Author: fortraders

Citigroup Inc. (NYSE:C) has scrapped plans to sell its Mexican consumer unit, Banamex, and will instead list it in 2025. The surprise move delays the bank’s overhaul and is likely to cause investor anxiety due to the country’s leftist president.

Citi is considering a dual stock listing, possibly in Mexico City and New York, for the unit. The bank had been in talks to sell Banamex to Mexican billionaire German Larrea’s conglomerate Grupo Mexico, but tensions between the conglomerate and Mexican President Andres Manuel Lopez Obrador led to the deal being abandoned.

Citi first bought Banamex in 2001 for $12.5 billion and announced in January 2022 that it would exit Mexico. The sale was part of a broader overhaul at the U.S. No.3 bank, which has struggled for years to gain scale and profitability from a myriad of businesses worldwide.

It remains unclear what investor appetite would be for such a deal, especially given the Mexican government’s opposition to layoffs that could be needed to make the unit more competitive. Citi CEO Jane Fraser said in a statement that the bank had decided an IPO would be the best path to “advancing our goal to simplify our firm.”

Stocks are falling on Wednesday as negotiations on the debt ceiling continue with the deadline quickly approaching. Abercrombie & Fitch Company (NYSE:ANF) shares jumped 27% as the specialty retailer reported a surprise profit for the first quarter and a gain in net sales. Kohl’s Corp (NYSE:KSS) shares also rose 7.7% after a surprise profit. Petco Health and Wellness Company Inc (NASDAQ:WOOF) shares fell 15% after providing weak revenue guidance for the current quarter. Palo Alto Networks Inc (NASDAQ:PANW) shares rose 7.4% after the cybersecurity firm raised its guidance for profit, sales and billings for the fiscal year. Intuit Inc (NASDAQ:INTU) shares fell 6.9% after the maker of financial software reported third-quarter revenue below forecasts. Sarepta Therapeutics Inc (NASDAQ:SRPT) shares slid 11% after the biotech said the FDA was pushing back a decision date on its muscular dystrophy gene therapy by about a month.

The French stock market closed lower on Wednesday, with the CAC 40 index falling 1.70%. Losses in the Consumer Goods, Industrials and Basic Materials sectors weighed on the index. Eurofins Scientific SE was the best performer, rising 0.19%, while STMicroelectronics NV was the worst, falling 5.38%. The CAC 40 VIX, which measures the implied volatility of CAC 40 options, was unchanged at 18.96. Gold Futures for June delivery was down 0.69%, while Crude oil for delivery in July rose 0.92%. The EUR/USD was unchanged at 1.08, while the US Dollar Index Futures was up 0.37%.

Microsoft Corp (MSFT) is appealing the decision by British regulators to block its $75 billion takeover of Activision Blizzard (ATVI). The appeal is expected to be lodged by the end of Wednesday. Microsoft has not yet responded to a Reuters request for comment.

The decision to block the takeover was made by the Competition and Markets Authority (CMA) in July, citing concerns that the deal would reduce competition in the gaming industry. The CMA argued that the merger would reduce the number of major players in the market, leading to higher prices and less choice for consumers.

The appeal is the latest development in the ongoing saga between Microsoft and the CMA. Microsoft has argued that the takeover would create a stronger gaming platform and provide more opportunities for gamers. It remains to be seen whether the appeal will be successful.

A U.S. judge has rejected former JPMorgan Chase & Co executive Jes Staley’s bid to dismiss the bank’s lawsuit against him. The ruling means Staley, who is also a former Barclays Plc chief executive, could be liable for millions of dollars over his ties to Jeffrey Epstein, a JPMorgan client from 1998 to 2013. JPMorgan faces two lawsuits over Epstein, and has denied liability. One is a proposed class action by women, led by a former ballet dancer known as Jane Doe 1, who say Epstein sexually abused them. The other is by the U.S. Virgin Islands, where Epstein allegedly abused women on a private island he owned. Judge Jed Rakoff will provide reasons for his ruling “in due course.”

Israel stocks closed lower on Wednesday, with losses in the Communication, Technology and Biomed sectors leading the TA 35 index down 0.85%. Shikun & Binui was the best performer, rising 3.37%, while OPC Energy Ltd was the worst, falling 7.79%. Crude oil for July delivery rose 1.26%, while the June Gold Futures contract fell 0.77%. The US Dollar Index Futures was up 0.42%.

Union Pacific Corp (NYSE:UNP) and the Brotherhood of Locomotive Engineers and Trainmen (BLET) have reached a tentative agreement for the U.S. railroad operator’s locomotive engineers. The agreement provides locomotive engineers with 11 days of work and four days off. This comes a week after Norfolk Southern (NYSE:NSC) also reached an agreement, offering additional five days of paid sick leave per year for its engineers.

U.S. rail unions have been in a tussle with the railroad operators demanding better sick leave and attendance policies. BLET National President Eddie Hall said in a joint statement that the change in scheduling will make life better for locomotive engineers and their families, and should help Union Pacific retain and recruit employees.

The agreement is a positive step forward for the railroad industry, and will help ensure that locomotive engineers have the necessary time off to rest and recuperate.

Bank of America has reiterated a Buy rating on Eli Lilly & Co. (NYSE:LLY) and raised their 12-month price target on the stock to $500.00. This follows a proprietary consumer analysis conducted to examine the escalating hype surrounding new obesity medications. The study found that >55% heard about these therapeutics on some form of social media, suggesting the need for targeted advertising. BofA analysts increased revenue forecasts for Mounjaro in Type 2 diabetes and tirzepatide in obesity by an average 19% and 40% respectively for ’23-’30. Shares of LLY are up 0.51% in mid-day trading on Wednesday.

William Blair analysts have identified generative AI (GAI) as a game changer, with near-term beneficiaries likely to be Alphabet (GOOGL), Meta Platforms (META) and Microsoft (MSFT). GAI is fundamentally different from other new technologies, as it has the ability to generate new content on its own after being trained by a machine learning model. This makes it highly applicable to virtually all industry sectors and has the potential to fuel a new wave of productivity and innovation in the global economy. NVIDIA (NVDA) is seen as the most obvious winner on the “picks and shovels” side, given its dominance in GPUs and related AI software.

Abercrombie & Fitch Co (ANF) posted a surprise quarterly profit and lifted its full-year sales forecast, sending its shares up as much as 29%. The apparel retailer has worked to increase its stock across all its labels and lure affluent Americans to purchase for a variety of items including dresses, cargos and formal pants.

The company’s eponymous Abercrombie label posted a 14% increase in sales in the quarter, while the Hollister brand, dropped 7%. Gross margins rose 570 basis points to 61%, benefiting from lower freight costs and its efforts to control promotions.

ANF’s Q1 report suggests brands with good momentum have remained resilient despite macro pressures. The Ohio-based company now expects 2023 net sales to increase 2% to 4%, compared to its previous range of 1% to 3% growth. On an adjusted basis, Abercrombie reported a profit of 39 cents per share, compared with estimates of a loss of 5 cents.

Neil Saunders, managing director of GlobalData, said that while pressures are building in the retail market, they are not anticipating this to create a complete collapse in consumer demand. Abercrombie is fortunately on the right side of trends.