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What’s happening: Shares of Kroger Company jumped on Thursday, after the company released results for its second quarter.
What happened: Although the supermarket chain missed sales expectations, it reported stronger-than-expected earnings for the second quarter.
Kroger also raised the lower end of its sales outlook for the year.
How were the results: The Cincinnati, Ohio-based company reported almost flat sales for the quarter.
Why it matters: US consumer spending remained constrained in the second quarter. Customers continued to look for products at the lowest price and preferred eating at home.
Kroger offered deals and discounts to attract price sensitive customers, to compete with its bigger rival Walmart. The company’s merger agreement with Albertsons came under antitrust review by the US Federal Trade Commission.
Kroger’s digital sales grew by 11% in the second quarter. The company exited the quarter with $2.8 billion in cash and temporary cash investments, and inventories of $6.64 billion. Its long-term debt, including obligations under finance leases, stood at $12.034 billion.
Management reiterated their 2024 earnings guidance of $4.30-$4.50 per share but raised their forecast for same-store sales, excluding fuel, to 0.75%-1.75% growth, from their previous guidance of 0.25%-1.75%.
How shares responded: Kroger’s shares climbed 7.2% to close at $55.20 on Thursday, following the release of quarterly results. The stock has added around 19% year to date.
What to watch: Investors will continue monitoring the progress in Kroger’s merger deal with Albertsons. Markets will also focus on inflation, as the US Federal Reserve gears up to lower interest rates.
Context: The CAD/USD forex pair remained almost flat on Thursday, as investors assessed the latest economic data.
Details: Data released on Thursday showed the total value of building permits in Canada rose by 22.1% to $12.39 billion in July, significantly higher than market estimates of a 2.5% gain. The figure also compared favourably to the previous month’s 13% decline.
Last week, the Bank of Canada lowered its benchmark interest rate for the third straight time. The policy rate was cut by 25 basis points to 4.25%. Markets expect policymakers to cut rates in October and December.
Strength in the price of crude oil, one of Canada’s major exports, lent some support to the loonie. WTI crude oil prices gained $1.66 to settle at $68.97 per barrel on Thursday.
Some weakness in the greenback also provided support to the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.3% to 101.37.
The CAD/USD forex pair was almost flat at 1.3580 on Thursday. Stocks in Canada surged to a record high on Thursday, with the S&P/TSX Composite Index gaining 1.14% to close the session at 23,475. The index has gained 4.8% over the past month, while adding around 16% over the past year.
What to watch: Investors await the release of economic data on capacity utilisation and wholesale sales from Canada today. Canadian industries, which operated at 78.5% of their production capacity during the first quarter, are expected to operate at 78.4% in the second quarter. Analysts expect wholesale sales to decline by 1.1% in July, worse than June’s 0.6% contraction.
Other Markets: European indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.57%, 1.03%, 0.52% and 0.80%, respectively.
US Secretary of State Antony Blinken announced plans to provide over $700 million in humanitarian aid for Ukraine. The news sent the RUB/USD pair slightly lower in forex trading this morning.
New Zealand’s BusinessNZ Performance of Manufacturing Index rose to 45.8 in August, from 44.4 in the previous month, lending support to the NZD/USD forex pair.
South Korea’s export prices rose by 5.7% year-over-year in August. This marked an easing from the previous month’s 13% surge, which sent the KRW/USD pair lower in forex trading this morning.
India’s industrial output grew by 4.8% year-over-year in July. The figure coming in higher than market expectations of 4.7% lent support to the INR/USD forex pair.
Brazil’s retail sales grew by 0.6% in July, compared to a 0.9% decline in the previous month, which sent the BRL/USD pair higher in forex trading this morning.
France’s consumer prices, Eurozone’s industrial production, Russia’s GDP growth and Bank of Russia’s interest rate decision, India’s foreign exchange reserves and total passenger vehicle sales, Brazil’s IBC-Br economic activity index and industrial entrepreneur confidence index, US export prices, import prices, University of Michigan consumer sentiment, Baker Hughes crude oil rigs and Baker Hughes total rigs, as well as China’s new yuan loans, money supply M2, total social financing and value of loans.
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