DJ Auto & Transport Roundup: Market Talk

The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

2131 GMT - Airlines are falling in line with the Biden Administration's vaccine requirements, with JetBlue and Alaska Airlines telling employees that they will have to be vaccinated in accordance with an executive order. The airlines say they expect to be treated as federal contractors, rather than large employers, which means there won't be an option for regular testing in lieu of vaccination. Both airlines say the deadline could be as soon as Dec. 8. United Airlines has already strictly required vaccines for all employees, while other carriers have said they're still studying the federal policy. Delta Air Lines, which has said unvaccinated employees will have to pay higher health insurance premiums starting in November--says its vaccination rate climbed to 84%. (alison.sider@wsj.com; @alyrose)

1939 GMT - Deere & Co says it has reached a tentative agreement for a new six-year contract with production and maintenance workers represented by the United Auto Workers Union. Details of the deal, which covers about 10,000 workers at more than a dozen plants, were not disclosed. The contract faces a ratification vote by union members in the coming weeks. Brad Morris, vice president of labor relations, says the agreement "builds a strong foundation for our shared success in the future." The company and the union agreed late Thursday to extend the expiring contract to allow negotiations to continue. Deere shares up 2.4% at $343.06. (robert.tita@wsj.com; @bob_tita)

1829 GMT - JPMorgan's airline sector research has "a new, proprietary data source"--the travel stats for the bank's own employees, "which we believe can serve as a reasonable proxy for the Financial Services component of corporate demand (estimated at 30% of the US corporate wallet)." JPMorgan, "excited about our newfound access to JPM employee travel data," says "flown domestic segments by JPM employees are gyrating between 25% and 35% of 2019 levels, having sprung to life in early summer." It says "Intra-Europe is trailing, but has recently experienced a sharp increase" and the "New York-London market remains significantly depressed, though we're seeing some forward bookings." The bank mentions BTN figures indicating it was the 19th largest US air-travel spender in 2019. (josh.beckerman@wsj.com)

1527 GMT - Motorpoint investors are likely to focus on any ongoing effect on the car dealership's volumes of broader industry supply-chain disruption in a 1H trading update Oct. 7. Numis Securities expects the group to touch on similar trends to those aired in the company's annual general meeting trading update in July, of supply changes weighing on volume growth, compensated by gross-margin strength. "We expect the net of these to result in 1H21 PBT ahead of that reported in 1H20 or 1H21," Numis analyst Georgios Pilakoutas says. "This ought to leave FY22 forecasts well underpinned, though we expect a degree of caution given the tight supply conditions." (philip.waller@wsj.com)

1526 GMT - A Delaware judge denied a request by current and former Boeing directors, including CEO David Calhoun, to clarify her earlier ruling that indicated she agreed with shareholder-plaintiffs' claims the company's board members "publicly lied" about their oversight of the 737 MAX before two of the jets crashed. In a letter to attorneys in the case, Vice Chancellor Morgan Zurn of Delaware's Court of Chancery said Boeing's "motion for clarification," wasn't legitimate, adding: "It is a legally frivolous and opportunistic filing that feigns confusion over a hornbook standard of review." The defendants had argued the judge's ruling went further than it needed in establishing that plaintiffs had met certain legal thresholds to proceed with their case. Representatives of Boeing and the defendants declined to comment. (andrew.tangel@wsj.com; @AndrewTangel)

1343 GMT - US car lots have been practically bare for more than a year, driving up prices and wearing down shoppers--some of whom are finally giving up. A recent Kelley Blue Book survey of car shoppers found 48% of respondents are likely to postpone a vehicle purchase because of a global shortage of semiconductor chips that has hampered auto production this year. This is likely to be reflected in the US auto industry's 3Q sales, with analysts predicting the first quarterly drop in sales this year. (nora.naughton@wsj.com)

1216 GMT - DHL Express raises international delivery service rates by an average of 5.9%, effective Jan. 1, for US customers shipping to or from the 220 countries and territories in which it operates. The increase by the unit of Deutsche Post AG effectively matches FedEx's recently-announced average price hike, and adds pressure on retailers to pass rising shipping costs on to customers. UPS has not announced plans for a 2022 rate increase. (lydia.oneal@wsj.com)

1139 GMT - US giant retailer Target is the latest shipper to charter its own ship in the battle to keep its shelves stocked amid unprecedented supply chain disruptions. "As co-managers of the ship, we can avoid delays from additional stops and steer clear of particularly backed-up ports," Target said, without elaborating. Target follows Walmart, Costco and Home Depot in chartering its own tonnage ahead of the year-end, busy shopping season.(costas.paris@wsj.com)

0940 GMT - BMW's raised guidance for full-year auto EBIT margins came as a surprise given the continuing semiconductor shortage, but this more upbeat outlook will in all likelihood be an exception in the sector, Nord/LB says. "While more than five million cars can't be produced or delivered this year worldwide across all companies due to the supply bottlenecks, BMW should still manage relatively well here with only 90,000 to 100,000 vehicles," the bank says. Pointing to the recent guidance cut by auto-parts supplier Hella, Nord/LB expects other companies in the auto industry to issue downgraded outlooks as the sector continues to face chip troubles. Nord/LB raises its rating for BMW to buy from hold and increases the price target on the stock to EUR93 from EUR84. Shares in BMW trade 1.8% higher at EUR84.21. (kim.richters@wsj.com)

0853 GMT - Hutchison Port Holdings Trust is set to benefit from a rise in shipping activity, as a strong performance by its Yantian and Kwai Tsing ports should support earnings, DBS Research says. Throughput at the two facilities are stronger than expected, with year-to-date volumes at Yantian rising 9.0% on year and up 3.4% at Kwai Tsing. The bank raises its 2021 earnings forecast by 33% and for 2022 earnings by 10% on stronger-than-expected 1H results, expecting "a sustained period of recovery" ahead. DBS keeps a buy rating and revises up the target price to $0.33 from $0.32. Shares are 2.1% lower at $0.24. (yongchang.chin@wsj.com)

(END) Dow Jones Newswires

October 02, 2021 04:20 ET (08:20 GMT)

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