Market Update
U.S. Stocks Wobble Amid Higher-for-Longer Rate Worries
Barry Adams
19 Mar, 2024
New York City
Stocks turned lower in Tuesday's trading as investors awaited rate decisions from the Federal Reserve.
The S&P 500 index and the Nasdaq Composite declined 0.3%, and investors booked profits in hot tech stocks.
The Federal Reserve is set to kick off its two-day policy meeting amid growing worries that policymakers may be influenced by the recent inflation updates, and keep higher rates for longer.
Consumer and wholesale price inflation has cooled over the last fifteen months, and inflation is still above the 2% target rate set by policymakers despite eleven rate hikes.
Moreover, home prices are still rising in most urban markets faster than wage gains, making home ownership a distant possibility for first-time home buyers.
U.S. Housing Starts Jump In February
U.S. housing starts and permits increased in February, the Commerce Department reported Tuesday.
Low home inventories are forcing more and more buyers to buy new homes as buyers struggle with elevated mortgage rates and home affordability.
Seasonally adjusted privately owned housing starts rose to 1.521 million, an increase of 10.7% from January and 5.9% from a year ago.
Single-family housing starts in February were at a rate of 1.129 million, an increase of 11.6% above the revised January level of 1.01 million. T
Building permits increased 1.9% from the previous month and 2.4% from a year ago to a total of 1.518 million.
Single-family authorizations in February totaled 1.031 million, an increase of 1.0% above the revised January level of 1.021 million.
Authorizations of multi-family buildings with five units or more were at a rate of 429,000 in February.
Housing completions surged 19.7% from January and increased 9.7% from a year ago to 1.73 million.
Single-family housing completions in February totaled 1,072,000, an increase of 20.2% above the revised January rate of 892,000.
The February rate for completions of buildings with multi-family units was 644,000.
U.S. Indexes and Yields
The S&P 500 index increased 0.8% to 5,157.22, and the Nasdaq Composite rose 0.9% to 16,132.21.
The yield on 2-year Treasury notes decreased to 4.70%, 10-year Treasury notes inched up to 4.30%, and 30-year Treasury bonds edged down to 4.44%.
WTI crude oil increased $0.02 to $82.75 a barrel, and natural gas prices increased 3 cents to $1.74 a thermal unit.
Gold decreased by $2.66 to $2,157.77 an ounce, and silver rose 1 cent to $25.15.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.88.
In overseas trading, European markets hovered near record highs, and the Nikkei in Japan traded volatile after the Bank of Japan ended its negative interest rate policy and raised rates for the first time after 17 years.
U.S. Stock Movers
Nvidia declined 1.9% to $867.99 after the company released its fastest AI graphics processor, dubbed Blackwell, at its first annual developer's GTC conference.
The first Blackwell chip, called BG200, is scheduled to ship later in the year and promises to sharply increase processing power for artificial applications and accelerate training of AI models and tools.
AMD declined 4.6% to $181.99 after Nvidia's announcement of a new chip.
Super Micro Computer declined 10.2% to $898.57 after the company announced its plan to sell as many as 2 million shares.
Super Micro stock has soared more than 250% this year following the enthusiasm for artificial intelligence.
Super Micro is the preferred vendor for building servers using Nvidia's chips for artificial intelligence applications.
Coinbase Global declined 2.2% to $227.04 after bitcoin prices dropped as much as 6.2% in early trading, extending losses from the peak above $73,000 reached last week.
Unilever PLC increased 2.5% to $49.77 after the company announced its plans to spin off its ice cream division, which includes Ben & Jerry's and Magnum brands.
The company also added that it plans to implement a productivity program to accelerate sales, improve its cost structure, and eliminate as many as 7,500 jobs.
Europe Movers: Close Brothers, Deutz, Fraport, SThree, Thyssenkrupp, Trustpilot, Unilever
Inga Muller
19 Mar, 2024
Frankfurt
Benchmark indexes in Europe trade in a tight range as investors await rate decisions from the Bank of England and the U.S. Federal Reserve later in the week.
The DAX index increased by 0.2% to 17,956.85, the CAC-40 index rose by 0.2% to 8,163.73, and the FTSE 100 index inched lower by 0.01% to 7,721.61.
The yield on 10-year German bonds edged down to 2.43%; French bonds inched lower to 2.87%; the UK gilts edged lower to 4.08%; and Italian bonds inched lower to 3.67%.
Thyssenkrupp AG declined 0.6% to €4.80 after the German industrial conglomerate said that the company is exploring alternatives for its Marine Systems business with the private equity group Carlyle.
Deutz AG rose 0.9% to €5.89 after the engine maker reported record earnings, which were in line with market expectations.
The company delivered 186,718 engines, and fiscal year 2023 revenue increased to 9% of €2.1 billion and an adjusted EBIT of €120.4 million.
The company guided fiscal year 2024 revenue to fall between €1.9 billion and €2.1 billion and adjusted its EBIT margin between 5.0% and 6.5%.
Fraport Frankfurt Airport Services decreased 5% to €49.19 after the airport operator reported weaker-than-expected fourth quarter operating earnings and the company's 2024 outlook fell below market expectations.
Close Brothers Group soared 7.2% to 358.80 pence after the financial services company announced its plans to raise £400 million to strengthen its balance sheet.
Trustpilot Group gained 2.4% to 210.0 pence after the business review platform reported a narrower loss in the latest fiscal year, driven by improved sales.
Unilever plc increased 2.8% to 3,925.0 pence after the food products company plans to separate its ice cream division and implement a productivity improvement program.
SThree fell 2.2% to 415.0 pence after the recruitment company said the job market was challenging in the first two months of 2024.
European Markets Trade In Tight Range, Hourly Labor Cost Growth Slows in the Fourth Quarter
Bridgette Randall
19 Mar, 2024
Frankfurt
Benchmark indexes in Europe flatlined, and investors awaited monetary policy announcements from the U.S. Federal Reserve and the Bank of England.
The DAX index and the CAC-40 index edged up 0.2% and traded near record highs as investors debated future rate paths in the eurozone and reviewed the latest monetary policy decisions from the Bank of Japan.
The Bank of Japan ended its negative rate regime put in place in 2016 and raised rates for the first time in 17 years after inflation gathered steam and large corporations agreed to solid wage gains for the second year in a row.
The central bank also said it will end the purchase of stock ETFs to support the stock market and stop managing the yield curve or targeting the yield on Japanese government bonds.
The broad swathe of changes announced by the central bank surprised many market watchers, and the Japanese yen edged fractionally lower to 149.90 against the U.S. dollar after the announcement.
Hourly labor cost in the eurozone rose 3.4% from a year ago in the fourth quarter of 2023, following a downwardly revised 5.2% increase in the previous three months, Eurostat reported Tuesday.
The labor cost growth decreased in the quarter after the pace of increase of slowed in construction to 4.4% from 6.0%, industry eased to 4.2% from 5.7%, and services inched down to 4.1% from 5.7% a year ago, respectively.
Europe Indexes and Yields
The DAX index increased by 0.2% to 17,956.85, the CAC-40 index rose by 0.2% to 8,163.73, and the FTSE 100 index inched lower by 0.01% to 7,721.61.
The yield on 10-year German bonds edged down to 2.43%; French bonds inched lower to 2.87%; the UK gilts edged lower to 4.08%; and Italian bonds inched lower to 3.67%.
The euro edged higher to $1.084, the British pound inched higher to $1.267, and the U.S. dollar held steady at 88.78 Swiss cents.
Brent crude decreased $0.37 to $86.52 a barrel, and the Dutch TTF natural gas fell by €0.36 to €28.46 per MWh.
Europe Stock Movers
Thyssenkrupp AG declined 0.6% to €4.80 after the German industrial conglomerate said that the company is exploring alternatives for its Marine Systems business with the private equity group Carlyle.
Deutz AG rose 0.9% to €5.89 after the engine maker reported record earnings, which were in line with market expectations.
The company delivered 186,718 engines, and fiscal year 2023 revenue increased to 9% of €2.1 billion and an adjusted EBIT of €120.4 million.
The company guided fiscal year 2024 revenue to fall between €1.9 billion and €2.1 billion and adjusted its EBIT margin between 5.0% and 6.5%.
Fraport Frankfurt Airport Services decreased 5% to €49.19 after the airport operator reported weaker-than-expected fourth quarter operating earnings and the company's 2024 outlook fell below market expectations.
Close Brothers Group soared 7.2% to 358.80 pence after the financial services company announced its plans to raise £400 million to strengthen its balance sheet.
Trustpilot Group gained 2.4% to 210.0 pence after the business review platform reported a narrower loss in the latest fiscal year, driven by improved sales.
Unilever plc increased 2.8% to 3,925.0 pence after the food products company plans to separate its ice cream division and implement a productivity improvement program.
SThree fell 2.2% to 415.0 pence after the recruitment company said the job market was challenging in the first two months of 2024.
Japan Ends Negative Rates In a Historic Move, First Rate Hike In 17 Years
Arjun Pandit
19 Mar, 2024
Mumbai
Asian markets struggled to advance amid China's earnings worries and Japan's decision to end its negative rate regime after lagging other major central banks for years.
Market indexes in Tokyo rebounded from a morning slump after the rate decision, but they closed down in Shanghai and Hong Kong after market mood tuned negative on a lack of catalysts and worries about earnings growth compounded market anxieties.
Japan Ends Negative Interest Rate Policy
The Bank of Japan ended its negative interest rate policy and set its policy rate range between zero and 0.1% in a sweeping policy overhaul that ended its negative interest rate regime.
The central bank lifted its policy rate for the first time in 17 years from -0.1% to 0.0% amid high inflation and sharp gains in wages at large companies.
In a 7-2 interest rate decision, policymakers decided to end the negative interest rates, but the accompanying statement provided little guidance about interest rate direction in the future.
Major central banks have raised rates multiple times in the U.S. and Europe for two years, while the Bank of Japan stuck with its negative policy rates first implemented in 2016.
The central bank will also stop buying Japanese stocks through the purchase of ETFs and end its yield control program.
The widely anticipated move exceeded many market watchers' expectations after the central bank announced its plans to end the purchase of stocks and also set a target rate for government bond yields.
Ultraeasy monetary policy in place since 2000 has contributed to the Japanese yen's weakness and stoked inflationary forces since the onset of the COVID-19 pandemic in 2020.
The BoJ said it will continue to purchase Japanese government bonds at the current rate, suggesting that the central bank will continue its easy monetary policy for a while.
After the rate decision announcement, the Japanese yen drifted lower to 149.86 against the U.S. dollar.
The Nikkei 225 Stock Average gained 0.04% to 39,768.19, and the Topix index advanced 0.5% to 2,734.58.
Tokyo Electron and Advantest fell between 1% and 2%, and Disco Corp. and Screen Holdings advanced around 1.5%.
Mitsubishi UFJ Financial Group, Mizuho Financial, and Sumitomo Mitsui Financial Group fell between 0.3% and 1.2%.
In other news in the region, the Reserve Bank of Australia held its policy rate for the third time in a row at 4.35% and softened its hawkish inflation stance.
Earnings Worries Drag Down China Stocks
Stocks in Shanghai and Hong Kong extended losses after corporate earnings lagged market expectations.
The worries about China's fragile economic recovery were compounded by the weaker-than-anticipated pace of earnings growth and the protracted property market slump.
The average earnings growth has lagged market expectations as the rebound in consumer demand has been weaker than expected after the end of zero COVID lockdowns.
The CSI 300 index fell 0.3% to 3,592.42, and the Hang Seng index declined 1.1% to 16,550.90.
Wuxi Apptec dropped 6.6% to HK$39.90 after the company issued a cautious outlook, blaming global macroeconomic headwinds. Wuxi Biologics declined 4.9% to HK$14.04.
Tech stocks and electric vehicle makers faced selling pressure on earnings and valuation worries.
XPeng dropped 4% to HK$38.85 ahead of the company's earnings announcement later in the day.
Li Auto plunged 12%, and Alibaba Group, JD.com, Tencent Holdings, and Meituan Group declined between 1% and 3%.
India Stocks Remain In Negative Territory
Stocks in Mumbai edged lower in early trading following the weakness in Asian markets after the monetary policy decisions from the Bank of Japan and the Reserve Bank of Australia.
The Sensex and the Nifty indexes fell as much as 0.5% amid interest rate uncertainties, rising crude oil prices, and a regulatory crackdown on speculation in small-cap stocks.
The Federal Reserve is set to announce its rate decision tomorrow, and investors are anticipating that the central bank will hold interest rates steady.
The crude oil price extended two-week gains to more than 5% in international trading amid rising tensions in the Middle East.
Small-cap stocks continued their decline after the securities regulatory agency SEBI urged mutual fund companies to halt accepting new fund flows.
The Sensex index decreased 0.4% to 72,462.94, and the Nifty index edged down 0.5% to 21,946.45.
On the Mumbai stock exchange, 17 stocks traded at their 52-week highs and 19 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.08%, and the Indian rupee edged lower to ₹82.92 against the U.S. dollar.
U.S. and Global Markets Advance, Crude Oil and Copper Jump After China Data Surpass Expectations
Barry Adams
18 Mar, 2024
New York City
Benchmark indexes advanced in Monday's trading, and tech stocks led the gainers ahead of the monetary policy announcements from major central banks.
The U.S. Federal Reserve, the Bank of England, and the Bank of Japan are expected to keep interest rates unchanged, but investors are looking ahead to the economic growth outlook and interest rate projections.
Investors pared rate-cut expectations in the U.S. after consumer and wholesale price inflation stayed ahead of expectations in February, supporting the case for keeping higher rates for longer.
Moreover, crude oil prices have rebounded in March, which is expected to keep overall inflation higher in the current month, denting expectations of a rate even after the next policy meeting in May.
In addition, investors are looking forward to the release of U.S. housing starts, completions, building permits, and existing home sales data.
Homebuilder sentiment rose more than expected in March, according to the latest update released by the industry association.
The NAHB/Wells Fargo Housing Market Index increased to 51 in March from 48 in February, the National Association of Home Builders reported Monday.
The measure of confidence was the highest in 8 months as a lack of existing home inventory pushed buyers to new home construction.
But home builders anticipate another surge in demand for homes as the Federal Reserve prepares to lower the interest rate later in the year.
In the UK, the Bank of England is expected to keep its benchmark rate steady at 5.25%, and consumer price inflation is expected to edge higher by 0.7% in February.
Central banks in Norway, Turkey, and Switzerland are also expected to keep their interest rates steady.
In Tokyo, expectations are high that the Bank of Japan may finally end its negative interest rate regime and stem the decline in the yen after large corporations agreed with labor unions for a wage increase above 5% for the second year in a row.
Japanese investors are also awaiting the release of inflation, industrial production, and international trade data this week.
U.S. Indexes and Yields
The S&P 500 index increased 0.8% to 5,157.22, and the Nasdaq Composite rose 0.9% to 16,132.21.
The yield on 2-year Treasury notes decreased to 4.71%, 10-year Treasury notes inched up to 4.30%, and 30-year Treasury bonds edged down to 4.43%.
WTI crude oil increased $1.47 to $82.50 a barrel, and natural gas prices increased 4 cents to $1.69 a thermal unit.
Gold decreased by $5.60 to $2,160.70 an ounce, and silver rose 1 cent to $25.15.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.34.
U.S. Stock Movers
Nvidia jumped 2.5% to $900.60 ahead of the company's annual GTC conference, where the chipmaker is expected to release new artificial intelligence-related products.
Alphabet Inc. advanced 5.2% to $148.67 on a report that the company is in advanced talks with Apple to power its iPhones with Gemini AI.
Bloomberg News first reported the discussions between the companies, which could not be independently verified.
Super Micro Computer gained 2.4% to $1,097.99 as the company's stock traded as part of the S&P 500 index.
Positive Bias Lifts European Markets to New Intra-day Highs
European markets advanced in Monday's trading as investors awaited monetary policy decisions from major central banks.
Investors pared expectations of a rate cut in the U.S. after consumer and producer price inflation in February stayed ahead of expectations.
The Federal Reserve may keep interest rates unrevised for the next several months because of the resilient U.S. economy and healthy labor market conditions.
Market participants may have to adjust their rate expectations if the Federal Reserve's economic growth projection and interest rate outlook call for higher rates for at least two months or longer.
Benchmark indexes in Frankfurt and Paris gained about 0.2% in early trading but lost momentum in the late afternoon, and they traded near record highs as investors reviewed the latest eurozone inflation data.
Euro Area Inflation Eases In February
Euro Area inflation eased to 2.6% in February from 2.8% in January and fell from 8.5% in the corresponding month a year ago, Eurostat reported Monday.
A year earlier, the rate was 8.5%.
The steady decline in energy prices supported the easing of inflation from the previous month and from a year ago; services inflation was 1.73%; food, drink, and tobacco inflation decreased to 0.8%; and energy inflation turned negative to 0.4%.
Europe Indexes and Yields
The DAX index increased by 0.01% to 17,939.24, the CAC-40 index fell by 0.2% to 8,148.14, and the FTSE 100 index inched lower by 0.06% to 7,722.55.
Last week, the DAX index gained 1.7%, the CAC-40 index advanced 2.4%, and the FTSE 100 index inched up 1.3%.
The yield on 10-year German bonds edged up to 2.46%; French bonds inched higher to 2.90%; the UK gilts edged higher to 4.14%; and Italian bonds inched lower to 3.70%.
The euro edged higher to $1.089, the British pound inched higher to $1.273, and the U.S. dollar held steady at 88.34 Swiss cents.
Brent crude increased $1.19 to $86.58 a barrel, and the Dutch TTF natural gas advanced by €2.13 to €29.13 per MWh.
Europe Stock Movers
Hannover Re increased 1.1% to €247.30 after the German reinsurance company reported an increase in full-year net income, and the company estimated improved results in the fiscal year 2024.
Logitech International decreased 7.4% to CHF 77.98 after the company announced the departure of its chief financial officer, Charles Boynton.
Julius Baer declined 1.1% to CHF 49.57 after the Swiss financial services firm announced its targets for the next two years.
Metals and mining companies declined after China reported construction industry investment shrank by more than 9% in the two months to February.
Antofagasta and Anglo American declined by 1%, but Glencore increased by 1.2%.
Marshalls declined 7% to 270.0 pence after the UK-based building materials group reported a decline in annual revenue and pre-tax earnings.
Currys gained 2.5% to 58.25 pence after the UK-based electronics retailer raised its profit outlook.
British American Tobacco increased 1.1% to 2,369.0 pence after the company launched its stock buyback program after selling part of its stake in ITC for £1.6 billion.
ProsiebenSat Media decreased 0.2% to €6.32, and the company's major shareholder, MFE-MediatorEurope, stepped up its pressure on the German broadcaster to separate its e-commerce operations from its core television services.
British Land Company advanced 2.8% to 378.90 pence after the company announced a 50:50 joint venture with Royal London Asset Management.
China's Economic Data and Japan's Rate Decision Dominate Asian Market Sentiment
Asian stock markets advanced after China reported better-than-expected retail sales, fixed investment, and industrial output in two-month period to February.
Benchmark indexes in Tokyo advanced ahead of the monetary policy announcements by the Bank of Japan at the end of its two-day meeting on Tuesday.
The Nikkei 225 Stock Average gained 2.5% to 39,665.98, and the Topix index added 1.9% to 2,720.33.
Investors are hoping that the Bank of Japan will announce its plans to end the negative interest rate regime and adjust the yield curve to arrest the widening rate gap with the U.S.
Moreover, strong wage increases for the second year in a row agreed upon by large corporations during the annual negotiations with the labor unions also raised hopes that the Bank of Japan may be nearing the end of its ultra-loose monetary policy.
The yen eased against the U.S. dollar to 149.16 ahead of the rate decision on Tuesday.
Tech stocks led the gainers in Tokyo trading, and Advantest, Tokyo Electron, Screen Holdings, and Disco Corp. jumped between 2% and 4%.
Vehicle makers were also among the leading gainers, and Toyota Moto, Honda Motor, and Nissan Motor advanced between 1% and 2%.
Banks also participated in the market rally in the hope of a rise in interest rates and a change in yield curve management policy.
Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial advanced between 1.4% and 2.5%.
China Stocks Rebound
Market indexes in Shanghai and Hong Kong advanced following better-than-expected economic data in January and February.
China releases key economic data for two months combined to smooth out the calendar shift because of the Lunar Holidays.
The CSI 300 index gained 0.7% to 3,595.09, and the Hang Seng index advanced 0.2% to 16,751.31.
Property developers extended losses from the previous week after construction investment declined in the two-month period.
Longfor Group, China Resources Land, China Vanke, and Sun Hung Kai Properties fell between 2% and 4%.
China's Industrial Output, Retail Sales and Fixed Investment Data Ahead of Expectations
China's fixed investment, retail sales, and industrial output gathered speed in the first two months of 2024, driven in part by the economic stimulus provided in October.
China's industrial output increased 7.0% for the two-month period ending in February from a year ago, faster than 5.8% in December, the National Bureau of Statistics reported Monday.
Manufacturing accelerated to 7.7% growth from 7.1% in December, utility output increased at a faster pace of 7.9% from 7.7%, while production at mines slowed to an increase of 2.3% from 4.7% a year ago.
China is struggling to revive its industrial output amid a fragile economic recovery from the coronavirus pandemic.
Fixed asset investment increased 4.2% from the previous year in the two-month period to February, despite the sharp decline in real estate investments.
Real estate investment contracted by 9.4% in the period compared to a 9.6% decline in the corresponding period a year ago.
But investment in electricity, gas, water, and heat jumped 25.4%, and in the mining sector, it advanced 14.4%.
China's consumer demand recovery has also been slower than anticipated by a wide margin because of the protracted weakness in the property market and economic uncertainties.
Retail sales increased 5.5% in the period, slower than the 7.4% rebound in December. largely reflecting a higher base last year after consumer spending surged following the ending of the coronavirus lockdown.
China's jobless rate increased to a 7-month high of 5.3% in February from 5.2% in January, the National Bureau of Statistics reported Monday.
The jobless rate in 31 large cities and towns was estimated at 5.1%.
The statistical bureau said youth unemployment data for February will be released later in the week, and January's modified jobless rate stood at 14.6% in the 16–24 age group.
China's economic data is generally viewed with skepticism by most international observers for its lack of transparency and widespread practice of generating data to satisfy goals set by political leaders.
India's Overall Trade Deficit Plunged
Stocks in Mumbai lacked direction in early trading as investors awaited rate decisions from major central banks this week.
The Sensex and the Nifty indexes traded around the flatline, and investors turned cautious in Monday's trading after volatile sessions in two consecutive weeks in a row.
Moreover, investors reviewed the international trade balance data for February, released late Friday by the Ministry of Commerce and Industry.
Overall exports in the month increased 14.2% from a year ago to $73.55 billion, while imports jumped 10.1% to $75.50 billion, driving the overall trade deficit down 53% to $1.95 billion from $4.15 billion.
Goods exports rose 11.9% to $41.4 billion from $37.01 billion, and imports jumped 12.1% to $60.1 billion from $53.6 billion, widening the trade deficit by 6.8% to $18.7 billion from $17.5 billion.
Gold imports surged 133% from a year ago to $6.2 billion amid rising demand ahead of the wedding season.
The Sensex index decreased 0.1% to 72,556.30, and the Nifty index edged down 0.2% to 21,973.40.
On the Mumbai stock exchange, 60 stocks traded at their 52-week highs and 29 stocks traded at their 52-week lows.
U.S. Movers: Alphabet, Nvidia, Super Micro Computer
Scott Peters
18 Mar, 2024
New York City
Tech and energy stocks led the two popular indexes higher in Monday's trading.
Investors looked forward to monetary policy decisions from the U.S., U.K., and Japan, and central banks in Norway, Turkey, and Switzerland are also expected to announce their rate decisions this week.
The S&P 500 index increased 0.7% to 5,221.32, and the Nasdaq Composite rose 1.1% to 16,140.27.
The yield on 2-year Treasury notes decreased to 4.71%, 10-year Treasury notes inched up to 4.30%, and 30-year Treasury bonds edged down to 4.43%.
Nvidia jumped 2.5% to $900.60 ahead of the company's annual GTC conference, where the chipmaker is expected to release new artificial intelligence-related products.
Alphabet Inc. advanced 5.2% to $148.67 on a report that the company is in advanced talks with Apple to power its iPhones with Gemini AI.
Bloomberg News first reported the discussions between the companies, which could not be independently verified.
Super Micro Computer gained 2.4% to $1,097.99 as the company's stock traded as part of the S&P 500 index.
U.S. Major Averages Advance Ahead of Nvidia Conference and Rate Decisions
Barry Adams
18 Mar, 2024
New York City
Stocks on Wall Street traded higher, and investors looked ahead to monetary policy announcements from major central banks.
The U.S. Federal Reserve, the Bank of England, and the Bank of Japan are expected to keep interest rates unchanged, but investors are looking ahead to the economic growth outlook and interest rate projections.
Investors pared rate-cut expectations in the U.S. after consumer and wholesale price inflation stayed ahead of expectations in February, supporting the case for keeping higher rates for longer.
Moreover, crude oil prices have rebounded in March, which is expected to keep overall inflation higher in the current month, denting expectations of a rate even after the next policy meeting in May.
In addition, investors are looking forward to the release of U.S. housing starts, completions, building permits, and existing home sales data.
In the UK, the Bank of England is expected to keep its benchmark rate steady at 5.25%, and consumer price inflation is expected to edge higher by 0.7% in February.
Central banks in Norway, Turkey, and Switzerland are also expected to keep their interest rates steady.
In Tokyo, expectations are high that the Bank of Japan may finally end its negative interest rate regime and stem the decline in the yen after large corporations agreed with labor unions for a wage increase above 5% for the second year in a row.
Japanese investors are also awaiting the release of inflation, industrial production, and international trade data this week.
U.S. Indexes and Yields
The S&P 500 index increased 0.7% to 5,221.32, and the Nasdaq Composite rose 1.1% to 16,140.27.
The yield on 2-year Treasury notes decreased to 4.71%, 10-year Treasury notes inched up to 4.30%, and 30-year Treasury bonds edged down to 4.43%.
WTI crude oil increased $0.51 to $81.60 a barrel, and natural gas prices decreased 8 cents to $1.74 a thermal unit.
Gold decreased by $5.60 to $2,160.70 an ounce, and silver rose 1 cent to $25.15.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.34.
U.S. Stock Movers
Nvidia jumped 2.5% to $900.60 ahead of the company's annual GTC conference, where the chipmaker is expected to release new artificial intelligence-related products.
Alphabet Inc. advanced 5.2% to $148.67 on a report that the company is in advanced talks with Apple to power its iPhones with Gemini AI.
Bloomberg News first reported the discussions between the companies, which could not be independently verified.
Super Micro Computer gained 2.4% to $1,097.99 as the company's stock traded as part of the S&P 500 index.
Europe Movers: BAT, British Land, Currys, Hannover Re, Julius Baer, Logitech, ProsiebenSat
Inga Muller
18 Mar, 2024
Frankfurt
Benchmark indexes in Germany and France traded at new intraday highs ahead of rate decisions from the central banks of the U.S., UK, and Japan.
The DAX index increased by 0.3% to 17,993.25, the CAC-40 index rose by 0.1% to 8,17182, and the FTSE 100 index inched higher by 0.102% to 7,738.82.
Last week, the DAX index gained 1.7%, the CAC-40 index advanced 2.4%, and the FTSE 100 index inched up 1.3%.
The yield on 10-year German bonds edged up to 2.46%; French bonds inched higher to 2.90%; the UK gilts edged higher to 4.14%; and Italian bonds inched lower to 3.70%.
Hannover Re increased 1.1% to €247.30 after the German reinsurance company reported an increase in full-year net income, and the company estimated improved results in the fiscal year 2024.
Logitech International decreased 7.4% to CHF 77.98 after the company announced the departure of its chief financial officer, Charles Boynton.
Julius Baer declined 1.1% to CHF 49.57 after the Swiss financial services firm announced its targets for the next two years.
Metals and mining companies declined after China reported construction industry investment shrank by more than 9% in the two months to February.
Antofagasta and Anglo American declined by 1%, but Glencore increased by 1.2%.
Marshalls declined 7% to 270.0 pence after the UK-based building materials group reported a decline in annual revenue and pre-tax earnings.
Currys gained 2.5% to 58.25 pence after the UK-based electronics retailer raised its profit outlook.
British American Tobacco increased 1.1% to 2,369.0 pence after the company launched its stock buyback program after selling part of its stake in ITC for £1.6 billion.
ProsiebenSat Media decreased 0.2% to €6.32, and the company's major shareholder, MFE-MediatorEurope, stepped up its pressure on the German broadcaster to separate its e-commerce operations from its core television services.
British Land Company advanced 2.8% to 378.90 pence after the company announced a 50:50 joint venture with Royal London Asset Management.
Positive Bias Lifts DAX and CAC-40 to New Intra-day Highs, Euro Area Inflation Eases
Bridgette Randall
18 Mar, 2024
Frankfurt
European markets advanced in Monday's trading as investors awaited monetary policy decisions from major central banks.
Investors pared expectations of a rate cut in the U.S. after consumer and producer price inflation in February stayed ahead of expectations.
The Federal Reserve may keep interest rates unrevised for the next several months because of the resilient U.S. economy and healthy labor market conditions.
Market participants may have to adjust their rate expectations if the Federal Reserve's economic growth projection and interest rate outlook call for higher rates for at least two months or longer.
Benchmark indexes in Frankfurt and Paris gained about 0.2%, and they traded near record highs as investors reviewed the latest eurozone inflation data.
Euro Area Inflation Eases In February
Euro Area inflation eased to 2.6% in February from 2.8% in January and fell from 8.5% in the corresponding month a year ago, Eurostat reported Monday.
A year earlier, the rate was 8.5%.
The steady decline in energy prices supported the easing of inflation from the previous month and from a year ago; services inflation was 1.73%; food, drink, and tobacco inflation decreased to 0.8%; and energy inflation turned negative to 0.4%.
Europe Indexes and Yields
The DAX index increased by 0.3% to 17,993.25, the CAC-40 index rose by 0.1% to 8,171.82, and the FTSE 100 index inched higher by 0.102% to 7,738.82.
Last week, the DAX index gained 1.7%, the CAC-40 index advanced 2.4%, and the FTSE 100 index inched up 1.3%.
The yield on 10-year German bonds edged up to 2.46%; French bonds inched higher to 2.90%; the UK gilts edged higher to 4.14%; and Italian bonds inched lower to 3.70%.
The euro edged higher to $1.089, the British pound inched higher to $1.273, and the U.S. dollar held steady at 88.34 Swiss cents.
Brent crude increased $0.60 to $85.95 a barrel, and the Dutch TTF natural gas advanced by €1.33 to €28.63 per MWh.
Europe Stock Movers
Hannover Re increased 1.1% to €247.30 after the German reinsurance company reported an increase in full-year net income, and the company estimated improved results in the fiscal year 2024.
Logitech International decreased 7.4% to CHF 77.98 after the company announced the departure of its chief financial officer, Charles Boynton.
Julius Baer declined 1.1% to CHF 49.57 after the Swiss financial services firm announced its targets for the next two years.
Metals and mining companies declined after China reported construction industry investment shrank by more than 9% in the two months to February.
Antofagasta and Anglo American declined by 1%, but Glencore increased by 1.2%.
Marshalls declined 7% to 270.0 pence after the UK-based building materials group reported a decline in annual revenue and pre-tax earnings.
Currys gained 2.5% to 58.25 pence after the UK-based electronics retailer raised its profit outlook.
British American Tobacco increased 1.1% to 2,369.0 pence after the company launched its stock buyback program after selling part of its stake in ITC for £1.6 billion.
ProsiebenSat Media decreased 0.2% to €6.32, and the company's major shareholder, MFE-MediatorEurope, stepped up its pressure on the German broadcaster to separate its e-commerce operations from its core television services.
British Land Company advanced 2.8% to 378.90 pence after the company announced a 50:50 joint venture with Royal London Asset Management.
China Stocks Rebound On Economic Optimism, Japan Stocks Jump Ahead of Rate Decisions
Arjun Pandit
18 Mar, 2024
Mumbai
Asian stock markets advanced after China reported better-than-expected retail sales, fixed investment, and industrial output in two-month period to February.
Benchmark indexes in Tokyo advanced ahead of the monetary policy announcements by the Bank of Japan at the end of its two-day meeting on Tuesday.
The Nikkei 225 Stock Average gained 2.5% to 39,665.98, and the Topix index added 1.9% to 2,720.33.
Investors are hoping that the Bank of Japan will announce its plans to end the negative interest rate regime and adjust the yield curve to arrest the widening rate gap with the U.S.
Moreover, strong wage increases for the second year in a row agreed upon by large corporations during the annual negotiations with the labor unions also raised hopes that the Bank of Japan may be nearing the end of its ultra-loose monetary policy.
The yen eased against the U.S. dollar to 149.16 ahead of the rate decision on Tuesday.
Tech stocks led the gainers in Tokyo trading, and Advantest, Tokyo Electron, Screen Holdings, and Disco Corp. jumped between 2% and 4%.
Vehicle makers were also among the leading gainers, and Toyota Moto, Honda Motor, and Nissan Motor advanced between 1% and 2%.
Banks also participated in the market rally in the hope of a rise in interest rates and a change in yield curve management policy.
Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial advanced between 1.4% and 2.5%.
China Stocks Rebound
Market indexes in Shanghai and Hong Kong advanced following better-than-expected economic data in January and February.
China releases key economic data for two months combined to smooth out the calendar shift because of the Lunar Holidays.
The CSI 300 index gained 0.7% to 3,595.09, and the Hang Seng index advanced 0.2% to 16,751.31.
Property developers extended losses from the previous week after construction investment declined in the two-month period.
Longfor Group, China Resources Land, China Vanke, and Sun Hung Kai Properties fell between 2% and 4%.
China's Industrial Output, Retail Sales and Fixed Investment Data Ahead of Expectations
China's fixed investment, retail sales, and industrial output gathered speed in the first two months of 2024, driven in part by the economic stimulus provided in October.
China's industrial output increased 7.0% for the two-month period ending in February from a year ago, faster than 5.8% in December, the National Bureau of Statistics reported Monday.
Manufacturing accelerated to 7.7% growth from 7.1% in December, utility output increased at a faster pace of 7.9% from 7.7%, while production at mines slowed to an increase of 2.3% from 4.7% a year ago.
China is struggling to revive its industrial output amid a fragile economic recovery from the coronavirus pandemic.
Fixed asset investment increased 4.2% from the previous year in the two-month period to February, despite the sharp decline in real estate investments.
Real estate investment contracted by 9.4% in the period compared to a 9.6% decline in the corresponding period a year ago.
But investment in electricity, gas, water, and heat jumped 25.4%, and in the mining sector, it advanced 14.4%.
China's consumer demand recovery has also been slower than anticipated by a wide margin because of the protracted weakness in the property market and economic uncertainties.
Retail sales increased 5.5% in the period, slower than the 7.4% rebound in December. largely reflecting a higher base last year after consumer spending surged following the ending of the coronavirus lockdown.
China's jobless rate increased to a 7-month high of 5.3% in February from 5.2% in January, the National Bureau of Statistics reported Monday.
The jobless rate in 31 large cities and towns was estimated at 5.1%.
The statistical bureau said youth unemployment data for February will be released later in the week, and January's modified jobless rate stood at 14.6% in the 16–24 age group.
China's economic data is generally viewed with skepticism by most international observers for its lack of transparency and widespread practice of generating data to satisfy goals set by political leaders.
India's Overall Trade Deficit Plunged
Stocks in Mumbai lacked direction in early trading as investors awaited rate decisions from major central banks this week.
The Sensex and the Nifty indexes traded around the flatline, and investors turned cautious in Monday's trading after volatile sessions in two consecutive weeks in a row.
Moreover, investors reviewed the international trade balance data for February, released late Friday by the Ministry of Commerce and Industry.
Overall exports in the month increased 14.2% from a year ago to $73.55 billion, while imports jumped 10.1% to $75.50 billion, driving the overall trade deficit down 53% to $1.95 billion from $4.15 billion.
Goods exports rose 11.9% to $41.4 billion from $37.01 billion, and imports jumped 12.1% to $60.1 billion from $53.6 billion, widening the trade deficit by 6.8% to $18.7 billion from $17.5 billion.
Gold imports surged 133% from a year ago to $6.2 billion amid rising demand ahead of the wedding season.
The Sensex index decreased 0.1% to 72,556.30, and the Nifty index edged down 0.2% to 21,973.40.
On the Mumbai stock exchange, 60 stocks traded at their 52-week highs and 29 stocks traded at their 52-week lows.
India Movers: Hindustan Aeronautics, IRCON, KPI Green Energy, Railtel, SJVN, Torrent Power, Zydus Lifesciences
Arun Goswami
18 Mar, 2024
Mumbai
Stocks in Mumbai traded down in Monday's trading after crude oil prices advanced for the fourth week in a row amid rising tensions in the Middle East.
India's overall trade deficit plunged after exports rose at a faster pace than imports.
The Sensex index decreased 0.1% to 72,556.30, and the Nifty index edged down 0.2% to 21,973.40.
On the Mumbai stock exchange, 60 stocks traded at their 52-week highs and 29 stocks traded at their 52-week lows.
SJVN Ltd. soared 7.1% to ₹127.10 after the company received an order for a 200 MW solar project from Gujarat Urja Vikas Nigam.
Railtel Corporation of India increased 4.1% to ₹352.85, and the company won an order worth ₹482 crore.
IRCON International gained 2.4% to ₹222.0, and the railway and transportation contractor said it won an order worth ₹630 crore from the National Highways and Infrastructure Development Corporation.
Zydus Lifesciences gained 0.6% to ₹989.65, and the generic drug company said it received final approval from the U.S. drug regulator to sell its generic therapy for the treatment of benign prostatic hyperplasia, a noncancerous enlargement of the prostate gland.
Torrent Power gained 5.5% to ₹1,217.90, and the independent electric power company said it won a 300 MW solar and wind power project with a tariff of ₹3.65 per kWh.
KPI Green Energy jumped the daily limit of 5% to ₹1,525.35 after the company won a bid to deliver a 100 MWA solar power project for Maharashtra State Power Generation Company.
Hindustan Aeronautics jumped 2.1% to ₹3,167.0 after the company received a ₹2,890 crore order from the Ministry of Defense to upgrade 25 Dornier aircraft for the Indian Navy.
U.S. Movers: Adobe, McDonald's, Ulta Beauty, Weight Watchers
Scott Peters
15 Mar, 2024
New York City
The S&P 500 index decreased 0.5% to 5,127.12, and the Nasdaq Composite fell 0.6% to 16,033.73.
The yield on 2-year Treasury notes increased to 4.72%, 10-year Treasury notes inched up to 4.32%, and 30-year Treasury bonds edged down to 4.43%.
Adobe declined 12.2% to $502.07 after the software developer reported mixed quarterly results and issued a weak outlook for the current quarter.
Ulta Beauty dropped 7.6% to $522.0 after the cosmetic retailer estimated a lower-than-expected full-year sales outlook.
Net sales in the fourth quarter ending on February 3 increased 10.2% to $3.6 billion from $3.2 billion, net income advanced to $394.4 million from $340.7 million, and diluted earnings per share rose to $8.08 from $6.68 a year ago.
The fourth quarter included one extra week compared to a year ago because of the calendar shift.
Calendar-adjusted comparable store sales in the quarter slowed sharply to 2.5% from 15.6% in the period a year ago.
During the fourth quarter, the retailer repurchased 352,005 shares of its common stock at a cost of $159.5 million, and in fiscal 2023, the company repurchased 2.2 million shares of its common stock at a cost of $1.0 billion.
As of February 3, 2024, $99.9 million remained available under the $2 billion share repurchase program announced in March 2022.
On March 12, 2024, the company’s board of directors approved a new share repurchase authorization of $2 billion, replacing the current program in place since March 2022.
The company estimated fiscal 2024 sales to range between $11.7 billion and $11.8 billion, an annual increase between 4% and 5%.
The retailer estimated diluted earnings per share in the fiscal year 2024 to fall between $26.20 and $27.0, based on opening net new stores between 60 and 65 and operating margins between 14.0% and 14.3%.
McDonald's Corp. decreased 0.1% to $282.05 after the fast food chain operator faced a global technology outage, forcing some restaurants to temporarily suspend operations in Japan, Australia, and the U.K.
WW International soared 10.7% to $2.07 and rebounded from the 52-week low after the Weight Watchers' parent company's ongoing concerns and core weight loss business.
S&P500 and Nasdaq Extend Weekly Losses After Inflation Worries Resurface
Barry Adams
15 Mar, 2024
New York City
Stocks on Wall Street declined in Friday's trading amid heightened volatility because of the expiration of index options, futures, and individual stock options.
The S&P 500 index and the Nasdaq Composite inched 0.5% lower, and the benchmark indexes are likely to extend losses from the previous week on the worry of resurgent inflation.
At the close of the previous week, the S&P 500 index declined 0.2% and the Nasdaq Composite dropped 1.0%.
Investors pared back rate-cut expectations following the June policy meeting after consumer price inflation and producer price inflation stayed significantly above the Fed's target rate of 2%.
Despite the multiple rate hikes over the last eighteen months, inflation is well anchored in the economy and continues to broaden to the services sector.
Consumer price inflation has steadily declined after peaking at 9.1% in June 2022 to around 3%, but that decline was largely driven by the fall in energy prices and not because of the Fed's policy actions.
Moreover, volatile energy prices have also been on the upward trend for the last three months, amid elevated tensions in the Middle East and a faster-than-expected decline in crude oil inventories in the U.S., the largest consumer of fossil fuels.
U.S. Indexes and Yields
The S&P 500 index decreased 0.5% to 5,127.12, and the Nasdaq Composite fell 0.6% to 16,033.73.
The yield on 2-year Treasury notes increased to 4.72%, 10-year Treasury notes inched up to 4.32%, and 30-year Treasury bonds edged down to 4.43%.
WTI crude oil increased $0.17 to $81.09 a barrel, and natural gas prices decreased 1 cent to $1.73 a thermal unit.
Gold decreased by $0.95 to $2,161.95 an ounce, and silver rose 6 cents to $24.91.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.34.
U.S. Stock Movers
Adobe declined 12.2% to $502.07 after the software developer reported mixed quarterly results and issued a weak outlook for the current quarter.
Ulta Beauty dropped 7.6% to $522.0 after the cosmetic retailer estimated a lower-than-expected full-year sales outlook.
McDonald's Corp. decreased 0.1% to $282.05 after the fast food chain operator faced a global technology outage, forcing some restaurants to temporarily suspend operations in Japan, Australia, and the U.K.
WW International soared 10.7% to $2.07 and rebounded from the 52-week low after the Weight Watchers' parent company's ongoing concerns and core weight loss business.
Europe Movers: Berkeley Group, Bodycote, HelloFresh, Salzgitter, Vodafone, Vonovia
Inga Muller
15 Mar, 2024
Frankfurt
European stock market indexes traded at new intra-day highs and the German benchmark index gained for the fifth week in a row.
The DAX index increased by 0.3% to 17,991.01, the CAC-40 index rose by 0.3% to 8,188.55, and the FTSE 100 index inched higher by 0.102% to 7,745.08.
For the week, the DAX index gained 1.7%, the CAC-40 index advanced 2.4%, and the FTSE 100 index inched up 1.3%.
Vodafone Group jumped 4.2% to 68.81 pence after the UK-based multinational telecom company agreed to sell Vodafone Italy to Swisscom for an enterprise value of €8 billion.
Berkeley Group PLC gained 0.2% to 4,686.0 pence after the UK-based home builder reiterated its annual pre-tax profit outlook.
Scottish Mortgage Investment Trust jumped 3.2% to 806.75 pence after the company's board approved the stock buyback program of £1 billion over the next two years.
Bodycote PLC jumped 4.8% to 661.50 pence after the thermal processing company reported an increase in profit and launched a £60 million stock repurchase plan.
Salzgitter AG decreased 1.9% to €23.30 after the German specialty steel company reported a decline in its annual profit because of lower steel prices and challenging macroeconomic conditions.
HelloFresh soared 10.2% to €7.43 after the meal-kit delivery company reported a less-than-expected 6.6% decline in its active customer base in the fourth quarter.
Last week, the company issued its second profit warning in six months.
Vonovia SE declined 6.2% to €25.15 after the German real estate company reported a record annual loss in 2023.