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World

Deaths from Papua New Guinea earthquake rise to seven, police say

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SYDNEY, Sept 12 (Reuters) – The death toll from a “significant” earthquake that struck Papua New Guinea on Sunday has risen to seven, the Pacific island nation’s police commissioner said, adding that it occurred deep below ground which limited damage.

An initial earthquake of 7.6 magnitude struck the Markham Valley at 9:46am on Sunday, followed by a 5.0 magnitude earthquake 70 km (45 miles) north an hour later, Commissioner of Police David Manning said in a statement on Monday. read more

The two earthquakes were reported at a depth of 90 km and 101 km underground, he said.

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Significant damage to buildings and roads and landslides were reported in Morobe, Eastern Highlands and Madang provinces, he said.

“Sadly, seven people have been confirmed dead as a result of these landslides. Three in Kabwum District and three in Wau Town, Morobe Province, and one in Rai Coast, Madang Province,” he said.

“This was a significant earthquake, however it occurred deep below ground level and this meant damage was less than if the epicentre had been closer to the surface,” he added.

Aviation company Manolos Aviation organised medical evacuations from Kombul village in Kabwum district.

“Half of the mountain is gone,” said Manolos Aviation public relations officer Erebiri Zurenuoc, who was at the scene in Kombul.

A National Command Centre has been established by the government, and a COVID-19 hotline has been repurposed for the public to offer information on earthquake damage.

The regional power grid, internet cables, roads and highways had been damaged, Manning said.

In Eastern Highlands province, there was damage to the University of Goroka and reports of injuries to students, he said. Engineers are assessing damage to the Yonki Dam that has caused power outages.

In Madang province, there were multiple injuries as buildings and houses were damaged, and one death was reported on the Rai Coast, he said.

He warned of a significant risk of aftershocks.

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Reporting by Kirsty Needham and Lewis Jackson in Sydney; Editing by Ana Nicolaci da Costa

Our Standards: The Thomson Reuters Trust Principles.

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Business

Procter & Gamble Sounds a Warning After Strong Quarter

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Procter & Gamble Co.

PG -6.18%

, maker of Tide detergent and Pampers diapers, is predicting the slowest sales growth in years as consumer belt-tightening is beginning to hit household staples.

The outlook comes after the Cincinnati-based consumer-products giant on Friday reported its biggest annual sales increase in 16 years because of the price increases that it placed on mainstays from toothpaste to toilet paper.

P&G’s organic sales, a closely watched metric that strips out deals and currency moves, rose 7% for the year ended June 30, the most since 2006. Shoppers paid substantially higher prices.

But consumers are beginning to cut back amid mounting inflation, executives said. They are using up products they stockpiled during the pandemic or holding off on replenishing supplies. Sales volumes declined 1% in the most recent quarter.

“For us, the downturn is not yet visible,” P&G finance chief

Andre Schulten

said. “We’re also not naive, we see the pressure on the consumer.”

P&G expects organic sales growth of 3% to 5% for the current year, the lowest since 2019 when the company notched a 5% increase. The company predicts consumer-goods industry growth will slow by a percentage point or more from the last fiscal year’s 5% growth.

P&G Chief Executive

Jon Moeller

said in an interview that consumers are beginning to shift to cheaper, private-label alternatives, a trend already under way in food and beverages. He called the shift small but noticeable.

Mr. Moeller said he is confident that growth, though more muted relative to the past few years, will remain solid as high employment levels coupled with healthy household balance sheets enable consumers to keep spending on necessities while they cut costs elsewhere.

“There is no inherent reason why people are just going to stop buying modestly priced consumer products, daily-use essentials where performance matters,” he said. “You have to look elsewhere to get signals of consumer stress.”

The consumer-sentiment index and the consumer-confidence index both try to measure the same thing: consumers’ feelings. WSJ explains why the Federal Reserve is keeping a close eye on consumer confidence in 2022. Illustration: Adele Morgan

P&G shares fell more than 6%.

P&G’s results and outlook largely echo the messages coming from other big consumer brands. Companies including

Coca-Cola Co.

,

McDonald’s Corp.

and

Kimberly-Clark Corp.

this week reported sales gains driven by higher prices, and executives said they would keep passing along increased costs to shoppers for now. Yet some executives also said consumers are starting to show signs of stress, trading down to cheaper brands or cutting back on how much they buy.

The world’s biggest consumer packaged goods company by sales, P&G has largely outpaced competitors amid the pandemic, especially in the U.S.

Rivals are showing signs of gaining ground.

Colgate-Palmolive Co.

on Friday said it now expects bigger-than-expected organic sales gains, predicting an increase of 5% to 7% for the calendar year, up from 4% to 6%. Last week,

Kimberly-Clark

and

Unilever

PLC also raised sales outlooks for the calendar year.

Church & Dwight Co.

Chief Executive

Matthew Farrell

said on Friday that demand is accelerating for low-cost laundry detergent, while people are giving up electric toothbrushes for manual options. “Consumers are making choices to make their budget stretch further,” he said.

A central question is how consumers and retailers respond to further price increases. P&G said Friday that it had announced to retailers another round of price increases, in mid-single-digit percentages, which will take effect toward the end of summer.

SHARE YOUR THOUGHTS

How do you feel about the strength of the economy now? Join the conversation below.

P&G, after more than four years of market-share gains, lost share in the four-week period ended July 16 compared with a year ago, Bernstein analyst Callum Elliott said in a research note analyzing retail data. Losses are in every category except for beauty, he said.

“While prices spiral, the consumer also continues to adjust to the new reality,” he said.

Mr. Moeller said P&G continues to gain market share broadly in the U.S. and globally.

Organic sales rose 7% in the quarter ended June 30, with prices up 8% on average. P&G attributed the 1% decline in sales volume primarily to Covid-related shutdowns in China and intentional downsizing of its business in Russia amid the war in Ukraine.

P&G reported $19.5 billion in revenue for the quarter, up 3% from a year ago. Diluted net earnings per share were $1.21, up 7%.

The company expects diluted net earnings per share will be between flat and up 4% for the fiscal year as it faces an anticipated $3.3 billion hit tied to foreign-exchange rates and higher costs for materials and freight.

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Procter & Gamble Says Prices Will Keep Going Up

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Procter & Gamble Co.

PG 3.36%

is betting the world’s consumers will remain undeterred by higher prices on household staples from Pampers diapers to Gillette razors.

The Cincinnati-based consumer-products company said sales increased 6% in the quarter ended Dec. 31 compared with a year earlier, fueled in part by the company’s largest average price increases since the spring of 2019.

Executives on Wednesday said its price increases will continue throughout 2022, and predicted higher profitability and improved margins in coming quarters even as labor, freight and raw-materials costs continue to balloon due to the global supply-chain turmoil.

“The consumer is very resilient and very focused on these categories of clean home and health and hygiene,” P&G finance chief

Andre Schulten

said in an interview.

P&G shares gained more than 3% Wednesday to close at $162.

U.S. inflation in 2021 hit its fastest pace in nearly four decades, as pandemic supply-and-demand imbalances pushed up prices on everything from used cars to household staples.

Pricing on average rose 3% in the latest quarter, P&G said, and price increases accounted for half of the company’s revenue growth in the period. Higher volumes accounted for the other half. P&G reported revenue of $21 billion for the quarter.

The added revenue helped offset soaring prices for raw materials, labor and transportation of goods, as supply-chain woes continue to weigh on almost every industry.

SHARE YOUR THOUGHTS

How has your spending on household staples changed over the course of the pandemic? Join the conversation below.

P&G’s core earnings per share rose 1%, to $1.66, from the same period a year earlier. Margins fell despite the added revenues and cost cutting. The company has spent big to keep factories running and products in stock as much as possible, said Chief Executive

Jon Moeller,

who took over the company in November.

On Wednesday, executives said there is no relief in sight from higher costs for labor, transportation of goods and raw materials such as fuel, resin and pulp. “The flexibility that we’ve talked about that our supply people have generated doesn’t come for free,” said Mr. Schulten, the CFO. “When we need to shift to alternate materials, when we need to shift to alternate suppliers, all our sources of materials geographically, that comes at a premium.”

P&G, which has posted more consistent sales gains than rivals throughout the pandemic, raised its revenue forecast for the fiscal year ending June 30, even as the company said costs will be higher than previously projected.

P&G said it expects to commit $2.8 billion more to commodity, freight and foreign-exchange costs this fiscal year. The figure is about $500 million more than it forecast last quarter. Its earnings estimates remained unchanged.

As the cost of groceries, clothing and electronics have gone up in the U.S., prices in Japan have stayed low. WSJ’s Peter Landers goes shopping in Tokyo to explain why steady prices, though good for your wallet, can be a sign of a slow-growing economy. Photo: Richard B. Levine/Zuma Press; Kim Kyung Hoon/Reuters

Mr. Schulten said that in addition to absorbing higher prices, consumers also are switching to pricier, higher-end products, such as trading liquid laundry detergent for costlier single-dose pods.

A broad range of consumer-products companies, including P&G rivals

Unilever

PLC and

Kimberly-Clark Corp.

, have implemented price increases to offset higher costs amid snags in the global supply chain.

The recent rise in Covid-19 cases due to the fast-spreading Omicron variant didn’t spur the kind of hoarding behavior that led to shortages of toilet paper, cleaners and other products during previous surges, he said.

Sales jumped for products to treat respiratory issues, driving a 20% revenue increase for P&G’s personal-health unit, which includes Vicks and NyQuil brands.

P&G now expects organic sales, which strips out deals and currency moves, to grow 4% to 5% for the fiscal year, up from the previous forecast for growth of 2% to 4%.

How the Biggest Companies Are Performing

Corrections & Amplifications
“The flexibility that we’ve talked about that our supply people have generated doesn’t come for free,” said P&G finance chief Andre Schulten. “When we need to shift to alternate materials, when we need to shift to alternate suppliers, all our sources of materials geographically, that comes at a premium.” An earlier version of this article incorrectly attributed the quote to Chief Executive Jon Moeller. (Corrected on Jan. 19)

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Get ready for the climb. Here’s what history says about stock-market returns during Fed rate-hike cycles.

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Bond yields are rising again so far in 2022. The U.S. stock market seems vulnerable to a bona fide correction. But what can you really tell from a mere two weeks into a new year? Not much and quite a lot.

One thing feels assured: the days of making easy money are over in the pandemic era. Benchmark interest rates are headed higher and bond yields, which have been anchored at historically low levels, are destined to rise in tandem.

Read: Weekend reads: How to invest amid higher inflation and as interest rates rise

It seemed as if Federal Reserve members couldn’t make that point any clearer this past week, ahead of the traditional media blackout that precedes the central bank’s first policy meeting of the year on Jan. 25-26.

The U.S. consumer-price and producer-price index releases this week have only cemented the market’s expectations of a more aggressive or hawkish monetary policy from the Fed.

The only real question is how many interest-rate increases will the Federal Open Market Committee dole out in 2022. JPMorgan Chase & Co.
JPM,
-6.15%
CEO Jamie Dimon intimated that seven might be the number to beat, with market-based projections pointing to the potential for three increases to the federal funds rate in the coming months.

Check out: Here’s how the Federal Reserve may shrink its $8.77 trillion balance sheet to combat high inflation

Meanwhile, yields for the 10-year Treasury note yielded 1.771% Friday afternoon, which means that yields have climbed by about 26 basis points in the first 10 trading days to start a calendar year, which would be the briskest such rise since 1992, according to Dow Jones Market Data. Back 30 years ago, the 10-year rose 32 basis points to around 7% to start that year.

The 2-year note
TMUBMUSD02Y,
0.960%,
which tends to be more sensitive to the Fed’s interest rate moves, is knocking on the door of 1%, up 24 basis points so far this year, FactSet data show.

But do interest rate increases translate into a weaker stock market?

As it turns out, during so-called rate-hike cycles, which we seem set to enter into as early as March, the market tends to perform strongly, not poorly.

In fact, during a Fed rate-hike cycle the average return for the Dow Jones Industrial Average
DJIA,
-0.56%
is nearly 55%, that of the S&P 500
SPX,
+0.08%
is a gain of 62.9% and the Nasdaq Composite
COMP,
+0.59%
has averaged a positive return of 102.7%, according to Dow Jones, using data going back to 1989 (see attached table). Fed interest rate cuts, perhaps unsurprisingly, also yield strong gains, with the Dow up 23%, the S&P 500 gaining 21% and the Nasdaq rising 32%, on average during a Fed rate hike cycle.

Dow Jones Market Data

Interest rate cuts tend to occur during periods when the economy is weak and rate hikes when the economy is viewed as too hot by some measure, which may account for the disparity in stock market performance during periods when interest-rate reductions occur.

To be sure, it is harder to see the market producing outperformance during a period in which the economy experiences 1970s-style inflation. Right now, it feels unlikely that bullish investors will get a whiff of double-digit returns based on the way stocks are shaping up so far in 2022. The Dow is down 1.2%, the S&P 500 is off 2.2%, while the Nasdaq Composite is down a whopping 4.8% thus far in January.

Read: Worried about a bubble? Why you should overweight U.S. equities this year, according to Goldman

What’s working?

So far this year, winning stock market trades have been in energy, with the S&P 500’s energy sector
SP500.10,
+2.44%

XLE,
+2.35%
looking at a 16.4% advance so far in 2022, while financials
SP500.40,
-1.01%

XLF,
-1.04%
are running a distant second, up 4.4%. The other nine sectors of the S&P 500 are either flat or lower.

Meanwhile, value themes are making a more pronounced comeback, eking out a 0.1% weekly gain last week, as measured by the iShares S&P 500 Value ETF
IVE,
-0.14%,
but month to date the return is 1.2%.

See: These 3 ETFs let you play the hot semiconductor sector, where Nvidia, Micron, AMD and others are growing sales rapidly

What’s not working?

Growth factors are getting hammered thus far as bond yields rise because a rapid rise in yields makes their future cash flows less valuable. Higher interest rates also hinder technology companies’ ability to fund stock buy backs. The popular iShares S&P 500 Growth ETF
IVW,
+0.28%
is down 0.6% on the week and down 5.1% in January so far.

What’s really not working?

Biotech stocks are getting shellacked, with the iShares Biotechnology ETF
IBB,
+0.65%
down 1.1% on the week and 9% on the month so far.

And a popular retail-oriented ETF, the SPDR S&P Retail ETF
XRT,
-2.10%
tumbled 4.1% last week, contributing to a 7.4% decline in the month to date.

And Cathie Wood’s flagship ARK Innovation ETF
ARKK,
+0.33%
finished the week down nearly 5% for a 15.2% decline in the first two weeks of January. Other funds in the complex, including ARK Genomic Revolution ETF
ARKG,
+1.04%
and ARK Fintech Innovation ETF
ARKF,
-0.99%
are similarly woebegone.

And popular meme names also are getting hammered, with GameStop Corp.
GME,
-4.76%
down 17% last week and off over 21% in January, while AMC Entertainment Holdings
AMC,
-0.44%
sank nearly 11% on the week and more than 24% in the month to date.

Gray swan?

MarketWatch’s Bill Watts writes that fears of a Russian invasion of Ukraine are on the rise, and prompting analysts and traders to weigh the potential financial-market shock waves. Here’s what his reporting says about geopolitical risk factors and their longer-term impact on markets.

Week ahead

U.S. markets are closed in observance of the Martin Luther King Jr. holiday on Monday.

Read: Is the stock market open on Monday? Here are the trading hours on Martin Luther King Jr. Day

Notable U.S. corporate earnings

(Dow components in bold)
TUESDAY:

Goldman Sachs Group
GS,
-2.52%,
Truist Financial Corp.
TFC,
+0.96%,
Signature Bank
SBNY,
+0.07%,
PNC Financial
PNC,
-1.33%,
J.B. Hunt Transport Services
JBHT,
-1.04%,
Interactive Brokers Group Inc.
IBKR,
-1.22%

WEDNESDAY:

Morgan Stanley
MS,
-3.58%,
Bank of America
BAC,
-1.74%,
U.S. Bancorp.
USB,
+0.09%,
State Street Corp.
STT,
+0.32%,
UnitedHealth Group Inc.
UNH,
+0.27%,
Procter & Gamble
PG,
+0.96%,
Kinder Morgan
KMI,
+1.82%,
Fastenal Co.
FAST,
-2.55%

THURSDAY:

Netflix
NFLX,
+1.25%,
United Airlines Holdings
UAL,
-2.97%,
American Airlines
AAL,
-4.40%,
Baker Hughes
BKR,
+4.53%,
Discover Financial Services
DFS,
-1.44%,
CSX Corp.
CSX,
-0.82%,
Union Pacific Corp.
UNP,
-0.55%,
The Travelers Cos. Inc. TRV, Intuitive Surgical Inc. ISRG, KeyCorp.
KEY,
+1.16%

FRIDAY:

Schlumberger
SLB,
+4.53%,
Huntington Bancshares Inc.
HBAN,
+1.73%

U.S. economic reports

Tuesday

  • Empire State manufacturing index for January due at 8:30 a.m. ET
  • NAHB home builders index for January at 10 a.m.

Wednesday

  • Building permits and starts for December at 8:30 a.m.
  • Philly Fed Index for January at 8:30 a.m.

Thursday

  • Initial jobless claims for the week ended Jan. 15 (and continuing claims for Jan. 8) at 8:30 a.m.
  • Existing home sales for December at 10 a.m.

Friday

Leading economic indicators for December at 10 a.m.

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Business

Deodorant recall 2021: Procter & Gamble voluntary recalls specific Old Spice, Secret aerosol spray antiperspirant products

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Procter and Gamble is recalling 18 Old Spice and secret products because of a cancer-causing chemical.

The aerosol antiperspirants were sold in stores nationwide and online.

The FDA said the products may have benzene, which is known to lead to blood cancers and other blood disorders.

There have been no reports of adverse effects from the products.
The affected products are used as antiperspirant spray products and are packaged in aerosol cans. See below for Product names and UPC codes and further descriptions.

UPC: Description

037000728870: Old Spice Sweat Defense Pure Sport Plus Dry Spray Antiperspirant/Deodorant 107 g

037000728863: Old Spice Sweat Defense Stronger Swagger Dry Spray Antiperspirant/Deodorant 107 g

012044029053: Old Spice Sweat Defense Ultimate Captain Dry Spray Antiperspirant/Deodorant 107 g

056100008965: Secret Baby Powder Spray Antiperspirant/Deodorant 122 g

037000747765: Secret Outlast Completely Clean Dry Spray Antiperspirant/Deodorant 107 g
037000747826: Secret Outlast Protecting Powder Dry Spray Antiperspirant/Deodorant 107 g

037000729587: Secret Dry Spray Lavender Anti-perspirant/Deodorant 107 g

037000729600: Secret Dry Spray Waterlily Anti-perspirant/Deodorant 107 g

If you have one of the sprays, you can get in touch with the company to get a refund.

Consumers with questions regarding this recall can seek more information via the Consumer Care team at 888-339-7689 from Monday – Friday from 9:00am – 6:00pm EST or by visiting visit www.oldspice.com or www.secret.com for more information about the impacted products and to learn how to receive reimbursement for eligible products. Consumers should contact their physician or healthcare provider if they have experienced any problems that may be related to using these products.

The Associated Press contributed to this post.

Copyright © 2021 WLS-TV. All Rights Reserved.



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