Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
What’s happening: Shares of The Kroger Company fell on Thursday, after the company released results for its first quarter.
What happened: The supermarket chain topped Wall Street expectations for the first quarter amid steady demand for essentials.
Investors were disappointed, despite Kroger reaffirmed its projections for the full year.
How were the results: The Cincinnati, Ohio-based company reported growth in sales for the first quarter.
Why it matters: Shoppers have been pulling back from spending due to high inflation and economic uncertainty, which has impacted Kroger’s results.
Kroger’s comparable sales, excluding fuel, rose 3.5% in the first quarter, slightly ahead of market estimates. Its operating margins narrowed from 3.4% to 3.3%, while operating income contracted by 2.3% to $1.47 billion, with higher promotions exerting pressure on the company’s profits.
As of May 20, 2023, Kroger had $2.6 billion in cash and equivalents and a total debt of $13.4 billion. The company plans to continue paying its quarterly dividend and projects an increase in the same over time, subject to board approval.
Last month, Kroger’s peer Walmart raised its annual guidance as more customers shopped for essential goods. However, Kroger kept its outlook unchanged this time, after raising it for two years.
Kroger reaffirmed its adjusted earnings forecast of $4.45-$4.60 per share for the full year, versus market expectations of $4.50 per share. The company also projected adjusted FIFO operating profit of $5 billion to $5.2 billion for the year.
How shares responded: Kroger’s shares fell 2.7% to close at $45.94 on Thursday, following the release of quarterly results. The stock has lost around 6% over the past month.
What to watch: Investors will watch developments around Kroger’s acquisition of its smaller rival Albertsons in a transaction worth $25 billion. The deal is currently undergoing an antitrust review.
Inflation will also remain one of the major focus areas, as this could significantly impact the company’s overall results ahead.
Context: European markets edged lower on Thursday, as investors digested the latest interest-rate decision from the European Central Bank.
Details: The ECB raised its benchmark policy rate further by 25 basis points at its meeting on Thursday, marking the eighth straight rate hike.
The latest hike brings the rate on main refinancing operations to 4%, the highest level since the 2008 crisis, while taking the deposit facility rate to a 22-year high of 3.5%.
The region’s central bank also raised its inflation projections and slightly lowered its growth estimates. ECB President Christine Lagarde stated that the central bank would likely continue increasing interest rates in July, as inflation is expected to remain high.
In the US, the Federal Reserve decided to keep interest rates unchanged at its June policy meeting on Wednesday.
The Eurozone posted a trade deficit of €11.7 billion in April, compared to a year-ago deficit of €34.5 billion.
The pan STOXX Europe 600 Index fell 0.13% to close at 464.33 on Thursday. Construction and materials shares were among the worst performers, while media stocks settled the session higher.
The EUR/USD forex pair rose sharply following the monetary policy decision. The euro added 1.02% to reach 1.0946 against the US dollar.
London’s FTSE 100 gained 0.34% to close at 7,628.26, while Germany’s DAX 40 and France’s CAC 40 lost 0.13% and 0.51%, respectively.
What are expectations: Traders await the release of data on consumer price inflation, labour costs and wage growth from the Eurozone today. The consumer price inflation in the Eurozone is expected to ease to 6.1% in May, from 7.0% in the prior month.
Analysts expect hourly labour costs rising by 3.2% year-over-year in the first quarter, following a 5.7% rise in the fourth quarter. Wages and salaries, which climbed by 5.1% year-over-year in the fourth quarter, is projected to rise by 3.9% in the first quarter.
Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.26%, 1.22% and 1.20%, respectively.
A group of UN experts raised concerns around Russian military forces torturing Ukraine’s civilians and prisoners of war. The news sent the safe-haven US dollar index higher this morning.
The Bank of Japan held its key short-term interest rate unchanged at -0.1% at its recent meeting, exerting pressure on the JPY/USD forex pair.
Singapore’s non-oil domestic exports fell by 14.7% year-over-year in May 2023. The figure coming in much worse than market expectations of an 8.1% decline sent the SGD/USD pair lower in forex trading this morning.
New Zealand’s BusinessNZ Performance of Manufacturing Index fell to 48.9 in May, from 49.1 in the previous month, exerting pressure on the NZD/USD forex pair.
Argentina’s central bank maintained its key Leliq interest rate at 97% at its latest meeting, which sent the ARS/USD pair slightly lower in forex trading this morning.
Italy’s inflation rate, India’s value of deposits, foreign exchange reserves and value of loans, Brazil’s IBC-Br index of economic activity, Canada’s wholesale sales and foreign investment in securities, as well as US University of Michigan consumer sentiment and Baker Hughes crude oil rigs.
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
