Selective US Stocks Analysis 

The US dollar rose on Thursday (Nov 17) as investors digested mixed US economic data, while the British pound fell as the UK government unveiled its latest budget update. The greenback has tumbled in recent weeks as inflation data and comments from Federal Reserve (Fed) officials have suggested that the central bank can soon slow the pace of its punishing interest rate hikes. Yet the US dollar climbed on Thursday after US retail sales data for October, released on Wednesday, came in stronger than expected. The euro was down 0.63 per cent against the US dollar at US$1.033 at 1340 GMT, after hitting its highest level since July at US$1.048 on Tuesday. The US dollar index, which measures the currency against six major peers, rose 0.66 per cent to 106.98. The index has fallen more than 6 per cent since hitting a 20-year high in September, although it remained 11 per cent higher for the year on Thursday. St Louis Fed president James Bullard said on Thursday that even under a “generous” analysis of monetary policy the central bank needs to continue raising interest rates probably by at least another full percentage point. The Fed has already hiked interest rates from next to zero in March to a range of 3.75 per cent to 4 per cent. Bullard’s comments came after San Francisco Fed president Mary Daly – until recently one of the most dovish officials – added to doubts about a change of direction from the Fed by saying a pause was off the table on Wednesday. The greenback rose 0.49 per cent against the Japanese yen on Thursday to 140.28 after falling earlier in the session. It plunged 3.7 per cent on Thursday last week when US consumer inflation data for October came in lower than expected.

US upscale department store chain Macy’s Inc raised its annual profit forecast on Thursday (Nov 17) on resilient demand for high-end suits, gowns and beauty products as wealthier shoppers were undeterred by inflation. Luxury goods sales have held up relatively well for Macy’s as higher-income shoppers, eager to get back to social events after the pandemic, splurge their savings on pricier handbags, perfumes and clothing. Rival Kohl’s Corp, however, withdrew its 2022 sales and profit forecasts, as the company, which caters to more lower-income customers and stocks fewer luxury goods, took a hit from weakening demand due to rising prices. Shares of Macy’s rose 8 per cent in pre-market trading, while Kohl’s shares fell 4 per cent, with the company also blaming the sudden departure of top boss Michelle Gass as a reason for pulling the forecasts. Macy’s inventory levels were just 4 per cent higher, thanks to heavy discounts to clear the excess stocks of cheaper, casual and athleisure apparel. In contrast, Kohl’s inventories were 34 per cent higher in the third quarter. Macy’s said it expects fiscal 2022 adjusted profit of US$4.07 to US$4.27 per share, compared with its previous forecast of US$4 to US$4.20. Excluding items, it earned 52 US cents per share in the quarter ended Oct 29, beating estimates of 19 US cents, according to Refinitiv data.

Hasbro, which has been weighing options for its Entertainment One (EOne) media division, has decided to put most of the business up for sale. The maker of GI Joe action figures and Transformers toys has appointed JPMorgan Chase and Centerview Partners to steer the process after receiving takeover interest from potential bidders, according to a statement on Thursday (Nov 17). The assets Hasbro is selling generated sales of close to US$1 billion last year, or about 16 per cent of the company’s total, Bloomberg reported earlier, citing people familiar with the matter. They include virtually all of the EOne businesses geared to adults, including film and TV production and a library of about 6,500 titles. Those include Naked and Afraid and a distribution arm for popular shows such as The Walking Dead. Hasbro said it intends to retain EOne assets that it considers crucial to its ambitions in entertainment, including the Peppa Pig children’s brand. Hasbro will also retain a team of EOne employees to work on animation, short digital films, as well as feature-length movies and TV series. Shares of Hasbro fell less than 1 per cent to US$55.70 at 9.32 am in New York. In August, Bloomberg reported that Hasbro was considering a sale or restructuring of EOne, which it acquired for about US$4 billion in 2019. The entire business generated US$1.15 billion in sales last year. Chief executive officer Chris Cocks said at an investor event in October that the company will roughly triple its spending on media content based on its brands over the next three years. Thoroughbreds in Hasbro’s stable include the Dungeons & Dragons board games, which the company has adapted into Dungeons & Dragons: Honor Among Thieves, a film that will be released in March. Last year, the company sold EOne’s music business to private equity firm Blackstone for US$385 million.