World finance :: Earnings, Stock markets & Investing

Target forecasts continued drop in same store sales, shares sink


Target Corp (TGT. N) reported a steeper-than-expected decline in fourth-quarter same-store sales and said it expected sales to continue to fall this fiscal year, sending its shares tumbling 12 percent in premarket trading on Tuesday. The company has struggled with declining sales as shoppers increasingly gravitate to online retailers such as Amazon.com Inc (AMZN. O) and spend more on big-ticket purchases such as cars and home renovations rather than electronics, food and apparel. The big box retailer's net income slumped to $817 million, or $1.45 per share in the fourth quarter ended Jan. 28, from $1.43 billion, or $2.32 per share, a year earlier. Analysts on average were expecting a profit of $1.51 per share, according to Thomson Reuters I/B/E/S. Sales at stores open for at least a year fell 1.5 percent, missing the average analyst estimate of a decline of 1.3 percent, according to research firm Consensus Metrix.

Net sales fell 4.3 percent to $20.69 billion, declining for the sixth quarter in a row. Target forecast same-store sales would fall in the low- to mid-single digit percentage range in the first quarter and that it would earn $0.80-$1.00 per share from continuing operations in the period.

The Minneapolis-based retailer said it expected a low-single digit decline in full-year comparable sales, and forecast full-year earnings from continuing operations of $3.80-$4.20 per share. Target's shares slumped 12 percent to $58.90 in premarket trading.

Futures flat ahead of Trump's address to Congress U.S. stock index futures were flat on Tuesday but hovered near all-time highs as investors awaited President Donald Trump's speech for details on his agenda for the economy.

JPMorgan expects 2017 expenses to rise about 3.4 percent JPMorgan Chase & Co said it expected 2017 expenses to rise about 3.4 percent as the lender spends more on technology and signing up new credit card accounts.

Samsung Group chief charged with bribery, corporate nerve center dismantled SEOUL South Korean prosecutors charged Samsung Group [SARG. UL] chief Jay Y. Lee with bribery and embezzlement on Tuesday as the top conglomerate announced the dismantling of its corporate strategy office, the latest developments in a graft scandal that has rocked the country.

Wall Street challenges U.S. regulator over proposed commodities rule


Wall Street is pushing back against a proposed rule to force U.S. banks like Goldman Sachs Group Inc to hold more capital against investments in commodities, placing what some see as an overly restrictive limit on banks' ties to the sector. In a comment letter filed late on Friday and not yet made public, the industry argues the proposed rule would hurt the economy, and that fears about environmental risks from physical commodities activities are overblown. The U.S. Federal Reserve handed down the proposal in September, after a public backlash stemming from the belief that big banks’ involvement in commodities markets hurt consumers by driving up prices. The comment letter, filed by the Securities Industry and Financial Markets Association and the Institution of International Bankers and seen by Reuters, comes as big banks face an uncertain future in Washington. Even though President Donald Trump has said he favors deregulation and has hired several Wall Street executives as advisers, it is unclear how he or the new Congress will approach various rules. Apart from Goldman Sachs, few banks have large exposure to physical commodities any longer. At one time, it was a big and lucrative business for both Goldman and Morgan Stanley, due to a quirk in their regulatory structure. Other banks, including JPMorgan Chase & Co, eventually plunged into the business as well, but exited as global capital requirements got more onerous, making such investments too costly to maintain. The Fed’s proposed rule would formalize and increase those standards, imposing what it has called a 1,250 percent risk weighting on banks that own, trade and move physical commodities. Among other measures, $1 in capital would need to be held for every $1 investment, the regulator's highest charge for the riskiest investments.

The rule could potentially force banks to withdraw from the commodities business altogether, because such capital charges would severely depress returns. In its proposal, the Fed said new measures would shield banks and the broader financial system from a costly mishap like the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Advocates say the rule is also needed to help mitigate commodity price fluctuations and social conflicts that arise from commodity-related activities.

In the letter filed on Friday, the bank-affiliated groups said the rule would hurt “competition, end users, the liquidity of commodities markets ... and thus the real economy." A number of utility and power companies, including Calpine Corp, have also cited liquidity and price concerns. Big banks have been using similar arguments in lobbying to roll back existing rules, including the Volcker rule limiting risky, speculative trading and the Durbin rule, which caps the fees they can charge retailers for processing debit card transactions. Industry sources say the fight against the Fed’s proposal is more about regaining a competitive edge than protecting an existing source of revenue. Between 2007 and 2009, commodities trading accounted for as much as one-fifth of revenue for Morgan Stanley and Goldman Sachs.

Factbox: Disruptions, labor negotiations at copper mines Copper prices surged to 21-month highs above $6,200 a tonne earlier this month, up more than 40 percent since January 2016 due to worries about supplies after disruptions in top producer Chile, Indonesia and Peru.

BHP to Trump: protectionism will hurt growth, commodity demand LONDON U.S. President Donald Trump's protectionist stance is likely to erode economic growth over the longer term and therefore demand for raw materials, the chief executive of the world's biggest miner, BHP Billiton, said on Tuesday.

Shut Enbridge pipeline to be drained for several days: regulator CALGARY, Alberta Part of the shut Enbridge Inc 2A pipeline will need to be drained for several days, Canada's National Energy Board said on Tuesday, without giving an estimation of when it will be back online.