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Oil Prices Climb On US Growth Optimism

Stock Alert: Luckin Coffee Plunges 50% After Filing For Bankruptcy In US

Shares of Luckin Coffee Inc. (LKNCY) are down more than 50% Friday morning after the China-based coffee chain filed for bankruptcy in the U.S.

The company filed for Chapter 15 bankruptcy protection that allows a foreign company to file for bankruptcy in the United States court system.

Luckin Coffee said “it is negotiating with its stakeholders regarding the restructuring of the Company’s financial obligations, to strengthen the Company’s balance sheet and enable it to emerge from the Cayman Proceeding as a going concern, for the benefit of all stakeholders.”

The company said its outlets remain open for business.

LKNCY, currently at $6.25, has been trading in the range of $0.95- $43.18 in the last one year.

U.S. Labor Productivity Pulls Back Sharply In Q4, Labor Costs Spike

A report released by the Labor Department on Thursday showed a steep drop in U.S. labor productivity in the fourth quarter and a sharp increase in unit labor costs.

The Labor Department said labor productivity plunged by 4.8 percent in the fourth quarter after spiking by an upwardly revised 5.1 percent in the third quarter.

Economists had expected productivity to tumble by 2.8 percent compared to the 4.6 percent jump that had been reported for the previous quarter.

The substantial decrease in productivity, a measure of output per hour, came as hours worked soared by 10.7 percent compared to a 5.3 percent surge in output.

“Looking ahead, productivity growth should pick up later this year as the economic recovery gets a boost from the rollout of vaccines and sizeable fiscal stimulus,” said Lydia Boussour, Lead U.S. Economist at Oxford Economics.

She added, “However, we expect the gains to gradually revert back to a more subdued trend in the medium run.”

The report also showed unit labor costs skyrocketed by 6.8 percent in the fourth quarter after plummeting by a revised 7.7 percent in the third quarter.

Unit labor costs were expected to surge up by 3.9 percent compared to the 6.6 percent nosedive that had been reported for the previous quarter.

The spike in labor costs reflected the steep drop in productivity combined with a 1.7 percent increase in hourly compensation.

Illinois Tool Works Inc Announces Gain In Q4 Profit

Illinois Tool Works Inc (ITW) reported a profit for its fourth quarter that increased from the same period last year.

The company’s bottom line came in at $642 million, or $2.02 per share. This compares with $641 million, or $1.99 per share, in last year’s fourth quarter.

Analysts had expected the company to earn $1.79 per share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items.

The company’s revenue for the quarter rose 0.3% to $3.48 billion from $3.47 billion last year.

Illinois Tool Works Inc earnings at a glance:

-Earnings (Q4): $642 Mln. vs. $641 Mln. last year.
-EPS (Q4): $2.02 vs. $1.99 last year.
-Analysts Estimate: $1.79
-Revenue (Q4): $3.48 Bln vs. $3.47 Bln last year.

Magnite To Acquire SpotX – Quick Facts

Magnite (MGNI) has entered into a definitive agreement to acquire SpotX from RTL Group for $1.17 billion in cash and stock. Purchase price consists of $560 million in cash and 14 million shares of Magnite stock. Magnite plans to finance the deal with cash on hand, 14 million shares issued to RTL Group and committed financing from Goldman Sachs.

Magnite is targeting in excess of $35 million in run-rate operating cost synergies, with more than half of the synergies realized within the first year of combined operations. The company anticipates the acquisition to close in the second quarter of 2021.

Magnite stated that preliminary results for fourth quarter 2020 include GAAP revenue of $82 million, up 69% on an as-reported basis, and up 20% on a pro forma basis from prior year. Net income was $5.8 million and adjusted EBITDA was $29.9 million, for the quarter.

U.S. Factory Orders Jump More Than Expected In December

New orders for U.S. manufactured goods showed another significant increase in the month of December, according to a report released by the Commerce Department on Thursday.

The report said factory orders jumped by 1.1 percent in December after surging up by 1.3 percent for three consecutive months. Economists had expected factory orders to climb by 0.7 percent.

The bigger than expected increase in factory orders came as orders for non-durable goods spiked by 1.7 percent, while orders for durable goods rose by an upwardly revised 0.5 percent.

Shipments of manufactured goods also shot up by 1.7 percent in December following a 0.8 percent increase in November.

The Commerce Department said inventories of manufactured goods also rose by 0.3 percent in December after climbing by 0.8 percent in the previous month.

With shipments rising by more than inventories, the inventories-to-shipments ratio dropped to 1.39 in December from 1.41 in November.

Oil Prices Climb On US Growth Optimism

Oil prices rose on Friday to reach their highest levels since 2020 after the release of upbeat U.S. data and amid expectations of a large U.S. stimulus package.

Benchmark Brent crude rose over 1 percent to $59.62 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 1.3 percent at $56.98, reaching its top since Jan. 22 last year.

A report from the Labor Department showed a continued decline in first-time claims for U. S. unemployment benefits in the week ended January 30th in a sign that layoffs are abating.

The U.S. factory sector is also showing solid momentum, with orders rising for eighth straight months.

Orders for manufactured goods rose 1.1 percent in December after a 1.3 percent gain in the prior month, the Commerce Department said overnight.

The U.S. Labor Department will release its closely-watched report on the employment situation in the month of January later in the day.

Economists expect employment to rise by 50,000 jobs in January after a decline of 140,000 jobs in December.

Markets have ramped bets on stimulus and Covid-19 vaccines to fuel a swift economic rebound.