Closing Stock Market SummaryThe S&P 500 fell 1.5% on Thursday, fading an early 1.2% gain, as technical factors, rising interest rates, and hawkish-sounding Fed commentary overshadowed a batch of pleasing earnings news.
The Nasdaq Composite (-2.1%), Dow Jones Industrial Average (-1.1%), and Russell 2000 (-2.3%) also coughed up early gains and closed sharply lower.
All 11 S&P 500 sectors closed lower in a steady decline with energy (-3.1%) and communication services (-2.4%) taking a brunt of the damage. The consumer staples sector (-0.1%) outperformed on a relative basis with a 0.1% decline.
Tesla (TSLA 1008.78, +31.58, +3.2%) was the main driver in early action, with shares rallying as much as 12% after the company topped earnings estimates and reaffirmed its multi-year growth expectations. Like the broader market, though, TSLA shares cooled off.
Investors seemed to first lose confidence as the S&P 500 couldn't stay above its 200-day moving average (4497) early in the day. The benchmark index ultimately fell below its 50-day moving average (4413) on a closing basis.
Risk sentiment was further pressured as the 10-yr yield flirted with 2.96%, and Fed Chair Powell said he wasn't ready to declare peak inflation, adding that the Fed could move to a tight policy after reaching a neutral rate, if necessary. On a related note, Chicago Fed President Evans (FOMC voter in 2023) plans to retire in early 2023.
The 10-yr yield did calm down a bit, settling eight basis points higher at 2.92%, while the 2-yr yield rose 12 basis points to 2.69%. The U.S. Dollar Index increased 0.2% to 100.60. WTI crude futures rose 1.6%, or $1.62, to $104.02/barrel.
Nevertheless, the upwards trend in rates kept a lid on the growth stocks. The streaming space, meanwhile, couldn't catch a break with an announcement from Warner Bros. Discovery (WBD 21.45, -1.56, -6.8%) that it will shut down CNN+ on April 30.
In other earnings news, AT&T (T 20.21, +0.78, +4.0%), Dow Inc. (DOW 69.51, +1.97, +2.9%), Nucor (NUE 175.59, +6.34, +3.8%), American Airlines (AAL 20.22, +0.74, +3.8%), United Airlines (UAL 50.85, +4.33, +9.3%), and Alaska Air (ALK 58.78, +0.09, +0.2%) each closed higher following their earnings reports.
Reviewing Thursday's economic data:
- Initial jobless claims for the week ending April 16 decreased by 2,000 to 184,000 ( consensus 195,000). Continuing jobless claims for the week ending April 9 decreased by 58,000 to 1.417 million, which is the lowest level since February 21, 1970.
- The key takeaway from the report is that it covered the week in which the survey for the April employment report was conducted. The decidedly low level of initial claims should feed expectations for strong nonfarm payrolls growth in April.
- The Philadelphia Fed Index for April decreased to 17.6 ( consensus 21.0) from 27.4 in March.
- The Conference Board's Leading Economic Index (LEI) increased 0.3% m/m in March (consensus 0.3%) following a revised 0.6% increase (from 0.3%) in February.
Looking ahead, investors will receive the preliminary IHS Markit Manufacturing and Services PMIs for April on Friday.
- Dow Jones Industrial Average -4.3% YTD
- S&P 500 -7.8% YTD
- Russell 2000 -11.3% YTD
- Nasdaq Composite -15.8% YTD
After Hours Summary: CRSR -13.3%, GMED -11.4%, GPS -11% fall on weak guidance; ATEN +10.3% as it gets added to S&P SmallCap 600After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SIVB +9.9%, UFPI +5.8% (also increases dividend), XM +4.8%, BJRI +4%, VICR +2.5%, WAL +1.3%, SNAP +0.3%
Companies trading higher in after hours in reaction to news: ATEN +10.3% (to join S&P SmallCap 600), DDD +3.1% (enters radiation oncology market with FDA 510(k) clearance of VSP Bolus), RVNC +2.4% (FDA accepts BLA resubmission for DaxibotulinumtoxinA for Injection), VWTR +1.4% (announces court decision), JD +1% (weighing payment of special cash dividend), TWTR +0.8% (Elon Musk is in talks with Thoma Bravo about partnering on possible takeover bid, according to NY Post), ADN +0.5% (stock offering), ACMR +0.4% (moves wafer cleaning tool to mass production), MCD +0.2% (issues statement in response to Mr. Icahn's media outreach)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CRSR -13.3% (guides Q1 revs below consensus), GMED -11.4% (guides Q1 revs below consensus; also CEO to resign), GPS -11% (lowers AprQ revenue guidance; also Old Navy CEO stepping down), HTH -5.8%, ISRG -3.5%, SAM -3.1%, FE -2.4%, GBCI -0.5%, PPG -0.2%
Companies trading lower in after hours in reaction to news: SWVL -2.4% (stock offering), BYND -0.2% (NDLS chooses Impossible Foods for its plant-based chicken, according to Bloomberg), KSS -0.1% (releases investor presentation)
>>> Up
* Air Liquide Raised to Buy at Stifel; PT 197 euros
* Aker Horizons Holding AS Raised to Buy at SEB Equities
* BHG Group Raised to Buy at Kepler Cheuvreux; PT 95 kronor (+)
* Coltene Raised to Market Perform at ZKB (+)
* Exxon Raised to Outperform at RBC; PT $100
* Hilton Worldwide PT Raised to $188 from $178 at Argus
* InPost Raised to Buy at Wood & Company; PT 9 euros (+)
* Odfjell Raised to Buy at Pareto Securities; PT 55 kroner
* Spindox Raised to Outperform at EnVent S.p.A.; PT 19.30 euros
* Tesla PT Raised to $375 from $313 at Citi
* TotalEnergies Raised to Buy at HSBC; PT 53 euros
>>> Down
* Chevron Cut to Sector Perform at RBC; PT $165
* Danone Cut to Market Perform at Bernstein; PT 56 euros
* Grieg Seafood Cut to Hold at Kepler Cheuvreux; PT 142 kroner (+)
* National Grid Cut to Hold at Berenberg; PT 1,210 pence
* Netflix Cut to Hold at Edward Jones
* QinetiQ Cut to Neutral at Citi; PT 382 pence (+)
>>> Initiation
* Acciona Energia Rated New Outperform at Oddo BHF; PT 42.30 euros
* Demant Reinstated Buy at Jefferies; PT 360 kroner
* Emmerson Rated New Buy at Liberum; PT 14.80 pence
* Himalaya Shipping Rated New Buy at Arctic Securities
* Hornbach Holding Rated New Buy at Berenberg; PT 150 euros
* Mutares SE & Co KGaA Rated New Buy at Jefferies; PT 30 euros
* Nyxoah Rated New Outperform at Oppenheimer; PT 27.67 euros
* PatientSky Group Rated New Buy at Arctic Securities
* Piaggio Rated New Buy at Berenberg; PT 3.40 euros
* Sonova Reinstated Hold at Jefferies; PT 410 Swiss francs
* Thyssenkrupp Reinstated Buy at Jefferies; PT 12.65 euros
* Thyssenkrupp ADRs Reinstated Buy at Jefferies; PT $14.50
>>> Call
* ABB 1Q Update a Beat, Results Look Encouraging, Citi Says (+)
* ASMI Results Show Strong Order Momentum, Jefferies Says
* Carrefour 1Q Beats, But Barclays Notes ‘Small’ French Miss
* Carrefour Shares Likely to Hit Pause Even as 1Q Reassures: Citi
* Demant Buy, Sonova Hold in Jefferies Hearing Aid Initiations
* European Margin Forecasts Are Too Optimistic: BNP Strategists
* Getlink 1Q Results In Line, Guidance Limited, Citi Says (+)
* Hornbach Gets Another Buy as Berenberg Cites Strong Presence
* National Grid Cut at Berenberg Following Strong Run For Stock
* Nestle’s Strong 1Q Raises Questions on Guidance: Jefferies (+)
* Piaggio ‘Worth a Second Look,’ Berenberg Initiates at Buy
* Rexel 1Q Strong on Pricing, Though Citi Notes No Guidance Raise (+)
* Segro 1Q Update is ‘Unsurprisingly Strong,’ Goodbody Says (+)
* Siemens Energy Takeover of Gamesa Unit Seen Closer at Citi, DB (+)
* Verallia 1Q Beat Helps Alleviate Cost Concerns, Citi Says
- Yara (IU2 TH) +2.1%
- Fertilizer Prices Split at Equator on Tighter 3Q Supply Outlook
- Sartorius (SRT3 TH) +1.7%
- Sartorius 1Q Adjusted Ebitda Beats Estimates
- TotalEnergies (TOTB TH) +1%
- $100 Crude Supercycle Is Here, Yet May Not Stretch to a Decade
- Bankinter (BAKA TH) +1%
- Bankinter 1Q Net Income Beats Estimates
- CD Projekt (7CD TH) +0.9%
- Anglo American (NGLB TH) +0.9%
- Anglo American Maintains FY Diamond Production Forecast
- Unilever (UNVB TH) +0.9%
- Siemens Energy (ENR TH) -0.4%
- Maersk (DP4B TH) -0.8%
- Novo Nordisk (NOVC TH) -1%
- Glencore (8GC TH) -1%
- HelloFresh (HFG TH) -1.3%
- Prosus (1TY TH) -3.1%
- Treasuries Dip, Futures Rise; Asia Stocks Mixed: Markets Wrap
DAX:
- VW (VOW3 TH) +0.9%
- Mercedes (MBG TH) +0.9%
- BMW (BMW TH) +0.9%
- Covestro (1COV TH) +0.7%
- SAP (SAP TH) +0.7%
- HelloFresh (HFG TH) -1.3%
MDAX:
- Thyssenkrupp (TKA TH) +1.9%
- Duerr (DUE TH) +1.3%
- Lanxess (LXS TH) +1.3%
- Lufthansa (LHA TH) +1.1%
- Watch Long-Haul Airlines After United Jumps on Profit Forecast
SDAX:
- LPKF (LPK TH) +2.1%
- Schaeffler (SHA TH) +1.7%
- Kloeckner (KCO TH) +1.5%
- Heidelberger Druck (HDD TH) +1.4%
- Hamborner REIT (HABA TH) +1%
- Fielmann (FIE TH) +1%
Hermès Touts Craftsmanship Over Metaverse at Shareholders’ Meeting
"We are full of confidence about the future," said executive chairman Axel Dumas.
Artisans at the Hermès leather goods workshop in Saint-Vincent-de-Paul, France.
COURTESY OF HERMÈS
PARIS — Digital commerce has become second nature for Hermès International, which boasts that 78 percent of customers at its online store are new to the brand.
But how about the metaverse? Not so much.
“I don’t know,” Hermès executive chairman Axel Dumas shrugged when confronted with a question about its metaverse intentions at the company’s annual shareholders’ meeting here Wednesday. “For the time being, we’re interested to see how this world evolves and changes.”
Dumas noted that it “could conceivably” offer Hermès a “great means of communications” in the future — and in its quirky fashion.
“But this is not a priority of ours,” he stressed. “We’re mainly interested to learn and to monitor, rather than rush into the metaverse.”
Hosting its first in-person meeting since 2019, Hermès made no mistake that it is a company rooted in physical objects, human creativity and exceptional craftsmanship, screening countless videos of its artisans caressing, cutting and stitching its coveted leather goods in light, airy workshops set in the picturesque French countryside. “We still devote 15 hours to making each handbag,” Dumas declared proudly.
The two-hour session opened with a pianist engaged in a duet with exotic birds singing and strutting on a giant screen, electronic gurgles and a flute player adding to the cacophony.
Hermès has every right to chirp, having logged a “record year” in 2021 that saw revenues vault 41.8 percent to 8.982 billion euros — this despite price increases amounting to less than 2 percent, Dumas pointed out.
The executive gave no specific guidance for 2022, while declaring: “We are full of confidence about the future.”
The French luxury house certainly galloped ahead in the first quarter of 2022, recording a 27.1 percent rise in revenues at constant exchange to 2.76 billion euros and touting double-digit growth across all business lines and territories.
Looking ahead, Hermès plans to continue to increase its production capacity, especially in leather goods, and expand its retail network. Major openings planned for this year include New York City, Shanghai, Strasbourg, Barcelona and Doha.
“Our stores are all unique places,” Dumas asserted, explaining that its boutique buyers are fully empowered to tailor product assortments to local tastes and needs.
The French firm ended 2021 with 303 boutiques in the world, having added or expanded locations in cities including Detroit, Tokyo, Macau and Shenzhen.
The gathering served as a recap of how mightily Hermès weathered the pandemic, with executives touting the exceptional flexibility and devotion of its artisans, HR managers and sales associates; its culture of “French excellence,” and the unity of the family shareholders. About 100 or so family members last year decided to block 54 percent of the share capital until at least 2041 under the nonlisted holding company known as H51.
Responding to shareholder questions about its large cash reserves, Dumas said not having any financial constraints or debt is “of paramount importance” to its resilience, allowing it to maintain jobs and wages, while continuing to invest in retail operations and factories.
Hermès operates 52 production sites in France, 19 of them for leather goods. Last month, the company said it would open two more leather goods workshops in France within the next five years, adding 500 more artisans to its payroll. Three other sites are already under construction in France, meaning it will boast 24 workshops for leather goods and saddlery by 2026.
Meanwhile, other Hermès sectors logged faster growth than handbags in 2021. By product sector for the full-year versus 2019, watches rose 76.6 percent and ready-to-wear and accessories 44.3 percent, outpacing leather goods and saddlery at 22.8 percent.
Hermès added about 1,000 jobs in 2021, bringing the worldwide employee count to 17,600, all of whom received a 3,000 euro bonus and 100 euro a month salary bump.
“We are pleased to share with employees, the benefits of our growth,” Dumas said.
Beyoncé, Rihanna Among the All-Female Investors in Destree
Reese Witherspoon, Gisele Bündchen and Gabriela Hearst are also among the participants in the series A funding round.
As a fundraising round, it’s a major and unprecedented statement about female power, influence and business know-how.
Géraldine Guyot, cofounder of the Paris-based accessories firm Destree, has revealed that investors in the fast-growing company range from venture capital firm Sequoia Capital China, at the behest of Angelica Cheung, to such bold-faced names as Beyoncé, Rihanna, Reese Witherspoon, Gisele Bündchen and Gabriela Hearst.
The French entrepreneur, who has parlayed her passion for modern and contemporary art into unique hats, handbags, jewelry and now apparel, said she and cofounder Laetitia Lumbroso plans to use the series A funding to almost double the size of their small team; open Destree’s first freestanding stores; expand into new or underdeveloped markets like the Middle East, China, Japan and the U.S., and supercharge e-commerce operations and digital-native marketing.
Géraldine Guyot
COURTESY OF DESTREE
Disclosing the transaction exclusively to WWD, Guyot said the list of investors also includes Venezuelan businesswoman Carmen Busquets, actress and beauty entrepreneur Jessica Alba, Glossier founder Emily Weiss and venture capitalist Amy Griffin of G9 Ventures — all of whom contributed a like amount.
Financial terms were not disclosed, but it is understood Guyot and Lumbroso retain majority control of the business, founded in 2016.
What’s clear is that Guyot’s idea of having only women around the table at Destree solidified interest in every potential investor she approached, and allowed her to assemble a diverse group with knowledge and experience across sustainability, fashion-tech, entrepreneurship, communications, beauty and entertainment.
“We noticed Destree because of their distinctive collections, with designs that are artistic and recognizable,” said Cheung, venture partner at Sequoia Capital China, which spurred the series A and led the funding round. “In this crowded and competitive space, Destree has had a very promising start by already establishing a strong DNA, which often determines future growth. We’re excited to be part of their journey while leveraging our global and local resources to help them realize their ambitions.”
Cheung is the former editor in chief of Vogue China. Since she arrived at Sequoia, the firm has taken stakes in luxury retailer Ssense and fashion brands including Ami Paris and Seoul-based We11done.
Busquets, who has invested in such companies as Farfetch, Moda Operandi and Lyst, touted Destree’s French savoir faire and its business model, with 60 percent of revenues already coming from direct-to-consumer sales.
“They also propose handpicked edits to the most exclusive multibrand stores internationally,” Busquets said. “This strategy works very well as an impressive road map to scale the business in an effective and sustainable way.”
According to Guyot, it was the perfect time to raise capital and further develop the business, as luxury fashion rebounds and the pandemic ebbs.
“So far we’ve grown organically, reinvesting our own profits since Day One,” she said in an interview. “Our main growth avenue is market share gain, which will come by increasing our physical and digital presence.
“This fund-raise will allow us to gain control of our distribution and control our clientele much more. We are targeting over 80 percent of directly controlled sales,” she added. “We are thankful for and honored by our female-only funding round. So many of our role models are participating.”
Asked how she will cope with the pressure of delivering value to such a powerful clutch of shareholders, Guyot characterized it as an energizer.
“The good thing is I tend to work well under pressure, better than under no pressure,” she said over tea at the Hôtel Plaza Athénée in Paris, her pitch-black dog Lemon resting quietly at her feet. “When you have investors, you have to be accountable.…It’s good pressure. It should nourish me.
“We look forward to the moments in which we may draw inspiration from this unique pool of investors. It is definitely not a coincidence: We were oversubscribed and had to turn down many reputable male investors in order to fulfill this vision,” she added.
By all accounts, Guyot seemed destined for a career in the art world, not fashion. Her mother is on the board of the Pompidou Museum and has been collecting mainly German and American art from the second half of the 20th century.
“I was raised in a family of art lovers. Since my early childhood, I had the privilege of being surrounded by art and I quickly developed a strong passion for it,” she said.
She recalled how her parents collected postcards of artworks from museums around the world and used them as flash cards to teach their daughter about contemporary works and artists.
“I grew up going to museums. My whole childhood was about going to museums and galleries, meeting artists,” she said. “It is an essential part of my life and of Destree’s DNA, which I think gives it an unconventional signature and approach to fashion.”
Guyot listed among artists she appreciates as Donald Judd, James Turrell, Kenneth Noland, Wade Guyton, Jadé Fadojutimi, Cecily Brown and Bridget Riley, whose striped and optical works seem to vibrate when viewed from a certain distance.
“I like art that disturbs the eye visually,” she explained. “I am more focused on the art of our time, and collecting works I can relate to, as well as works from artists I am able to build deep relationships with.”
In parallel, she nurtured a fascination with fashion and began amassing vintage pieces from the 1960s and 1970s from the likes of Yves Saint Laurent and Celine. Her collection also includes lesser-known talents like Franck Sorbier, and she flicked through her camera roll to show off some of his arty jackets.
After graduating from Central Saint Martins in London, where she studied art and received a BA in culture, criticism and curation, Guyot decided she would launch an accessories brand.
She seized on the word D’Estree, plucked from a familiar street in Paris and sounding very French, and decided she would start with hats, sensing the marketplace was too crowded with leather goods and jewelry.
Applying her eye for bold color and graphic shapes to the category, Guyot succeeded in winning attention for the category before eventually expanding with jewelry and handbags.
In November, she threw up a test balloon with ready-to-wear via a pop-up shop at Le Bon Marché in Paris, and it did gangbusters. Women responded to her feminine, vaguely historical silhouettes and styles named after artists.
Handbags — including hero styles like the Albert — rank as Destree’s biggest product category, with jewelry and rtw now vying for second place, and hats the smallest. In rtw, her hero product is the puff-sleeved Yoshitomo/Amoako suit, and the plan is to flesh out the apparel category.
The entire product range will be showcased in Destree’s first freestanding boutique, slated to open in June at Rue du 29 Juillet in Paris, across the street from the Saint Laurent Rive Droite flagship on Rue Saint Honoré that used to be Colette, and among a clutch of trendy stores that will soon include Danish brand Ganni.
Guyot is plotting a New York City boutique for a fall opening, plus her first outpost in China in 2023, with strategic advice from Sequoia’s Cheung, who is based in Beijing. Eventually, select cities in Japan may also get Destree stores.
Her near-term goal is to have the three or four physical stores running successfully alongside Destree’s e-store and a wholesale network numbering about 80 stores. Marquee wholesale accounts include Selfridges, The Webster, Isetan and Le Bon Marché, where a permanent shop-in-shop is slated to open in June.
Guyot described a more selective exposure for the rtw category. Destree is already carried by stores in Europe, the U.S., Japan and Korea. The Middle East and China represent key geographies for expansion.
Beyoncé was among the first big celebrities to carry a Destree bag. Guyot had sent a few on a lark through the music star’s stylist Zerina Akers, and roughly a year later the singer was pictured during New York Fashion Week toting her Alvar style on one shoulder. “We were so excited!” she recalled.
Her hunch was right that accessories could be a fast-track to breaking through the clutter of a crowded fashion market.
“I’ve always been fascinated by the relentless efficiency of accessories,” she said. “Your outfit can be very simple, but accessories always give it character.”
She explained that her approach to accessories, “graphic and structured,” is uncommon.
Guyot explored a funding round in late 2019, but abandoned the project when the coronavirus pandemic hit. She and Lumbroso pivoted successfully to e-commerce, making 2021 the “best year so far” for the young company.
Laetitia Lumbroso
COURTESY OF DESTREE
Lumbroso went to business school and had 10 years of experience in the luxury sector before hooking up with Guyot. “We are very complimentary and work hand-in-hand,” she said. “As a start-up, we need to multitask all the time, roll up our sleeves and be very street smart when it comes to working on any aspect of the business.”
Guyot restarted the funding process last year after she moved to New York, having followed her new husband Alexandre Arnault Stateside when he accepted a job as executive vice president, product and communications, at Tiffany & Co. following its acquisition by the family group LVMH Moët Hennessy Louis Vuitton.
“We are still headquartered in Paris,” she noted. “I go back and forth as much as I can and am acting as head of the U.S. market.”
She stressed Destree’s Parisian essence, with each step of the creative process occurring in the French capital, “from conceptualization to design and responsible craftsmanship.”
“We have been working with the same artisans since the beginning and we are very proud of these partnerships we have built over the years.”
Hearst was among the first women Guyot approached for the funding round, having ghost-designed some of the accessories for Hearst’s signature brand for spring 2021.
“We were not only looking for money, because money is easy to find. What’s hard to find is people with different expertise,” Guyot said, explaining that the investors she assembled will “help us open doors in different parts of the world.”
Destree boasts 60,500 followers on its Instagram account, and the brand has relied on word-of-mouth and press mentions so far. “We plan on organizing trunk shows across the U.S. since I live there now, to localize discovery of the brand,” Guyot said.
She noted Destree also plans to shoot campaigns monthly in tandem with its rtw drops. WWD was present at the shoot for its summer 2022 delivery, which includes 10 color versions of the asymmetric Albert bag, and new interpretations of the Amoako suit.
Asian stocks traded mixed and U.S. futures climbed Thursday with investors seeking clues on Chinese policy support and pondering a burgeoning debate around whether inflation is peaking. Treasuries pared a rally. Equities rose in Japan. They fell in Hong Kong and China where an address by President Xi Jinping failed to soothe investors pining for more measures to support growth. S&P 500 and Nasdaq 100 futures advanced after positive earnings from Tesla Inc. and United Airlines Holdings Inc. Rate markets underwent a sharp repricing Wednesday, sending long bond yields sinking. Investors such as Bank of America Corp. and Nomura Asset Management said this is a buying opportunity after the recent rout. Ten-year yields trimmed a steep retreat, with central bank stimulus withdrawal looming large. The dollar pared a slide and the yen resumed a decline. Chinese tech stocks fell for a third consecutive day, weighed by shares linked to electric vehicle production as lockdowns on the mainland disrupt logistics. Investors have so far been disappointed at Chinese attempts to counter the economic impact of lockdowns. US After Hours UAL +7.7%, TSLA +5.6% trade higher on earnings; SNBR -5.8%, CVNA -5.4%, EFX -5.2%, AA -5.1%, LRCX -2.1% lower on earnings
Nikkei +1,23% Hang Seng -1,62% CSI -1,09% Shanghai -1,35% Shenzen -2,13%
Eur$ 1,0843 CNH 6,4692 CNY 6,4419 JPY 128,18 GBP 1,3062 CHF 0,9502 RUB 82,3632 TRY 14,6722 WTI$ 103,02 Gold 1950,70 BTC 41,693 ETH 3095
S&P +0,49% Nasdaq +0,73% EuroStoxx +0,34% FTSE +0,32% Dax +0,41% SMI +0,59%
Macro :
- European Margin Forecasts Are Too Optimistic: BNP Strategists
- As Brevan Howard’s Gains Mount, Founder Cuts Back On Trading
- Melvin Capital Eyes Returning Capital to Start New Fund:CNBC
Keep an eye on :
- ABBN SW : ABB 1Q Operating Ebita Beats Estimates
- AKZA NA : Akzo Nobel 1Q Adjusted Operating Income Beats Estimates
- MT NA : Alcoa 1Q Adjusted Ebitda Beats Estimates: Snapshot
- ASM NA : ASMI Sees 2Q Revenue EU540M to EU570M, Est. EU541M
- AXFO SS : Axfood 1Q Operating Profit Beats Estimates
- BAR BB : Barco 1Q Orders EU246.9M Vs. EU288.1M Q/Q
- BAS1V FH : BasWare 1Q Ebit Beats Estimates
- BFIT NA : Basic-Fit 1Q Revenue EU162M Vs. EU10.7M Y/y
- BCART BB : Biocartis 1Q Cash and Cash Equivalents EU37.3M Vs. EU53.5M Q/Q
- CARLB DC : Carlsberg May Sell Russian Brewery to AB InBev Efes: Kommersant
- CA FP : Carrefour 1Q Sales Beats Estimates
- COTN SW : Comet Sees FY Sales CHF570M to CHF610M, Est. CHF577.7M
- DBAN GY : Deutsche Beteiligungs AG Sees FY Net Loss EU15.0M to EU25.0M
- EDEN FP : Edenred 1Q Revenue Beats Estimates
- ERF FP : Eurofins Scientific Boosts FY Adjusted Ebitda View, Meets Est.
- GET FP : Getlink 1Q Revenue EU227.8M Vs. EU156M Y/y
- GRNG SS : Granges 1Q Adjusted Operating Profit Beats Estimates
- HUSQB SS : Husqvarna 1Q Operating Profit SEK2.16B
- IIA AV : Immofinanz FY Net Income Beats Estimates
- IMB LN : Imperial Brands to Take GBP225m Hit For Divesting Russian Ops
- FII FP : LISI 1Q Sales EU342.4M Vs. EU309.4M Y/y
- HEX NO : Hexagon Composites to Buy Stake in Liquid Gas Storage Tech Co.
- TL5 SM : Mediaset Espana Appoints Borja Prado as Chairman
- MERY FP : Mercialys 1Q Like-for-Like Rental +4.8%
- FB US : Meta Investor Group Calls for Governance Reforms
- NFLX US : Pershing Square Holdings Says It Sold Netflix Investment Today
- NESN SW : Nestle 1Q Organic Revenue Beats Estimates
- PSH NA : Pershing Square Holdings Says It Sold Netflix Investment Today
- RXL FP : Rexel 1Q Sales Beats Estimates
- DIM FP : Sartorius Stedim Biotech 1Q Revenue Beats Estimates
- SIP BB : Sipef 1Q Palm Oil Output 85,226 Metric Tons
- SLIGR NA : Sligro 1Q Sales EU468M Vs. EU328M Y/y
- TEL2B SS : Tele2 1Q Net Sales Meets Estimates
- SPM IM : Saipem 1Q Revenue Misses Estimates
- SAN FP : Sanofi: Rezurock Results Show Strong, Not Universal Correlation
- SW FP : Sodexo Stops Activities in Russia, Tranfers Ownership
- TIT IM : Telecom Italia Is Said to Seek $3.3 Billion State-Backed Loan
- TIT IM : Oi Concludes Mobile Unit Sale For BRL15.9b, Repays BNDES Debt
- TSLA US : Musk Appeals for More Lithium Production to Meet Battery Demand
- VRLA FP : Verallia 1Q Revenue Beats Estimates
>>> Up
* Air Liquide Raised to Buy at Stifel; PT 197 euros
* Aker Horizons Holding AS Raised to Buy at SEB Equities
* Exxon Raised to Outperform at RBC; PT $100
* Hilton Worldwide PT Raised to $188 from $178 at Argus
* Odfjell Raised to Buy at Pareto Securities; PT 55 kroner
* Spindox Raised to Outperform at EnVent S.p.A.; PT 19.30 euros
* Tesla PT Raised to $375 from $313 at Citi
* TotalEnergies Raised to Buy at HSBC; PT 53 euros
>>> Down
* Chevron Cut to Sector Perform at RBC; PT $165
* Danone Cut to Market Perform at Bernstein; PT 56 euros
* National Grid Cut to Hold at Berenberg; PT 1,210 pence
* Netflix Cut to Hold at Edward Jones
>>> Initiation
* Acciona Energia Rated New Outperform at Oddo BHF; PT 42.30 euros
* Demant Reinstated Buy at Jefferies; PT 360 kroner
* Emmerson Rated New Buy at Liberum; PT 14.80 pence
* Himalaya Shipping Rated New Buy at Arctic Securities
* Hornbach Holding Rated New Buy at Berenberg; PT 150 euros
* Mutares SE & Co KGaA Rated New Buy at Jefferies; PT 30 euros
* Nyxoah Rated New Outperform at Oppenheimer; PT 27.67 euros
* PatientSky Group Rated New Buy at Arctic Securities
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>>> Call
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China On The Verge Of A Major Food Crisis - Part 1
By Eric Mertz of the General Crisis Watch Substack
A worker transplants rice seedlings in China’s Jilin province, where up to a third of farmers have insufficient agricultural inputs after authorities sealed off villages to fight Covid-19
This report from the CCP administrations in those regions comes mere weeks before farmers were due to start planting, meaning they would at best miss the best time to plant - driving down yields - and at worst not be able to plant at all. The later seems likely, given the recent fertilizer shortage brought about by Putin's invasion of Ukraine.
The war in Ukraine will have a further impact for China, due to their reliance on roughly 2 million tons of corn from Ukraine each year, most of which is used as livestock feed for China's pig farms.
This disruption in corn to Chinese pig farmers comes as demand is increasing after three years of severe cuts due to African Swine Fever resulting in mass culling. Though its entirely possible China isn’t out of the woods yet. Chinese pig farmers are reportedly losing $75 per hog slaughtered, as opposed to a profit of $175 per hog last year. This is extremely significant for Chinese nutritional health, as pork makes up over 60% of the average Chinese meat consumption at ~54 pounds per person per year.
The domestic situation is not helped by trucking volumes in rural areas dropping by 87% for the year. Vice-Premiere Hu Chunhua has already called on provincial authorities to adjust their Zero COVID policies to stop arresting farmers for working their fields during the lockdowns. This crisis seems to be driven by local officials implementing strict policies which results in truckers facing two-week quarantines. At a cost of ¥3360 ($556) for the 14 days spent in a camp, this amounts to half the annual average income for truck drivers in China. The situation linking rural areas to the cities aren’t much better as major cities, and even entire provinces, shut down highway travel to prevent becoming another Shanghai. Beijing has ordered provincial authorities to implement priority passes to get long-haul truckers in to deliver goods, but it is likely too-little too-late.
Political Infighting
To make matters worse, the political infighting between former party leader Jiang Zemin’s Shanghai Clique and Xi Jinping’s Tsinghua clique may have just broken into the open. Vice-Premiere Sun Chunlan - the woman responsible for implementing China’s COVID policy - has summoned a number of Shanghai officials before her to answer accusations of "lying flat". This comes after reports of party and local government mismanagement began to circulate on Western social media websites.
There have already been reports of assassination attempts against Xi in the past. And Xi hasn't left China since his state visit to Myanmar 822 days ago. In that time, he has purged top leadership of China’s internal apparatus of oppression.
Now, with the 14th National Party Congress convening in March of 2023 - and with it the selection of the next President of the People’s Republic of China - it appears Xi may be in a very real life-or-death struggle for control over the party.
However, these are not the only issues facing China. There is more to come.