Burger King Plans To Launch $5 Value Meal

Posted on May 24, 2024 by RTT Staff Writer

Burger King Co., owned by Restaurant Brands International Inc., is planning to launch $5 value meal to boost demand among Americans, who are cutting back on dining out, reports said.

The fast-food hamburger chain’s offer is said to include a choice of one of three sandwiches, with nuggets, fries, and a drink.

The news comes after rival chain McDonald’s Corp. reportedly announced a plan to introduce a similar $5 value meal beginning June 25 and lasting roughly a month. The pack is said to include a McChicken or McDouble, four-piece chicken nuggets, fries, and a drink.

Meanwhile, Bloomberg News reported, citing a memo, that Burger King Franchisees had voted in early April to approve $5 ‘Your Way Meal’ offer, which is likely to be launched ahead of McDonald’s.

As per the report, Burger King plans to run its offer for several months, while McDonald’s promotion would run for about four weeks.

Burger King chain is also testing two other value platforms that are expected to be ready in the second half of the year.

Among other burger chains, Wendy’s earlier this week has announced a $3 breakfast meal deal.

Fast-food chains are heightening their promotions to attract demand as cash-short consumers are cutting down their cost of living by avoiding going out for dinner and eating more meals at home.

McDonald’s CEO Chris Kempczinski, while announcing first-quarter results in late April, said, “As consumers are more discriminating with every dollar that they spend, we will continue to earn their visits by delivering leading, reliable, everyday value and outstanding execution in our restaurants.”

Starting in 2022, Burger King had invested around $400 million over two years to uplift average sales and profitability in the U.S. restaurants. The investment comprised $150 million under the ‘Fuel the Flame’ plan, and $250 million under the initial ‘Royal Reset’ plan.

In late April, Restaurant Brands announced an additional $300 million investment to launch the ‘Royal Reset 2.0’ remodel program, aiming to modernize restaurants across the U.S.

Japan Inflation Slows For Second Month

Posted on May 24, 2024 by RTT Staff Writer

Japan’s core inflation weakened for the second consecutive month in April, but the slowdown is likely to be temporary given the expected increase in wages and a weaker yen adding upward pressure on import prices, and this is set to keep the Bank of Japan cautious regarding the future path of interest rates.

Core inflation that excludes fresh food softened to 2.2 percent from 2.6 percent in the previous month, the Ministry of Internal Affairs and Communications said.

The indicator continued to stay above the 2 percent target for 25 straight months and matched economists’ expectations.

The consumer price index excluding prices of fresh food and energy rose 2.4 percent year-on-year, which was slower than the 2.9 percent increase in March. This was the weakest since September 2022.

Headline CPI inflation fell to 2.5 percent in April from 2.7 percent in the prior month.

Services inflation eased to 1.7 percent in April from 2.1 percent, mostly due to a one-off decline in education fees. Food prices grew at a slower pace of 3.5 percent.

Capital Economics economist Marcel Thieliant said the bank is still expected to deliver a final rate hike at its July meeting and it would not be able to tighten monetary policy much further.

The economist said BoJ policymakers prefer to think in narratives and have often ignored economic data.

The prevailing narrative is that the strength in pay hikes in this year’s spring wage negotiations will fuel a virtuous cycle between prices and wages, Thieliant added.

“A choppy inflation path was expected due to various government programs, so the temporary slowdown won’t change the BoJ’s policy normalization stance,” economists at ING said.

April data marks the start of the current fiscal year. Japanese companies are set to implement wage increases in the fiscal year and these hikes are likely to boost consumption and also price pressures. Moreover, weaker yen has been pushing up import cost.

Japanese households curbed their consumption due to higher prices. The economy contracted 2.0 percent in the first quarter as private consumption eased 0.7 percent.

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U.S. Stocks May Regain Ground Following Yesterday's Downturn

Posted on May 24, 2024 by RTT Staff Writer

After coming under pressure over the course of the previous session, stocks may move back to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.

Traders may look to pick up stocks at somewhat reduced levels following the downturn seen on Thursday, which saw the Dow post its worst daily drop since March 2023.

The weakness that emerged on Wall Street in the previous session came as a positive reaction to earnings news from Nvidia (NVDA) was overshadowed by lingering concerns about the outlook for interest rates.

Overall trading activity may be somewhat subdued, however, as some traders look to get a head start on the long Memorial Day weekend.

On the U.S. economic front, the Commerce Department released a report showing an unexpected increase in durable goods orders in the month of April, although the growth came following a significantly downwardly revised jump in March.

The report said durable goods orders climbed by 0.7 percent in April following a downwardly revised 0.8 percent advance in March.

Economist had expected durable goods orders to decrease by 0.8 percent compared to the 2.6 percent surge originally reported for the previous month.

Excluding orders for transportation equipment, durable goods orders rose by 0.4 percent in April after coming in unchanged in March. Ex-transportation orders were expected to inch up by 0.1 percent.

Shortly after the start of trading, The University of Michigan is due to release its final reading on consumer sentiment in the month of May.

The consumer sentiment index for May is expected to be unrevised from the preliminary reading of 67.4, which was down from 77.2 in April.

Stocks moved mostly higher at the start of trading on Thursday but failed to sustain the initial upward move and came under pressure over the course of the session. The major averages pulled back well off their highs of the session and into negative territory.

After reaching record intraday highs, the Nasdaq fell 65.51 points or 0.4 percent to 16,736.03 and the S&P 500 slid 39.17 points or 0.7 percent to 5,267.84. The narrower Dow showed a more significant move to the downside, tumbling 605.78 points or 1.5 percent to 39,065.26.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Friday. Japan’s Nikkei 225 Index dove by 1.2 percent, while China’s Shanghai Composite Index slumped by 0.9 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.3 percent, the German DAX Index and the U.K.’s FTSE 100 Index are both down by 0.4 percent.

In commodities trading, crude oil futures are slipping $0.24 to $76.63 a barrel after falling $0.70 to $76.87 a barrel on Thursday. Meanwhile, after plummeting $55.70 to $2,337.20 an ounce in the previous session, gold futures are inching up $3.50 to $2,340.70 an ounce.

On the currency front, the U.S. dollar is trading at 157.05 yen versus the 156.93 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0848 compared to yesterday’s $1.0815.

German GDP Grows 0.2% As Estimated

Posted on May 24, 2024 by RTT Staff Writer

The German economy expanded as initially estimated in the first quarter and avoided a recession, thanks to the rebound in investment and exports.

Gross domestic product expanded 0.2 percent sequentially in the first quarter, in contrast to the 0.5 percent decrease in the preceding three months, Destatis reported Friday.

The statistical office confirmed the flash estimate published on April 30.

“After GDP declined at the end of 2023, the German economy started 2024 with positive growth,” Federal Statistical Office President Ruth Brand said.

On a yearly basis, the calendar-adjusted GDP shrank 0.2 percent, the same rate as seen in the fourth quarter and in line with the preliminary estimate.

Price-adjusted GDP logged an annual fall of 0.9 percent, as estimated, after a 0.4 percent drop.

On the expenditure side, household consumption dropped 0.4 percent as spending on food and clothing decreased. Likewise, government spending fell 0.4 percent.

By contrast, gross fixed capital formation was up 1.2 percent following weak performance in the second half of 2023.

Gross fixed capital formation in construction rose significantly by 2.7 percent, while gross fixed capital formation in machinery and equipment fell 0.2 percent.

Positive contributions also came from foreign trade as both exports and imports recovered in the first quarter. Exports of goods and services climbed 1.1 percent. At 0.6 percent, growth in imports was less pronounced.

Changes in inventories contributed nil growth to GDP after providing -0.7 percent to GDP in the previous quarter.

ING economist Carsten Brzeski said the German economy should gain more momentum as strong wage growth should fuel a cautious recovery in private consumption and the inventory cycle should start to turn positive.

The economist said there are still several cyclical factors potentially dragging down economic activity. Moreover, well-known structural weakness will not disappear overnight and it will limit the pace of any rebound, said Brzeski.

Last week, the European Commission projected the German economy to stagnate this year. Growth is seen at a modest 0.1 percent this year. Driven by domestic demand, growth is expected to rise moderately to 1.0 percent next year.

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Elon Musk Says He Favors No Tariffs On Chinese EVs

Posted on May 24, 2024 by RTT Staff Writer

Tesla founder and CEO Elon Musk, while speaking at a technology conference in Paris, said that he doesn’t support President Biden’s recent announcement of a tariff on imported Chinese-made electric vehicles.

At the Viva Technology conference, Musk said, “Tesla competes quite well in the market in China with no tariffs and no deferential support… I’m in favor of no tariffs and no incentives for electric vehicles, or for oil and gas.”

While responding during a question and answer session at the conference, Musk stated, “Neither Tesla nor I asked for these tariffs. In fact, I was surprised when they were announced.”

Earlier this month, the Biden administration had announced tariff on Chinese EVs as well as EV batteries and other parts in an effort to stop the flooding of cheap Chinese EVs to the domestic market. The reports also said the Government was preparing to raise tariffs on clean-energy goods from China in the following days.

Beijing is giving significant subsidies to green energy companies, helping them overproduce EVs and clean energy products like solar panels for lower price.

Earlier this year, Musk had remarked that in the absence of trade restrictions, Chinese EV companies will crush competitors elsewhere.

Tesla recently has reported weak production and deliveries in its first quarter.

The luxury electric car maker, which is struggling with slower demand and severe competition, in April had reduced prices across its various models in China, after similar cuts in the United States. The company also slashed the price of its Full Self-Driving or FSD driver assistant software.

In late March, Bloomberg reported that Tesla has cut down its electric vehicle production at its Giga Shanghai factory in China due to sluggish growth in the sales of new-energy vehicles, tough competition and price war. Tesla had also limited manufacturing of EV parts.

However, Tesla’s stock gained significantly in April after Musk, during a trip to Beijing, signed a deal to introduce its FSD software service in China, with the support of local tech giant Baidu’s mapping and navigation services.

UK Retail Sales Decline On Poor Weather; Consumer Sentiment Improves

Posted on May 24, 2024 by RTT Staff Writer

UK retail sales declined more than expected in April as poor weather reduced footfall, official data revealed on Friday.

Meanwhile, a monthly survey conducted by the market research group GfK showed that British consumer sentiment strengthened in May as households’ became more optimistic about future personal finances and general economic outlook.

The retail sales volume dropped 2.3 percent on a monthly basis, following a revised 0.2 percent drop in March, the Office for National Statistics reported. Economists had forecast a 0.5 percent drop for April.

The ONS said sales decreased across most sectors, with clothing retailers, sports equipment, games and toys stores, and furniture stores doing badly as poor weather reduced footfall.

In the three months to April, the retail sales volume rose 0.7 percent from the previous three months and fell 0.8 percent from the same period last year.

In April, non-food store sales decreased 4.1 percent, which was the joint largest fall since January 2021.

At the same time, food stores sales volumes fell for their third consecutive month, mainly because of supermarkets. Food sales shrunk 0.8 percent.

Automotive fuel sales volumes showed their largest monthly fall since October 2021, which was down 4.9 percent.

Excluding auto fuel, the retail sales volume posted a monthly fall of 2.0 percent after a 0.6 percent decrease in March, data showed.

On a yearly basis, retail sales decreased 2.7 percent, in contrast to the 0.4 percent increase in March. Sales were forecast to drop only 0.2 percent.

Excluding auto fuel, retail sales slid 3.0 percent, bigger than economists’ forecast of 1.1 percent fall.

Capital Economics economist Ashley Webb said the weakness in April was probably a one-off.

As inflation falls further, the rising real household disposable incomes should boost retail activity throughout the rest of this year, the economist added.

Data from GfK showed that the consumer sentiment index rose two points to -17 in May. The score was better than economists’ forecast of -18.

Only major purchase measure showed a slight drop as the cost-of-living crisis continued to weigh on spending.

The outlook for personal financial situation and general economic conditions gained 5 points and 4 points, respectively. Assessment of past personal financial situation and general economic situation posted marginal increases.

GfK Client Strategy Director Joe Staton said, “With the latest drop in headline inflation and the prospect of interest rate cuts in due course, the trend is certainly positive after a long period of stasis which has seen the Overall Index Score stuck in the doldrums.”

“All in all, consumers are clearly sensing that conditions are improving,” Staton added. The result signaled further growth in confidence in the months to come.

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U.S. Durable Goods Orders Unexpectedly Rise In April But March Jump Downwardly Revised

Posted on May 24, 2024 by RTT Staff Writer

New orders for U.S. manufactured durable goods unexpectedly increased in the month of April, according to a report released by the Commerce Department on Friday, although the growth came following a significantly downwardly revised jump in March.

The report said durable goods orders climbed by 0.7 percent in April following a downwardly revised 0.8 percent advance in March.

Economist had expected durable goods orders to decrease by 0.8 percent compared to the 2.6 percent spike originally reported for the previous month.

“Contrary to what the headline suggests, we see little signs of relief for durable goods in the latest report,” said Nationwide Financial Markets Economist Oren Klachkin. “Any reassuring sign from the April data is tempered by downward revisions to prior months.”

The unexpected increase by durable goods orders partly reflected continued strength in orders for transportation equipment, which shot up by 1.2 percent in April after surging by 2.5 percent in March.

While orders for non-defense aircraft and parts plummeted by 8.0 percent after soaring in the previous month, orders for defense aircraft and parts leapt by 2.5 percent and orders for motor vehicles and parts jumped by 1.5 percent.

Excluding orders for transportation equipment, durable goods orders rose by 0.4 percent in April after coming in unchanged in March. Ex-transportation orders were expected to inch up by 0.1 percent.

Orders for primary metals and electrical equipment, appliances and components saw notable growth, while orders for computers and electronic products, machinery and fabricated metal products also rose.

The Commerce Department also said orders for non-defense capital goods excluding aircraft, a key indicator of business spending, rose by 0.3 percent in April after edging down by 0.1 percent.

Shipments in the same category, which is the source data for equipment investment in GDP, climbed by 0.4 percent in April after falling by 0.3 percent in March.

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U.S. Consumer Sentiment Drops Slightly Less Than Previously Estimated In May

Posted on May 24, 2024 by RTT Staff Writer

Consumer sentiment in the U.S. deteriorated slightly less than previously estimated in the month of May, according to revised data released by the University of Michigan on Friday.

The report said the consumer sentiment index for May was upwardly revised to 69.1 from the preliminary reading of 67.4. Economists had expected the index to be unrevised.

Despite the upward revision, the consumer sentiment index still fell sharply from 77.2 in April, slumping to its lowest level since hitting 61.3 last November.

“Consumers expressed particular concern over labor markets; they expect unemployment rates to rise and income growth to slow. The prospect of continued high interest rates also weighed down consumer views,” said Surveys of Consumers Director Joanne Hsu.

She added, “These deteriorating expectations suggest that multiple factors pose downside risk for consumer spending.”

The steep drop by the headline index came as the current economic conditions index tumbled to 69.6 in May from 79.0 in April, while the index of consumer expectations dove to 68.8 in May from 76.0 in April.

Meanwhile, the report showed year-ahead inflation expectations increased by much less than previously estimated, inching up to 3.3 percent in May from 3.2 percent in April.

The University of Michigan had previously reported year-ahead inflation expectations jumped to 3.5 percent, although the downwardly revised figure still represents the highest level since hitting 4.5 percent last November.

The revised data also showed long-run inflation expectations held steady at 3.0 percent for the second straight month compared to the previously reported uptick to 3.1 percent.

While long-run inflation expectations have been within the narrow 2.9-3.1 percent range for 30 of the last 34 months, they remain elevated relative to the 2.2-2.6 percent range seen in the two years pre-pandemic.

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U.S Stocks Regaining Ground After Coming Under Pressure In The Previous Session

Posted on May 24, 2024 by RTT Staff Writer

Stocks have moved mostly higher during trading on Friday, regaining ground after coming under pressure over the course of the previous session. The major averages have all moved to the upside, with tech-heavy Nasdaq leading the advance.

In recent trading, the Nasdaq and the S&P 500 have reached new highs for the session. The Nasdaq is up 155.67 points or 0.9 percent at 16,891.70 and the S&P 500 is up 33.91 points or 0.6 percent at 5,301.85.

The narrower Dow is posting a more modest gain, up 80.08 points or 0.2 percent at 39,145.34, after underperforming on Thursday.

The rebound on Wall Street comes as traders look to pick up stocks at somewhat reduced levels following the downturn seen in the previous session, which saw the Dow post its worst daily drop since March 2023.

The weakness that emerged on Wall Street on Thursday came as a positive reaction to earnings news from Nvidia (NVDA) was overshadowed by lingering concerns about the outlook for interest rates.

The report said durable goods orders climbed by 0.7 percent in April following a downwardly revised 0.8 percent advance in March.

Economist had expected durable goods orders to decrease by 0.8 percent compared to the 2.6 percent surge originally reported for the previous month.

Excluding orders for transportation equipment, durable goods orders rose by 0.4 percent in April after coming in unchanged in March. Ex-transportation orders were expected to inch up by 0.1 percent.

A separate report released by the University of Michigan showed consumer sentiment in the U.S. deteriorated slightly less than previously estimated in the month of May.

The report said the consumer sentiment index for May was upwardly revised to 69.1 from the preliminary reading of 67.4. Economists had expected the index to be unrevised.

Despite the upward revision, the consumer sentiment index still fell sharply from 77.2 in April, slumping to its lowest level since hitting 61.3 last November.

Meanwhile, the report showed year-ahead inflation expectations increased by much less than previously estimated, inching up to 3.3 percent in May from 3.2 percent in April.

The revised data also showed long-run inflation expectations held steady at 3.0 percent for the second straight month compared to the previously reported uptick to 3.1 percent.

Sector News

Computer hardware stocks are seeing substantial strength on the day, resulting in a 2.0 percent surge by the NYSE Arca Computer Hardware Index.

Semiconductor and networking stocks have also shown strong moves to the upside, contributing to the advance by the tech-heavy Nasdaq.

Gold stocks are also seeing considerable strength, with the NYSE Arca Gold Bugs Index rebounding by 1.7 percent after falling sharply lower over the past few sessions.

Notable strength is also visible among brokerage and housing stocks, while most of the other major sectors are showing more modest moves.

Other Markets

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index is down by 0.2 percent, the German DAX Index and the French CAC 40 Index are both down by 0.3 percent.

In the bond market, treasuries are showing a lack of direction after trending lower over the past several sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 4.479 percent.

Nasdaq, S&P 500 Hovering Firmly In Positive Territory, Dow Posting Modest Gain

Posted on May 24, 2024 by RTT Staff Writer

After moving mostly higher early in the session, stocks continue to turn in a strong performance in afternoon trading on Friday. The tech-heavy Nasdaq has shown a notable advance and is on pace to end the session at a new record closing high.

The major averages have moved roughly sideways in recent trading, hovering in positive territory. The Nasdaq is up 187.23 points or 1.1 percent at 16,923.26, the S&P 500 is up 38.55 points or 0.7 percent at 5,306.39 and the Dow is up 87.78 points or 0.2 percent at 39,153.04.