STOCK MARKET NEWS: Wholesale inflation jumps, Pepsi’s price hikes, Intel slashing jobs

Polestar 3 (Photo: Polestar Automotive)

Polestar Automotive officially revealed the Polestar 3 electric performance SUV.

• Polestar 3 is the company's first SUV, and its first car planned to be produced on two continents

• Unique design language inspired by Polestar Precept makes production debut

• Fully electric 5-seat SUV produces up to 380 kW (517 hp) and 910 Nm (671 lb-ft)

• Very high level of standard equipment available at launch; priced from USD 83,900

TimkenSteel is sliding in extended trading. The maker of high-quality specialty steel said a July melt shop explosion that killed one worker and injured two others significantly impacted third quarter profitability.

The company expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the range of approximately $9 million to $12 million.

Net sales decreased 24% to $316.8 million from the sequential second quarter driven by lower shipments and surcharge revenue per ton, partially offset by higher base sales prices.

Melt utilization was 40 percent compared with 84 percent in the second quarter. The sequential decline in melt utilization was due to the melt shop incident and resulted in significantly lower manufacturing cost absorption in the third quarter.

he company release full third quarter results on November 3.

Victoria’s Secret is higher in extended trading. The owner of Victoria’s Secret, PINK and Happy Nation said it expects third quarter operating income will be towards the high end of its previously communicated guidance range of $10 million to $40 million, and earnings are estimated to be towards the high end of the previously communicated guidance range of $0.00 to $0.25 per diluted share.

The updated operating income and earnings per diluted share guidance is based on a net sales decline in the high single digit range compared to last year, which is consistent with the company’s previously communicated guidance.

The world's largest intimates specialty retailer hosts an investor day Thursday in Chicago.

Applied Materials’ corporate signage in Santa Clara, Calif., Aug. 22, 2016. (Courtesy Applied Materials/Handout via Reuters)

Applied Materials is revising its fourth quarter business outlook in response to new export regulations for U.S. semiconductor technology sold in China, including wafer fabrication equipment and related parts and services.

The supplier of equipment, services and software for the manufacture of semiconductor chips currently estimates that the new regulations will reduce its fourth-quarter net sales by approximately $400 million, plus or minus $150 million.

Applied is revising its fourth-quarter business outlook for net sales to approximately $6.4 billion, plus or minus $250 million, which compares to the prior outlook of $6.65 billion, plus or minus $400 million. The revised net sales outlook reflects the impact of the new export regulations partially offset by supply chain performance improvements.

Applied is pursuing additional export licenses and authorizations where needed. The company currently expects the new regulations will impact net sales in the first quarter of fiscal 2023 by a similar amount as in the current quarter.

TECHNOLOGY

Elon Musk sells $1M worth of 'Burnt Hair' fragrance

Elon Musk tweeted on Tuesday that his Boring Company had already sold more than 10,000 bottles of his "Burnt Hair" fragrance. Each perfume bottle costs $100.

Elon Musk has a new line of business — fragrances. The billionaire CEO of Tesla and SpaceX is selling a perfume called “Burnt Hair” for $100 a bottle.

So far, he’s sold 10,000 bottles at $100 each, making $1 million.

TECHNOLOGY

NASA reveals Artemis I's next launch attempt

Artemis I is an uncrewed test flight that will launch the agency's Space Launch System and send its Orion spacecraft around the Moon and back to Earth.

Artemis has a new launch date. NASA will try to launch the moon rocket on Nov. 14.

A launch on Nov. 14 would result in a mission duration of about 25-and-a-half days with a splashdown in the Pacific Ocean on Dec. 9.Problems have postponed the launch three times.

PERSONAL-FINANCE

Inflation tops financial worries among retirees: Goldman Sachs

In addition to inflation, surveyed retirees' top concerns were about future health care, potential reductions in future Social Security benefits and running out of money.

A new Goldman Sachs Asset Management survey shows retirees are worried about how much they can spend and how long their savings will last.

“Spending needs are primarily elevated due to high inflation, fixed income portfolios are under pressure due to rising interest rates, and equity portfolios have declined notably as the markets try to assess the impact of a potential recession,” said Greg Calnon, Head of Multi-Asset Solutions.

More than half of those surveyed are living on less than 50% of their pre-retirement annual income.

ECONOMY

Fed minutes show concerns of more persistent high inflation

The Fed has lifted its benchmark federal-funds rate five times this year to a range between 3% and 3.25%, the most rapid pace of rate increases since the early 1980s.

Minutes from the Federal Reserve’s September meeting show the central bankers reaffirmed their strong commitment to returning inflation to the Fed’s 2% objective, with many stressing the importance of staying on this course even as the labor market slowed.

“In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the committee's objectives,” the meeting minutes said.

Extreme Networks said it uncovered actions taken by a former employee, now working with a Russian distributor, to sell Extreme’s product to a U.S. sanctioned company that was a front to MMZ Avangard, a Russian military contractor.

The technology sold was legacy networking hardware used to enable network connectivity.

Extreme said information supplied by Reuters helped uncover the scheme. Reuters said Extreme may have provided computer networking equipment for iMMZ Avangard’s office IT systems.

The total figure of the misappropriated product sales over five years is currently estimated to be approximately $645,00.

MMZ Avangard makes missiles for one of Russia's most sophisticated weapons, the S-400 air-defense system, Reuters said.

T. Rowe Price declined almost 6% in Wednesday trading before cutting some losses. The investment manager said preliminary figures showed customers pulled $24.6 billion out of their accounts, bringing preliminary year-to-date net outflows to $44.6 billion.

Total assets under management were $1.23 trillion, compared to $1.69 trillion at the beginning of the year.

Mutual fund assets under management are down 29.5% to $614 billion.

Subadvised and separate accounts and other investment products fell 24.6% to $616 billion.

Royal Philips fell as much as 12% Wednesday. The health technology company said it expects comparable sales to decline 5% to 4.3 billion euros ($4.2 billion) in the third quarter.

The company also expects to record a 1.3 billion euro non-cash charge in the third quarter for the impairment of goodwill of its Sleep & Respiratory Care business (Philips Respironics) due to revisions to the financial forecast of this business.

Looking ahead, Philips still expects a better second half of the year, compared to the first half of 2022. However, the company sees prolonged supply chain disruptions and a worsening macro-environment.

Consequently, Philips now expects a mid-single-digit comparable sales decline for the fourth quarter of 2022 with a high-single-to-double-digit adjusted earnings before interest, taxes and amortization (EBITA) margin range.

The company will report the final results on October 24.

PHILIPS RECALLS MORE RESPIRATORY MACHINES DUE TO POSSIBLE PLASTIC CONTAMINATION

Former Kansas City Federal Reserve President and CEO Thomas Hoenig reacts to the release of the September PPI, the impact from inflation, and provides an outlook for the future on 'Mornings with Maria.'

Oil futures fell for a third day on Wednesday, as worries about a weaker fuel demand outlook and rising U.S. interest rates outweighed supply concerns that followed last week's OPEC+ cut to its production target.

OPEC slashed its demand outlook on Wednesday. Last week, together with allies including Russia, the group sent prices rising by agreeing to cut supply by 2 million barrels per day (bpd).

Brent crude futures lost $1.61, or 1.7% to $92.68 a barrel as of 11:25 a.m. EDT (1525 GMT). U.S. West Texas Intermediate crude lost $1.78, or 2%, at $87.57.

OPEC on Wednesday cut its outlook for growth this year by 460,000 bpd to 2.64 million bpd, citing the resurgence of China's COVID-19 containment measures and high inflation.

OPEC's decision has angered the United States, with U.S. President Joe Biden vowing unspecified "consequences" for relations with Saudi Arabia after the move, due to current tightness in supply worldwide.

Washington's response has "amplified the initial impact in the oil market", said Torbjorn Soltvedt, analyst at risk intelligence company Verisk Maplecroft, adding that the extent of the impact on oil output may be more muted than suggested by the OPEC+ decision.

Pushing prices down further, the International Monetary Fund on Tuesday cut its global growth forecast for 2023 and warned of increasing risk of a global recession.

Syringes at Skippack Pharmacy in Schwenksville, Pa., May 19, 2022. (Reuters/Hannah Beier)

The U.S. Food and Drug Administration on Wednesday authorized Omicron-tailored COVID-19 booster shots from Moderna Inc and Pfizer Inc for children, a move that will boost the government's fall vaccination campaign.

Moderna's bivalent vaccine is authorized for those aged six and above, while Pfizer's updated shot can be administered in children of five years of age and above.

The redesigned bivalent booster shots from both Moderna and Pfizer target the original version as well as the currently circulating BA.4 and BA.5 subvariants of Omicron.

Following the latest authorization, Pfizer's monovalent vaccine will no longer be allowed for administration as a booster dose for children between 5 and 11 years.

Merck logo at a gate to the Merck & Co campus in Rahway, N.J., July 12, 2018. (Reuters/Brendan McDermid)

Merck & Co Inc opted to jointly develop and potentially sell a personalized mRNA vaccine with Moderna Inc for a $250 million upfront payment on Wednesday, sending the vaccine maker's shares up over 8%.

Moderna's experimental vaccine is being tested in combination with Merck's blockbuster cancer immunotherapy, Keytruda, in a mid-stage trial to treat patients with melanoma. Data on the vaccine, mRNA-4157, is expected in the fourth quarter of this year.

With the size of the COVID-19 vaccine market expected to contract in subsequent years from the levels seen in 2021, Moderna has been pinning its hopes on its non-COVID vaccines which includes influenza and respiratory syncytial virus shots.

In 2016, Merck and Moderna entered a strategic partnership to develop a personalized vaccine for treatment of various types of cancer.

Merck in 2020 sold its equity investment in Moderna, benefiting from a surge in the vaccine-maker's stock price that year.

Pepsi bottles at a grocery store in Pasadena, Calif., July 11, 2017. (Reuters/Mario Anzuoni)

PepsiCo Inc on Wednesday lifted its annual forecasts for revenue and profit as the soda and snack giant raised prices again to battle surging costs while also signaling resilient consumer demand.

PepsiCo's domination of the carbonated drinks market with Coca-Cola has helped it raise prices with little resistance from customers, while its snacks business is benefiting from a shift to eating more at home than at restaurants to rein in discretionary spending.

The price mark-ups helped revenue rise across all segments, especially in its biggest two divisions of North America beverage and Frito-Lay.

Average prices were up 17% for the quarter ended Sept. 3, while organic volume was down 1%.

However, the beverages business, its largest, which houses brands such as Mirinda, 7UP, and Gatorade, posted a 1% increase in volume.

The company raised its 2022 organic revenue forecast for a third time this year and now expects it to rise 12%, compared to a prior forecast of a 10% increase.

PepsiCo now expects fiscal 2022 core constant currency earnings per share of about $6.73, up from its previous forecast of $6.63, even as it warned on continued freight and commodity price pressures and a stronger dollar.

For the quarter, the company earned a better-than-expected profit of $1.97 per share on revenue of about $22 billion.

Stock traders (Reuters)

U.S. equity futures were trading higher ahead of the latest report on producer prices.

The major futures indexes suggest a gain of 0.4% when trading begins on Wall Street.

Oil prices rose on Wednesday as the dollar gained steam.

West Texas Intermediate crude futures were trading around $89.00.

Brent crude futures traded around $94.00 a barrel.

Both benchmarks fell 2% in the previous session.

The Bureau of Labor Statistics will report wholesale inflation for September. The producer price index is expected to rise 0.2% month-over-month according to Refinitiv forecasts.

Year-over-year, prices paid by wholesalers are anticipated to jump 8.4%, down from 8.7% in August and the third straight month of slowing growth. 

If you exclude food and energy costs, core producer prices are anticipated to rise 0.3% monthly in September, trailing August’s 0.4% gain. 

Benchmarks fell in Tokyo, Hong Kong, but rose in Shanghai.

Japan's Nikkei 225 was virtually unchanged, losing 4 points. Hong Kong's Hang Seng slipped 0.8% and China's Shanghai Composite climbed 1.5%.

On Wall Street, the S&P 500 fell 0.7% Tuesday, marking its fifth straight loss, closing at 3,588.84.

The Nasdaq dropped 1.1% to 10,426.19. The Dow Jones Industrial Average added 0.1% to 29,239.19.

Dollar illustration (iStock)

The dollar rose to a fresh 24-year high against the yen on Wednesday, as traders braced for U.S. inflation data and its impact on further Federal Reserve rate hikes.

The dollar strengthened 0.3% to 146.30 yen in Asian trading, after pushing as high as 146.35, a level not seen since August 1998.

The benchmark 10-year Treasury yield jumped to a 14-year high overnight at 4.006%.

The U.S. dollar index which measures the greenback against a basket of six major peers, including the yen, sterling and the euro - edged 0.16% higher to 113.52, after touching the highest since Sept. 29 at 113.54.

Gas prices (AAA)

The average price of a gallon of gasoline slipped fractionally on Wednesday to $3.922, according to AAA.

Tuesday's price was $3.923. 

A week ago, gasoline was at $3.831. Gas hit a high of $5.016 on June 14. 

Diesel's price gained to $5.16 per gallon.

Oil Rig (AP)

Oil prices gained on Wednesday as the dollar gained steam and investors braced for U.S. inflation data.

West Texas Intermediate crude futures were trading around $89.00.

Brent crude futures traded around $94.00 a barrel.

Both benchmarks fell 2% in the previous session.

The dollar rose to a fresh 24-year high against the yen on Wednesday on concerns about inflation and the pace of U.S. rate hikes. A stronger dollar makes dollar-denominated commodities more expensive.

Bitcoin was trading around $19,000, after trading lower in four of the last five days.

For the week, Bitcoin was trading 6% lower. For the month, the cryptocurrency was down more than 2%.

Bitcoin is down more than 58% year-to-date.

Ethereum was trading around $1,300, after trading 6% lower for the week.

Dogecoin was trading at 6 cents, after losing more than 8% in the past week.

The Biden administration has proposed a new rule that could re-classify millions of gig workers as employees, a move that could deal a significant blow to small businesses across the country.

The Labor Department on Tuesday unveiled a new proposal that would make it more difficult for companies to classify their workers as independent contractors — a change that could have major consequences for ride-hailing, delivery and other industries that depend heavily on gig workers.

Companies are required to provide certain benefits and legal protections to employees but not contractors, making employment of those types of workers more expensive. That includes minimum wage, overtime, Social Security and Medicare payroll taxes, unemployment insurance and workers' compensation insurance.

In determining whether a worker qualifies as an independent contractor or not, the Labor Department said it would take into consideration the worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer’s business," among other factors.

Click here for more: Biden's proposed gig worker rule could deal a major blow to small businesses

The CEO of a marketing agency based in Clearwater, Florida, sent texts that appeared to downplay Hurricane Ian’s impact, encouraging her staff to bring their pets and kids into the office "so they wouldn’t miss work," the Tampa Bay Times reported recently.

Joy Gendusa, head of PostcardMania, apparently sent the texts to employees the Monday before the powerful storm hit — a storm that was originally forecast to hit the Tampa Bay area directly, potentially causing up to 10 feet of storm surge, said the same outlet.

"I’ve lived here for over 30 years. There is always more hype in the media than any storm that has ever hit here. PostcardMania is the best place to be," Gendusa said, as text messages obtained by the publication indicated.

Workers were expected to come to the office "to continue to service our national clients." 

Employees were also told there would be "movies and fun" for the children.

"We are not closing. We are working," the CEO reportedly wrote.

Click here for more on the story: PostcardMania leader in storm of controversy after telling staff to report to office

Intel logo and computer chips (iStock)

The job ax may soon be coming down at Intel.

The semiconductor manufacturer is reportedly planning a major reduction in its workforce, as the company looks to cut costs and deal with a slowdown in the personal computer market, according to Bloomberg.

The layoffs will be announced as early as this month, possibly in connection with its third-quarter earnings report on Oct. 27.

As of July, the chipmaker had 113,700 employees.

Some divisions, including Intel’s sales and marketing group, could see cuts affecting about 20% of staff, according to people familiar with the situation.

For more on the story, click here: Intel to cut thousands of Jobs as PC demand slows: report