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Business

China economic data, Covid, inflation

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SINGAPORE — Shares in the Asia Pacific rose on Monday as investors watched for a slew of Chinese economic data.

Japan’s Nikkei 225 gained 1.54%, while the Topix advanced 0.93% in early trading.

The Kospi in South Korea rose 0.46%, and the Kosdaq was 1.43% higher.

In Australia, the S&P/ASX 200 climbed 0.73%.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.33%

Stock indexes in Asia and around the world were volatile last week over inflation concerns. Tech stocks and cryptocurrencies were hit hard, though bitcoin has since pared some losses. U.S. stocks rebounded on Friday, but still posted losses for the week.

Stock picks and investing trends from CNBC Pro:

China will report data on April’s industrial production, retail sales, fixed asset investment and unemployment on Monday — investors are looking to those numbers for clues on the impact of the country’s zero-Covid policy on the economy.

“While Shanghai provided some positivity for markets, it is not clear when China will pivot to living with Covid,” Tapas Strickland, director of economics at National Australia Bank, said in a note. NAB expects economic data for April to slow sharply.

Shanghai authorities said on Sunday that some businesses will begin to resume in-store operations, Reuters reported.

Markets in Singapore, Malaysia, Indonesia and Thailand are closed for a holiday on Monday.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 104.553, slightly higher than last week’s levels.

The Japanese yen traded at 129.45 per dollar, still stronger than the 130 levels seen last week. The Australian dollar was at $0.6943.

Oil futures rose early in Asia trade. U.S. crude futures climbed 0.23% to $110.74 per barrel, while international benchmark Brent crude futures were up 0.8% at $111.77 per barrel.

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Business

5 things to know before the stock market opens Tuesday, May 10

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Here are the most important news, trends and analysis that investors need to start their trading day:

1. Wall Street set to rise after S&P 500 hits lowest level in over a year

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, March 22, 2022.

Brendan McDermid | Reuters

U.S. stock futures bounced Tuesday, with investors hoping Wall Street can break its three-session losing streak. The S&P 500 on Monday fell to its lowest level in more than a year. The broad market index dropped 3.2%, closing under 4,000. The Nasdaq tumbled nearly 4.3% and the Dow Jones Industrial Average dropped close to 2%. The Nasdaq’s bear market approached a 30% decline from its last record high in November. The S&P 500 and the Dow moved deeper into correction territory, defined by a drop of 10% or more from their most recent record highs, which were in early January.

2. 10-year Treasury yield and U.S. oil prices drop; bitcoin bounces

The brutal selling in the stock market of late has been triggered in large part by the rise in the 10-year Treasury yield, as bond traders bet that the Federal Reserve won’t be able to get inflation under control in a timely fashion. Ahead of two key inflation reports Wednesday and Thursday, President Joe Biden on Tuesday is set to deliver remarks on inflation.

  • The 10-year yield’s decline from multiyear highs did not seem to help equities Monday. However, the benchmark yield dipped again Tuesday, going below 3%, and stocks advanced in the premarket.
  • One day after sinking nearly 6.1%, U.S. oil prices dropped another roughly 1.5% on Tuesday but remained over $100 per barrel. Elevated crude prices have been reflected at American gas pumps — and on Tuesday, the national average hit an unadjusted-for-inflation record of $4.37 per gallon, according to AAA.
  • Bitcoin rose above $31,000 on Tuesday, one day after falling below that level for a more than 50% decline from November’s all-time high. The recent price drops come amid a broader, multiday sell-off that has ensnared much of the crypto market and equities.

3. Peloton plunges after reporting a big loss and weak guidance

Peloton on Tuesday reported a wider-than-expected quarterly loss and a steep decline in sales, as inventory piled up in warehouses and ate away at the company’s cash. Shares of the connected fitness equipment maker plunged more than 20% in premarket trading. Peloton offered up a weak sales outlook for the current quarter, citing softer demand. The company anticipates that planned subscription price hikes may lead some users to cancel their monthly memberships.

4. Migraine drug stock soars; shares of Covid vaccine maker sinks

Pfizer said Tuesday it will buy migraine drug maker Biohaven Pharmaceutical for about $11.6 billion in cash. Pfizer will acquire all the outstanding shares of Biohaven that it doesn’t already own for $148.50 each in cash. That’s 78.6% higher than Biohaven’s closing price Monday, a premium largely reflect in Tuesday’s premarket. In November, Pfizer acquired overseas marketing rights to two migraine drugs from Biohaven for up to $1.24 billion, with Pfizer taking a 2.6% equity stake.

Novavax shares sank over 20% in premarket trading after the vaccine maker missed both top and bottom line estimates for its latest quarter. The miss comes as Novavax shipped just 31 million Covid doses during the quarter, putting it well off the pace of its projected 2 billion shots for 2022. While reiterating its prior 2022 revenue forecast, the company said it expected vaccine sales to accelerate during the current quarter.

5. Tesla halts Shanghai production; Musk ‘aligned’ with EU tech law

Tesla has stopped most of its production at its Shanghai plant due to problems securing parts, according to Reuters, citing an internal memo. It’s the latest in a series of difficulties for the electric vehicle maker’s factory in China’s biggest city, which has been experiencing various levels of lockdowns for more than a month under that country’s zero-Covid policy.

EU industry chief Thierry Breton met Elon Musk in Texas on Monday, and the two signaled agreement on Europe’s digital media regulation ahead of the Tesla CEO’s purchase of Twitter. In a video with Breton, Musk said the spirit of the Digital Services Act “exactly aligned” with his thinking. The two did not go into detail on the law, which levies hefty fines on platforms if they do not control illegal content.

— CNBC’s MacKenzie Sigalos, Lauren Thomas and Pippa Stevens as well as Reuters contributed to this report.

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Business

Highest quarterly profit since 2008 on strong oil prices

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Shell posted adjusted earnings of $9.1 billion for the first quarter of 2022.

Ben Stansall | Afp | Getty Images

LONDON — Oil giant Shell on Thursday reported its highest quarterly profit since 2008 on soaring commodity prices, fueling calls for a one-off windfall tax on oil and gas companies to help U.K. households with spiraling energy bills.

Shell posted adjusted earnings of $9.1 billion for the three months through to the end of March, in line with expectations of analysts polled by Refinitiv. That compared with $3.2 billion over the same period a year earlier and $6.4 billion for the fourth quarter of 2021.

The company also announced plans to increase its dividend by around 4% to $0.25 per share for the first quarter.

Of the firm’s $8.5 billion share buyback program announced for the first half of the year, Shell said $4 billion had been completed to date. The remaining $4.5 billion share buybacks are scheduled to be completed before the announcement of second-quarter earnings.

Shell’s results echo bumper profits seen across the oil and gas industry, even as many energy majors incur costly write-downs from exiting Russia.

U.K. rival BP on Tuesday announced plans to boost share buybacks after first-quarter net profit jumped to its highest level in more than a decade. France’s TotalEnergies, Norway’s Equinor and U.S. oil giants Chevron and Exxon Mobil also reported strong first-quarter profits on soaring commodity prices.

Shell confirmed it had taken $3.9 billion of post-tax charges in the first quarter as a result of its exit from Russia. The company had previously warned it could write off between $4 billion and $5 billion in the value of its assets after pulling out of the country. The firm said these charges were not expected to impact adjusted earnings.

“The war in Ukraine is first and foremost a human tragedy, but it has also caused significant disruption to global energy markets and has shown that secure, reliable and affordable energy simply cannot be taken for granted,” CEO Ben van Beurden said in a statement.

“The impacts of this uncertainty and the higher cost that comes with it are being felt far and wide. We have been engaging with governments, our customers and suppliers to work through the challenging implications and provide support and solutions where we can.”

Shell reported a sharp upswing in full-year profit in 2021 on rebounding oil and gas prices.

Shares of the company have jumped more than 36% year-to-date.

‘Obscene’ profits

Union groups and environmental campaigners have labeled record profits for U.K. fossil fuel companies as “obscene” at a time when many consumers are grappling with surging energy costs.

Opposition lawmakers have repeatedly called on Prime Minister Boris Johnson’s government to impose higher taxes on oil and gas companies to help struggling families.

Finance Minister Rishi Sunak has suggested such a policy may be possible if oil and gas companies do not properly reinvest profits. Johnson, however, has rejected fresh calls for a windfall tax, saying it will discourage investment and keep oil prices high over the long term.

Meanwhile, the European Union on Wednesday said it plans to ban Russian oil imports within six months and refined products by the end of the year in its latest round of economic sanctions. The bloc’s proposed measures reflect the widespread anger at Russian President Vladimir Putin’s unprovoked onslaught in Ukraine.

Oil prices jumped on the news, adding to these gains on Thursday morning.

International benchmark Brent crude futures traded at $110.9 in London, up almost 0.7% for the session, while U.S. West Texas Intermediate futures stood at $108.4, roughly 0.5% higher.

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Business

Bumper first-quarter net profit, massive loss on Russia

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A BP logo on display in London, U.K., on Tuesday, Feb. 2, 2021.

Chris J. Ratcliffe | Bloomberg | Getty Images

BP on Tuesday reported bumper first-quarter profits and boosted share buybacks, despite posting a massive loss after offloading its nearly-20% stake in Russian-controlled oil company Rosneft.

The oil and gas giant’s first-quarter underlying replacement cost profit, used as a proxy for net profit, jumped to its highest level in more than a decade as it came in at $6.2 billion.

That compared with a profit of $4.1 billion in the fourth quarter and $2.6 billion for the first quarter of 2021. Analysts had expected BP to report first-quarter profit of $4.5 billion, according to Refinitiv.

The oil and gas giant also announced a further $2.5 billion in share buybacks.

However, BP reported a headline loss for the quarter of $20.4 billion. This included non-cash pre-tax charges of $24 billion and $1.5 billion relating to the exit of its Rosneft stake in response to Moscow’s invasion of Ukraine.

“We took the decision to exit Russia within 96 hours of the invasion happening and today you’re seeing the financial implications of that decision,” BP CEO Bernard Looney told CNBC’s “Squawk Box Europe” on Tuesday.

Looney said trading had a “very good” start to the year and net debt — which fell to $27.5 billion — was reduced for the eighth consecutive quarter.

“All in all, in an underlying sense, a good quarter for the company,” he added.

When asked to provide further details on how the company plans to extricate itself from Russia, Looney replied: “We have been very, very clear. We are announcing our intention to leave the country. We made that decision as I said very, very quickly and like any commercial process that’s ongoing, we wouldn’t comment and I’d rather not comment on that this morning.”

The first-quarter results come as the EU prepares its sixth package of economic sanctions against Russia; the bloc remains split on how to wind down its dependence on Russian energy supplies.

Meanwhile, U.K. oil and gas majors face the prospect of a possible windfall tax to help fund a national package of support for households over spiraling energy bills.

Britain’s Finance Minister Rishi Sunak has reportedly opened the door to a possible tax on oil and gas providers after repeatedly rejecting the policy citing fears that it could discourage investment.

Oil prices are hovering above $100 a barrel after climbing to multi-year highs earlier this year.

International benchmark Brent crude futures traded at $106.95 during morning deals in London, down 0.6% for the session, while U.S. West Texas Intermediate futures stood at $104.62. around 0.5% lower.

Shares of London-listed BP rose 2% shortly after the opening bell. The firm’s stock price has climbed more than 18% year-to-date.

BP reported a massive upswing in full-year net profit for 2021, its highest in eight years, supported by soaring commodity prices. Global oil demand roared back last year, with gasoline and diesel use surging as consumers resumed travel and business activity recovered amid the coronavirus pandemic.

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