STOCK MARKET NEWS: Inflation jumps, Boeing’s 787 snag, Carvana losses widen

The U.S. Treasury Department on Friday imposed fresh sanctions on Russian banks and targeted its mining and metals sector, while going after over 30 individuals and companies from Switzerland, Germany and other countries for helping Moscow evade earlier sanctions to fund its war against Ukraine.

The new measures, announced on the first anniversary of Russia’s invasion, hit 22 Russian individuals and 83 entities, adding to more than 2,500 sanctions imposed over the past year. The action would further isolate Russia from the global economy, Treasury said in a statement.

The new sanctions were coordinated with other U.S. agencies, U.S. allies and the Group of Seven rich nations to limit Russia’s ability to wage the war
that has killed tens of thousands, and uprooted millions of Ukrainians.

Treasury said the latest measures were aimed at “impeding the ability of President Vladimir Putin’s regime to raise capital in support of the war” by targeting banks, wealth management-related firms and individuals in Russia’s financial services sector.

U.S. stock averages tumbled after latest inflation report
showed consumer prices continued to rise last month, moving up 0.6% from the previous month while rising 5.4% on an annual basis. The PCE, considered the Federal Reserve’s preferred measure of inflation, is the latest in a string of hotter-than-expected inflation reports.

The Dow is down over 400 points, while both the S&P and Nasdaq fell over 1%. Large-cap tech including Meta, Google, Microsoft, and Amazon all under pressure.

Meanwhile, commodities are also down with oil off around 0.98% to $74.65 a barrel as gold slips approximately 0.50% to $1,817.70 an ounce. 

EOG Resources Inc. (EOG) on Thursday reported fourth-quarter net income of $2.28 billion.

The Houston-based company said it had net income of $3.87 per share. Earnings, adjusted for non-recurring gains, were $3.30 per share.

The results missed Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of $3.31 per share.

The oil and gas company posted revenue of $6.72 billion in the period, topping Street forecasts. Seven analysts surveyed by Zacks expected $6.39 billion.For the year, the company reported profit of $7.76 billion, or $13.22 per share. Revenue was reported as $25.7 billion.

Sweetgreen shares are falling. The fast casual restaurant chain forecast 2023 same store sales growth of 2% to 6% versus 13% in 2022. Growth in 2022 was half the 25% same-store sales change reported in fiscal 2021.

Revenue is seen between $575 million to $595 million compared to $470.1 million in fiscal 2022.

Adjusted EBITDA is forecast between negative $20 million to negative $10 million versus negative 49.9 million in FY 2022.

Fiscal fourth quarter revenue for the three months ended Dec. 25, 2022 rose 23% to $118.6 million.

The net loss was $(49.3) million versus a net loss of $(66.2) million in the prior year period.

British Airways-owner IAG reported on Friday
its first annual profit since the pandemic and said earnings could jump almost 90% this year as business rebounds, but its shares dropped around 6% amid concerns about the group’s debt.

“As a long-haul specialist, IAG has been one of the last names in the sector to gain momentum following the pandemic,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. “Of course, aviation has flown straight into another hurdle: a cost-of-living crisis. So far it seems pent up demand for travel is keeping things propped up, but there is a limit to how long this can continue.”

IAG forecast 2023 operating profit in the range of 1.8 billion euros to 2.3 billion euros. That would still be well below pre-pandemic levels of 3.3 billion euros in 2019.

The group agreed on Thursday to pay 400 million euros ($424 million) to Spain’s Globalia for the remaining 80% of Spain-based Air Europa it did not already own, a deal aimed at expanding its position in the Latin American market but that could also come with additional regulatory hurdles.

“Expanded flying programs and the agreed acquisition of the remaining Air Europa stake both mean IAG is in the best position possible to capture as much of the market as possible,” Lund-Yates said.

Reuters contributed to this report.

Shares of Cineworld slumped as much as 22% on Wednesday after media reports said the world’s second-largest cinema operator had received 40 non-binding bids, but none for its UK and U.S. assets or nearing its $6 billion secured debt load.

The reports cited company counsel Joshua Sussberg’s comments to the U.S. Bankruptcy Court in Houston on Tuesday, where he also said the initial bids received by a Feb. 16 deadline were all for the rest of Cineworld’s global assets, mainly for theatres in central Europe, eastern Europe and Israel.

“Selling subsidiaries doesn’t mean it will be suddenly swimming in cash. Any interested party in Cineworld’s assets knows that the cinema group is desperate and so they are likely to pitch any offers at a low level,” said Russ Mould, investment director at AJ Bell.

“From where we stand today, two things look almost certain — one, that we won’t see a bidder for the whole business; and two, that shareholders will be left with nothing. Even if the company does sell some of its subsidiaries, the end game still appears to be a debt-for-equity swap whereby creditors take control of the business,” Mould added.

In January, Cineworld said it would focus on a sale of the group as a whole rather than individual assets, months after the British cinema operator filed for U.S. bankruptcy protection
in its bid to restructure debt and strengthen its balance sheet.

When requested by Reuters, Cineworld did not immediately confirm details of the update it provided to the court.

Reuters contributed to this report.

American billionaire financier Thomas H. Lee, considered a pioneer of private equity investment and leveraged buyouts, died at the age of 78, his family said in a statement on Thursday, without noting the cause of his death.

The New York Post, citing unidentified police sources
, reported Lee was discovered dead on Thursday morning at his Fifth Avenue Manhattan office, headquarters of his investment firm, from a self-inflicted gunshot wound.

According to the Post, he was found after police responded to an emergency-911 call around 11:10 a.m. (1610 GMT).

Reuters could not immediately confirm the cause of death. The New York Police Department said emergency medical service personnel responding to a 911 call on Fifth Avenue at about that time found a “male who was pronounced dead at the scene.”

Police gave no further details, and said the city medical examiner’s office would determine the cause and manner of death.

The coroner’s office could not immediately be reached for comment.

The U.S. Justice Department is preparing an antitrust lawsuit to block software maker Adobe Inc’s $20 billion bid for cloud-based designer platform Figma, Bloomberg News reported on Thursday, citing people familiar with the matter.

The lawsuit could come as early as next month, Bloomberg reported.

Responding to the report, Adobe said it and Figma were in different product areas, with Figma focusing on interactive designs.

“We are engaged in constructive and cooperative discussions with regulators in the US, UK and EU among others. We continue to expect to close the transaction in 2023,” the company said in a statement.

The Justice Department declined comment.

Adobe, which makes Photoshop, said in September it would buy Figma, with investors concerned about the hefty price tag.

Russia’s invasion of Ukraine
has been going on for one year and the economic impacts are deep and hitting the American consumer.

The Federal Reserve’s preferred measure of inflation didn’t provide any relief in the latest read.