Market Update
U.S. Movers: AMD, Amazon, Pinterest, Starbucks, Super Micro Computer
Scott Peters
01 May, 2024
New York City
Starbucks Corp. dropped 13% to $77.0 after the coffee chain operator reported weaker-than-expected revenue and earnings in the first quarter.
The expensive coffee chain is battling an uneven and fragile economic recovery in China, its second-largest market, and elevated inflation in the U.S. is keeping customers away from discretionary purchases.
Global comparable store sales declined 4%, driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average ticket.
North America and U.S. comparable store sales declined 3%, driven by a 7% decline in comparable transactions, partially offset by a 4% increase in average ticket.
Consolidated revenue in the fiscal second quarter ending in arch declined 1.8% to $8.6 billion from $8.7 billion, net income dropped 15% to $772.4 million from $908.3 million, and diluted earnings per share declined to 68 cents from 79 cents a year ago.
The company increased cash dividends per share to 57 cents from 53 cents a year ago.
Pinterest soared 16.6% to $39.03 after the social media company reported better-than-expected revenue and earnings in the first quarter.
Revenue in the first quarter increased 23% to $740 million from $603 million, net loss shrank to $24.8 million from $208.6 million, and diluted loss per share eased to 4 cents from 31 cents a year ago.
The company projected second-quarter revenue between $835 million and $850 million, representing growth between 18% and 20% from a year ago.
Super Micro Computer dropped 14% to $738.50 after the company announced lower-than-expected third-quarter revenue of $3.85 billion and higher-than-expected adjusted earnings per share of $6.65.
Net sales in the fiscal third quarter ending in March increased to $3.85 billion from $1.28 billion, net income soared to $402.5 million from $85.5 million, and diluted earnings per share advanced to $6.56 from $1.53 a year ago.
The company estimated for the fiscal fourth quarter ending in June revenue between $5.1 billion and $5.5 billion and diluted earnings per share between $7.20 and $8.05, including $30 million in expenses related to stock-based compensation.
Amazon.com rose 1.6% to $177.85 after the online retailer and cloud services provider reported better-than-expected revenue and earnings in the first quarter after advertising revenue soared 24%.
Net sales in the first quarter increased 13% to $143.3 billion from $127.4 billion, net income soared to $10.3 billion from $3.2 billion, and diluted earnings per share advanced to 98 cents from 31 cents a year ago.
Sales in North America increased 12% from a year ago to $86.3 billion, and international sales rose 10%, or 11% in constant currency, to $31.9 billion.
The company said revenue in the current quarter is expected to range between $144 billion and $149 billion, representing an increase between 7% and 11%.
The Amazon Web Services business soared 17% to $25 billion, calming the worries that the division's growth had topped out following slower growth last year.
The company said it plans to invest $10 billion in Mississippi, the single largest capital investment in the state's history, and build two data center complexes and generate 1,000 jobs.
AMD fell 6.8% to $147.70 after the advanced chipmaker reiterated its full-year outlook, dampening expectations of sales and earnings revisions.
Revenue in the first quarter increased 2% to $5.47 billion from $5.35 billion, net income swung to a profit of $123 million from a loss of $139 million, and diluted earnings per share were 7 cents compared to a loss of 9 cents a year ago.
For the second quarter, AMD projected revenue of $5.7 billion with a band of $300 million, representing growth of 6% from a year ago at the midpoint of the revenue range.
Europe Movers: Aston Martin, Domino's Pizza, GSK Group, Next PLC
Inga Muller
01 May, 2024
Frankfurt
Aston Martin Lagonda Global declined 4.6% to 141.43 pence after the luxury automaker reported a wider-than-expected loss in the first quarter.
Revenue in the first quarter declined by 26% to £945 million from £1.3 billion; pre-tax losses expanded to £138.8 million from £74.2 million; and net debt increased by 20% to £1.04 billion from £868.1 million a year ago.
The company said vehicle sales declined in the quarter after it introduced new products, ended production of several core products, and ramped up production of the new Vantage, upgraded DBX 707, and V12 sports car.
Vehicle sales in the first quarter dropped 26% to 945 from 1,269 units in the corresponding period a year ago.
Next plc increased 0.1% to 9,020.49 pence after the apparel retailer reiterated its full-year outlook.
Revenue in the first quarter increased 5.7% from a year ago, driven by an 8.8% rise in online sales and flat in-store sales.
The retailer projected a full-year 2024 consolidated sales increase of 6% to £6.2 billion, a pre-tax profit rise of 4.6% to £960 million, and an after-tax earnings per share gain of 4.8% to 606.3 pence.
GSK plc increased 2.2% to 1,706.75 pence after the pharmaceutical company reported a better-than-expected 27% increase in its core operating profit in the first quarter.
Revenue in the first quarter increased 10% to 7.4 billion, core operating profit soared 27% to 2.4 billion, and earnings per share declined 19% to 25.7 pence.
The company announced a 15-pence per share cash dividend.
The pharmaceutical company's full-year sales are likely towards the upper end of its previously announced sales growth range of between 5% and 7%, with core operating profit rising between 9% and 11% and core earnings per share rising between 8% and 10%.
Domino's Pizza Group PLC decreased 0.7% to 323.40 pence after the company reported weaker-than-expected quarterly results.
Comparable sales in the first quarter declined by 0.5%, and total orders fell by 0.8% from the previous year, but on a two-year basis, comparable sales rose by 8.4%.
Total system sales in the first quarter declined 0.4% to £385.1 million from £386.6 million, and total orders on a comparable basis fell 0.8% to 17.7 million from 17.8 million a year ago.
Total orders fell 1.8% to 17.7 million from 18.0 million.
UK's FTSE 100 Index Trades Higher, European Markets Closed for May Day Holiday
Bridgette Randall
01 May, 2024
Frankfurt
The benchmark index in London edged slightly higher as financial markets in Continental Europe were closed for the May Day holiday.
The FTSE 100 index opened higher and bond yields held firm in thin trading as most traders were away in Zurich, Paris, Milan, and Frankfurt.
In April, benchmark indexes in London rose about 2.5%, but the DAX CAC-40 indexes dropped about 2% as investors adjusted rate-cut expectations and reacted to local corporate earnings.
In the absence of local and regional economic news, investors awaited the release of the U.S. Fed's monetary policy announcements later in the day after the close.
Fed policymakers are widely expected to hold the interest rate range between 5.25% and 5.50%, and investors are awaiting the Fed's direction on the level of interest rates.
Investors had bid up stocks in the first quarter in the hopes that policymakers were ready to begin rate cuts as early as June, followed by as many as three additional cuts later in the year.
However, those expectations have been lowered after several economic reports suggested that the U.S. economy and labor market conditions are more resilient than previously expected.
Moreover, several inflation indicators have stayed above the expectations set by economists, with service inflation staying above 3%, indicating that policymakers may await cooler inflation before lowering rates.
The lowered rate cut expectations had a direct and negative effect on investor sentiment, driving the U.S. benchmark indexes lower by 4% in April.
Europe Indexes and Yields
Financial markets in Frankfurt and Paris were close for the May Day holiday, and the FTSE 100 index in London inched higher by 0.1% to 8,150.17.
The yield on 10-year German bonds edged up to 2.58%; French bonds inched higher to 3.07%; the UK gilts edged higher to 4.38%; and Italian bonds inched lower to 3.87%.
The euro edged higher to $1.066; the British pound inched higher to $1.249; and the U.S. dollar edged higher to 92.06 Swiss cents.
Brent crude decreased $1.50 to $84.82 a barrel, and the Dutch TTF natural gas fell by €0.69 to €28.70 per MWh.
Europe Stock Movers
Aston Martin Lagonda Global declined 4.6% to 141.43 pence after the luxury automaker reported a wider-than-expected loss in the first quarter.
Revenue in the first quarter declined by 26% to £945 million from £1.3 billion; pre-tax losses expanded to £138.8 million from £74.2 million; and net debt increased by 20% to £1.04 billion from £868.1 million a year ago.
The company said vehicle sales declined in the quarter after it introduced new products, ended production of several core products, and ramped up production of the new Vantage, upgraded DBX 707, and V12 sports car.
Vehicle sales in the first quarter dropped 26% to 945 from 1,269 units in the corresponding period a year ago.
Next plc increased 0.1% to 9,020.49 pence after the apparel retailer reiterated its full-year outlook.
Revenue in the first quarter increased 5.7% from a year ago, driven by an 8.8% rise in online sales and flat in-store sales.
The retailer projected a full-year 2024 consolidated sales increase of 6% to £6.2 billion, a pre-tax profit rise of 4.6% to £960 million, and an after-tax earnings per share gain of 4.8% to 606.3 pence.
GSK plc increased 2.2% to 1,706.75 pence after the pharmaceutical company reported a better-than-expected 27% increase in its core operating profit in the first quarter.
Revenue in the first quarter increased 10% to 7.4 billion, core operating profit soared 27% to 2.4 billion, and earnings per share declined 19% to 25.7 pence.
The company announced a 15-pence per share cash dividend.
The pharmaceutical company's full-year sales are likely towards the upper end of its previously announced sales growth range of between 5% and 7%, with core operating profit rising between 9% and 11% and core earnings per share rising between 8% and 10%.
Domino's Pizza Group PLC decreased 0.7% to 323.40 pence after the company reported weaker-than-expected quarterly results.
Comparable sales in the first quarter declined by 0.5%, and total orders fell by 0.8% from the previous year, but on a two-year basis, comparable sales rose by 8.4%.
Total system sales in the first quarter declined 0.4% to £385.1 million from £386.6 million, and total orders on a comparable basis fell 0.8% to 17.7 million from 17.8 million a year ago.
Total orders fell 1.8% to 17.7 million from 18.0 million.
Japan's Manufacturing Contraction Extends to Eleventh Month; Lasertec Reports Strong Results
Akira Ito
01 May, 2024
Tokyo
Stocks in Tokyo traded lower in thin trading and erased some of the gains in the previous two sessions as investors remained cautious amid the flood of earnings.
Market indexes fell in a broad selloff that saw technology and financial stocks leading the decliners following sharp declines in overnight trading in New York.
Market indexes fell nearly 1% on Wall Street after a measure of wages and benefits rose at the fastest pace in one year at 1.2%, supporting the case for the Federal Reserve to wait longer before lowering interest rates.
The expectations of fewer and delayed U.S. rate cuts soured market sentiment in New York, overhanging Tokyo trading.
Japan's manufacturing sector continued to contract for the eleventh month in a row, but at a slower pace in April, S&P Global reported in its final update.
The au Jibun Japan Manufacturing PMI eased to 49.6 in April from 49.9 in the preliminary estimate and a final 48.2 in March.
Manufacturing activities contracted at a slower pace in April as output and new orders shrank at a slower pace in the month.
However, business sentiment was unchanged from March, driven in part by improving demand, the report noted.
The Nikkei 225 Stock Average declined 0.2% to 38,356.20, and the Topix index dropped 0.3% to 2,733.96.
Tokyo Electron, Advantest, Screen Holdings, and SoftBank fell between 1.5% and 3.5%.
Toyota Motor, Honda Motor, and Nissan Motor declined between 0.4% and 1.1%.
Financial stocks were among the leading decliners, and Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui Financial Group decreased between 0.2% and 1.4%.
Rising travel demand lifted the revenue of three Japanese railway companies, driven by the ending of the travel restrictions imposed during COVID-19 and the return of international tourists.
East Japan Railway consolidated revenue in the year ending in March rose 13.5% to 2,730 billion yen, and West Japan Railway revenue rose 17.2% to 1,635 billion yen.
Central Japan Railway revenue surged 22.1% to 1,710 billion yen.
West Japan Railway increased 8% to ¥3,233.0; East Japan Railway added 3.3% to ¥2,987.50; and Central Japan Railway declined 0.1% to ¥3,614.0.
Lasertec Reports Strong Quarterly Results and Announces Executive Changes
Lasertec Corporation soared 15.8% to ¥40,080.0 after the company reported higher-than-expected sales and earnings in the nine-month period ending in March.
Consolidated nine-month revenue increased 97.9% to 157.2 billion yen from 79.4 billion yen, ordinary income soared 109.8% to 58.7 billion yen, and diluted earnings per share rose to 460.02 yen compared to 229.53 a year ago.
The company estimated sales in the fiscal year ending in June 2024 to increase by 27.6% to 195 billion yen, ordinary income to increase by 5.2% to 67 billion yen, and diluted earnings per share to be 543.32 yen.
The company reiterated its plans to pay a total cash dividend of 191 yen, higher than 180 yen a year ago.
The company also promoted its chief sales officer, Tetsuya Sendoda, as the new chief executive officer and the current CEO, Osamu Okabayashi, as the new chairman.
S&P 500 Index Extends April's Decline to 3% After Hot Wage Data
Alexander Garcia
30 Apr, 2024
Miami
Market indexes on Wall Street dropped following the fresh worry of an inflation rebound ahead of the Federal Reserve's monetary policy decision on Wednesday.
The Employment Cost Index rose 1.2% from a year ago in the first quarter, the Labor Department reported Tuesday.
The measure of wages and benefits rose at the fastest pace in a year and drove the short-term Treasury yield above 5%.
Persistent wage pressures are likely to support the Fed's case to keep elevated interest rates for longer, and policymakers may opt to wait for more data before deciding to lower rates.
Market indexes turned lower after struggling in early trading following the employment cost data, as investors feared that the Federal Reserve may not lower the rate till the end of the year.
Investors are widely anticipating that the Federal Reserve will hold steady interest rates after the two-day policy meeting on Wednesday.
Despite the eleven rate hikes between March 2022 and July 2023, inflation is still above the Fed's target range of 2%, driven by nearly 4% inflation in the service sector.
After rallying for six months in a row, major indexes are set to close down in April, as investors' hopes of as many as four rate cuts are not likely to materialize.
Investors have lowered rate-cut expectations to just one after inflation stayed elevated over the last four months.
In April, the S&P 500 index and the Nasdaq Composite were down 3.3%, bringing the year-to-date gains to 7%.
Corporate quarterly results also impacted trading on Wall Street.
McDonald's reported weaker-than-expected same-store sales growth, Coca-Cola lifted its full-year organic revenue outlook, Eli Lilly reported a surge in quarterly sales, and NXP Semiconductors announced better-than-expected adjusted quarterly earnings.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 1% to 5,066.0, and the Nasdaq Composite fell 1.2% to 15,792,70.
The yield on 2-year Treasury notes edged higher to 5.02%, 10-year Treasury notes inched lower to 4.66%, and 30-year Treasury bonds edged lower to 4.78%.
WTI crude oil decreased $1.03 to $81.68 a barrel, and natural gas prices decreased 2 cents to $2.01 a thermal unit.
Gold decreased by $37.95 to $2,295.47 an ounce, and silver fell 68 cents to $26.39.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.95.
U.S. Stock Movers
McDonald's decreased 0.8% to $271.36 after the fast food company reported mixed quarterly results and sales took a hit from the boycott in the Middle East.
Revenue in the first quarter increased 5% to $6.2 billion from $5.9 billion, net income rose 7% to $1.9 billion from $1.8 billion, and diluted earnings per share advanced to $2.66 from $2.45.
Global comparable same-store sales slowed sharply in the first quarter to 1.9% from 12.6%, and U.S. sales slowed to 2.5% from 12.6% in the corresponding period a year ago.
NXP Semiconductors gained 4.2% to $257.50 after the advanced chipmaker reported better-than-expected quarterly results.
Revenue in the first quarter increased by 0.2% to $3.13 billion, net income increased to $639 million from $615 million, and diluted earnings per share advanced to $2.47 from $2.35 a year ago.
Coca-Cola decreased 0.1% to $62.0 despite the beverage company reporting better-than-expected quarterly results and raising its annual outlook.
Consolidated net operating revenue in the first quarter increased 3% to $11.3 billion from $10.98 billion, net income rose 2% to $3.18 billion from $3.11 billion, and diluted earnings per share advanced to 74 cents from 72 cents a year ago.
Eli Lilly & Co. increased 6.9% to $788.0 after the drugmaker reported better-than-expected quarterly results and raised its full-year outlook.
Revenue in the first quarter soared 26% to $8.7 billion from $6.9 billion, net income advanced 67% to $2.2 billion from $1.3 billion, and diluted earnings per share rose 58% to $2.58 from $1.62 a year ago.
Sales growth in the quarter was driven by increases of 16% in volume and 10% due to higher realized prices.
The volume increase was primarily driven by growth from Mounjaro, Zepbound, Verzenio, and Jardiance, partially offset by declines in Trulicity.
The company continues to expand manufacturing capacity, with the most significant production increases in 2024 expected in the second half of the year.
New Products revenue grew by $1.79 billion to $2.39 billion in Q1 2024, led by its blockbuster diabetes drug Mounjaro and weight loss treatment Zepbound.
Eurozone Inflation Holds Steady In April and GDP Expands In the First Quarter
Benchmark indexes in Europe meandered after investors reviewed a fresh batch of economic data and corporate quarterly results.
Market indexes in Frankfurt and Paris declined, but they rose in London after the eurozone GDP rose faster than anticipated and inflation held steady.
The Euro Area GDP in the first quarter increased by 0.3% from the previous quarter and rose by 0.4% from a year ago, Eurostat reported in its preliminary report Tuesday.
The faster-than-expected economic expansion in the first quarter highlighted strengthening economic recovery after the region suffered a mild recession towards the end of 2023.
On an annual basis, the economy of Germany shrank by 0.2%, France expanded by 1.1%, Italy rose by 0.6%, and Spain soared by 2.4%.
Germany, the largest economy in the region, avoided a technical recession after GDP rose to 0.2% in the first quarter from the previous quarter, when it shrank to the revised 0.5%.
The annual rate of consumer inflation in the eurozone held steady at 2.4% in April, the statistical agency noted in a separate report on Tuesday.
The core rate of inflation, which excludes food, tobacco, and alcohol prices, rose 2.8%.
Energy prices decreased at a slower pace of 0.6% compared to 1.8%, non-energy industrial goods inflation slowed to 0.9% from 1.1%, and service inflation slowed to 3.7% from 4.0%.
Despite the multiple rate hikes of the last two years and interest rates at a multi-decade high, prices are still rising faster than the European Central Bank's target rate of 2%.
Europe Indexes and Yields
The DAX index decreased by 1.1% to 17,932.17; the CAC-40 index fell by 1% to 7,984.93; and the FTSE 100 index inched lower by 0.04% to 8,144.13.
In April, the DAX declined 1.9%, the CAC -40 fell 1.7%, but the FTSE 100 index rose 2.6%.
The yield on 10-year German bonds edged up to 2.54%; French bonds inched lower to 3.05%; the UK gilts edged lower to 4.31%; and Italian bonds inched lower to 3.85%.
The euro edged higher to $1.071; the British pound inched higher to $1.254; and the U.S. dollar edged higher to 91.14 Swiss cents.
Brent crude decreased $0.87 to $86.31 a barrel, and the Dutch TTF natural gas fell by €1.14 to €29.39 per MWh.
Europe Stock Movers
Mercedes-Benz Group declined 3.9% to €71.72 after the German luxury automaker reported a 30% fall in annual operating earnings in the first quarter.
Volkswagen declined 2.2% to €118.10 after the German automaker reported a 20% decline in operating profit in the first quarter.
Stellantis dropped 3.2% to €22.48 after the Franco-Italian-American automaker reported a 12% decline in revenue in the first quarter.
Vonovia increased 5.1% to €27.46 after the German real estate group reiterated its full-year outlook despite a decline in first-quarter profit.
Air France KLM fell 3.7% to €9.70 after the international carrier reported a wider operating loss in the first quarter.
Adidas revenue decreased 1.3% to €229.20 after the German athletic shoemaker unexpectedly lifted its annual profit outlook.
Revenue in the first quarter increased 4% to €5.5 billion from €5.3 billion, and operating profit soared to €336 million from €60 million a year ago.
Gross margin improved sharply by 6.4 percentage points to 51.2% from 44.8%, driven by tighter cost management and an increase in the sale of higher-margin products.
Net income from continuing operations swung to a profit of €171 million from a net loss of €24 million, and basic earnings per share rose to 96 cents from a loss of 18 cents in the year ago period, respectively.
The company estimated full-year revenue in 2024 to increase by a mid-to-high single-digit rate and operating profit in the year to be as high as €700 million.
Japan Indexes Play Catch Up After 3-day Weekend
Market indexes in Tokyo traded higher after investors returned from a three-day weekend as investors digested the latest economic updates.
Japan's government reported updates on factory output, retail sales, and jobless rates.
The flood of economic data highlighted short-term challenges but confirmed that Japan's economy is likely to rebound in the second quarter after struggling in the first quarter.
The Nikkei 225 Stock Average rose 0.8% to 38,218.36, and the Topix index advanced 1.6% to 2,730.42.
Industrial Production Rebounded In March
Seasonally adjusted industrial production increased 3.8% from the previous month, but the unadjusted index from a year ago dropped 6.7%, the ministry of economy, trade, and industry reported Tuesday.
Industrial production plunged 5.4% in the first quarter from the previous quarter as manufacturing struggled to recover from the earthquake near Tokyo at the beginning of the year.
Shipments increased 4.3% from the previous month and declined 7.1% from a year ago, and inventories rose 1.1% from the previous month but fell 0.9% from a year ago.
Toyota's suspension of production at its smaller unit, Daihatsu, also negatively impacted production during the period.
However, March's production rebounded after vehicle production rose 9.6% from the previous month, after Toyota restarted diesel engine production at its subsidiary following a certification scandal in February.
Electronic parts and accessories production increased 9.2%, and machinery production, including semiconductor equipment, rose 11.6% from the previous quarter.
The ministry anticipates factory output to increase on a monthly basis by 4.1% in April and by 4.4% in May.
Retail Sales Expanded, Jobless Rate Held Steady
Overall commercial sales increased 1.7% from a year ago to 53.3 trillion yen, driven by an increase in retail sales of 1.2% to 14.7 trillion yen, the ministry said in a separate report.
Japan's labor market remained tight in March as employers struggled to find skilled workers; the job-to-applicant ratio edged up to 1.28, the labor ministry said in a note released Tuesday.
The unemployment rate remained unchanged at 2.6%, the ministry of internal affairs reported Tuesday.
Yen's Recovery Prompts Market Intervention Speculation
The Japanese yen was in focus, and the embattled currency rebounded to 156.80 against the U.S. dollar after crossing the 160-mark on the presumed market intervention by Japanese authorities.
Japan Stock Movers
In stock trading, tech and industrial companies led gainers in heavy trading after the release of economic updates.
Tokyo Electron, Advantest, Screen Holdings, and SoftBank advanced between 1.5% and 3.5%.
Toyota Motor, Honda Motor, and Nissan Motor gained between 0.2% and 0.7% after the persistent weakness in the yen raised the prospect of higher earnings in domestic currency.
Hitachi jumped 8.2% to ¥14,620.0 after the diversified engineering company projected robust growth and a strong shareholder return in the current fiscal year.
Asian Markets Advance
Across Asia, market indexes advanced tracking gains in overnight trading in New York in tech stocks.
Market indexes in Mumbai, Seoul, Hong Kong, and Sydney advanced between 0.2% and 0.5%, but they declined 0.3% in Shanghai.
China Business Activities Show Moderate Expansion
Market indexes in Shanghai struggled, the Chinese yuan retained a downward bias, and the yield on the Chinese government bond hovered and approached a record high.
China's manufacturing and service activity growth moderated, according to a private and government survey released on Tuesday.
The government's survey includes a sample of state-owned companies.
The official manufacturing purchasing managers' index decreased to 50.4 in April from a one-year high of 50.8 in March, the National Bureau of Statistics reported Tuesday.
The official non-manufacturing PMI fell to a three-month low of 51.2 in April from 52.0 in March, the statistical bureau reported in a separate report Tuesday.
The private survey of the manufacturing industry, which tracks a larger segment of private companies active in exports and international trade, showed expansion.
The Caixin China General Manufacturing PMI increased to 51.4 in April from 51.1 in March, S&P Global reported Tuesday.
China Stock Movers
The CSI 300 index decreased 0.2% to 3,616.76, and the Hang Seng Index advanced 0.1% to 17,770.43.
Financial markets are closed on Wednesday in Hong Kong for Labor Day, and markets in Shanghai are closed for the rest of the week.
The Hang Seng index jumped the most among its global peers, as the index rebounded after state-controlled entities stepped up buying activities following a string of positive earnings.
Haier Smart Home jumped 7.2% to HK$29.05 after the home appliance maker reported a 20% surge in profit in the March quarter.
ICBC and Agriculture Bank Report Declining Earnings
Industrial and Commercial Bank of China, ICBC, decreased 0.4% to HK$4.22 after the largest Chinese bank reported March quarter net income declined 2.8% to 87.7 billion yuan, or $12.1 billion.
The net interest margin narrowed to 1.48% from 1.63% in the previous quarter ending in December 2023.
Agriculture Bank of China fell 1.5% to HK$3.53 after the bank reported its first profit decline in a year.
Net income fell 1.6% to 70.4 billion yuan, or just under $10 billion; the net interest margin shrank to 1.44% from 1.6%; and the non-performing loan ratio decreased to 1.32%.
State-controlled banks are likely to face smaller net interest margin after as the government is likely to demand banks to increase lending to large and state-owned developers.
Moreover, banks earnings are likely to face significant headwinds as banks book larger losses amid a protracted property market slump.
Asian Markets Extend a 2-Day Rally
Across Asia, market indexes advanced tracking gains in overnight trading in New York in tech stocks.
Market indexes in Seoul and Sydney advanced between 0.2% and 0.5%, but they declined 0.3% in Mumbai.
Investors Turn Cautious Ahead of Fed's Rate Decisions
Barry Adams
30 Apr, 2024
New York City
Stocks on Wall lacked direction in early trading as investors reviewed the latest batch of earnings and awaited the Fed's monetary policy announcement on Wednesday.
Mc Donald's reported weaker-than-expected same-store sales growth, Coca-Cola lifted its full-year organic revenue outlook, Eli Lilly reported a surge in quarterly sales, and NXP Semiconductors announced better-than-expected adjusted quarterly earnings.
Investors are widely anticipating that the Federal Reserve will hold steady interest rates after the two-day policy meeting on Wednesday.
Despite the eleven rate hikes between March 2022 and July 2023, inflation is still above the Fed's target range of 2%, driven by nearly 4% inflation in the service sector.
Major indexes are set to close the month with losses after rallying for six months in a row and lowering rate expectations.
At the beginning of 2024, investors were hoping for as many as six rate cuts, and those expectations have been sharply lowered to just one after inflation stayed elevated.
The S&P 500 index and the Nasdaq Composite are likely to close down April with a loss of 2% and trim the year-to-date gains to 8%.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,135.19, and the Nasdaq Composite surged 0.3% to 15,990,38.
The yield on 2-year Treasury notes edged higher to 5.02%, 10-year Treasury notes inched lower to 4.66%, and 30-year Treasury bonds edged lower to 4.78%.
WTI crude oil decreased $0.02 to $82.69 a barrel, and natural gas prices increased 1 cent to $2.04 a thermal unit.
Gold decreased by $27.02 to $2,306.78 an ounce, and silver fell 6 cents to $26.41.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.95.
U.S. Stock Movers
McDonald's decreased 0.8% to $271.36 after the fast food company reported mixed quarterly results and sales took a hit from the boycott in the Middle East.
Revenue in the first quarter increased 5% to $6.2 billion from $5.9 billion, net income rose 7% to $1.9 billion from $1.8 billion, and diluted earnings per share advanced to $2.66 from $2.45.
Global comparable same-store sales slowed sharply in the first quarter to 1.9% from 12.6%, and U.S. sales slowed to 2.5% from 12.6% in the corresponding period a year ago.
NXP Semiconductors gained 4.2% to $257.50 after the advanced chipmaker reported better-than-expected quarterly results.
Revenue in the first quarter increased by 0.2% to $3.13 billion, net income increased to $639 million from $615 million, and diluted earnings per share advanced to $2.47 from $2.35 a year ago.
Coca-Cola decreased 0.1% to $62.0 despite the beverage company reporting better-than-expected quarterly results and raising its annual outlook.
Consolidated net operating revenue in the first quarter increased 3% to $11.3 billion from $10.98 billion, net income rose 2% to $3.18 billion from $3.11 billion, and diluted earnings per share advanced to 74 cents from 72 cents a year ago.
Eli Lilly & Co. increased 6.9% to $788.0 after the drugmaker reported better-than-expected quarterly results and raised its full-year outlook.
Revenue in the first quarter soared 26% to $8.7 billion from $6.9 billion, net income advanced 67% to $2.2 billion from $1.3 billion, and diluted earnings per share rose 58% to $2.58 from $1.62 a year ago.
Sales growth in the quarter was driven by increases of 16% in volume and 10% due to higher realized prices.
The volume increase was primarily driven by growth from Mounjaro, Zepbound, Verzenio, and Jardiance, partially offset by declines in Trulicity.
The company continues to expand manufacturing capacity, with the most significant production increases in 2024 expected in the second half of the year.
New Products revenue grew by $1.79 billion to $2.39 billion in Q1 2024, led by its blockbuster diabetes drug Mounjaro and weight loss treatment Zepbound.
U.S. Movers: Chegg, Coca-Cola, Eli Lilly, McDonald's, NXP Semiconductors,
Scott Peters
30 Apr, 2024
New York City
McDonald's decreased 0.8% to $271.36 after the fast food company reported mixed quarterly results and sales took a hit from the boycott in the Middle East.
Revenue in the first quarter increased 5% to $6.2 billion from $5.9 billion, net income rose 7% to $1.9 billion from $1.8 billion, and diluted earnings per share advanced to $2.66 from $2.45.
Global comparable same-store sales slowed sharply in the first quarter to 1.9% from 12.6%, and U.S. sales slowed to 2.5% from 12.6% in the corresponding period a year ago.
NXP Semiconductors gained 4.2% to $257.50 after the advanced chipmaker reported better-than-expected quarterly results.
Revenue in the first quarter increased by 0.2% to $3.13 billion, net income increased to $639 million from $615 million, and diluted earnings per share advanced to $2.47 from $2.35 a year ago.
Coca-Cola decreased 0.1% to $62.0 despite the beverage company reporting better-than-expected quarterly results and raising its annual outlook.
Consolidated net operating revenue in the first quarter increased 3% to $11.3 billion from $10.98 billion, net income rose 2% to $3.18 billion from $3.11 billion, and diluted earnings per share advanced to 74 cents from 72 cents a year ago.
Eli Lilly & Co. increased 6.9% to $788.0 after the drugmaker reported better-than-expected quarterly results and raised its full-year outlook.
Revenue in the first quarter soared 26% to $8.7 billion from $6.9 billion, net income advanced 67% to $2.2 billion from $1.3 billion, and diluted earnings per share rose 58% to $2.58 from $1.62 a year ago.
Sales growth in the quarter was driven by increases of 16% in volume and 10% due to higher realized prices.
The volume increase was primarily driven by growth from Mounjaro, Zepbound, Verzenio, and Jardiance, partially offset by declines in Trulicity.
The company continues to expand manufacturing capacity, with the most significant production increases in 2024 expected in the second half of the year.
New Products revenue grew by $1.79 billion to $2.39 billion in Q1 2024, led by its blockbuster diabetes drug Mounjaro and weight loss treatment Zepbound.
Chegg declined 15.6% to $6.04 after the company reported weaker-than-expected quarterly results.
Revenue in the first quarter declined 7% to $174.4 million from $187.6 million, net income swung to a loss of $1.4 million from a profit of $2.2 million, and diluted earnings per share were a loss of 1 cent compared to a profit of 2 cents a year ago.
Europe Movers: Adidas, Air France, Deutz, Glencore, HSBC, Hargreaves, Mercedes-Benz, Stellantis
Inga Muller
30 Apr, 2024
Frankfurt
Market indexes in Europe lacked direction after inflation in the currency union stalled and GDP in the region rose at a faster-than-expected pace in the first quarter.
The DAX index decreased by 0.4% to 18,041.53; the CAC-40 index fell by 0.2% to 8,047.41; and the FTSE 100 index inched higher by 0.4% to 8,176.98.
The yield on 10-year German bonds edged up to 2.54%; French bonds inched lower to 3.05%; the UK gilts edged lower to 4.31%; and Italian bonds inched lower to 3.85%.
Mercedes-Benz Group declined 3.9% to €71.72 after the German luxury automaker reported a 30% fall in annual operating earnings in the first quarter.
Volkswagen declined 2.2% to €118.10 after the German automaker reported a 20% decline in operating profit in the first quarter.
Stellantis dropped 3.2% to €22.48 after the Franco-Italian-American automaker reported a 12% decline in revenue in the first quarter.
Vonovia increased 5.1% to €27.46 after the German real estate group reiterated its full-year outlook despite a decline in first-quarter profit.
Air France KLM fell 3.7% to €9.70 after the international carrier reported a wider operating loss in the first quarter.
Adidas revenue decreased 1.3% to €229.20 after the German athletic shoemaker unexpectedly lifted its annual profit outlook.
Revenue in the first quarter increased 4% to €5.5 billion from €5.3 billion, and operating profit soared to €336 million from €60 million a year ago.
Gross margin improved sharply by 6.4 percentage points to 51.2% from 44.8%, driven by tighter cost management and an increase in the sale of higher-margin products.
Net income from continuing operations swung to a profit of €171 million from a net loss of €24 million, and basic earnings per share rose to 96 cents from a loss of 18 cents in the year ago period, respectively.
The company estimated full-year revenue in 2024 to increase by a mid-to-high single-digit rate and operating profit in the year to be as high as €700 million.
Deutz AG decreased 3% to €5.63 after the engine maker said revenue in the first quarter declined 10% to €454.7 million from €507 million, operating income plunged 35.3% to €23.8 million from €36.8 million, and earnings per share fell to 13 cents from 24 cents a year ago.
HSBC gained 4.5% to 471.90 pence after the UK and China-based bank reported better-than-expected quarterly profit and announced its plan to expand its stock repurchase plan by £3 billion.
Pre-tax income in the quarter declined 1.6% to $12.7 billion, and the bank announced cash dividends of 10 cents per share.
Chief executive Noel Quinn unexpectedly announced his plans to step down after spending nearly five years in the leadership role.
Hargraves Lansdown rose 4.7% to 822.40 pence after the investment management company said assets under management rose by £7.5 billion to £149.7 billion in the first quarter.
Whitbred PLC rose 3.3% to 3,141.72 pence after the parent company of Premier Inn announced its plan to eliminate 1,500 jobs in the U.K.
Glencore PLC decreased by 0.3% to 471.90 pence after the mining company reported a decline in copper and coal output in the first quarter.
Eurozone Inflation Holds Steady In April and GDP Expands In the First Quarter
Bridgette Randall
30 Apr, 2024
Frankfurt
Benchmark indexes in Europe meandered after investors reviewed a fresh batch of economic data and corporate quarterly results.
Market indexes in Frankfurt and Paris declined, but they rose in London after the eurozone GDP rose faster than anticipated and inflation held steady.
The Euro Area GDP in the first quarter increased by 0.3% from the previous quarter and rose by 0.4% from a year ago, Eurostat reported in its preliminary report Tuesday.
The faster-than-expected economic expansion in the first quarter highlighted strengthening economic recovery after the region suffered a mild recession towards the end of 2023.
On an annual basis, the economy of Germany shrank by 0.2%, France expanded by 1.1%, Italy rose by 0.6%, and Spain soared by 2.4%.
Germany, the largest economy in the region, avoided a technical recession after GDP rose to 0.2% in the first quarter from the previous quarter, when it shrank to the revised 0.5%.
The annual rate of consumer inflation in the eurozone held steady at 2.4% in April, the statistical agency noted in a separate report on Tuesday.
The core rate of inflation, which excludes food, tobacco, and alcohol prices, rose 2.8%.
Energy prices decreased at a slower pace of 0.6% compared to 1.8%, non-energy industrial goods inflation slowed to 0.9% from 1.1%, and service inflation slowed to 3.7% from 4.0%.
Despite the multiple rate hikes of the last two years and interest rates at a multi-decade high, prices are still rising faster than the European Central Bank's target rate of 2%.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,041.53; the CAC-40 index fell by 0.2% to 8,047.41; and the FTSE 100 index inched higher by 0.4% to 8,176.98.
The yield on 10-year German bonds edged up to 2.54%; French bonds inched lower to 3.05%; the UK gilts edged lower to 4.31%; and Italian bonds inched lower to 3.85%.
The euro edged higher to $1.071; the British pound inched higher to $1.254; and the U.S. dollar edged higher to 91.14 Swiss cents.
Brent crude decreased $0.20 to $87.40 a barrel, and the Dutch TTF natural gas fell by €0.89 to €29.14 per MWh.
Europe Stock Movers
Mercedes-Benz Group declined 3.9% to €71.72 after the German luxury automaker reported a 30% fall in annual operating earnings in the first quarter.
Volkswagen declined 2.2% to €118.10 after the German automaker reported a 20% decline in operating profit in the first quarter.
Stellantis dropped 3.2% to €22.48 after the Franco-Italian-American automaker reported a 12% decline in revenue in the first quarter.
Vonovia increased 5.1% to €27.46 after the German real estate group reiterated its full-year outlook despite a decline in first-quarter profit.
Air France KLM fell 3.7% to €9.70 after the international carrier reported a wider operating loss in the first quarter.
Adidas revenue decreased 1.3% to €229.20 after the German athletic shoemaker unexpectedly lifted its annual profit outlook.
Revenue in the first quarter increased 4% to €5.5 billion from €5.3 billion, and operating profit soared to €336 million from €60 million a year ago.
Gross margin improved sharply by 6.4 percentage points to 51.2% from 44.8%, driven by tighter cost management and an increase in the sale of higher-margin products.
Net income from continuing operations swung to a profit of €171 million from a net loss of €24 million, and basic earnings per share rose to 96 cents from a loss of 18 cents in the year ago period, respectively.
The company estimated full-year revenue in 2024 to increase by a mid-to-high single-digit rate and operating profit in the year to be as high as €700 million.
Nikkei Jump 1%, Yen Recovers from a New Low; Factory Output Rebounds, Jobless Rate Holds Steady
Akira Ito
30 Apr, 2024
Tokyo
Market indexes in Tokyo traded higher after investors returned from a three-day weekend as investors digested the latest economic updates.
Japan's government reported updates on factory output, retail sales, and jobless rates.
The flood of economic data highlighted short-term challenges but confirmed that Japan's economy is likely to rebound in the second quarter after struggling in the first quarter.
Industrial Production Rebounded In March
Seasonally adjusted industrial production increased 3.8% from the previous month, but the unadjusted index from a year ago dropped 6.7%, the ministry of economy, trade, and industry reported Tuesday.
Industrial production plunged 5.4% in the first quarter from the previous quarter as manufacturing struggled to recover from the earthquake near Tokyo at the beginning of the year.
Shipments increased 4.3% from the previous month and declined 7.1% from a year ago, and inventories rose 1.1% from the previous month but fell 0.9% from a year ago.
Toyota's suspension of production at its smaller unit, Daihatsu, also negatively impacted production during the period.
However, March's production rebounded after vehicle production rose 9.6% from the previous month, after Toyota restarted diesel engine production at its subsidiary following a certification scandal in February.
Electronic parts and accessories production increased 9.2%, and machinery production, including semiconductor equipment, rose 11.6% from the previous quarter.
The ministry anticipates factory output to increase on a monthly basis by 4.1% in April and by 4.4% in May.
Retail Sales Expanded, Jobless Rate Held Steady
Overall commercial sales increased 1.7% from a year ago to 53.3 trillion yen, driven by an increase in retail sales of 1.2% to 14.7 trillion yen, the ministry said in a separate report.
Japan's labor market remained tight in March as employers struggled to find skilled workers; the job-to-applicant ratio edged up to 1.28, the labor ministry said in a note released Tuesday.
The unemployment rate remained unchanged at 2.6%, the ministry of internal affairs reported Tuesday.
The Japanese yen was in focus, and the embattled currency rebounded to 156.80 against the U.S. dollar after crossing the 160-mark on the presumed market intervention by Japanese authorities.
The Nikkei 225 Stock Average rose 0.8% to 38,218.36, and the Topix index advanced 1.6% to 2,730.42.
Japan Stock Movers
In stock trading, tech and industrial companies led gainers in heavy trading after the release of economic updates.
Tokyo Electron, Advantest, Screen Holdings, and SoftBank advanced between 1.5% and 3.5%.
Toyota Motor, Honda Motor, and Nissan Motor gained between 0.2% and 0.7% after the persistent weakness in the yen raised the prospect of higher earnings in domestic currency.
Hitachi jumped 8.2% to ¥14,620.0 after the diversified engineering company projected robust growth and a strong shareholder return in the current fiscal year.
Asian Markets Advance
Across Asia, market indexes advanced tracking gains in overnight trading in New York in tech stocks.
Market indexes in Mumbai, Seoul, Hong Kong, and Sydney advanced between 0.2% and 0.5%, but they declined 0.3% in Shanghai.
China Business Activities Show Moderate Expansion, ICBC and Agriculture Bank Report Declining Earnings
Li Chen
30 Apr, 2024
Hong Kong
Market indexes in Shanghai struggled, the Chinese yuan retained a downward bias, and the yield on the Chinese government bond hovered and approached a record high.
China's manufacturing and service activity growth moderated, according to a private and government survey released on Tuesday.
The government's survey includes a sample of state-owned companies.
The official manufacturing purchasing managers' index decreased to 50.4 in April from a one-year high of 50.8 in March, the National Bureau of Statistics reported Tuesday.
The official non-manufacturing PMI fell to a three-month low of 51.2 in April from 52.0 in March, the statistical bureau reported in a separate report Tuesday.
The private survey of the manufacturing industry, which tracks a larger segment of private companies active in exports and international trade, showed expansion.
The Caixin China General Manufacturing PMI increased to 51.4 in April from 51.1 in March, S&P Global reported Tuesday.
The CSI 300 index decreased 0.2% to 3,616.76, and the Hang Seng Index advanced 0.1% to 17,770.43.
Financial markets are closed on Wednesday in Hong Kong for Labor Day, and markets in Shanghai are closed for the rest of the week.
The Hang Seng index jumped the most among its global peers, as the index rebounded after state-controlled entities stepped up buying activities following a string of positive earnings.
Haier Smart Home jumped 7.2% to HK$29.05 after the home appliance maker reported a 20% surge in profit in the March quarter.
Industrial and Commercial Bank of China, ICBC, decreased 0.4% to HK$4.22 after the largest Chinese bank reported March quarter net income declined 2.8% to 87.7 billion yuan, or $12.1 billion.
The net interest margin narrowed to 1.48% from 1.63% in the previous quarter ending in December 2023.
Agriculture Bank of China fell 1.5% to HK$3.53 after the bank reported its first profit decline in a year.
Net income fell 1.6% to 70.4 billion yuan, or just under $10 billion; the net interest margin shrank to 1.44% from 1.6%; and the non-performing loan ratio decreased to 1.32%.
State-controlled banks are likely to face smaller net interest margin after as the government is likely to demand banks to increase lending to large and state-owned developers.
Moreover, banks earnings are likely to face significant headwinds as banks book larger losses amid a protracted property market slump.
Asian Markets Extend a 2-Day Rally
Across Asia, markets advanced, and the Nikkei 225 Stock Average in Tokyo soared 1.4% after investors returned from a three-day weekend.
The Japanese yen was in focus, and the embattled currency rebounded to 156.80 against the U.S. dollar after crossing the 160-mark on the presumed market intervention by Japanese authorities.
Market indexes in Seoul and Sydney advanced between 0.2% and 0.5%.
India Movers: Coromandel International, KEC, Patanjali Foods, Poonawalla Fincorp, RVNL, Rashtriya Chemicals, Rites, Tata Chemicals
Arun Goswami
30 Apr, 2024
Mumbai
Stocks in Mumbai advanced in thin trading ahead of the Maharashtra Day holiday, and investors reviewed the latest batch of earnings.
The Sensex index increased by 0.5% to 74,052.08, and the Nifty index rose by 0.3% to 22,489.36.
On the Mumbai stock exchange, 92 stocks traded at their 52-week highs, and 3 stocks traded at their 52-week lows.
Poonawalla Fincorp. rose 0.6% to ₹488.0 after the non-bank financial service provider reported strong quarterly results.
Net interest income in the March quarter increased 57% to ₹640.5 crore, and net income advanced 83.6% to ₹331.7 crore from a year ago, respectively.
Tata Chemicals declined 1.9% to ₹1,099.85 after the company declared a loss in the March quarter due to a one-time charge linked to its soda ash and bicarb business in the U.K.
Rashtriya Chemicals and Fertilizers was unchanged at ₹152.0 after the central government agreed to increase its equity investment in the Talcher Fertilizer project in Odisha.
The Cabinet Committee on Economic Affairs approved the increase in investment to ₹2,169.7 crore from the previous estimate of ₹1,184.20 crore.
Rites Ltd. declined 1.1% to ₹687.0 after the company received a $111.3 million, or ₹922 crore, order from Bangladesh Railways to supply 200 broad gauge passenger carriages over the next three years.
Rail Vikas Nigam decreased 0.4% to ₹288.65 after the company's joint venture with Kerala Rail Development Corporation won an order from Southern Railways to redevelop Thiruvananthapuram Central Railway Station for ₹440 crore.
Patanjali Foods declined 1.4% to ₹1,560.95, and the Uttarakhand drug regulator suspended production of 14 products made by the company for making misleading advertising claims.
KEC International increased 1% to ₹733.95 after the company won ₹1,036 crore orders in the domestic and international markets.
Coromandel International rose 1.7% to ₹1,204.0, and the company initiated activities to set up phosphoric acid and sulfuric acid plants in Kakinada, Andhra Pradesh.
Busy Week of Earnings and Economic Releases Keep Indexes In Tight Trading Range
Alexander Garcia
29 Apr, 2024
Miami
Benchmark indexes advanced in Monday's trading, and mega cap tech stocks led gainers on Wall Street.
investors looked forward to key earnings releases, the Federal Reserve's rate decisions, and a labor market update.
The S&P 500 index and the Nasdaq Composite advanced 0.3% following sharp gains in the previous week.
The S&P 500 index gained 2.2% in the previous week and delivered the best weekly gain since November as investors warmed up after positive earnings from several leading large companies.
The Nasdaq Composite advanced 3.5% in the previous week, delivered its best weekly return in five months, and halted its 3-week slide after Google and Microsoft reported solid earnings.
This week, investors are looking ahead to quarterly earnings from 700 other companies, including Apple, Amazon, Coca-Cola, and McDonald's.
On the economic front, the Federal Reserve is widely expected to hold rates steady at the end of its two-day meeting on Wednesday.
The central bank's statement and post-announcement conference are likely to provide more insights into policymakers thinking and outlook for economic growth and rate paths.
Despite eleven rate hikes between March 2022 and July 2023, inflation is well anchored and above the Fed's target rate of 2%, and price pressure is showing no signs of easing.
Nonfarm payrolls are scheduled to be released on Friday, providing key labor market updates and wage inflation pressures.
Republic First Bank: First Bank Failure in 2024
Regional banks were in focus after a Pennsylvania regulator closed down the Philadelphia-based Republic First Bank.
Over the weekend, Federal Deposit Insurance arranged the transfer of Republic First Bank's $6 billion in assets, $4 billion in deposits, and 32 branches to Fulton Bank.
Republic First Bank is the first bank to fail in 2024, but more small banks may face challenging times ahead as commercial real estate prices remain depressed and elevated interest rates may prolong losses in U.S. Treasury holdings.
The FDIC is expected to take a hit of $667 million, but the insurance company said selling the bank to Fulton Bank was the best possible outcome for the bank.
U.S. Indexes and Yields
The S&P 500 index increased 0.3% to 5,114.27, and the Nasdaq Composite surged 0.3% to 15,975,43.
The yield on 2-year Treasury notes edged higher to 4.99%, 10-year Treasury notes inched lower to 4.62%, and 30-year Treasury bonds edged lower to 4.74%.
Crude oil fell as much as 1% after the U.S. urged Israel and Hamas to settle dispute through talks and asked Israel to extend cease fire.
WTI crude oil decreased $0.69 to $83.03 a barrel, and natural gas prices increased 11 cents to $2.03 a thermal unit.
Gold decreased by $6.50 to $2,344.95 an ounce, and silver rose 15 cents to $27.35.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.57.
U.S. Stock Movers
Domino's Pizza increased 7.2% to $535.01 after the pizza chain operator said it was improving gross margins at the company-owned stores in the U.S. and same-store sales picked up pace.
Revenue in the quarter increased by $1.08 billion, and diluted earnings per share rose to $3.59.
Tesla Inc. soared 12.3% to $188.88 after the company met a key regulatory requirement to roll out its self-driving technology in China.
Koninklijke Philips N.V. jumped 38% to $28.92 after the Dutch medical device maker announced that it provisioned Є982 million to settle personal injury and medical monitoring claims, ending years of litigation uncertainty.
The settlement amount was far less than the widely estimated range between Є2 billion and Є4 billion.
The company agreed to the settlement without admitting any liability or causing any injuries.
European Markets Traded Around Flatline
European markets traded mixed, and bond yields edged lower in Monday's trading.
Benchmark indexes in London and Paris edged higher, but the reference index in Frankfurt lacked direction.
Popular indexes staged a strong rally in Frankfurt and London last week and halted a three-week slide as investors reacted to corporate quarterly results and overlooked the ongoing interest rate debate.
Mining and metals stocks also rebounded after BHP Group made an unsolicited £31 billion takeover offer for Anglo American.
Anglo American rejected the offer citing that the BHP's offer significantly undervalues the company and its future prospects.
Euro Area Economic Sentiment Weakens
The European Sentiment Indicator in the eurozone decreased by 0.6 to 95.6 in April, the European Commission reported Monday.
Persistent inflation and elevated interest rates have kept consumers spending on basic items, and businesses are facing macroeconomic headwinds.
Business sentiment weakened among manufacturers, builders, retailers, and service providers.
Among the four largest economies in the region, the sentiment index declined sharply in France and moderately in Italy, but improved in Spain and Germany.
Spain's Consumer Price Inflation Accelerated In April
On the economic front, Spain's consumer price inflation inched up to a three-month high to 3.3% in April from 3.2% in March, the National Statistics Institute (INE) reported Monday.
The rise in energy and food prices drove overall inflation higher in the month.
European Union-harmonized annual inflation rose to 3.4% in April from 3.3% in March.
The consumer price index on a monthly basis increased by 0.7% in April, following a 0.8% rise in March, and the EU harmonized inflation index rose by 0.6% in April from 1.4% in the previous month.
Europe Indexes and Yields
The DAX index decreased by 0.2% to 18,118.32; the CAC-40 index eased by 0.3% to 8,065.15; and the FTSE 100 index inched higher by 0.1% to a new record high of 8,147.03.
The yield on 10-year German bonds edged down to 2.52%; French bonds inched lower to 3.02%; the UK gilts edged lower to 4.30%; and Italian bonds inched lower to 3.83%.
The euro edged higher to $1.071; the British pound inched higher to $1.253; and the U.S. dollar edged higher to 91.15 Swiss cents.
Brent crude decreased $0.71 to $88.52 a barrel, and the Dutch TTF natural gas fell by €1.16 to €28.26 per MWh.
Europe Stock Movers
Banco Bilbao decreased 2.2% to €10.73, despite the Spain-based international bank reporting better-than-expected first quarter profit and lifting its profit outlook in 2024.
Deutsche Bank dropped 6.5% to €15.46 after Germany's largest bank confirmed its ongoing litigation related to the acquisition of Post Bank is likely to impact its second quarter and full-year profits.
The company said litigation costs could rise to as much as €1.3 billion and added that it strongly disagrees that the bank underpaid for Postbank.
AstraZeneca increased 1.6% to 12,178.0 pence after the pharmaceutical company announced significant progress with two breast cancer drug treatments.
Vivendi SE decreased 0.4% to €9.81 after the French media holding company said revenue in the first quarter rose, driven by increases in Canal+ Group and Havas and the integration of publishing group Lagardere.
Atos SE soared 18.5% to €2.26 after the company confirmed that French government is looking to acquire key divisions of the company that are deemed strategically important to France.
The non-binding offer of €1 billion from France covers three key divisions: advanced computing, missing-critical systems, and cyber security products.
The finance ministry moved to prevent the company from falling into the hands of foreign private equity groups.
Hong Kong Index Extends Two-month Rebound to 20%
Markets in Shanghai and Hong Kong advanced following positive earnings, and a move by the regional government to revive the property market bolstered market sentiment.
Bargain hunters stepped up exposure to profitable tech and financial companies in the hopes that the sustained cash flow would support higher valuations.
However, many international investors view the latest rebound in Chinese stocks as a technical and temporary bounce lacking fundamental catalysts.
The CSI 300 index increased 1.4% to 3,634.94, and the Hang Seng index advanced 1.1% to 17,850.12.
The Chinese yuan approached a 16-year low as the currency hovered near 7.25 against the U.S. dollar, and exporters kept revenue in foreign currencies in anticipation of devaluation in the next few weeks.
The yield on a 10-year Chinese government bond traded near a record low of 2.35%, even after the People's Bank of China held its interest rate steady this month.
The broader benchmark index in Shanghai, tracking the largest companies in mainland China, advanced after AIA reported a 27% increase in its new value business.
The Hang Seng index extended the previous week's gain of 8%, and the index advanced to 20% from the low reached on January 22.
Property stocks jumped more than 5% after the Chengdu regulatory body relaxed qualification rules for new home buyers and facilitated financing for home developers.
The move by the largest Southwestern city in China, with a population of more than 16 million, sparked speculation that other large cities may follow similar moves to revive property market activities.
Longfor Group soared 8.5% to HK$11.94, China Resources Land added 3.4% to HK$28.90, and China Vanke advanced 19% to HK$4.91.
Electric vehicle makers participated in Monday's rally, and Li Auto advanced 4.5% to HK$58.20, Xpeng added 3.9% to HK$31.50, and BYD added 2.4% to HK$217.80.
Insurer AIA Group Expands Stock Buyback Plan
AIA Group rallied 7.7% to HK$58.20 after the insurance company reported a sharp increase in its quarterly results and announced a new stock buyback program.
New Value Business increased to $1.3 billion from $1.05 billion a year ago, and annualized new premium increased by 23% to $2.4 billion.
The insurance company expanded its stock repurchase program by $2 billion to $10 billion, and the company said it plans to distribute 75% of its annual net new surplus funds.
The Hong Kong-based insurance company's stock has declined 38% in 2023, despite the company reporting a 30% increase in its new business value.
The insurance company has also ramped up its stock repurchase program following the buyback of $7.2 billion of its own shares in the last two years.
Asian Markets Advance, Japan Closed for Golden Week Holiday
In Asian trading, market indexes in Mumbai, Seoul, and Sydney advanced as investors overlooked the hot-inflation report in the U.S. and focused on domestic corporate results.
Financial markets are closed in Tokyo on Monday and Friday as Japan celebrates a national holiday between April 29 and May 6, generally known as Golden Week.
The Japanese yen rebounded about 2% to 155.85 after dropping to as low as 160.20 against the dollar, and most traders attributed the currency's strength to the government's intervention.
U.S. Movers: Domino's Pizza, Philips, Tesla
Scott Peters
29 Apr, 2024
New York City
Domino's Pizza increased 7.2% to $535.01 after the pizza chain operator said it was improving gross margins at the company-owned stores in the U.S. and same-store sales picked up pace.
Revenue in the quarter increased by $1.08 billion, and diluted earnings per share rose to $3.59.
Tesla Inc. soared 12.3% to $188.88 after the company met a key regulatory requirement to roll out its self-driving technology in China.
Koninklijke Philips N.V. jumped 38% to $28.92 after the Dutch medical device maker announced that it provisioned Є982 million to settle personal injury and medical monitoring claims, ending years of litigation uncertainty.
The settlement amount was far less than the widely estimated range between Є2 billion and Є4 billion.
The company agreed to the settlement without admitting any liability or causing any injuries.
U.S. Indexes Move Higher Amid Strong Earnings, Elevated Inflation, and Slowing Economy
Barry Adams
29 Apr, 2024
New York City
Market indexes in Monday's trading edged higher on Wall Street as investors looked forward to key earnings releases, the Federal Reserve's rate decisions, and a labor market update.
The S&P 500 index and the Nasdaq Composite advanced 0.2% following sharp gains in the previous week.
The S&P 500 index gained 2.2% in the previous week and delivered the best weekly gain since November as investors warmed up after positive earnings from several leading large companies.
The Nasdaq Composite advanced 3.5% in the previous week, delivered its best weekly return in five months, and halted its 3-week slide after Google and Microsoft reported solid earnings.
This week, investors are looking ahead to quarterly earnings from 700 other companies, including Apple, Amazon, Coca-Cola, and McDonald's.
On the economic front, the Federal Reserve is widely expected to hold rates steady at the end of its two-day meeting on Wednesday.
The central bank's statement and post-announcement conference are likely to provide more insights into policymakers thinking and outlook for economic growth and rate paths.
Despite eleven rate hikes between March 2022 and July 2023, inflation is well anchored and above the Fed's target rate of 2%, and price pressure is showing no signs of easing.
Nonfarm payrolls are scheduled to be released on Friday, providing key labor market updates and wage inflation pressures.
U.S. indexes and yields
The S&P 500 index increased 0.2% to 5,135.19, and the Nasdaq Composite surged 0.3% to 15,990,38.
The yield on 2-year Treasury notes edged higher to 4.99%, 10-year Treasury notes inched lower to 4.62%, and 30-year Treasury bonds edged lower to 4.74%.
WTI crude oil decreased $0.39 to $83.33 a barrel, and natural gas prices increased 2 cents to $1.94 a thermal unit.
Gold decreased by $2.39 to $2,334.95 an ounce, and silver rose 11 cents to $27.31.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.65.
U.S. Stock Movers
Domino's Pizza increased 7.2% to $535.01 after the pizza chain operator said it was improving gross margins at the company-owned stores in the U.S. and same-store sales picked up pace.
Revenue in the quarter increased by $1.08 billion, and diluted earnings per share rose to $3.59.
Tesla Inc. soared 12.3% to $188.88 after the company met a key regulatory requirement to roll out its self-driving technology in China.
Koninklijke Philips N.V. jumped 38% to $28.92 after the Dutch medical device maker announced that it provisioned Є982 million to settle personal injury and medical monitoring claims, ending years of litigation uncertainty.
The settlement amount was far less than the widely estimated range between Є2 billion and Є4 billion.
The company agreed to the settlement without admitting any liability or causing any injuries.