Market Update
U.S. Movers: 3M, Coinbase, Dollar Tree, Intel, Petco
Scott Peters
13 Mar, 2024
New York City
Benchmark indexes rested after the S&P500 index closed at a new record high in the previous session.
The S&P 500 index decreased 0.1% to 5,170.25, and the Nasdaq Composite fell 0.5% to 16,180.22.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes inched up to 4.09%, and 30-year Treasury bonds edged down to 4.26%.
Coinbase declined 1.7% to $251.90 after the company announced its plans to raise $1 billion through a convertible bond offering.
Petco Health & Wellness advanced 5% to $2.69 after the pet food retailer reported better-than-expected financial results in the fiscal fourth quarter.
Dollar Tree dropped 13% to $136.0 after the deep discount retailer reported weaker-than-expected quarterly results.
The retailer also announced plans to close 1,000 underperforming stores.
Intel declined 1.1% to $44.71 after reports suggested the company is likely to get less-than-expected federal funding.
The U.S. Department of Defense has scrapped a $2.5 billion grant to the chip giant and asked the U.S. Commerce Department to shoulder the entire $3.5 billion in proposed funding for the company.
The news was first reported by Bloomberg News but could not be verified by Ticker.com.
3M Company increased 3.8% to $44.71 after the diversified conglomerate revised its earnings per share outlook to as high as $2.20 from the previous range between $2.0 and $2.15.
The company attributed the increase in earnings to higher interest payments from debt transactions related to the spinoff of its healthcare division.
The company is set to spin off its healthcare division, Solventum, on April 1.
The company also announced Bill Brown as its new chief executive, starting May 1.
The former chief executive of L3 Harris Technologies will replace current chief Mike Roman, who will remain executive chairman of the board.
U.S. Averages Rest Near Record Highs, Crude Oil Jumps 2%
Barry Adams
13 Mar, 2024
New York City
Stocks traded in a narrow range, and benchmark indexes hugged the flatline as investors debated interest rate paths.
The S&P 500 index was nearly unchanged after the market rally in the previous session lifted the index to a new record high.
The 4-month market rally has broadened beyond tech stocks to healthcare, industrial, transportation, and retailers.
The S&P 500 index and the Nasdaq Composite have advanced more than 8% in the year so far, following the 24% and 43% surge in 2023, respectively.
U.S. Indexes and Yields
The S&P 500 index decreased 0.1% to 5,170.25, and the Nasdaq Composite fell 0.5% to 16,180.22.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes inched up to 4.09%, and 30-year Treasury bonds edged down to 4.26%.
WTI crude oil decreased $0.13 to $77.83 a barrel, and natural gas prices increased 5 cents to $1.81 a thermal unit.
Gold decreased by $7.22 to $2,179.44 an ounce, and silver rose 2 cents to $24.45.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.94.
U.S. Stock Movers
Coinbase declined 1.7% to $251.90 after the company announced its plans to raise $1 billion through a convertible bond offering.
Petco Health & Wellness advanced 5% to $2.69 after the pet food retailer reported better-than-expected financial results in the fiscal fourth quarter.
Dollar Tree dropped 13% to $136.0 after the deep discount retailer reported weaker-than-expected quarterly results.
The retailer also announced plans to close 1,000 underperforming stores.
Europe Movers: Adidas, Advanced Medical Solutions, Inditex, Sandoz, Volkswagen
Inga Muller
13 Mar, 2024
Frankfurt
Benchmark indexes in Europe advanced, Germany's wholesale price inflation decline accelerated in January, and eurozone industrial output dropped on the weakness in capital goods production.
The DAX index increased by 0.1% to 17,976.13, the CAC-40 index rose by 0.4% to 8,123.63, and the FTSE 100 index inched higher by 0.2% to 7,759.53.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.96%; and Italian bonds inched lower to 3.59%.
The euro edged higher to $1.093, the British pound inched higher to $1.278, and the U.S. dollar held steady at 87.82 Swiss cents.
Sandoz Group declined 0.1% to CHF 27.76 after the generic drug maker said core net income in 2023 declined to $953 million from $1.2 billion a year ago.
Inditex rose 5.6% to €43.40 after the apparel retailer reported higher sales and pre-tax profit in 2023.
Volkswagen Group decreased 0.7% to €120.0 despite the German vehicle maker reporting strong financial results in 2023.
Investors are worried that rising competition in China and in the company's domestic market from Chinese suppliers of electric vehicles is likely to negatively impact earnings in 2024.
Adidas AG decreased 0.5% to €193.72 after the German athletic shoe maker reported an annual loss in 2023.
Advanced Medical Solutions Group gained 1.7% to 214.08 pence after the UK-based company agreed to acquire Peters Surgical for a maximum price of 141.4 million.
The company agreed to make an initial cash payment of €132.5 million on a debt-free and cash-free basis and an earnout of up to €8.9 million, approximately £7.6 million, payable on delivery of US regulatory approvals, achievement of fiscal year 2024 revenue and gross margin targets, and satisfying certain inventory and tax conditions.
Capital Goods Weakness Drags Eurozone Industrial Output, German Wholesale Inflation Declines
Bridgette Randall
13 Mar, 2024
Frankfurt
European stock market indexes advanced, and investors looked beyond interest rate uncertainties.
Benchmark indexes in Paris and Frankfurt traded at new record highs, and the reference index in London inched higher after the UK's economy rebounded modestly in January.
UK GDP Slightly Rebounded In January
Gross domestic product increased by 0.2% in January, reversing a 0.1% decrease in December after construction and service activities expanded.
The UK's economy has been struggling amid weak consumer demand and muted business activities, and the economy slipped into a technical recession in the second half of 2023.
For the three months to January, the UK's economy shrank by 0.1%, the Office for National Statistics reported Wednesday.
Germany's Wholesale Price Decline Accelerated
Germany's wholesale price decline accelerated in January, confirming the slowing inflation trend in the largest economy in the eurozone.
Wholesale prices declined 3.0% in January, steeper than the 2.7% fall in December, the Federal Statistical Institute reported Wednesday.
Eurozone Industrial Output Dropped In January
Industrial output in the eurozone declined sharply in January after production of capital goods plunged, Eurostat reported Wednesday.
Industrial production plunged 3.2% from the previous month and 6.7% from a year ago in January, reversing the 1.6% monthly growth in December.
Capital goods production plunged 14.5% from the previous month and decreased 12.1% from a year ago, and monthly output of durable goods declined 1.2% and non-durable goods fell 0.2%.
The decline in industrial output was the steepest since last year's March, on the persistent weakness in capital goods, durable and non-durable goods.
Europe Indexes and Yields
The DAX index increased by 0.1% to 17,976.13, the CAC-40 index rose by 0.4% to 8,123.63, and the FTSE 100 index inched higher by 0.2% to 7,759.53.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.96%; and Italian bonds inched lower to 3.59%.
The euro edged higher to $1.093, the British pound inched higher to $1.278, and the U.S. dollar held steady at 87.82 Swiss cents.
Brent crude increased $1.25 to $83.14 a barrel, and the Dutch TTF natural gas decreased by €0.02 to €24.76 per MWh.
Europe Stock Movers
Sandoz Group declined 0.1% to CHF 27.76 after the generic drug maker said core net income in 2023 declined to $953 million from $1.2 billion a year ago.
Inditex rose 5.6% to €43.40 after the apparel retailer reported higher sales and pre-tax profit in 2023.
Volkswagen Group decreased 0.7% to €120.0 despite the German vehicle maker reporting strong financial results in 2023.
Investors are worried that rising competition in China and in the company's domestic market from Chinese suppliers of electric vehicles is likely to negatively impact earnings in 2024.
Adidas AG decreased 0.5% to €193.72 after the German athletic shoe maker reported an annual loss in 2023.
Advanced Medical Solutions Group gained 1.7% to 214.08 pence after the UK-based company agreed to acquire Peters Surgical for a maximum price of 141.4 million.
The company agreed to make an initial cash payment of €132.5 million on a debt-free and cash-free basis and an earnout of up to €8.9 million, approximately £7.6 million, payable on delivery of US regulatory approvals, achievement of fiscal year 2024 revenue and gross margin targets, and satisfying certain inventory and tax conditions.
Weak Tech Stocks Drive Nikkei Lower In Tokyo, China Stocks Extend 4-day Rally
Arjun Pandit
13 Mar, 2024
Mumbai
Asian markets traded mixed after the latest U.S. inflation report suggested that the U.S. Federal Reserve is more likely to keep rates higher at the end of its policy meeting on March 19.
In overnight trading, benchmark indexes in New York advanced more than 1% after February's consumer price inflation met investors' expectations.
In Asia, the Nikkei 225 Stock Average declined 0.4%, the benchmark indexes in Shanghai fell 0.3% but in Hong Kong gained 0.4%, and the KOSPI index in Seoul added 0.3%.
Tech Stocks in Tokyo Edged Lower, Investors Look Ahead of Rate Decision
Benchmark indexes in Tokyo traded down, and semiconductor stocks led the decliners on the worry that the recent monthslong rally may have stretched valuation too far.
On the other hand, investors welcomed the rise in the producer price inflation data released on Tuesday.
Japan's producer price inflation rose 0.6% from a year ago in February or gained 0.2% from the previous month, the Bank of Japan reported.
The rise in producer prices follows the increase in consumer prices in the Tokyo metropolitan area, indicating inflation may be on the path to the 2% target set by the central bank.
Investors are keenly awaiting the monetary policy outcome of the Bank of Japan on Wednesday, March 19, amid rising hopes that the central bank may lay the groundwork for lifting interest rates.
Japan is the only developed nation in the world with negative interest rates, and investors are hoping that the central bank is ready to end its ultra-loose monetary policy.
The Nikkei 225 Stock Average fell 0.4% to 38,717.18, and the Topix index dropped 0.2% to 2,652.04.
Semiconductor stocks rebounded following the gains in overnight trading in New York.
Advantest, Screen Holdings, Tokyo Electron, Disco Corp., and SoftBank gained between 2% and 3%.
Panasonic, Mitsubishi Electric, and Canon declined between 0.5% and 2%, but vehicle makers Toyota, Honda, and Nissan reversed morning losses to close up between 1% and 3%.
Bargain Hunters Return to China Amid Low Valuations
Market sentiment in Shanghai and Hong Kong was driven by bargain hunters and corporate buybacks, as well as persistent worries about property market weakness and weak consumer sentiment.
Chinese stock market indexes are down for the fourth year in a row after foreign portfolio investors continue to lighten their holdings and foreign direct investment plunged following the protracted downturn in the property market, persistent worries of intellectual theft, and rising personal security concerns after the government's expansion of espionage laws.
Moreover, the recently concluded Chinese lawmakers annual parliamentary convention failed to make significant announcements to stabilize financial markets.
The CSI 300 index decreased 0.6% to 3,576.31, and the Hang Seng index added 0.3% to 17,138.75.
Hong Kong stocks advanced for the fourth day in a row after the listed companies ramped up their stock buybacks to take advantage of their beaten-down stocks.
The latest surge is the longest market rally since the five-day advance in October.
Electric vehicle makers BYD gained 0.4%, Li Auto advanced 4%, but Xiaomi Corp. declined 0.3%.
AIA Group advanced more than 1% ahead of the company's annual results on Thursday, and yesterday the company confirmed it purchased its stock worth HK$12.7 million.
Cathay Pacific Airways jumped 6.5% to HK$9.24 after the company reported a sharp jump in revenue and swung to profit in 2023.
Cathay Pacific Traffic Rebounds
The Hong Kong-based airline said 2023 revenue jumped 85.1% to HK$94.5 million, and net income swung to a profit of HK$9.78 billion from a loss of HK$6.62 billion in 2022.
The airline has been struggling to expand capacity amid a shortage of pilots and a slow recovery in passenger demand, but the return to profitability allowed the company to declare a cash dividend of 43 Hong Kong cents per share.
Passengers carried by the airlines jumped more than fivefold to 17.98 million in 2023 from 2.8 million, and air cargo delivered soared 19.6% to 1.38 million tons.
India's Consumer Price Inflation Held Steady, Industrial Production Moderated
Stocks in Mumbai faced headwinds in early trading as investors reviewed the latest updates on inflation and industrial production.
Retail inflation in India held steady in February and stayed within the range set by the Reserve Bank of India.
Consumer price inflation in February held at 5.1% and stayed in the tolerance range between 2% and 6% for the fourth month in a row.
Volatile fresh vegetables, vegetables, and pulses contributed to the food price inflation acceleration to 8.9% from 8.3% in the previous month, said the statistical agency, the Ministry of Statistics and Programme Implementation.
In other economic news, industrial output decreased moderately to 3.8% in January from 4.2% in December.
Mining production rose 5.9%, manufacturing output increased 3.2%, and electricity surged 5.6%, according to the preliminary estimate released by the statistical agency.
India's industrial production index has three components, with 77.6% weight assigned to manufacturing, 14.3% to mining, and 8% to electricity.
The Sensex index increased 0.01% to 73,516.42, and the Nifty index edged up 0.01% to 22,334.45.
On the Mumbai stock exchange, 37 stocks traded at their 52-week highs and 105 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.03%, and the Indian rupee strengthened to ₹82.79 against the U.S. dollar.
India Movers: Glenmark HG Infra, Life Sciences, Likhitha Infra, Shalby, Vedanta
Arun Goswami
13 Mar, 2024
Mumbai
Stocks in Mumbai lacked direction, retail inflation in February held steady, and industrial production moderated in January on the weakness in metals and paper product manufacturing.
The Sensex index increased 0.01% to 73,516.42, and the Nifty index edged up 0.01% to 22,334.45.
On the Mumbai stock exchange, 37 stocks traded at their 52-week highs and 105 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.03%, and the Indian rupee strengthened to ₹82.79 against the U.S. dollar.
Glenmark Life Sciences increased 2% to ₹737.85 after Nirma completed the purchase of a 75% stake in the company.
Vedanta declined 0.8% to ₹269.80, and the mining company was fined ₹77.62 crore by the securities regulator for the company's delay in paying dividends between January 2014 and June 2017 to UK-based Cairn Energy PLC.
In addition, the SEBI also barred the company promoter, Anil Agarwal, and the entire company board from accessing capital markets for two months.
HG Infra Engineering gained 0.7% to ₹909.50 after the company was awarded a 709 crore project for laying tracks in Bihar by the East Central Railway.
Likhitha Infrastructure added 4.3% to ₹254.10 after the company won a ₹106 crore order from Hindustan Petroleum Corporation Limited.
Shalby gained 0.6% to ₹231.65 after the multi-specialty hospital said it plans to acquire a 100% stake in Healers Hospital Private Limited for ₹104 crore.
U.S. and European Markets Jump 1% After Inflation Worries Eased
Barry Adams
12 Mar, 2024
New York City
Popular technology and semiconductor stocks started to rise again as investors looked over the most recent report on inflation.
The stock rally continued in Tuesday's trading after struggling in the previous two sessions in a row after the overall inflation in February met investors' expectations.
The S&P 500 index advanced 0.5%, and the Nasdaq Composite gained 0.8%.
Last week's healthy labor market reports has supported positive market sentiment, and the easing of inflation has reaffirmed the US. economy's resilience.
Later in the week investors are looking forward to the release of the producer price inflation report and the Federal Reserve's policy meeting outcome at the end of a two-day meeting on March 19.
U.S. Consumer Inflation Unexpectedly Edge Higher
Consumer price inflation in February unexpectedly increased to 3.2% from 3.1% in the previous month, the U.S. Bureau of Labor Statistics reported Tuesday.
The rising cost of shelter and gasoline contributed about 60% of overall inflation as rents continued to rise across the nation.
On a monthly basis, inflation held steady at 0.4% and matched the rate in January.
Core inflation, which excludes food and energy prices, rose at a slower annual pace of 3.8%, compared to 3.9% in January.
Prices of food, shelter, new vehicles, and medical care continued to rise, but at a slower pace in the month.
Food price inflation slowed to 2.2% from 2.6%, housing costs eased to 5.7% from 6.0%, new vehicle prices rose 0.4% from 0.6%, and medical care inflation eased to 2.9% from 3.0%.
However, transportation costs accelerated to 9.9%, compared to 9.5% in the previous month.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 5,146.28, and the Nasdaq Composite advanced 0.8% to 16,153.36.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes inched up to 4.09%, and 30-year Treasury bonds edged down to 4.26%.
WTI crude oil increased $0.23 to $78.18 a barrel, and natural gas prices decreased 5 cents to $1.70 a thermal unit.
Gold decreased by $20.87 to $2,161.63 an ounce, and silver fell 21 cents to $24.15.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.94.
U.S. Stock Movers
Oracle Corp. increased 11.5% to $127.26 after the database and cloud computing company reported better-than-expected quarterly earnings.
Kohl's Corp. declined 2.5% to $26.50 after the department store chain operator reported better-than-expected quarterly results but issued a weak outlook.
On Holding plunged 14.5% to $28.75 after the Swiss shoemaker reported weaker-than-expected revenue of CHF 447.0 million and net income swung to a loss of 5 Swiss cents per share.
Southwest Airlines declined 8.5% to $30.93 after the regional airline said it plans to reduce its capacity and reevaluate its financial projections for 2024 in light of persistent aircraft deliveries from its sole supplier, Boeing.
The airline also said leisure revenue in the first quarter was lighter than expected and estimated unit revenue to range from a flat to a 2% increase from a year ago, but lower than an increase of as much as 4.5%.
New Record Highs In Paris and Frankfurt
European markets hovered near record highs amid interest rate uncertainties and mixed economic data in recent days.
In early morning, benchmark indexes in Frankfurt, Paris, and London traded around the flatline as investors debated future rate paths, the global economic backdrop, and the ongoing weakness in consumer spending in the eurozone.
However, market indexes in Paris and Frankfurt traded at new highs after the U.S. inflation met investors' expectations, supporting the case for the Federal Reserve to lower rates as early as June.
UK Wage Growth Slowed, Unemployment Rate Expanded
On the economic front, UK wage growth in the three months to January rose at the slowest pace since October 2022, the Office for National Statistics reported Tuesday.
Regular weekly pay, excluding bonuses, rose 6.1% to £627 per week, slower than the 6.2% rise in the previous three months.
Adjusted for inflation, regular pay increased 1.8%.
Total pay, including bonuses, rose at a slower pace to £672 per week, and the growth eased to 5.6% from 5.8%.
The wholesaling, retailing, hotels, and restaurants sectors saw the largest annual regular growth rate at 7.2%, followed by the manufacturing sector with a 6.8% increase and the finance and business services sector with a 6.6% rise.
The unemployment rate in the three-month period to January increased to 3.9% from 3.8% in the previous three-month period, and employment levels eased to 75%.
The number of people claiming jobless benefits in February increased by 16,800 from the previous month and 85,800 from a year ago to 1.585 million.
The number of job vacancies declined by 43,000 in the three-month period to January to 908,000, and the vacancies declined from the previous quarter but are still significantly above pre-pandemic levels.
The U.K. is battling with long-term sickness, and inactive people who are neither looking for work nor employed have increased to 21.8% of the population, or a near-record 2.7 million.
Germany's Inflation Downtrend Continued in February
Germany's inflation eased to an annual pace of 2.5%, down from 2.9% in January and 3.7% in December, the Federal Statistical Office confirmed Tuesday.
The inflation rate in the eurozone's largest economy has been cooling and dropped to the lowest rate since June 2021, when inflation stood at 2.4%.
"The price situation for energy products continues to ease. The increase in food prices has slowed markedly and is now below the overall inflation rate for the first time in more than two years," said President Ruth Brand, President of the Federal Statistical Office.
Weakening in energy prices drove the overall inflation lower, and the energy prices in February were 2.4% lower than in the same month a year ago, despite the ending of the government's energy subsidy in January.
Energy prices for households declined at a faster annual pace of 3.6% in February, despite the introduction of higher carbon prices since the beginning of 2024.
Excluding energy prices, the inflation rate was 3.1%, and excluding food and energy, the inflation rate was 3.4%.
But still, hopes ran high after inflation dropped to the level last seen in mid-2021, in hopes that the worst of the pandemic-era cost of living crisis was nearing its end.
Most of the decline in inflation is driven by the sharp fall in energy prices, and policymakers cannot take credit for the steady fall in inflation because prices are still significantly higher than pre-pandemic 2019 despite multiple interest rate hikes.
Europe Indexes and Yields
The DAX index increased by 1.2% to 17,965.11, the CAC-40 index rose by 0.8% to 8,087.48, and the FTSE 100 index inched higher by 1.0% to 7,747.81.
The yield on 10-year German bonds edged up to 2.29%; French bonds inched higher to 2.74%; the UK gilts edged lower to 3.92%; and Italian bonds inched higher to 3.60%.
The euro edged higher to $1.093, the British pound inched higher to $1.278, and the U.S. dollar held steady at 87.67 Swiss cents.
Brent crude increased $0.19 to $82.40 a barrel, and the Dutch TTF natural gas gained by €0.02 to €24.95 per MWh.
Europe Stock Movers
Energy stocks advanced following the rise in crude oil prices after tensions in the Middle East.
BP plc advanced 1.6% to 479.10 pence, and Shell PLC gained 0.8% to €29.53.
Generali increased 1.9% to €22.65 after the Italian insurance company reported a record profit in 2023.
Oracle Corp. jumped 12.7% to €117.78 after the U.S.-based database company reported better-than-expected quarterly earnings.
Hill & Smith advanced 2.4% to 1,894.0 pence after the infrastructure products and services provider reported record annual sales.
Persimmon plc declined 3.3% to 1,329.0 pence after the UK-based home builder reported slightly lower-than-expected 2023 revenue earnings.
Wacker Chemie gained 6.3% to €110.30 despite the German chemical company estimating a slight decline in 2024 revenue and earnings.
Porsche Automobil SE increased 1.3% to €47.44 after the sportscar maker lifted its dividend but lowered its 2024 profitability outlook because of the launch of new electric and hybrid vehicles.
Asian Markets Turn Cautious Ahead of U.S. Inflation Report
Benchmark indexes in Asia edged lower amid cautious trading, and investors reacted to local corporate and economic news.
Chinese lawmakers ended their weeklong parliamentary session and did not provide any substantial measures to revive the property market and stabilize financial markets.
Moreover, China's housing minister said troubled property developers should pursue bankruptcy and restructuring alternatives, sending strong signals that the government is not likely to provide any financial assistance to troubled developers.
Tokyo indexes Drop to 3-week Lows, Producer Price Inflation Rebounded
Benchmark indexes in Japan traded down to three-week lows, and the yen and Japanese bond yields rallied on the hopes of the Bank of Japan ending its ultra-loose interest rate policy next week.
Investors are closely watching the outcome of spring wage negotiations between large corporations and workers unions, and expectations are high that real wages, after adjusting for inflation, are likely to rise more than 4% for the first time in nearly two decades.
Faster wage increases are likely to provide a strong signal to policymakers that inflation is likely to stay above 2%, supporting the move to end negative interest rates.
Producer prices in Japan rose 0.6% from a year ago in February amid widespread price increases, the Bank of Japan reported Tuesday.
The measure of wholesale prices rose at the fastest pace since last October, when prices advanced 1.1%. Prices rose at a slower pace of 0.2% in December and January.
Prices of food products, beverages, metal products, machinery, fuel, and coal rose at an elevated pace.
The Nikkei 225 Stock Average declined 0.4% to 38,659.89, and the Topix index dropped 0.8% to 2,646.82.
The yen edged up 0.3% to 147.39, and the yield on the 10-year Japanese government bond inched higher to 0.77%.
Tech stocks were among the leading decliners, and Tokyo Electron, Screen Holdings, SoftBank, and Advantest declined between 2% and 3%.
Leading exporters also declined, and Panasonic, Canon, Sony, and Mitsubishi Electric fell between 0.5% and 1.5%.
Marubeni, Mitsui & Company, Itochu, and Sumitomo declined between 2% and 4%.
Stock Buybacks Lift Market Mood In Hong Kong and Shanghai
Stocks in Shanghai struggled but advanced in Hong Kong in the hopes that more companies may buy back their shares amid weak prices.
Investors are hoping that the recent wave of stock buybacks from companies is indicative of the company's confidence in their businesses, and stock prices are trading at discounts to the company's business valuations.
Moreover, these purchases contribute to stabilizing financial markets.
WuXi Apptec jumped 5% to ¥57.54 after the biotech company said it bought back 50 million yuan of its own shares in Shanghai on Monday.
AIA Group increased 1.5% to HK$63.15 after the company said it acquired its stock for HK$12.7 million.
Xiaomi jumped 9.5% to $14.68 after the smartphone maker launched its electric vehicle, making an entry in a crowded market suffering from oversupply and intense price competition.
China Vanke rose 3.5% to $5.91 on the hopes that the government will provide financial support to the state-controlled home developer.
Separately, Moody's Investor Services downgraded the home developer's debt to junk level, citing a rising liquidity crunch amid a falling market and growing price pressures to sell newly developed projects.
Belatedly, Moody's Ratings replaced the company's investment grade "Baa3" rating with "Ba1," which is considered speculative and "subject to substantial risk."
The CSI 300 index edged down 0.03% to 3,588.30, and the Hang Seng index increased 1.7% to 16,870.31.
India Stocks Traded Around Record High
Stocks in Mumbai edged higher in early trading, and investors reviewed mixed global markets.
The Sensex and the Nifty indexes inched higher after struggling in the last two sessions, and the Indian government bond yields held steady as the rupee strengthened against the U.S. dollar.
Domestic and international investors stepped up investing in Indian stocks after investors searched for bargains.
Gold and silver prices continued to move higher, tracking gains in international markets, on the growing consensus that the U.S. Federal Reserve and the European Central Bank are laying the groundwork to cut interest rates starting as early as June.
Lower interest rates weaken the U.S. dollar and support a higher price of precious metals.
Market sentiment on Dalal Street has been positive after the Reserve Bank of India said last week that the March fourth quarter gross domestic product is likely to surpass the government's estimate.
The central bank's estimated fiscal year 2024 economic growth is likely to cross 8%, higher than the government's estimate of 7.6%.
The Sensex index increased 0.01% to 73,516.42, and the Nifty index edged up 0.01% to 22,334.45.
On the Mumbai stock exchange, 193 stocks traded at their 52-week highs and 105 stocks traded at their 52-week lows.
ITC declined 1% to ₹409.20, and the company's parent, British American Tobacco, is looking to divest between a $2 billion and a $3 billion stake in the company as early as this week.
Mahindra & Mahindra decreased 0.5% to ₹1,888.60, and the company's February vehicle sales increased 26% to 71,384 units, and production expanded 26% to 73,380 units from 56,551 units.
U.S. Movers: Kohl's, On Holding, Oracle, Southwest Airlines
Scott Peters
12 Mar, 2024
New York City
U.S. stocks lacked direction after consumer price inflation in February unexpectedly edged higher, driven by a surge in gasoline prices and persistently elevated housing inflation.
The S&P 500 index increased 0.5% to 5,210.50, and the Nasdaq Composite advanced 0.8% to 16,022.73.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes inched up to 4.09%, and 30-year Treasury bonds edged down to 4.26%.
Oracle Corp. increased 11.5% to $127.26 after the database and cloud computing company reported better-than-expected quarterly earnings.
Revenue in the fiscal third quarter ending on February increased 7% to $13.3 billion from $12.4 billion, net income advanced 27% to $2.4 billion from $1.8 billion, and diluted earnings per share rose to 85 cents from 68 cents a year ago.
Cloud revenue increased 25% to $5.1 billion and cloud infrastructure surged 49% to $1.8 billion, respectively.
"Large new cloud infrastructure contracts signed in Q3 drove Oracle's total Remaining Performance Obligations up 29% to over $80 billion—an all-time record," said Oracle CEO, Safra Catz.
The company also signaled strong demand for its cloud computing products and indicated sustained revenue growth at least for the remainder of 2024.
"We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly.
We expect that 43% of our current $80 billion of Remaining Performance Obligations will be recognized as revenue over the next four quarters, added Catz.
The company also indicated that its Gen2 Cloud Infrastructure business "will remain in a hypergrowth phase for the foreseeable future" after surging 53% in the fiscal third quarter.
Kohl's Corp. declined 2.5% to $26.50 after the department store chain operator reported better-than-expected quarterly results but issued a weak outlook.
On Holding plunged 14.5% to $28.75 after the Swiss shoemaker reported weaker-than-expected revenue of CHF 447.0 million and net income swung to a loss of 5 Swiss cents per share.
Southwest Airlines declined 8.5% to $30.93 after the regional airline said it plans to reduce its capacity and reevaluate its financial projections for 2024 in light of persistent delays in aircraft deliveries from its sole supplier, Boeing.
The airline also said leisure revenue in the first quarter was lighter than expected and estimated unit revenue to range from a flat to a 2% increase from a year ago, but lower than an increase of as much as 4.5%.
U.S. Stocks Lack Direction After Inflation Unexpectedly Edge Higher
Barry Adams
12 Mar, 2024
New York City
Stocks rebounded in Tuesday's trading after struggling in the previous two sessions in a row after the overall inflation in February met investors' expectations.
The S&P 500 index advanced 0.5%, and the Nasdaq Composite gained 0.8%.
Market sentiment has remained positive after healthy labor market conditions and the easing of inflation have reaffirmed the resilience of the US. economy.
U.S. Consumer Inflation Unexpectedly Edge Higher
Consumer price inflation in February unexpectedly increased to 3.2% from 3.1% in the previous month, the U.S. Bureau of Labor Statistics reported Tuesday.
The rising cost of shelter and gasoline contributed about 60% of overall inflation as rents continued to rise across the nation.
On a monthly basis, inflation held steady at 0.4% and matched the rate in January.
Core inflation, which excludes food and energy prices, rose at a slower annual pace of 3.8%, compared to 3.9% in January.
Prices of food, shelter, new vehicles, and medical care continued to rise, but at a slower pace in the month.
Food price inflation slowed to 2.2% from 2.6%, housing costs eased to 5.7% from 6.0%, new vehicle prices rose 0.4% from 0.6%, and medical care inflation eased to 2.9% from 3.0%.
However, transportation costs accelerated to 9.9%, compared to 9.5% in the previous month.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 5,210.50, and the Nasdaq Composite advanced 0.8% to 16,022.73.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes inched up to 4.09%, and 30-year Treasury bonds edged down to 4.26%.
WTI crude oil decreased $0.13 to $77.83 a barrel, and natural gas prices increased 5 cents to $1.81 a thermal unit.
Gold decreased by $7.22 to $2,179.44 an ounce, and silver rose 2 cents to $24.45.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 102.94.
U.S. Stock Movers
Oracle Corp. increased 11.5% to $127.26 after the database and cloud computing company reported better-than-expected quarterly earnings.
Kohl's Corp. declined 2.5% to $26.50 after the department store chain operator reported better-than-expected quarterly results but issued a weak outlook.
On Holding plunged 14.5% to $28.75 after the Swiss shoemaker reported weaker-than-expected revenue of CHF 447.0 million and net income swung to a loss of 5 Swiss cents per share.
Southwest Airlines declined 8.5% to $30.93 after the regional airline said it plans to reduce its capacity and reevaluate its financial projections for 2024 in light of persistent aircraft deliveries from its sole supplier, Boeing.
The airline also said leisure revenue in the first quarter was lighter than expected and estimated unit revenue to range from a flat to a 2% increase from a year ago, but lower than an increase of as much as 4.5%.
Europe Movers: Generali, Hill & Smith, Oracle, Persimmon, Porsche, Wacker Chemie
Inga Muller
12 Mar, 2024
Frankfurt
European stock market indexes struggled near record highs, and bond yields in the eurozone drifted lower after Germany confirmed a cooler inflation trend in February.
The DAX index increased by 0.2% to 17,786.57, the CAC-40 index fell by 0.01% to 8,018.20, and the FTSE 100 index inched higher by 0.9% to 7,742.50.
The yield on 10-year German bonds edged up to 2.29%; French bonds inched higher to 2.74%; the UK gilts edged lower to 3.92%; and Italian bonds inched higher to 3.60%.
Energy stocks advanced following the rise in crude oil prices after tensions in the Middle East.
BP plc advanced 1.6% to 479.10 pence, and Shell PLC gained 0.8% to €29.53.
Generali increased 1.9% to €22.65 after the Italian insurance company reported a record profit in 2023.
Oracle Corp. jumped 12.7% to €117.78 after the U.S.-based database company reported better-than-expected quarterly earnings.
Hill & Smith advanced 2.4% to 1,894.0 pence after the infrastructure products and services provider reported record annual sales.
Persimmon plc declined 3.3% to 1,329.0 pence after the UK-based home builder reported slightly lower-than-expected 2023 revenue earnings.
Wacker Chemie gained 6.3% to €110.30 despite the German chemical company estimating a slight decline in 2024 revenue and earnings.
Porsche Automobil SE increased 1.3% to €47.44 after the sportscar maker lifted its dividend but lowered its 2024 profitability outlook because of the launch of new electric and hybrid vehicles.
UK Wage Growth Eased, German Inflation Cooled In February
Bridgette Randall
12 Mar, 2024
Frankfurt
European markets hovered near record highs amid interest rate uncertainties and mixed economic data in recent days.
Benchmark indexes in Frankfurt, Paris, and London traded around the flatline as investors debated future rate paths, the global economic backdrop, and the ongoing weakness in consumer spending in the eurozone.
UK Wage Growth Slowed, Unemployment Rate Expanded
On the economic front, UK wage growth in the three months to January rose at the slowest pace since October 2022, the Office for National Statistics reported Tuesday.
Regular weekly pay, excluding bonuses, rose 6.1% to £627 per week, slower than the 6.2% rise in the previous three months.
Adjusted for inflation, regular pay increased 1.8%.
Total pay, including bonuses, rose at a slower pace to £672 per week, and the growth eased to 5.6% from 5.8%.
The wholesaling, retailing, hotels, and restaurants sectors saw the largest annual regular growth rate at 7.2%, followed by the manufacturing sector with a 6.8% increase and the finance and business services sector with a 6.6% rise.
The unemployment rate in the three-month period to January increased to 3.9% from 3.8% in the previous three-month period, and employment levels eased to 75%.
The number of people claiming jobless benefits in February increased by 16,800 from the previous month and 85,800 from a year ago to 1.585 million.
The number of job vacancies declined by 43,000 in the three-month period to January to 908,000, and the vacancies declined from the previous quarter but are still significantly above pre-pandemic levels.
The U.K. is battling with long-term sickness, and inactive people who are neither looking for work nor employed have increased to 21.8% of the population, or a near-record 2.7 million.
Germany's Inflation Downtrend Continued in February
Germany's inflation eased to an annual pace of 2.5%, down from 2.9% in January and 3.7% in December, the Federal Statistical Office confirmed Tuesday.
The inflation rate in the eurozone's largest economy has been cooling and dropped to the lowest rate since June 2021, when inflation stood at 2.4%.
"The price situation for energy products continues to ease. The increase in food prices has slowed markedly and is now below the overall inflation rate for the first time in more than two years," said President Ruth Brand, President of the Federal Statistical Office.
Weakening in energy prices drove the overall inflation lower, and the energy prices in February were 2.4% lower than in the same month a year ago, despite the ending of the government's energy subsidy in January.
Energy prices for households declined at a faster annual pace of 3.6% in February, despite the introduction of higher carbon prices since the beginning of 2024.
Excluding energy prices, the inflation rate was 3.1%, and excluding food and energy, the inflation rate was 3.4%.
But still, hopes ran high after inflation dropped to the level last seen in mid-2021, in hopes that the worst of the pandemic-era cost of living crisis was nearing its end.
Most of the decline in inflation is driven by the sharp fall in energy prices, and policymakers cannot take credit for the steady fall in inflation because prices are still significantly higher than pre-pandemic 2019 despite multiple interest rate hikes.
Europe Indexes and Yields
The DAX index increased by 0.2% to 17,786.57, the CAC-40 index fell by 0.01% to 8,018.20, and the FTSE 100 index inched higher by 0.9% to 7,742.50.
The yield on 10-year German bonds edged up to 2.29%; French bonds inched higher to 2.74%; the UK gilts edged lower to 3.92%; and Italian bonds inched higher to 3.60%.
The euro edged higher to $1.093, the British pound inched higher to $1.278, and the U.S. dollar held steady at 87.67 Swiss cents.
Brent crude increased $0.63 to $82.84 a barrel, and the Dutch TTF natural gas decreased by €0.03 to €24.91 per MWh.
Europe Stock Movers
Energy stocks advanced following the rise in crude oil prices after tensions in the Middle East.
BP plc advanced 1.6% to 479.10 pence, and Shell PLC gained 0.8% to €29.53.
Generali increased 1.9% to €22.65 after the Italian insurance company reported a record profit in 2023.
Oracle Corp. jumped 12.7% to €117.78 after the U.S.-based database company reported better-than-expected quarterly earnings.
Hill & Smith advanced 2.4% to 1,894.0 pence after the infrastructure products and services provider reported record annual sales.
Persimmon plc declined 3.3% to 1,329.0 pence after the UK-based home builder reported slightly lower-than-expected 2023 revenue earnings.
Wacker Chemie gained 6.3% to €110.30 despite the German chemical company estimating a slight decline in 2024 revenue and earnings.
Porsche Automobil SE increased 1.3% to €47.44 after the sportscar maker lifted its dividend but lowered its 2024 profitability outlook because of the launch of new electric and hybrid vehicles.
Japan's Producer Price Inflation Rebounded, Chinese Companies Accelerate Stock Buyback Plans
Arjun Pandit
12 Mar, 2024
Mumbai
Benchmark indexes in Asia edged lower amid cautious trading, and investors reacted to local corporate and economic news.
Chinese lawmakers ended their weeklong parliamentary session and did not provide any substantial measures to revive the property market and stabilize financial markets.
Moreover, China's housing minister said troubled property developers should pursue bankruptcy and restructuring alternatives, sending strong signals that the government is not likely to provide any financial assistance to troubled developers.
Tokyo indexes Drop to 3-week Lows, Producer Price Inflation Rebounded
Benchmark indexes in Japan traded down to three-week lows, and the yen and Japanese bond yields rallied on the hopes of the Bank of Japan ending its ultra-loose interest rate policy next week.
Investors are closely watching the outcome of spring wage negotiations between large corporations and workers unions, and expectations are high that real wages, after adjusting for inflation, are likely to rise more than 4% for the first time in nearly two decades.
Faster wage increases are likely to provide a strong signal to policymakers that inflation is likely to stay above 2%, supporting the move to end negative interest rates.
Producer prices in Japan rose 0.6% from a year ago in February amid widespread price increases, the Bank of Japan reported Tuesday.
The measure of wholesale prices rose at the fastest pace since last October, when prices advanced 1.1%. Prices rose at a slower pace of 0.2% in December and January.
Prices of food products, beverages, metal products, machinery, fuel, and coal rose at an elevated pace.
The Nikkei 225 Stock Average declined 0.4% to 38,659.89, and the Topix index dropped 0.8% to 2,646.82.
The yen edged up 0.3% to 147.39, and the yield on the 10-year Japanese government bond inched higher to 0.77%.
Tech stocks were among the leading decliners, and Tokyo Electron, Screen Holdings, SoftBank, and Advantest declined between 2% and 3%.
Leading exporters also declined, and Panasonic, Canon, Sony, and Mitsubishi Electric fell between 0.5% and 1.5%.
Marubeni, Mitsui & Company, Itochu, and Sumitomo declined between 2% and 4%.
Stock Buybacks Lift Market Mood In Hong Kong and Shanghai
Stocks in Shanghai struggled but advanced in Hong Kong in the hopes that more companies may buy back their shares amid weak prices.
Investors are hoping that the recent wave of stock buybacks from companies is indicative of the company's confidence in their businesses, and stock prices are trading at discounts to the company's business valuations.
Moreover, these purchases contribute to stabilizing financial markets.
WuXi Apptec jumped 5% to ¥57.54 after the biotech company said it bought back 50 million yuan of its own shares in Shanghai on Monday.
AIA Group increased 1.5% to HK$63.15 after the company said it acquired its stock for HK$12.7 million.
Xiaomi jumped 9.5% to $14.68 after the smartphone maker launched its electric vehicle, making an entry in a crowded market suffering from oversupply and intense price competition.
China Vanke rose 3.5% to $5.91 on the hopes that the government will provide financial support to the state-controlled home developer.
Separately, Moody's Investor Services downgraded the home developer's debt to junk level, citing a rising liquidity crunch amid a falling market and growing price pressures to sell newly developed projects.
Belatedly, Moody's Ratings replaced the company's investment grade "Baa3" rating with "Ba1," which is considered speculative and "subject to substantial risk."
The CSI 300 index edged down 0.03% to 3,588.30, and the Hang Seng index increased 1.7% to 16,870.31.
India Stocks Traded Around Record High
Stocks in Mumbai edged higher in early trading, and investors reviewed mixed global markets.
The Sensex and the Nifty indexes inched higher after struggling in the last two sessions, and the Indian government bond yields held steady as the rupee strengthened against the U.S. dollar.
Domestic and international investors stepped up investing in Indian stocks after investors searched for bargains.
Gold and silver prices continued to move higher, tracking gains in international markets, on the growing consensus that the U.S. Federal Reserve and the European Central Bank are laying the groundwork to cut interest rates starting as early as June.
Lower interest rates weaken the U.S. dollar and support a higher price of precious metals.
Market sentiment on Dalal Street has been positive after the Reserve Bank of India said last week that the March fourth quarter gross domestic product is likely to surpass the government's estimate.
The central bank's estimated fiscal year 2024 economic growth is likely to cross 8%, higher than the government's estimate of 7.6%.
The Sensex index increased 0.01% to 73,516.42, and the Nifty index edged up 0.01% to 22,334.45.
On the Mumbai stock exchange, 193 stocks traded at their 52-week highs and 105 stocks traded at their 52-week lows.
ITC declined 1% to ₹409.20, and the company's parent, British American Tobacco, is looking to divest between a $2 billion and a $3 billion stake in the company as early as this week.
Mahindra & Mahindra decreased 0.5% to ₹1,888.60, and the company's February vehicle sales increased 26% to 71,384 units, and production expanded 26% to 73,380 units from 56,551 units.
India Movers: Bharat Highways, HIL, Hindustan Zinc, ITC, Jupiter Wagons, PSP, Pitti Engineering, RK Swamy
Arun Goswami
12 Mar, 2024
Mumbai
Jupiter Wagons edged higher by 0.3% to ₹366.0 after the company won a ₹957 crore contract from the Ministry of Railways for the supply of wagons with side mechanisms.
ITC declined 1% to ₹409.20, and the company's parent, British American Tobacco, is looking to divest between a $2 billion and a $3 billion stake in the company as early as this week.
HIL decreased 0.2% to ₹2,706.0, and the company said it agreed to acquire Crestia Polytech and four other related entities for ₹265 crore.
Mahindra & Mahindra decreased 0.5% to ₹1,888.60, and the company's vehicle sales increased 26% to 71,384 units, and production expanded 26% to 73,380 units from 56,551 units.
However, vehicle exports declined 31.6% to 1,539 units.
PSP Projects fell 2.2% to ₹651.0 after the company said it received additional orders for 410 crore for a building construction project in GIFT city, Gandhinagar.
Hindustan Zinc declined 0.7% to ₹308.80 after the central government ministry declined the company's plan to split its zinc and lead, silver, and recycling into three separate companies.
Pitti Engineering inched lower by 5.7% to ₹745.10 after the company signed a binding agreement to acquire Bagadia Chaitra Industries for ₹124.9 crore.
RK Swampy is scheduled to list its stock after the integrated marketing services provider sold its stock at ₹288 per share in an initial public offering and raised ₹423 crore.
Bharat Highways InvIT, a real estate investment trust, is expected to list its stock at ₹100 per share.