游客发表
发帖时间:2024-09-29 12:21:21
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10178.52
10186.94
10139.73
0.24
114.14%
Forex_USDOLLAR_Eyes_10200-_AUD_Remains_at_Risk_on_RBA_Policy_body_ScreenShot220.png,why do some allen wrenches have rounded or ball tips USDOLLAR Eyes 10,200- AUD Remains at Risk on RBA Policy
The initial reaction to the
U.S. Non-Farm Payrolls
report was short-lived as the
Dow Jones-FXCM U.S. Dollar Index (Ticker:
USDollar
)
is now trading 0.24 percent higher from the open, and the bullish sentiment surrounding the greenback may gather pace next week as a deeper look at the employment report raises the fundamental outlook for the world’s largest economy. As discourage workers return to the work force, the upward trend in the labor pool remains encouraging, and the more broad-based recovery in the U.S. should push the Fed away from easing cycle as it dampens the prospects of seeing a higher natural rate of unemployment. In turn, the USDOLLAR is certainly making another run at the 10,200 figure, but we will need to keep a close eye on the 30-minute relative strength index as it approaches overbought territory.
Forex_USDOLLAR_Eyes_10200-_AUD_Remains_at_Risk_on_RBA_Policy_body_ScreenShot221.png, USDOLLAR Eyes 10,200- AUD Remains at Risk on RBA Policy
Beyond the slew of positive developments coming out of the U.S.,
St
.
Louis Fed President James Bullard
, who serves on the FOMC in 2013, floated the idea that the committee may slow its asset purchases or bring quantitative easing as the recovery gradually gathers pace At the same time, Mr. Bullard saw a diminishing risk for deflation as the economy gets on a more sustainable path, and we may see a growing number of central bank officials scale back their willingness to expand the balance sheet further as it raises the long-term risk for inflation. As the Fed drops its dovish tone for monetary policy, we may see the USDOLLAR continue to threaten trendline resistance, but we will look to buy dips in the greenback as the upward trend carried over from the previous year continues to pan out. Indeed, we’re still looking for a run at 10,200 as the relative strength index tilts back to the upside, and we may see a very shallow correction in the reserve currency amid the shift in the policy outlook.
Forex_USDOLLAR_Eyes_10200-_AUD_Remains_at_Risk_on_RBA_Policy_body_ScreenShot222.png, USDOLLAR Eyes 10,200- AUD Remains at Risk on RBA Policy
The greenback strengthen against three of the four components, led by a 0.91 percent drop in the Japanese Yen, while the Australian dollar shed 0.27 percent ahead of the Reserve Bank of Australia interest rate decision on tap for next week. According to Credit Suisse overnight index swaps, market participants are pricing a 22 percent change for a 25bp rate cut on February 4, but interest rate expectations may take a further spill should central bank Governor Glenn Stevens show a greater willingness to expand monetary policy further. As the recourse boom in the $1T economy comes to an end, we should see the RBA continue to strike a dovish tone for the region, and we will maintain our bearish forecast for the AUDUSD as the pair fails to preserve the upward trend dating back to October. As the aussie-dollar remains capped by the 1.0600 figure, we are looking for a move back towards the 50.0 percent Fibonacci retracement from the 2011 high to low around 1.0230, and the high-yielding currency remains poised to weaken further throughout the year as the region continues to cope with an uneven recovery.
Story continues
--- Written by David Song, Currency Analyst
To contact David, e-mail [email protected]. Follow me on Twitter at @DavidJSong.
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As shown below, the results in the quarter materially changed the trend in two-year stacked comps for each of the banners, along with a significant acceleration for consolidated comps.
The increase in consolidated comps was the primary driver of an 8% increase in revenues to $6.3 billion. The company ended the quarter with 15,370 locations, up less than 1% year-over-year. This reflects a 7% increase in Dollar Tree units, offset by a 4% decline in Family Dollar units.
The top-line results at each banner flowed through to their respective income statements, with Dollar Tree gross margins and operating margins declining year-over-year while Family Dollar gross margins and operating margins expanded year-over-year. On a consolidated basis, gross margins contracted by 120 basis points in the quarter to 28.5%, reflective of a shift to lower-margin consumables, tariff costs and the impact of markdowns from the Easter headwinds at the Dollar Tree banner. The company saw slight operating leverage on SG&A from higher comps, with the net result being an 80 basis point contraction in operating margins to 5.8%, with operating income declining 5% to $366 million. This is not adjusted for $73 million of pandemic-related costs, such as PPE supplies.
In the first quarter, the company opened 85 stores (net of closures) and completed 220 Family Dollar renovations to the H2 format. Importantly, comps at renovated Family Dollar stores continue to outpace the chain average by more than 10%. On the call, management indicated that they plan on reducing both the number of new store openings (from 550 to 500) and the number of H2 renovations (from 1,250 to 750) in 2020.
Personally, given the fact that Family Dollar is seeing material benefits to its business from the pandemic with new or lapsed customers coming into its stores, I think the company should try to get more aggressive with its renovation plans, not less. On the other hand, you could argue that renovations cause short-term disruptions and limit their ability to fully capitalize on the business momentum they are currently experiencing.
As a result of fewer new stores and remodels, management now expects 2020 capital expenditures to total $1.0 billion compared to previous guidance of $1.2 billion. In addition, the company has temporarily suspended share repurchases. At quarter's end, the company had $1.8 billion in cash on its balance sheet compared to $4.3 billion in total debt.
Conclusion
In recent years, Dollar Tree has been a tale of two cities. While its namesake banner has generally delivered impressive financial results, Family Dollar has been a persistent underperformer. This quarter, those results flipped, and given what we've seen in the weeks since quarter's end, there's a decent possibility that we will see something similar in the coming months. As the CEO noted, the second quarter is off to a very good start at Family Dollar.
Here's the important question: how useful is that information is in terms of making future predictions about the business? Will recent success at Family Dollar translate into long-term success for the banner? The optimistic take is that new or lapsed customers, especially those visiting the renovated stores, could become recurring business for the banner. The pessimistic take is that they have experienced short-term success out of necessity as people went to any store that was open to try and find essentials like toilet paper and hand sanitizer that were largely out of stock throughout the retail landscape. From that view, many of these customers could abandon the retailer when life returns to normal. As Philbin noted on the conference call, early on [during the pandemic], folks needed us. Will people still shop as much at Family Dollar when it's no longer a necessity?
Personally, I do not place too much weight on the recent results. I will need to see incremental data points that indicate that Family Dollar has truly won sustained business from these new customers. While I still believe that the Dollar Tree banner is a well-positioned retailer with attractive unit returns, I'm not yet willing to say the same thing for Family Dollar. For that reason, along with the recent run-up in the stock price, I plan on staying on the sidelines for now.
Disclosure: None
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