- Home Depot drops after annual sales forecast cut
- Capital One up as Berkshire Hathaway reveals stake
- Horizon falls after FTC to block Amgen’s deal to buy co
- Futures: Dow down 0.24%, S&P off 0.07%, Nasdaq flat
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May 16 (Reuters) – Dow futures fell on Tuesday after a dour forecast from Home Depot ahead of critical debt limit talks, and retail sales data that will offer more insight on the economy’s health.
The main indexes started the week with modest gains as trading was range-bound amid a wrangling in Washington between the White House and Republicans.
They will sit down later in the day to try to make progress on a deal to raise the U.S. government’s $31.4 trillion debt ceiling and avert an economically catastrophic default.
“There is little chance we will see a resolution to the U.S. debt ceiling issue today,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“The negotiations will likely remain tight as Republicans ask decent spending cuts to accept a debt ceiling relief, while Biden is not willing to compromise on spending into the election year.”
Dow Jones Industrial Average (.DJI) component Home Depot (HD.N) shed 4.4% in premarket trading after the home improvement chain cut its annual sales forecast, with Americans cutting back on spending on tools and building materials as inflation stays sticky.
Shares of rival Lowe’s Companies Inc (LOW.N) fell 3.2%, while retail giant Walmart Inc (WMT.N) slipped 0.4%.
Focus will also be on economic data, with retail sales expected to increase by 0.8% in April after falling 0.6% in the month before.
Data recently has pointed to a slowing U.S. economy, which is starting to feel the heat of the Federal Reserve’s restrictive monetary policy, and also heightened expectations for when the central bank will pause its hiking cycle.
At 6:56 a.m. ET, Dow e-minis were down 80 points, or 0.24%, S&P 500 e-minis were down 3 points, or 0.07%, and Nasdaq 100 e-minis were up 5.25 points, or 0.04%.
Shares of Capital One Financial Corp (COF.N) jumped 6.3% after Berkshire Hathaway Inc (BRKa.N) on Monday disclosed it has begun investing in the consumer lender.
Berkshire also upped its stake in HP Inc (HPQ.N), sending its shares up 1.6%, while shedding stake in regional bank US Bancorp (USB.N), which slipped 1.2%.
Horizon Therapeutics (HZNP.O) slid 17.8% as the Federal Trade Commission is expected to file a lawsuit to block Amgen Inc’s (AMGN.O) $27.8 billion deal to buy the company. Shares of Amgen rose 1.2% in thin volumes.
Reporting by Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel
Our Standards: The Thomson Reuters Trust Principles.
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March 7 (Reuters) – FTX said on Monday its affiliate Alameda Research had sued Grayscale Investments and its owner, cryptocurrency conglomerate Digital Currency Group (DCG), alleging the digital asset manager was “enriching itself at shareholders’ expense”.
In a lawsuit filed with a Delaware court on Monday, Alameda attacked Grayscale for its high fees and its refusal to allow investors to redeem their shares from its two crypto-focused trusts, the Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust.
DCG is already under pressure after its unit Genesis Global Trading’s bankruptcy, spurred by a crypto rout last year that was worsened by the high-profile collapse of FTX.
Last year, Grayscale had sued the U.S. Securities and Exchange Commission after the regulator rejected the company’s proposal to convert GBTC into an exchange traded fund (ETF).
However, Grayscale is still charging fees far bigger than those typically paid to advisers on crypto-tied ETFs, Alameda alleged.
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“The lawsuit filed by Sam Bankman-Fried’s hedge fund, Alameda Research, is misguided. Grayscale has been transparent in our efforts to obtain regulatory approval to convert GBTC into an ETF – an outcome that is undoubtedly the best long-term product structure for Grayscale’s investors,” a spokesperson for Grayscale said.
Alameda said it was suffering “hundreds of millions of dollars in harm” because of Grayscale’s actions.
Reporting by Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri and Shailesh Kuber
Our Standards: The Thomson Reuters Trust Principles.
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BEIJING, Feb 23 (Reuters) – The number of Chinese households that decided against buying a home soared in the fourth quarter of 2022, a private survey showed, as COVID infections and lockdowns sapped sentiment, while property foreclosures soared as the economy slowed.
But more households were considering buying a home or investing in other assets in the coming three months, according to the survey by a research institute and think tank under Ant Group and the Southwestern University of Finance and Economics released on Wednesday.
Stabilising the crisis-hit property sector will be a key challenge for policymakers this year as they try to kick-start an economic recovery. Much hinges on how quickly people will start spending again after the government abruptly dismantled its tough COVID restrictions in December.
The number of families opting to stay on the sidelines for property in the last quarter rose to 27.2% of respondents from 20.1% in July-October, the survey showed.
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However, it also found 16.6% of Chinese families had plans to buy a home in the coming three months, up from 7.0% in the July-October quarter.
Respondents’ willingness to allocate money to domestic stocks, funds, and overseas asset classes also increased, the survey showed.
The quarterly survey of over 34,000 households focuses on changes in Chinese household wealth.
China’s real estate sector, once a key driver of the world’s second-largest economy, fell into a deep slump in 2022 as debt-ridden developers failed to finish stalled projects and some buyers boycotted mortgage payments. As a result, property investment and sales fell sharply, weighing on home prices.
Foreclosed properties reached 606,000 units last year, up 35.7% from 2021, with the number of such properties finding buyers at auctions slumping 14.9% on year, according to calculations from a separate survey by China Index Academy, one of the country’s largest independent real estate research firms.
Cities with high numbers of foreclosures were mostly in central and western China, as well as the prosperous Yangtze River Delta and Pearl River Delta regions, according to the property research firm.
A tentative revival was seen in the property sector in January, with home prices rising for the first time in a year, boosted by the government’ aggressive support measures late last year, lower mortgage rates and the u-turn on the “zero COVID” containment policy.
But analysts expect a sustainable recovery in the sector will only kick in towards the second half of this year.
In the poll by Ant Group’s institutions, the overall debt of Chinese families and all types of debt increased significantly in the fourth quarter and were at higher levels than in the year-earlier period.
The survey also showed demand for consumer loans increased in the fourth quarter, although low interest rates on consumer loans have led many home buyers to use the funds to pay off their existing mortgages in advance.
Reporting by Liangping Gao and Ryan Woo; Editing by Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
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