Domino’s and Papa John’s shares sink after pizza chains deliver soft sales, outlook (2 min read)
Shares of Domino’s and Papa John’s fell on Thursday after reporting revenue misses and a weak outlook. Papa John’s was the only one with total revenue better than expected, but it gave a soft sales forecast for the year. Both pizza companies have raised prices recently to offset rising food, transportation, and labor costs. Their quarterly report came just after the stronger than expected earnings posted by McDonald’s and Yum! Brands for the same period, despite the economic challenges in the industry.
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Warner Bros Discovery revenue misses as media giant posts big loss (3 min read)
Warner Bros. Discovery posted a $2.1 billion loss in Q4 as the advertising market softens. Revenue came in at $11.01 billion versus expectations of $11.36 billion. Its TV networks, which include TNT, TBS, and Discovery, reported a 6% decrease in revenue, with advertising revenue falling in particular. The firm has been trying to reduce debt and cut costs since its merger in 2022. Despite the earnings miss, its streaming segment's global subscriber base grew to 96.1 million.
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The US economy grew less in fourth quarter than previously believed (4 min read)
The US economy grew at a 2.7% annual rate in Q4 2022, less than the previous estimate of 2.9%, indicating that the Fed’s rate hikes are having a greater impact than previously thought. While the lower growth rate may be welcoming news to those advocating for the Fed to keep interest rates low, a rise in inflation may lead to further rate hikes in 2023. The PCE Price Index rose to 3.7% in Q4 2022, compared to a preliminary reading of 3.2%, which could cause further drag on the economy later in the year.
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Mapped: Unemployment Forecasts, by Country in 2023 (3 min read)
So far this year, the unemployment rate in six of the G7 countries has been hovering near the lowest in a century. Strong labor markets pose a key challenge for central banks globally because it contribute to high inflation numbers. However, it is likely to start rising this year as rate increases by central banks take about a year to reach full effect. This article mapped out the unemployment forecasts by country in 2023 using data from the IMF’s World Economic Outlook.
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Retail ETFs Beating Broader Market While Warning Signs Flash (3 min read)
Retail ETFs like iShares U.S. Consumer Focused ETF (IEDI) and Vanguard Consumer Staples ETF (VDC) have outperformed major indexes due to strong retail sales. However, retailers have warned of uncertainty this year due to high inflation and interest rates, and mixed economic data. The performance of big-name retailers may depend on the Fed's rate policy ahead, and grocery and staple product retailers may fare better than those in larger discretionary items, according to analysts.
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The Most Shorted ETFs (4 min read)
Shorting is the process of borrowing a security to sell it immediately, and then buying it back at a later date to repay the security. It is essentially a way to profit by betting against the rise of a security. In the ETF market, some of the areas that traders are currently betting against include retailers, regional banks, corporate bonds, homebuilders, and biotech. This article from etf.com provides a full list of most shorted ETFs ranked by short interest percentage.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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