Market Update
Eurozone Retail Sales Dropped In April, German Factory Orders Unexpected Eased In April
Bridgette Randall
06 Jun, 2024
Frankfurt
Benchmark indexes in Europe advanced for the third day in a row in the hopes of a widely anticipated rate cut by the European Central Bank later today.
Market indexes in Frankfurt, Paris, and London advanced between 0.3% and 0.7% amid expectations of a cut in three key lending rates by 25 basis points for the first time since 2016.
The ECB lowered only one of the three key lending rates, the deposit facility rate, in 2019.
Investors are also looking forward to comments from ECB president Christine Lagarde about the possibility of additional rate cuts in the year.
Most market participants are looking for at least one rate cut in September or December.
In other economic news, Switzerland's jobless rate held steady at 2.3% in May compared to the previous month, the Secretariat for Economic Affairs announced Thursday.
Eurozone Retail Sales Edged Lower In April
In other economic news, eurozone retail sales decreased 0.5% in April, following a downwardly revised 0.7% increase in March, Eurostat reported Thursday.
Sales of food, drinks, and tobacco fell 0.5% in April after rising 1% in the previous month, and auto fuel sales decreased 2.2%, reversing the 1% gain.
Nonfood sales declined 1% in April, matching the rate of decline in the previous month.
On an annual basis, retail sales were unchanged following a 0.7% rise in March.
German Factory Orders Declined In April.
Real factory orders, adjusted for seasonal and calendar factors, in Germany decreased by 0.2% from the previous month in April, the Federal Statistical Office, or Destatis, reported Thursday.
On an annual basis, new orders declined 1.6%.
Incoming orders in a three-month period to April declined 5.4% from the previous three-month period, mainly due to a large order in December 2023.
Excluding the large orders, new orders in April were 2.9% higher than in March and 1.4% lower in the three-month period between February and April than the previous three-month period.
The decline in orders was widespread, and orders declined in four key sectors.
Incoming orders for electric equipment declined 4.1%, mechanical engineering fell 1.5%, aircraft, ships, and trains dropped 15.4%, and electronic and optical products fell 5.1%.
However, orders in the automotive industry rose 4.1%, offsetting the overall decline in incoming orders.
Domestic orders declined by 0.3%, and foreign orders fell by 0.1%, driven by a 1.4% decline in orders from the eurozone, while orders from the rest of the world rose by 0.6%.
Europe Indexes and Yields
The DAX index increased by 0.7% to 18,696.65; the CAC-40 index rose by 0.4% to 8,041.74; and the FTSE 100 index advanced by 0.3% to 8,272.49.
The yield on 10-year German bonds edged lower to 2.53%; French bonds inched lower to 3.02%; the UK gilts edged lower to 4.17%; and Italian bonds inched lower to 3.82%.
The euro edged higher to $1.087; the British pound inched higher to $1.276; and the U.S. dollar weakened to 89.11 Swiss cents.
Brent crude increased $0.27 to $77.68 a barrel, and the Dutch TTF natural gas rose by €0.33 to €33.71 per MWh.
Europe Stock Movers
N Brown Group soared 31% to €0.17 after the online fashion retailer reported a profit in its fiscal year 2024. The company also estimated sales would improve in the current fiscal year.
Hargreaves Services jumped 2.4% to 573.68 pence, and the company estimated pre-tax earnings marginally ahead of market expectations.
In Paris trading, Carrefour declined 0.8% to €14.82, Capgemini rose 1.2% to €194.30, and L'Air Liquide rose 1% to €186.46.
In Frankfurt trading, BMW advanced 0.1% to €91.48, Deutsche Bank gained 1.5% to €15.24, Deutsche Lufthansa declined 0.7% to €6.32, and Siemens AG decreased 1% to €177.04.
Nikkei 225 Jumps 1% Following Market Rally In New York, Elliott Management Amasses a $2 Billion Stake In Softbank
Akira Ito
06 Jun, 2024
Tokyo
Market indexes in Tokyo jumped, following a tech-stock-driven rally in overnight trading on Wall Street.
Benchmark indexes jumped as much as 1% after tech stocks rallied in Tokyo and the market advanced broadened to most sectors in the early afternoon.
The semiconductor stocks in Tokyo advanced following the record high at Nvidia in New York, which lifted the S&P 500 index and the Nasdaq Composite to new highs.
The Japanese yen held firm at 155.89 against the U.S. dollar, and the yield on the 10-year Japanese government bonds fell below 1% for the first time in two weeks.
Japan Stock Movers
The Nikkei 225 Stock Average jumped 0.7% to 38,751.57, and the Topix index advanced 0.4% to 2,759.05.
Tech stocks led the gainers, and Tokyo Electron, Advantest, and Screen Holdings jumped between 1.5% and 5%.
SoftBank jumped 1.3% to ¥9,545.0 after activist investor Elliott Investment acquired a $2 billion stake in the company with the aim of pushing the tech conglomerate to buy back $15 billion of its own stock.
The news was first reported by the Wall Street Journal and confirmed by two traders in Tokyo and New York.
Ocean shipping companies were in focus again, and Kawasaki Kisen Kaisha jumped 4.2% to ¥2,465.0 and Nippon Yusen advanced 2.6% to ¥5,018.0.
Energy companies traded higher despite the recent weakness in crude oil prices.
Idemitsu Kosan jumped 3% to ¥1,072.0, INPEX gained 0.02% to ¥2,313.0, and Iwatani jumped 2.6% to ¥9,458.0.
On the downside, Alps Alpine declined 5.5% to ¥1,463.0, and Mercari dropped as much as 3% to ¥2,023.50.
China Stocks Advanced Ahead of Exports Data, China's Property Sales Remain Depressed
Li Chen
06 Jun, 2024
Hong Kong
Stocks in Shanghai and Hong Kong advanced, and the yuan remained under pressure for the second consecutive week.
Benchmark indexes advanced ahead of the release of international trade data on Friday, and economists are estimating export growth to accelerate above 5% in May.
Market sentiment was also bolstered after Country Garden reported rising residential property unit sales in May, following the increase reported by China Vanke.
Policymakers are hoping that recent supportive measures announced by local authorities and the People's Bank of China may encourage more property transactions.
Despite the cautious optimism, markets are worried that the long-term economic growth trajectory is on the decline, which is likely to negatively impact corporate earnings growth.
The National Bureau of Statistics is set to announce international trade data on Friday, and economists are looking for exports to jump by as much as 5% amid rising global demand for electric vehicles and industrial machinery.
Investors are also awaiting the release of import growth, which generally signals the health of domestic demand.
China Stock Movers
The CSI 300 index increased 0.4% to 3,610.63, and the Hang Seng index advanced 0.5% to 18,508.73.
Country Garden decreased 3.1% to $5.62 despite the residential property developer reporting rising sales in May, according to filings with the Hong Kong Stock Exchange.
Contracted sales in May increased by 11.4% to 440,000 square meters from 430,000 square meters in April.
Sales increased to 4.29 billion yuan, or $592 million, from 3.85 billion yuan in April.
Despite the recent pick-up in activities, sales declined 76% from a year ago after dropping 83% in April, indicating the government measures are not working as fast as anticipated and the incipient recovery is still limited to tier-1 cities.
Nationwide residential property sales by the top 100 Chinese developers increased 3.4% from the previous month in May to 322.4 billion yuan, still down about 34% from a year ago, according to the data released by the China Real Estate Information Corporation.
India Movers: BHEL, IEX, KPI Green, Force Motors, Maruti Suzuki, NBCC, Nazara Tech
Arun Goswami
06 Jun, 2024
Mumbai
Stocks rebounded for the second day in a row, and the post-election results jitters eased after the NDA moved fast to form the next central government.
The Sensex index increased by 0.5% to 74,780.33, and the Nifty index rose by 0.5% to 22,740.65.
On the Mumbai stock exchange, 48 stocks traded at their 52-week highs, and 24 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.03%, and the Indian rupee edged higher at ₹83.52 against the U.S. dollar.
Maruti Suzuki increased 2.7% to ₹12,511.55, and the vehicle maker said it plans to invest 450 crore over the next three years in renewable energy projects.
BHEL jumped 5.7% to ₹269.90 after the company won a 3,500 crore order from Adani Power for setting up a power plant in Chhattisgarh.
Indian Energy Exchange surged 5.2% to ₹164.30 after the company said overall trading volume jumped 29% to 10,633 million units from 8,251 million units in May.
KPI Green Energy soared 4.4% to ₹1,756.75 after the company won orders for solar energy generation and transmission worth ₹351 crore.
Nazara Technologies advanced 3.9% to ₹715.60 after the company's subsidiary agreed to acquire SoapCentral.com, the soap opera-focused content provider, for $1.4 million, or approximately ₹11 crore.
NBCC added 7.6% to ₹139.95 after the company said it won 13 new orders worth ₹451 crore.
Force Motors gained 0.7% to ₹8,460.0 after the commercial vehicle maker said total domestic unit sales in May rose 13.9% to 2,412 from 2,118.
However, total exports in the month plunged 63% to 180 units from 491 units a year ago.
Aimtron Electronics is set to list its stock on the National Stock Exchange's small and medium enterprise platform with a plan to raise as much as 87 crore through the sale of 54.05 lakh shares.
Service Sector Strength and Rally In Nvidia Lift S&P 500 and Nasdaq to New Record Highs
Alexander Garcia
05 Jun, 2024
Miami
Stocks on Wall Street moved higher as investors reviewed the latest update on private payroll and the service sector and reaffirmed their bet on at least one rate cut before the year's end.
After two hours of trading, the market rally broadened beyond semiconductor and leading tech companies, and the two benchmark indexes inched further into record territory.
The S&P 500 index and the Nasdaq Composite advanced, and the AI chip leader Nvidia soared to a new record high.
Private payroll expanded by 152,000 in May, according to the latest survey released by ADP.
The private payroll rose at the slowest pace in four months, and fewer jobs were added compared to the downwardly revised 188,000 in April.
Most of the job gains were in the service sector, with an increase of 149,000, and goods-producing sector payroll expanded by 3,000 in the month.
Annual wage gains for those who switched jobs slowed to 7.8%, and for those who continued with their current jobs, they held steady at 5% for the third month in a row.
A separate report showed that service growth accelerated in May due to faster new order growth and notably higher business activity.
The service sector's activities expanded at the fastest pace in nine months, according to the latest survey released by ISM.
The ISM Services PMI in the U.S. jumped to 53.8 in May from 49.4 in April, when it contracted for the first time since December.
"The majority of survey participants suggested that inflation and the current interest rates are an impediment to improving business conditions," Anthony Nieves, chair of the ISM business survey committee, said.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.9% to 5,336.56, and the Nasdaq Composite advanced 0.7% to 17,122.81.
The yield on 2-year Treasury notes edged lower to 4.78%, 10-year Treasury notes decreased to 4.34%, and 30-year Treasury bonds edged higher to 4.47%.
WTI crude oil increased $0.34 to $73.60 a barrel, and natural gas prices rose 9 cents to $2.68 a thermal unit.
Gold increased by $24.65 to $2,353.49 an ounce, and silver rose 37 cents to $29.95.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.34.
U.S. Stock Movers
Hewlett-Packard Enterprise rose 12.4% to $19.79 after the advanced computer system maker reported a better-than-expected fiscal second quarter.
CrowdStrike Holdings jumped 6.7% to $326.56 after the cyber security firm reported better-than-expected first quarter results and issued a stronger-than-expected outlook for the current quarter.
Nio Inc. increased 0.01% to $5.22 after the Chinese electric vehicle maker received approval to build its third production facility in China.
The news was first reported by Reuters but could not be independently verified.
Deere & Co. declined 0.2% to $368.79 after the farm equipment maker said in a regulatory filing that it plans to trim its "production and salaried workforce" as the company struggles with a global demand slowdown.
European Markets Close Higher Ahead of Thursday's Rate Decisions
European markets edged higher in cautious trading ahead of the European Central Bank's rate decisions on Thursday.
Benchmark indexes in Frankfurt, Paris, and London advanced in choppy trading as investors awaited the ECB's first rate cut and insights in timing for additional cuts.
The ECB is widely expected to cut its policy rates by 25 basis points from a record high of 4% after inflation eased over the last eighteen months from a record high close to 9%.
Industrial Producer Prices Fell Sixth Consecutive Month in May
On the economic front, industrial producer prices in the Euro Area declined 1% from the previous month in April, following a downwardly revised drop of 0.5% in March, Eurostat reported on Wednesday.
Producer prices, a measure of wholesale inflation, declined for the sixth month in a row.
The decline in producer prices in May was driven by a 3.6% decline in energy prices (compared to a fall of 2.3% in March).
Excluding energy, producer prices edged slightly up by 0.2%, slower than an increase of 0.3% in the previous month.
Euro-Area Business Activities Expanded in May
Business activities in the eurozone in May rose, according to the final update released by the HCOB and S&P Global on Wednesday.
The HCOB eurozone composite PMI edged slightly lower to 52.2 in May from the preliminary reading of 52.3, but rose from 51.7 in April.
The growth accelerated to the highest level since May 2023, following the decline in inflation in the currency union.
France's Industrial Output Rebounded in May
France's industrial output increased by 0.5% on a monthly basis in April, rebounding from the revised 0.2% decline in March, the statistical office INSEE reported in its monthly update.
The rebound in manufacturing output by 0.4% from the contraction of 0.4% in March and the acceleration in mining, energy, water supply, and waste management to 1.2% from 0.8% in March drove the French output higher.
However, construction activity shrank by 1% on a monthly basis in April, reversing the 0.8% increase in March.
On a yearly basis, industrial production growth accelerated to 0.9% from 0.7% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.9% to 18,575.94; the CAC-40 index rose by 0.9% to 8,006.57; and the FTSE 100 index advanced by 0.2% to 8,246.95.
The yield on 10-year German bonds edged lower to 2.52%; French bonds inched lower to 3.01%; the UK gilts edged lower to 4.20%; and Italian bonds inched lower to 3.84%.
The euro edged higher to $1.086; the British pound inched higher to $1.277; and the U.S. dollar weakened to 89.23 Swiss cents.
Brent crude increased $0.75 to $78.33 a barrel, and the Dutch TTF natural gas fell by €0.74 to €33.37 per MWh.
Europe Stock Movers
Inditex jumped 4.5% to €45.94 after the parent company of apparel retailer Zara reported higher sales and earnings in the first quarter.
Elekta AB plunged 17.5% to SEK 70.25 after the maker of radiation therapy equipment reported lower-than-expected operating earnings in its fiscal fourth quarter.
Workspace Group plc increased 4.6% to 576.59 pence, despite the office space firm reporting a wider pre-tax loss.
Centrica PLC decreased 2.9% to 138.10 pence after the UK-based energy service company said the company's performance is in line with market expectations.
KPN increased 1.5% to €3.53 after the company signed an agreement with the Dutch pension fund ABP, a new wireless communication tower company.
AstraZeneca increased 1% to 12,532.0 pence after the pharmaceutical company announced the completion of the acquisition of Fusion Pharmaceuticals, a clinical-stage biopharmaceutical company.
Japan's Wage Gains Lag Inflation In April, Safety Certification Falsification Scandal Widens
Market indexes in Tokyo fell amid a broad market selloff as investors reassessed the rate path outlook and the persistent rate differential between the U.S. and Japan.
The Nikkei and the Topix index declined more than 1% after banks, tech and industrial companies, and vehicle makers were among the leading decliners.
Market sentiment was dented after April wage gains lagged inflation, stoking fears of weak consumer spending negatively impacting economic growth in the current quarter.
Wages in April rose 2.1%, lagging core consumer price inflation of 2.2% in the month as small- and medium-sized businesses struggled to lift wages.
The Japanese yen edged higher and hovered near 155.73 against the U.S. dollar, reversing the previous week's slide.
Currency traders are still anticipating the yen to dip to 165 against the dollar due to the persistent yield differential between the U.S. and Japan.
Moreover, the Bank of Japan is reluctant to lift its interest rates, despite the recent rise in inflation driven by the increase in commodities, energy, and food prices.
Japan Stock Movers
The Nikkei 225 stock average decreased 1.1% to 38,405.05, and the Topix index declined 1.6% to 38,405.05.
Tokyo Electron, Advantest, Screen Holdings, and Softbank declined between 1.2% and 3.3%.
Resource-linked stocks also declined after metals and crude oil prices fell for the second week in a row.
JFE Holdings, Nippon Steel, and Inpex Corp. fell between 2% and 4%.
Toyota Motor, Honda Motor, and Nissan Motor fell between 0.7% and 2.8% after the yen edged higher.
Toyota Motor Corp. declined 2.4% to ¥3,218.0 after the company said it plans to halt the shipment of three models produced in Japan following certification issues and a government raid at its headquarters.
Honda also fell after the company confirmed that it had falsified safety certification tests after a government action against the company.
Mazda Motor also temporarily halted shipment of two models after an internal investigation discovered irregularities; however, these models have not been in production since the end of May.
China's Service Growth Accelerates in April, Stock Indexes Extend 3-day Rally
Stocks in Shanghai and Hong Kong attempted to rebound for the third session in a row, and the yuan struggled amid persistent devaluation worries.
The CSI 300 and the Hang Seng index edged up 0.3% after the service sector expanded at the fastest pace in May.
The Caixin-SS&P Global services purchasing managers' index increased to 54.0 in May from 52.5 in April.
Earlier in the week, the private survey of the manufacturing sector showed an expansion, and together the two reports showed rising business activities last month.
The Hang Seng index advanced on speculation that the economy is likely to hit the government's target rate of 5% and corporate earnings in the current quarter are likely to be ahead of market expectations.
China indexes have been on the rebound in the last three months after hitting their lows in late January, but benchmark indexes are still down more than 40% from the peak reached in January 2018.
Moreover, China's economy is likely to continue to face deceleration, and GDP growth is likely to slow to less than 3% over the next three years.
The Chinese yuan hovered at 7.252 against the U.S. dollar, and the currency traded near a five-month low.
China Stock Movers
The CSI 300 index decreased 0.3% to 3,606.94, and the Hang Seng index jumped 0.4% to 18,525.56.
Meituan declined 0.2% to HK$113.30 ahead of the food delivery company's earnings after the market closed.
The food delivery company is expected to report a narrower loss in the first quarter as the company prioritizes profitability over sales growth.
Trip.com declined 1.3% to HK$403.0 after the online travel agency announced a $1.3 billion convertible debt offering to repay its existing debt, fund its foreign expansion, and finance its working capital needs.
Electric vehicle makers were in focus ahead of the release of international trade data later in the week.
BYD increased 1.2% to HK$233.60, Li Auto fell 0.4% to HK$79.25, and Xpeng rose 1.7% to HK$32.85.
U.S. Movers: CrowdStrike, Deere, Hewlett-Packard, Nio
Scott Peters
05 Jun, 2024
New York City
Hewlett-Packard Enterprise rose 12.4% to $19.79 after the advanced computer system maker reported a better-than-expected fiscal second quarter.
CrowdStrike Holdings jumped 6.7% to $326.56 after the cyber security firm reported better-than-expected first quarter results and issued a stronger-than-expected outlook for the current quarter.
Nio Inc. increased 0.01% to $5.22 after the Chinese electric vehicle maker received approval to build its third production facility in China.
The news was first reported by Reuters but could not be independently verified.
Deere & Co. declined 0.2% to $368.79 after the farm equipment maker said in a regulatory filing that it plans to trim its "production and salaried workforce" as the company struggles with a global demand slowdown.
Rate Cut Hopes Support Market Advance, Private Payrolls Growth Slows in May
Barry Adams
05 Jun, 2024
New York City
Stocks on Wall Street attempted to move higher as investors reviewed the latest update on private payroll and the service sector.
The S&P 500 index and the Nasdaq Composite advanced in early trading, and the AI chip leader Nvidia soared to a new record high.
Private payroll expanded by 152,000 in May, according to the latest survey released by ADP.
The private payroll rose at the slowest pace in four months, and fewer jobs were added compared to the downwardly revised 188,000 in April.
Most of the job gains were in the service sector, with an increase of 149,000, and goods-producing sector payroll expanded by 3,000 in the month.
Annual wage gains for those who switched jobs slowed to 7.8%, and for those who continued with their current jobs, they held steady at 5% for the third month in a row.
A separate report showed that service growth accelerated in May due to faster new order growth and notably higher business activity.
The service sector's activities expanded at the fastest pace in nine months, according to the latest survey released by ISM.
The ISM Services PMI in the U.S. jumped to 53.8 in May from 49.4 in April, when it contracted for the first time since December.
"The majority of survey participants suggested that inflation and the current interest rates are an impediment to improving business conditions," Anthony Nieves, chair of the ISM business survey committee, said.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,302.60, and the Nasdaq Composite advanced 0.7% to 16,975.08.
The yield on 2-year Treasury notes edged lower to 4.78%, 10-year Treasury notes decreased to 4.34%, and 30-year Treasury bonds edged higher to 4.47%.
WTI crude oil increased $0.34 to $73.60 a barrel, and natural gas prices rose 9 cents to $2.68 a thermal unit.
Gold increased by $16.10 to $2,346.48 an ounce, and silver rose 14 cents to $29.79.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.34.
U.S. Stock Movers
Hewlett-Packard Enterprise rose 12.4% to $19.79 after the advanced computer system maker reported a better-than-expected fiscal second quarter.
CrowdStrike Holdings jumped 6.7% to $326.56 after the cyber security firm reported better-than-expected first quarter results and issued a stronger-than-expected outlook for the current quarter.
Nio Inc. increased 0.01% to $5.22 after the Chinese electric vehicle maker received approval to build its third production facility in China.
The news was first reported by Reuters but could not be independently verified.
Deere & Co. declined 0.2% to $368.79 after the farm equipment maker said in a regulatory filing that it plans to trim its "production and salaried workforce" as the company struggles with a global demand slowdown.
Europe Movers: AstraZeneca, Centrica, Elekta, Inditex, KPN, Workspace Group,
Inga Muller
05 Jun, 2024
Frankfurt
European market indexes edged slightly higher in cautious trading ahead of the release of monetary policy decisions by the European Central Bank on Thursday.
Producer prices in the eurozone declined on a monthly basis for the sixth month in a row due to the persistent softness in energy prices.
France's industrial output rebounded in May.
The DAX index increased by 0.8% to 18,546.01; the CAC-40 index rose by 0.7% to 7,992.45; and the FTSE 100 index advanced by 0.3% to 8,252.46.
The yield on 10-year German bonds edged lower to 2.52%; French bonds inched lower to 3.01%; the UK gilts edged lower to 4.20%; and Italian bonds inched lower to 3.84%.
Inditex jumped 4.5% to €45.94 after the parent company of apparel retailer Zara reported higher sales and earnings in the first quarter.
Elekta AB plunged 17.5% to SEK 70.25 after the maker of radiation therapy equipment reported lower-than-expected operating earnings in its fiscal fourth quarter.
Workspace Group plc increased 4.6% to 576.59 pence, despite the office space firm reporting a wider pre-tax loss.
Centrica PLC decreased 2.9% to 138.10 pence after the UK-based energy service company said the company's performance is in line with market expectations.
KPN increased 1.5% to €3.53 after the company signed an agreement with the Dutch pension fund, ABP, to form a new wireless communication tower company.
AstraZeneca increased 1% to 12,532.0 pence after the pharmaceutical company announced the completion of the acquisition of Fusion Pharmaceuticals, a clinical-stage biopharmaceutical company.
Eurozone PPI Eased Sixth Consecutive Month, France's Industrial Output Rebounded In May
Bridgette Randall
05 Jun, 2024
Frankfurt
European markets edged higher in cautious trading ahead of the European Central Bank's rate decisions on Thursday.
Benchmark indexes in Frankfurt, Paris, and London advanced in choppy trading as investors awaited the ECB's first rate cut and insights in timing for additional cuts.
The ECB is widely expected to cut its policy rates by 25 basis points from a record high of 4% after inflation eased over the last eighteen months from a record high close to 9%.
Industrial Producer Prices Fell Sixth Consecutive Month in May
On the economic front, industrial producer prices in the Euro Area declined 1% from the previous month in April, following a downwardly revised drop of 0.5% in March, Eurostat reported on Wednesday.
Producer prices, a measure of wholesale inflation, declined for the sixth month in a row.
The decline in producer prices in May was driven by a 3.6% decline in energy prices (compared to a fall of 2.3% in March).
Excluding energy, producer prices edged slightly up by 0.2%, slower than an increase of 0.3% in the previous month.
Euro-Area Business Activities Expanded in May
Business activities in the eurozone in May rose, according to the final update released by the HCOB and S&P Global on Wednesday.
The HCOB eurozone composite PMI edged slightly lower to 52.2 in May from the preliminary reading of 52.3, but rose from 51.7 in April.
The growth accelerated to the highest level since May 2023, following the decline in inflation in the currency union.
France's Industrial Output Rebounded in May
France's industrial output increased by 0.5% on a monthly basis in April, rebounding from the revised 0.2% decline in March, the statistical office INSEE reported in its monthly update.
The rebound in manufacturing output by 0.4% from the contraction of 0.4% in March and the acceleration in mining, energy, water supply, and waste management to 1.2% from 0.8% in March drove the French output higher.
However, construction activity shrank by 1% on a monthly basis in April, reversing the 0.8% increase in March.
On a yearly basis, industrial production growth accelerated to 0.9% from 0.7% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.8% to 18,546.01; the CAC-40 index rose by 0.7% to 7,992.45; and the FTSE 100 index advanced by 0.3% to 8,252.46.
The yield on 10-year German bonds edged lower to 2.52%; French bonds inched lower to 3.01%; the UK gilts edged lower to 4.20%; and Italian bonds inched lower to 3.84%.
The euro edged higher to $1.086; the British pound inched higher to $1.277; and the U.S. dollar weakened to 89.23 Swiss cents.
Brent crude increased $0.15 to $77.66 a barrel, and the Dutch TTF natural gas declined by €0.24 to €33.87 per MWh.
Europe Stock Movers
Inditex jumped 4.5% to €45.94 after the parent company of apparel retailer Zara reported higher sales and earnings in the first quarter.
Elekta AB plunged 17.5% to SEK 70.25 after the maker of radiation therapy equipment reported lower-than-expected operating earnings in its fiscal fourth quarter.
Workspace Group plc increased 4.6% to 576.59 pence, despite the office space firm reporting a wider pre-tax loss.
Centrica PLC decreased 2.9% to 138.10 pence after the UK-based energy service company said the company's performance is in line with market expectations.
KPN increased 1.5% to €3.53 after the company signed an agreement with the Dutch pension fund ABP, a new wireless communication tower company.
AstraZeneca increased 1% to 12,532.0 pence after the pharmaceutical company announced the completion of the acquisition of Fusion Pharmaceuticals, a clinical-stage biopharmaceutical company.
Japan's Wage Gains Lag Core Inflation In April, Safety Certification Falsification Scandal Widens
Akira Ito
05 Jun, 2024
Tokyo
Market indexes in Tokyo fell amid a broad market selloff as investors reassessed the rate path outlook and the persistent rate differential between the U.S. and Japan.
The Nikkei and the Topix index declined more than 1% after banks, tech and industrial companies, and vehicle makers were among the leading decliners.
Market sentiment was dented after April wage gains lagged inflation, stoking fears of weak consumer spending negatively impacting economic growth in the current quarter.
Wages in April rose 2.1%, lagging core consumer price inflation of 2.2% in the month as small- and medium-sized businesses struggled to lift wages.
The Japanese yen edged higher and hovered near 155.73 against the U.S. dollar, reversing the previous week's slide.
Currency traders are still anticipating the yen to dip to 165 against the dollar due to the persistent yield differential between the U.S. and Japan.
Moreover, the Bank of Japan is reluctant to lift its interest rates, despite the recent rise in inflation driven by the increase in commodities, energy, and food prices.
Japan Stock Movers
The Nikkei 225 stock average decreased 1.1% to 38,405.05, and the Topix index declined 1.6% to 38,405.05.
Tokyo Electron, Advantest, Screen Holdings, and Softbank declined between 1.2% and 3.3%.
Resource-linked stocks also declined after metals and crude oil prices fell for the second week in a row.
JFE Holdings, Nippon Steel, and Inpex Corp. fell between 2% and 4%.
Toyota Motor, Honda Motor, and Nissan Motor fell between 0.7% and 2.8% after the yen edged higher.
Toyota Motor Corp. declined 2.4% to ¥3,218.0 after the company said it plans to halt the shipment of three models produced in Japan following certification issues and a government raid at its headquarters.
Honda also fell after the company confirmed that it had falsified safety certification tests after a government action against the company.
Mazda Motor also temporarily halted shipment of two models after an internal investigation discovered irregularities; however, these models have not been in production since the end of May.
China's Service Sector Growth Accelerates in April, Stock Indexes Extend 3-day Rally
Li Chen
05 Jun, 2024
Hong Kong
Stocks in Shanghai and Hong Kong attempted to rebound for the third session in a row, and the yuan struggled amid persistent devaluation worries.
The CSI 300 and the Hang Seng index edged up 0.3% after the service sector expanded at the fastest pace in May.
The Caixin-SS&P Global services purchasing managers' index increased to 54.0 in May from 52.5 in April.
Earlier in the week, the private survey of the manufacturing sector showed an expansion, and together the two reports showed rising business activities last month.
The Hang Seng index advanced on speculation that the economy is likely to hit the government's target rate of 5% and corporate earnings in the current quarter are likely to be ahead of market expectations.
China indexes have been on the rebound in the last three months after hitting their lows in late January, but benchmark indexes are still down more than 40% from the peak reached in January 2018.
Moreover, China's economy is likely to continue to face deceleration, and GDP growth is likely to slow to less than 3% over the next three years.
The Chinese yuan hovered at 7.252 against the U.S. dollar, and the currency traded near a five-month low.
China Stock Movers
The CSI 300 index decreased 0.3% to 3,606.94, and the Hang Seng index jumped 0.4% to 18,525.56.
Meituan declined 0.2% to HK$113.30 ahead of the food delivery company's earnings after the market closed.
The food delivery company is expected to report a narrower loss in the first quarter as the company prioritizes profitability over sales growth.
Trip.com declined 1.3% to HK$403.0 after the online travel agency announced a $1.3 billion convertible debt offering to repay its existing debt, fund its foreign expansion, and finance its working capital needs.
Electric vehicle makers were in focus ahead of the release of international trade data later in the week.
BYD increased 1.2% to HK$233.60, Li Auto fell 0.4% to HK$79.25, and Xpeng rose 1.7% to HK$32.85.
India Movers: Container Corporation, GPT Infra, Hindalco, NLC, Nuvama Wealth, State Bank of India, Ztech India
Arun Goswami
05 Jun, 2024
Mumbai
Stocks in Mumbai struggled for the second session in a row after the ruling coalition lost its solid majority in the Lok Sabha election, forcing the BJP to seek a power-sharing arrangement with regional parties.
The Sensex index increased by 0.3% to 72,315.25, and the Nifty index rose by 0.4% to 21,965.70.
On the Mumbai stock exchange, 50 stocks traded at their 52-week highs, and 90 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.03%, and the Indian rupee edged higher at ₹83.52 against the U.S. dollar.
Container Corporation of India decreased 1.5% to ₹936.15, and the company signed an agreement with Shipping Corporation of India to provide a logistic solution.
Nuvama Wealth Management dropped 0.3% to ₹4,536.0, and the company set up a subsidiary in Dubai to serve the growing community of Indian professionals.
NLC India declined 1.2% to ₹198.90, and the company said it plans to raise foreign currency loans of $600 million through a direct offering.
GPT Infraprojects fell 1.5% to ₹225.15, and the company won an order worth ₹547 crore from Rail Vikas Nigam.
Hindalco Industries plunged 7.5% to ₹644.0 after the company postponed the initial public offering of its U.S. unit Novelis, citing challenging market conditions.
State Bank of India decreased 2.5% to ₹774.60, and the financial service provider scheduled a board meeting to discuss its options to raise foreign currency loans worth $3 billion in the current financial year.
Ztech India is set to list its stock in an initial public offering and raise as much as 37.3 crore through the sale of 37.3 crore shares.
The company's initial public offering has been oversubscribed 371 times.
Rate Path and Economic Growth Worries Kept Indexes In Check Across Atlantic, India Indexes Plunged 6%
Alexander Garcia
04 Jun, 2024
Miami
Major averages on Wall Street traded marginally lower as investors assessed the economic growth outlook and the Fed's maneuvering room to lower interest rates.
Investors hoped that the recent weakness in manufacturing activities in May and the slight decline in job openings in April would provide much-needed headroom for policymakers to consider a possible rate cut later in the year.
The S&P 500 index and the Nasdaq Composite declined, and the yield on Treasury notes edged slightly lower after weak manufacturing data weighed on the market.
Moreover, the Federal Reserve is likely to keep rates unrevised in the near future, as the central bank awaits solid evidence of inflation to be on a sustained downward path towards its target rate of 2%.
In a busy week of economic reports, investors are looking forward to the release of the JOLT, or Job Openings and Labor Turnover Survey, and factor orders reports today, and the nonfarm payroll update for May is scheduled to be released on Friday.
The number of job openings changed little, at 8.1 million in April, the U.S. Bureau of Labor Statistics reported today.
The number of job openings declined by 296,000 from the previous month, the lowest level since February 2021.
Job openings decreased by 204,000 in healthcare and social assistance, by 59,000 in state and local government education, but increased by 50,000 in private educational services.
Over the month, both the number of hires and total separations were little changed, at 5.6 million and 5.4 million, respectively.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.2% to 5,271.99, and the Nasdaq Composite fell 0.3% to 16,793.31.
The yield on 2-year Treasury notes edged lower to 4.80%, 10-year Treasury notes decreased to 4.36%, and 30-year Treasury bonds edged higher to 4.51%.
Crude oil prices declined for the fifth day in a row on the expectation of rising supply from OPEC+ member nations.
Over the weekend, the oil-producing nations of OPEC+ announced their plans to keep production cuts until the end of the year in an effort to prevent the price of oil from sliding further.
WTI crude oil decreased $0.66 to $73.58 a barrel, and natural gas prices fell 0.1 cents to $2.75 a thermal unit.
Gold decreased by $21.79 to $2,328.85 an ounce, and silver was down $1.20 to $29.52.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.29.
U.S. Stock Movers
Intel Corp. increased 0.3% to $30.33 after the advanced chip maker announced the release of new artificial intelligence chips as the company played catch with rivals Nvidia and AMD.
Bath & Body Works declined 7.3% to $48.01 after the personal products and fragrance retailer topped revenue and earnings estimates in the first quarter, but the retailer's current quarter outlook fell short of market expectations.
European Market Turn Lower Ahead of Rate Decisions
European markets gave up gains from the previous session as investors awaited monetary policy decisions on Thursday.
Benchmark indexes in Paris, London, and Frankfurt declined between 0.5% and 1.2% in choppy trading, and bond yields in the region edged lower.
Germany's Jobless Rate Held Steady at 5.9% In May
Germany's seasonally adjusted jobless rate held steady at 5.9% for the sixth consecutive session in a row in May, the labor ministry reported Tuesday.
The jobless rate rose to the highest level for the first time since June 2021.
The number of unemployed persons increased by 25,000 to 2.76 million, marking the 17th month of rising unemployment in a row.
U.K. Retail Sales Struggled to Advance in May
The UK's retail sales rose at a slower annual pace in May, according to the latest report released by the British Retail Consortium.
Total retail sales increased by 0.7% in May, slower than the 3.9% increase in the corresponding month a year ago.
The increase in retail sales was above the 3-month average growth of 0.3% and below the 12-month average growth of 2.0%.
Food sales increased 3.6%, and non-food sales decreased 2.4% over the three months to May.
"Despite a strong bank holiday weekend for retailers, minimal improvement in weather across most of May meant only a modest rebound in retail sales last month," said Helen Dickinson, chief executive of the BRC.
Europe Indexes and Yields
The DAX index decreased by 1.1% to 18,405.64; the CAC-40 index fell by 0.8% to 7,937.90; and the FTSE 100 index declined by 0.4% to 8,232.04.
The yield on 10-year German bonds edged lower to 2.55%; French bonds inched lower to 3.04%; the UK gilts edged lower to 4.20%; and Italian bonds inched higher to 3.88%.
The euro edged higher to $1.086; the British pound inched higher to $1.275; and the U.S. dollar weakened to 89.35 Swiss cents.
Brent crude decreased $1.35 to $77.01 a barrel, and the Dutch TTF natural gas declined by €1.06 to €35.09 per MWh.
Europe Stock Movers
A.P. Moeller Maersk decreased a fraction to DKK11,730, despite the company raising its annual profit outlook.
British American Tobacco declined 1.2% to 2,405.0 pence after the cigarette maker said its first-half revenue and adjusted operating profit, on an organic and constant currency basis, were "single-digit."
Wizz Air Holdings rose 0.4% to 2,428.0 pence after the deep discount air carrier said passenger booking jumped 2.1% and load factor improved slightly in May.
Credit Agricole declined 1.2% to €14.70 after the French lender said its unit, Indosuez Wealth Management, has finalized the purchase of Bank Degroof Petercam.
Vistry Group declined 1.3% to 1,291.0 pence after the home builder agreed to sell 1,750 homes to the private equity group Backstone and its partner Regis in a £580 million deal.
The group of "affordable homes" are located across 36 developments in south-east England and meets demands from housing associations and families.
Vistry said most homes are expected to be delivered over the next two years, with the first batch of deliveries in June.
Nikkei Index In Tokyo Halts a Two-day Rally, Automakers In Focus
Japan's stock market indexes halted two-day gains amid weak market sentiment, valuation worries, and a lack of catalysts.
The Nikkei and the Topix index turned lower following mixed closings in overnight trading in New York after the U.S. manufacturing sector contracted for the second month in a row, according to a private survey.
The weakness in the U.S. manufacturing sector raised speculation that the U.S. Federal Reserve may be able to pass at least one rate cut before the end of the year.
Automakers were in focus after Japanese automakers reported a 15.7% increase in vehicle sales in North America in May to 2.2 million units.
Closer to home, investors are looking ahead to the release of Japanese wage and household data this week.
The Japanese yen hovered near 156.03 against the U.S. dollar in late afternoon trading in Tokyo as investors continued to bet on additional weakness in the Japanese yen.
Crude oil futures prices extended a two-day drop to 5% after OPEC+ announced its plans to phase out voluntary production cuts over the next year.
Brent crude oil futures for immediate-month delivery decreased 1.1% to $77.64 per barrel.
Japan Stock Movers
The Nikkei 225 stock average decreased 0.4% to 38,766.29, and the Topix index dropped 0.4% to 2,786.64.
Tech stocks were among the leading decliners following the weakness in overnight trading in New York.
Advantest, Tokyo Electron, Screen Holdings, and Softbank declined between 0.3% and 1.2%.
Banks lacked direction, and Sumitomo Mitsui traded nearly unchanged, Mizuho Financial declined 0.3%, and Mitsubishi UFJ fell 1.0%.
Toyota Motor decreased 1.3% to ¥3,299.0 after the vehicle maker temporarily halted shipments of some models on safety concerns.
Nissan Chemical advanced 4.2% to ¥4,814.0, and J. Front Retailing added 3.2% to ¥1,600.50.
Diversified conglomerates, known as Shogo Shosha, traded down.
Mitsui & Company fell 2.9% to ¥7,846.0, Mitsubishi Corp. fell 1.6% to ¥3,305.0, Marubeni declined 1.7% to ¥3,037.0, and Itochu decreased 1% to ¥7,457.0.
Hopes of Additional Supportive Measures Lift China Indexes
Market indexes in Hong Kong and Shanghai advanced, and the yuan faced headwinds as investors debated the strength of the economic recovery.
The CSI 300 and Hang Seng indexes edged up in active trading as investors hoped policymakers were preparing to provide additional measures to support financial and property markets.
Despite the recent flurry of announcements from the People's Bank of China, regulatory agencies, and leading policymakers, little has changed on the ground.
Consumer sentiment remains cautious amid weak job markets and an uneven economic recovery, which has generally bypassed small and medium businesses.
Moreover, the announced measures to support the property market have failed to revive transactions and improve liquidity among large developers.
Foreign investors are also avoiding Chinese stocks, despite their cheap valuation and stable earnings, because of ongoing geopolitical tensions, regulatory uncertainty, and the government's policy favoring large domestic companies.
The Chinese yuan traded around 7.25 against the U.S. dollar, and the yield on China's 10-year government bond held at 2.3% after a private survey showed activities in the manufacturing sector accelerated in May, contrasting the government survey showing a decline.
China Stock Movers
The CSI 300 index increased 0.4% to 3,602.60, and the Hang Seng Index advanced 0.2% to 18,441.59.
Banks generally traded higher in Shanghai and Hong Kong in the hopes that the People's Bank of China may ease requirements for mortgage loans.
Bank of China decreased 3.7% to HK$3.70, China Merchants Bank gained 0.1% to $35.30, and ICBC decreased 0.7% to $4.44.
Vehicle makers traded higher ahead of international trade statistics later in the week, and investors are hoping that exports of electric vehicles are likely to sustain elevated growth.
Li Auto fell 2.9% to $79.95, BYD added 0.4% to $231.40, and Xpeng decreased 1.3% to $32.25.
Internet companies edged higher in Hong Kong as foreign investors searched for bargains in beaten-down stocks.
Tencent Holdings increased 0.6% to $377.20, Meituan jumped 4.2% to HK$113.50, and Alibaba Group decreased 1.3% to HK$76.25.
Property stocks advanced in the hopes of additional measures to improve liquidity among large developers.
China Vanke, the largest residential developer in China, said sales in May increased from the prior month by 11.2% to US$3.2 billion.
China Vanke jumped HK$5.75, China Resources Land added 3% to HK$30.10, and Longfor Group added 3.3% to HK$12.98.
India Indexes Collapse 6% After Ruling Coalition Suffered Significant Setback In National Election
Market indexes on Dalal Street fell sharply in Tuesday's trading, as vote counting in the Lok Sabha election showed tighter-than-expected races in several leading states.
The Sensex and the Nifty indexes dropped 5.8% after the BJP-led NDA alliance was ahead in 293 seats and the opposition alliance INDIA was leading in 232 seats.
The early results were in sharp contrast to the expectations set by the leading exit polls for the NDA alliance to win at least 355 seats.
Prime Minister Narendra Modi's government is looking for a rare third term, and the winning coalition needs at least 272 seats to form the next government.
In the 2019 general election, the NDA alliance won 352 seats and the opposition alliance of parties controlled 94 seats.
In a broad market selloff, market indexes opened lower and continued to slide further as vote counting continued.
At market close, the NDA was ahead in 295 seats, and the INDIA Bloc alliance was leading in 232 seats, placing the opposition alliance closer to forming a government, which every leading exit poll failed to predict.
The BJP-led NDA is still likely to form the next government, but the slimmer majority of the alliance raises the prospect of an unstable government.
Indexes and Yields
The Sensex index decreased by 5,8% to 72,079.05, and the Nifty index fell by 5.9% to 21,884.50.
On the Mumbai stock exchange, 139 stocks traded at their 52-week highs, and 292 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.94%, and the Indian rupee edged higher at ₹83.15 against the U.S. dollar.
The gold price increased by 0.01% to ₹72,211 per ten grams, and silver edged up by 0.5% to ₹92,045 per kilo.
Crude oil futures prices declined by 4% after OPEC+ announced its plans to end voluntary quotas over the next year.
Crude oil decreased by 4.2% to ₹6,176 per barrel, and natural gas rose by 5% to ₹226.10 per thermal unit.
U.S. Movers: Bath & Body Works, Intel, Oil Explorers
Scott Peters
04 Jun, 2024
New York City
Intel Corp. increased 0.3% to $30.33 after the advanced chip maker announced the release of new artificial intelligence chips as the company played catch with rivals Nvidia and AMD.
Bath & Body Works declined 7.3% to $48.01 after the personal products and fragrance retailer topped revenue and earnings estimates in the first quarter, but the retailer's current quarter outlook fell short of market expectations.
Oil complex stock traded down after crude oil prices headed lower for the fifth session in a row and dropped to a four-month low on the fears that the global supply could rise later in the year.
Over the weekend, the oil-producing nations of OPEC+ announced their plans to keep production cuts until the end of the year in an effort to prevent the price of oil from sliding further.
Exxon Mobil declined 2.4% to $111.73, Chevron Corp. decreased 1.4% to $155.20, and ConocoPhillips fell 1.1% to $112.60.
U.S. Major Averages Edged Lower On Economic Growth Fears, Job Openings Changed Little
Barry Adams
04 Jun, 2024
New York City
Stocks on Wall Street lacked direction, and benchmark indexes traded down in early trading.
The S&P 500 index and the Nasdaq Composite declined, and the yield on Treasury notes edged slightly lower after weak manufacturing data weighed on the market.
Moreover, the Federal Reserve is likely to keep rates unrevised in the near future, as the central bank awaits solid evidence of inflation to be on a sustained downward path towards its target rate of 2%.
In a busy week of economic reports, investors are looking forward to the release of the JOLT, or Job Openings and Labor Turnover Survey, and factor orders reports today, and the nonfarm payroll update for May is scheduled to be released on Friday.
The number of job openings changed little, at 8.1 million in April, the U.S. Bureau of Labor Statistics reported today.
The number of job openings declined by 296,000 from the previous month, the lowest level since February 2021.
Job openings decreased by 204,000 in healthcare and social assistance, by 59,000 in state and local government education, but increased by 50,000 in private educational services.
Over the month, both the number of hires and total separations were little changed, at 5.6 million and 5.4 million, respectively.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.2% to 5,274.14, and the Nasdaq Composite fell 0.3% to 16,785.85.
The yield on 2-year Treasury notes edged lower to 4.80%, 10-year Treasury notes decreased to 4.36%, and 30-year Treasury bonds edged higher to 4.51%.
Crude oil prices declined for the fifth day in a row on the expectation of rising supply from OPEC+ member nations.
Over the weekend, the oil-producing nations of OPEC+ announced their plans to keep production cuts until the end of the year in an effort to prevent the price of oil from sliding further.
WTI crude oil decreased $1.24 to $72.97 a barrel, and natural gas prices fell 0.1 cents to $2.75 a thermal unit.
Gold decreased by $15.35 to $2,335.06 an ounce, and silver was down 72 cents to $29.99.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.29.
U.S. Stock Movers
Intel Corp. increased 0.3% to $30.33 after the advanced chip maker announced the release of new artificial intelligence chips as the company played catch with rivals Nvidia and AMD.
Bath & Body Works declined 7.3% to $48.01 after the personal products and fragrance retailer topped revenue and earnings estimates in the first quarter, but the retailer's current quarter outlook fell short of market expectations.