STOCK MARKET NEWS: Walmart inflation worries, job growth weakens, Commanders sale update
Walmart warns of persistent inflation as investors digest ADP’s private sector jobs report and ISM service sector data ahead of Friday’s government data, Jeff Bezos still eyeing Dan Snyder’s Washington Commanders, FedEx shakeup combines units. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
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Walmart Inc on Wednesday said inflation would continue to pressure its business this year, and that it would slow its pace of hiring as it builds out automation technology amid a tight labor market.
"We believe, over time, the number of associates will grow, but at a slower pace than in the past as we complement people growth with technology and automation," Chief Financial Officer John David Rainey said at the company's investor meeting in Tampa, Florida.
Rainey's comments come after the retailer on Tuesday said it expects about 65% of its stores to be serviced by automation within three years. The company does not anticipate any near-term layoffs besides the ones it has announced already.
Reuters reported last month that the company was letting go of hundreds of workers at at least five facilities that fulfill orders placed on Walmart.com.
The company, which has more than 5,000 U.S. stores, also kept its April quarter and full-year sales and profit forecast.
Washington Commanders owner Dan Snyder is confident he’ll fetch $6 billion or more from the sale of his team, people with direct knowledge of the matter, tell Fox Business.
The people add that Snyder would welcome a bid from Amazon founder Jeff Bezos.
Costco Wholesale Corporation said net sales increased 0.5% to $21.71 billion for the five weeks ended April 2, 2023.
For the thirty-one weeks ended April 2, 2023, the company reported net sales grew 6% to $137.77 billion.
Comparable sales were down 1.1% for March, but up 4.5% for the 31 week period. U.S. comp sales were down 1.5% and up 5.7% respectively.
U.S. stocks ended the session mixed as investors took in another round of weak economic data on jobs and the service sector.
Consumer discretionary companies lagged, while healthcare outperformed with Johnson & Johnson rising 4% after reaching a $8.9 billion settlement over its talc powder lawsuit.
In commodities, oil was little changed at $80.61 per barrel.
Palantir Technologies announced that Palantir Federal Cloud Service (PFCS) achieved FedRAMP authorization and accreditation to support workloads at U.S. Department of Defense (DoD) Impact Level (IL) 4 and DOD IL5 on Microsoft Azure.
This new milestone enables U.S. government customers and industry partners to access Palantir and Microsoft's secure, integrated, enterprise-grade capabilities in both Microsoft Azure Government and Azure Commercial environments.
The development expands Palantir and Microsoft's strategic partnership from the private sector to the public sector bringing the best in class cloud components to the federal marketplace. We're aiming to support IL6 through multi-cloud service integration.
Western Alliance Bancorporation said on Wednesday its first-quarter deposits were 11% lower than at the end of 2022, as customers spooked by the U.S. banking crisis pulled out funds.
The bank held total deposits of $47.6 billion as of March 31, down from $53.6 billion as of end-2022.
Regional banks, whose stocks have been battered since the collapse of two mid-sized U.S. lenders last month, have been trying to assure customers that their deposits are secure after the recent bank runs whipsawed the global financial ecosystem.
"As noted previously, the bank experienced elevated net deposit outflows surrounding the announcements of the Silicon Valley Bank and Signature Bank closures in mid-March," Western Alliance said.
Ford Motor Co plans "dramatic reductions" in the complexity of its product lineup starting in the 2024 model year, Jim Baumbick, the automaker's product development chief, said Wednesday at a conference hosted by Bank of America.
At the same time, Ford plans to develop more variations of certain model lines, such as the Bronco SUV, because they offer 30% or greater profit margins compared to the base model, Baumbick said.
Ford Chief Executive Jim Farley has said the automaker's product lineup and vehicle architectures are too complex and too costly. Ford is driving to cut billions from operating costs after 2022 profits fell short of investor expectations."
On Bronco, we are never going to let our foot off the pedal," Baumbick said.
Ford is also "rushing to add capacity" to build more Maverick compact pickup trucks, he said.
Exxon Mobil Corp has ended a major campaign to find oil in Brazil, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
Exxon said in an e-mail to Reuters its initial exploration drilling program in Brazil is now complete and that it is "still engaged in Brazil and continues to pursue exploration activity in the country".
The oil and gas giant suffered a sequence of drilling failures as an operator in the offshore acreage it started snapping up with partners for $4 billion in 2017, Reuters reported last year.
Exxon changed its Brazil country head last year and has been saying in presentations that it will focus efforts in the country with Bacalhau field, a successful exploration campaign led by its Norwegian partner Equinor ASA. In May 2022, Exxon agreed to expand with Equinor the $8-billion Bacalhau project expected to produce 220,000 barrels of oil and gas per day.
San Francisco police are investigating a stabbing death of a man that media reports identify as Cash App founder Bob Lee.
Police say they found a 43-year-old man suffering from apparent stab wounds. Officers rendered aid and summoned medics to the scene. The victim was transported to a local hospital with life-threatening injuries. Despite efforts by first responders and medical personnel, the victim succumbed to his injuries.
Johnson & Johnson's shares rose nearly 4% in early trading to hit a near two-month high of $164.48 on Wednesday as the company's $8.9 billion offer to settle talc-related lawsuits gained support of thousands of claimants, easing an overhang on its plans to list consumer health unit Kenvue.
Some analysts were positive about the new settlement that is far bigger than the original offer of $2 billion, as they believe it could bring an end to the lawsuit.
J.P. Morgan analyst Chris Schott said in a note the settlement amount was in-line with the brokerage's estimate of $8 billion to $10 billion.
The company late Tuesday said it secured the support of about 60,000 claimants for the offer who had alleged that talc in its iconic Baby Powder and other products caused cancer.
Amazon is closing Book Depository, the international book retailer the company acquired in 2011, a tweet said.
Customers will still be able to place orders until midday on April 26. Orders will continue to be delivered until June 23, The Book Depository said.
Bed Bath & Beyond is starting a new vendor consignment program with ReStore Capital, a Hilco Global company. Under this new, third-party agreement, ReStore Capital will purchase up to $120 million, on a revolving basis at any given time, of pre-arranged merchandise from the company's key suppliers to supplement inventory levels already sold at Bed Bath & Beyond and buybuy BABY.
ReStore Capital is a credit-focused investment manager providing creative financing solutions in the consumer, retail, commercial, wholesale and manufacturing industries.
“Our new vendor consignment program enables us to increase our inventory position in top items that customers are buying and improve the customer experience. This capital-light solution can allow us to strengthen merchandise availability and better fulfill demand," said CEO Sue Gove.
Conagra Brands Inc raised its full-year profit forecast on Wednesday, as the Slim Jim beef jerky maker bets on price increases to shield its margins at a time when demand for its frozen foods and snacks showed signs of weakening.
These price increases have boosted profits at Conagra, which is now also benefiting from easing inflation in commodity prices including those of meat and other proteins. The company's gross margin rose 325 basis points to 27.2% in the reported quarter.
However, higher grocery and food prices have forced some consumers to trade down from branded packaged food products to cheaper, private-label alternatives, denting sales volumes at Conagra.
Conagra said it expected fiscal 2023 adjusted per-share profit between $2.70 and $2.75, compared with its prior forecast of $2.60 to $2.70.
U.S. stock averages are mostly lower on Wednesday after the ADP report showed job growth in the private sector slowed.
Meanwhile, banking shares are still down in the wake of JPMorgan Chase CEO Jamie Dimon’s warning yesterday that the turmoil engulfing the financial sector is not over yet and will ripple throughout the economy for many years.
In commodities, the price of oil is down, hovering near $80.52 a barrel as gold moves up around $2,039.50 per ounce, closing in on an all-time high of $2,069.40 per troy ounce set in 2020.
The U.S. services sector slowed more than expected in March as demand cooled, while a measure of prices paid by services businesses fell to the lowest in nearly three years, giving the Federal Reserve a boost in the fight against inflation.
The Institute for Supply Management (ISM) said on Wednesday that its non-manufacturing PMI fell to 51.2 last month from 55.1 in February. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the non-manufacturing PMI decreasing to 54.5.
The PMI remains above the 49.9 level which the ISM says over time indicates growth in the overall economy. Nevertheless, the softer-than-expected reading, coming on the heels of continued weakness in manufacturing activity last month, increases the risk of a recession this year.
Walmart Inc on Tuesday said it expects about 65% of its stores to be serviced by automation by the end of its fiscal year 2026, just days after revealing plans to lay off more than 2,000 people at facilities that fulfill online orders.
The announcement, amid the U.S. retail giant's annual investor meeting in Tampa, Florida, comes as Walmart increasingly uses its huge stores to handle online-order deliveries and invests heavily in automation to speed up order processing at its e-commerce fulfillment facilities.
It was not immediately clear if this move would lead to more layoffs at the country's biggest private employer, with about 1.7 million U.S. workers and another 60,000 abroad. The company said the moves would reduce the need for lower-paid roles.
Seadrill Ltd missed Wall Street revenue and profit forecasts.
Total operating revenue fell 15% to $228 million in the fourth quarter; analysts expected $255.68 million.
The operating loss was $7 million compared to an operating profit of $20 million a year ago.
On a per share basis, the quarterly adjusted loss was 46 cents per share for the quarter ended in December. The mean expectation of five analysts for the quarter was for a loss of 40 cents per share.
Seadrill added approximately $187 million of order backlog during the quarter, bringing the total as of Dec. 31, 2022 to approximately $2.3 billion.
Reuters contributed to this report.
Schnitzer Steel topped Wall Street revenue estimates but missed on profit.
Fiscal second quarter revenue fell 3% to $756 million, which is higher than the estimated $698.47 million.
Net income was $4 million, down from $38 million a year ago.
On a per share basis , the company reported profits of 14 cents per share, $1.24 lower than the same quarter last year when Schnitzer Steel reported EPS of $1.38. Profits of 22 cents per share were anticipated by the two analysts providing estimates for the quarter.
Recycled metals demand and selling prices strengthened throughout the quarter in both the export and domestic markets amid stronger global steel demand, tight availability of scrap, strong rebar demand in Turkey, and inventory restocking, Schnitzer said.
Reuters contributed to this report.
FedEx will combine almost all of its ground, air and other operations by next year as part of a $4 billion cost cutting plan.
The package delivery company said Wednesday that FedEx Express, FedEx Ground, FedEx Services and other FedEx operating companies will be rolled into a single entity by June 2024 in a companywide reorganization. FedEx Freight, the company's freight transportation services division, will continue as a stand-alone company within Federal Express Corp.
Raj Subramaniam will serve as president and CEO of the combined organization. John Smith will become president and CEO of U.S. and Canada ground operations at FedEx Express and assume leadership of surface operations across the FedEx Express, FedEx Ground, and FedEx Freight businesses. Richard Smith will serve as president and CEO, airline and international at FedEx Express, overseeing all other regions and FedEx Logistics.
The company expects to realize permanent cost reductions of $4 billion from the reshuffle at some point during fiscal 2025.
U.S. private employers hired far fewer workers than expected in March, suggesting that the labor market was cooling.
Private employment increased by 145,000 jobs last month, the ADP National Employment report showed on Wednesday. Economists polled by Reuters had forecast private employment increasing 200,000.
Data for February was revised higher to show 261,000 jobs added instead of 242,000 as previously reported.
KPMG LLP is spinning out of Cranium, a cutting-edge software company that enables organizations to secure their artificial intelligence (AI) technologies.
Cranium was developed within KPMG’s startup incubator — KPMG Studio — and in collaboration with AI Security experts in the firm’s Advisory practice.
“Cranium is KPMG Studios’ inaugural spinout and exemplifies the firm’s commitment to cultivating innovative solutions that solve complex client challenges," said Cliff Justice, KPMG U.S. National Leader, Enterprise Innovation.
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