Update 26 September
The Federal Reserve held its September 2023 meeting on September 19-20, 2023. At the meeting, the Fed decided to keep the benchmark interest rate unchanged in a range of 5.25% to 5.50%. This was the first time the Fed had paused its rate-hiking campaign since March 2022. In its statement following the meeting, the Federal Reserve declared its dedication to employing all available means to return inflation to its 2 percent target. However, the Fed also acknowledged that the economy is facing “significant headwinds” from the war in Ukraine and other factors.
The Fed’s decision to pause its rate hikes was widely expected by economists. However, the Fed’s statement was more hawkish than some had expected, suggesting that the central bank is still prepared to raise rates further if necessary to bring inflation under control. The Fed’s next meeting is scheduled for November 1-2, 2023. Economists anticipate a further 25 basis points hike at that meeting. However, the Fed’s decision will depend on the latest data on inflation and the economy.
In the short term, the Fed’s decision to pause its rate hikes is likely to provide some relief to businesses and consumers. However, the Federal Reserve’s hawkish position implies that elevated interest rates are expected to persist for an extended period.
Fact Set Research Systems Inc. (NYSE: FDS)
FactSet, a leading provider of data analytics services, has reported a decline in fourth-quarter adjusted profit despite increased revenues.
Fourth-quarter revenues increased 7.3% year-over-year to $535.8 million.
The rise can be attributed mainly to increased sales of Analytics & Trading as well as Content & Technology solutions. However, adjusted earnings per share (EPS) dropped 6.4% to $2.93 as the company faced higher costs and expenses. On a per-share basis, earnings came in at $1.68, down 37.5% from the prior year. This was due to various factors, including a higher effective tax rate and a one-time charge related to the company’s acquisition of Alpha Vantage.
Despite the decline in profit, FactSet CEO Phil Snow said that the company is “pleased with our overall performance in fiscal 2023.” He added that the company is “well-positioned to continue to grow and innovate in the years to come.”
FactSet also reported that its client count increased by 5.1% or 383 during the year, while users grew by 5.6% or 9,990 from the prior year. This growth was driven by strong demand for FactSet’s data analytics services from both institutional and retail investors.
Discovery Ltd. (JSE: DSY)
The Discovery Group has reported a strong performance for the financial year ending 2023, with operating profit increasing by 24% to R11 661 million and headline earnings rising by 5% to R5 490 million. The company also reported a 12% increase in core new business annualized premium income (API), which sits at R22 788 million.
In a statement, Discovery Group CEO Adrian Gore said that the company’s performance was “underpinned by continued strong new business growth and the benefits of our shared-value model.” He further mentioned that the company is in a strong position to continue its growth and provide value to our shareholders.
Normalized operating profit growth was strong across each composite, with SA increasing by 22%, the UK increasing by 21%, and Vitality Group increasing by 74%. This was partly due to the benefit of the weaker rand during the year. SA is still the most important market for the group, with the SA businesses contributing R9.1 billion to a normalized operating profit of R11.7 billion.
Discovery Bank suffered a loss of R767 million, but the bank did well nonetheless, following an increase of nearly 60% in the number of accounts to more than 1.6 million. Retail deposits increased by 36% from R10.6 billion at the end of June 2022 to R14.3 billion at the end of the most recent financial year.
Sources: MoneyWeb; Benzinga; Barron’s; CNBC; The Wall Street Journal
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