Market Update
Japan Indexes Struggle Ahead of Inflation and Business Activities Surveys On Friday, Toyota Chairman Reelected
Akira Ito
20 Jun, 2024
Tokyo
Stocks opened lower in Tokyo and traded down for most of the session amid interest rate uncertainty, persistent weakness in the yen, and ahead of the release of economic data.
Investors are looking forward to the release of consumer inflation data in May and business activity updates in the manufacturing and services sectors on Friday.
The Nikkei 225 and the Topix index traded down in the session, but the Nikkei managed to climb above the flatline in the final thirty minutes of the session.
The yen weakened to 158.24 against the U.S. dollar in Tokyo amid interest rate uncertainty and the Bank of Japan's lack of urgency in fixing the persistent and wide rate differential between the U.S. and Japanese government bonds.
Japan Stock Movers
The Nikkei 225 Stock Average closed up 0.2% to 38,631.0, and the Topix Index declined 0.1% to 2,725.05.
Tech sector stocks turned lower amid a lack of clues from New York trading. Financial markets in the U.S. were closed for a public holiday on Wednesday.
Advantest, Tokyo Electron, and Screen Holding dropped as much as 1%.
Banks were among the leading decliners due to rate uncertainty and the persistent weakness of the yen.
Mitsubishi UFJ Financial, Sumitomo Mitsui, and Mizuho Financial dropped between 1% and 2%.
Among other widely held stocks, Fujikura, Kawasaki Heavy Industries, and Nidec fell between 3% and 5%.
Toyota Motor decreased 0.7% to ¥3,084.0, and earlier this week only 71.93% of shareholders approved the company Chairman Akio Toyoda reelection, according to a tally released by the finance ministry.
Akio Toyoda's approval took a big hit after the certification scandal and fell from 84.57% in 2023 to 96% in 2022.
Earlier this month, Japan's transportation ministry suspended the shipment of six Japanese vehicles, including three made by Toyota.
Despite the ongoing regulatory challenges linked to the embarrassing certification scandal, the company is enjoying record global sales and holding onto its number one positive for the fourth year in a row, surpassing Volkswagen AG.
In its latest fiscal year, Tokyo posted five trillion yen, or $31.7 billion, in operating profit, making it the first Japanese company to achieve the record.
In early 2023, Akio Toyoda stepped down from its chief executive position after 14 years and assumed the role of chairman, leading the company's transition to hybrid cars when the industry was shifting to electric vehicles.
PBoC Holds Loan Prime Rates Steady, China-controlled Funds Step Up Buying
Li Chen
20 Jun, 2024
Hong Kong
China stocks lacked momentum in Thursday's trading, and the central bank held its loan prime rates steady as widely expected but failed to announce new stimulus measures.
The Hang Seng and the CSI 300 indexes traded down 0.5% after the Hang Seng index gained 2.9% in the previous session, the best one-day gain in three months.
Investors welcomed the People's Bank of China's decision to hold its rates steady, but they were disappointed that the bank failed to provide additional measures to facilitate property transactions.
On Wednesday, China's top securities regulator announced broad outlines of financial market reforms for tech start ups to encourage more new company listings and support financing activities for emerging companies.
PBoC Holds Rates Steady
The People's Bank of China held its lending rates unchanged as the second-largest economy struggles to meet its ambitious annual economic growth target of 5%.
The People's Bank of China held its one-year loan prime rate at 3.45% and its five-year loan prime rate, the reference rate for mortgage lending, at 3.95%.
The central bank last lowered the 5-year LPR rate by 25 basis points in February.
Both lending rates are at record lows as the central bank steers the economy through the protracted property market malaise, weakening labor market, and rising capital flight.
Earlier in the week, the central bank held its medium-term lending rate at 2.5% while draining 55 billion yuan from the banking system to retain an appropriate level of liquidity.
China Stock Movers
The CSI 300 index decreased 0.6% to 3,507.78, and the Hang Seng index dropped 0.6% to 18,312.82.
State-owned companies were in focus in active trading for the second day in a row after China-controlled funds stepped up buying on Wednesday.
CNOOC advanced 3.5% to HK$23.50, China Petroleum Chemical gained 1.9% to HK$4.94, and PetroChina added 2.4% to HK$7.81.
Consumer-focused stocks headed lower on the persistent worries of weak consumer sentiment.
Haidilao International decreased 6.5% to HK$15.26, Budweiser Brewing declined 3.3% to HK$8.82, Li Ning fell 2.5% to HK$17.86, and Shenzhou International dropped 4.% to HK$80.10.
Real estate developers turned lower after the PBOC's rate decisions.
China Vanke decreased 4% to HK$4.92, China Resources Land declined 0.5% to HK$27.45, and Longfor Group turned down 4.4% to HK$11.48.
India Movers: Brigade Enterprises, MAS Financial, PNB Housing, Som Distilleries, Vodafone
Arun Goswami
20 Jun, 2024
Mumbai
In active trading in Mumbai, benchmark indexes traded down but hovered near record highs amid rising block trade transactions.
The Union cabinet unexpectedly hiked the minimum support price for several kharif crops.
The Sensex index decreased by 0.2% to 77,172.79, and the Nifty index fell by 0.2% to 23,485.60.
On the Mumbai stock exchange, 124 stocks traded at their 52-week highs, and 6 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.97%, and the Indian rupee edged lower at ₹83.45 against the U.S. dollar.
Tata Motors increased 0.8% to ₹984.85, and the third-largest vehicle maker said it plans to raise prices by 2% on commercial vehicles from July 1.
PNB Housing Finance declined 4.2% to ₹805.0 after the Asia Opportunities Fund and the private-equity company General Atlantic planned to sell 4.2% through a bock deal.
Brigade Enterprises increased 3.3% to ₹1,362.20, and the company said it arranged ₹150 core financing to develop the third tower at the World Trade Center located in the Infopark complex in Kochi.
MAS Financial Services jumped 2.7% to ₹321.25, and the company is in the process of raising ₹400 crore from institutional investors.
Som Distilleries and Breweries declined 4.3% to ₹111.12, and the Madhya Pradesh Excise Department canceled the company's license for a violation of child labor laws.
Vodafone Group plc edged up 1.5% to 71.64 pence after the UK-base wireless telecom carrier agreed to sell its stake in India-based Indus Tower.
Vodafone sold 18% stake in the company and lowered its stake to 3.1%, after raising ₹15,300 crore or Є1.7 billion, according to a statement released by the company.
Europe Movers: French Banks, Games Workshop, Spectris, Vodafone
Inga Muller
19 Jun, 2024
Frankfurt
French political turmoil dominated market sentiment in the eurozone amid elevated political uncertainty ahead of the parliamentary election in two weeks.
The DAX index decreased by 0.2% to 18,093.15; the CAC-40 index fell by 0.5% to 7,587.53; and the FTSE 100 index declined by 0.01% to 8,182.76.
The yield on 10-year German bonds edged lower to 2.40%. French bonds inched lower to 3.13%; the UK gilts edged lower to 4.08%; and Italian bonds increased to 3.91%.
Vodafone PLC increased 1.6% to 71.80 pence on a report that the wireless telecom is likely to sell its 9.9% stake in the India-based Indus Towers and raise as much as $1.1 billion to repay debt.
Indus Towers in Mumbai traded down 3.1% to ₹334.0 on possible stake sales as early as this week.
Games Workshop Group jumped 8.8% to 10,236.39 pence after video game makers estimated higher revenue and earnings in fiscal 2024.
Annual revenue in the fiscal year is expected to be at least £490 million from £445 million, and pre-tax profit is expected to increase to £220 million from £171 million a year ago.
Spectris Plc declined 6.5% to 2,998.0 pence after the precision instrumentation and controls group issued a profit warning.
BNP Paribas decreased 0.3% to €59.28, Societe Generale fell 0.3% to €22.37, and Credit Agricole declined 0.3% to €13.01.
French Risk Premium Stays Elevated, UK Inflation Slows to 2%
Bridgette Randall
19 Jun, 2024
Frankfurt
European markets lacked direction in Wednesday's trading, and investors stayed focused on French political developments in the European Union.
Benchmark indexes in Paris, London, and Frankfurt meandered, and the risk premium on French bonds held steady but elevated ahead of the snap election at the end of the month.
Investor sentiment has been on edge after the rise of far-right parties in the European Union, and in the upcoming snap election in France, the National Rally Party is likely to win a larger share of the lower house of the parliament.
National Party leader Jordan Bardella said he will not seek a nomination for prime minister if the party falls short of an outright majority.
The political turmoil in France comes at a very critical juncture, with the nation's debt hovering above 110% of gross domestic product and the annual government's deficit above 5%, prompting credit rating agencies to warn of a possible debt rating downgrade after the election.
The spread between the French and German bond yields has shot up above 70 basis points from 49 basis points just a month ago.
In other economic news in the region, the current account surplus in the Euro widened sharply to €34.4 billion from €5.5 billion a year ago, the European Central Bank reported Wednesday.
The rise in surplus was largely driven by the sharp jump in international goods trade surplus to €33.1 billion from €6.4 billion, and the service surplus expanded to €11.7 billion from €10.6 billion.
Meanwhile, the primary income surplus narrowed to €0.5 billion from €0.7 billion. and the secondary income deficit narrowed to €10.9 billion from €12.6 billion.
The UK's consumer price inflation slowed to the 2% target rate set by the Bank of England for the first time in three years.
Consumer price inflation slowed to 2.0% in May from 2.3% in April, meeting the widely held expectation of a slowdown, data from the Office for National Statistics showed Wednesday.
Despite the slowdown in inflation, the Bank of England is not likely to lower its policy rate by 5.25% after its policy meeting on Thursday, the highest since early 2008.
Europe Indexes and Yields
The DAX index decreased by 0.2% to 18,093.15; the CAC-40 index fell by 0.5% to 7,587.53; and the FTSE 100 index declined by 0.01% to 8,182.76.
The yield on 10-year German bonds edged lower to 2.40%. French bonds inched lower to 3.13%; the UK gilts edged lower to 4.08%; and Italian bonds increased to 3.91%.
The euro edged lower to $1.074; the British pound inched higher to $1.273; and the U.S. dollar weakened to 88.47 Swiss cents.
Brent crude decreased $0.19 to $85.13 a barrel, and the Dutch TTF natural gas rose by €0.19 to €34.48 per MWh.
Europe Stock Movers
Vodafone PLC increased 1.6% to 71.80 pence on a report that the wireless telecom is likely to sell its 9.9% stake in the India-based Indus Towers and raise as much as $1.1 billion to repay debt.
Indus Towers in Mumbai traded down 3.1% to ₹334.0 on possible stake sales as early as this week.
Games Workshop Group jumped 8.8% to 10,236.39 pence after video game makers estimated higher revenue and earnings in fiscal 2024.
Annual revenue in the fiscal year is expected to be at least £490 million from £445 million, and pre-tax profit is expected to increase to £220 million from £171 million a year ago.
Spectris Plc declined 6.5% to 2,998.0 pence after the precision instrumentation and controls group issued a profit warning.
BNP Paribas decreased 0.3% to €59.28, Societe Generale fell 0.3% to €22.37, and Credit Agricole declined 0.3% to €13.01.
Japan's Exports Growth Accelerated In May Amid Yen Weakness and Robust External Demand
Akira Ito
19 Jun, 2024
Tokyo
Market indexes in Tokyo jumped higher for the second day in a row after exports advanced more than expected amid a weak yen and robust external demand.
Japan's exports rose 13.5% to 8.3 trillion yen, or $52.3 billion, in May, the Ministry of Finance reported Wednesday.
Inbound shipments, or imports, rose for the second month in a row by 9.5% to 9.45 trillion yen.
Imports rose at the fastest pace in 16 months and reached a five-month high, indicating rising demand for energy and raw materials in Japan.
Exports to the U.S. advanced by 23.9%, to China by 17.8%, and to Vietnam by 24.4%, but to India they decreased by 0.5%, to Indonesia by 7.4%, and to Germany by 8.7%.
Exports rose for the sixth month in a row and rose at the fastest pace since November 2022.
Higher exports drove the trade deficit to 1.221 trillion yen from 1.382 trillion yen in the same month a year ago.
But, the trade deficit expanded from the previous month's 465.6 billion yen, after exports growth accelerated from April.
Japan Stock Movers
The Nikkei 225 Stock Average added 0.02% to 38,491.0, and the Topix index advanced 0.3% to 2,724.33.
Tech stocks led the market gainers following another surge in the sector in the overnight trading in New York, and Nvidia closed at a new record high, becoming the most valued company in the world.
Tokyo Electron and Advantest surged more than 4%, but Screen Holdings declined 3% in Wednesday's trading.
Banks traded mixed amid persistent weakness in the yen, and Sumitomo Mitsui Financial and Mizuho Financial advanced 0.4% and Mitsubishi UFJ advanced 1%.
Tempus AI declined 16.8% to $30.33 and fell below its $37 public offering price in New York. The company is backed by Softbank.
The latest export data showed a strong gain in vehicle exports in May, lifting automakers.
Toyota Motor advanced 1.6% to ¥3,107.0, Honda Motor gained 0.7% to ¥1,681.0, Nissan Motor jumped 2.5% to ¥543.20, and Mitsubishi Motors jumped 9% to ¥455.20.
Shiseido declined 4.7% to ¥4,681.0, Trend Micro fell 4.6% to ¥6,359.0, and Isetan Mitsukoshi dropped 5.5% to ¥2,888.50.
China Tech Market Reform Plans Lifts the Hang Seng Index 2%
Li Chen
19 Jun, 2024
Hong Kong
Market indexes in Hong Kong soared more than 2% after the top Chinese securities regulator announced plans to reform to attract more investment in the tech sector at an industry gathering.
The Hang Seng index advanced 2% and the CSI index gained 0.5% in the hopes that the securities regulator Wu Qing would follow up with concrete measures after the announcement at the Lujiazui financial forum.
Qing comments suggested that the government plans to strengthen investor rights, improve listing quality, and facilitate mergers for tech companies on the tech board of the Shanghai Stock Exchange.
Qing's upbeat comments were well received by investors on the mainland and in Hong Kong, raising hopes that the move could attract more foreign investments in the high-tech sector.
Moreover, market sentiment was bolstered after benchmark indexes in New York advanced to new record highs after tech companies led the surge for the third day in a row.
Nvidia, the company at the center of the latest boom in artificial intelligence, advanced to record heights and became the most valued company in the world.
China Stock Movers
The CSI 300 index declined 0.5% to 3,529.70, and the Hang Seng index advanced 2.1% to 18,290.31.
Lenovo Group advanced 7% to HK$11.86 in the hope that the company is likely to be one of the key beneficiaries of the recent advances in artificial intelligence.
Geely Automobile Holding gained 3.9% to HK$9.23 after a research note from HSBC noted that the company's May vehicle sales were ahead of market expectations because of a strong product cycle.
Longfor Group Holdings rose 3% to HK$11.90, and the residential property developer said during its annual meeting on Tuesday that the company is steadily lowering its overall debt because of positive net cash flows.
India Movers: Ami Organics, Bharat Forge, Birla Cable, Indus Towers, Kalpataru Projects, Snowman Logistics
Arun Goswami
19 Jun, 2024
Mumbai
Market indexes in Mumbai inched higher to new record highs amid optimism about economic and corporate earnings growth ahead of the release of the national budget.
The Sensex index increased by 0.2% to 77,420.34, and the Nifty index rose by 0.01% to 23,560.55.
On the Mumbai stock exchange, 176 stocks traded at their 52-week highs, and 6 stocks traded at their 52-week lows.
Bharat Forge increased 1.7% to ₹1,724.65, and the company said its U.S. subsidiary plants will invest $40 million to fund its capacity expansion.
Mrs. Bectors Food Specialties advanced 0.1% to ₹1,433.80, and the company's board plans to meet on June 24 and review fund-raising proposals.
Birla Cable decreased 1.6% to ₹245.89, and the European Union is looking to impose anti-dumping duties of 8.5% on optical fiber cables in the region.
Snowman Logistics decreased 1.2% to ₹74.90, and the promoter Gateway Distriparks acquired an additional 300,000 shares of a 0.18% stake in the company, increasing its stake to 45.98% in the logistics company.
Kalpataru Projects International rose 0.6% to ₹1,170.95, and the company's board declared a final dividend of ₹8 per share to shareholders on record on June 28.
Prestige Estates declined 3.6% to ₹1,868.90, and the company's board is scheduled to meet on June 21 to discuss fund-raising alternatives.
Ami Organics surged 4.1% to ₹1,364.90, and the company's board is scheduled to meet on June 21 to finalize the ₹500 crore offering price to institutional investors.
Indus Towers dropped 5.8% to ₹324.35 after Vodafone Idea plans to sell a 10% stake in the company for as much as $1.1 billion, or nearly ₹9,000 crore, as early as next week through block trading.
Retail Sales Edged Slightly Higher In May
Brian Turner
18 Jun, 2024
Washington, D.C.
Retail sales in May rose by 0.1% from the previous month, following a downwardly revised fall of 0.2% in April, the U.S. Census Bureau reported Tuesday.
The weak reading on retail sales offers another sign of cooling consumer spending amid elevated prices and a high cost of living.
Sales at gasoline stations declined 2.2%, food services and drinking places fell 0.4%, and food and beverage stores fell 0.2%.
Excluding gasoline, sales rose 0.3%.
Sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used in the calculation of gross domestic product, rose 0.4% following a drop of 0.5% in the previous month.
On an annual basis, retail sales rose 2.3% in May, following a downwardly revised 2.7% increase in April.
Optimism Rules U.S. and Global Stock Markets
Alexander Garcia
18 Jun, 2024
Miami
Stocks struggled to get their footing ahead of a public holiday on Wednesday, and investors reviewed the weaker-than-expected update on retail sales.
The S&P 500 index and the Nasdaq Composite lacked direction in thin trading as investors assessed the health of the consumer.
Both widely followed indexes closed at new record highs on Monday; they inched higher in Tuesday's trading after struggling at the open but failed to make a significant advance in Tuesday's trading.
Semiconductor stocks led the tech sector to advance and extend gains from the previous week and the previous session.
Nvidia, Qualcomm, and Micron Technology jumped between 2% and 5%, but Broadcom declined 0.2% after surging more than 20% in the previous two sessions following the announcement of a 1-for-1 stock split.
Retail Sales Edged Slightly Higher In May
Retail sales in May rose by 0.1% from the previous month, following a downwardly revised fall of 0.2% in April, the U.S. Census Bureau reported Tuesday.
The weak reading on retail sales offers another sign of cooling consumer spending amid elevated prices and a high cost of living.
Sales at gasoline stations declined 2.2%, food services and drinking places fell 0.4%, and food and beverage stores fell 0.2%.
Excluding gasoline, sales rose 0.3%.
Sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used in the calculation of gross domestic product, rose 0.4% following a drop of 0.5% in the previous month.
On an annual basis, retail sales rose 2.3% in May, following a downwardly revised 2.7% increase in April.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,483.33, and the Nasdaq Composite fell 0.01% to 17,841.51.
The yield on 2-year Treasury notes edged lower to 4.73%, 10-year Treasury notes decreased to 4.25%, and 30-year Treasury bonds edged higher to 4.40%.
WTI crude oil increased $0.35 to $80.55 a barrel, and natural gas prices fell 4 cents to $2.83 a thermal unit.
Gold decreased by $1.84 to $2,318.83 an ounce, and silver fell 11 cents to $29.27.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.26.
U.S. Stock Movers
Lennar decreased 3.3% to $151.40 despite the home builder reporting better-than-expected results in the second fiscal quarter.
Chegg soared 17% to $3.05 after the online textbook and education services provider announced a restructuring, including job cuts.
The company plans to reduce its global headcount by 23% and reiterates its commitment to an operating earnings margin of 25%.
La-Z-Boy jumped 18.8% to $40.47 after the furniture maker reported better-than-expected fourth-quarter results.
European Markets Rebounded In Choppy Trading, Inflation Edged Higher
European markets rebounded for the second day in a row, and the yield on French bonds stabilized, but the spread with the German bond remained elevated.
French President Emmanuel Macron's decision to dissolve the lower house of parliament sent shock waves through political circles, not just in France but across the European Union.
The rise of far-right parties is set to alter political agendas, domestic economic priorities, and pension reforms, which could negatively impact bond ratings and interest rate paths.
Last week, investors were on edge after the European Union election, which clearly showed voter anger and frustration over the rising cost of living and persistently elevated prices over the last three years.
The spread between the French and German bonds soared above 70 basis points and stayed at that level for the second week in a row, amid French election uncertainty and the possible rise of the far-right parties into the government.
The annual pace of inflation in the eurozone accelerated to 2.6% in May from 2.4% in April, Eurostat confirmed in its final update on Tuesday.
Inflation also edged higher to 2.7% in the wider European Union region, higher than 2.6% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.4% to 18,131.97; the CAC-40 index rose by 0.8% to 7,628.80; and the FTSE 100 index advanced by 0.6% to 8,191.29.
The yield on 10-year German bonds edged higher to 2.42%. French bonds inched higher to 3.15%; the UK gilts edged higher to 4.10%; and Italian bonds decreased to 3.90%.
The euro edged lower to $1.071; the British pound inched higher to $1.268; and the U.S. dollar weakened to 88.79 Swiss cents.
Brent crude decreased $0.50 to $84.75 a barrel, and the Dutch TTF natural gas rose by €0.40 to €34.65 per MWh.
Europe Stock Movers
Ashtead Group declined 5% to 5,234.0 pence after the equipment rental company estimated slower revenue growth in the fiscal year 2025.
Whitbread Group advanced 2.5% to 2,974.0 pence after the UK-based hotel group reiterated its annual outlook despite reporting weak first quarter results.
Frasers Group increased 0.3% to 858.0 pence after the retail chain group launched a new stock buyback plan worth as much as £80 million.
Carrefour SA declined 8.3% to €13.32 on a report that the French finance ministry is looking to impose a "record fine" on the hypermarket chain operator.
Schneider Electric rose 1.1% to €225.65, and the French electric equipment and automation system maker was upgraded by Jeffries to "buy" from "hold."
Novonesis increased 6.8% to DKK 428.80 after the Danish biotech company lifted its full-year outlook, citing rising demand for its biosolutions.
Tech Stocks Drive a Rebound In Japan Indexes, Yen Faces Persistent Downward Pressure
Market indexes in Tokyo rebounded and erased most of the losses in the previous session following a rebound in tech stocks in overnight trading in New York.
The Nikkei 225 and the Topix indexes jumped more than 0.4% in Tuesday's trading after tech stocks led the gainers in Tokyo.
Mega-cap tech stocks in New York traded higher, lifting the S&P 500 index and the Nasdaq Composite to new highs despite Treasury yields rebounding in Monday's trading.
The yen edged stabilized at 157.56 against the U.S. dollar after weakening in Friday's trading after the Bank of Japan held its interest rate steady and showed little urgency in tapering government bond purchases.
Governor of the Bank of Japan, Kauzo Ueda, told lawmakers today that the central bank is prepared to raise rates after the next policy meeting in July if future economic data support the move.
Ueda also stressed that a weak yen could increase operating costs for businesses and dampen consumer purchases, but higher wages could also support consumer sentiment and revive retail sales.
The yen has been under pressure and trading near a three-decade low after the Bank of Japan has shown little interest in raising rates or lowering government bond purchases, and the wide and persistent yield gap between the U.S. and Japan has also negatively impacted the currency.
The yen is expected to depreciate further over the next six months, as the finance ministry and the Bank of Japan prefer a steady and slow depreciation of the currency and avoid expensive market interventions.
Japan Stock Movers
The Nikkei 225 stock average rose 0.7% to 38,388.05, and the Topix index advanced 0.4% to 2,710.20.
Takeda Pharmaceuticals declined 3% to ¥4,043.0 after a seizure drug failed in late-stage trials.
Rakuten Group jumped 4.5% to ¥824.0 after the company reached a settlement with IBM for a patent dispute.
TDK Corp. soared 6.9% to ¥9,428.0 after the electronic component and data-storage media maker said that the latest improvement in battery technology will enhance battery life for wearable devices.
Nintendo, Murata, Nexon, Mitsubishi Heavy Industries, Konami Group, and Murata advanced more than 3%.
Mercari Inc. declined 2.5% to ¥2,034.50, and Sony and Mitsubishi Electric declined around 0.3%.
China Stocks Drift Lower Amid Lackluster Trading and Rising Trade Frictions with the EU
Market sentiment was weak in Shanghai and Hong Kong trading amid rising trade tensions between China and the European Union.
The CSI 300 index and the Hang Seng index lacked direction in early afternoon trading after China retaliated with an anti-dumping investigation on pork imports from Europe.
The move comes after the European Union placed an additional tariff of up to 38% on electric vehicle imports from China following a seven-month investigation.
Investors were on the defensive a day after China's statistics bureau reported a flood of mixed economic data, indicating a revival in consumer spending overshadowed by the deepening malaise in the property sector.
Moreover, the People's Bank of China held its one-year medium-term lending rate at 2.5%, dashing hopes of some investors looking for a rate cut to revive property transactions.
China's property sector is battling on two fronts: buyers are holding back amid falling prices, and property developers are struggling amid heavy debt loads and overbuilding.
China's property prices are falling at a rapid pace in the second- and third-tier cities, but prices are still elevated in the top-tier cities like Beijing and Shanghai, raising affordability issues for first-time home buyers.
China Stock Movers
The CSI 300 index increased 0.3% to 3,545.64, and the Hang Seng index fell 0.2% to 17,903.06.
BYD decreased 0.1% to HK$233.20, and Warren Buffett-controlled Berkshire Hathaway lowered its stake in the electric vehicle maker to 6.9% from 7.0%. ahead of the European Union tariffs.
Li Auto declined 3.7% to HK$71.15, and Geely Automobile fell 0.1% to HK$8.86.
Zijin Mining Group declined 2.5% to HK$15.90 after the company announced its plan to sell convertible bond debt and stocks to raise $2.5 billion.
Wuhan Youji Holdings soared more than 78% to HK$9.85 after the maker of toluene derivative products used in oil refining and paints priced its initial public offering at HK$5.50 per share.
U.S. Movers: Chegg, La-Z-Boy, Lennar, Semiconductor Stocks
Scott Peters
18 Jun, 2024
New York City
Lennar decreased 3.3% to $151.40 despite the home builder reporting better-than-expected results in the second fiscal quarter.
Chegg soared 17% to $3.05 after the online textbook and education services provider announced a restructuring, including job cuts.
The company plans to reduce its global headcount by 23% and reiterates its commitment to an operating earnings margin of 25%.
La-Z-Boy jumped 18.8% to $40.47 after the furniture maker reported better-than-expected fourth-quarter results.
Semiconductor stocks advanced and extended gains from the previous week and the previous session.
Nvidia, Qualcomm, and Micron Technology jumped between 2% and 5%, but Broadcom declined 0.2% after surging more than 20% in the previous two sessions following the announcement of a 1-for-1 stock split.
U.S. Major Averages Retain Upward Bias, Weak Bounce In Retail Sales
Barry Adams
18 Jun, 2024
New York City
Stocks lacked direction in early trading, and investors reviewed the latest update on retail sales ahead of a public holiday on Wednesday.
The S&P 500 index and the Nasdaq Composite meandered in thin trading as investors assessed the health of the consumer.
Both widely followed indexes closed at new record highs on Monday; they inched higher in Tuesday's trading after struggling at the open.
Semiconductor stocks advanced and extended gains from the previous week and the previous session.
Nvidia, Qualcomm, and Micron Technology jumped between 2% and 5%, but Broadcom declined 0.2% after surging more than 20% in the previous two sessions following the announcement of a 1-for-1 stock split.
Retail Sales Edged Slightly Higher In May
Retail sales in May rose by 0.1% from the previous month, following a downwardly revised fall of 0.2% in April, the U.S. Census Bureau reported Tuesday.
The weak reading on retail sales offers another sign of cooling consumer spending amid elevated prices and a high cost of living.
Sales at gasoline stations declined 2.2%, food services and drinking places fell 0.4%, and food and beverage stores fell 0.2%.
Excluding gasoline, sales rose 0.3%.
Sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used in the calculation of gross domestic product, rose 0.4% following a drop of 0.5% in the previous month.
On an annual basis, retail sales rose 2.3% in May, following a downwardly revised 2.7% increase in April.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,483.33, and the Nasdaq Composite fell 0.01% to 17,841.51.
The yield on 2-year Treasury notes edged lower to 4.73%, 10-year Treasury notes decreased to 4.25%, and 30-year Treasury bonds edged higher to 4.40%.
WTI crude oil increased $0.35 to $80.55 a barrel, and natural gas prices fell 4 cents to $2.83 a thermal unit.
Gold decreased by $1.84 to $2,318.83 an ounce, and silver fell 11 cents to $29.27.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.26.
U.S. Stock Movers
Lennar decreased 3.3% to $151.40 despite the home builder reporting better-than-expected results in the second fiscal quarter.
Chegg soared 17% to $3.05 after the online textbook and education services provider announced a restructuring, including job cuts.
The company plans to reduce its global headcount by 23% and reiterates its commitment to an operating earnings margin of 25%.
La-Z-Boy jumped 18.8% to $40.47 after the furniture maker reported better-than-expected fourth-quarter results.
Europe Movers: Ashtead, Carrefour, Frasers Group, Novonesis, Schneider Electric, Whitbread
Inga Muller
18 Jun, 2024
Frankfurt
European markets attempted to rebound for the second day in a row after a week of sharp declines following the European Union election results that threw France and Belgium into political turmoil.
The DAX index increased by 0.5% to 18,151.29; the CAC-40 index rose by 0.6% to 7,619.24; and the FTSE 100 index advanced by 0.1% to 8,176.52.
The yield on 10-year German bonds edged higher to 2.42%. French bonds inched higher to 3.15%; the UK gilts edged higher to 4.10%; and Italian bonds decreased to 3.90%.
Ashtead Group declined 5% to 5,234.0 pence after the equipment rental company estimated slower revenue growth in the fiscal year 2025.
Whitbread Group advanced 2.5% to 2,974.0 pence after the UK-based hotel group reiterated its annual outlook despite reporting weak first quarter results.
Frasers Group increased 0.3% to 858.0 pence after the retail chain group launched a new stock buyback plan worth as much as £80 million.
Carrefour SA declined 8.3% to €13.32 on a report that the French finance ministry is looking to impose a "record fine" on the hypermarket chain operator.
Schneider Electric rose 1.1% to €225.65, and the French electric equipment and automation system maker was upgraded by Jeffries to "buy" from "hold."
Novonesis increased 6.8% to DKK 428.80 after the Danish biotech company lifted its full-year outlook, citing rising demand for its biosolutions.
European Markets Rebound In Choppy Trading, Inflation Edges Higher
Bridgette Randall
18 Jun, 2024
Frankfurt
European markets rebounded for the second day in a row, and the yield on French bonds stabilized, but the spread with the German bond remained elevated.
French President Emmanuel Macron's decision to dissolve the lower house of parliament sent shock waves through political circles, not just in France but across the European Union.
The rise of far-right parties is set to alter political agendas, domestic economic priorities, and pension reforms, which could negatively impact bond ratings and interest rate paths.
Last week, investors were on edge after the European Union election, which clearly showed voter anger and frustration over the rising cost of living and persistently elevated prices over the last three years.
The spread between the French and German bonds soared above 70 basis points and stayed at that level for the second week in a row, amid French election uncertainty and the possible rise of the far-right parties into the government.
The annual pace of inflation in the eurozone accelerated to 2.6% in May from 2.4% in April, Eurostat confirmed in its final update on Tuesday.
Inflation also edged higher to 2.7% in the wider European Union region, higher than 2.6% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.5% to 18,151.29; the CAC-40 index rose by 0.6% to 7,619.24; and the FTSE 100 index advanced by 0.1% to 8,176.52.
The yield on 10-year German bonds edged higher to 2.42%. French bonds inched higher to 3.15%; the UK gilts edged higher to 4.10%; and Italian bonds decreased to 3.90%.
The euro edged lower to $1.071; the British pound inched higher to $1.268; and the U.S. dollar weakened to 88.79 Swiss cents.
Brent crude decreased $0.17 to $84.07 a barrel, and the Dutch TTF natural gas rose by €0.25 to €34.50 per MWh.
Europe Stock Movers
Ashtead Group declined 5% to 5,234.0 pence after the equipment rental company estimated slower revenue growth in the fiscal year 2025.
Whitbread Group advanced 2.5% to 2,974.0 pence after the UK-based hotel group reiterated its annual outlook despite reporting weak first quarter results.
Frasers Group increased 0.3% to 858.0 pence after the retail chain group launched a new stock buyback plan worth as much as £80 million.
Carrefour SA declined 8.3% to €13.32 on a report that the French finance ministry is looking to impose a "record fine" on the hypermarket chain operator.
Schneider Electric rose 1.1% to €225.65, and the French electric equipment and automation system maker was upgraded by Jeffries to "buy" from "hold."
Novonesis increased 6.8% to DKK 428.80 after the Danish biotech company lifted its full-year outlook, citing rising demand for its biosolutions.