Tag: quarter

Outlook for April-June quarter GDP amid Covid

Post author By
Post date June 2, 2021

Crowds of people are seen shopping during a weekly market at Kandivali.

SOPA Images | LightRocket | Getty Images

India is expected to see double-digit expansion in the three months ending in June — but economists warn that the data won’t be painting the full picture of the country’s growth trajectory.

South Asia’s largest economy released fourth quarter GDP data Monday that showed an expansion of 1.6% from the same period a year ago, driven mostly by state spending and manufacturing sector growth. Full year GDP is estimated to have contracted 7.3% compared to a 4% growth in the previous year.

Since February, India has been battling a devastating second wave of coronavirus that accelerated in April and peaked in early May. The infection forced most of India’s industrial states to implement localized lockdown measures to slow the spread of the virus.

“With the lockdowns which are there, we think that going ahead, the economy will tend to slow down,” Madan Sabnavis, chief economist at Care Ratings, said Tuesday on CNBC’s “Street Signs Asia.”

“The numbers which we get for the first quarter of fiscal 2022 — that is for the quarter ending in June — may be very much misleading,” he said. India’s fiscal year begins in April and ends in March the following year.

On (a) sequential basis, we are going to see a double digit contraction when we do a seasonally adjusted data, but on the year-on-year comparison, you are going to see a strong double-digit growth.

For the April-June quarter last year, the economy contracted 23.9% as a months-long national lockdown hammered the country. Economists argue that while the reported year-on-year figure for the current quarter will likely show a double-digit growth, the strong number will be due to the low base from last year’s negative print.

“On (a) sequential basis, we are going to see a double digit contraction when we do a seasonally adjusted data, but on the year-on-year comparison, you are going to see a strong double-digit growth,” Radhika Rao, an economist with Singapore’s DBS Group, said Tuesday on CNBC’s “Squawk Box Asia.”

“That’s because it’s coming on the back of a 24% drop the same time last year,” she added.

Still, experts agree that the economic impact of the second wave may not be as severe as the one seen last year. India has, thus far, avoided another national lockdown, allowing states to implement localized shutdowns instead. Economists agree that the country is generally on track to revive its growth but at a delayed pace.

Data is likely to show that consumption lost momentum this quarter on a sequential basis due to the second wave as households had to prioritize more of their spending on hospitalization and medical expenses, Rao explained.

“So, domestic demand, which is the main component for growth, is not going to look that good. Plus you have got contact-intensive services, most of which had been shut down,” she said, adding, “Only into June now, some of the states are starting to talk about reopening. But, certainly, it’s a very staggered and a very unpredictable path, in terms of the unwinding of restrictions.”

Many economists have trimmed their full fiscal 2022 growth predictions for India. Goldman Sachs, for example, lowered its full-year real GDP growth forecast from 11.1% to 9.9%.

Tags AprilJune, Covid, GDP, outlook, quarter

Business

Europe’s Economic system Shrank in First Quarter, Revealing a Recession: Reside Updates

Post author By
Post date April 30, 2021

Shuttered storefronts in Milan last month. Extended lockdowns across Europe have slowed economic growth.

Here’s what you need to know:

Credit…Alessandro Grassani for The New York Times

The eurozone economy contracted by 0.6 percent over the first three months of the year, sliding back into recession, as the still-raging pandemic prompted governments to extend lockdowns.

Coming a day after the United States disclosed that its economy expanded 1.6 percent over the same period, the European downturn presented a contrast of fortunes on opposite sides of the Atlantic.

Propelled by dramatic public expenditures to stimulate growth, as well as swift increases in vaccination rates, the United States — the world’s largest economy — expanded rapidly during the first months of 2021. At the same time, the 19 nations that share the euro currency were caught in the second part of a so-called double-dip recession, reflecting far less aggressive stimulus spending and a botched effort to secure vaccines.

But figures for gross domestic product represent a snapshot of the past, and recent weeks have produced encouraging signs that Europe is on the mend. The alarming spread of Covid-19 in major economies like Germany and France has begun to trend downward, factories have revived production, while growing numbers of people are on the move in cities.

Even as the German economy diminished by 1.7 percent from January to March, Italy and Spain slipped by much smaller magnitudes — 0.4 percent and 0.5 percent respectively. The French economy grew by a modest 0.4 percent, though its prospects face a fresh challenge in the form of new pandemic restrictions imposed this month by the government.

The initial lockdowns last year punished Europe’s economies, bringing large swaths of commercial life to a halt. But the current restrictions are calibrated to reflect improved understanding of how the virus spreads. Rather than closing their doors altogether, restaurants in some countries are serving meals on patios and dispensing takeout orders. Roofers, carpenters and other skilled trades have resumed work, so long as they can stay outside.

“We have sort of learned to live with the pandemic,” said Dhaval Joshi, chief strategist at BCA Research in London. “We are adapting to it.”

Vaccination rates are increasing throughout Europe, a trend likely to be advanced by the European Union’s recent deal to secure doses from Pfizer.

Most economists and the European Central Bank expect the eurozone to expand at a blistering pace over the rest of 2021, yielding growth of more than 4 percent for the full year.

Still, even in the most hopeful scenario, Europe’s recovery is running behind the United States, a reflection of their differing approaches to economic trauma.

Since last year, the United States has unleashed additional public spending worth 25 percent of its national economic output for pandemic-related stimulus and relief programs, according to the International Monetary Fund. That compares to 10 percent in Germany.

But Europe also began the crisis with far more comprehensive social safety net programs. While the United States directed cash to those set back by the pandemic, Europe limited a surge in unemployment.

“Europe has more insurance schemes,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Oslo. “You don’t fall as hard, but you don’t rebound that sharply either.”

Credit…Lee Celano/Reuters

Exxon Mobil and Chevron, the two biggest oil companies in the United States, on Friday reported their first quarterly profits after several quarters of losses, signaling that the energy industry is rebounding from the coronavirus pandemic.

Oil prices have climbed in recent months and are now roughly where they were before the pandemic’s full force was felt. As a result, Exxon reported a $2.7 billion profit in the first three months of the year, compared with a loss of $610 million in the same period a year ago. Chevron said its profit was $1.4 billion, down from $3.6 billion a year earlier. Chevron this week raised its dividend by nearly 4 percent.

The American oil benchmark price, now around $64 a barrel, has tripled since last April. Natural gas prices have also strengthened during the recovery.

“The strong first quarter results reflect the benefits of higher commodity prices and our focus on structural cost reductions,” Darren Woods, Exxon’s chief executive, said in a statement.

Only six months ago, many analysts warned that Exxon would have to cut its dividend, but now the shareholder payout appears safe because of rising production and higher chemical prices. Exxon this month reported yet another in a string of big oil discoveries off the coast of Guyana, one of its most important growth areas.

At Chevron, sales and other revenue in the quarter increased to $31 billion, $1 billion more than the year-ago quarter.

“Earnings strengthened primarily due to higher oil prices as the economy recovers,” said Mike Wirth, Chevron’s chief executive.

Both companies suffered losses from the severe Texas freeze in February. Exxon reported that lost sales and repairs cost the company nearly $600 million. Chevron said its results were weakened by $300 million in lost oil and refining production and repairs.

Credit…Bryan Derballa for The New York Times

Volkswagen’s American unit was only kidding when it put out the word late in March that it was changing its name to “Voltswagen” to show its commitment to electric vehicles. To say the April Fool’s joke didn’t land is an understatement. Now the misfired marketing gag has prompted an inquiry by the Securities and Exchange Commission.

Volkswagen did not dispute reports in Der Spiegel and other German media that the S.E.C. was looking into whether the carmaker misled shareholders with the faux rebranding. Volkswagen in Germany declined to comment Friday.

Publicly listed companies are not supposed to fool their shareholders, even in jest. Some media reported the purported name change as fact until Volkswagen of America admitted it was all a joke.

German law also requires companies to be honest with their shareholders, but a spokeswoman for the stock market regulator, known as Bafin, said the agency saw no basis to investigate the Voltswagen issue.

It is unlikely that Volkswagen will face a serious penalty if the S.E.C. finds a violation, at least not compared to the tens of billions of dollars that an emissions scandal has cost the company since 2015. The gag does not appear to have had any influence on the price of Volkswagen shares, which rose for several days even after the company admitted it was all a ruse.

Like a comedian bombing onstage, the most painful consequence may be the humiliation.

Credit…Pool photo by Pat Greenhouse/EPA, via Shutterstock

Martin J. Walsh, the labor secretary, said on Thursday that “in a lot of cases” gig workers in the United States should be classified as employees, not independent contractors. “In some cases they are treated respectfully and in some cases they are not, and I think it has to be consistent across the board,” he told Reuters.

Shares of Uber, Lyft, Fiverr and DoorDash fell sharply on the news. These companies’ business models depend on classifying workers as independent contractors, who are not entitled to labor protections like a minimum wage or overtime pay.

But how much control does Mr. Walsh have over how companies classify their employees?

There’s no single law that makes workers employees or contractors. The Labor Department can enforce the Fair Labor Standards Act, which establishes the federal minimum wage and overtime pay. This law applies only to employees, and who should fall into that category has been the subject of a long-running debate.

In 2015, the Obama administration issued guidance that many interpreted to mean that app-based workers should be considered employees. It was rescinded by the Trump administration.

In 2021, the Trump administration issued a rule that would have made it easier for the same companies to classify workers as contractors. It was nixed by the Biden administration. Mr. Walsh’s comments suggest his interpretation will be similar to the Obama administration’s. And David Weil, reportedly President Biden’s nominee to lead the Labor Department’s wage and hour division, wrote the 2015 guidance.

New guidance wouldn’t change the law, but it could change how the Labor Department decides whether to bring lawsuits against gig economy companies. “It’s implicitly a sign to employers that you should comply with this interpretation or there’s a risk of enforcement,” Brian Chen, a staff attorney at the National Employment Law Project, told the DealBook newsletter.

Although such guidance is nonbinding, Benjamin Sachs, a professor at Harvard Law School, said courts “tend to give it deference” when making decisions. “I wouldn’t be surprised if we saw specific action coming from the department sometime this year,” said William Gould, a Stanford law professor and the former chairman of the National Labor Relations Board.

Credit…Shannon Stapleton/Reuters

The Endeavor Group, the entertainment conglomerate run by the Hollywood mogul Ari Emanuel, pulled its initial public offering at the last minute in 2019, amid lukewarm interest from investors. Last year posed its own difficulties, with a pandemic that hurt its live events business as well as its talent agency.

But Endeavor finally made its market debut on Thursday, closing the day with a market cap of more than $10 billion. Mr. Emanuel spoke with the DealBook newsletter about what changed — and what comes next.

On why the I.P.O. went ahead this time:

“There was confusion with regard to the U.F.C., so we cleaned that up,” Mr. Emanuel said about the mixed-martial arts league that Endeavor is acquiring full control of with proceeds from the offering. Debt was also a worry before, and the company’s leverage will be reduced with help from a $1.7 billion private placement, with Third Point and Elliot Management among the investors. S&P Global upgraded the company’s credit rating on Thursday.

Endeavor also used the pandemic period to restructure and consolidate, shifting further away from its talent agency roots. And Mr. Emanuel expects its events business, entertainment relationships and intellectual property will help feed a demand for “content in all forms” after the pandemic: “We’re the story about coming out.”

On Endeavor’s role in the streaming wars:

“We’re platform agnostic, and we serve all parties,” Mr. Emanuel said. The broadcasters are spending “huge” amounts to build out their streaming platforms. “I don’t have to do that,” he said. “I just have to supply it.”

On how he met Elon Musk, who is joining Endeavor’s board:

“I definitely cold called. That’s kind of in my nature,” Mr. Emanuel said. “We’ve represented him in some of his endeavors. And then over time, he and I became friendly.”

“He’s also a great entrepreneur, meaning he knows how hard it is to build and run a company,” he added, noting that they often call each other for advice.

On whether he has any concerns about putting Mr. Musk on the board given the Tesla chief’s run-ins with securities regulators:

“No.”

Credit…Akos Stiller for The New York Times

The vaccine developed by AstraZeneca and the University of Oxford brought in $275 million in sales from about 68 million doses delivered in the first three months of this year, AstraZeneca reported on Friday.

AstraZeneca disclosed the figure, most of which came from sales in Europe, as it reported its first-quarter financial results. It offers the clearest view to date of how much money is being brought in by one of the leading Covid vaccines.

AstraZeneca, which has pledged not to profit on its vaccine during the pandemic, has been selling the shot to governments for several dollars per dose, less expensive than the other leading vaccines. The vaccine has won authorization in at least 78 countries since December but is not approved for use in the United States.

The vaccine represented just under 4 percent of AstraZeneca’s revenue for the quarter; it was nowhere near the company’s biggest revenue generator. By comparison, the company’s best-selling product, the cancer drug Tagrisso, brought in more than $1.1 billion in sales in the quarter.

AstraZeneca has said it is planning to seek emergency authorization for its vaccine to be used in the United States, even as it has become clear that the doses are not needed. The Biden administration said this week that it would make available to the rest of the world up to 60 million doses of its supply of AstraZeneca shots, pending a review of their quality.

If the company does win authorization from the U.S. Food and Drug Administration, it could help shore up confidence in a vaccine whose reputation been hit by concerns about a rare but serious side effect involving blood clotting. The F.D.A.’s evaluation process is considered the gold standard globally.

Johnson & Johnson, whose vaccine was authorized for emergency use at the end of February, reported last week that its vaccine generated $100 million in sales in the United States in the first three months of the year. The federal government is paying the company $10 a dose. Like AstraZeneca, Johnson & Johnson has pledged to sell its vaccine “at cost” — meaning it won’t profit on the sales — during the pandemic.

Vaccines from Pfizer and Moderna cost more, and neither company has said that it will forego profits. Pfizer has said that it expects its vaccine to bring in about $15 billion in revenue this year; Moderna said it anticipates $18.4 billion in sales.

Both companies are scheduled to report their first-quarter results next week.

By: Ella Koeze·Data delayed at least 15 minutes·Source: FactSet

U.S. stocks fell in early trading on Friday, with the S&P 500 pulling back from a record high reached the day before, as traders closed positions for the end of the month and continued to react to company earnings.

Despite Friday’s decline, the S&P 500 is still on track for a gain of about 5 percent for April, its best monthly showing since November — when stocks rallied nearly 11 percent in the wake of the U.S. presidential election.

The benchmark stock index had hit a record after data showed the American economy grew strongly at the start of the year. Forecasters predict the economy will be back to its prepandemic size by the summer and will help drive global economic growth.

Oil prices fell, with futures on West Texas Intermediate, the U.S. benchmark, dropping more than 2 percent to $63.50 a barrel.

Europe

The Stoxx Europe 600 index was slightly lower. The index is heading for a second consecutive week of losses, which hasn’t happened since October.
The eurozone economy contracted by 0.6 percent over the first three months of the year, sliding back into recession, as the pandemic prompted governments to extend lockdowns. The decline was smaller than economists surveyed by Bloomberg had forecast, but it still puts much of Europe in a double-dip recession.

Company earnings

AstraZeneca rose 3.4 percent in London after the drugmaker’s first-quarter earnings beat analysts expectations. The company also said that the vaccine it developed with the University of Oxford brought in $275 million in sales from about 68 million doses in the first three months of the year; the company has pledged not to profit from the vaccine.
Barclays shares plunged 6 percent after what the bank’s chief executive described as a “mixed result” for its first-quarter earnings. Income from trading in equities rose but fell for other assets. Still, the bank has a sunny outlook for the future. Jes Staley, the chief executive, said he expected the British economy to grow at the fastest pace since 1948.
Twitter shares dropped 13 percent after the social media platform cautioned investors that its user numbers were unlikely to increase substantially this year when compared with the spike caused by the pandemic.
Amazon rose about 1 percent after it reported $108.5 billion in sales in the first three months of the year, up 44 percent from a year earlier. It also posted $8.1 billion in profit, an increase of 220 percent from the same period last year.

With the pandemic shifting sales online and consumers flush with stimulus checks, Amazon on Thursday reported $108.5 billion in sales in the first three months of the year, up 44 percent from a year earlier. It also posted $8.1 billion in profit, an increase of 220 percent from the same period last year. The high volume of orders during the pandemic has let Amazon operate more efficiently. It has run its warehouses closer to full capacity, and delivery drivers have made more stops on their routes, with less time driving between customers. The number of items Amazon sold grew 44 percent, but the cost to fulfill those orders was up only 31 percent.
Twitter reported on Thursday that its revenue in the first quarter of the year was $1.04 billion, a 28 percent increase from the same quarter the previous year that modestly exceeded analyst expectations. Net income for the quarter was $68 million, a turnaround from an $8.4 million loss in the same quarter a year ago. The banning of former President Donald J. Trump did not appear to have hurt Twitter’s financial performance in the quarter. The company saw a 20 percent jump in daily active users who see ads, to 199 million. It also added new advertising formats, leading to a 32 percent increase in ad revenue in the quarter.

Credit…Caleb Kenna for The New York Times

Tesla’s solar ambitions date to 2015 when it announced that it would sell panels and home batteries alongside its electric cars. A year later, Elon Musk, the company’s chief executive, promised that Tesla’s new shingles would turbocharge installations by attracting homeowners who found solar panels ugly.

After delays, Tesla began rolling out the shingles in a big way this year, but it is already encountering a major problem, Ivan Penn reports for The New York Times.

The company is hitting some customers with price increases before installation that are tens of thousands of dollars higher than earlier quotes, angering early adopters and raising big questions about how Tesla, which is better known for its electric cars, is running its once dominant rooftop solar business.

The shingles remain such a tiny segment of the solar market that few industry groups and analysts bother to track installations.

Tesla is not the only company to pursue the idea of embedding solar cells, which convert sunlight into electricity, in shingles. Dow Chemical, CertainTeed, Suntegra and Luma, among others, have offered similar products with limited success.

But given Mr. Musk’s success with Tesla’s electric cars and SpaceX’s rockets, Tesla’s glass shingles attracted outsize attention. He promised that they would be much better than anything anybody else had come up with and come in a variety of styles so they could resemble asphalt, slate and Spanish barrel tiles to fit the aesthetic of each home.

During a quarterly earnings call on Monday, Mr. Musk insisted that demand for Tesla’s solar roofs “remains strong” even though the company had raised prices substantially. He described the last-minute increases as a teething problem.

Customers are unhappy with the growing pains. Dr. Peter Quint was eager to install Tesla’s solar shingles on his 4,000-square-foot home in Portland, Ore., until the company raised the price to $112,000, from $75,000, in a terse email. When he called Tesla for an explanation, he was put on hold for more than three hours.

“I said, ‘This isn’t real, right?’” said Dr. Quint, whose specialty is pediatric critical care. “The price started inching up. We could deal with that. Then this. At that price, in our opinion, it’s highway robbery.”

Credit…Mohamed Sadek for The New York Times

In the first months of 2021, what was good for the auto industry was decidedly good for the American economy.

Spending on motor vehicles and parts rose almost 13 percent in the first quarter, making a big contribution to the increase in gross domestic product, the Commerce Department reported Thursday. Strong sales of new and used vehicles were propelled by consumers who had delayed purchases earlier in the pandemic and by others who — because of the virus — wanted to rely less on public transit or shared transportation services like Uber.

Two rounds of stimulus payments since late December were a big factor. Low interest rates, readily available credit, rising home values and stock prices, and strong trade-in values for used models also eased the path for consumers.

In fact, demand in the first quarter was robust enough that the auto industry was able to post healthy results despite a shortage of computer chips that forced temporary shutdowns of many auto plants.

The number of new cars and light trucks sold increased 11 percent from the comparable period a year earlier, to 3.9 million, according to the auto-sales data provider Edmunds.com.

On Wednesday, Ford Motor reported it made a $3.3 billion profit in the quarter, its highest total since 2011. While it produced 200,000 fewer vehicles in the quarter than it had planned, the average selling price of Ford models rose to $47,858, 8 percent higher than in the first quarter a year ago, Edmunds reported.

The combination of strong consumer demand and tight inventories — partly a result of the chip shortage — has produced something of a dream scenario for auto retailers. At AutoNation, the country’s largest chain of dealerships, many vehicles are being sold near or at sticker price even before they arrive from the factory.

“I’ve never seen so much preselling of shipments,” said Mike Jackson, the chief executive. “These vehicles are coming in and going right out.”

In the first quarter, AutoNation’s revenue jumped 27 percent, to $5.9 billion, and the company reported $239 million in profit. That was a turnaround from a loss a year ago, when the pandemic crimped sales and forced AutoNation to close stores.

Tags Economy, Europes, Live, quarter, Recession, Revealing, Shrank, Updates

World News

Japan’s Nikkei 225 jumps greater than 1% because the second quarter kicks off

Post author By
Post date April 1, 2021

Japan's Nikkei 225 jumps more than 1% as the second quarter kicks off

SINGAPORE – Asia Pacific stocks rose Thursday morning as the second quarter began with several economic data releases expected in the region.

The Japanese Nikkei 225 rose 1.24% in morning trading while the Topix index rose 0.67%. South Korea’s Kospi was also up 0.76%.

Australian stocks rose as the S & P / ASX 200 rose 0.32%.

MSCI’s broadest index for stocks in the Asia Pacific region rose 0.19%.

Economic data

A range of economic data will be released across the region on Thursday. The headline index for major manufacturers in the Bank of Japan’s quarterly Tankan Business Sentiment poll came in at 5, contrary to expectations of 0 in a Reuters poll.

Retail sales in Australia fell by a seasonally adjusted 0.8% month-on-month in February. This compares with expectations for a 1.1% decline in a Reuters poll.

The country also recorded a trade surplus of A $ 7.529 billion (about $ 5.71 billion) in February, compared with expectations for a trade surplus of A $ 9.7 billion, according to Reuters.

A private survey on China’s factory activity is also expected in March. The Caixin / Markit Manufacturing Purchasing Managers’ Index (PMI) is due to be released around 9:45 a.m. HK / SIN.

China’s official manufacturing PMI, released Wednesday, came in at 51.9, up from February’s 50.6. PMI values above 50 represent expansion, while those below this value represent contraction. The PMI values are sequential and represent a monthly expansion or contraction.

Overnight, the S&P 500 closed 0.36% higher at 3,972.89 while the Nasdaq Composite rose 1.54% to end its trading day at 13,246.87. The Dow Jones Industrial Average, on the other hand, fell 85.41 points to close at 32,981.55.

For the quarter, the Dow and S&P 500 gained 7.8% and 5.8%, respectively. The Nasdaq showed relative underperformance as technology stocks are particularly sensitive to rising interest rates due to their reliance on cheap money to invest in their future growth. Still, it rose 2.8% in the quarter.

Meanwhile, US President Joe Biden announced on Wednesday an infrastructure package worth more than $ 2 trillion. The goals of the plan include revitalizing American transportation infrastructure as well as manufacturing.

Currencies and oil

The US dollar index, which tracks the greenback versus a basket of its peers, closed at 93.202 after a previous low of 93.188.

The Japanese yen was trading at 110.73 per dollar, still weaker than below 109.6 against the greenback earlier this week. The Australian dollar changed hands at $ 0.7585 after falling above $ 0.765 earlier in the week.

Oil prices were higher in Asia on the morning of trading hours and the international reference Brent crude oil futures rose 0.46% to $ 63.03 a barrel. The US crude oil futures also gained 0.51% to $ 59.46 a barrel.

Here’s a look at what’s on tap:

China: Caixin / Markit Manufacturing Purchasing Managers Index at 9.45am HK / SIN

– CNBC’s Yun Li contributed to this report.

Tags Japans, jumps, kicks, Nikkei, quarter

World News

The tip of the quarter might create volatility for markets within the week forward

Post author By
Post date March 27, 2021

The end of the quarter could create volatility for markets in the week ahead

Traders work on the trading floor of the New York Stock Exchange.

NYSE

Stocks could be hurt in the coming week from quarter-end trading as pension funds and other large investors buy bonds and sell stocks to balance their portfolios.

The dramatic rise in bond yields this quarter is causing fund managers to shift their holdings to make up for the lack of bond holdings.

The focus in the coming week could be on the overall economy. The March employment report is expected on Friday, and the White House infrastructure plans are expected to be released on Wednesday. There is also ISM manufacturing data released on Thursday.

The March job report is scheduled for a morning when the stock market is closed for Good Friday. However, bonds trade for half a day, ending at 12:00 noon. Economists estimate that 630,000 jobs were created in March and the unemployment rate fell from 6.2% to 6%, according to the Dow Jones.

President Joe Biden is expected to announce details of his $ 3-4 trillion infrastructure plan in Pittsburgh on Wednesday. However, strategists say it is too early to say what the plan might look like or how big it will be in its final form.

Stocks were higher for the past week while government bond yields were less volatile. The closely observed 10-year ratio was 1.67% on Friday after 1.75% the previous week. Yields are moving against price and strategists expect rates to fall further over the coming week as investors rebalance their holdings.

“It’s the last week of the quarter so there can only be too much noise,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group. “Of course we will keep an eye on the bonds. The 10-year period now seems to be in a range of 1.60% to 1.70%. I think people are just trying to get a foothold here. They are trying to to find out. ” out.”

Some strategists say quarter-end trading for stocks, especially big-cap tech, could be positive as rates temporarily stopped rising.

Inventories are higher in the quarter to date. The S&P 500 gained 1.6% over the course of the week and 5.8% in the quarter to date. The Dow was up 1.4% for the week and up 8% in the first quarter. The Nasdaq lagged behind, falling 0.6% for the week and 1.9% for the quarter.

Bonds were much more dramatic in the quarter. The 10-year reference return rose from 0.93% at the end of last year.

“It’s in the driver’s seat right now,” said NatWest’s Blake Gwinn of the 10-year return. The 10 year rate of return is the most widely used rate of return as it affects mortgages and other major financing rates.

Gwinn, head of US interest rate strategy, said he had changed his view of the 10-year deadline and now expects the yield to hit 2% from 1.75% by the end of the year. In the short term, however, the yield could fall further as large funds buy Treasuries. Japanese investors are also expected to be active buyers towards the end of the year on Wednesday.

“If anything, we really hope that returns will continue to drop a little lower so that we have a better place to get back into shorts,” he said.

Infrastructure plan

Gwinn said he is focused on the Biden infrastructure plan and doesn’t think it’s still priced in in the market. The $ 1.9 trillion fiscal plan just signed by the president was a driver of bond yields as investors weighed the expected surge in economic activity and the associated higher debt levels.

“The Biden plan is my biggest risk to the treasury market right now. I don’t have the full Biden plan priced into my … forecast this year,” he said. “If we suddenly get started quickly and that comes together in the second quarter, I’ll have to rethink my 2% target.”

Gwinn said the market had “fiscal fatigue”.

“There are a lot of doubts and uncertainties about how it will pass, when it will pass and whether it will pass … it is not tangible enough,” he said.

The plan is expected to span several years, and the Democrats are expected to seek tax increases to pay for it.

rotation

The rotation into cyclical and value stocks is expected to continue in the next quarter. Energy and Finance had the best results in the first quarter, up 33% and 16.5% respectively. Tech was up 1.7% but outperformed utilities and consumer staples.

“I think certain parts of the market have a lot of upside potential, but some of it may come at the expense of growth stocks,” said Dan Suzuki, vice CIO, Richard Bernstein Advisors. He also assumes that growth stocks will continue to react negatively to rising interest rates and positively to falling ones. This trade has decoupled a bit in the past week.

“It won’t go one-on-one with every wobble,” he said. “I think the base behind this is real. If you think rates will climb to 2% by the end of the year, that’s really bad for expensive high-growth names. Markets care less about absolute levels than direction The higher the interest, the worse it is for high multiple stocks. “

Suzuki said the rise in interest rates is pushing some of the foam off the market. Special purpose vehicle stocks (SPACs) had risen by more than 5% on average on their first few days of trading in February and posted no profit in March, according to a University of Florida finance professor.

“As we see the economy getting better and better at an incredibly fast rate, especially as you add some extra momentum, you have companies that will benefit the most from that acceleration and that will grow 2X, 3X plus.” he said. “To her credit, those high, multi-growth stocks have been so robust last year … Tech earnings growth comes in mid-teens next year, but again the more cyclical parts of the economy – energy, materials, industry, small caps as a result As they rebound, they will see much stronger earnings growth this year.

Calendar for the week ahead

Monday

Merits: Vaxcyte, Cal-Maine Foods

Tuesday

Merits: Lululemon Athletica, Chewy, McCormick, BioNtech, FactSet, Blackberry, PVH

9:00 am S&P / Case-Shiller property prices

9:00 a.m. FHFA real estate prices

10:00 am Consumer Confidence

12:00 pm Raphael Bostic, Atlanta Fed President

2:30 p.m. John Williams, President of the New York Fed

Wednesday

Merits: Walgreens Boots Alliance, Micron, Dave & Buster, guess

8:15 am ADP employment

9:45 am Chicago PMI

10:00 a.m. Pending home sales

10:45 am Bostic from Atlanta Fed

Thursday

Merits: CarMax

8:30 am Initial jobless claims

9:45 am Manufacturing PMI

10:00 am ISM Manufacturing

10:00 a.m. building expenses

1:00 p.m. Philadelphia Fed President Patrick Harker

Friday

Good Friday holiday

Exchange closed

8:30 a.m. Employment Report

Tags ahead, create, Markets, quarter, Volatility, Week

Business

U.S. Financial system Grew 1 P.c within the Final Quarter: Stay Updates

Post author By
Post date January 28, 2021

Here’s what you need to know:

Gross domestic product, adjusted for inflation and seasonality, at annual rates

Gross domestic product, adjusted for inflation

and seasonality, at annual rates

The U.S. economic recovery stumbled but didn’t collapse at the end of last year, setting the stage for a much stronger rebound this year.

Gross domestic product rose 1 percent in the final three months of 2020, the Commerce Department said Thursday. That represented a sharp slowdown from the previous quarter, when business reopenings led to a record 7.5 percent growth rate. On an annualized basis, G.D.P. increased 4 percent in the fourth quarter, down from 33.4 percent in the third.

Looking at the quarter as a whole obscures the full extent of the slump: Many analysts believe economic output declined outright in November and December, as rising coronavirus cases and waning government aid led consumers to pull back on spending and forced businesses to shut down, in some cases for good.

But four weeks into January, the new year looks different. Aid passed by Congress in December has begun to flow in enhanced unemployment benefits, small-business loans and direct payments to households. Two runoff elections in Georgia delivered Democratic control of the Senate, making further rounds of assistance more likely. And the rollout of coronavirus vaccines, though slower than hoped, offers the prospect that hotels, bars and other businesses hurt by the pandemic will see customers return later this year.

“That fiscal stimulus is helping push the train of the economy through the tunnel, and the light on the other side is widespread vaccination and inoculation,” said Nela Richardson, chief economist at the payroll processing firm ADP.

The late-year slump was driven by a slowdown in consumer spending. Spending grew less than 1 percent in the fourth quarter, compared with 9 percent in the third. But parts of the economy that are less exposed to the pandemic helped pick up the slack. The housing market continued to surge, partly because of low interest rates, and business investment was strong, a sign of confidence among corporate leaders.

The economy is still in a significant hole. Measured against the final quarter of 2019, G.D.P. ended 2020 down 2.5 percent, making it the second-worst calendar year on record after a 2.8 percent contraction in 2008. Comparing 2020’s output over all with the previous year’s, G.D.P. fell 3.5 percent, the worst on record. The economy has regained roughly three-quarters of the output lost during the collapse last spring, and only a bit more than half of the jobs.

Cumulative percent change in

G.D.P. from the start of the

last five recessions

Final quarter

before

recession

4 quarters

into recession

Cumulative percent change in G.D.P.

from the start of the last five recessions

Final quarter

before

recession

4 quarters

into recession

Still, the rebound has been significantly stronger than most forecasters expected last spring. In May, economists at the Congressional Budget Office estimated that G.D.P. would end the year down 5.6 percent and wouldn’t reach its pre-pandemic level until well into 2022. Now, most forecasters expect it to hit that benchmark this year.

Last year’s overall showing was “bad but not historically bad, and not as bad as what was experienced in the Great Recession, and not nearly as bad as what was expected midyear,” said Jason Furman, a Harvard economist who ran the Council of Economic Advisers under President Barack Obama.

The stronger-than-expected rebound is partly a reflection of businesses’ flexibility — retailers embraced online sales, restaurants built outdoor patios, and factories reorganized production lines to allow for social distancing. But it is also a result of trillions of dollars in federal aid, which kept households and small businesses afloat when much of the economy was shut down.

“The fiscal stimulus package was not perfect,” said Stephanie Aaronson, an economist at the Brookings Institution. “But the truth is both Congress and the Fed acted very, very quickly, and I think that did save the economy from a much worse outcome.”

Credit…Ariana Drehsler for The New York Times

New claims for unemployment fell last week, the government reported on Thursday, but the elevated levels are fueling worries about prolonged damage inflicted on the labor market by the pandemic and the slow rollout of vaccines.

A total of 873,966 workers filed first-time claims for state unemployment benefits for the week that ended Jan. 23, the Labor Department said, while an additional 426,856 new claims were filed under a federal pandemic jobless program that covers freelancers, part-time workers and others normally ineligible for state jobless benefits. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 847,000.

The figures for newly filed claims are below the staggering levels of last spring, when the coronavirus started its march across the map, but they continue to dwarf previous records.

The impact of the virus on the service sector, particularly leisure and hospitality, is extracting the heaviest toll. “We need the service sector to come back for the economy more broadly to come back,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Although the Conference Board reported on Tuesday that consumer confidence edged up in January, views of the labor market’s current health dropped. The percentage of respondents saying jobs are “plentiful” declined, and the share saying that “jobs are hard to get” rose.

“Everything goes back to the health crisis,” Ms. Farooqi said, “Once you get most of the population vaccinated, that’s a completely different picture.”

The $900 billion pandemic relief bill signed into law last month has provided a bridge of support, but provisions specifically extending relief to jobless workers are scheduled to expire in mid-March.

President Biden has proposed a $1.9 trillion emergency relief package that includes a $400 weekly unemployment insurance supplement, although Republicans and a handful of Democratic lawmakers have balked at the cost of the overall proposal.

Credit…Tristan Spinski for The New York Times

Job recruiters are accustomed to seeing a pattern in late January: When the holiday crush and seasonal gigs end, job-hunting surges. But not this year.

The demand is there, but many of the job seekers aren’t, said Julia Pollak, a labor economist with the hiring site ZipRecruiter.

“In our marketplace over the past three weeks, employer activity has been completely exuberant, it has surpassed our forecasts,” Ms. Pollak said. But the ranks of “job seekers are way, way, way lower than usual.”

Some have argued that generous jobless benefits are discouraging people from working. But Ms. Pollak disagrees, saying the main reason for the low number of applications is the continuing fallout from the coronavirus pandemic.

“Many people who should be looking for jobs aren’t even eligible for benefits, like millions of women who left the labor market for child care,” she said. And some are staying home because of other family responsibilities, or out of concern about getting sick if they re-enter the work force, particularly with the arrival of a more infectious coronavirus strain, she said.

Ernie Tedeschi, an economist and head of fiscal analysis at Evercore ISI, described the labor market as “treading water right now.”

The pandemic and the cold winter months in parts of the country continue to hobble the economy’s recovery, he said, and vaccine distribution has been too slow to have much effect.

At ZipRecruiter, the strongest demand for jobs can be found in delivery services, e-commerce, big-box and grocery stores and warehouse clubs as well as tax preparation, mortgage origination and home building.

Industries like hospitality, leisure, travel and others that involve face-to-face contact have incurred the biggest job losses, but in one way that lopsidedness is reassuring, Mr. Tedeschi said. Those are businesses that one would expect to be down because of the pandemic. It would be more worrying if the weakness had spread throughout the labor market, a sign of longer-term scarring in the economy, he said.

Credit…Lindsey Wasson for The New York Times

American Airlines, Southwest Airlines and JetBlue Airways reported steep annual losses on Thursday, joining industry peers in closing the books on a merciless year for aviation.

American lost nearly $8.9 billion in 2020, which its chief executive, Doug Parker, described as “the most challenging year in our company’s history.” JetBlue shed almost $1.4 billion and Southwest nearly $3.1 billion, its first annual loss since 1972.

“The Covid-19 pandemic challenged our industry in ways we have never seen before,” Robin Hayes, JetBlue’s chief executive, said in a statement.

The airline industry’s hopes now rest on the distribution of the coronavirus vaccine, but none of the airlines expect a rebound to materialize soon. In fact, Southwest expects to incur higher daily losses in January and February than it did in the final three months of 2020 because of a seasonal decline in travel and the rising cost of fuel.

Southwest said it also expected revenues to be down between 65 and 70 percent in January and February compared to a year earlier. American said it expected revenues to be down 60 to 65 percent in the first three months of 2021 compared to the same period in 2019. JetBlue forecast a similar decline.

Operating revenues for 2020 were down about 63 percent for Southwest and 65 percent for both American and JetBlue compared to 2019. Southwest said it ended the year with about $13.3 billion in easily accessible cash and short-term investments, while American had nearly $14.3 billion and JetBlue about $3.1 billion.

Southwest also said that it expects to start flying Boeing’s 737 Max on March 11, just over two years after the plane was grounded worldwide following two fatal crashes. The Federal Aviation Administration lifted its ban on the jet in November and has since been followed by regulators in Brazil, Canada and Europe.

The trio of financial results on Thursday came a day after Boeing reported a $11.9 billion loss in 2020, its worst year ever. Earlier this month, United Airlines reported a $7 billion annual loss and Delta Air Lines a loss of over $12 billion. At the time, Delta’s chief executive called 2020 the “toughest year” in the carrier’s history, and United’s chief executive said the pandemic had “changed United Airlines forever.”

After a tumultuous day on Wednesday, futures markets indicated New York trading would open with a measure of calm on Thursday. The S&P 500 was set to open little changed following the worst single-day drop since October.

European markets opened lower before recovering some of their losses, and Asian stock markets closed in the red. This week, traders have been unnerved by the gloomy short-term outlook for the global economy and the havoc caused by speculative trading in other corners of the market.

Investors are facing a host of concerns, which has increased volatility. There is uncertainty about whether the market can sustain its relentless rise of recent months, and whether asset bubbles were starting to form. They also worried about whether the Biden administration would be able to quickly pass an ambitious stimulus spending program or be forced to pare it back to get a bill through a closely contested Senate.And investors are watching the pace of the coronavirus vaccine rollout, wary of delays that could push back the economic recovery around the world.

“The assumption was by the time we got to midyear we were fully back to normal and that’s being questioned,” said Karen Ward, a strategist at J.P. Morgan Asset Management.

“The whole timeline of vaccine rollout and that point of normality is going back a few months,” she said. “The markets are pretty comfortable waiting as long as they know that in the economic cost that’s incurred in the interim is absorbed by governments.”

Unease also stemmed from the shocking run-up in shares of companies with big brand names but uncertain prospects, like GameStop, the video game retailer; AMC, the movie theater chain; and BlackBerry, once the maker of hand-held devices that no financial professional would leave the office without. The surge pointed to frothy conditions in financial markets, suggesting a bunch of amateurs investors could take the reins and force steep losses on established hedge funds.

Investors who had bet that these stocks would perform poorly were taking losses at a steep cost brought on by a group of traders cheering each other on in a Reddit forum for picking stocks. Point72, the hedge fund run by Steve Cohen, the billionaire hedge fund manager and owner of the New York Mets baseball team, has lost nearly 15 percent this year, according to a person with knowledge of the matter.

Regulators stepped in to say that they were watching the situation. In premarket trading on Thursday, shares in GameStop rose again. Naked Brand, a clothing retailer, was one of the most heavily traded stocks in premarket trading, up more 70 percent after being cited in a Reddit forum.

Elsewhere, investors moved money into traditionally safe assets. Yields on U.S. Treasury bonds fell back toward 1 percent as prices rose.

Europe

The Stoxx Europe 600 was down 0.7 percent.
The FTSE 100 in Britain fell 1 percent, the DAX in Germany was down 0.6 percent, and the CAC 40 in France was 0.2 percent lower.

Asia

In Japan, the Nikkei 225 index tumbled 1.5 percent.
China-related stocks also suffered. The Shanghai Composite Index fell 1.9 percent, while Hong Kong shares were down 2.6 percent.

GameStop One-Week Share Price

GameStop’s shares were one of the most actively traded stocks in premarket trading on Thursday as amateur traders continue to drive it higher, while collectively taking on some of Wall Street’s most sophisticated investors. They’ve piled into trades around companies — big and small — that other investors had written off, pushing stock prices to stratospheric levels.

The main focus is GameStop, the troubled video game retailer. Its stock is up about 40 percent in premarket trading, a much more moderate gain after trading platforms placed restrictions on the stock. But it’s already up 1,700 percent this month, including Wednesday’s climb of 135 percent, that has given the company an astonishing market valuation of $24 billion. AMC Entertainment rose 300 percent on Wednesday, and BlackBerry is up more than 275 percent this month.

Billions of shares were traded in Naked Brand, a clothing manufacturer, on Wednesday. Its share price rose from 39 cents to $1.38, a 252 percent gain. It was again one of the most traded stocks in premarket on Thursday, rising 110 percent, after being cited on a Reddit forum. The company had been trying to orchestrate its own turnaround and escape “penny stock” status to avoid being delisted.

The surging shares have become detached from the factors that traditionally help establish a company’s value to investors — like growth potential or profits. But the traders who are piling in probably aren’t thinking about those fundamentals.

Instead, they are part of a frenzy that appears to have originated on a Reddit message board, WallStreetBets, a community known for irreverent market discussions, and on messaging platforms like Discord. (One comment from WallStreetBets read, “PUT YOUR LIFTOFF DIAPERS ON ITS ABOUT TO START.”) Both Tesla’s Elon Musk and the billionaire tech investor Chamath Palihapitiya have encouraged the crowd via Twitter.

Egged on by the message boards, these traders are rushing to buy options contracts that will profit from a rise in the share price. And that trading can create a feedback loop that drives the underlying share prices higher, as brokerage firms that sell the options have to buy shares as a hedge.

As more traders snap up options, the brokers have to buy up more shares, driving the astounding rise in the company’s stock prices. GameStop began the year at $19 and ended trading on Wednesday at nearly $348.

Another reason the shares are rising so quickly is that, until recently, they were heavily targeted by big investors who bet the stocks would decline by taking on short positions. As the shares surge, the shorters also have to buy the stock in order to cut their losses, and that triggers a so-called short squeeze — a sudden spike in a share’s value.

Gabe Plotkin, the hedge fund trader whose Melvin Capital was shorting GameStop, confirmed to CNBC on Wednesday that he had exited his position after having to raise a $2.75 billion bailout from Citadel and his former boss, Steve Cohen, amid the short squeeze. Mr. Plotkin’s other short bets appear to be suffering, possibly because they are being targeted by traders — Melvin and Mr. Plotkin are often pilloried on the message boards.

The Securities and Exchange Commission said Wednesday it is “actively monitoring” the volatile trading.

Credit…Sasha Arutyunova for The New York Times

As shares of GameStop, the video game retailer, have surged amid a wave of speculative investment by small investors, Point72, the hedge fund run by the Mets owner Steve Cohen, has lost nearly 15 percent this year, according to a person with knowledge of the matter.

GameStop’s sudden rally — the shares jumped 135 percent on Wednesday alone and are up more than 1,700 percent this year — has taken a toll on some large investors who had bet against the stock. The losses at Point72, which manages nearly $19 billion in assets, stem in part from the firm’s investment in Melvin Capital, a hedge fund that had a massive bet against GameStop.

As the shares rose, Melvin was saddled with sudden losses and had to accept $2.75 billion in rescue capital from two outside investors. One of the rescuers was Point72, which already had roughly $1 billion under management with Melvin, said two people with knowledge of the relationship, and added $750 million to help stabilize Melvin this week.

Because Melvin was investing money on Point72’s behalf, Point72’s results have also been hurt by the recent turmoil, said those people.

Point72’s losses are the first clear indication of the ripple of effect of Melvin’s recent troubles, which have been a cause of concern for both Wall Street and the baseball community. Stocks faced their worst performance since October on Wednesday in part because investors are worried that other large funds could be facing losses as well.

And late Tuesday night, Mr. Cohen faced questions on Twitter over the potential impact of the Melvin losses on the Mets, which he purchased for about $2.5 billion in November.

“Why would one have anything to do with the other,” Mr. Cohen replied in a post on Twitter.

A spokesman for Mr. Cohen said he was not available for comment.

Credit…Armando Babani/EPA, via Shutterstock

The European Central Bank on Thursday effectively warned eurozone banks to clean up their acts, saying that many are complacent about losses they may suffer from a surge in problem loans caused by the pandemic.

The central bank, which has ultimate supervisory authority over commercial banks in the 19 countries that belong to the eurozone, also said that top managers at many lenders were not doing a good job of overseeing their operations and that many banks lacked a clear plan to address chronically weak profits.

No large European banks have failed since the pandemic hit. That is largely because after the financial crisis a decade ago, regulators forced lenders to reduce risk and increase their ability to absorb losses.

But in its annual report on the health of eurozone banks, the European Central Bank said that risks to banks remained high, especially as government support programs begin to run out.

Andrea Enria, the head of the European Central Bank’s bank supervision arm, said there was evidence that commercial banks are deliberately ignoring signs that problem loans could spike once emergency measures expire. He pointed to rules that allow companies and individuals to delay loan repayments.

Banks are required to set aside money to cover loans that are likely to default. But these provisions cut into profits and banks often try to keep these reserves as low as they can get away with. Mr. Enria said that provisions for problem loans in Europe were lower than in the United States and other countries, a sign that banks may be systematically underestimating risk.

“Asset quality deterioration remains our main concern for 2021,” Mr. Enria said at a news conference.

He also expressed concern that eurozone banks are loading up on leveraged loans, packages of high-risk credit to businesses that have invited comparison to the mortgage-backed securities that led to the 2008 financial crisis.

Without naming any bank, the European Central Bank criticized managers for “insufficient follow-up and oversight of business functions.” It also said banks were not doing enough to rectify the fact that most of them are barely profitable, if at all.

Mr. Enria urged banks to consider mergers as a way to address the overcrowded European banking market, and said that they need to do more to reduce costs.

“Staff cuts will be absolutely necessary,” he said.

Credit…Ethan Miller/Getty Images

Eric Bolling, a former Fox News personality whose weekly talk show for the Sinclair Broadcast Group showcased his friendly relationship with former President Donald J. Trump, is leaving the broadcasting network, he said on Wednesday.

Mr. Bolling said that he planned to return to television shortly, but that he would wait to share details about his new job until after his Sinclair program, “America This Week,” ends on Saturday. He is also starting a podcast next month with the former Green Bay Packers quarterback Brett Favre.

Hired by Sinclair in 2019 to expand its current-affairs programming, Mr. Bolling was one of a handful of conservative-leaning hosts granted interviews with Mr. Trump during his tenure in the White House. His show aired on Sinclair stations in dozens of local markets.

Sinclair gained attention for mandating that its affiliates air segments from pro-Trump commentators, including a former Trump campaign aide, Boris Epshteyn. In October, Sinclair was forced to edit an episode in which Mr. Bolling spread misinformation about the coronavirus and questioned the utility of lockdowns and face masks.

“Eric has decided to pursue other professional opportunities,” Sinclair said in a statement on Wednesday. “We wish Eric the best in his future endeavors.”

Mr. Bolling was a co-host of “The Five” on Fox News. He left the network in 2017 after denying allegations that he had sent lewd messages to colleagues. He later became a prominent national advocate for curbing opioid abuse after the death of his son, who had taken a pill laced with fentanyl.

It’s called a short squeeze, and it involves investors betting on which way a stock will go — up or down. These bets are placed by buying stock options, and the options allow an investor to make money even if the stock itself loses value. If the stock goes up in value, the bets can become losers. Investors who bet against a stock are called “shorts.”

In the case of GameStop, the video game retailer many professional investors had written off, the shorts include at least two big hedge funds. Now a band of day traders, fueled in part by a message board on Reddit, are putting the squeeze on Wall Street.

The Times’s Matt Phillips explains what’s going on.

Peacock, Comcast’s ad-supported streaming service, grabbed over 33 million customers as of the end of last year, a 50 percent jump from September, the company reported in its fourth-quarter results Thursday.

The company overall saw a 2.4 percent drop in sales to $27.7 billion and a 29 percent plummet in adjusted profit to $2.6 billion as the pandemic continued to cut into its theatrical and theme parks businesses. Still, Comcast’s performance beat investor’s expectations. Brian Roberts, the chief executive, said he is “optimistic” the company will come back toward growth as vaccines are distributed throughout the world.

Comcast also announced it would raise its dividend payments to shareholders by 8 cents on an annualized basis to $1 per share and plans to repurchase shares later in the year. The stock rose more than 3 percent in premarket trading.

Comcast has recast itself as more of an internet and technology provider than a television service, and its focus on Peacock is part of that effort. The company’s quarterly performance has become a regular reminder of that ongoing transformation. Comcast’s traditional pay-TV business lost 248,000 customers in the period, but it added 538,000 broadband subscribers for a total of 30.6 million, a high. Its cable video customers now number only 19.8 million.

The company’s NBCUniversal division, which continues to undergo a massive reorganization, last week announced a deal with WWE to make Peacock its exclusive streaming provider, in effect buying out the WWE Network’s digital TV service. NBCUniversal has been bolstering Peacock’s sports lineup, adding the majority of its Premier League games to the platform. Comcast also plans to shut down its NBC Sports Cable network by the end of this year and shunt its programming over to Peacock and the USA Network.

But longer term, Peacock is meant to replace the lost advertising dollars from a shrinking pay-TV universe. That means it will need to be far larger and be available on digital players as well as other broadband systems such as Cox and Charter. Adding more sports and exclusive content would help add leverage to those negotiations.

Comcast’s NBC broadcast group saw a 12 percent drop in sales to $2.7 billion on weaker advertising, in part because of the loss of sports programming, while its studios division fell 8.3 percent to $1.4 billion. Advertising across its broadcast and cable networks fell 7.8 percent to $2.5 billion. Theme parks dropped 63 percent to $579 million.

The company still expects the Tokyo Olympics to take place this summer, a cash cow for its advertising business.

Tags Economy, Grew, Live, Percent, quarter, Updates

Business

launch of fourth quarter, full-year 2020 GDP

Post author By
Post date January 18, 2021

release of fourth quarter, full-year 2020 GDP

Employees working on a dry-type transformer production line at a power generation factory in Haian, east China’s Jiangsu Province, Jan. 4, 2021.

Stringer | AFP | Getty Images

BEIJING – China reported GDP rose 2.3% over the past year as the world battled to contain the coronavirus pandemic.

However, Chinese consumers continued to be reluctant to spend as retail sales fell 3.9% over the year. Retail sales increased 4.6% year over year in the fourth quarter.

The gross domestic product grew by 6.5% in the fourth quarter compared to the previous year.

Economists expected China to be the only major economy to have grown over the past year and forecast GDP growth of just over 2%.

Covid-19 first appeared in the Chinese city of Wuhan at the end of 2019. To control the virus, Chinese authorities closed more than half the country and the economy contracted 6.8% in the first three months of 2020.

However, China returned to growth in the second quarter. Economists polled by Reuters forecast GDP to grow 6.1% in the fourth quarter, faster than the 4.9% pace in the previous quarter.

China’s GDP growth this year is expected to come from a lower base.

In late December, the National Bureau of Statistics cut China’s official growth rate for 2019 to 6.0% from the 6.1% previously reported. The cut came mostly in manufacturing as factories dealt with new US tariffs on Chinese goods valued at billions of dollars.

Tags fourth, fullyear, GDP, quarter, release

World News

revenue possible rose in fourth quarter

Post author By
Post date January 8, 2021

The Samsung logo can be seen on an Android phone.

Omar Marques / SOPA Pictures | LightRocket | Getty Images

SINGAPORE – Samsung Electronics announced Friday that operating income for the quarter ended December was expected to increase 26% year over year to Korean won 9 trillion (US $ 8.22 billion).

According to Refinitiv SmartEstimate, this was largely in line with analysts’ estimate of 9.1 trillion won.

Samsung Electronics’ shares in South Korea rose 7.12% on Friday.

The company announced that consolidated sales were expected to reach 61 trillion won in the fourth quarter, an increase of nearly 2% year over year. Samsung has not broken down the performance of each business unit, including the main profitable semiconductor business.

Full results for the December quarter are expected later this month.

Korean won and smartphone sales

According to Daniel Kim, senior research analyst at Macquarie Equities Research, Samsung’s forecast fell short of analysts’ expectations for two reasons.

“A strong Korean won against (a) some major currencies like the US dollar and the euro,” he said on CNBC’s Squawk Box Asia on Friday. The other reason is “disappointing” smartphone sales, which have been quite unpredictable over the past few quarters, Kim said.

But the analyst is bullish about the stock. He pointed out that memory chip prices are expected to change this quarter, and average sales prices are expected to rise – this would benefit the semiconductor business.

“The memory surge is likely to last much longer than many people think. So I’m very pleased with my outperformance rating of the stock,” said Kim, adding that Samsung “remains one of the cheapest semiconductor stocks in the world.” “”

Both operating income and consolidated sales were down from the previous quarter, based on Friday’s guidance.

Tags fourth, profit, quarter, rose