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Sunday July 5, 2020

Finances

Finances
 

FedEx Reports Earnings

FedEx Corp. (FDX) released its latest quarterly and full-year earnings on Tuesday, June 30. The company’s revenue dipped slightly while its bottom line improved.

Revenue came in at $17.4 billion for the quarter, down slightly from $17.8 billion during the same quarter last year. For the full year, FedEx posted revenue of $69.2 billion, down from last year’s revenue of $69.7 billion.

“Though our fiscal fourth quarter performance was severely affected by the COVID-19 pandemic, I am extremely proud of the herculean efforts of our team members,” said FedEx Chairman and CEO Frederick W. Smith. “With safety as the first priority, these men and women provided essential transportation of critical supplies across the globe and delivered peak-level e-commerce volumes in the United States.”

FedEx reported a quarterly net loss of $334 million, an improvement over the $1.97 billion net loss reported during the same quarter last year. The company reported a full-year net income of $1.29 billion, up from $540 million last year.

FedEx shares jumped 13% following the earnings release. As expected, the company reported a sharp drop in commercial deliveries for the quarter. Residential deliveries, however, increased during the same period. The company declined to offer its outlook for the upcoming fiscal year, as the timing of the economic recovery remains unclear.

FedEx Corp. (FDX) shares ended the week at $155.52, up 18.4% for the week.

Macy’s Posts Quarterly Results


Macy’s, Inc. (M) reported its latest quarterly earnings on Wednesday, July 1. The department store company reported a decrease in sales and profits.

The company’s net sales for the quarter totaled $3.02 billion. This was down from $5.50 billion during the same quarter last year.

“The first quarter of 2020 was challenging for the country, the industry and Macy’s, Inc,” said Macy’s Chairman and CEO Jeff Gennette. “While our stores are re-opened, we expect that the COVID-19 pandemic will continue to impact the country for the remainder of the year. We do not anticipate another full shutdown, but we are staying flexible and are prepared to address increases in cases on a regional level.”

Macy’s posted a net loss for the quarter of $3.58 billion. Last year at this time, the company reported a profit of $136 million.

As with most non-grocery retailers, Macy’s faced widespread store closures during much of the quarter. Now, with many states in various stages of reopening, Macy’s has reopened nearly all of its stores. However, the potential resurgence of COVID-19 has states and businesses prepared to scale back reopening plans if necessary.

Macy’s, Inc. (M) shares ended the week at $6.79, up 11.7% for the week.

General Mills Reports Quarterly Earnings


General Mills, Inc. (GIS) posted quarterly and full-year earnings on Wednesday, July 1. The company posted increased sales and profits for the year.

Net sales totaled $5.02 billion for the quarter, up 21% from $4.16 billion during the same quarter last year. For the full year, the company reported $17.63 billion in net sales, up 5% from the prior year.

“I’m proud of the way our organization has remained focused on serving the needs of our consumers and communities while protecting the health and safety of our employees throughout the COVID-19 pandemic,” said General Mills Chairman and Chief Executive Officer Jeff Harmening. “Amid significant challenge and change in the world around us, General Mills adapted and executed in fiscal 2020 to deliver outstanding financial results while fulfilling our purpose of making food the world loves.”

The company reported net earnings of $625.70 million for the quarter, up from $570.20 million during the same quarter last year. Net earnings for the full year increased 24% to $2.18 billion.

General Mills saw a 36% rise in net sales in its North America Retail segment. The company’s Europe & Australia segment posted a 6% rise in net sales. This offset a decrease of 24% in net sales in the company’s Convenience Stores & Foodservice segment. The company’s Asia & Latin America segment posted a 12% loss.

General Mills, Inc. (GIS) shares ended the week at $61.46, up 3.0% for the week.

The Dow started the week at $25,512 and closed at 25,827 on 7/2. The S&P 500 started the week at 3,073 and closed at 3,130. The NASDAQ started the week at 9,995 and closed at 10,208.
 

Treasury Yields Rise Following Strong Jobs Report

Yields on U.S. Treasurys increased on Thursday in response to a stronger-than-expected jobs report. Cautious optimism among investors pushed the markets upward going into the holiday weekend.

On Thursday, the U.S. Department of Labor released the Employment Situation Summary for June. The report showed an increase in nonfarm payrolls of 4.8 million. Analysts expected a gain of 3 million jobs for the month.

The benchmark 10-year Treasury note yield reached 0.71% during early trading on Thursday, up from 0.69% at close of market on Wednesday. The 30-year Treasury bond yield reached 1.47% during trading on Thursday after closing at 1.42% the day prior.

“The 4.8 million rise in nonfarm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated,” said Michael Pearce of Capital Economics. “But that still leaves employment 9.6% below its February level and with the spread of the virus accelerating again, we expect the recovery from here will be a lot bumpier and job gains far slower on average.”

The unemployment rate fell to 11.1% for June. This was a 2.2% drop from May’s rate of 13.3%. The total number of unemployed individuals decreased from 21.0 million to 17.8 million.

“These numbers are quite large and represent basically the opposite of the closing of the economy,” said Jamie Cox of Harris Financial Group. “If we can get the unemployment rate under 10% in the next read, then we’ll be able to say this is a full-on recovery.”

The 10-year Treasury note yield closed at 0.67% on 7/2, while the 30-year Treasury bond yield was 1.43%.
 

Mortgage Rates Reach Record Low

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, July 2. Rates dropped to historic lows this week.

The 30-year fixed rate mortgage averaged 3.07% for the week, down from last week’s average of 3.13%. At this time last year, the 30-year fixed rate mortgage averaged 3.75%.

This week, the 15-year fixed rate mortgage averaged 2.56%, down from 2.59% last week at this time. During the same period last year, the 15-year fixed rate mortgage averaged 3.18%.

“Mortgage rates continue to slowly drift downward with a distinct possibility that the average 30-year fixed-rate mortgage could dip below 3% later this year,” said Freddie Mac’s Chief Economist Sam Khater. “On the economic front, incoming data suggest the rebound in economic activity has paused in the last couple of weeks with modest declines in consumer spending and a pullback in purchase activity.”

Based on published national averages, the savings rate was 0.06% for the week of 6/29. The one-year CD averaged 0.24%.

Published July 3, 2020
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