The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1842 ET -- Vicinity Centres's sale of a 50% interest in the Broadmeadows Central mall could help to lift its stock higher as it points to cap rates being in better shape than investors may have thought, Citi says. Vicinity said yesterday it is selling the stake to Melbourne-based Nikos Property. According to Citi analyst Howard Penny in a note, the transaction adds to other supportive datapoints, such as the recent valuation of Abacus Property's portfolio. "We therefore expect cap rates to potentially move higher by a lesser extent than the market may be anticipating," says Citi. "The lower-than-expected moves in cap rates could be supportive of overall Vicinity valuations and gearing levels." Citi opens a 30-day catalyst watch on Vicinity's stock. (david.winning@wsj.com; @dwinningWSJ)
1822 ET -- Australia's S&P/ASX 200 looks set to rise at the start of the week's final session, building on a positive lead by U.S. equities. ASX futures are up by 0.8%, suggesting that the benchmark index has a shot at avoiding a second straight weekly loss. The ASX 200 lost 1.7% last week and is down 0.6% so far this week amid rising expectations of further central-bank interest-rate rises. Major U.S. indices jumped as investors cheered progress toward a deal to avert a government default. The tech-heavy Nasdaq Composite led added 1.3%, the S&P 500 added 1.0%, and the Dow Jones Industrial Average added 0.5%. (stuart.condie@wsj.com; @StuartLCondie)
1814 ET -- Jefferies sees an opportunity to pick up Paladin Energy shares on the cheap. Earlier this week, Paladin's stock fell 20% after a news article quoted the Namibian Mines and Energy minister proposing that the state should take a stake in mining and energy companies. Paladin, which owns the Langer Heinrich uranium mine in Namibia, then recovered half of those losses when a second report said this wasn't the case. "We see a very low chance of anything eventuating that will impact Paladin and take this sell-off as a buying opportunity," Jefferies analyst Chris Drew says in a note. The bank sees an increasingly bullish outlook for uranium, with small upticks in the uranium spot price now evident. (david.winning@wsj.com; @dwinningWSJ)
1802 ET -- Zumiez's 1Q loss significantly widened amid changing shopping behaviors among U.S. customers, CEO Rick Brooks says. "The domestic demand environment and heightened promotional activity has put pressure on our full-price selling model," he says. The specialty clothing store expects to report lower-than-expected sales for the 2Q. Shares fall 4.5%, to $14.99, in after-hours trading. (sabela.ojea@wsj.com; @sabelaojeaguix)
1756 ET - Canadian stocks close higher, with the benchmark S&P/TSX Composite Index and the blue-chip S&P TSX 60 Index both edging up 0.5% to 19672 and 1182, respectively. The S&P/TSX Index sees gains in its non-energy minerals sector, while consumer non-durables lead the decline. Uranium miner Cameco gains 7.9% to C$40.76 is one of the day's top risers. (denny.jacob@wsj.com; @pennedbyden)
1745 ET - Bark has its sights set on FY24. The dog-centric company says throughout the year it made improvements such as a higher average order value thanks to stronger cross-selling abilities and lower adjusted losses. Bark burned $17M in cash in FY23, down from $194M in cash burned in FY22, and generated $17M in free cash flow in the second half of the fiscal year. "We expect profitable quarters to become more common, enabling us to redirect our focus from profitability to growth--particularly in the consumables space," says CEO Matt Meeker. Revenue and total orders fell in 4Q from year-ago levels, signaling potential cautious spending by consumers. Petco Health & Wellness last week said customers were trading down and exhibiting caution. (denny.jacob@wsj.com; @pennedbyden)
1727 ET - Chip-maker Broadcom is expecting sales of chips tied to the boom in artificial intelligence to reach more than $1B a quarter later this year, Chief Executive Hock Tan says in a call with analysts. Broadcom, which makes a range of networking and communications chips, reported quarterly sales and profits above Wall Street estimates on Thursday, and gave a positive projection for its current quarter. Its shares were up about 1% in after-hours trading.(asa.fitch@wsj.com)
1659 ET - The IPC stock index edges down 0.02%, closing at 52724 points. Grupo Mexico shares rise 4.6%. President Andrés Manuel López Obrador said his government signed an agreement with the company's rail unit, which will relinquish its concession on a stretch of railway in southeast Mexico that the government wants for an infrastructure project in exchange for an 8-year extension on another rail line. The peso strengthens to 17.55 against the US dollar from 17.68 yesterday. (anthony.harrup@wsj.com)
1626 ET - A Canadian think tank's central banking watchdog recommends the Bank of Canada keep its main interest rate unchanged next week, when it issues its latest policy decision. Market commentators have argued BOC might need to end its pause of rate increases, amid a slight acceleration in inflation and stronger-than-expected 1Q growth. C.D. Howe's 11-member monetary policy council, a mix of economists from academia and the private sector, were split on what the central bank should do. Three economists said BOC should raise rates on June 7, to 4.75%. Meanwhile, three economists wanted the main rate to be lower than the current 4.50% by December. Members said a recession was still a possibility, but expected it to unfold later-than-forecast "and perhaps shallower than previously anticipated." (paul.vieira@wsj.com)
1604 ET - US stocks rise in a relief rally after the House easily passes a bill to avert a default, sending the legislation to the Senate. Technology is the biggest gainer and energy shares rise on a 3% gain in oil prices on worries ahead of next week's OPEC+ meeting. ADP private payrolls and weekly jobless claims come in stronger than anticipated, raising the stakes for tomorrow's nonfarm payrolls report. Retail shares suffer, however, after weak outlooks from Macy's and Dollar General. DJIA gains 0.5% to 33061, the S&P 500 adds 1% to 4221 and the Nasdaq climbs 1.3% to 13100. (patrick.sullivan@wsj.com)
1540 ET - Dell shares rise 1.8% after a brief trading halt ahead of the earlier-than-expected release of their earnings. The computer maker reports adjusted EPS and revenue above Wall Street's expectations. "We executed well against a challenging economic backdrop," says Chuck Whitten, co-chief operating officer. "We maintained pricing discipline, reduced operating expenses, and our supply chain continued to perform well after normalizing ahead of competitors." Dell's business has come under pressure in recent quarters from weakening PC demand and tighter IT budgets amid widespread macroeconomic concerns. But this quarter's results hint at better times ahead. Dell is up 13% year-to-date. (patrick.sheridan@wsj.com)
1403 ET - S&P companies are recording their best performance relative to analysts expectations since the 4Q 2021 despite reporting a 1Q blended earnings decline of 2.1%, according to FactSet's earnings insight report. About 78% of these companies reported positive EPS surprises in 1Q, with 75% of them also having reported upside revenue surprises in the period, FactSet says. Looking ahead, analysts still expect earnings growth for the second half of 2023, projecting an earnings drop of 6.4% in the 2Q and earnings growth of 0.9% and 8.3% in the 3Q and 4Q, respectively. For 2023 as a whole, analysts predict earnings growth of 1.2%. (sabela.ojea@wsj.com; @sabelaojeaguix)
(END) Dow Jones Newswires
June 01, 2023 18:42 ET (22:42 GMT)
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