Morning News: August 9, 2021
Posted by Eddy Elfenbein on August 9th, 2021 at 7:01 am

Oil Slides 4% on China Virus Curbs and Climate Warning

How China’s Ping Pong Prowess Explains Its Economy

China’s Covid-Zero Strategy Risks Leaving It Isolated for Years

They Wait Hours to Withdraw Cash, but Most A.T.M.s Are Empty

Markets Are Running Hot on an Economic Enigma Machine

This Is a Terrible Time for Savers

Infrastructure Bill’s Boost to Economy Is Likely to Be Limited

Malls Are Back. But for How Long?

They Don’t Want the Shot. They Don’t Want Colleagues to Know.

Amazon Lures Advertisers From Facebook After Apple Privacy Shift

Saudi Aramco Posts $25 Billion Profit

Brookfield Reinsurance Unit to Buy American National for $5.1 Billion

Billionaire-Backed Mining Firm to Seek Electric Vehicle Metals in Greenland

Jay Y. Lee, Samsung’s De Facto Leader, Wins Parole From Prison

The Man Who Lost $20 Billion in Two Days Is Lying Low in New Jersey

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Various Items
Posted by Eddy Elfenbein on August 6th, 2021 at 5:17 pm

The stock market closed today at 4,436.52. That’s another all-time high.

I wanted to touch on a few issues that I couldn’t get to before.

Moody’s (MCO) said it’s buying RMS for $2 billion. RMS is a catastrophe risk management and modeling firm.

Ross Stores (ROST) said it will release its Q2 earnings on August 19.

Check Point Software (CHKP) expanded its share buyback program by $2 billion.

Barron’s printed an excerpt of Canaccord Genuity research on Cerner (CERN). Here’s a snippet:

We are raising our price target to $90, from $89. Cerner [a healthcare information-technology company] reported second-quarter results that beat estimates. It also updated 2021 guidance, with revenue growth maintained and adjusted EPS raised. For several years, Cerner has been refining and resizing its business. These efforts are beginning to take hold, with improved financial performance and new client wins, existing client extensions and expansions, and lower attrition. Longer term, the transformation efforts could accelerate revenue growth, as it is becoming clear that new processes are improving management’s ability to execute. Furthermore, there is continued opportunity for incremental R&D efficiencies. The company’s actions are clearly putting it in a better position to succeed.

July Jobs Report: +943,000
Posted by Eddy Elfenbein on August 6th, 2021 at 8:44 am

The jobs report for July is out and it’s a strong one. Last month, the U.S. economy created 943,000 net new jobs. According to Bloomberg, the consensus on Wall Street was for a gain of 870,000 jobs.

Private sector payrolls rose by 703,000. Government added 240,000 new jobs.

The unemployment rate ticked down to 5.4%. Average hourly earnings rose by 0.4%. The labor force participation rate increased to 61.7%.

June payrolls were revised to 938,000 from 850,000. May was revised to 614,000 from 583,000.

The unemployment rate for discouraged workers fell to 9.2% from 9.8%.

As has been the case for the past several months, leisure and hospitality led job creation, adding 380,000 positions, of which 253,000 came in bars and restaurants. The sector took the hardest hit during the pandemic but has been showing consistent gains during the economic reopening.

The unemployment rate for leisure and hospitality tumbled to 9% in July from 10.9% in June and compared to 25% a year earlier, though there are still about 1.8 million fewer workers than prior to the pandemic. Wages in the sector rose 1.2% month over month and are up 3.1% from a year earlier.

Education also showed strong gains, with 261,000 new hires. The BLS cautioned, however, that the pandemic has distorted the sector’s numbers and likely elevated the number for July.

Morning News: August 6, 2021
Posted by Eddy Elfenbein on August 6th, 2021 at 7:07 am

The Era of Cheap Natural Gas Ends as Prices Surge by 1,000%

Going for Broke in Cryptoland

U.S. Job Growth Seen Strong as Technical Factors Provide a Boost

CEOs and Central Bankers Talk Past Each Other on Inflation

U.S. Business Groups Urge Biden to Restart China Trade Talks

The Surprisingly Okay State of Consumer Debt

How Biden’s E.V. Plan Could Help Tesla and Squeeze Toyota

NBC Tries to Salvage a Difficult Olympics

Amazon Scores Big Win as India Court Stalls Future’s $3.4 Billion Retail Deal

Indonesia Just Had Its Biggest-Ever IPO

Alibaba Warns of Higher Taxes as China Crackdown Widens

China’s Antitrust Regulator Planning to Fine Meituan About $1 Billion

Huawei Reports Biggest Ever Revenue Drop as Consumer Growth Engine Stutters

A Harvard Deal Tries to Break the Charmed Circle of White Wealth

Banker to World’s Richest Families Builds a $3.6 Billion Fortune

Virgin Galactic to Sell Space Flight Tickets Starting at $450,000 A Seat

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Zoetis Earns $1.19 per Share for Q2.
Posted by Eddy Elfenbein on August 5th, 2021 at 11:16 am

This morning, Zoetis (ZTS) reported very good earnings for its fiscal Q2. Zoetis made $1.19 per share. That’s up 34% from last year and it beat estimates of $1.08 per share. Quarterly revenue rose 26% to $1.9 billion.

“We achieved strong results once again this quarter with 22% operational revenue growth and 28% growth in adjusted net income, driven by our petcare parasiticides, key dermatology products, vaccines and diagnostics,” said Kristin Peck, Chief Executive Officer of Zoetis. “Our triple combination parasiticide Simparica Trio® continues exceeding our launch expectations and strengthening our overall position in this competitive market, and we remain very positive about further uptake of our petcare innovations in monoclonal antibodies and diagnostics.”

“We are raising guidance for revenue and adjusted net income for the full year to reflect our confidence in Zoetis and the underlying growth drivers of our business, even while we continue to expect more modest growth rates in the second half of 2021. We remain in a strong position to invest both internally and externally in the innovations, market expansion and direct-to-consumer promotions that can support future growth,” said Peck.

Zoetis divides its business into two segments, U.S. and International. The U.S. segment saw its revenues rise 22% to $1.0 billion. The International segment increased 31% to $924 million.

Now for the best news. Zoetis sees full-year revenue ranging between $7.625 and $7.7 billion. For earnings, the company now sees 2021 earnings between $4.47 and $4.55 per share.

This is the second time Zoetis has raised its earnings forecast this year. The original range was $4.36 to $4.46 per share. Three months ago, ZTS lifted it to $4.42 to $4.51 per share.

Continuing Claims Drop Below Three Million
Posted by Eddy Elfenbein on August 5th, 2021 at 10:50 am

This morning’s jobless claims report came in at 385,000. That’s pretty good. It’s down 14,000 from the prior week’s report. Importantly, continuing claims fell to 2.93 million. That’s the lowest since the pandemic began about 17 months ago.

The slide in continuing claims came as the total of those receiving benefits under all programs fell to just below 13 million, a reduction of 181,251, according to data through July 17 that reflected a drop in those receiving extended benefits. A year ago, that number was just shy of 32 million as enhanced unemployment benefits were directed to those displaced by widespread business lockdowns.

Also this morning, we learned that the trade deficit rose 46% over last year. The monthly deficit was $75.7 billion.

The jobs report comes out tomorrow morning. Dow Jones says consensus is for 845,000.

Morning News: August 5, 2021
Posted by Eddy Elfenbein on August 5th, 2021 at 7:10 am

Britain’s Central Bank Is Expected to Raise Inflation Forecasts as Analysts Look for a Stimulus Exit Plan

How A Little-Known G7 Task Force Unwittingly Helps Governments Target Critics

Biden Sets U.S. Goal for Clean Cars to Be Half of 2030 Sales

Senators Go Beyond Biden Plan to End Private-Equity Tax Break

Democrats See Chance to Reset Wall St. Oversight When Top Fed Official Steps Down

New Candidate for Top Bank Regulator Sees Risks in Crypto and Fintechs

Goldman Sachs Becomes S&P 500’s Biggest Bull

The Mystery of the Missing Workers, Explained

Robinhood Catches Its Own Meme Stock Spotlight With Wild 100% Surge

Twitter Is Stuck With Itself, Too

JAB’s Panera Bread to Join Coffee, Bagel Chains in New Unit

Weber Prices Below Expectations as Grill Maker Downsizes Its IPO

Casino Owner Vici Properties Buys MGM Growth Properties for $17.2 Billion

Singapore Banks Increase Dividends on Profit Beat, Outlook

Yes, You’re Paying About 15% More To Move This Year. Here’s Why

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Earnings from Miller Industries and Ansys
Posted by Eddy Elfenbein on August 4th, 2021 at 4:30 pm

After the bell, Miller Industries (MLR) said it had net sales of $181.2 million for Q2. That’s up 40.9% last year’s Q2. Comparisons with last year aren’t terribly useful due to the unusual environment.

For Q2, Miller’s net income rose to $6.5 million or 57 cents per share. That’s up from 51 cents for last year’s Q2. For the first half of the year, Miller has made 85 cents per share.

Miller is now going for less than 11 times its 2019 earnings.

Jeffrey I. Badgley, Co-Chief Executive Officer of the Company said, “We are encouraged by our strong performance in the second quarter as our operations continued to normalize towards pre-pandemic levels. For the second quarter, sales increased 40.9% to $181.2 million as demand trends continued to improve across all of our markets. In addition, our operations are beginning to see the benefits of our enterprise software upgrades completed in the first quarter and we do not anticipate any significant disruptions to our business operations as we work to implement further system improvements across our network. Despite favorable demand conditions and improving industry dynamics, our operations continue to be impacted by supply chain disruptions and limited availability of freight transportation across our network, as well as increased employee turnover and difficulties in hiring new workers. While we anticipate these headwinds to continue, we are leveraging all available resources to ensure we can meet customer demand.”

Mr. Badgley continued, “With industry dynamics such as vehicle miles traveled continuing to improve, we are encouraged by the favorable demand backdrop as evidenced by our healthy order rates and strong backlog. Despite the challenges faced in our domestic export shipping operations, customer demand in our international business is strong. As we move into the second half of the year, the industry backdrop continues to improve and we are well positioned to capitalize on all growth opportunities. Lastly, our financial position and strong cash generation grant us the financial flexibility to drive the business forward and deliver for our customers.”

This report is a big relief. I’ve been a believer in Miller even as the stock has gone down. The company is clearly profitable. I’m a little concerned about the 44% jump in cost of operations.

Ansys (ANSS) said it had Q2 earnings of $1.85 per share. Expectations had been for $1.56 per share. Operating cash flows was $118.9 million.

Nicole Anasenes, Ansys CFO, stated, “Our outstanding performance was highlighted by 25% ACV growth in the second quarter, driving our first half 2021 ACV growth to 16%. Given the strength and momentum in our core business year-to-date, coupled with our sales pipeline, I am confident in our ability to achieve our increased full-year 2021 guidance.”

For Q3, Ansys sees earnings of $1.22 to $1.39 per share on revenue of $400 million to $425 million. For the whole year, Ansys now sees earnings ranging between $6.85 and $7.15 per share on revenue of $1.84 to $1.89 billion. That’s an increase from their previous forecast for earnings between $6.69 per share and $7.10 per share.

Robinhood Soars and Is Halted
Posted by Eddy Elfenbein on August 4th, 2021 at 12:35 pm

Robinhood (HOOD) went public last Thursday. The shares were halted today after they rose 65%. The stock didn’t do so well on its first day of trading. It closed higher but not with the huge pop some were expecting. Until yesterday when HOOD then rose 24%, that is. The shares were halted today due to high volatility.

This morning’s ADP jobs report showed a gain of 330,000. That was well below estimates of 653,000. The official government report is due out on Friday.

We have two more earnings reports coming after today’s close. Ansys (ANSS) and Miller Industries (MLR) are due to report.

Morning News: August 4, 2021
Posted by Eddy Elfenbein on August 4th, 2021 at 7:20 am

Reality Bites: China’s Meddling Cools But Can’t Reverse Hot Commodity Prices

Big Economic Challenges Await Biden and the Fed This Fall

Markets Primed for Powell Second Term at Risk From Surprise Pick

SEC’s Gensler Signals Pathway for a Bitcoin ETF With Tough Rules

After Months of Avoiding the Vaccine Issue, Companies Begin to Mandate

CDC Says Travelers Should Avoid Greece, Ireland Regardless of Vaccine Status

Ex-Enron Trader Discovers Greed Is Good—for the Environment

Facing Severe Droughts, Developers Seek to Reuse the Water They Have

Amazon Faces Wider Fight Over Labor Practices

Robinhood Surges More Than 24%, Blows Past $38 IPO Price

Square’s $29 Billion Bet on Afterpay Heralds Future for ‘Buy Now, Pay Later’ Trend

Apple, Affirm to Join on Buy Now, Pay Later for Canadian Purchases

Toyota, Honda Beat Profit Estimates But Are Wary of Extended Chip Crunch

CVC Buys 10% Stake in Spain’s La Liga for $3.2 Billion

Tencent Boss Loses $14 Billion in Rout, More Than Jack Ma

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