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DJ Global Equities Roundup: Market Talk

· 02/04/2021 17:13

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

1713 ET - Australian shares look set to open strongly following a positive lead from US stocks, which gained amid cautious optimism about Covid-19 vaccine rollouts and economic recovery. ASX futures are up by 1.0%, pointing to a resumption of the S&P/ASX 200's recent gains. The benchmark slipped 0.9% Thursday after rising 3.3% across the previous three sessions. The S&P 500 rose 1.1% and closed at a record. The DJIA also rose 1.1%, while the Nasdaq Composite climbed 1.2% to a fresh record. Ahead of the local open, News Corp reported a 40% rise in 2Q segment Ebitda, while REA said 1H underlying profit rose 13%. (stuart.condie@wsj.com; @StuartLCondie)

1707 ET - AGL Energy's announcement of A$2.7 billion in charges means the focus of its 1H result, due next week, will now be on its telecommunications offering and retail competition, Goldman Sachs says. AGL's retail strategy will be measured up against Origin Energy's Octopus/Kraken business and Alinta's EnCore platform, the bank says. "While AGL is trading below our target price, tough trading conditions are expected to persist into FY 2022, and a recovery in earnings will lag the commodity cycle due to the regulatory price reset structure," Goldman says. "On this basis we believe it is still too soon for a more positive recommendation." It continues to prefer Origin's stock. (david.winning@wsj.com; @dwinningWSJ)

1703 ET - The key question for Centuria Office REIT from here is leasing, UBS says. It notes Centuria Office REIT currently has 8.5% vacant space within its portfolio, which it considers to be more of a concern than FY21 and FY22 lease expiries of 4.3% and 6.4%, respectively. "For context in 1H Centuria Office REIT leased 28,000 square meters or 9% of the portfolio across 31 transactions," UBS says. "This leasing progress is approximately equal to the current vacancy, but the leases were mostly smaller deals." The bank expects the Docklands and Robina properties to be re-leased by the end of FY22 and otherwise assumes 50% tenant retention and 6 months' downtime on leases. UBS's estimates are 7% ahead of consensus, which it says highlights "how cautious the market is regarding office." (david.winning@wsj.com; @dwinningWSJ)

1702 ET - Sales of Activision Blizzard's "Call of Duty" rose 40% in 2020 from the year prior, while "Call of Duty: Mobile," a free-to-play game, generated double-digit growth in net bookings in 4Q from the year-earlier period. Looking ahead, many of Activision Blizzard's other franchises will go in the same direction as "Call of Duty" by adding free-to-play entry points across consoles, PCs and mobile devices, the company's longtime chief executive, Bobby Kotick, tells the WSJ. "A big part of what we want to do is grow our reach," he says. "Our stated goal is from 400 million to 1 billion players. There's only one way to do that--you have to be free and accessible." Shares are up 5% after-hours. (sarah.needleman@wsj.com; @saraheneedleman)

1659 ET - The trucker formerly known as YRC Worldwide reports widening losses after a rocky year when it took a $700M federal coronavirus-relief loan to shore up its pandemic-battered business. Now named Yellow, the less-than-truckload provider reports a net 4Q loss of $18.7M compared to a $15.3M net loss for the same period in 2019. Revenue stays essentially flat at $1.17B for the quarter, up 0.4% YOY. CEO Darren Hawkins says volumes and pricing improved in the quarter, with LTL revenue per hundredweight up 2.2% excluding fuel surcharge. Yellow plans to spend $450M to $550M this year on new equipment. (jennifer.smith@wsj.com)

1656 ET - The S&P/TSX Composite Index rises 0.7% to 18041. The blue-chip S&P/TSX Index gains 0.8% to close at 1068. Canada Goose soars 22% after the company known for its outerwear reported revenue for F3Q that rose for the first time during the pandemic, beat forecasts from analysts and said it was helped by stronger ecommerce demand. (micah.maidenberg@wsj.com; @MicahMaidenberg)

1649 ET - Drugmaker Mallinckrodt has picked a mediator to help resolve questions over how the drugmaker's $1.6B settlement of opioid-related litigation should be allocated among people who have asserted drug-related injuries and other creditor groups. Mallinckrodt has asked a judge to appoint Kenneth Feinberg to assist in negotiations on the allocation issue, according to court papers the drug company filed yesterday in the US Bankruptcy Court in Wilmington, Del. Resolving how proceeds will be distributed is a key obstacle to finalizing a chapter 11 plan of reorganization, Mallinckrodt says. The company filed for bankruptcy protection in October with the outline of a deal to resolve thousands of opioid-related lawsuits already in hand. (jonathan.randles@wsj.com)

1642 ET - Peruvian President Francisco Sagasti says his government signed a deal with Pfizer to receive 20 million coronavirus vaccines. Sagasti says the first 250,000 shots will arrive in March, and another 300,000 in April. Peru also has contracts with Sinopharm, which is expected to deliver the first million doses of its vaccine on Feb. 13, Sagasti says. The country has also inked a deal to receive vaccines from AstraZeneca and through the Covax initiative. (ryan.dube@wsj.com; @duberyan)

1626 ET - T-Mobile's 2020 Sprint purchase gave the combined company opportunities to save money in the long run as well as big near-term costs, a fact reflected in 2021 guidance. The cellphone carrier says merger-related costs will run $2.5B-$3B before taxes this year, adding to last-year's $1.9B tab for combining once separate stores, back-office jobs and network infrastructure. Integrating the erstwhile rival contributed to a slightly lower 4Q profit result despite much higher revenue from new Sprint customers. (andrew.fitzgerald@wsj.com; @drewfitzgerald)

1623 ET - US air-safety regulators ordered high-priority inspections to check the structural integrity of rudders on more than 1,600 single-aisle Airbus jets registered in the US. The move, following a similar safety directive issued last month by European authorities, is intended to check for potentially hazardous internal breakdowns of sections of composite rudders installed on various Airbus models, including popular A320 and A321 aircraft. If inspections reveal problems, the issues must be resolved. Over the years Airbus has had durability and safety problems with some composite parts, and this time the inspections are intended to identify problems stemming from earlier rudder repairs. Defects could cause "reduced structural integrity of the rudder, and consequent reduced controllability of the airplane," according to the FAA. (andy.pasztor@wsj.com)

1610 ET - Clorox says its namesake disinfecting wipes won't be fully in stock until the end of 2021, about six months later than the company initially expected. Pandemic-fueled demand continues to outpace the company's ability to make wipes, despite moves over the last year to double capacity. In the meantime, Clorox has lost share to smaller, relatively-unknown rivals that capitalized on its inability to meet soaring demand. Clorox shares closed off 6% today. (sharon.terlep@wsj.com)

1614 ET - Activision Blizzard posts a 4Q increase in revenue and net bookings, as people continued to turn to videogames to stay entertained during the pandemic. But the maker of Call of Duty says implied adjusted EPS slipped to $1.21, down from $1.23 a year ago. Revenue of $2.41B and net bookings of $3.05B were up from $1.99B and $2.71B, respectively. For the full year, the company says it generated $8.09B in revenue and $8.42B in net bookings, up from $6.49B and $6.39B for 2019, respectively. Activision shares are up 5% in after-hours trading. (sarah.needleman@wsj.com; @saraheneedleman)

(END) Dow Jones Newswires

February 04, 2021 17:13 ET (22:13 GMT)

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