it boasted was AI capable, that uses an Intel chip," Blinken told NPR host Steve Inskeep while visiting Beijing.
"I think it demonstrates that what we're focused on is only the most sensitive technology that could pose a threat to our security."
"We're not focused on cutting off trade, or for that matter containing or holding back China."
Intel and Qualcomm's licenses to sell to Huawei were granted during President Donald Trump's administration and have remained in place under President Joe Biden.
Those companies' direct competitors, AMD and MediaTek, have not received similar exemptions, and neither the Trump nor Biden administrations have explained why.
Reporting by Stephen Nellis in San Francisco; Editing by Sandra Maler
https://www.reuters.com/technology/us-c ... 024-04-26/
Re: THE DAILY NEWS
REUTERS
"US regulators seize troubled lender Republic First, sell it to Fulton Bank"
By Reuters
April 26, 2024
April 26 (Reuters) - U.S. regulators have seized Republic First Bancorp and agreed to sell it to Fulton Bank, underscoring the challenges facing regional banks a year after the collapse of three peers.
Philadelphia-based Republic First, which had abandoned funding talks with a group of investors, was seized by the Pennsylvania Department of Banking and Securities.
The Federal Deposit Insurance Corp (FDIC), appointed as a receiver, said on Friday Fulton Bank, a unit of Fulton Financial Corp, will assume substantially all deposits and purchase all the assets of Republic Bank, which is the operating name for Republic First, to "protect depositors".
Republic Bank had about $6 billion in total assets and $4 billion in total deposits, as of Jan. 31, 2024.
The FDIC estimated the cost of the failure to its fund will be $667 million.
Apart from deposits, Republic also had borrowings and other liabilities of approximately $1.3 billion, Fulton said in a statement.
Fulton said the deal almost doubles its presence in the Philadelphia market with combined company deposits of approximately $8.6 billion.
"With this transaction, we are excited to double our presence across the region," said Fulton Chairman and CEO Curt Myers in a statement.
Republic Bank's 32 branches in New Jersey, Pennsylvania and New York will reopen as branches of Fulton Bank on Saturday or on Monday during business hours.
The decision marks the latest U.S. regional bank failure following the unexpected collapses of three lenders - Silicon Valley and Signature in March 2023 and First Republic in May.
Republic Bank had struck a deal with an investor group that included veteran businessman George Norcross and high-profile attorney Philip Norcross late last year, but the effort was terminated in February.
After that deal collapsed, the FDIC resumed efforts to seize and sell the bank, according to the Wall Street Journal, which first reported the news.
Republic Bank cut jobs and exited its mortgage origination business in early 2023 as it reeled under pressure from higher costs and inability to improve profitability.
The bank's stock price has tumbled from just over $2 at the start of the year to about 1 cent on Friday, leaving it with a market capitalization below $2 million.
Its shares were delisted from the Nasdaq in August and now trade over the counter.
Piper Sandler & Co and BofA Securities acted as financial advisers to Fulton, while Sullivan & Cromwell LLP acted as legal adviser.
Reporting by Manas Mishra, Pritam Biswas and Nathan Gomes in Bengaluru; Additional reporting by Saeed Azhar in New York; Editing by Shilpi Majumdar, Sriraj Kalluvila and Muralikumar Anantharaman
https://www.reuters.com/business/financ ... 024-04-26/
"US regulators seize troubled lender Republic First, sell it to Fulton Bank"
By Reuters
April 26, 2024
April 26 (Reuters) - U.S. regulators have seized Republic First Bancorp and agreed to sell it to Fulton Bank, underscoring the challenges facing regional banks a year after the collapse of three peers.
Philadelphia-based Republic First, which had abandoned funding talks with a group of investors, was seized by the Pennsylvania Department of Banking and Securities.
The Federal Deposit Insurance Corp (FDIC), appointed as a receiver, said on Friday Fulton Bank, a unit of Fulton Financial Corp, will assume substantially all deposits and purchase all the assets of Republic Bank, which is the operating name for Republic First, to "protect depositors".
Republic Bank had about $6 billion in total assets and $4 billion in total deposits, as of Jan. 31, 2024.
The FDIC estimated the cost of the failure to its fund will be $667 million.
Apart from deposits, Republic also had borrowings and other liabilities of approximately $1.3 billion, Fulton said in a statement.
Fulton said the deal almost doubles its presence in the Philadelphia market with combined company deposits of approximately $8.6 billion.
"With this transaction, we are excited to double our presence across the region," said Fulton Chairman and CEO Curt Myers in a statement.
Republic Bank's 32 branches in New Jersey, Pennsylvania and New York will reopen as branches of Fulton Bank on Saturday or on Monday during business hours.
The decision marks the latest U.S. regional bank failure following the unexpected collapses of three lenders - Silicon Valley and Signature in March 2023 and First Republic in May.
Republic Bank had struck a deal with an investor group that included veteran businessman George Norcross and high-profile attorney Philip Norcross late last year, but the effort was terminated in February.
After that deal collapsed, the FDIC resumed efforts to seize and sell the bank, according to the Wall Street Journal, which first reported the news.
Republic Bank cut jobs and exited its mortgage origination business in early 2023 as it reeled under pressure from higher costs and inability to improve profitability.
The bank's stock price has tumbled from just over $2 at the start of the year to about 1 cent on Friday, leaving it with a market capitalization below $2 million.
Its shares were delisted from the Nasdaq in August and now trade over the counter.
Piper Sandler & Co and BofA Securities acted as financial advisers to Fulton, while Sullivan & Cromwell LLP acted as legal adviser.
Reporting by Manas Mishra, Pritam Biswas and Nathan Gomes in Bengaluru; Additional reporting by Saeed Azhar in New York; Editing by Shilpi Majumdar, Sriraj Kalluvila and Muralikumar Anantharaman
https://www.reuters.com/business/financ ... 024-04-26/
Re: THE DAILY NEWS
RIGZONE
"Oil Ends Rocky Month Falling Below $82"
by Bloomberg | Julia Fanzeres, Alex Longley and Jordan Fitzgerald
Tuesday, April 30, 2024
Oil slid near its lowest price in a month as the potential for a cease-fire in the Middle East eased geopolitical tensions.
West Texas Intermediate settled below $82 a barrel, testing its 50-day moving average of about $81.80.
The level has provided technical support for prices, and a decisive drop below it may accelerate selling.
Earlier, oil was pressured by a potential agreement between Israel and Hamas to release hostages, a move that may de-escalate conflict in the region.
Meanwhile, continued signs of elevated inflation — including an acceleration in a broad gauge of US labor costs — are weighing on the outlook for crude demand.
Economic data in Europe showed the region exited recession, but inflation has also proved sticky.
Crude endured a rocky April after surging to the highest since October following Iran’s unprecedented attack on Israel.
While OPEC+ supply curbs are also bolstering prices, uncertainty over US monetary policy and softness in some fuel markets like diesel are adding headwinds.
US Secretary of State Antony Blinken, in an ongoing visit to the Middle East, urged leaders of the Hamas militant group — designated a terrorist organization by the US and the European Union — to quickly reach a decision on Israeli conditions for a cease-fire.
Prices:
WTI for June fell 0.8% to settle at $81.93 a barrel in New York.
Brent for July dropped 1% to $86.33 a barrel.
https://www.rigzone.com/news/wire/oil_e ... 6-article/
"Oil Ends Rocky Month Falling Below $82"
by Bloomberg | Julia Fanzeres, Alex Longley and Jordan Fitzgerald
Tuesday, April 30, 2024
Oil slid near its lowest price in a month as the potential for a cease-fire in the Middle East eased geopolitical tensions.
West Texas Intermediate settled below $82 a barrel, testing its 50-day moving average of about $81.80.
The level has provided technical support for prices, and a decisive drop below it may accelerate selling.
Earlier, oil was pressured by a potential agreement between Israel and Hamas to release hostages, a move that may de-escalate conflict in the region.
Meanwhile, continued signs of elevated inflation — including an acceleration in a broad gauge of US labor costs — are weighing on the outlook for crude demand.
Economic data in Europe showed the region exited recession, but inflation has also proved sticky.
Crude endured a rocky April after surging to the highest since October following Iran’s unprecedented attack on Israel.
While OPEC+ supply curbs are also bolstering prices, uncertainty over US monetary policy and softness in some fuel markets like diesel are adding headwinds.
US Secretary of State Antony Blinken, in an ongoing visit to the Middle East, urged leaders of the Hamas militant group — designated a terrorist organization by the US and the European Union — to quickly reach a decision on Israeli conditions for a cease-fire.
Prices:
WTI for June fell 0.8% to settle at $81.93 a barrel in New York.
Brent for July dropped 1% to $86.33 a barrel.
https://www.rigzone.com/news/wire/oil_e ... 6-article/
Re: THE DAILY NEWS
CNBC
"2-year Treasury yield surpasses 5% after employment cost data comes in hotter than expected"
Brian Evans @BRIANSYNDICATES Alex Harring @ALEX_HARRING Sophie Kiderlin @IN/SOPHIE-KIDERLIN-B327B914A/ @SKIDERLIN
PUBLISHED TUE, APR 30 2024
U.S. Treasury yields advanced on Tuesday, after data on labor costs rose more than forecasted while traders awaited news out of the Federal Reserve meeting.
The 2-year Treasury yield added around 7 basis points to 5.043%, above the closely watched 5% level.
The yield on the 10-year Treasury jumped 7.6 basis points to 4.688%.
Yields and prices move in opposite directions.
One basis point equals 0.01%.
Treasury yields took a leg up after the release of the employment cost index, a measure of wages for civilian workers.
The index jumped 1.2% for the first quarter, above the 1% consensus estimate from economists polled by Dow Jones.
“There is nothing in this series [of data] to suggest there is a near-term path for the Fed to contemplate cutting rates; Powell will need a lot more convincing at this point,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.
That came as investors awaited updates out of the Federal Reserve’s meeting, which began Tuesday and concludes Wednesday with a fresh interest rate decision and press conference.
Investors are looking for guidance about the outlook for interest rates as questions swirl around when and by how much monetary policy can start being eased.
Markets had been hoping that rates would be cut as soon as June, but this timeline has since moved to September after recent economic data has suggested that inflation is persistent and the economy remains resilient.
Elsewhere, data out of the euro zone showed inflation was 2.4% in April, in line with estimates, while gross domestic product rose by 0.3% in the first quarter of 2024.
Data also provided by Reuters
https://www.cnbc.com/2024/04/30/treasur ... eting.html
"2-year Treasury yield surpasses 5% after employment cost data comes in hotter than expected"
Brian Evans @BRIANSYNDICATES Alex Harring @ALEX_HARRING Sophie Kiderlin @IN/SOPHIE-KIDERLIN-B327B914A/ @SKIDERLIN
PUBLISHED TUE, APR 30 2024
U.S. Treasury yields advanced on Tuesday, after data on labor costs rose more than forecasted while traders awaited news out of the Federal Reserve meeting.
The 2-year Treasury yield added around 7 basis points to 5.043%, above the closely watched 5% level.
The yield on the 10-year Treasury jumped 7.6 basis points to 4.688%.
Yields and prices move in opposite directions.
One basis point equals 0.01%.
Treasury yields took a leg up after the release of the employment cost index, a measure of wages for civilian workers.
The index jumped 1.2% for the first quarter, above the 1% consensus estimate from economists polled by Dow Jones.
“There is nothing in this series [of data] to suggest there is a near-term path for the Fed to contemplate cutting rates; Powell will need a lot more convincing at this point,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.
That came as investors awaited updates out of the Federal Reserve’s meeting, which began Tuesday and concludes Wednesday with a fresh interest rate decision and press conference.
Investors are looking for guidance about the outlook for interest rates as questions swirl around when and by how much monetary policy can start being eased.
Markets had been hoping that rates would be cut as soon as June, but this timeline has since moved to September after recent economic data has suggested that inflation is persistent and the economy remains resilient.
Elsewhere, data out of the euro zone showed inflation was 2.4% in April, in line with estimates, while gross domestic product rose by 0.3% in the first quarter of 2024.
Data also provided by Reuters
https://www.cnbc.com/2024/04/30/treasur ... eting.html
Re: THE DAILY NEWS
REUTERS
"Wall Street stocks fall as markets weigh strong wage data, Fed meeting"
By Chibuike Oguh
April 30, 2024
Summary
* Amazon reports Q1 results
* Eli Lilly jumps after raising annual profit forecast
* GE Healthcare shrinks after Q1 revenue miss
NEW YORK, April 30 (Reuters) - U.S. stocks ended lower on Tuesday as markets weighed economic data showing rising labor costs and deteriorating consumer confidence on the day of a key Federal Reserve policy meeting to decide the direction of interest rates.
Data showed on Tuesday that U.S. labor costs rose by a more-than-expected 1.2% last quarter, indicating an uptick in wage pressures.
A survey also found that U.S. consumer confidence worsened in April, dropping to its lowest level in more than 1-1/2 years.
The reports came a day before the Federal Reserve Open Market Committee (FOMC) ends its two-day meeting, with investors widely expecting the central bank to leave interest rates unchanged.
Most Magnificent Seven stocks finished lower, including Tesla, Alphabet, Nvidia, Microsoft, and Amazon.
"We're still in an environment where the knee-jerk reaction is to extrapolate any warmer data into firmer inflation and more hawkish reaction from the Fed," said Garrett Melson, portfolio strategist at Natixis Investment Managers in Boston.
"But nothing has changed: growth is still strong, labor markets are holding up, and ultimately we're taking a little bit of breather in the disinflation process," Melson added.
Money markets are pricing in just about 31 basis points (bps) of rate cuts this year, down from about 150 bps estimated at the start of 2024, according to LSEG data.
According to preliminary data, the S&P 500 lost 79.92 points, or 1.56%, to end at 5,036.25 points, while the Nasdaq Composite lost 325.26 points, or 2.00%, to 15,664.13.
The Dow Jones Industrial Average fell 574.08 points, or 1.47%, to 37,823.57.
Shares of GE HealthCare shrank after its first-quarter revenue missed analyst estimates, 3M gained after posting a better-than-expected quarterly profit.
Drugmaker Eli Lilly jumped after it raised its full-year profit forecast.
PayPal rose after raising its full-year adjusted profit forecast.
Of the 265 companies in the S&P 500 that have reported earnings to date for the first quarter, 79.2% have beat analyst estimates, compared with the long-term average of 67%, according to LSEG I/B/E/S data.
Reporting by Chibuike Oguh in New York; additional reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Aurora Ellis
https://www.reuters.com/markets/us/futu ... 024-04-30/
"Wall Street stocks fall as markets weigh strong wage data, Fed meeting"
By Chibuike Oguh
April 30, 2024
Summary
* Amazon reports Q1 results
* Eli Lilly jumps after raising annual profit forecast
* GE Healthcare shrinks after Q1 revenue miss
NEW YORK, April 30 (Reuters) - U.S. stocks ended lower on Tuesday as markets weighed economic data showing rising labor costs and deteriorating consumer confidence on the day of a key Federal Reserve policy meeting to decide the direction of interest rates.
Data showed on Tuesday that U.S. labor costs rose by a more-than-expected 1.2% last quarter, indicating an uptick in wage pressures.
A survey also found that U.S. consumer confidence worsened in April, dropping to its lowest level in more than 1-1/2 years.
The reports came a day before the Federal Reserve Open Market Committee (FOMC) ends its two-day meeting, with investors widely expecting the central bank to leave interest rates unchanged.
Most Magnificent Seven stocks finished lower, including Tesla, Alphabet, Nvidia, Microsoft, and Amazon.
"We're still in an environment where the knee-jerk reaction is to extrapolate any warmer data into firmer inflation and more hawkish reaction from the Fed," said Garrett Melson, portfolio strategist at Natixis Investment Managers in Boston.
"But nothing has changed: growth is still strong, labor markets are holding up, and ultimately we're taking a little bit of breather in the disinflation process," Melson added.
Money markets are pricing in just about 31 basis points (bps) of rate cuts this year, down from about 150 bps estimated at the start of 2024, according to LSEG data.
According to preliminary data, the S&P 500 lost 79.92 points, or 1.56%, to end at 5,036.25 points, while the Nasdaq Composite lost 325.26 points, or 2.00%, to 15,664.13.
The Dow Jones Industrial Average fell 574.08 points, or 1.47%, to 37,823.57.
Shares of GE HealthCare shrank after its first-quarter revenue missed analyst estimates, 3M gained after posting a better-than-expected quarterly profit.
Drugmaker Eli Lilly jumped after it raised its full-year profit forecast.
PayPal rose after raising its full-year adjusted profit forecast.
Of the 265 companies in the S&P 500 that have reported earnings to date for the first quarter, 79.2% have beat analyst estimates, compared with the long-term average of 67%, according to LSEG I/B/E/S data.
Reporting by Chibuike Oguh in New York; additional reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Aurora Ellis
https://www.reuters.com/markets/us/futu ... 024-04-30/
Re: THE DAILY NEWS
REUTERS
"US consumer confidence deteriorates in April"
By Reuters
April 30, 2024
WASHINGTON, April 30 (Reuters) - U.S. consumer confidence deteriorated in April, falling to its lowest level in more than 1-1/2 years amid worries about the labor market and income, a survey showed on Tuesday.
The Conference Board said that its consumer confidence index fell to 97.0 this month, the lowest level since July 2022, from a downwardly revised 103.1 in March.
Economists polled by Reuters had forecast the index little changed at 104.0 from the previously reported 104.7
"Confidence retreated further in April as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income," said Dana Peterson, chief economist at the Conference Board in Washington.
"According to April's write-in responses, elevated price levels, especially for food and gas, dominated consumer’s concerns, with politics and global conflicts as distant runners-up."
Consumers' inflation expectations were unchanged at 5.3%.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-c ... 024-04-30/
"US consumer confidence deteriorates in April"
By Reuters
April 30, 2024
WASHINGTON, April 30 (Reuters) - U.S. consumer confidence deteriorated in April, falling to its lowest level in more than 1-1/2 years amid worries about the labor market and income, a survey showed on Tuesday.
The Conference Board said that its consumer confidence index fell to 97.0 this month, the lowest level since July 2022, from a downwardly revised 103.1 in March.
Economists polled by Reuters had forecast the index little changed at 104.0 from the previously reported 104.7
"Confidence retreated further in April as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income," said Dana Peterson, chief economist at the Conference Board in Washington.
"According to April's write-in responses, elevated price levels, especially for food and gas, dominated consumer’s concerns, with politics and global conflicts as distant runners-up."
Consumers' inflation expectations were unchanged at 5.3%.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/us-c ... 024-04-30/
Re: THE DAILY NEWS
REUTERS
"Growth in US labor costs accelerates in first quarter"
By Lucia Mutikani
April 30, 2024
Summary
* Employment cost index rises 1.2% in first quarter
* Wages increase 1.1%; up 4.4% year-on-year
* House prices surge 7.0% year-on-year in February
WASHINGTON, April 30 (Reuters) - U.S. labor costs increased more than expected in the first quarter amid a rise in wages and benefits, confirming the surge in inflation early in the year that will likely delay a much- anticipated interest rate cut later this year.
The pick-up in labor costs reported by the Labor Department on Tuesday was despite signs of some easing in labor market conditions as supply rises.
Adding to the darkening inflation picture, house prices accelerated in February amid tight supply.
Housing has been a key driver of inflation through higher rents.
Federal Reserve officials started a two-day policy meeting on Tuesday.
The U.S. central bank is expected to leave its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July.
"On balance, today's (labor costs) reading is not the end of the world for the Fed, but it is yet another data point that suggests the inflation slowdown that began this time last year stalled out in the first quarter of 2024," said Michael Pugliese, senior economist at Wells Fargo.
The Employment Cost Index (ECI), the broadest measure of labor costs, increased 1.2% last quarter after rising by 0.9% in the fourth quarter, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the ECI would advance 1.0%.
Labor costs increased 4.2% on a year-on-year basis after rising by the same margin in the fourth quarter.
They have declined from a peak of 5.1% at the end of 2022.
Some economists blamed the quarterly rise in wages on challenges adjusting the data at the start of the year for seasonal fluctuations.
The ECI is viewed by policymakers as one of the better measures of labor market slack and a predictor of core inflation because it adjusts for composition and job-quality changes.
The report followed data last week that showed price pressures heating up in the first quarter.
The Fed has raised the policy rate by 525 basis points since March 2022.
Financial markets have pushed back expectations of a rate cut this year to September from June.
A handful of economists continue to expect that borrowing costs may be lowered in July in the belief that the labor market will slow noticeably in the coming months.
Others believe the window for the Fed to start its easing cycle is closing.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
EYES ON PRODUCTIVITY DATA
Wages increased 1.1% in the January-March quarter after advancing by the same margin in the prior three months.
They jumped 4.4% year-on-year after rising 4.3% in the fourth quarter.
Private sector wages rose 1.1% after gaining 1.0% in the prior quarter.
They gained 4.3% in the 12 months through March.
Wage gains remain above their pre-pandemic levels.
There were big increases in wages in the transportation and warehousing industry, professional and business services, wholesale trade, educational services.
Retail wages were unchanged as were those in the finance and insurance sector.
Annual compensation costs increased 5.3% for union workers and were up 3.9% for non-union workers.
Wages and salaries for union workers shot up 6.3% compared to the 4.1% rise for non-union workers in the 12 months through March.
State and local government wages accelerated 1.4% after rising 1.1% in the prior quarter.
They surged 5.0% year-on-year after gaining 4.7% in the fourth quarter.
With fewer workers quitting their jobs in search of greener pastures and increasing labor supply, driven by a rise in immigration over the past year, economists expect wages to gradually trend lower this year and bring inflation closer to the Fed's 2% target.
Though job growth accelerated in the first quarter, surveys including from the NFIB and Institute for Supply Management suggest a moderation ahead.
The Conference Board's consumer confidence survey on Tuesday showed households soured a bit on the labor market in March.
The survey's labor market's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, narrowed to 25.3 in April from 29.5 in March.
Some economists also anticipated the so-called residual seasonality, which they say boosted labor costs last quarter to fade.
Others argued that worker productivity, which has quickened since the second quarter of 2023, would be key.
Productivity, however, appears to have decelerated in the first quarter based on last week's gross domestic product report.
First-quarter productivity data is due to be published on Thursday.
"The growth rate of productivity is important in assessing how fast employment costs can increase without putting upward pressure on inflation or downward pressure on profit margins," said Conrad DeQuadros, senior economic advisor at Brean Capital.
"But if GDP is depressed by residual seasonality in the first quarter, then productivity will likely be as well and thus the increase in unit labor costs will be overstated."
Inflation-adjusted wages for all workers increased 0.9% year-on-year after rising 1.0% in the fourth quarter, which could help to underpin consumer spending and the overall economy.
Benefits increased 1.1% after gaining 0.7% in the October-December quarter.
They advanced 3.7% year-on-year.
Another report from the Federal Housing Finance Agency showed house prices rebounded 1.2% in February after dipping 0.1% in January.
They vaulted 7.0% year-on-year, the most since November 2022, after advancing 6.5% in January.
A fourth report from the Census Bureau showed there were 728,000 houses for sale in the first quarter compared to 665,000 in the first three months of 2023.
"It is clearer than ever that there is a massive housing shortage in the country," said Christopher Rupkey, chief economist at FWDBONDS.
"Home prices are going to keep inflation higher for longer."
Reporting by Lucia Mutikani; Editing by Paul Simao, Andrea Ricci and Chizu Nomiyama
https://www.reuters.com/markets/us/us-l ... 024-04-30/
"Growth in US labor costs accelerates in first quarter"
By Lucia Mutikani
April 30, 2024
Summary
* Employment cost index rises 1.2% in first quarter
* Wages increase 1.1%; up 4.4% year-on-year
* House prices surge 7.0% year-on-year in February
WASHINGTON, April 30 (Reuters) - U.S. labor costs increased more than expected in the first quarter amid a rise in wages and benefits, confirming the surge in inflation early in the year that will likely delay a much- anticipated interest rate cut later this year.
The pick-up in labor costs reported by the Labor Department on Tuesday was despite signs of some easing in labor market conditions as supply rises.
Adding to the darkening inflation picture, house prices accelerated in February amid tight supply.
Housing has been a key driver of inflation through higher rents.
Federal Reserve officials started a two-day policy meeting on Tuesday.
The U.S. central bank is expected to leave its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July.
"On balance, today's (labor costs) reading is not the end of the world for the Fed, but it is yet another data point that suggests the inflation slowdown that began this time last year stalled out in the first quarter of 2024," said Michael Pugliese, senior economist at Wells Fargo.
The Employment Cost Index (ECI), the broadest measure of labor costs, increased 1.2% last quarter after rising by 0.9% in the fourth quarter, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the ECI would advance 1.0%.
Labor costs increased 4.2% on a year-on-year basis after rising by the same margin in the fourth quarter.
They have declined from a peak of 5.1% at the end of 2022.
Some economists blamed the quarterly rise in wages on challenges adjusting the data at the start of the year for seasonal fluctuations.
The ECI is viewed by policymakers as one of the better measures of labor market slack and a predictor of core inflation because it adjusts for composition and job-quality changes.
The report followed data last week that showed price pressures heating up in the first quarter.
The Fed has raised the policy rate by 525 basis points since March 2022.
Financial markets have pushed back expectations of a rate cut this year to September from June.
A handful of economists continue to expect that borrowing costs may be lowered in July in the belief that the labor market will slow noticeably in the coming months.
Others believe the window for the Fed to start its easing cycle is closing.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury prices fell.
EYES ON PRODUCTIVITY DATA
Wages increased 1.1% in the January-March quarter after advancing by the same margin in the prior three months.
They jumped 4.4% year-on-year after rising 4.3% in the fourth quarter.
Private sector wages rose 1.1% after gaining 1.0% in the prior quarter.
They gained 4.3% in the 12 months through March.
Wage gains remain above their pre-pandemic levels.
There were big increases in wages in the transportation and warehousing industry, professional and business services, wholesale trade, educational services.
Retail wages were unchanged as were those in the finance and insurance sector.
Annual compensation costs increased 5.3% for union workers and were up 3.9% for non-union workers.
Wages and salaries for union workers shot up 6.3% compared to the 4.1% rise for non-union workers in the 12 months through March.
State and local government wages accelerated 1.4% after rising 1.1% in the prior quarter.
They surged 5.0% year-on-year after gaining 4.7% in the fourth quarter.
With fewer workers quitting their jobs in search of greener pastures and increasing labor supply, driven by a rise in immigration over the past year, economists expect wages to gradually trend lower this year and bring inflation closer to the Fed's 2% target.
Though job growth accelerated in the first quarter, surveys including from the NFIB and Institute for Supply Management suggest a moderation ahead.
The Conference Board's consumer confidence survey on Tuesday showed households soured a bit on the labor market in March.
The survey's labor market's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, narrowed to 25.3 in April from 29.5 in March.
Some economists also anticipated the so-called residual seasonality, which they say boosted labor costs last quarter to fade.
Others argued that worker productivity, which has quickened since the second quarter of 2023, would be key.
Productivity, however, appears to have decelerated in the first quarter based on last week's gross domestic product report.
First-quarter productivity data is due to be published on Thursday.
"The growth rate of productivity is important in assessing how fast employment costs can increase without putting upward pressure on inflation or downward pressure on profit margins," said Conrad DeQuadros, senior economic advisor at Brean Capital.
"But if GDP is depressed by residual seasonality in the first quarter, then productivity will likely be as well and thus the increase in unit labor costs will be overstated."
Inflation-adjusted wages for all workers increased 0.9% year-on-year after rising 1.0% in the fourth quarter, which could help to underpin consumer spending and the overall economy.
Benefits increased 1.1% after gaining 0.7% in the October-December quarter.
They advanced 3.7% year-on-year.
Another report from the Federal Housing Finance Agency showed house prices rebounded 1.2% in February after dipping 0.1% in January.
They vaulted 7.0% year-on-year, the most since November 2022, after advancing 6.5% in January.
A fourth report from the Census Bureau showed there were 728,000 houses for sale in the first quarter compared to 665,000 in the first three months of 2023.
"It is clearer than ever that there is a massive housing shortage in the country," said Christopher Rupkey, chief economist at FWDBONDS.
"Home prices are going to keep inflation higher for longer."
Reporting by Lucia Mutikani; Editing by Paul Simao, Andrea Ricci and Chizu Nomiyama
https://www.reuters.com/markets/us/us-l ... 024-04-30/
Re: THE DAILY NEWS
REUTERS
"AMD AI chip revenue forecast fails to impress, shares dive 7%"
By Arsheeya Bajwa and Max A. Cherney
April 30, 2024
April 30 (Reuters) - Advanced Micro Devices issued a forecast on Tuesday for its artificial intelligence chips that failed to impress investors, and its shares slumped about 7% in extended trading.
In the earnings call, Chief Executive Officer Lisa Su said AMD now expected AI chip sales of roughly $4 billion for 2024, an increase of $500 million from its prior estimate for the year.
The increase of a half billion dollars was not enough to meet Wall Street's lofty expectations for AI chips.
Nvidia has consistently crushed investor expectations because of soaring AI chip sales.
Enterprises rushing to adopt generative AI have prioritized spending on AI server chips, hitting demand for traditional server semiconductors, which constitute a large portion of AMD's revenue.
These processors cannot effectively handle the complex tasks associated with AI.
While some of AMD's central processors (CPUs) are used in conjunction with AI chips, the ratio is skewed in favor of more advanced AI processors versus CPUs.
AMD trails front-runner Nvidia, which commands a share of about 80% in the booming market for artificial intelligence server semiconductors.
On an adjusted basis, AMD forecast gross margin of about 53% for the second quarter, just beating the estimate of 52.9%.
Revenue at its data center business jumped 80% to $2.3 billion.
Analysts had expected revenue growth from AMD's MI300 series of AI processors to offset weakness in the traditional server market.
Uncertain demand from the gaming market has further hurt AMD.
Personal computing and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026, according to research firm Newzoo.
Gaming revenue fell 48% to $922 million.
The company had forecast significant double-digit percentage declines in this segment as revenue from the chips it designs for gaming consoles such as Microsoft's Xbox and the Sony PlayStation 5 has already hit its peak.
This year, 2024, marks the fifth year of the gaming cycle, CFO Jean Xu had said in January.
AMD's videogame console revenue peaks after roughly four years.
Revenue from the embedded segment fell 46% to $846 million compared with the year-ago quarter.
The company had said in January demand for the segment will remain soft through the first half of the year.
Ongoing inventory corrections have hit revenue from this segment as clients clear out a build-up of chips.
The company forecast revenue of about $5.70 billion, plus or minus $300 million, for the second quarter, in line with analysts' average estimate, according to LSEG data.
AMD reported revenue of $5.47 billion for the first quarter, compared to analysts' average estimate of $5.46 billion.
AMD reported per-share earnings of 62 cents, adjusted for stock-based compensation, among other items.
Analysts expected adjusted earnings of 61 cents a share.
Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Pooja Desai and David Gregorio
https://www.reuters.com/technology/chip ... 024-04-30/
"AMD AI chip revenue forecast fails to impress, shares dive 7%"
By Arsheeya Bajwa and Max A. Cherney
April 30, 2024
April 30 (Reuters) - Advanced Micro Devices issued a forecast on Tuesday for its artificial intelligence chips that failed to impress investors, and its shares slumped about 7% in extended trading.
In the earnings call, Chief Executive Officer Lisa Su said AMD now expected AI chip sales of roughly $4 billion for 2024, an increase of $500 million from its prior estimate for the year.
The increase of a half billion dollars was not enough to meet Wall Street's lofty expectations for AI chips.
Nvidia has consistently crushed investor expectations because of soaring AI chip sales.
Enterprises rushing to adopt generative AI have prioritized spending on AI server chips, hitting demand for traditional server semiconductors, which constitute a large portion of AMD's revenue.
These processors cannot effectively handle the complex tasks associated with AI.
While some of AMD's central processors (CPUs) are used in conjunction with AI chips, the ratio is skewed in favor of more advanced AI processors versus CPUs.
AMD trails front-runner Nvidia, which commands a share of about 80% in the booming market for artificial intelligence server semiconductors.
On an adjusted basis, AMD forecast gross margin of about 53% for the second quarter, just beating the estimate of 52.9%.
Revenue at its data center business jumped 80% to $2.3 billion.
Analysts had expected revenue growth from AMD's MI300 series of AI processors to offset weakness in the traditional server market.
Uncertain demand from the gaming market has further hurt AMD.
Personal computing and console gaming revenue growth is expected to remain below pre-pandemic levels through 2026, according to research firm Newzoo.
Gaming revenue fell 48% to $922 million.
The company had forecast significant double-digit percentage declines in this segment as revenue from the chips it designs for gaming consoles such as Microsoft's Xbox and the Sony PlayStation 5 has already hit its peak.
This year, 2024, marks the fifth year of the gaming cycle, CFO Jean Xu had said in January.
AMD's videogame console revenue peaks after roughly four years.
Revenue from the embedded segment fell 46% to $846 million compared with the year-ago quarter.
The company had said in January demand for the segment will remain soft through the first half of the year.
Ongoing inventory corrections have hit revenue from this segment as clients clear out a build-up of chips.
The company forecast revenue of about $5.70 billion, plus or minus $300 million, for the second quarter, in line with analysts' average estimate, according to LSEG data.
AMD reported revenue of $5.47 billion for the first quarter, compared to analysts' average estimate of $5.46 billion.
AMD reported per-share earnings of 62 cents, adjusted for stock-based compensation, among other items.
Analysts expected adjusted earnings of 61 cents a share.
Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Pooja Desai and David Gregorio
https://www.reuters.com/technology/chip ... 024-04-30/