Stock Markets
US trade deficit rises slightly in December
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![US trade deficit rises marginally in December; narrows sharply in 2023](https://i-invdn-com.investing.com/trkd-images/LYNXMPEK160KR_L.jpg)
© Reuters. Sea gulls sit on a lamppost beside shipping containers stacked at the Paul W. Conley Container Terminal in Boston, Massachusetts, U.S., May 9, 2018. REUTERS/Brian Snyder/File Photo
By Lucia Mutikani
WASHINGTON (Reuters) – The U.S. trade deficit widened slightly in December, but contracted by the most in 14 years in 2023 as imports declined and exports jumped to a record high.
The report from the Commerce Department on Wednesday also showed the United States’ rising status as a major oil producer, with the inflation-adjusted value of petroleum exports surging 15.9% to a record high in December. The nation is now a net oil exporter and has reduced its dependence of foreign oil, helping to shrink the current account deficit.
Economists expected trade, which contributed to gross domestic product growth last year, to remain mostly supportive to the economy in 2024, though Red Sea shipping disruptions and drought in the Panama Canal posed risks.
“We look for net trade to remain a positive contributor to first-quarter growth,” said Matthew Martin, a U.S. economist at Oxford Economics. “The largest risk resulting from disruptions to global shipping is likely higher prices for goods, but longer lead times to receive goods could lead to either over- or underbuilding of inventories, which presents risks to our near-term outlook for imports.”
The trade deficit increased 0.5% to $62.2 billion, the Commerce Department’s Bureau of Economic Analysis said. Data for November was revised higher to show the trade gap shrinking to $61.9 billion instead of $63.2 billion as previously reported.
December’s trade shortfall was in line with economists’ forecasts. While it was close to the assumptions made by the government in its advance fourth-quarter GDP estimate published last month, November’s data was revised higher. Economists said the inflation adjusted or so-called real trade deficit was now smaller than the government had assumed.
They expected that trade’s contribution to GDP would be raised from the 0.43 percentage point estimated last month. On the bases of the December trade report, they anticipated that overall fourth-quarter GDP growth would be boosted to about a 3.6% annualized rate from the 3.3% pace reported in January when the government publishes its second estimate later this month.
“On the whole, the trade data for the fourth-quarter now look stronger than was anticipated with respect to GDP that quarter,” said Daniel Silver, an economist at JPMorgan in New York.
RECORD HIGH EXPORTS
The trade gap narrowed 18.7% in 2023, the largest drop since 2009, to $773.4 billion. It represented 2.8% of GDP, down from 3.7% in 2022. Trade added more than half a percentage point to the economy’s 2.5% growth last year.
Exports increased 1.2% to a record $3 trillion last year, propelled by capital goods, automotive vehicles, parts and engines as well as consumer and other goods. Imports slumped 3.6% to $3.8 trillion amid decreases in industrial supplies, which include petroleum, and consumer goods.
Exports ended the year on a strong note, rising 1.5% to $258.2 billion in December. Goods exports shot up 1.8% to $171.2 billion. Industrial supplies and materials exports increased $3.3 billion, amid rises in nonmonetary gold, other petroleum products and .
Consumer goods exports advanced as did those of foods, feeds and beverages. Services exports climbed $0.8 billion to a record $87.0 billion, lifted by travel, transport and financial services.
Imports picked up, increasing 1.3% to $320.4 billion in December. Goods imports rose 1.5% to $260.3 billion. There were gains in imports of consumer goods, mostly pharmaceutical preparations, and cell phones and other household goods.
Industrial supplies and materials imports also rose, but capital goods fell as did imports of automotive vehicles, parts and engines. Imports of services increased $0.5 billion to $60.1 billion amid a rise in transport. Travel services declined. The services surplus in December was the highest on record.
Economists were not too concerned about the decline in capital goods imports, which on face value would suggest weaker business investment and is over time associated with recession.
“Recessions are normally marked by sharp contractions in import volumes and, as yet, there is no sign that this is unfolding,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
The real goods trade deficit declined 1.4% to $82.8 billion in December. Real dollar exports of petroleum rose to a record $17.3 billion from $15.0 billion in November.
Real dollar exports of foods, feeds and beverages were the highest since June 2022, while those of automotive vehicles, parts and engines hit a 1-1/2-year low.
“The outlook for trade flows going forward is likely one of moderation given expectations of slower demand and growth going forward, both domestically and abroad,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
Stock Markets
Five9 stock hits 52-week low at $28.74 amid market challenges
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In a turbulent market environment, Five9 (NASDAQ:) Inc’s stock has touched a 52-week low, reaching a price level of $28.74. This significant downturn reflects a broader trend for the cloud software company, which has seen its shares plummet by -58.79% over the past year. Investors are closely monitoring Five9’s performance as it navigates through a period of heightened volatility and shifting industry dynamics, which have contributed to the stock’s current valuation at this low point. The company’s efforts to rebound from this position will be under scrutiny in the coming quarters as market participants look for signs of a strategic turnaround or further indications of market pressures.
In other recent news, Five9 Inc . has achieved an annual revenue run rate exceeding $1 billion in Q2, a significant milestone despite lowering its annual revenue guidance by 3.8% due to customer budget constraints. The company’s adjusted EBITDA margin rose to 17% of revenue, contributing to a strong operating cash flow of $126 million. The company also confirmed plans to reduce its global workforce by approximately 7% by the end of 2024, a strategic move projected to cost between $12 million and $15 million.
Five9’s recent acquisition of Acqueon, a firm specializing in proactive outbound omnichannel customer engagement, aims to expand its AI offerings and bolster its growth. This move is in line with the company’s focus on managing expenses and improving profitability, with initiatives like FedRAMP and expansion into India anticipated to improve gross margins.
In their analysis, Piper Sandler maintained an Overweight rating for Five9, with a steady price target of $47.00, while Needham and BTIG both maintained a Buy rating with price targets of $48.00 and $45.00 respectively. These ratings reflect the firms’ confidence in Five9’s strategic positioning and potential for growth, despite the current challenges and workforce reduction.
InvestingPro Insights
Amid the current market conditions, Five9 Inc’s recent performance can be put into perspective with select data from InvestingPro. The company’s market capitalization stands at roughly $2.15 billion, indicating the size and scale of the business amidst its challenges. Despite the stock’s decline, analysts are showing a hint of optimism, with 20 analysts having revised their earnings estimates upwards for the upcoming period. This could signal a potential turnaround in sentiment or underlying business performance.
Importantly, Five9’s liquid assets are reported to surpass short-term obligations, suggesting that the company maintains a degree of financial flexibility to navigate its current difficulties. Furthermore, while the stock is trading near its 52-week low, it’s worth noting that the relative strength index (RSI) suggests the stock is in oversold territory, which can sometimes precede a rebound in share price. Investors looking for comprehensive analysis and additional InvestingPro Tips on Five9 can find more insights, including 14 other tips, at https://www.investing.com/pro/FIVN.
In terms of financial health, the company operates with a moderate level of debt and is expected to become profitable this year, according to analysts’ predictions. These elements may offer some solace to investors considering the stock’s substantial price fall over the last year. For those seeking a deeper dive into Five9’s valuation and future prospects, the InvestingPro platform provides a fair value estimate of $45.04, which is considerably higher than the current trading price, suggesting potential undervaluation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Stock Markets
TD Cowen maintains Buy on Terns Pharmaceuticals
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TD Cowen reiterated its Buy rating on shares of Terns Pharmaceuticals (NASDAQ:TERN), following the company’s investor call. The call was held to manage expectations for the upcoming Phase 1/2 CARDINAL study data for chronic myeloid leukemia (CML). The firm noted the challenges in measuring the efficacy endpoint (EP) due to disease progression and the absence of treatment switch guidelines, which makes major molecular response (MMR) a challenging efficacy endpoint for Phase 1/2 trials.
The interim Phase 1/2 data aims to evaluate descriptive efficacy signals, considering patients’ baseline BCR-ABL levels and treatment history. The analyst highlighted that the once-daily (QD) dosing and the lack of food effect could potentially enhance the quality of life for patients compared to other allosteric tyrosine kinase inhibitors (TKIs).
Terns Pharmaceuticals has been focusing on the development of improved treatment options for CML. The company’s approach to dosing, which does not require food intake, may offer a more convenient alternative for patients, potentially leading to better adherence and outcomes.
The topline data from the 6-month Phase 1/2 CARDINAL study is anticipated to be available in 2025. This data will provide further insights into the treatment’s efficacy and safety, which are critical factors in the ongoing development and potential approval process.
Investors and stakeholders in Terns Pharmaceuticals are expected to closely monitor the progress of the CARDINAL study, as it could have a significant impact on the company’s future prospects and position in the CML treatment landscape.
In other recent news, Terns Pharmaceuticals has experienced significant developments. The biopharmaceutical company reported robust earnings and revenue results, with Mizuho Securities maintaining an Outperform rating on Terns shares, citing strong enthusiasm for the company’s drug, TERN-701, a potential treatment for chronic myeloid leukemia.
The firm expects the first interim Phase 1 CARDINAL study data for TERN-701 in December.
Terns also announced the appointment of Elona Kogan as its new chief legal officer, a move that underscores the company’s strategic development and pipeline advancement.
The company also secured an extension of its office lease in Foster City, California, through 2027, reflecting Terns Pharmaceuticals’ operational stability and long-term planning.
In terms of clinical trials, Terns has made progress in its ongoing Phase 1 study of TERN-701, with interim findings suggesting the drug can be administered once daily with or without food.
This development, coupled with the forthcoming Phase 1 data for another of Terns’ drugs, TERN-601—an oral GLP-1 receptor agonist for obesity—expected next month, underscores the company’s commitment to innovative therapies.
These recent developments, from financial performance to executive appointments and clinical trials, highlight Terns Pharmaceuticals’ ongoing efforts to advance its strategic objectives and deliver on its mission. The company’s activities are closely watched by investors and industry analysts, including those from Mizuho Securities, who continue to support the company’s potential.
InvestingPro Insights
As Terns Pharmaceuticals (NASDAQ:TERN) navigates the complexities of its Phase 1/2 CARDINAL study, investors are keeping a keen eye on the company’s financial health and stock performance. According to InvestingPro, Terns holds more cash than debt, which is a positive signal for financial stability. Additionally, with five analysts revising their earnings upwards for the upcoming period, there is a sense of optimism about the company’s potential performance.
However, it’s important to note that Terns is not currently profitable and has been quickly burning through cash, which may raise concerns about long-term sustainability. The company’s P/E Ratio stands at -5.71, reflecting these profitability challenges. Despite these hurdles, Terns has managed a 1 Year Price Total Return of 45.42%, indicating some investor confidence in the company’s growth prospects. The anticipated fair value from analysts stands at 15 USD, while the InvestingPro Fair Value is calculated at 5.8 USD, highlighting a divergence in valuation perspectives.
For those looking for more in-depth analysis, additional InvestingPro Tips on Terns Pharmaceuticals can be found at https://www.investing.com/pro/TERN, offering a comprehensive look at the company’s financial details and stock performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Stock Markets
Macron discussed support for Ukraine and Gaza ceasefire with Germany’s Scholz
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PARIS (Reuters) – French President Emmanuel Macron discussed the importance of maintaining support for Ukraine and the need for a ceasefire in Gaza during talks on Friday with German Chancellor Olaf Scholz, said the French presidency.
Regarding Ukraine, the two leaders expressed their determination to support the country “for as long and as intensively as necessary” in its war against Russia, the Elysee said.
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