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Marriott Hosts Robust Q4 Results

The news shaping the markets today

China’s annual inflation rate eased to 0.9% in January, from 1.5% in the previous month. This was also lower than market expectations of 1%, helping the CNY/USD forex pair remain almost flat.


South Korea’s unemployment rate fell to 3.6% in January, from 3.8% a month ago. Although the country added 1,135,000 jobs year-over-year in January, the KRW/USD pair declined in forex trading this morning.


Japan’s Reuters Tankan sentiment index for manufacturers fell to 6 in February, from 17 a month ago. The index falling to its lowest level since March 2021 exerted significant pressure on the JPY/USD forex pair.


Argentina’s monthly inflation rate accelerated to 3.9% in January, from 3.8% a month ago. This being the highest monthly inflation rate since April 2021 sent the ARS/USD pair lower in forex trading this morning.


Colombia’s economic output surged 10.8% in the last quarter of 2021, versus 13.5% growth in the prior period. Although the latest reading was above market expectations of 8.7%, the COP/USD forex pair remained under pressure after the news.

 

What’s happening: Shares of Marriott International gained on Tuesday, after the company reported better-than-expected results for its fourth quarter.

What happened: A surge in occupancy rates across its hotels helped Marriott record strong growth in quarterly revenues.

The hotel chain company reported a significant rebound in revenue per available room in all regions except one of the major countries.

How were the results: Marriott reported growth in revenues and earnings for the fourth quarter, with both metrics easily beating market views.

  • Revenues jumped 105% to $4.45 billion, beating Street expectations of $4.014 billion.
  • Earnings surged a whopping 983% to $1.30 per share, surpassing the consensus estimate of $1 per share.

Why it matters: An increase in covid-19 vaccination rates around the world provided support to the hotel industry in the fourth quarter, with customers vacationing in the holiday season.

The reopening of borders and several countries not imposing strict restrictions also helped drive the hotel industry’s performance.

The company saw new bookings across customer segments recover to pre-omicron levels despite recording a decline in January. The company’s CEO Anthony Capuano said he was optimistic about recovery in travel demand around the world throughout 2022.

Marriott said its RevPAR (revenue per available room) rebounded meaningfully in all regions, except Greater China where recovery stalled due to the country’s strict zero-covid policy. The world’s largest hotel chain recorded a surge of 124.5% in its global RevPAR, with 144% growth in North America and 83% growth in international markets.

Despite this growth, overall occupancy remained below the 2019 levels. The company said it plans to continue adding rooms to its overall portfolio, after adding 20,440 rooms last quarter.

Management indicated plans to begin returning cash to shareholders later this year, provided there’s no major setback in the global recovery. The company projected net rooms growth between 3.5% and 4% in 2022.

How shares responded: Shares of Marriott gained 5.8% to close at $181.20 on Tuesday. The stock has added more than 10% year to date.

What to watch: Investors will keep an eye on the spread of covid-19, as this could impact the company’s overall results ahead. Markets will also monitor vaccination rates around the world.

 

The markets today

US stocks will be in focus today, ahead of a basket of economic reports from the country

 

Context: Wall Street recorded gains on Tuesday, with the Dow Jones snapping a three-session losing streak.

Details: Equity markets have recently been under pressure due to concerns around Russia’s possible invasion of Ukraine. Fears eased after Russia’s Defence Ministry said on Tuesday that some of the troops had been asked to return to their bases after exercises at the border.

“De-escalating tensions between Russia and Ukraine are helping overall sentiment today, but that isn’t the only good news. US Covid cases are now down 80% from their January peak, another sign the reopening will be moving forward,” LPL Financial analyst Ryan Detrick said in a note to clients.

Investor sentiment was also supported by a rise in the US producer price index by 1% in January, versus market expectations of 0.5%. The New York Empire state manufacturing index also increased to 3.1 in February. However, the reading was significantly below the consensus estimate of 12.15.

US crude prices tumbled around 4% on Tuesday, amid easing tensions between Russia and Ukraine. This boosted travel-related stocks, which were among the top performers on Tuesday. However, the decline in crude prices weighed on energy stocks.

The Dow Jones jumped about 423 points, or 1.22%, to close at 34,988.84 on Tuesday, after shedding more than 170 points in the previous session. The S&P 500 added 1.58% to reach 4,471.07, while the tech-laden Nasdaq 100 advanced about 2.47% to 14,620.82.

What to watch: Traders await economic reports on retail sales, export prices, import prices and industrial production from the US today. US retail sales, which contracted by 1.9% in December, are expected to grow 2% in January. Export and import prices are projected to increase 1.3% each in January. Analysts expect industrial production to grow 0.4% in January, following a 0.1% decline in the previous month.

The release of FOMC (Federal Open Market Committee) minutes will also remain in focus today, with investors looking for further clarity into the Fed’s rate-hike plans.

Other Markets: European trading indices closed higher on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 up by 1.03%, 1.98%, 1.86% and 1.43%, respectively.

Support & resistances for today

Technical Levels News Sentiment

EUR/USD – 1.1349 and 1.1353



Positive


USD/CAD – 1.2714 and 1.2722


Negative


Dow Jones – 34,877.95 and 35,058.27


Positive


S&P 500 – 4,463.03 and 4,469.73


Positive


Gold – 1,852.79 and 1,854.74 Positive

 

Market snapshot

What else to watch today

UK’s inflation rate, retail price inflation, producer prices and input producer prices, Eurozone’s industrial production and ECB non-monetary policy meeting, South Africa’s inflation rate and retail trade, US MBA mortgage applications, manufacturing production, capacity utilization, business inventories, NAHB housing market index, crude oil inventories, gasoline inventories, heating oil stocks and distillate stockpiles, Canada’s inflation rate and manufacturing sales, Russia’s producer price inflation, as well as China’s total vehicle sales.


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