Market Update
U.S. Movers: Alibaba Group, Chipotle Mexican Grill, Ford Motor, NYCB, Uber
Scott Peters
07 Feb, 2024
New York City
Alibaba Group decreased 0.4% to $77.90 after the China-based e-commerce platform operator reported sharply lower quarterly earnings.
Revenue in the December quarter slowed to 5% to 260.35 billion yuan, or $36.67 billion, and net income plunged 77% to 10.7 billion yuan, or $1.5 billion, from a year ago, respectively.
The e-commerce giant also expanded its stock repurchase program by $25 billion to $35.3 billion through March 2027.
Chipotle Mexican Grill jumped 2.5% to $2,550.0 after the fast food restaurant operator reported sharply higher quarterly earnings following a surge in store traffic.
Net sales in the quarter increased 15.4% to $2.52 billion, net income rose to $282.1 million from $223.7 million, and diluted earnings per share advanced to $10.21 from $8.02 a year ago.
The restaurant chain operator said foot traffic increased 7.4% and comparable same-store sales advanced 8.4% from a year ago.
For the full year 2024, the company estimated a same-store sales increase in the "mid-single-digit" range and plans to open between 285 and 315 new stores.
New York Community Bank soared 10.6% to $4.65 and traded volatile after Moody's Investors Service lowered the regional bank's debt rating two notches to junk level.
Ford Motor Company increased 5.5% to $12.74 after the vehicle maker reported better-than-expected earnings and announced an additional dividend to shareholders.
Revenue in the fourth quarter rose 2% to $46 billion from $44 billion, net income swung to a profit of $1.3 billion from a loss of $0.5 billion, and diluted earnings per share were 32 cents compared to a loss of 13 cents a year ago.
The company declared a regular first-quarter dividend of 15 cents per share and announced a supplemental dividend of 18 cents per share payable on March 1 to shareholders on record on February 16.
The company also said it plans to defer certain investments in the EV business because mainstream adoption of electric vehicles is "happening at a slower rate" than the industry expected.
Uber Technologies declined 2% to $69.0 after the ridesharing platform operator reported a double-digit rise in revenue and bookings in its latest quarter.
Revenue in the fourth quarter increased 15% to $9.9 billion from $8.6 billion, net income increased to $1.4 billion from $595 million, and diluted earnings per share jumped to 66 cents from 29 cents a year ago.
Gross bookings in the quarter surged 22% to $37.6 billion from $30.7 billion, driven by a 29% increase in mobility bookings to $19.3 billion and a delivery booking surge of 19% to $17.0 billion.
Yum Brands declined 1.8% to $125.0 after the operators of Pizza Hut, KFC, and Taco Bell reported weaker-than-expected same-store sales increases in its latest quarter.
In the fourth quarter, worldwide system sales rose 5%, excluding foreign currency translation, with sales increasing at KFC chains by 7%, Taco Bell by 6%, and Pizza Hut by 1%.
Total revenues in the quarter increased 1% to $2.03 billion from $2.01 billion, net income surged 25% to $463 million from 371 million, and diluted earnings per share rose 26% to $1.62 from $1.29 a year ago.
The company increased its quarterly dividend to 60.5 cents from 57 cents a year ago.
U.S. Market Averages Inch Higher as Investors Digest Another Batch of Earnings
Barry Adams
07 Feb, 2024
New York City
Market indexes were on hold in Wednesday's trading, and investors reviewed another batch of corporate earnings.
The S&P 500 index and the Nasdaq Composite edge slightly higher following lackluster trading in the previous session.
Investors have bid up stocks, and market indexes have extended their rally to the fourth month in a row following a string of positive earnings and the expectations of interest rate cuts.
However, those expectations were dented after Fed Chairman Jerome Powell confirmed that the rate cut in March is not likely, and stronger-than-estimated job gains in March also suggested that the U.S. economy is resilient even after eleven interest rate increases over the last two years.
Alibaba Group, Uber, Chipotle Mexican Grill, Ford, Pandora, and Yum Brands were in focus after the release of financial results.
New York Community Bank soared 10.6% to $4.65 and traded volatile after Moody's Investors Service lowered the regional bank's debt rating two notches to junk level.
U.S. indexes and yields
The S&P 500 index increased 0.1% to 4,981.12, and the Nasdaq Composite added 0.2% to 15,598.06.
The yield on 2-year Treasury notes decreased to 4.42%, 10-year Treasury notes rose to 4.13%, and 30-year Treasury bonds edged up to 4.33%.
WTI crude oil increased $0.63 to $73.95 a barrel, and natural gas prices increased 0.1 cent to $2.01 a thermal unit.
Gold decreased by $3.22 to $2,032.55 an ounce and extended the previous week's gains after the U.S. dollar rebounded in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.09.
U.S. Stock Movers
Alibaba Group decreased 0.4% to $77.90 after the China-based e-commerce platform operator reported sharply lower quarterly earnings.
Revenue in the December quarter slowed to 5% to 260.35 billion yuan, or $36.67 billion, and net income plunged 77% to 10.7 billion yuan, or $1.5 billion, from a year ago, respectively.
The e-commerce giant also expanded its stock repurchase program by $25 billion to $35.3 billion through March 2027.
Chipotle Mexican Grill jumped 2.5% to $2,550.0 after the fast food restaurant operator reported sharply higher quarterly earnings following a surge in store traffic.
Net sales in the quarter increased 15.4% to $2.52 billion, net income rose to $282.1 million from $223.7 million, and diluted earnings per share advanced to $10.21 from $8.02 a year ago.
The restaurant chain operator said foot traffic increased 7.4% and comparable same-store sales advanced 8.4% from a year ago.
For the full year 2024, the company estimated a same-store sales increase in the "mid-single-digit" range and plans to open between 285 and 315 new stores.
Europe Movers: Ashmore, Pandora, Siemens Energy, Sainsbury, TeamViewer, TotalEnergies, Vestas
Inga Muller
07 Feb, 2024
Frankfurt
European markets lacked direction, and investors reacted to the latest batch of corporate results and looked beyond rate uncertainty.
The DAX index decreased 0.2% to 17,002.44, the CAC-40 index rose 0.05% to 7,641.82, and the FTSE 100 index inched lower by 0.2% to 7,668.52.
The yield on 10-year German bonds edged down to 2.28%; French bonds inched lower to 2.79%; the UK gilts edged lower to 3.98%; and Italian bonds inched lower to 3.85%.
Vestas Wind Systems soared 5.9% to DKK 199.30 after the Danish manufacturer of wind turbines swung to a full-year pre-tax profit on the back of strong gains in orders.
Revenue in the full-year 2023 increased to €15.4 billion, and order backlog at the end of the year surged to €60.1 billion.
Net income in the year swung to €78 million from a loss of €1.57 billion and gross margin increased to 8.3% from 0.8% a year ago, respectively.
Pandora declined 1% to DKK 1,019.50, and the fashion jewelry retailer announced a new DKK 4.0 billion stock repurchase plan.
Revenue in the fourth quarter increased to DKK 10.8 billion from DKK 9.8 billion, and operating profit rose to DKK 3.67 billion from DKK 3.2 billion a year ago.
The company reported a comparable sales store increase of 9% in the fourth quarter and a "high single-digit" increase in the first quarter.
TotalEnergies SE declined 2.5% to €58.77 after the French energy company reported lower-than-expected adjusted earnings per share.
TeamViewer SE jumped 4.5% to €14.37 after the German software company reported higher-than-expected sales in the fourth quarter.
Siemens Energy rose 0.6% to €14.32 after the company swung to a net profit of €1.58 billion in the fiscal first quarter and reiterated its full-year 2024 outlook.
Ashmore Group declined 0.6% to 209.40 pence after the UK-based emerging market-focused fund management company reported a decline in adjusted profit in the first half.
J Sainsbury plc declined 3.5% to 265.50 pence after the UK-based retailer reported a decline in merchandise sales in the 16-week period ending on January 6.
European Markets Trade Sideways, French Trade Deficit Shrinks and UK Home Prices Rise Fourth Consecutive Month
Bridgette Randall
07 Feb, 2024
Frankfurt
European markets traded sideways as investors lowered hopes of rate cuts and reacted to another batch of corporate financial results.
Benchmark indexes in Frankfurt, London, and Paris struggled to gain traction after bond yields edged lower and the euro and the pound weakened.
Investors also reviewed January vehicle sales and passenger car sales in China, and sales faltered after the ending of government incentives.
China Vehicle Sales Plunged in January
Total vehicle sales, including exports, surged 47.9% from the previous year and dropped 22.7% from a year ago to 2.44 million units, according to a report from the China Association of Automobile Manufacturers.
Exports accounted for 18.2%, or 443,000 vehicles, and new energy vehicles soared 78.8% and accounted for 29.9% of total vehicle sales.
German Industrial Activities Shrank In 2023
Closer to home, German industrial production fell 1.6% from the previous month in December, the fourth month of contraction in a row.
Industrial activity declined 1.8% in the fourth quarter and dropped 1.5% in 2023.
French Trade Deficit Shrank In 2023
France's trade deficit widened in December after imports rose at a faster pace than exports, a report from the customs office showed on Wednesday.
The trade deficit in December rose to €6.8 billion from €5.9 billion in November but fell sharply from €14.7 billion in the month a year ago.
For the entire year 2023, the trade deficit shrank to €99.6 billion from €162.6 billion in 2022, after exports advanced 1.5% and imports declined 7.1%.
UK Home Prices Rise Fourth Consecutive Month
UK home prices rose for the fourth month in a row, according to a survey conducted by Lloyds Bank subsidiary Halifax and S&P Global.
The Halifax House Price Index increased 2.5% from a year ago in January, from the upwardly revised 1.8% increase in December.
A typical UK home now costs £291,029, an increase of £3,900 from the last month.
The average house price in London decreased 0.4% from a year ago to £529,528, the highest across all regions in the UK.
“For those looking to buy a first home, the average deposit raised is now £53,414, around 19% of the purchase price. It’s not surprising that almost two-thirds (63%) of new buyers getting a foot on the ladder are now buying in joint names," said Kim Kinnaird, Director of Halifax Mortgages.
"Looking ahead, affordability challenges are likely to remain, and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment," Kinnard added.
Europe Indexes and Yields
The DAX index decreased 0.2% to 17,002.44, the CAC-40 index rose 0.05% to 7,641.82, and the FTSE 100 index inched lower by 0.2% to 7,668.52.
The yield on 10-year German bonds edged down to 2.28%; French bonds inched lower to 2.79%; the UK gilts edged lower to 3.98%; and Italian bonds inched lower to 3.85%.
The euro edged lower to $1.076, the British pound inched higher to $1.263, and the U.S. dollar gained to 87.15 Swiss cents.
Brent crude increased $0.51 to $79.10 a barrel, and the Dutch TTF natural gas decreased by €0.28 to €28.33 per MWh.
Europe Stock Movers
Vestas Wind Systems soared 5.9% to DKK 199.30 after the Danish manufacturer of wind turbines swung to a full-year pre-tax profit on the back of strong gains in orders.
Pandora declined 1% to DKK 1,019.50, and the fashion jewelry retailer announced a stock repurchase plan.
TotalEnergies SE declined 2.5% to €58.77 after the French energy company reported lower-than-expected adjusted earnings per share.
TeamViewer SE jumped 4.5% to €14.37 after the German software company reported higher-than-expected sales in the fourth quarter.
Earnings Drive Asian Markets Trading, KDDI Launches Tender Offer to take Lawson Private
Arjun Pandit
06 Feb, 2024
Mumbai
Asian markets advanced tracking gains in overnight trading in New York as investors reassessed interest rate expectations and reacted to the latest batch of earnings.
In overnight trading, markets in New York edged higher as investors shifted their focus from rate uncertainty to the latest corporate results.
Nikkei Lacked Direction, KDDI Pursues Lawson
Market indexes in Japan edged higher, and those in China advanced for the second day in a row in the hopes that policymakers will provide more support and the sovereign wealth fund will continue to purchase stocks and stabilize markets.
The Nikkei 225 average declined 0.2% to 36,076.22, and market indexes trimmed losses amid positive corporate earnings.
Toyota Motor jumped 3.9% to ¥3,260.0 after the largest automotive company in the world by unit sales reported better-than-expected fiscal third-quarter sales.
The vehicle manufacturer also increased its full-year revenue outlook on the back of the strength in hybrid sales.
GS Yuasa soared 20% to ¥2,541.0 after the maker of lead acid and lithium-ion batteries reported sales in the nine-month ending in December rose 9.8% to ¥411 billion and net income more rose 124% to ¥17.7 billion.
The company forecasted fiscal year sales to increase 8% to ¥560 billion and net income attributable to shareholders to jump 51% to ¥21 billion.
Lawson jumped 13% to ¥10,280.0 after the retailer received a tender offer from KDDI for ¥500 billion or $3.4 billion, and after the deal, Mitsubishi Corp. and KDDI will jointly own the company with an equal stake of 50% each.
KDDI, the telecom company plans to use data from convenience store to promote its banking and insurance and offer Lawson products to customers of its 2,200 'au' mobile phone outlets across Japan.
China Indexes Extended 2-Day Gains
Market indexes in Shanghai and Hong Kong advanced for the second day in a row amid optimism that policymakers are working on additional steps to stabilize financial markets.
The Chinese regulators also banned securities lending to brokers for selling short, arresting the market decline in the short term.
Benchmark indexes in the previous session jumped 4% in Hong Kong and 3% in Shanghai after a unit of China's sovereign wealth fund confirmed purchasing index-focused exchange-traded funds.
The CSI index advanced 0.5% to 3,326.57, and the Hang Seng index edged down 0.1% to 16,124.92.
China's stock markets are expected to resume their selling as the government struggles to devise plans to support overleveraged property developers and plunging property prices.
Over the years, Chinese local governments relied on the sale of land to property developers to fund rapid but wasteful infrastructure buildup, which came to a screeching halt during the pandemic-era lockdowns.
Residential buyers also walked away from making additional purchases after several large developers failed to complete housing projects, adding to the price declines.
Travel and entertainment-related stocks were in focus ahead of the start of the Lunar New Year holidays.
Chinese hotpot restaurant chain Haidilao jumped 1% to HK$13.28.
Yum China added 13.8% to HK$330.0 after the fast food company reported rising sales and announced its plan to buy back its shares.
Alibaba Group declined 1.8% to HK$75.0 ahead of the company releasing its quarterly results later in the day.
Longfor, China Resources Land, and China Vanke decreased between 0.3% and 2.5%.
India Indexes Extended Gains Following Steady Fund Flows and Positive Earnings
Stocks in Mumbai opened higher, and investors reacted to the latest batch of earnings.
Benchmark indexes advanced in early trading amid earnings optimism and a steady flow of new funds from domestic and international investors.
Banks, financial services providers, food product makers, and tech services were among the leading gainers.
The Reserve Bank of India is widely anticipated to hold rates steady at the end of its policy meeting on Thursday.
The Sensex index increased 152.47 points to 72,338.57, and the Nifty index gained 52.40 points to 21,981.80.
On the Mumbai stock exchange, 311 stocks traded at their 52-week highs and 16 stocks traded at their 52-week lows.
India Movers: Britannia Industries, FSN E-Commerce, Kotak Mahindra, Max Financial, One 97 Communications, Morepen Labs
Arun Goswami
06 Feb, 2024
Mumbai
Stocks in Mumbai advanced amid positive earnings and sustained fund flows ahead of the RBI's monetary policy announcement on Thursday.
The Sensex index increased 152.47 points to 72,338.57, and the Nifty index gained 52.40 points to 21,981.80.
On the Mumbai stock exchange, 311 stocks traded at their 52-week highs and 16 stocks traded at their 52-week lows.
Britannia Industries declined 2.2% to ₹5,015.0 after the food product maker reported a sharp decline in its quarterly profit.
Revenue in the third quarter decreased 1% to ₹4,256 crore, and net profit fell 40% to ₹556 crore from a year ago, respectively.
FSN E-commerce Ventures decreased 0.6% to ₹160.50 after the online beauty and cosmetic store reported its quarterly results.
Consolidated profit in the December quarter nearly doubled to ₹16.2 crore from a year ago.
Max Financial Services rose 2.5% to ₹932.0 after the insurance regulator IRDA approved the investment of 1,612 crore by Axis Bank into the company's subsidiary Max Life.
Kotak Mahindra Bank added 0.2% to ₹1,791.0, and the competition commission approved the 70% stake in the company's subsidiary, Kotak General Insurance, in Zurich Insurance.
One 97 Communications gained 2.4% to ₹463.0, and the company's founder met with Finance Minister Nirmala Sitharaman and the Reserve Bank of India as the online payment platform struggles to comply with regulatory requirements.
Morepen Laboratories jumped 1.8% to ₹55.60 after the medical device and pharmaceutical ingredient maker reported its latest quarterly results.
Revenue in the December quarter rose 28% to 448.6 crore from 349.7 crore, net income soared 256% to 31.2 crore from 9.0 crore, and diluted earnings per share rose to 63 paisa from 18 paisa a year ago.
Earnings Take Center Stage, Household Debt and Delinquencies Pile Up
Barry Adams
06 Feb, 2024
New York City
Benchmark indexes lacked direction and struggled to advance after traders attempted to shake off rate path worries.
Investors have begun shifting their attention to broader economic development and corporate earnings after months of rate uncertainty and confusing messaging from the U.S. Federal Reserve.
The U.S. economy has added about 5 million jobs over the last two years, when interest rates were hiked from 0.25% to 5.5%, surprising most economists and policymakers.
The U.S. economy has proven to be resilient, and the labor market has expanded payrolls, contrary to predictions of an economic slowdown or a recession by most market watchers and economists.
Moreover, inflation has fallen from a high of 9% to close to 3% over the last year, but still above the Fed's target of 2.0%, which may be harder to achieve.
Investors have now pinned their hopes of a rate cut after the policy meeting in May, but many investors are worried that the central bank may not be ready to lower rates until the end of the third quarter.
Household Debt Reaches $17.5 Trillion; Delinquency Rates Rise
Most of the decline in inflation is driven by the sharp fall in energy prices and the easing of pandemic-era supply chain disruption, both of which are not impacted by the Fed's monetary policy.
The Federal Reserve may have a harder time bringing down inflation to 2.0% over the next year if energy prices rebound because of the ongoing tensions in the Middle East and resurgent home prices if mortgage rates ease.
Rising interest rates have started to impact consumer wallets and delinquencies on consumer loans are rising across all types of loans, New York Federal Reserve reported Tuesday.
Total household debt swelled by $212 billion to $17.3 trillion at the end of the final quarter of 2023.
Total debt increased about 1.2% from the previous quarter and rose 3.6% from a year ago.
New York Fed researchers said the rise in credit card debt is more worrisome.
Credit card balances increased by $50 billion to $1.13 trillion over the quarter, while mortgage balances rose by $112 billion to $12.25 trillion.
Auto loan balances rose by $12 billion to $1.61 trillion, continuing an upward trajectory seen since 2011. Delinquency transition rates increased for all debt types except for student loans.
Seriously delinquent debt for credit card balances, past due by more than 90 days, surged 59% to 6.4%, after average credit card interest rate jumped to 21.5% from 14.5%.
Mortgage debt increased 2.8% in 2023, and delinquency rate increased by 0.25 percentage point to 0.82%.
U.S. indexes and yields
The S&P 500 index decreased 0.03% to 4,942.91, and the Nasdaq Composite fell 0.2% to 15,567.95.
The yield on 2-year Treasury notes increased to 4.43%, 10-year Treasury notes declined to 4.11%, and 30-year Treasury bonds edged down to 4.31%.
WTI crude oil increased $0.39 to $73.18 a barrel, and natural gas prices decreased 5 cents to $2.02 a thermal unit.
Gold decreased by $11.75 to $2,036.13 an ounce and extended the previous week's gains after the U.S. dollar rebounded in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.32.
U.S. Stock Movers
Palantir Technologies surged 15.8% to $19.38 after the company reported a jump in its commercial customers.
Revenue in the fourth quarter jumped 20% to $608.4 million from $508.6 million, net income soared to $93.4 million from $30.9 million, and diluted earnings per share advanced to 4 cents from 1 cent.
The company said demand for its AI-driven and large language-based platform is "unrelenting."
The company also said the number of commercial customers increased by 55% to 221 from 143 a year ago.
The company forecasted first-quarter revenue between $612 million and $618 million and full-year revenue between $2.65 billion and $2.67 billion.
Chegg declined 7.5% to $8.60 after the online textbook platform operator estimated lower-than-expected revenue in the first quarter.
Revenue in the fourth quarter declined 8% to $188 million from $205.2 million, net income rebounded to $9.6 million from $1.9 million, and diluted earnings per share rose to 9 cents from 1 cent a year ago.
The company estimated revenue in the first quarter to range between $173 million and $175 million, gross margin between 73% and 74%, and adjusted operating earnings between $43 million and $45 million.
NXP Semiconductors rose 3% to $227.60 after the advanced semiconductor chip maker reported better-than-expected quarterly results.
Revenue in the fourth quarter increased 3% to $3.4 billion from $3.3 billion, net income declined to $703 million from $734 million, and diluted earnings per share dropped to $2.68 from $2.76 a year ago.
Revenue in the full-year increased 1% to $13.3 billion from $13.2 billion, net income was unchanged at $2.8 billion, and diluted earnings per share edged up to $10.70 from $10.55 a year ago.
European Markets Closed Higher
European markets hovered near recent highs, and bond yields advanced, but the euro edged lower against the U.S. dollar.
Benchmark indexes in Paris, London, and Frankfurt hovered near the flatline as investors reviewed the latest earnings results and economic update from Germany.
Germany Factory Orders Expanded
German factory orders rose 8.9% from the previous month and advanced 2.7% from a year ago in December, The Federal Statistics Office, or Destatis, reported Tuesday.
Eurozone Retail Sales Declined
Eurozone annual retail sales declined for the fifteenth month in a row after elevated borrowing costs and high inflation weighed on demand.
Retail sales declined 1.1% from the previous month in December and fell 0.8% from a year ago, Eurostat reported Tuesday.
Food, drinks, and tobacco sales declined for the third month in a row and declined at a faster pace of 1.6% compared to 0.1% in November.
Non-food products sales fell by 1.0% for the first time after rising in previous two months.
China-linked Stocks In Focus
China-linked stocks were in focus after China's sovereign wealth fund intervened and acquired exchange-traded index funds to bolster China's stocks.
On Tuesday, Central Huijin Investment, an arm of China's $1.3 trillion sovereign wealth fund, confirmed its purchase of index-based exchange-traded funds.
The sovereign wealth fund's arm also confirmed its plans to make additional purchases but did not elaborate on the amount and timing of these acquisitions.
Benchmark indexes in Shanghai and Hong Kong fell for the fourth year in a row in 2023, and the Hang Seng index dropped 9%, its second worst January decline since 2016.
Europe Indexes and Yields
The DAX index increased 0.7% to 17,024.28, the CAC-40 index rose 0.6% to 7,634.61, and the FTSE 100 index inched higher by 0.9% to 7,683.16.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.81%; the UK gilts edged higher to 4.01%; and Italian bonds inched lower to 3.87%.
The euro edged lower to $1.072, the British pound inched higher to $1.254, and the U.S. dollar gained to 87.24 Swiss cents.
Brent crude increased $0.32 to $78.31 a barrel, and the Dutch TTF natural gas increased by €0.45 to €28.80 per MWh.
Europe Stock Movers
UBS Group declined 2.5% to CHF 25.07 after the Swiss bank reported its second consecutive quarterly loss in a row.
Nokia Oyj fell 1% to €3.32, and the Finnish telecom equipment maker signed a cross-licensing arrangement with China-based telecom company Vivo.
BP plc gained 5.5% to 478.01 pence after the energy explorer and distributor announced a stock repurchase plan of $1.75 billion and the company reported its second highest annual profit in a decade.
Beiersdorf AG inched up 0.3% to €140.80 after the German personal care products maker hiked its dividend and announced a stock repurchase plan.
China Intervention Lifts Shanghai and Hong Kong Stocks, Australia Holds Rates Again
Markets in Asia lacked direction but retained a downward slide, and investors reacted to domestic earnings and local economic news.
Asian markets looked beyond the rate decisions of major central banks as investors recalibrated global interest rate expectations after Fed Chair Jerome Powell stressed the need for higher interest rates until inflation is on a sustained downward path to 2%.
Bond yields advanced in Asia after Powell's comments tracked the higher yields on the U.S. Treasury notes.
Moreover, the Japanese yen, Indian rupee, Chinese yuan, and Korean won eased against the U.S. dollar.
The Reserve Bank of Australia held its cash rate steady at 4.35% and reiterated its commitment to bring down inflation to its target range of 2% to 3% by 2025.
Japan Indexes Fall Tracking Lower U.S. Markets
Market indexes in Japan turned lower after rising in the previous two sessions.
The Nikkei and the Topix indexes declined around 0.5% after the U.S. dollar edged higher, the yield on 10-year U.S. Treasury notes advanced, and Fed Chair Jerome Powell dashed hopes of an imminent rate cut in March.
The Nikkei 225 average declined 0.5% to 36,185.90, and the yen edged lower to 148.15 against the U.S. dollar.
On the economic front, Japan's household spending declined more than expected by 2.5% in December, the tenth monthly decline in a row.
Mitsui Fudosan declined 1.2% to ¥3,861.0 and trimmed gains from the previous session when Elliott Investment Management called for a one trillion yen stock buyback.
Mitsubishi UFJ, Daikin Industries, and Sony Group declined between 1.5% and 3.0%.
China Stocks Rebound After Government Intervention
Stocks in Shanghai and Hong Kong advanced after a unit of China's sovereign wealth fund stepped up its stock purchase and the Chinese regulator reiterated its commitment to stabilizing financial markets.
The CSI 300 index gained 3.5% to 3,311.50, and the Hang Seng index advanced 3.7% to 16,079.43.
On Tuesday, Central Huijin Investment, an arm of China's $1.3 trillion sovereign wealth fund, confirmed its purchase of index-based exchange-traded funds.
The sovereign wealth fund's arm also confirmed its plans to make additional purchases but did not elaborate on the amount and timing of these acquisitions.
The China Securities Regulatory Commission also warned investors against market manipulation and devising schemes that benefit from market slumps.
Alibaba Group soared 7.7%, Meituan added 6.6%, Tencent Holdings gained 4.4%, and JD.com increased 2.8%.
Longfor Group advanced 9%, China Resources Land gained 5%, and Sun Hung Kai Properties edged up 0.1%.
India Indexes Inch Closer to Record Highs Ahead of Rate Decisions
Stocks in Mumbai traded higher, and benchmark indexes rebounded from losses in the previous session.
The Nifty and the Sensex indexes advanced 0.3% amid strength in large- and mid-cap stocks.
Banks, financial services, energy and power generators and distributors, port operators, and chemical makers were among the leading gainers.
The Reserve Bank of India is expected to hold rates steady for the sixth consecutive time at the end of its policy meeting on Thursday.
The central bank is likely to follow the leads of other central banks and hold rates steady as inflation continues to decline around the world and pandemic-era supply disruptions are ending.
The Sensex index increased 166.67 points to 71,898.19, and the Nifty index gained 74.90 points to 21,846.60.
On the Mumbai stock exchange, 234 stocks traded at their 52-week highs and 27 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held steady at 7.08%, and the Indian rupee strengthened ₹83.03 against the U.S. dollar.
Bharti Airtel eased 3.3% to ₹1,113.60 after the wireless telecom carrier reported its latest quarterly results.
Consolidated revenue in the December quarter increased 5.8% to ₹37,988.5 crore, and net income soared 54% to ₹2,442 crore from a year ago, respectively.
U.S. Movers: Chegg, DocuSign, NXP Semiconductors, Palantir
Scott Peters
06 Feb, 2024
New York City
Palantir Technologies surged 15.8% to $19.38 after the company reported a jump in its commercial customers.
Revenue in the fourth quarter jumped 20% to $608.4 million from $508.6 million, net income soared to $93.4 million from $30.9 million, and diluted earnings per share advanced to 4 cents from 1 cent.
The company said demand for its AI-driven and large language-based platform is "unrelenting."
The company also said the number of commercial customers increased by 55% to 221 from 143 a year ago.
The company forecasted first-quarter revenue between $612 million and $618 million and full-year revenue between $2.65 billion and $2.67 billion.
Chegg declined 7.5% to $8.60 after the online textbook platform operator estimated lower-than-expected revenue in the first quarter.
Revenue in the fourth quarter declined 8% to $188 million from $205.2 million, net income rebounded to $9.6 million from $1.9 million, and diluted earnings per share rose to 9 cents from 1 cent a year ago.
The company estimated revenue in the first quarter to range between $173 million and $175 million, gross margin between 73% and 74%, and adjusted operating earnings between $43 million and $45 million.
NXP Semiconductors rose 3% to $227.60 after the advanced semiconductor chip maker reported better-than-expected quarterly results.
Revenue in the fourth quarter increased 3% to $3.4 billion from $3.3 billion, net income declined to $703 million from $734 million, and diluted earnings per share dropped to $2.68 from $2.76 a year ago.
Revenue in the full-year increased 1% to $13.3 billion from $13.2 billion, net income was unchanged at $2.8 billion, and diluted earnings per share edged up to $10.70 from $10.55 a year ago.
DocuSign dropped 6.6% to $49.70 after the company said it plans to reduce 6% of its staff as a part of its restructuring effort to streamline its operations and reduce costs.
The company employed about 7,336 according to its latest filling with the Securities and Exchange Commission as of end of January 2023.
U.S. Investors Look Beyond Rate Uncertainty and Shift Focus to Earnings
Barry Adams
06 Feb, 2024
New York City
Benchmark indexes on Wall Street traded around the flatline after falling in the previous session due to rate uncertainty.
Investors have begun shifting their attention to broader economic development and corporate earnings after months of rate uncertainty and confusing messaging from the U.S. Federal Reserve.
The U.S. economy has added about 5 million jobs over the last two years, when interest rates were hiked from 0.25% to 5.5%, surprising most economists and policymakers.
The U.S. economy has proven to be more resilient, and the labor market has expanded payrolls, contrary to predictions of an economic slowdown or a recession.
Moreover, inflation has fallen from a high of 9% to close to 3% over the last year, but still above the Fed's target of 2.0%, which may be harder to achieve.
Most of the decline in inflation is driven by the sharp fall in energy prices and the easing of pandemic-era supply chain disruption, both of which are not impacted by the Fed's monetary policy.
The Federal Reserve may have a harder time bringing down inflation to 2.0% over the next year if energy prices rebound because of the ongoing tensions in the Middle East and resurgent home prices if mortgage rates ease.
U.S. indexes and yields
The S&P 500 index decreased 0.03% to 4,939.07, and the Nasdaq Composite fell 0.02% to 15,431.14.
The yield on 2-year Treasury notes increased to 4.46%. 10-year Treasury notes declined to 4.16%, and 30-year Treasury bonds edged down to 4.34%.
WTI crude oil increased $0.50 to $73.30 a barrel, and natural gas prices decreased 1 cent to $2.06 a thermal unit.
Gold decreased by $1.55 to $2,026.22 an ounce and extended the previous week's gains after the U.S. dollar rebounded in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.51.
U.S. Stock Movers
Palantir Technologies surged 15.8% to $19.38 after the company reported a jump in its commercial customers.
Revenue in the fourth quarter jumped 20% to $608.4 million from $508.6 million, net income soared to $93.4 million from $30.9 million, and diluted earnings per share advanced to 4 cents from 1 cent.
The company said demand for its AI-driven and large language-based platform is "unrelenting."
The company also said the number of commercial customers increased by 55% to 221 from 143 a year ago.
The company forecasted first-quarter revenue between $612 million and $618 million and full-year revenue between $2.65 billion and $2.67 billion.
Chegg declined 7.5% to $8.60 after the online textbook platform operator estimated lower-than-expected revenue in the first quarter.
Revenue in the fourth quarter declined 8% to $188 million from $205.2 million, net income rebounded to $9.6 million from $1.9 million, and diluted earnings per share rose to 9 cents from 1 cent a year ago.
The company estimated revenue in the first quarter to range between $173 million and $175 million, gross margin between 73% and 74%, and adjusted operating earnings between $43 million and $45 million.
NXP Semiconductors rose 3% to $227.60 after the advanced semiconductor chip maker reported better-than-expected quarterly results.
Revenue in the fourth quarter increased 3% to $3.4 billion from $3.3 billion, net income declined to $703 million from $734 million, and diluted earnings per share dropped to $2.68 from $2.76 a year ago.
Revenue in the full-year increased 1% to $13.3 billion from $13.2 billion, net income was unchanged at $2.8 billion, and diluted earnings per share edged up to $10.70 from $10.55 a year ago.
Europe Movers: Aurubis, BP, Beiersdorf, Infineon, Nokia, UBS
Inga Muller
06 Feb, 2024
Frankfurt
BP hiked its quarterly dividend and announced a stock repurchase plan. Beiersdorf increased its dividend and said it plans to launch its stock buyback plan in May. Aurubis reiterated its annual outlook.
Benchmark indexes across Europe traded around the flatline after eurozone retail sales contracted for the 15th month in a row.
The DAX index decreased 0.03% to 16,899.54, the CAC-40 index rose 0.3% to 7,608.93, and the FTSE 100 index inched higher by 0.4% to 7,639.81.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.81%; the UK gilts edged higher to 4.01%; and Italian bonds inched lower to 3.87%.
UBS Group declined 2.5% to CHF 25.07 after the Swiss bank reported its second consecutive quarterly loss in a row.
Nokia Oyj fell 1% to €3.32, and the Finnish telecom equipment maker signed a cross-licensing arrangement with China-based telecom company Vivo.
BP plc gained 5.5% to 478.01 pence after the energy explorer and distributor announced a stock repurchase plan of $1.75 billion and the company reported its second highest annual profit in a decade.
Revenue declined to $213 billion from $248.9 billion, earnings swung to a profit of $15.2 billion from a loss of $2.5 billion, and diluted earnings per share were 85.8 cents compared to a loss of 13.10 a year ago.
The oil company increased its fourth-quarter dividend by 10% from a year ago to 7.27 cents per share.
Beiersdorf AG inched up 0.3% to €140.80 after the German personal care products maker hiked its dividend and announced a stock repurchase plan.
The company announced plans to increase its dividend by 30 cents to €1.0 per share and a €500 million stock repurchase plan starting in May and completed by the end of 2024.
Infineon Technologies declined 3% to €33.63 after the semiconductor company lowered its fiscal year 2024 outlook.
Aurubis AG increased 0.8% to €65.0, and the non-ferrous metal recycler confirmed its financial year outlook.
The company confirmed its pre-tax annual earnings to range between 380 million and 480 million.
Revenue in the latest quarter declined 5% to €3.9 billion from €4.1 billion, and consolidated net income dropped 10% to €89 million from €99 million a year ago, respectively.
Eurozone Retail Sales Contracted, German Factory Orders Advanced
Bridgette Randall
06 Feb, 2024
Frankfurt
European markets hovered near recent highs, and bond yields advanced, but the euro edged lower against the U.S. dollar.
Benchmark indexes in Paris, London, and Frankfurt hovered near the flatline as investors reviewed the latest earnings results and economic update from Germany.
Germany Factory Orders Expanded
German factory orders rose 8.9% from the previous month and advanced 2.7% from a year ago in December, The Federal Statistics Office, or Destatis, reported Tuesday.
Eurozone Retail Sales Declined
Eurozone annual retail sales declined for the fifteenth month in a row after elevated borrowing costs and high inflation weighed on demand.
Retail sales declined 1.1% from the previous month in December and fell 0.8% from a year ago, Eurostat reported Tuesday.
Food, drinks, and tobacco sales declined for the third month in a row and declined at a faster pace of 1.6% compared to 0.1% in November.
Non-food products sales fell by 1.0% for the first time after rising in previous two months.
China-linked Stocks In Focus
China-linked stocks were in focus after China's sovereign wealth fund intervened and acquired exchange-traded index funds to bolster China's stocks.
On Tuesday, Central Huijin Investment, an arm of China's $1.3 trillion sovereign wealth fund, confirmed its purchase of index-based exchange-traded funds.
The sovereign wealth fund's arm also confirmed its plans to make additional purchases but did not elaborate on the amount and timing of these acquisitions.
Benchmark indexes in Shanghai and Hong Kong fell for the fourth year in a row in 2023, and the Hang Seng index dropped 9%, its second worst January decline since 2016.
Europe Indexes and Yields
The DAX index decreased 0.03% to 16,899.54, the CAC-40 index rose 0.3% to 7,608.93, and the FTSE 100 index inched higher by 0.4% to 7,639.81.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.81%; the UK gilts edged higher to 4.01%; and Italian bonds inched lower to 3.87%.
The euro edged lower to $1.072, the British pound inched higher to $1.254, and the U.S. dollar gained to 87.24 Swiss cents.
Brent crude decreased $0.16 to $77.81 a barrel, and the Dutch TTF natural gas increased by €0.10 to €27.81 per MWh.
Europe Stock Movers
UBS Group declined 2.5% to CHF 25.07 after the Swiss bank reported its second consecutive quarterly loss in a row.
Nokia Oyj fell 1% to €3.32, and the Finnish telecom equipment maker signed a cross-licensing arrangement with China-based telecom company Vivo.
BP plc gained 5.5% to 478.01 pence after the energy explorer and distributor announced a stock repurchase plan of $1.75 billion and the company reported its second highest annual profit in a decade.
Beiersdorf AG inched up 0.3% to €140.80 after the German personal care products maker hiked its dividend and announced a stock repurchase plan.