STOCK MARKET NEWS: Consumer prices up 6.5%, Disney target of activist, FTX’s SBF defends himself
Consumer inflation remains high, Trian's Nelson Peltz targets Disney, Walmart and Salesforce partnering on tech deal. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
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Newly constructed home for sale, Lawnside, N.J,, Jan. 7, 2023
After two straight weekly increases, the average long-term U.S. mortgage rate came back down again this week but remains a significant hurdle for many prospective homebuyers.
Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell to 6.33% from 6.48% last week. A year ago the average rate was 3.45%.
The average long-term rate reached a two-decade high of 7.08% in the fall as the Federal Reserve continued to boost its key lending rate in its quest to cool the economy and tame inflation.
At its final meeting of 2022, the Federal Reserve raised its rate 0.50 percentage points, its seventh increase last year. That pushed the central bank’s key rate to a range of 4.25% to 4.5%, its highest level in 15 years.
Starbucks cups are pictured on a counter in the Manhattan borough of New York City, New York, Feb. 16, 2022. (Reuters/Carlo Allegri)
| Symbol | Price | Change | %Change |
|---|---|---|---|
| SBUX | $105.52 | -0.78 | -0.73 |
Starbucks Corp said on Wednesday its U.S. support center employees have to work from office at least three days a week, compared with a previous commitment of at least one day per week.
The coffee chain giant joins other U.S. companies that are bringing back employees from work-from-home or hybrid work models prompted by the pandemic.
Effective Jan. 30, Starbucks employees within commuting distance would be required to come in to work on Tuesdays, Wednesdays and a third day of the week that would be mutually decided by the immediate leader and team. They would be free to work from anywhere the remaining two days, the company added.
Starbucks said the thrice-a-week policy to come into work was a requirement for all support employees, after several of them failed to meet the previous "minimum promise" of one day a week in office.
The policy change also applies to region-based support partners within commuting distance of a regional office. For regional staff, the third day would be one when all partners were in the office together, according to the coffee chain giant.
Protestors march on the streets around Montefiore Medical Center during a nursing strike, Wed., Jan. 11, 2023. (AP Photo/John Minchillo)
Thousands of nurses at two New York City hospitals ended a three-day strike Thursday after reaching a tentative contract agreement that union officials said offers better working conditions, in addition to pay raises.
The tentative deals at Mount Sinai Hospital, in Manhattan, and Montefiore Medical Center, in the Bronx, include raises totaling 19% over three years. Nurses began returning to work at both hospitals Thursday morning, with Gov. Kathy Hochul greeting returning nurses at Mount Sinai just before dawn.
The nurses, represented by the New York State Nurses Association, walked out early Monday after negotiations with management ran aground. Each hospital has over 1,000 beds and 3,500 or more union nurses.
The union stressed staffing levels as a key concern, saying that nurses who labored through the grueling peak of the coronavirus pandemic are stretched far too thin because too many jobs are open. Nurses say they have had to work overtime, handle twice as many patients as they should, and skip meals and even bathroom breaks.
The agreements with the privately owned, nonprofit hospitals include concrete, enforceable staffing ratios, the union said. The agreement with Montefiore also included what the union described as community health improvements and nurse-student partnerships to recruit local nurses from the Bronx.
American Airlines planes sit stored at Pittsburgh International Airport, Mar. 31, 2020, in Imperial, Pa. (AP Photo/Gene J. Puskar)
| Symbol | Price | Change | %Change |
|---|---|---|---|
| AAL | $16.11 | 0.77 | 5.01 |
| LUV | $36.47 | 0.50 | 1.39 |
American Airlines raised its forecast of fourth-quarter revenue and profit Thursday, boosted by higher fares and full planes capped off with a busy holiday travel period.
American earned $1.12 to $1.17 per share in the fourth quarter, nearly double its previous forecast. Revenue was 16% to 17% above the same quarter in 2019, before the pandemic.
A severe winter storm affected all U.S. airlines before Christmas, but American and most others were able to recover quickly; Southwest was not. Southwest canceled more than 16,000 flights in the last 10 days of December, or 37.5% of its schedule, leaving more than 1 million passengers scrambling for new flights including on other airlines.
“There was certainly some benefit from re-accommodating probably a relatively small amount of Southwest passengers ... but overall the (new, higher forecast) was just broad-based strength across the quarter,” Chief Financial Officer Devon May said in an interview.
Officials said any gain from Southwest's meltdown was likely offset by American canceling more than 800 flights, or 2.6% of its schedule, in late December, according to FlightAware figures.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| DIS | $97.85 | 1.52 | 1.58 |
People visit Magic Kingdom Park at Walt Disney World Resort in Lake Buena Vista, Fla, April 18, 2022. (AP Photo/Ted Shaffrey)
Activist investor Nelson Peltz is fighting for a seat on the board of Walt Disney Co., claiming that the company is struggling with self-inflicted problems.
Peltz's attempt to join Disney's board comes just months after the company brought back longtime CEO Bob Iger to lead Disney again. Disney urged shareholders to vote against Peltz and named current board member Mark Parker as its chair. Parker, who also serves as executive chairman at Nike Inc., succeeds Susan Arnold, who won’t stand for re-election due to Disney’s 15-year term limit requirements.
With the departure of Arnold, Disney's board will shrink to 11 directors.
Peltz said that he should be elected to Disney's board because of his prior experience turning around companies to improve performance and increase long-term shareholder value. Peltz has previously waged successful proxy battles at blue chip companies including DuPont and Procter & Gamble. Peltz’s Trian Group said in a regulatory filing that he’s seeking a one-year term.
Trian argues that Disney's recent operating performance is disappointing, and said that the stock is almost at an eight-year low despite the return of Bob Iger to the CEO post two months ago.
Shoppers at a grocery store in the Queens borough of New York City
Inflation continued to cool in December thanks to a decline in gas and energy costs, but consumer prices remain historically high.
The Labor Department said Thursday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, fell 0.1% in December from the previous month. Prices climbed 6.5% on an annual basis.
Stock traders (AP)
U.S. stock futures are up on Thursday as all three major U.S. benchmarks prime for the opening bell.
The Dow Jones Industrial Average futures is up roughly 56 points, or 0.16%, while the S&P and Nasdaq futures are approximately 0.18% and 0.09% higher, respectively.
Year-to-date, the Dow is now up around 2.57%, the S&P is up around 3.36%, while the tech-heavy Nasdaq is now 4.05% into the green.
In commodities, West Texas Intermediate crude futures jumped 1.42% to $78.51 a barrel, as gold popped 0.65% to $1,891.10 an ounce.
Thursday's report is expected to show that price gains slowed further in December thanks to a decline in gas and energy costs, but still remain historically high.
Economists expect the consumer price index, which measures a basket of goods, including gasoline, health care, groceries and rent, to show that monthly price gains were flat in December, down from an increase of 0.1% November.
Airport delay board (Reuters)
U.S. airlines said they expect operations to return to normal on Thursday.
The Federal Aviation Administration (FAA) is scrambling to pinpoint the cause of Wednesday's computer outage that grounded flights nationally.
As of Thursday morning, 432 delays were reported within, into, or out of the United States, according to FlightAware.com.
More than 11,300 U.S. flights were delayed or canceled on Wednesday in the first national grounding of domestic traffic in about two decades.
Major carriers such as Delta Air Lines, United Airlines and Southwest Airlines said they expected normal operations on Thursday.
The FAA computer failure prevented airports from filing updated safety notices that warn pilots of potential hazards such as runway closures, equipment outages and construction, bringing flights to a temporary halt, according to Reuters.
FAA officials said a preliminary review traced the problem to a damaged database file.
Retail store display (AP)
Traders will be focusing on a major data point Thursday morning in the form of consumer prices.
The Bureau of Labor Statistics is expected to say the consumer price index was unchanged in December after a smaller-than-expected rise of 0.1% the previous month.
On a year-over-year basis watch for prices to be up 6.5%, just over half a percentage point below November’s 7.1% print.
It would be the lowest reading since October 2021, and the sixth month in a row of slowing annual growth since June’s 9.1% surge.
“The CPI will command a lot of attention and go a long way toward further shaping expectations for the first Federal Reserve meeting of 2023," said Bankrate.com chief financial analyst Greg McBride, CFA. "Continued moderation in price pressures across a broader range of goods and services will underscore the notion that inflation has peaked and sustain the hope for further relief from inflation in the months ahead.”
If you factor out volatile food and energy costs, the core consumer price index is anticipated to rise 0.3% in December, slightly above November’s 0.2% increase.
Annually, core CPI is forecast to rise 5.7% in December, the lowest in a year.
The Labor Department will also report how many new jobless claims were filed last week. Expectations are for 215,000, after falling unexpectedly to a 3-month low of 204,000 the previous week.
Continuing claims, which track the total number of workers collecting unemployment benefits, are expected to rise to 1.705 million.
Bitcoin was trading around $18,000, after gaining in eight straight days.
For the week, Bitcoin was trading 6% higher.
For the month and year-to-date, the cryptocurrency has gained more than 6%.
Bitcoin has lost more than 59% in the past year.
Ethereum was trading around $1,300, after gaining 10% in the past week.
Dogecoin was trading at 7 cents, after gaining more than 6% in the past week.
Taiwan Semiconductor logo (Reuters)
Taiwan Semiconductor Manufacturing said Thursday that fourth-quarter net profit rose to a new record.
Profit was boosted by growing demand for high-speed computing and better margins.
The world’s largest contract chip maker said net profit for the quarter rose 78% from a year earlier to $9.72 billion, topping estimates.
Fourth-quarter revenue increased 43% from a year earlier.
Both quarterly revenue and net profit marked new record highs.
While revenue from smartphones fell 4% from the previous quarter, revenue from high-performance computing increased 10%.
Subway has reportedly retained advisers to explore a sale of the closely held sandwich shop, according to the Wall Street Journal.
Things are in the very early stages and it is possible there won’t be a sale or other deal.
The restaurant chain could be valued at more than $10 billion, according to people familiar with the situation.
Gas prices (AAA)
The nationwide price for a gallon of gasoline gained on Thursday to $3.272, according to AAA.
The average price of a gallon of gasoline on Wednesday was $3.267.
A year ago, the price for a gallon of regular gasoline was $3.301.
One week ago, a gallon of gasoline cost $3.285. A month ago, that same gallon of gasoline cost $3.262.
Gas hit an all-time high of $5.016 on June 14.
Diesel slipped lower, remaining below $5.00 per gallon to $4.618, but that is still a far cry from the $3.588 of a year ago.
A U.S. labor board director upheld an Amazon warehouse workers' landmark union victory.
Amazon says it will appeal.
The Wednesday decision brings the online retailer closer to bargaining with staff on a contract.
The victory by the Staten Island employees marked the first time U.S. staff at Amazon had decided to unionize in the company's nearly three-decade history.
Oil rigs pumping (Reuters)
Oil prices edged up on Thursday, building on gains in the previous session.
Oil getting a boost as China's demand outlook improved, though gains were limited ahead of upcoming inflation data from the United States.
U.S. West Texas Intermediate crude traded around $77.00 per barrel.
Brent crude traded around $82.00 per barrel.
Both benchmarks rose 3% in Wednesday's session, boosted by hopes for an improved global economic outlook and concern over the impact of sanctions on Russian crude output, according to Reuters.
China is reopening its economy after the end of strict COVID-19 curbs, boosting optimism that demand for fuel will grow in 2023.
Economists are expecting the rise in core U.S. consumer prices to slow to an annual pace of 5.7% in December, versus 6% a month earlier. Month-on-month headline inflation is seen at zero.
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