Market Update
Movers: Best Buy, Birkenstock, C3.ai, Duolingo, Salesforce, Snowflake
Scott Peters
29 Feb, 2024
New York City
Duolingo soared 20.1% to $235.56 after the language learning platform estimated strong revenue guidance in the fiscal first quarter and full-year after posting better-than-expected fourth-quarter results.
Total revenue in the fourth quarter increased 45% to $151 million from $103 million, net income swung to $12.1 million from a loss of $13.9 million, and diluted earnings per share were 29 cents compared to a loss of 35 cents a year ago.
Cash flow from operating activities was $49.2 million compared to $11.6 million in the prior year quarter, and free cash flow was $47.7 million compared to $11.3 million in the prior year quarter.
Total bookings increased 51% from a year ago to $191 million, and paid subscribers surged 57% to 6.6 million at the end of the quarter.
Snowflake plunged 22.9% to $177.20 after the company reported better-than-expected quarterly results and also announced the retirement of its chief executive, Frank Slootman.
The stock was also under pressure after the company estimated a weaker-than-expected product revenue outlook in the first quarter.
Okta soared 24.5% to $108.50 after the identity software management company reported better-than-expected quarterly results and estimated higher-than-expected quarterly results.
Fourth quarter revenue increased 19% to $605 million, net loss shrank to $44 million from $153 million, and diluted loss per share decreased to 26 cents from 95 cents a year ago.
Net cash provided by operations in the quarter increased to $174 million, or 29% of total revenue, compared to net cash provided by operations of $76 million, or 15% of total revenue, in the quarter a year ago.
Free cash flow was $166 million, or 28% of total revenue, compared to $72 million, or 14% of total revenue, in the fourth quarter of fiscal 2023.
C3.ai surged 19% to $35.07 after the artificial intelligence company reported better-than-expected quarterly results.
Salesforce inched up 0.5% to $301.36 after the customer relationship management software reported better-than-expected quarterly results but guided revenue growth of less than 9% in the current fiscal year.
Revenue in the fourth quarter increased 11% to $9.29 billion, net income swung to a profit of $1.44 billion from a loss of $98 million, and diluted earnings per share were $1.47 compared to a loss of 10 cents a year ago.
The company guided fiscal year 2025 first quarter revenue between $9.12 billion and $9.17 billion, and GAAP diluted earnings per share between $1.42 and $1.44.
For the full-year fiscal year 2025, the company estimated revenue between $37.7 billion and $38.0 billion, and GAAP diluted earnings per share between $6.07 and $6.15.
Best Buy increased 4.8% to $83.46 after the electronics retailer reported a smaller-than-expected decline in sales.
Revenue in the fiscal fourth quarter ending on February 3rd declined to $14.65 billion from $14.73 billion, net income fell to $460 million from $495 million, and diluted earnings per share dropped to $2.12 from $2.23 a year ago.
In the quarter, the company returned a total of $268 million to shareholders through dividends of $198 million and share repurchases of $70 million.
For the full year, the company returned a total of $1.1 billion to shareholders through dividends of $801 million and share repurchases of $340 million.
The company announced its board of directors approved a 2% increase in the regular quarterly dividend to $0.94 per share payable on April 11 to shareholders of record on March 21.
The retailer guided fiscal 2025 earnings per share in the range of $5.75 to $6.20 and anticipated revenue between $41.3 billion and $42.6 billion.
For the fiscal first quarter, Best Buy expects comparable sales to decline by approximately 5%, with a non-GAAP operating income rate of around 3.4%, matching the rate in the first quarter of fiscal year 2024.
Birkenstock edged up 0.3% to $52.12 after the newly listed German sandals company reported higher revenue and narrowed its loss in the holiday quarter.
Revenue in the fourth quarter increased 22% to Є302.9 million from Є248.5 million, net loss shrank to Є7.15 million from Є9.19 million, and diluted loss per share fell to 4euro cents from 5 euro cents a year ago.
S&P 500 and Nasdaq Composite Rebounded After Inflation Acceleration Met Expectations
Barry Adams
29 Feb, 2024
New York City
Stocks on Wall Street rebounded after the closely watched measure of inflation met the market's expectations.
The S&P 500 index inched up 0.2% and the Nasdaq Composite advanced 0.5%, and Treasury yields held steady after personal income rose, spending edged lower, and an alternative measure of watered-down inflation accelerated in January.
Personal income unexpectedly increased by 1.0%, while personal expenditure declined by 0.1%, according to the data released by the Bureau of Economic Analysis on Thursday.
The personal consumption expenditures price index, an alternative measure of inflation that accounts for product substitution by consumers, increased by 0.3% on the month and by 2.4% from a year ago.
The December price index was downwardly revised to an increase of 0.1%.
The core price index, which excludes food and energy, increased 0.4% for the month and rose 2.8% from a year ago as consumers continued to shift spending to services from goods.
Core inflation accelerated from an increase of 0.1% in December.
Services prices increased by 0.6% and goods prices decreased by 0.2% from the previous year, respectively, and the changes were larger when compared to the data a year ago.
Services prices rose 3.9%, and goods prices declined 0.5% from a year ago.
U.S. indexes and Yields
The S&P 500 index increased 0.3% to 5,096.75, and the Nasdaq Composite increased 0.5% to 16,016.38.
The yield on 2-year Treasury notes decreased to 4.66%, 10-year Treasury notes inched up to 4.28%, and 30-year Treasury bonds edged down to 4.42%.
WTI crude oil decreased $0.02 to $78.52 a barrel, and natural gas prices decreased 4 cents to $1.84 a thermal unit.
Gold increased by $4.25 to $2,036.69 an ounce, and silver fell 7 cents to $22.52.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.80.
U.S. Stock Movers
Duolingo soared 20.1% to $235.56 after the language learning platform estimated strong revenue guidance in the fiscal first quarter and full-year after posting better-than-expected fourth-quarter results.
Snowflake plunged 22.9% to $177.20 after the company reported better-than-expected quarterly results and also announced the retirement of its chief executive, Frank Slootman.
The stock was also under pressure after the company estimated a weaker-than-expected product revenue outlook in the first quarter.
Okta soared 24.5% to $108.50 after the identity software management company reported better-than-expected quarterly results and estimated higher-than-expected quarterly results.
C3.ai surged 19% to $35.07 after the artificial intelligence company reported better-than-expected quarterly results.
Salesforce inched up 0.5% to $301.36 after the customer relationship management software reported better-than-expected quarterly results but guided revenue growth of less than 9% in the current fiscal year.
Europe Movers: Air France KLM, Aixtron, Beiersdorf, CRH, IAG, Nordex
Inga Muller
29 Feb, 2024
Frankfurt
European markets edged higher and bond yields inched up after inflation in France and Spain eased, the jobless rate increased but retail sales dropped in Germany, and payrolls were stable in France.
The DAX index increased by 0.4% to 17,672.06, the CAC-40 index gained by 0.8% to 7,961.29, and the FTSE 100 index inched higher by 0.2% to 7,639.69.
The yield on 10-year German bonds edged up to 2.50%; French bonds inched higher to 2.98%; the UK gilts edged lower to 4.26%; and Italian bonds inched lower to 3.95%.
International Consolidated Airlines eased 0.7% to 151.74 pence after the parent company of British Air and Iberian Airlines reported a surge in profit.
Air France KLM dropped 8.2% to €10.47 after the international airline swung to a loss in the fourth quarter.
Nordex jumped 4.8% to €10.10 after the German wind turbine maker narrowed its full-year net loss in the previous fiscal year.
CRH PLC rose 7.2% to 6,646.0 pence after the Ireland-based diversified construction material maker reported a rise in pre-tax profit.
Total revenue in 2023 increased 7% to $34.9 billion from $32.7 billion, net income from continuing operations increased 14% to $3.1 billion from $2.7 billion, and diluted earnings per share rose to $4.36 from $3.58 a year ago.
Aixtron SE dropped 17.5% to €25.99 despite the semiconductor parts maker reporting fourth-quarter revenue ahead of market expectations.
Beiersdorf AG decreased 2.8% to €133.90 after the maker of Nivea signaled slower revenue growth.
The company guided the group's organic sales growth in the "mid-single-digit range" and consolidated EBIT margin "slightly above the previous year's level.
Group's total sales in 2023 increased 10.8% to €9.5 billion, and Nivea business segment sales rose in double digits across all categories and geographies to €5.2 billion. Tesa business segment sales increased 3.2% to €1.7 billion.
The company proposed a 43% increase in dividends to €1.0 per share and a stock buyback program of up to €500 million.
Inflation Cooled in France and Spain, German Retail Sales Contracted In January
Bridgette Randall
29 Feb, 2024
Frankfurt
European markets traded higher and bond yields rose after a flood of economic data and earnings results.
Benchmark indexes in Paris, Frankfurt, and London edged higher after inflation in Spain cooled more than expected and in France slowed to its weakest level since September 2021.
The Swiss GDP expanded 0.3% from the previous month and rose 0.6% from a year ago in the final quarter of 2023, the State Secretariat for Economic Affairs reported Thursday.
For all of 2023, Swiss GDP rose 0.8% from a year ago after industrial and service sectors rebounded and exports held up despite macroeconomic uncertainties.
German Unemployment Rate Rises to a 3-year High, French Payrolls Stable
France confirmed payroll employment in the fourth quarter was stable, as previously estimated.
France added 11,900 net new jobs in the fourth quarter, after adding 60,800 in the third quarter compared to the previous quarter, respectively.
Payrolls expanded by 1.3 million or 5% in the fourth quarter compared to the pre-Covid fourth quarter in 2019, and about one in three jobs are apprentice contracts.
Germany's unemployment rate expanded to nearly a 3-year high of 5.9% in February from 5.8% in January, destatis reported Thursday.
German Retail Sales Contracted In January
Germany retail sales decreased 0.4% from the previous month in January as high borrowing costs and elevated inflation forced consumers to stick to basic items, destatis, or the Federal Statistics Office, reported Thursday.
Retail sales declined for the third month in a row and fell in eight of the last twelve months.
From a year ago, retail sales declined 1.4% in January, after falling 1.7% in each of the previous two months, as consumers battled rising costs of food, energy, and housing.
For all of 2023, retail sales declined, deepening to 3.3% from a fall of 0.7% in 2022.
Spain's Inflation Cools to a 6-month Low In February
Spain's annual consumer price inflation eased to a six-month low of 2.8% in February, down from 3.4% in January, the National Statistics Institute reported Thursday.
Consumer inflation increased by 0.3% when measured on a monthly basis.
The core rate of inflation, which excludes food and energy prices, eased for the seventh month in a row to 3.4%.
French Inflation Eased Due to Base Effects
France's annual inflation rate eased to 2.9% in February from 3.1% in the previous month, the statistical agency INSEE reported Thursday.
Consumer price inflation slowed in February largely because of the higher base in the previous year, and compared to the previous month, inflation rose by 0.8%.
Food, which is about 15% of the consumer basket, saw inflation rise at a slower pace of 3.6% compared to 5.6% a year ago.
For services, which account for about 51% of consumption, inflation eased to 3.1% from 3.2% in the previous year.
Over the year, the harmonized consumer price index increased by 3.1% in February after a 3.4% rise in January, and from the previous month, inflation rebounded by 0.9% after falling 0.2% the previous month.
Europe Indexes and Yields
The DAX index increased by 0.4% to 17,672.06, the CAC-40 index gained by 0.8% to 7,961.29, and the FTSE 100 index inched higher by 0.2% to 7,639.69.
The yield on 10-year German bonds edged up to 2.50%; French bonds inched higher to 2.98%; the UK gilts edged lower to 4.26%; and Italian bonds inched lower to 3.95%.
The euro edged higher to $1.084, the British pound inched higher to $1.266, and the U.S. dollar weakened to 87.99 Swiss cents.
Brent crude decreased $0.80 to $81.99 a barrel, and the Dutch TTF natural gas increased by €0.79 to €24.83 per MWh.
Europe Stock Movers
International Consolidated Airlines eased 0.7% to 151.74 pence after the parent company of British Air and Iberian Airlines reported a surge in profit.
Air France KLM dropped 8.2% to €10.47 after the international airline swung to a loss in the fourth quarter.
Nordex jumped 4.8% to €10.10 after the German wind turbine maker narrowed its full-year net loss in the previous fiscal year.
CRH PLC rose 7.2% to 6,646.0 pence after the Ireland-based diversified construction material maker reported a rise in pre-tax profit.
Total revenue in 2023 increased 7% to $34.9 billion from $32.7 billion, net income from continuing operations increased 14% to $3.1 billion from $2.7 billion, and diluted earnings per share rose to $4.36 from $3.58 a year ago.
Retail Sales Advance but Industrial Output Falls in Japan, Hong Kong Exchanges Hikes Dividend
Arjun Pandit
29 Feb, 2024
Mumbai
Stocks in Asia lacked direction, and investors reacted to domestic corporate and economic news.
Benchmark indexes in Japan declined after industrial production fell for the third month in a row; in China, they edged slightly higher in lackluster trading; and in India, they traded around flatline amid a lack of fresh market catalysts after the end of the earnings season.
Nikkei In Japan Extend Losses to Second Consecutive Session
Stocks in Tokyo declined for the second day in a row, and benchmark indexes edged lower following weak markets in New York.
Investors also reviewed the latest update on retail sales and industrial production, but market sentiment remained cautious ahead of the release of inflation data in the U.S.
Retail sales in Japan rose 2.3% from a year ago in January, following the upwardly revised 2.4% increase in December, the Ministry of Economy, Trade, and Industry reported Thursday.
Retail sales rose for the 23rd month in a row as consumption continued to rebound since the decline during the pandemic era over the two years between 2020 and 2021.
A separate report by the government agency showed industrial production declined 7.5% from the previous month in January after rising 1.4% in the previous month.
On an annual basis, industrial production declined 1.5%, after declining 1.0% in December and extending contraction for the third month in a row.
The Nikkei 225 average declined 0.1% to 39,172.78, and the Topix index added 0.1% to 2,677.82.
China Stocks Turned Higher In Weak Trading
Market indexes in Shanghai and Hong Kong edged higher on the hopes that the regulators would take more steps and China-controlled funds would provide capital to stabilize financial markets.
Property stocks advanced for the second day in a row in Hong Kong after the local government removed decade-old measures to cool residential property speculation.
The CSI 300 index added 0.9% to 3,481.52, and the Hang Seng index added 0.2% to 16,561.53.
Longfor, China Vanke, China Resource Land, Sun Hung Kai, and Henderson Land advanced between 0.3% and 0.8%.
Tech stocks were mixed, and Baidu declined 8.1% after the largest search engine operator in China reported revenue in the fourth quarter increased by 6% but net income dropped by half.
Xinyi Solar soared 22% to HK$4.68 after the company reported better-than-expected quarterly earnings due to a higher margin.
Hong Kong Exchanges Annual Earnings Rebound
Hong Kong Exchanges & Clearing increased 0.1% to $245.0 after the company reported an 18% increase in annual profit to HK$11.9 billion, or HK$9.37 per share, meeting market expectations.
The company proposed to pay a second interim cash dividend of HK$3.91, increasing the annual total to HK$8.41 and higher than HK$7.14 in 2022.
The exchange operator's annual earnings were aided by HK$1.5 billion in net investment income in its global stock and bond portfolio, compared to a loss of HK$48 million in the previous year.
The steady decline in trading activity by 16% to HK$105 billion in 2023 also negatively impacted the company's core revenue by 18%, as the exchange struggled under weakening market confidence and faltering interest from foreign investors.
The Hong Kong Exchange was an attractive place for foreign investors looking to get exposure to mainland Chinese stocks.
But the exchange has lost its luster among foreign investors and young companies seeking to list their companies, as Chinese regulators have stepped up arbitrary spying charges and clamped down on tech companies under the guise of national security.
This week, Chinese regulators forced out a quant hedge fund manager after the regulators and China-controlled funds intervened in the market to stabilize faltering stocks, further denting investors' confidence in the financial systems of Hong Kong and mainland China.
About 68 Chinese companies raised $6 billion through an initial public offering in 2023, a 20-year low, amid weak interest from investors.
India Stocks Attempt to Rebound Amid Cautious Asian Markets
Stocks in Mumbai traded slightly higher amid cautious market sentiment.
The Sensex and the Nifty indexes edged up 0.2% as investors debated market drivers for the next leg up.
So far in 2024, foreign investors have poured money into Indian stocks in the hopes of a continued rebound in corporate earnings driven by sustained economic growth.
Moreover, domestic investors have supported the market advance despite high stock valuations.
In addition, global market sentiment has been cautious as several markets around the world trade at record highs.
Benchmark indexes in the U.S., Germany, France, Japan, and India are trading near record highs.
The Sensex index increased 0.2% to 72,603.30, and the Nifty index rose 0.3% to 21,011.85.
On the Mumbai stock exchange, 47 stocks traded at their 52-week highs and 15 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.06%, and the Indian rupee strengthened to ₹82.86 against the U.S. dollar.
India Movers: Coal India, BHEL, Reliance Industries, Shriram Finance, UPL
Arun Goswami
28 Feb, 2024
Mumbai
Stocks in Mumbai advanced amid cautious global markets as investors reviewed the earnings results of the fiscal third quarter released in the recently completed earnings season.
The Sensex index increased 0.2% to 72,603.30, and the Nifty index rose 0.3% to 21,011.85.
On the Mumbai stock exchange, 76 stocks traded at their 52-week highs and 32 stocks traded at their 52-week lows.
Reliance Industries increased 1.3% to ₹2,948.30 after the company announced a deal to merge its media properties and form a joint venture with Disney and Viacom18 Media.
The deal brings together the television stations, streaming, and online media properties of three companies to form the largest media company in India.
The merged entity is estimated to be valued at ₹70,352 crore, according to a joint statement released by three companies.
Shriram Finance advanced 1.8% to ₹2,380.75 after the company was selected to be included in the Nifty 50 index as of March 28, replacing UPL.
UPL declined 0.8% to ₹472.50.
Coal India increased 0.6% to ₹436.70 and Bharat Heavy Electricals decreased 0.3% to ₹224.15, and the two companies announced a joint venture to set up an ammonium nitrate plant.
Coal India will own 51%, and BHEL will control the remaining 49% stake in the company.
Venus Pipes & Tubes soared 7.4% to ₹1,861.95 after the company announced its plan to invest as much as 175 crore to manufacture stainless steel and titanium welded tubes.
U.S. and World Markets Trade Sideways as Indexes Hover Near Record Peaks
Barry Adams
28 Feb, 2024
New York City
Stocks, bonds, and commodities on Wall Street struggled to gain traction, and Treasury yields decreased ahead of the release of the personal consumption expenditure report on Thursday.
The S&P 500 index and the Nasdaq Composite turned down as investors debated future rate paths and the health of the economy and reacted to the latest earnings results.
Stock market indexes lacked direction and struggled to extend gains from the previous week after an AI-powered rally appeared to stall ahead of the release of more economic data on Friday.
Investors have generally adjusted to higher interest rates, despite the rate uncertainty, because corporate earnings have been going higher as most companies have managed to pass higher costs on to consumers.
U.S. GDP Growth Revised Slightly Lower
The U.S. economic growth was revised downward in the fourth quarter to 3.2% from the preliminary estimate of 3.3%, following the 4.9% annual pace of increase in the third quarter, the U.S. Bureau of Economic Analysis reported Wednesday.
The lower reading in inventories negatively impacted the overall economic growth in the quarter.
The revised reading on inventories subtracted 0.27 percentage points from the increase of 0.07 percentage points estimated in the first estimate.
With the second estimate, downward revisions to private inventory investment and federal government spending were partly offset by upward revisions to state and local government spending, consumer spending, residential fixed investment, nonresidential fixed investment, and exports.
Consumer spending was revised higher to 3% from 2.8%, government spending increased to 4.2% from 3.3%, and exports increased to 6.4% from 6.3% and imports to 2.7% from 1.9%.
Both exports and imports were revised higher than expected.
Residential investment advanced at 2.9%, and non-residential investment increased to 2.4% from 1.9%.
For the full-year 2023, the GDP growth in the second estimate was unrevised at 2.5%, compared to 1.9% in 2022.
U.S. indexes and Yields
The S&P 500 index decreased 0.1% to 5,070.91, and the Nasdaq Composite increased 0.4% to 15,961.52.
The yield on 2-year Treasury notes decreased to 4.68%, 10-year Treasury notes inched down to 4.27%, and 30-year Treasury bonds edged down to 4.42%.
WTI crude oil decreased $0.27 to $78.60 a barrel, and natural gas prices increased 3 cents to $1.84 a thermal unit.
Gold increased by $3.75 to $2,033.39 an ounce, and silver fell 1 cent to $22.42.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.10.
U.S. Stock Movers
First Solar rose 6.4% to $154.10 after the solar panel maker reported a 30% increase in its net income in the fourth quarter and the company guided annual revenue that met analysts' expectations.
eBay Inc. jumped 5.4% to $46.75 after the online marketplace operator reported fourth-quarter results that met investor expectations.
The company also increased its dividend per share by 2 cents and announced a plan to buyback as much as $2 billion.
Boston Beer dropped 10% to $333.48 after the craft brewery reported weaker-than-expected fourth-quarter results.
The company reported revenue of $394 million and earnings per share of $1.49.
Urban Outfitters plunged 9.5% to $42.69 after the apparel retailer reported weaker-than-expected fiscal fourth quarter results.
European Markets Traded Mixed Amid Flood of Earnings Results
European markets traded mixed, and bond yields inched higher as investors reviewed the latest batch of earnings.
Benchmark indexes in Paris and Frankfurt flatlined, and the euro edged higher against the U.S. dollar as market participants lowered expectations of a rate cut in the near future.
The eurozone economic sentiment indicator unexpectedly declined in February, the European Commission reported Wednesday.
The measure of confidence declined as businesses struggled under high inflation, rising interest rates, and weak external demand growth.
The sentiment indicator declined to 95.4 in February from the revised 96.1 in January.
Moreover, the consumer inflation expectations index increased 3.5 points to 15.5 in February, while the index for selling price expectations declined by 0.6 points to 3.8.
Europe Indexes and Yields
The DAX index increased by 0.2% to 17,580.90, the CAC-40 index decreased by 0.07% to 7,944.35, and the FTSE 100 index inched lower by 0.6% to 7,638.95.
The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.93%; the UK gilts edged lower to 4.18%; and Italian bonds inched lower to 3.90%.
The euro edged higher to $1.080, the British pound inched higher to $1.263, and the U.S. dollar gained to 88.05 Swiss cents.
Brent crude decreased $0.80 to $82.94 a barrel, and the Dutch TTF natural gas increased by €0.65 to €25.05 per MWh.
Europe Stock Movers
ASM International declined 3.6% to €559.30 after the Dutch semiconductor equipment maker's current quarter revenue fell short of market expectations.
Lanxess AG dropped 4.7% to €22.97 after the company said it plans to take a good impairment charge of €413 million linked to polymer additives, flavors, and fragrances business units.
Just Eat Takeaway.com dropped 5.9% to €14.17, despite the food delivery company reporting a narrower loss in the last year.
Reckitt Benckiser plunged 10% to 5,253.0 pence after the consumer products maker reported fourth-quarter comparable sales that fell short of market expectations.
Aston Martin Lagonda Global Holdings declined 1.9% to 173.20 pence after the luxury sports car maker delayed its plans to launch an electric car by a year.
Vodafone Group rose 1.6% to 69.42 pence after the company said it was in advanced talks to sell its Italian arm to Swisscom for cash.
Glanbia Plc increased 2.5% to €15.79 after the dietary supplement company reported a 20% increase in full-year after-tax profit.
Halfords dropped by 31% to 138.20 pence after the vehicle repair and maintenance company trimmed its 2024 profit outlook.
Taylor Wimpey declined 2.4% to 136.70 pence after the UK-based housebuilder reported a decline in pre-tax profit for fiscal year 2023.
Capita PLC increased 3.6% to 20.74 pence after the outsourcing company, a European telecom service provider, enlarged its current contract.
Casino Guichard Perrachon dropped 15% to €0.60 after the troubled retailer reported deeper losses in 2023.
Worldline SA plunged 9.3% to €11.12 after the payment processing company reported a loss of €1.15 billion due to a goodwill impairment linked to its merchant services activities.
Nicox SA dropped 1.1%, and the ophthalmology company appointed veteran biotech executive Gavin Spencer as the company's chief executive.
Asian Markets Turned Lower
Stock markets in Japan, India, and China headed lower as investors awaited the release of U.S. inflation data and China's manufacturing report.
Market sentiment was cautious in the region, and the Japanese yen flirted near a 4-decade low as investors debated the timing of the Bank of Japan's ultra-loose monetary policy.
Hong Kong stocks were also in focus after the Hong Kong government announced a raft of measures to support the ailing property market, including eliminating decade-old curbs and relaxing mortgage rules.
But foreign investors continued to sell stocks in Shanghai and Hong Kong due to a lack of earnings growth after a protracted property market decline, and the rising job insecurity kept consumer spending in check.
Nikkei 225 in Tokyo Eased Ahead of U.S. Inflation Report
Stocks in Tokyo traded down, and benchmark indexes struggled to advance after investors turned cautious ahead of the release of U.S. inflation data later in the day.
The Nikkei 225 average declined 0.1% to 39,208.52, and the Topix index dropped 0.1% to 2,675.77.
Investors are hoping that the Bank of Japan will continue its ultra-loose monetary policy, but more and more market participants are looking for the central bank to end its zero interest rate policy as early as the second half of this year.
The Japanese yen edged up to 150.64 against the year; the low was last seen in March 1990, and the interest rate differential between the U.S. and Japan persists over 500 basis points.
In Wednesday's stock trading, tech stocks were among the leading decliners, and SoftBank, Nintendo, Advantest, and Screen Holdings fell between 0.5% and 4%.
Electronics exporters Sony, Canon, Panasonic, and Mitsubishi Electric declined between 0.3% and 3%.
China Stocks Look Down, Hong Kong Removes Decade-old Housing Transaction Restrictions
Stocks in China traded with a familiar pessimism, despite the Hong Kong government's removal of all restrictions placed on property transactions over the last decade.
The CSI 300 index increased 0.2% to 3,500.69, and the Hang Seng index decreased 0.1% to 16,773.28.
Hong Kong's finance chief announced sweeping measures to revive the moribund property market, including the elimination of stamp duty for the purchase of second and additional homes by resident and non-resident buyers.
The government also increased the available mortgage for properties worth less than HK$30 million to 70% from 60% and to 60% for properties worth more than that amount.
Hong Kong property prices have been falling for nine months in a row, and prices are at the level last seen in 2016.
Sun Hung Kai, China Vanke, China Resources Land, Henderson Land Development, Link REIT, and Hung Lung Properties gained between 2% and 5%.
Tech stocks were also down amid market weakness, and Tencent, Alibaba Group, Baidu, and Meituan declined between 0.3% and 2.2%.
India Stocks Traded Lower Amid Cautious Trading
Stocks in Mumbai opened higher, and investors reviewed cautious global market sentiment ahead of the release of economic data in China and the U.S.
The Sensex and the Nifty indexes traded mixed, and investors remained cautious ahead of the release of the measure of inflation in the U.S. later in the day.
The Sensex index decreased 1.1% to 72,304.88, and the Nifty index fell 1.1% to 21,951.15.
On the Mumbai stock exchange, 260 stocks traded at their 52-week highs and 47 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.06%, and the Indian rupee strengthened to ₹82.88 against the U.S. dollar.
U.S. Movers: Boston Beer, eBay, First Solar, Urban Outfitters
Scott Peters
28 Feb, 2024
New York City
First Solar rose 6.4% to $154.10 after the solar panel maker reported a 30% increase in its net income in the fourth quarter and the company guided annual revenue that met analysts' expectations.
eBay Inc. jumped 5.4% to $46.75 after the online marketplace operator reported fourth-quarter results that met investor expectations.
The company also increased its dividend per share by 2 cents and announced a plan to buyback as much as $2 billion.
Boston Beer dropped 10% to $333.48 after the craft brewery reported weaker-than-expected fourth-quarter results.
The company reported revenue of $394 million and earnings per share of $1.49.
Urban Outfitters plunged 9.5% to $42.69 after the apparel retailer reported weaker-than-expected fiscal fourth quarter results.
Walt Disney declined 0.3% to $108.88 and the company announced the merger of its India operations with media assets held by Reliance Industries.
The newly formed Star India venture will have properties controlled by Disney and Reliance, and Reliance plans to contribute $1.4 billion to driven future growth.
After the merger, Mukesh Ambani controlled Viacom18 will have 36.8%, Reliance Industries will own 16.38%, and Disney will hold 36.84%.
Stocks Lack Direction On Wall Street, U.S. GDP Growth Revised Lower
Barry Adams
28 Feb, 2024
New York City
Stocks on Wall Street struggled to gain traction, and Treasury yields decreased ahead of the release of the personal consumption expenditure report on Thursday.
The S&P 500 index and the Nasdaq Composite turned down as investors debated future rate paths and the health of the economy and reacted to the latest earnings results.
U.S. GDP Growth Revised Slightly Lower
The U.S. economic growth was revised downward in the fourth quarter to 3.2% from the preliminary estimate of 3.3%, following the 4.9% annual pace of increase in the third quarter, the U.S. Bureau of Economic Analysis reported Wednesday.
The lower reading in inventories negatively impacted the overall economic growth in the quarter.
The revised reading on inventories subtracted 0.27 percentage points from the increase of 0.07 percentage points estimated in the first estimate.
With the second estimate, downward revisions to private inventory investment and federal government spending were partly offset by upward revisions to state and local government spending, consumer spending, residential fixed investment, nonresidential fixed investment, and exports.
Consumer spending was revised higher to 3% from 2.8%, government spending increased to 4.2% from 3.3%, and exports increased to 6.4% from 6.3% and imports to 2.7% from 1.9%.
Both exports and imports were revised higher than expected.
Residential investment advanced at 2.9%, and non-residential investment increased to 2.4% from 1.9%.
For the full-year 2023, the GDP growth in the second estimate was unrevised at 2.5%, compared to 1.9% in 2022.
U.S. indexes and Yields
The S&P 500 index decreased 0.1% to 5,065.43, and the Nasdaq Composite increased 0.1% to 15,995.52.
The yield on 2-year Treasury notes decreased to 4.68%, 10-year Treasury notes inched down to 4.27%, and 30-year Treasury bonds edged down to 4.42%.
WTI crude oil decreased $0.13 to $78.73 a barrel, and natural gas prices increased 3 cents to $1.84 a thermal unit.
Gold increased by $4.53 to $2,033.36 an ounce, and silver fell 1 cent to $22.42.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.10.
U.S. Stock Movers
First Solar rose 6.4% to $154.10 after the solar panel maker reported a 30% increase in its net income in the fourth quarter and the company guided annual revenue that met analysts' expectations.
eBay Inc. jumped 5.4% to $46.75 after the online marketplace operator reported fourth-quarter results that met investor expectations.
The company also increased its dividend per share by 2 cents and announced a plan to buyback as much as $2 billion.
Boston Beer dropped 10% to $333.48 after the craft brewery reported weaker-than-expected fourth-quarter results.
The company reported revenue of $394 million and earnings per share of $1.49.
Urban Outfitters plunged 9.5% to $42.69 after the apparel retailer reported weaker-than-expected fiscal fourth quarter results.
European Markets Trade Mixed Amid Flood of Earnings Results
Bridgette Randall
28 Feb, 2024
Frankfurt
European markets traded mixed, and bond yields inched higher as investors reviewed the latest batch of earnings.
Benchmark indexes in Paris and Frankfurt flatlined, and the euro edged higher against the U.S. dollar as market participants lowered expectations of a rate cut in the near future.
The eurozone economic sentiment indicator unexpectedly declined in February, the European Commission reported Wednesday.
The measure of confidence declined as businesses struggled under high inflation, rising interest rates, and weak external demand growth.
The sentiment indicator declined to 95.4 in February from the revised 96.1 in January.
Moreover, the consumer inflation expectations index increased 3.5 points to 15.5 in February, while the index for selling price expectations declined by 0.6 points to 3.8.
Europe Indexes and Yields
The DAX index increased by 0.2% to 17,580.90, the CAC-40 index decreased by 0.07% to 7,944.35, and the FTSE 100 index inched lower by 0.6% to 7,638.95.
The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.93%; the UK gilts edged lower to 4.18%; and Italian bonds inched lower to 3.90%.
The euro edged higher to $1.080, the British pound inched higher to $1.263, and the U.S. dollar gained to 88.05 Swiss cents.
Brent crude decreased $0.80 to $82.94 a barrel, and the Dutch TTF natural gas increased by €0.65 to €25.05 per MWh.
Europe Stock Movers
ASM International declined 3.6% to €559.30 after the Dutch semiconductor equipment maker's current quarter revenue fell short of market expectations.
Lanxess AG dropped 4.7% to €22.97 after the company said it plans to take a good impairment charge of €413 million linked to polymer additives, flavors, and fragrances business units.
Just Eat Takeaway.com dropped 5.9% to €14.17, despite the food delivery company reporting a narrower loss in the last year.
Reckitt Benckiser plunged 10% to 5,253.0 pence after the consumer products maker reported fourth-quarter comparable sales that fell short of market expectations.
Aston Martin Lagonda Global Holdings declined 1.9% to 173.20 pence after the luxury sports car maker delayed its plans to launch an electric car by a year.
Vodafone Group rose 1.6% to 69.42 pence after the company said it was in advanced talks to sell its Italian arm to Swisscom for cash.
Glanbia Plc increased 2.5% to €15.79 after the dietary supplement company reported a 20% increase in full-year after-tax profit.
Halfords dropped by 31% to 138.20 pence after the vehicle repair and maintenance company trimmed its 2024 profit outlook.
Taylor Wimpey declined 2.4% to 136.70 pence after the UK-based housebuilder reported a decline in pre-tax profit for fiscal year 2023.
Capita PLC increased 3.6% to 20.74 pence after the outsourcing company, a European telecom service provider, enlarged its current contract.
Casino Guichard Perrachon dropped 15% to €0.60 after the troubled retailer reported deeper losses in 2023.
Worldline SA plunged 9.3% to €11.12 after the payment processing company reported a loss of €1.15 billion due to a goodwill impairment linked to its merchant services activities.
Nicox SA dropped 1.1%, and the ophthalmology company appointed veteran biotech executive Gavin Spencer as the company's chief executive.
Europe Movers: ASM, Aston Martin, Capita, Casino Group, Glanbia, Halfords, Just Eat, Reckitt
Inga Muller
28 Feb, 2024
Frankfurt
European market indexes traded mixed and the eurozone economic sentiment indicator unexpectedly fell in February.
ASM International declined 3.6% to €559.30 after the Dutch semiconductor equipment maker's current quarter revenue fell short of market expectations.
Lanxess AG dropped 4.7% to €22.97 after the company said it plans to take a good impairment charge of €413 million linked to polymer additives and flavors and fragrances business units.
Just Eat Takeaway.com dropped 5.9% to €14.17, despite the food delivery company reporting a narrower loss in the last year.
Reckitt Benckiser plunged 10% to 5,253.0 pence after the consumer products maker reported fourth-quarter comparable sales that fell short of market expectations.
Aston Martin Lagonda Global Holdings declined 1.9% to 173.20 pence after the luxury sports car maker delayed its plans to launch an electric car by a year.
Vodafone Group rose 1.6% to 69.42 pence after the company said it was in advanced talks to sell its Italian arm to Swisscom for cash.
Glanbia Plc increased 2.5% to €15.79 after the dietary supplement company reported a 20% increase in full-year after-tax profit.
Halfords dropped by 31% to 138.20 pence after the vehicle repair and maintenance company trimmed its 2024 profit outlook.
Taylor Wimpey declined 2.4% to 136.70 pence after the UK-based housebuilder reported a decline in pre-tax profit for fiscal year 2023.
Capita PLC increased 3.6% to 20.74 pence after the outsourcing company a European telecom service provider has enlarged its current contract.
Casino Guichard Perrachon dropped 15% to €0.60 after the troubled retailer reported deeper losses in 2023.
Worldline SA plunged 9.3% to €11.12 after the payment processing company reported a loss of €1.15 billion due to a goodwill impairment linked to its merchant services activities.
Nicox SA dropped 1.1%, and the ophthalmology company appointed veteran biotech executive Gavin Spencer as the company's chief executive.
Asian Markets Turned Lower, Hong Kong Removed Decade-old Property Market Curbs
Arjun Pandit
28 Feb, 2024
Mumbai
Stock markets in Japan, India, and China headed lower as investors awaited the release of U.S. inflation data and China's manufacturing report.
Market sentiment was cautious in the region, and the Japanese yen flirted near a 4-decade low as investors debated the timing of the Bank of Japan's ultra-loose monetary policy.
Hong Kong stocks were also in focus after the Hong Kong government announced a raft of measures to support the ailing property market, including eliminating decade-old curbs and relaxing mortgage rules.
But foreign investors continued to sell stocks in Shanghai and Hong Kong due to a lack of earnings growth after a protracted property market decline, and the rising job insecurity kept consumer spending in check.
Nikkei 225 in Tokyo Eased Ahead of U.S. Inflation Report
Stocks in Tokyo traded down, and benchmark indexes struggled to advance after investors turned cautious ahead of the release of U.S. inflation data later in the day.
The Nikkei 225 average declined 0.1% to 39,208.52, and the Topix index dropped 0.1% to 2,675.77.
Investors are hoping that the Bank of Japan will continue its ultra-loose monetary policy, but more and more market participants are looking for the central bank to end its zero interest rate policy as early as the second half of this year.
The Japanese yen edged up to 150.64 against the year; the low was last seen in March 1990, and the interest rate differential between the U.S. and Japan persists over 500 basis points.
In Wednesday's stock trading, tech stocks were among the leading decliners, and SoftBank, Nintendo, Advantest, and Screen Holdings fell between 0.5% and 4%.
Electronics exporters Sony, Canon, Panasonic, and Mitsubishi Electric declined between 0.3% and 3%.
China Stocks Look Down, Hong Kong Removes Decade-old Housing Transaction Restrictions
Stocks in China traded with a familiar pessimism, despite the Hong Kong government's removal of all restrictions placed on property transactions over the last decade.
The CSI 300 index increased 0.2% to 3,500.69, and the Hang Seng index decreased 0.1% to 16,773.28.
Hong Kong's finance chief announced sweeping measures to revive the moribund property market, including the elimination of stamp duty for the purchase of second and additional homes by resident and non-resident buyers.
The government also increased the available mortgage for properties worth less than HK$30 million to 70% from 60% and to 60% for properties worth more than that amount.
Hong Kong property prices have been falling for nine months in a row, and prices are at the level last seen in 2016.
Sun Hung Kai, China Vanke, China Resources Land, Henderson Land Development, Link REIT, and Hung Lung Properties gained between 2% and 5%.
Tech stocks were also down amid market weakness, and Tencent, Alibaba Group, Baidu, and Meituan declined between 0.3% and 2.2%.
India Stocks Traded Lower Amid Cautious Trading
Stocks in Mumbai opened higher, and investors reviewed cautious global market sentiment ahead of the release of economic data in China and the U.S.
The Sensex and the Nifty indexes traded mixed, and investors remained cautious ahead of the release of the measure of inflation in the U.S. later in the day.
The Sensex index increased 6.79 points to 73,088.03, and the Nifty index fell 12.55 points to 22,187.50.
On the Mumbai stock exchange, 116 stocks traded at their 52-week highs and 12 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.06%, and the Indian rupee strengthened to ₹82.88 against the U.S. dollar.
S&P 500 and Nasdaq In a Holding Pattern Ahead of Inflation Data
Barry Adams
27 Feb, 2024
New York City
Stocks traded in a narrow range for the second day in a row, and benchmark indexes hovered near highs as investors prepared for a barrage of economic releases later this week.
The S&P 500 index and the Nasdaq Composite edged slightly lower, and Treasury yields edged down as investors digested the release of factory orders and new home sales data.
Moreover, investors debated the impact of higher-for-longer rates on the housing market and consumer spending, as interest rates are not expected to come down at least for the next three months.
Investors are also factoring in the possibility of a no-landing scenario, where the Federal Reserve keeps interest rates at elevated levels while inflation eases slowly to 2% over a period of time, or over eighteen months.
Durable Goods Orders Decline in January
Seasonally adjusted factory orders decreased 6.1% from the previous month in January, the U.S. Census Bureau reported Tuesday.
The orders declined 0.8% from a year ago, and the monthly decline in orders was the steepest decline since April 2020.
Excluding large-ticket transportation, orders declined 0.3%, and excluding defense, new orders fell 7.3% from the previous month.
New orders of non-defense capital goods, excluding volatile aircraft orders, which provides a better insight into capital expenditure by businesses, increased 0.1% from the previous month but fell 0.2% from a year ago.
U.S. indexes and Yields
The S&P 500 index decreased 0.1% to 5,065.43, and the Nasdaq Composite increased 0.1% to 15,995.52.
The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury notes inched down to 4.29%, and 30-year Treasury bonds edged down to 4.41%.
WTI crude oil increased $0.78 to $78.36 a barrel, and natural gas prices increased 9 cents to $1.83 a thermal unit.
Gold decreased by $0.18 to $2,030.36 an ounce, and silver fell 2 cents to $22.49.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.76.
U.S. Stock Movers
AutoZone rose 2% to $2,825.0 after the automotive parts retailer reported better-than-expected revenue and earnings in its fiscal second quarter.
Revenue in the fiscal second quarter rose to $3.85 billion, and earnings advanced to $28.89 per share.
Macy's declined 1.9% to $19.0 after the apparel retailer reported slightly lower-than-expected revenue in the fourth quarter and offered a cautious sales outlook in the current quarter.
The retailer reported revenue in its latest quarter of $8.12 billion and estimated full-year revenue between $22.2 billion and $22.9 billion.
Lowe's Companies decreased 0.6% to $230.01 after the home improvement retailer reported better-than-expected fourth-quarter results.
The retailer also estimated full-year revenue in the current fiscal year to decline between $84 billion and $85 billion, from $86.4 billion in the fiscal year 2023.
Zoom Video Communications rose 9% to $68.80 after the online communication platform reported slightly better-than-expected quarterly revenue.
Consumer Confidence Remains Weak In Germany and France
European markets struggled to extend gains as investors reviewed the latest update on consumer confidence in Germany and France.
The forward-looking consumer confidence indicator improved slightly in March as consumers battled high prices and weak economic conditions persisted.
The GfK Consumer Climate Indicator for Germany improved to 29.0 in March from an 11-month low of 2.6 in February, said the survey company GfK Group.
However, France's consumer confidence declined unexpectedly in February, the statistical agency INSEE reported Tuesday.
The consumer sentiment index decreased to 89 from 91 in January as more consumers were pessimistic about the outlook for their standard of living and their financial situation.
Also, more consumers worried about the inflation outlook and losing their jobs and felt now was not the best time to make a major purchase.
Eurozone Overall Private Sector Credit Growth Stalled
Elsewhere in the eurozone, bank lending to households increased by 0.3% to €6.87 trillion, the slowest pace of increase since March 2015, the European Central Bank reported Tuesday.
Moreover, lending to non-financial corporations increased by 0.2% in January, following an upwardly revised 0.5% rise in December.
The overall private sector credit growth, including corporations and households, increased by 0.4%, matching the rate in the previous month.
UK Retail Price Inflation Eased
Separately, the UK's retail trade association said retail price inflation dropped to a near two-year low in February.
The retail shop price index increased 2.5% from a year ago in February, slower than 2.9% in January, and the lowest since March 2022, the British Retail Consortium reported Tuesday.
Europe Indexes and Yields
The DAX index increased by 0.8% to 17,556.49, the CAC-40 index rose by 0.2% to 7,948.40, and the FTSE 100 index inched lower by 0.01% to 7,683.02.
The yield on 10-year German bonds edged up to 2.41%; French bonds inched higher to 2.89%; the UK gilts edged lower to 4.13%; and Italian bonds inched lower to 3.87%.
The euro edged higher to $1.085, the British pound inched higher to $1.268, and the U.S. dollar gained to 87.99 Swiss cents.
The natural gas price in Europe dropped 8% last week and approached the pre-Ukraine war crisis level of May 2021.
Brent crude increased $0.75 to $83.28 a barrel, and the Dutch TTF natural gas increased by €0.38 to €24.39 per MWh.
Europe Stock Movers
SEB SA declined 6% to €107.0 after Peugeot Invest sold its stake in the consumer appliance maker.
Abrdn PLC declined 1.8% to 158.65 pence after the company narrowed its full-year losses and announced its plan to cut 500 jobs as part of its cost reduction program.
Smith & Nephew increased 1.2% to 1,139.50 pence after the company reported improving financial results in the fourth quarter and in full-year 2023.
Casino Guichard Perrachon soared 29% to €0.68 after a French court approved the company's restructuring plan.
Bouygues SA advanced 5.9% to €35.98 after the diversified construction conglomerate reported core annual profit ahead of its own target.
Asian Markets Struggle to Hold Near Record Highs
Financial markets in Asia reacted to local news, and inflation in Japan dropped after food prices rose at the slowest pace in more than 15 months.
Crude oil edged higher in international trading due to rising tensions in the Middle East and a lack of additional tankers to cover longer routes, as merchants have no plans to use Red Sea shipping lanes in the near future.
Market indexes in Japan and India hovered near record highs but the indexes in Shanghai and Hong Kong resumed their downward slide after initial enthusiasm for the government intervention waned.
Japan's Inflation Drops to a 22-month Low
Stocks in Tokyo edged lower, and the annual inflation rate in Japan edged lower in January.
The Nikkei 225 Average decreased 0.2% to 39,163.85, and the Topix index gained 0.1% to 2,676.96.
Retail inflation decreased to 2.2% in January from 2.4% in December, the Ministry of Internal Affairs and Communications reported Tuesday.
Core inflation, which excludes fresh food but includes energy, fell to 2.0% from 2.3% in December and fell to within the target rate set by the Bank of Japan after staying above for 21 months in a row.
Tech stocks and large-cap companies were among the leading gainers in Tuesday's trading.
Tokyo Electron, Screen Holdings, SoftBank Group, Nippon Steel, and Mitsubishi UFJ gained between 0.5% and 4%.
China Stocks Extend Losses, Hong Kong Awaits Annual Budget
China stocks extended losses to the third day as government intervention faded and investors focused on weak economic fundamentals and the ongoing property market malaise.
The CSI 300 index increased 0.9% to 3,483.13, and the Hang Seng index edged up 0.6% to 16,645.29.
Benchmark indexes in Hong Kong extended losses to the third day after advancing 0.7% in the previous two sessions.
Hong Kong stocks were also under pressure ahead of the release of the city's budget on Wednesday, and investors are looking for incentives for property transactions, tourism, and capital inflow.
Property developers were among the leading decliners, and Sun Hung Kai, China Resources Land, China Vanke, Longfor Group, and Hang Lung Properties fell between 0.8% and 4%.
Tech stocks traded sideways, and Baidu, Meituan, Alibaba Group, JD.com, and Tencent declined between 2% and 4%.
Valuation Worries Keep India Indexes Under Pressure
Stocks in Mumbai struggled to get traction as investors debated the future rate path, economic growth drivers, and earnings results.
The Sensex and the Nifty indexes traded down but hovered near record highs after indexes extended gains in the previous weeks.
Both the Sensex and Nifty indexes have advanced for five consecutive weeks, driven by steady fund flows from domestic and international investors.
However, market participants are increasingly worried about stock valuations ahead of election jitters, and banks have faced selling pressure.
Moreover, investors have avoided tech service exporters because of uncertainties related to the impact of artificial intelligence on future growth rates, and higher interest rates have dampened the present value of future earnings.
The Sensex index decreased 66.60 points to 72,723.53, and the Nifty index fell 31.85 points to 22,090.20.
On the Mumbai stock exchange, 187 stocks traded at their 52-week highs and 11 stocks traded at their 52-week lows.