Market Update
Europe Movers: Electrolux, Husqvarna, Vinci, Wizz
Inga Muller
02 Feb, 2024
Frankfurt
Benchmark indexes in Europe advanced in Friday's trading and trimmed weekly losses after the central banks of the U.S., U.K., and Sweden followed the ECB lead and held key lending rates steady.
The DAX index increased 0.7% to 16,970.76, the CAC-40 index rose 0.5% to 7,630.06, and the FTSE 100 index inched higher by 0.4% to 7,654.56.
The yield on 10-year German bonds edged down to 2.17%; French bonds inched lower to 2.67%; the UK gilts edged lower to 3.81%; and Italian bonds inched lower to 3.73%.
Electrolux declined 3.5% to SEK 94.08 after the Swedish home appliance maker reported a net loss that more than tripled in 2023.
Husqvarna increased 1.7% to SEK 83.16 after the lawn and garden equipment maker reported a smaller-than-expected loss in the fourth quarter.
Vinci SA added 0.9% to €118.14 after the French construction company won a six-year contract from Vattenfall, the Swedish energy company, to dismantle two units of the Ringhals nuclear power plant.
Wizz Air Holdings gained 5% to €25.0 after the discount airline reported a rise in passenger count in January compared to the previous year.
Europe Indexes Advance, France Industrial Output at 7-month High, Spain Jobless Count Rises
Bridgette Randall
02 Feb, 2024
Frankfurt
European markets advanced in cautious trading a day after the Bank of England held its key lending rate and laid the groundwork for a possible rate cut later in the year.
Benchmark indexes in Frankfurt, London, and Paris inched higher, and investors looked beyond central bank actions.
This week, the central banks of the U.S., UK, and Sweden decided to hold key lending rates but stressed the need for higher rates until inflation is on a sustained downward path to the target rate of 2%.
Spain Reports Lowest Jobless In January
Spain reported a surge in registered unemployed individuals after the weakness in the service sector.
Despite the increase, the overall number of unemployed individuals in January was the lowest in the last sixteen years.
People registered with the unemployment office rose by 60,404, or 2.2% to 2.77 million in January, reported the Ministerio de Empleo y Seguridad Social on Friday.
Youth unemployment among jobseekers younger than 25 years of age in January was 201,154, the lowest for January since record-keeping began in 1996.
The services sector led the increase in joblessness with 58,721 people, followed by increases in agriculture with 1,256 and industry by 440, while there was a decline in the construction sector by 1,234.
A separate report from the Social Security Ministry revealed that Spain added 38,357 net formal jobs in January, increasing the total to 20.9 million jobs.
France Industrial Output Rebounded to a 7-Month High
France's industrial output rose 1.1% in December after rising by 0.5% in November, the statistical agency INSEE reported Friday.
Industrial production soared to a 7-month high after output advanced in mining, water supply, waste management, and energy by 5.9% compared to a decline of 1.7% in the previous month.
However, construction activities continued to decline at a faster pace of 2.8% from 1.2% in the previous month.
A year ago, industrial production advanced by 0.9%, compared to a 0.4% increase in November.
Europe Indexes and Yields
The DAX index increased 0.7% to 16,970.76, the CAC-40 index rose 0.5% to 7,630.06, and the FTSE 100 index inched higher by 0.4% to 7,654.56.
The yield on 10-year German bonds edged down to 2.17%; French bonds inched lower to 2.67%; the UK gilts edged lower to 3.81%; and Italian bonds inched lower to 3.73%.
The euro edged lower to $1.088, the British pound inched higher to $1.274, and the U.S. dollar gained to 85.63 Swiss cents.
Brent crude increased $0.52 to $79.52 a barrel, and the Dutch TTF natural gas decreased by €0.08 to €29.08 per MWh.
Europe Stock Movers
Electrolux declined 3.5% to SEK 94.08 after the Swedish home appliance maker reported a net loss that more than tripled in 2023.
Husqvarna increased 1.7% to SEK 83.16 after the lawn and garden equipment maker reported a smaller-than-expected loss in the fourth quarter.
Vinci SA added 0.9% to €118.14 after the French construction company won a six-year contract from Vattenfall, the Swedish energy company, to dismantle two units of the Ringhals nuclear power plant.
Wizz Air Holdings gained 5% to €25.0 after the discount airline reported a rise in passenger count in January compared to the previous year.
Travel Stocks Power Tokyo Rally, China Domestic EV Sales Surge
Arjun Pandit
01 Feb, 2024
Mumbai
Market indexes in Japan, India, Australia, Korea, and Hong Kong advanced but fell in mainland China.
Market sentiment was positive after domestic corporations in the region reported rising profits, and the market mood was further reinforced by strong gains in overnight trading in New York.
About 61%, or 270 companies listed on the Tokyo Stock Exchange's prime market, reported an increase in profit, largely driven by a mix of price increases and higher demand, according to a report by Nikkei Asia.
Japan Tourism and Travel Companies Lift Earnings Estimate
Stocks in Tokyo traded higher after positive corporate earnings, and overnight gains in New York supported the market enthusiasm.
Domestic travel-related companies traded higher on the back of a sustained recovery in tourism and rising profit estimates.
The Nikkei 225 jumped 36,208.84, and the Topix added 0.4% to 2,543.68, tracking market gains in New York.
ANA Holding decreased 1% to ¥3,276.0 following a surge of more than 2% after the All Nippon Airways operator revised its annual earnings forecast on Wednesday.
Central Japan Railway, or JR Tokai, added 1.7% to ¥3,718.0 after the operator of the Shinkansen bullet train said revenue in the first half of December jumped 77% to 60 billion yen on strong inbound ridership.
East Japan Railway, or JR East, jumped 1.6% to ¥8,936.0 after the railroad operator revised its fiscal year profit growth estimate.
The company estimated profit to increase by 66% to 165 billion yen, or $1.1 billion, on the back of a rebound in foreign tourists and commuter traffic.
China EV Sales Surge In January, Anta-backed Amer Sports Jump In New York IPO
China stocks traded mixed, and tech stocks and electric vehicle makers were the focus of trading.
Chinese authorities permitted the release of a new batch of online video games, suggesting that the government is easing its stance on the industry.
The CSI 300 index declined 0.7% to 3,194.79, but the Hang Seng Index rose 0.6% to 15,657.26.
NetEase, Baidu, ByteDance, and Alibaba advanced between 1.5% and 4.0%.
Electric vehicle makers also traded higher after the three leading suppliers reported a sharp jump in local sales.
Geely, Li Auto, and Xpeng reported that electric vehicle sales in January jumped between 58% and 110%, according to regulatory filings.
Geely Automobile Holding said sales in January soared 110% to 213,487 vehicles, surpassing BYD's sales.
BYD sales jumped 33% to 201,493 electric vehicles after exports surged 248% to 36,174 from a year ago, respectively.
XPeng sales increased 58% from a year ago to 8,250 vehicles, but fell 59% from 20,115 in December.
Li Auto sales in January jumped 106% to 31,165 vehicles after the sale of extended-range SUVs advanced.
Chinese property developers advanced after the People's Bank of China injected 150 billion yuan of liquidity to support property sales.
China Resources Land advanced 3.7% to HK$24.10, Longfor Group added 3.6% to HK$8.74, and China Overseas Land and Investment gained 3.3% to HK$11.94.
Anta Sports Products advanced 3.0% to $67.15 after the company's U.S. subsidiary completed its $1.4 billion initial public offering in New York.
Amer Sports, based in Finland and backed by Anta, sold 105 million shares at $13 each.
Amer Sports stock closed up 3.1% to $13.40 in New York.
India Indexes Extend Weekly Gains After Investors Cheer Interim Budget Measures
Stocks in Mumbai advanced following the release of the interim budget, and bond yields edged lower after the government estimated lower gross borrowing.
The Nifty and Sensex indexes edged higher after investors welcomed the government's focus on infrastructure investing and retained its focus on fiscal consolidation.
Economists and market participants generally welcomed the government's plan to reduce its borrowings, lower overall subsidies, and maintain income tax rates.
The government bond yield edged lower after Finance Minister Sitharaman estimated the budget deficit to fall to 5.8% of the gross domestic product, lower than the 5.9% previously estimated.
Investors welcomed the government's plan to lower gross borrowing in the interim budget.
The budget calls for government borrowing to decrease by 8% to ₹15.43 lakh crore, or trillion, in the fiscal year 2025.
The interim budget for the fiscal year 2025 estimated an increase in GST tax collection of 11.5%, in corporate tax of 11.7%, and in income tax of 13%.
The budget also calls for an increase in allocation for infrastructure investment for the fourth year in a row.
Infrastructure investment is estimated to increase by 17% to ₹11.1 lakh crore, or trillion, following the 33% rise in the fiscal year 2024.
The Sensex index increased 332.26 points to 71,977.56, and the Nifty index rose 115.30 points to 21,812.75.
The yield on the 10-year Indian government bonds decreased to 7.06%, and the Indian rupee strengthened ₹82.93 against the U.S. dollar.
Bata India declined 2% to ₹1,457.55 after the footwear retailer reported a decline in earnings.
Revenue in the December quarter rose 0.4% to ₹903.4 crore from ₹900 crore, and net income dropped 30% to ₹58 crore from ₹83 crore a year ago, respectively.
India Movers: Bank of Baroda, Bata India, Mahindra & Mahindra Financial
Arun Goswami
01 Feb, 2024
Mumbai
Stocks in Mumbai advanced, and the yield on Indian government bonds edged lower after investors warmed up to the interim budget measures.
The Sensex index increased 332.26 points to 71,977.56, and the Nifty index rose 115.30 points to 21,812.75.
On the Mumbai stock exchange, 142 stocks traded at their 52-week highs and 5 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds decreased to 7.06%, and the Indian rupee strengthened ₹82.93 against the U.S. dollar.
Bata India declined 2% to ₹1,457.55 after the footwear retailer reported a decline in earnings.
Revenue in the December quarter rose 0.4% to ₹903.4 crore from ₹900 crore, and net income dropped 30% to ₹58 crore from ₹83 crore a year ago, respectively.
Bank of Baroda rose 3.5% to ₹256.50 after the company reported a jump in profit in its latest quarter.
Revenue in the December quarter rose to ₹31,415 crore from ₹27,092 crore, profit after-tax advanced 19% to ₹4,579 crore from ₹3,852 crore, and earnings per share increased to ₹8.86 from ₹7.45 a year ago.
Mahindra & Mahindra Financial declined 1.8% to ₹284.0 after the vehicle financial services provider reported better-than-expected quarterly earnings.
Net interest income in the December quarter surged 10% to ₹1,815 crore from ₹1,650 crore in the previous year.
Net interest income increased by 8% from the previous quarter.
Net interest margin declined to 6.8% from 7.4% a year ago but improved sequentially from 6.5%.
Stocks trading ex-dividends are expected to be among the most actively traded stocks today.
Mangalore Refinery has declared an interim dividend of ₹1.0, Oberoi Realty of ₹2.0. Zensar Technologies of ₹2.0, Indian Energy Exchange of ₹1.0, and Balkrishna Industries of ₹4.0, payable to shareholders on record on February 2.
S&P 500 and Nasdaq Rebound 1% After Investors Look Beyond Rate Decisions
Barry Adams
01 Feb, 2024
New York City
Stocks rebounded following a sharp decline in the previous session after Federal Reserve Chairman Powell said interest rate cuts in March were not likely.
The S&P 500 index and the Nasdaq Composite advanced more than 0.8% in trading after investors reassessed their interest rate outlook after the Federal Reserve held its key lending rate for the fourth time in a row.
In Wednesday's trading the S&P 500 index declined 1.6% and the Nasdaq Composite dropped 2.2%.
In Wednesday's trading, investors sold high-growth and tech stocks after Chairman Powell stressed that higher rates are needed until solid evidence emerges that inflation is on a sustained path to the target rate of 2%.
However, Chairman Powell left the door open for a rate cut later in the year but did not provide a specific timeline.
But in today's trading, market indexes rebounded after investors returned to increase exposure to tech stocks.
U.S. Jobless Claims Advanced Second Consecutive Week
Initial claims of jobless benefits rose for the second week in a row to 224,000 in the week ending on January 27 from the upwardly revised 218,000 in the previous week, the U.S. Department of Labor reported Thursday.
Continuing claims increased to 1.898 million in the week ending on January 20, from the downwardly revised 1.828 million in the previous week.
U.S. Indexes and Yields
The S&P 500 index increased 0.8% to 4,886.01, and the Nasdaq Composite rose 0.9% to 15,301.57.
The yield on 2-year Treasury notes decreased to 4.20%. 10-year Treasury notes declined to 3.87%, and 30-year Treasury bonds edged down to 4.11%.
WTI crude oil decreased $1.45 to $74.45 a barrel, and natural gas prices decreased 5 cents to $2.04 a thermal unit.
Gold increased by $15.83 to $2,052.53 an ounce and extended the previous week's gains after the U.S. dollar drifted slightly lower in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.62.
U.S. Stock Movers
Qualcomm declined 1.8% to $145.83 after the chipmaker reported better-than-expected fiscal first quarter revenue.
Revenue in the quarter increased 5% to $9.9 billion from $9.5 billion, net income increased by 24% to $2.7 billion from $2.2 billion, and diluted earnings per share advanced to $2.46 from $1.98 a year ago.
During the first quarter, the company returned $1.7 billion to stockholders, including $895 million, or $0.80 per share, of cash dividends paid and $784 million through repurchases of 6 million shares of its common stock.
The company estimated revenue in the fiscal second quarter between $8.9 billion and $9.7 billion and diluted earnings per share between $1.73 and $1.93.
Align Technology soared 12.2% to $300.0 after the orthodontics company reported better-than-expected sales and earnings in its latest quarter.
Revenue in the fourth quarter increased 6.1% to $956.7 million from $901.5 million, net income soared three-fold to $124.0 million from $41.8 million, and diluted earnings per share rose to $1.64 from 54 cents a year ago.
The company guided first quarter revenue between $960 million and $980 million and estimated 2024 total revenues to be "up mid-single digits over 2023."
Wolfspeed declined 4.5% to $31.0 after the company's fiscal third-quarter revenue fell short of market expectations.
Revenue in the fiscal second quarter ending in December increased to $208.4 million from $173.8 million; net loss expanded to $144.7 million from $90.9 million; and diluted loss per share rose to $1.15 from 73 cents a year ago.
The company estimated fiscal third quarter revenue between $185 million and $215 million, net loss from continuing operations between $134 million and $155 million, and diluted loss per share between $1.07 and $1.23.
European Markets Closed Down, Sweden and UK Hold Rates
In cautious trading, stocks in Europe edged slightly lower, but market indexes hovered near record highs.
Benchmark indexes in Frankfurt, Paris, and London traded in a tight range, and investors reviewed the monetary policy decisions in Sweden and the U.S.
The Swedish central bank, Riskbank, maintained its key policy rate at 4.0%, meeting market expectations.
The central bank noted that restrictive rates are having an impact on inflation, but prices are still rising at a faster-than-expected pace. Higher rates are needed to stabilize inflation at lower levels.
The Bank of England held its key rate at a 16-year high of 5.25%, and the central bank reiterated its commitment to bringing down inflation to its target level.
The Monetary Policy Committee in a 6-3 vote decided to hold rates, with two members favoring a rate increase by 25 basis points and one supporting a 25 basis points rate cut.
The committee noted that the headline inflation is expected to drop to 2% target level in the second quarter, but rebound in the third and the fourth, because how energy prices are accounted for in inflation calculation.
The headline inflation is not expected to drop to 2.3% until late 2026 and fall further in 2027.
Eurozone Inflation Slowed
The Eurozone inflation rate decreased to 2.8% in January from 2.9% in the previous month, Eurostat reported Thursday.
The core rate of inflation, which excludes food and energy prices, slowed to 3.3% and dropped to the lowest level since March 2022.
The decline in overall inflation was driven by the fall in energy inflation to 6.3% from 6.7% in the previous month, and food, alcohol, and tobacco inflation eased to 5.7% from 6.1%.
On a monthly basis, overall consumer prices declined by 0.4% in the month after rising by 0.2% in the previous month.
Euro Area Jobless Rate Held Steady
Despite the sharp jump in interest rates and global market uncertainties, the labor market in the Euro Area has remained resilient.
The seasonally adjusted unemployment rate in the Euro Area held steady at 6.4% in December, Eurostat reported in a separate report on Thursday.
The number of individuals seeking jobs decreased by 17,000 to 10.909 million, but the jobless rate varied widely across the region.
The youth jobless rate, tracking applicants younger than 25 years and seeking jobs, decreased to 14.4% from 14.5% in November.
Spain led the jobless rate in the currency union with 11.7%, followed by France with 7.3% and Italy with 7.2%.
Germany reported the lowest jobless rate of 3.1% in the Euro Area.
Europe Indexes and Yields
The DAX index decreased 0.3% to 16,859.04, the CAC-40 index fell 0.9% to 7,588.75, and the FTSE 100 index inched higher by 0.1% to 7,622.11.
The yield on 10-year German bonds edged down to 2.20%; French bonds inched higher to 2.70%; the UK gilts edged lower to 3.82%; and Italian bonds inched lower to 3.77%.
The euro edged lower to $1.079, the British pound inched higher to $1.264, and the U.S. dollar gained to 86.31 Swiss cents.
Brent crude decreased $1.10 to $79.45 a barrel, and the Dutch TTF natural gas decreased by €1.24 to €28.99 per MWh.
Europe Stock Movers
BNP Paribas declined 8.2% to €57.51 after the French lender reported a decline in pre-tax income in the fourth quarter to €1.47 billion from €2.79 billion a year ago.
Adidas dropped 5.8% to €165.82 after the German sportswear maker's operating earnings guidance fell short of expectations.
Deutsche Bank added 4.4% to €12.56 after the German lender said it plans to increase shareholder payouts by 50% and announced a plan to cut 3,500 jobs.
Sanofi SA declined 2.3% to €91.16 after the global pharmaceutical company headquartered in Paris, France, reported weaker-than-expected fourth-quarter earnings.
Asian Markets Struggle Amid Weak Global Backdrop
Asian markets traded in a tight range, and tech stocks were under pressure in Japan following the steep decline in overnight trading in New York.
The U.S. Federal Reserve held its key lending rate range for the fourth time between 5.25% and 5.50% and clarified that interest rates are not likely to be trimmed in the immediate future, dashing hopes of a rate cut at the end of the next policy meeting in March.
The S&P 500 index closed down 1.6%, and the Nasdaq Composite dropped 2.2%.
The Nikkei 225 decreased 0.8% to 36,011.46, and technology stocks led the decline.
Tokyo Electric Power, Sony Group, Kawasaki Kisen, Fast Retailing, and Toyota Motor declined between 1.5% and 2.0%.
Nomura Holdings rose more than 5% after the financial services provider reported better-than-expected quarterly results.
ANA Holdings and East Japan Railways also gained more than 1% after reporting financial results.
Elsewhere in the region, the ASX 200 index decreased 1.2% to 36,011.46 after trading at a new record high in the previous session.
Banks, miners, and real estate stocks were among the leading decliners in Sydney trading.
In Seoul, the KOSPI index soared 1.7% to 2,540.35, and South Korea swung to a trade surplus in January.
Broad Recovery Lifts South Korea Exports
The Ministry of Trade, Industry, and Energy (MOTIE) announced the monthly update on Thursday.
South Korea’s exports increased 18.0% from the previous year to $54.7 billion. Imports decreased 7.8% to $54.4 billion, and the trade balance stood at a surplus of $0.3 billion.
The trade balance was in surplus for January, extending the surplus for the eighth consecutive month since June 2023.
Generally, international trade in January recorded a deficit, but this year’s trade balance improved by $13 billion from the previous year, boosted by strong exports.
By destination, eight of the nine major markets saw growth in January.
Specifically, shipments to China and the U.S. surpassed the $10 billion thresholds for the sixth and fifth consecutive month, respectively.
China Indexes Rebound After Private Survey Show Manufacturing Expanded
Market indexes in China rebounded from five-year lows after a private survey showed the manufacturing sector expanded for the third month in a row in January.
China's manufacturing sector continued to grow at a stable rate, and the Caixin PMI Manufacturing Index was unchanged at 50.8 in January, contrasting the official survey released Wednesday.
Caixin surveys about 650 private and government companies primarily located in China's coastal region with a strong focus on export activities.
The official survey from the NBS, which gathers data from a wider sample of 3,200 companies, showed factory activities contracted in January after the Manufacturing PMI index edged slightly higher from the previous month to 49.2.
The CSI 300 index rose 0.6% to 3,235.11, and the Hang Seng index jumped 1% to 15,648.02.
Alibaba Group, NetEase, JD.com, Meituan, Baidu, and Tencent rebounded between 2% and 3%.
Hong Kong left its interest rate unrevised at 5.75% following the Fed's decision to hold rates steady.
Property developers Sun Hung Kai declined 1%, New World Development rose 3.5%, and Henderson Land Development added 1.5%.
Record Highs In India Indexes
Market indexes in Mumbai rebounded from early doldrums as investors awaited the release of the interim budget.
The index tracking growth of eight key infrastructure sectors slowed to a 14-month low of 3.8% in December 2023, the Office of the Economic Advisor reported Wednesday.
The eight core industries collectively weigh 40.27% in the index of industrial production.
The new government spending has been on hold, and private sector capital spending has been lackluster ahead of the Lok Sabha election scheduled between April and May.
The Nifty and the Sensex indexes struggled in early trading amid weak Asian markets and a sharp decline in New York overnight trading.
The Sensex index increased 280.49 points to 72,033.15, and the Nifty index rose 71.05 points to 21,805.30.
On the Mumbai stock exchange, 265 stocks traded at their 52-week highs, and 11 stocks sank to their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.14%, and the Indian rupee held steady at ₹83.03 against the U.S. dollar.
Bajaj Auto rose 0.9% to ₹7,733.60 after the 2- and 3-wheel vehicle maker reported January sales.
Vehicle sales in January jumped 24% from a year ago to 356,010 from 287,935 a year ago.
Domestic vehicle sales surged 31% to 230,043 and exports increased 12% to 126,967 from a year ago, respectively.
U.S. Movers: Align Technology, Honeywell International, Qualcomm, Wolfspeed
Scott Peters
01 Feb, 2024
New York City
Qualcomm declined 1.8% to $145.83 after the chipmaker reported better-than-expected fiscal first quarter revenue and the company's current quarter sales outlook fell short of expectations.
Revenue in the quarter increased 5% to $9.9 billion from $9.5 billion, net income increased by 24% to $2.7 billion from $2.2 billion, and diluted earnings per share advanced to $2.46 from $1.98 a year ago.
During the first quarter, the company returned $1.7 billion to stockholders, including $895 million, or $0.80 per share, of cash dividends paid and $784 million through repurchases of 6 million shares of its common stock.
The company estimated revenue in the fiscal second quarter between $8.9 billion and $9.7 billion and diluted earnings per share between $1.73 and $1.93.
Align Technology soared 12.2% to $300.0 after the orthodontics company reported better-than-expected sales and earnings in its latest quarter.
Revenue in the fourth quarter increased 6.1% to $956.7 million from $901.5 million, net income soared three-fold to $124.0 million from $41.8 million, and diluted earnings per share rose to $1.64 from 54 cents a year ago.
The company guided first quarter revenue between $960 million and $980 million and estimated 2024 total revenues to be "up mid-single digits over 2023."
Wolfspeed declined 4.5% to $31.0 after the company's fiscal third-quarter revenue fell short of market expectations.
Revenue in the fiscal second quarter ending in December increased to $208.4 million from $173.8 million; net loss expanded to $144.7 million from $90.9 million; and diluted loss per share rose to $1.15 from 73 cents a year ago.
The company estimated fiscal third quarter revenue between $185 million and $215 million, net loss from continuing operations between $134 million and $155 million, and diluted loss per share between $1.07 and $1.23.
Honeywell International declined 2.6% to $197.01 after the company announced mixed quarterly results.
Sales in the fiscal fourth quarter increased 3% to $9.4 billion from $9.2 billion, net income increased $1.3 billion from $1.0 billion, and diluted earnings per share rose to $1.91 from $1.51 a year ago.
The aerospace and building technology company estimated 2024 revenue between $38.1 billion and $38.9 billion and free cash flow between $5.6 billion and $6.0 billion.
Tech Stocks Attempt to Rebound After Investors Reassess Rate Outlook
Barry Adams
01 Feb, 2024
New York City
Stocks rebounded following a sharp decline in the previous session after Federal Reserve Chairman Powell said interest rate cuts in March were not likely.
The S&P 500 index and the Nasdaq Composite advanced more than 0.3% in early trading after investors reassessed their interest rate outlook after the Federal Reserve held its key lending rate for the fourth time in a row.
In Wednesday's trading the S&P 500 index declined 1.6% and the Nasdaq Composite dropped 2.2%.
Investors sold high-growth and tech stocks after Chairman Powell stressed that higher rates are needed until solid evidence emerges that inflation is on a sustained path to the target rate of 2%.
However, Chairman Powell left the door open for a rate cut later in the year but did not provide a specific timeline.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 4,895.43, and the Nasdaq Composite rose 0.7% to 15,195.03.
The yield on 2-year Treasury notes decreased to 4.23%. 10-year Treasury notes declined to 3.99%, and 30-year Treasury bonds edged down to 4.19%.
WTI crude oil increased $0.70 to $76.55 a barrel, and natural gas prices increased 3 cents to $2.12 a thermal unit.
Gold decreased by $4.03 to $2,033.17 an ounce and extended the previous week's gains after the U.S. dollar drifted slightly lower in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.62.
U.S. Stock Movers
Qualcomm declined 1.8% to $145.83 after the chipmaker reported better-than-expected fiscal first quarter revenue.
Revenue in the quarter increased 5% to $9.9 billion from $9.5 billion, net income increased by 24% to $2.7 billion from $2.2 billion, and diluted earnings per share advanced to $2.46 from $1.98 a year ago.
During the first quarter, the company returned $1.7 billion to stockholders, including $895 million, or $0.80 per share, of cash dividends paid and $784 million through repurchases of 6 million shares of its common stock.
The company estimated revenue in the fiscal second quarter between $8.9 billion and $9.7 billion and diluted earnings per share between $1.73 and $1.93.
Align Technology soared 12.2% to $300.0 after the orthodontics company reported better-than-expected sales and earnings in its latest quarter.
Revenue in the fourth quarter increased 6.1% to $956.7 million from $901.5 million, net income soared three-fold to $124.0 million from $41.8 million, and diluted earnings per share rose to $1.64 from 54 cents a year ago.
The company guided first quarter revenue between $960 million and $980 million and estimated 2024 total revenues to be "up mid-single digits over 2023."
Wolfspeed declined 4.5% to $31.0 after the company's fiscal third-quarter revenue fell short of market expectations.
Revenue in the fiscal second quarter ending in December increased to $208.4 million from $173.8 million; net loss expanded to $144.7 million from $90.9 million; and diluted loss per share rose to $1.15 from 73 cents a year ago.
The company estimated fiscal third quarter revenue between $185 million and $215 million, net loss from continuing operations between $134 million and $155 million, and diluted loss per share between $1.07 and $1.23.
Europe Movers: Adidas, BNP Paribas, Deutsche Bank, Glencore, Sanofi, Shell, Stora Enso
Inga Muller
01 Feb, 2024
Frankfurt
Benchmark indexes across Europe lacked direction, and Sweden maintained its lending rate at 4.0%.
The Bank of England is widely expected to hold its key lending rate steady at 5.25%.
The DAX index decreased 0.3% to 16,850.10, the CAC-40 index fell 0.8% to 7,599.65, and the FTSE 100 index inched higher by 0.4% to 7,658.88.
The yield on 10-year German bonds edged down to 2.20%; French bonds inched higher to 2.70%; the UK gilts edged lower to 3.82%; and Italian bonds inched lower to 3.77%.
BNP Paribas declined 8.2% to €57.51 after the French lender reported a decline in pre-tax income in the fourth quarter to €1.47 billion from €2.79 billion a year ago.
Adidas dropped 5.8% to €165.82 after the German sportswear maker's operating earnings guidance fell short of expectations.
Deutsche Bank added 4.4% to €12.56 after the German lender said it plans to increase shareholder payouts by 50% and announced a plan to cut 3,500 jobs.
Sanofi SA declined 2.3% to €91.16 after the global pharmaceutical company headquartered in Paris, France, reported weaker-than-expected fourth-quarter earnings.
Glencore PLC gained 1.9% to 428.55 pence, despite the resource company reporting a decline in production volumes of cobalt, nickel, and copper.
The mining company also signaled additional declines in production volumes in the current year.
Stora Enso declined 3.9% to €11.25 after the Finnish pulp and paper company reported a sharp fall in the fourth quarter and annual profit.
Shell PLC rose 3.3% to 2,520.50 after the energy explorer and distributor reported full-year earnings ahead of market expectations.
Ricardo plc increased 1.7% to 434.25 pence after the environmental consulting company reiterated its full-year earnings outlook.
Eurozone Inflation Slowed and Jobless Rate Held Steady, Sweden Leaves Rates Unchanged
Bridgette Randall
01 Feb, 2024
Frankfurt
In cautious trading, stocks in Europe edged slightly lower, but market indexes hovered near record highs.
Benchmark indexes in Frankfurt, Paris, and London traded in a tight range, and investors reviewed the monetary policy decisions in Sweden and the U.S.
The Swedish central bank, Riskbank, maintained its key policy rate at 4.0%, meeting market expectations.
The central bank noted that restrictive rates are having an impact on inflation, but prices are still rising at a faster-than-expected pace. Higher rates are needed to stabilize inflation at lower levels.
The Bank of England is widely expected to hold its key rate at a 16-year high of 5.25%, and the central bank is expected to reiterate its commitment to bringing down inflation to its target level.
The U.S. Federal Reserve held its key lending rate range for the fourth time between 5.25% and 5.50% and clarified that interest rates are not likely to be trimmed in the immediate future, dashing hopes of a rate cut at the end of the next policy meeting in March.
Eurozone Inflation Slowed
The Eurozone inflation rate decreased to 2.8% in January from 2.9% in the previous month, Eurostat reported Thursday.
The core rate of inflation, which excludes food and energy prices, slowed to 3.3% and dropped to the lowest level since March 2022.
The decline in overall inflation was driven by the fall in energy inflation to 6.3% from 6.7% in the previous month, and food, alcohol, and tobacco inflation eased to 5.7% from 6.1%.
On a monthly basis, overall consumer prices declined by 0.4% in the month after rising by 0.2% in the previous month.
Euro Area Jobless Rate Held Steady
Despite the sharp jump in interest rates and global market uncertainties, the labor market in the Euro Area has remained resilient.
The seasonally adjusted unemployment rate in the Euro Area held steady at 6.4% in December, Eurostat reported in a separate report on Thursday.
The number of individuals seeking jobs decreased by 17,000 to 10.909 million, but the jobless rate varied widely across the region.
The youth jobless rate, tracking applicants younger than 25 years and seeking jobs, decreased to 14.4% from 14.5% in November.
Spain led the jobless rate in the currency union with 11.7%, followed by France with 7.3% and Italy with 7.2%.
Germany reported the lowest jobless rate of 3.1% in the Euro Area.
Europe Indexes and Yields
The DAX index decreased 0.3% to 16,850.10, the CAC-40 index fell 0.8% to 7,599.65, and the FTSE 100 index inched higher by 0.4% to 7,658.88.
The yield on 10-year German bonds edged down to 2.20%; French bonds inched higher to 2.70%; the UK gilts edged lower to 3.82%; and Italian bonds inched lower to 3.77%.
The euro edged lower to $1.079, the British pound inched higher to $1.264, and the U.S. dollar gained to 86.31 Swiss cents.
Brent crude decreased $0.61 to $81.16 a barrel, and the Dutch TTF natural gas decreased by €0.30 to €29.98 per MWh.
Europe Stock Movers
BNP Paribas declined 8.2% to €57.51 after the French lender reported a decline in pre-tax income in the fourth quarter to €1.47 billion from €2.79 billion a year ago.
Adidas dropped 5.8% to €165.82 after the German sportswear maker's operating earnings guidance fell short of expectations.
Deutsche Bank added 4.4% to €12.56 after the German lender said it plans to increase shareholder payouts by 50% and announced a plan to cut 3,500 jobs.
Sanofi SA declined 2.3% to €91.16 after the global pharmaceutical company headquartered in Paris, France, reported weaker-than-expected fourth-quarter earnings.
Federal Reserve Holds Rates Steady, Leaves Door Open for Future Rate Cuts
Brian Turner
31 Jan, 2024
New York City
The Federal Reserve held rates steady for the fourth time in a row at a 23-year high between 5.25% and 5.50% and reiterated its data-dependent hawkish stance.
In an unanimous decision, all twelve members of the monetary policy committee voted to hold rates steady.
The Federal Reserve pushed back against those looking for immediate rate cuts but left a door open for future rate cuts, briefly sending market indexes lower.
"The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent," highlighted the accompanying statement released by the Fed.
Treasury yields inched lower after the rate announcement, as the Federal Reserve stressed that it is not ready to lower interest rates until more solid evidence emerges that indicates inflation is on a sustained path towards its target rate of 2%.