Market Update
U.S. Stocks Opened Mixed After Another Round of Hawkish Messages from Fed policymakers
Barry Adams
28 May, 2024
New York City
Stocks in early trading on Wall Street inched higher as investors looked ahead to the release of inflation data later in the week.
Market sentiment was subdued after Minneapolis Fed President Neal Kashkari said that policymakers will like to see sustained slowdown in inflation for several months before interest rates could be lowered.
Market sentiment was subdued after Minneapolis Fed President Neal Kashkari said that policymakers would like to see a sustained slowdown in inflation for several months before interest rates could be lowered.
Kashkari's comments echo comments from other participants in the rate-setting committee and minutes from the latest policy meeting.
“Many more months of positive inflation data, I think, to give me confidence that it’s appropriate to dial back,” Kashkari said in an interview with the CNBC.
Kashkari is not a voting member of the rate-setting committee in 2024, but he does participate in the policy decision.
Kashkari said that the Federal Reserve could potentially hike interest rates if inflation fails to weaken further in the coming months.
Tech stocks advanced after investors returned from a 3-day weekend amid ongoing interest rate jitters and worries of a consumer pullback.
The S&P 500 index inched higher by 0.1% and the Nasdaq Composite advanced by 0.2%.
This month, the S&P 500 index has advanced more than 5% and the Nasdaq Composite has gained about 8%, and the two popular market indexes are set to extend gains in this holiday-shortened week of trading.
Investors are looking forward to the release of the persona income and outlay report, which includes the persona consumption expenditure index, on Friday.
The PCE index, the preferred measure of inflation by Federal Reserve policymakers, is likely to provide fresh insights into the inflationary forces and how consumers are adjusting to the sustained increase in prices of food, fuel, and shelter.
U.S. Indexes and Treasury Yields
The S&P 500 index rose 0.1% to 5,322.24, and the Nasdaq Composite jumped 0.2% to 16,952.80.
The yield on 2-year Treasury notes edged lower to 4.93%, 10-year Treasury notes decreased to 4.46%, and 30-year Treasury bonds edged lower to 4.55%.
WTI crude oil increased $0.57 to $79.77 a barrel, and natural gas prices advanced 2 cents to $2.53 a thermal unit.
Gold increased by $1.53 to $2,353.84 an ounce, and silver rose 7 cents to $31.53.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.36.
U.S. Stock Movers
GameStop jumped 21% to $23.30 after the specialty retailer said it raised $933.4 million through the sale of 45 million in a secondary offering.
United States Cellular Corp. jumped 10.3% to $47.50 after the wireless services provider agreed to be acquired by T-Mobile.
Deutsche Telekom-controlled T-Mobile agreed to pay $4.4 billion for the wireless operation of U.S. Cellular and 30% of its wireless spectrum assets.
The deal is expected to be completed in the second quarter of 2025, and T-Mobile will also enter into a new licensing agreement on more than 2,000 towers.
Europe Movers: Cadeler, Intermediate Capital Group, Rheinmetall, SoftCat, ThyssenKrupp
Inga Muller
28 May, 2024
Frankfurt
European indexes struggled to advance ahead of inflation reports. Germany's wholesale price index declined at the slowest pace in nearly 30 months.
The DAX index increased by 0.1% to 18,800.32; the CAC-40 index fell by 0.4% to 8,099.12; and the FTSE 100 index decreased by 0.4% to 8,289.11.
The yield on 10-year German bonds edged down to 2.56%; French bonds inched higher to 3.05%; the UK gilts edged lower to 4.23%; and Italian bonds inched higher to 3.87%.
Rheinmetall AG increased 0.3% to €533.80 after the German automotive and arms company won an order from a European government for the supply of 35 mm AHEAD ammunition for the Skynex air defense system.
Cadeler AS decreased 1.7% to €5.80 after the offshore wind turbine installation vessel reported a loss in the first quarter.
Revenue in the first quarter was €19 million, matching the level in the period a year ago, and operating income swung to a loss of €10 million compared to a gain of €8 million a year ago.
The company reiterated its 2024 revenue to range between €225 million and €245 million and its operating income between €105 million and €125 million.
The company's order book swelled to €1.8 billion.
In addition, the company completed a successful private placement on February 15 and sold 39.5 million shares at a price of NOK 44.50 per share, raising €155 million before transaction costs.
Softcat PLC declined 0.9% to 1,700.0 pence despite the IT infrastructure company reiterating its full-year outlook.
ThyssenKrupp AG rose 1.9% to €4.82 after the company's material services unit's chairman, Martin Stillger, decided to resign effective May 31.
Intermediate Capital Group rose 2.7% to 2,382.0 pence after the private equity group reported record management fees and assets under management.
Management fees in the financial year increased 5% to £505 million, and fund management profit before tax soared 21% to £375 million.
Total fee earnings and assets under management rose 11% to £70 billion at the end of the financial year 2024.
The company declared a total ordinary dividend of 79 pence per share, increasing its annual dividend for the 14th year in a row.
European Indexes Struggled to Advance, Germany's Wholesale Price Decline Slowed In April
Bridgette Randall
28 May, 2024
Frankfurt
European market indexes struggled to rise above the flatline as investors awaited the release of inflation surveys in the eurozone and in the U.S.
Benchmark indexes in Frankfurt, Paris, and London as investors reviewed the latest economic updates.
The Euro Area consumer expectations' for the next 12 months eased to 2.9% in April from 3.0% in March, according to the survey from the European Central Bank released on Tuesday.
Inflation expectations fell to their lowest level since September 2021.
The U.K. shop price inflation slowed to an annual increase of 0.6% in May after an increase of 0.8% in April, the British Retail Consortium and the market research company NielsenIQ reported Tuesday.
The shop price inflation rose at the slowest pace since November 2021.
Germany's Wholesale Price Decline slowed In April
Germany's wholesale prices declined and slowed in April, according to the Federal Statistical Office, or Destastis.
The wholesale price index decline slowed to an annual pace of 1.8% in April, after falling 2.7% in March and 2.6% in February.
The latest wholesale price index is based on a new series that reflects the revised base rate for 2021 from 2015 and changes in baskets of goods and weights for individual items.
On a monthly basis, wholesale prices rose 0.4% in April from the previous month.
The main reason for the overall decline in wholesale prices was the drop in prices in the wholesale trade in chemical products (17.9%), grain, raw tobacco, seeds, and animal feed (12.2%), ores, metals, and semi-finished metal products (7.2%), scrap and residues (6.8%), and milk, milk products, eggs, edible oils, and food fats (6.3%).
Meanwhile, wholesale prices for coffee, tea, cocoa, and spices rose (9.3%), sugar, confectionery, and baked goods (7.2%), and tobacco products (5.0%).
Europe Indexes and Yields
The DAX index increased by 0.1% to 18,800.32; the CAC-40 index fell by 0.4% to 8,099.12; and the FTSE 100 index decreased by 0.4% to 8,289.11.
The yield on 10-year German bonds edged down to 2.56%; French bonds inched higher to 3.05%; the UK gilts edged lower to 4.23%; and Italian bonds inched higher to 3.87%.
The euro edged higher to $1.087; the British pound inched higher to $1.277; and the U.S. dollar gained to 91.06 Swiss cents.
Brent crude increased $0.47 to $83.35 a barrel, and the Dutch TTF natural gas rose by €0.42 to €34.50 per MWh.
Europe Stock Movers
Rheinmetall AG increased 0.3% to €533.80 after the German automotive and arms company won an order from a European government for the supply of 35 mm AHEAD ammunition for the Skynex air defense system.
Cadeler AS decreased 1.7% to €5.80 after the offshore wind turbine installation vessel reported a loss in the first quarter.
Revenue in the first quarter was €19 million, matching the level in the period a year ago, and operating income swung to a loss of €10 million compared to a gain of €8 million a year ago.
The company reiterated its 2024 revenue to range between €225 million and €245 million and its operating income between €105 million and €125 million.
The company's order book swelled to €1.8 billion.
In addition, the company completed a successful private placement on February 15 and sold 39.5 million shares at a price of NOK 44.50 per share, raising €155 million before transaction costs.
Softcat PLC declined 0.9% to 1,700.0 pence despite the IT infrastructure company reiterating its full-year outlook.
ThyssenKrupp AG rose 1.9% to €4.82 after the company's material services unit's chairman, Martin Stillger, decided to resign effective May 31.
Intermediate Capital Group rose 2.7% to 2,382.0 pence after the private equity group reported record management fees and assets under management.
Management fees in the financial year increased 5% to £505 million, and fund management profit before tax soared 21% to £375 million.
Total fee earnings and assets under management rose 11% to £70 billion at the end of the financial year 2024.
The company declared a total ordinary dividend of 79 pence per share, increasing its annual dividend for the 14th year in a row.
Japan Stocks Lack Direction Amid Rate Path and Yen Uncertainties
Akira Ito
28 May, 2024
Tokyo
Stocks in Tokyo traded sideways amid ongoing interest rate jitters and uncertainty surrounding the Bank of Japan's policy response.
The Nikkei 225 and the Topix index edged lower in a choppy trading session as investors parsed comments from Bank of Japan Deputy Governor Shinichi Uchida.
On Monday, Deputy Governor Uchida suggested that Japan's persistent battle against deflation is nearing an end amid sustained price increases driven by the increase in energy prices and that estimated wages are likely to keep rising in the near future.
Moreover, investors also reviewed the latest comments from the European Central Bank's policymakers, suggesting that the first interest rate cut may be announced as early as next week after the next policy meeting.
The Japanese yen traded at 156.87 against the U.S. dollar in late afternoon trading in Tokyo as currency traders bet that the Bank of Japan will keep its accommodative stance intact amid the large rate gap between the U.S. and Japan.
Japan Stock Movers
The Nikkei 2225 Stock Average declined 0.1% to 38,864.32, and the Topix index advanced 0.1% to 2,768.73.
Technology stocks traded mixed, and Tokyo Electron, Advantest, and Screen Holdings declined, but Socionext and Renesas Electronics fell as much as 1.0%.
Financial stocks also traded mixed for the second session in a row, with Sumitomo Mitsui Financial and Mitsubishi Financial advancing 1% and Mizuho Financial falling about 0.8%.
Power generators and distributors led the gainers in Tokyo trading.
Toray Industries, Furukawa Electric, and Kansai Electric Power advanced between 3% and 7%.
Shanghai Announces Measures to Support Property Market Transactions Amid Weak Demand and High Prices
Li Chen
28 May, 2024
Hong Kong
Benchmark indexes in Shanghai and Hong Kong attempted to trade higher after the Shanghai government announced measures to support local property market transactions.
Shanghai authorities announced several measures to revive property market transactions and became the first tier-1 city as the central government offers financial incentives for regional governments as a part of a national plan.
Shanghai lowered down-payment requirements and mortgage interest rates for first-time home buyers, permitted families with more than one child to purchase additional houses, and eased property purchase restrictions for out-of-city residents.
The moves are designed to encourage buyers to acquire additional properties and increase liquidity for property developers.
However, these measures are likely to fall short as buyers struggle with affordability issues amid sky-high house prices and job market uncertainty.
The CSI 300 index and the Hang Seng index jumped nearly 1% in early trading but lost momentum in afternoon trading.
China Stock Movers
The CSI 300 index decreased 0.4% to 3,620.25, and the Hang Seng index edged up 0.04% to 18,829.03.
China Vanke declined 1.3% to HK$6.03 after the state-controlled residential property developer agreed to sell an unfinished project for 2.24 billion yuan, or $309 million, and the company is likely to take a loss of 1.8 billion yuan.
China Vanke sold the plot of land to its largest shareholder, Shenzhen Metro, and Baishuo Investment, and the land was acquired in December 2017 with the plan to build the company's headquarters for 3.1 billion yuan.
Longfor Group decreased 1% to HK$13.48, and China Resources Land was nearly unchanged at HK$30.55.
Semiconductor stocks traded higher after Beijing announced the setting up of a $47.5 billion investment plan to achieve self-sufficiency in advanced semiconductor production.
SMIC gained 0.5% to HK$16.36, and Hua Hon Semiconductors jumped 0.4% to HK$19.86.
Alibaba Health Information Technology soared 10.4% to HK$3.40 after the company reported annual income rose 65% from a year ago in its latest financial year ending in March.
India Movers: Elgi, GMDC, LIC Lumax Auto Technologies, Natco, National Aluminium
Arun Goswami
28 May, 2024
Mumbai
Stocks in Mumbai advanced as investors reacted to the latest batch of mixed earnings. The rupee held firm, and the yield on the Indian government bond edged lower.
The Sensex index decreased by 0.1% to 75,368.18, and the Nifty index fell by 0.1% to 22,946.05.
On the Mumbai stock exchange, 140 stocks traded at their 52-week highs, and 27 stocks traded at their 52-week lows.
Life Insurance Corporation gained 0.8% to ₹1,037.65 after the largest insurance company reported a rise in revenue and earnings in the March quarter.
Standalone net premium increased 15.6% to ₹1.52 lakh crore from ₹1.32 lakh crore, and net income advanced 2.5% to ₹13,763 crore from ₹13,428 crore a year ago, respectively.
The company's board proposed a final dividend of ₹6 per share.
Lumax Auto Technologies gained 4% to ₹491.50 despite the auto component maker reporting a sharp decline in revenue and earnings in the March quarter.
Revenue declined 25.5% to ₹971 crore from ₹1,303 crore, and net income plunged 29.9% to ₹66 crore from ₹94 crore a year ago, respectively.
The company's board proposed a ₹75 per share final dividend.
Natco Pharma jumped 6.8% to ₹1,100.0 after the generic pharmaceutical products maker reported a surge in revenue and earnings in the March quarter.
Consolidated revenue advanced 19% to ₹1,068 crore from ₹898 crore, and net income soared 40.1% to ₹386 crore from ₹276 crore a year ago, respectively.
National Aluminium Company rose 4.2% to ₹204.50 despite the company reporting a decline in revenue in its March quarter.
Revenue decreased 2.5% to ₹3,579 crore from ₹3,671 crore, and net income soared to ₹997 crore from ₹495 crore a year ago, respectively.
Gujarat Mineral Development Corp. decreased 2.1% to ₹394.45 after the resource company reported a decline in revenue and profit in the March quarter.
Revenue fell 20.8% to ₹751 crore from ₹948 crore, and net profit fell 53.2% to ₹207 crore from ₹442 crore a year ago, respectively.
Elgi Equipments Ltd. dropped 5.2% to ₹616.45 after the compressor and heating systems maker reported a sharp decline in profit in the March quarter.
Revenue increased 3.6% to 866 crore from 836 crore, and net income plunged 55.2% to 76 crore from 170 crore a year ago, respectively.
The company declared a final dividend of 2 per share payable on or before August 29 to shareholders on record on July 24.
European Investors Look Ahead to Inflation Data, Alstom Launches Rights Issue
Bridgette Randall
27 May, 2024
Frankfurt
In thin trading, stocks edged slightly higher in Europe, and investors awaited the release of economic data later in the week.
Investors are looking forward to the release of consumer price inflation reports in the eurozone. Annual inflation is expected to rise to 2.5% in May, and core inflation is estimated to hold steady at 2.7%.
Investors are looking forward to the release of France’s jobless data and Switzerland’s foreign trade balances later in the week.
Benchmark indexes in Paris and London inched higher, and markets in the U.S. and the U.K. are closed for public holidays.
Eurozone inflation data later in the week could provide more insight into the inflation forces. Inflation has dropped over the last 12 months, but prices are still rising faster than the 2% target rate set by the European Central Bank, despite multiple rate hikes.
The German business climate index was unchanged in May, according to the report released by the Ifo Institute on Monday.
The business climate index was unchanged at 89.3 in May compared to a downwardly revised level in April.
Europe Indexes and Yields
The DAX index increased by 0.3% to 18,705.11; the CAC-40 index rose by 0.1% to 8,104.94; and the UK financial markets are closed for a holiday.
The yield on 10-year German bonds edged down to 2.56%; French bonds inched higher to 3.04%; the UK gilts edged higher to 4.26%; and Italian bonds inched lower to 3.86%.
The euro edged higher to $1.085; the British pound inched higher to $1.276; and the U.S. dollar gained to 91.39 Swiss cents.
Brent crude increased $0.57 to $82.68 a barrel, and the Dutch TTF natural gas rose by €0.78 to €34.74 per MWh.
Europe Stock Movers
Alstom SA rose 4.4% to €19.52 after the French transportation company launched a preferential rights issue of €1 billion, taking the final step of completing its plan to lower its debt by €2 billion.
EFG International soared 2.6% to CHF 12.56 on speculation that the Swiss rival Julius Baer Group Ltd. is looking to acquire the company.
PF Bakkafrost declined 1.9% to NOK 591.0 after the Norwegian salmon farming company confirmed that infectious salmon anaemia had been found at two Bakkafrost pens at a site in the Faroe Islands.
SBB gained 2% to SEK4.61 after the Swedish bank struck a joint venture with the U.S.-based Castlelake.
Castlelake agreed to provide a loan of €464 million, or SEK 5.2 billion, to the joint venture SBB Infrastructure AB to acquire properties from SBB and refinance debt.
The joint venture agreed to provide collateral totaling SEK 9.4 billion for properties in Sweden and Finland.
JGB Yield Hold Above 1% and the Yen Retains Downward Pressure
Akira Ito
27 May, 2024
Tokyo
Benchmark indexes in Tokyo advanced and pared losses in the previous session as investors reacted to the latest comments from Bank of Japan Governor Kazuo Ueda.
The Nikkei 225 and the Topix indexes advanced after Governor Ueda said investors should exercise caution in estimating higher interest rates because it is "challenging" to accurately predict neutral interest rates in Japan.
His comments were directed at curbing the recent enthusiasm about possible rate increases later in the year and arresting the decline in the Japanese yen.
The yen edged slightly higher to 156.80 against the U.S. dollar in late afternoon trading in Tokyo.
The yield on a 10-year Japanese government bond inched higher to 1.02%, a twelve-year high, after investors reacted to comments from BOJ Governor Ueda.
Investors are looking ahead to the release of retail sales, industrial production, the unemployment rate, and housing starts data later in the week.
In stock trading, tech stocks and shipping companies led the gainers, but financial services, automakers, and industrial companies traded mixed.
Japan Stock Movers
The Nikkei 225 Stock Average rose 0.5% to 38,837.44, and the Topix index advanced 0.7% to 2,760.35.
Renesas Electronics, Socionext, Disco Corp., Tokyo Electron, and Advantest gained between 1% and 3%.
Shipping lines were among the leading gainers in Tokyo trading.
Nippon Yusen advanced 3.2% to ¥5,059.0, Mitsui OSK added 2.1% to ¥5,184.0, and Kawasaki Kisen added 4% to ¥2,418.0.
Toyota Motor advanced 1.7% to ¥3,450.0, Honda Motor gained 0.6% to ¥1,745.0, Nissan Motor increased 1.2% to ¥559.20, and Mitsubishi Motor added 1% to ¥430.0.
Nexon dropped 3.5% to ¥2,466.0, CyberAgent dropped 4.2% to ¥965.80, and Hoya Corp. decreased 1.4% to ¥18,225.0.
China Stocks Halt 4-day Losses, Industrial Profits Rebound In April
Li Chen
27 May, 2024
Hong Kong
Stocks in Shanghai and Hong Kong edged higher in Monday's trading after a week of sharp selloffs.
Benchmark indexes in Shanghai and Hong Kong gained more than 0.3% after profits at industrial companies rose in April, the National Bureau of Statistics reported Monday.
Profits for industrial companies advanced 4% from the previous month in April, reversing the 3.5% decline in the previous month.
The government's data weighs heavily on large state-owned companies and has fewer small- and medium-sized private companies.
The statistical bureau is also scheduled to release the manufacturing sector's May activities on Friday, and economists are anticipating the sector to show positive growth.
The Hang Seng index has trimmed its gains by more than 5% in the previous week after rallying for more than 20% in the previous six weeks.
Market sentiment has been cautious in the last five trading sessions on the worry that the inadequate policy response, lack of consumer demand, and inflated home prices are likely to prolong the property market malaise.
Moreover, fragile economic recovery and weaker-than-expected corporate earnings so far in the earnings season also weighed heavily on market sentiment.
China Stock Movers
The CSI 300 index increased 0.3% to 3,613.76, and the Hang Seng index added 0.4% to 18,677.42.
Property developers extended last week's losses on the worry that the government's attempt to improve market liquidity may fall short of expectations.
Longfor Group edged down 0.1% to HK$13.52, China Vanke fell 1.6% to HK$6.13, and China Resources Land eased 0.2% to HK$30.50.
Leading technology companies advanced in Monday's trading in the hopes that export revenue growth may overcome domestic market weakness.
Lenovo Group increased 8.5% to HK$12.02, Xiaomi added 0.6% to HK$18.40, and Semiconductor Manufacturing International Corp increased 5.8% to HK$16.24.
Alibaba Group advanced 1.1% to HK$78.95, JD.com fell 1.6% to HK$117.70, and Meituan added 1.4% to HK$117.90.
BYD fell 1.2% to HK$205.40, Li Auto advanced 3.1% to $80.65, Xpeng advanced 1.3% to HK$32.20, and Nio advanced 3.1% to HK$38.35.
India Movers: Divi's Labs, Glenmark Pharma, Hindustan Copper, Kolte-Patil, NTPC, Torrent Pharmaceuticals, United Spirits
Arun Goswami
27 May, 2024
Mumbai
Stocks in Mumbai advanced in Monday's trading as investors looked forward to the release of March quarter GDP growth, the central government's deficit, and infrastructure spending.
The Sensex index decreased by 0.1% to 75,368.18, and the Nifty index fell by 0.1% to 22,946.05.
On the Mumbai stock exchange, 141 stocks traded at their 52-week highs, and 34 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.99%, and the Indian rupee edged lower at ₹83.07 against the U.S. dollar.
Divi's Laboratories increased 4.3% to ₹4,298.75 after the company reported a sharp rise in revenue and earnings in the March quarter.
Revenue increased 118% to ₹2,303 crore from ₹1,951 crore, and net income soared 67.6% to ₹538 crore from ₹321 crore a year ago, respectively.
Operating earnings soared 50.1% to ₹731 crore from ₹487 crore, and operating margin improved to 32% from 25% a year ago.
Torrent Pharmaceuticals jumped 3.3% to ₹2,724.85 after the company reported rising sales and earnings in the March quarter.
Consolidated revenue in the quarter rose 10.2% to ₹2,745 crore, and net profit soared 56.4% to ₹449 crore from a year ago, respectively.
The company's management proposed a final cash dividend of ₹6 per share, and the company said it plans to raise ₹500 crore.
United Spirits increased 1.2% to ₹1,192.50 after the alcohol beverage company reported a rise in revenue and earnings in the March quarter.
Revenue increased 11.2% to ₹2,783 crore, and net income soared 136% to ₹241 crore. The company's management proposed a final dividend of ₹5 per share.
Kolte Patil decreased 5.7% to ₹486.05 after the Pune-based real estate developer reported weaker-than-expected quarterly results.
Revenue in the March quarter dropped 34% to ₹486.05 to 526 crore, and net profit swung to a net loss of 26 crore.
Hindustan Copper declined 1.3% to ₹367.0 after the mining company reported a decline in net income in its latest quarter.
Revenue in the March quarter rose 1% to 565 crore and net income decreased 6% to 124 crore from a year ago, respectively.
NTPC increased 0.2% to ₹376.15 after the power generation company reported a rise in revenue and earnings in the March quarter.
Revenue rose 7.6% to ₹47.6222 crore, and net income increased 33.2% to ₹6,490 crore. The company's board recommended a final dividend of ₹3.25 per share.
Glenmark Pharmaceuticals rose 6.6% to ₹1,103.45 after the generic pharmaceutical company reported muted quarterly results.
Revenue in the March quarter increased by 2.1% to ₹3,063 crore, and net income swung to a loss of ₹1,218 crore because of a one-time charge of ₹447 crore.
U.S. Major Averages Halt 4-week Rally, Durable Goods Orders Unexpectedly Advance In April
Barry Adams
24 May, 2024
New York City
Stocks headed higher in Friday's trading, and the yield on Treasury notes held firm amid growing interest rate anxieties and the steady push back of the start of rate cuts.
The S&P 500 index and the Nasdaq Composite advanced in Friday's trading, and tech stocks extended declines for the second day in a row on the ongoing rate jitters.
The broader market failed to participate in the rally sparked by the over-the-top earnings from Nvidia as investors kept worrying about the future direction of interest rates.
Nvidia reported a fourfold increase in its revenue and a five-fold jump in earnings in its latest quarter, sparking a rally in artificial intelligence technology-related companies, including Microsoft, Google parent Alphabet, and Facebook parent Meta Platforms.
But the enthusiasm failed to lift other technology stocks, and the market rally in Thursday's morning turned to losses by the end of the session.
Moreover, investors are estimating that the Federal Reserve may cut interest rates only once, and that cut may happen after the last meeting of policymakers on December 18, 2024.
Durable Goods Orders Rise Third Consecutive Month in April
New orders for manufactured durable goods in April increased $1.9 billion, or 0.7%, from the previous month to $284.1 billion, the U.S. Census Bureau announced today.
This followed a downwardly revised 0.8% increase in March.
Excluding transportation, new orders increased by 0.4%, and excluding defense, new orders were nearly unchanged.
Orders for durable goods rose 1.2% on an annual basis.
The increase in new orders for durable goods was primarily driven by the 1.2% increase in transportation orders.
Non-defense capital goods, excluding aircraft, the proxy for business spending, increased 0.3% in April after falling 0.1% in March.
U.S. Indexes and Treasury Yields
The S&P 500 index rose 0.4% to 5,288.17, and the Nasdaq Composite jumped 0.5% to 16,819.89.
The yield on 2-year Treasury notes edged lower to 4.95%, 10-year Treasury notes decreased to 4.49%, and 30-year Treasury bonds edged higher to 4.59%.
WTI crude oil increased $0.60 to $77.45 a barrel, and natural gas prices declined 8 cents to $2.57 a thermal unit.
Gold increased by $7.61 to $2,339.58 an ounce, and silver rose 26 cents to $30.65.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.81.
U.S. Stock Movers
Ross Stores increased 8.4% to $142.78 after the discount apparel retailer reported better-than-expected quarterly results.
Intuit declined 8% to $609.37 after the tax software company estimated weaker-than-expected revenue in the fiscal fourth quarter.
Workday declined 11.6% to $230.56 after the enterprise management company lowered its subscription revenue estimate for the full year to $1.895 billion.
German First Quarter Economic Growth Confirmed, Poor Weather Dampen UK Retail Sales
Bridgette Randall
24 May, 2024
Frankfurt
European market indexes declined in Friday's trading after China stepped up military drills to intimidate Taiwan.
Market sentiment was also sapped by the ongoing U.S. interest rate uncertainty.
Benchmark indexes in London, Paris, and Frankfurt fell between 0.3% and 0.4%, and investors turned cautious amid a mixed batch of economic data.
German Economic Growth Confirmed in the First Quarter
Germany's GDP expanded 0.2% sequentially in the first quarter after falling 0.5% in the previous quarter, the Federal Statistical Office, or destatis, reported Friday.
The German economy expanded as initially estimated, driven by a rebound in exports and investment, the statistical office confirmed today.
On an annual basis, adjusted for the calendar effect, GDP expanded by 0.2%, as previously estimated, and matched the rate in the fourth quarter.
Poor Weather and High Prices Dampen UK Retail Sales
U.K. retail sales declined more than expected in April, the Office for National Statistics reported Friday.
Retail sales volume decreased 2.3% on a monthly basis following a revised 0.2% fall in March.
Poor weather negatively impacted retail sales, and elevated prices also kept consumers limiting their purchases to basic items.
Non-food store sales eased 4.1% from the previous month after weaker consumer traffic and poor weather dampened sales at apparel stores, toy and game stores, sports equipment stores, and furniture stores.
Food store sales declined for the third month in a row, and gasoline sales at pump stations dropped the most since October 2021.
On a yearly basis, retail sales decreased 2.7% compared to a 0.4% increase in March.
French manufacturing Confidence Dropped to a 4-month Low
Confidence among French manufacturers declined and dropped below its long-term average in April, France's statistical office, INSEE, reported Friday.
The index measuring confidence among manufacturing companies declined to 99 in May from 100 in April and fell to a 4-month low.
The index for the expected trend in selling price weakened (-1 from 3 in April), general production weakened (-9 from -7), the workforce fell (3 from 4), and personal production dropped (1 from 8).
Europe Indexes and Yields
The DAX index decreased by 0.3% to 18,629.16; the CAC-40 index fell by 0.2% to 8,088.82; and the FTSE 100 index inched lower by 0.4% to 8,307.20.
The yield on 10-year German bonds edged up to 2.58%; French bonds inched higher to 3.07%; the UK gilts edged higher to 4.25%; and Italian bonds inched lower to 3.89%.
The euro edged higher to $1.084; the British pound inched higher to $1.272; and the U.S. dollar gained to 91.47 Swiss cents.
Brent crude decreased $0.57 to $80.78 a barrel, and the Dutch TTF natural gas fell by €1.0 to €34.36 per MWh.
Europe Stock Movers
Acciona SA dropped 8.5% to €114.20 after the Spanish renewable energy and construction company issued a profit alert.
Intertek Group increased by 0.9% to 4,998.36 pence after the product testing and certification company reiterated its full-year estimate.
The company said revenue in the first four months to April increased 7.5% to £1.08 billion, driven by overall comparable sales growth of 7%.
The company reiterated its full-year comparable revenue growth in the "mid-single digit," improvement in margin, and "strong" free cash flow.
Rheinmetall AG decreased 0.8% to €529.40 despite the fact that the fact that the German automotive and arms maker said it won an order from NATO for 155 mm artillery ammunition.
Japan's Core Inflation Stays Above 2% Rate for 25th Month, Nikkei 225 Extend Weekly Losses to 1%
Akira Ito
24 May, 2024
Tokyo
Market indexes in Tokyo extended weekly losses, tracking the market decline in New York in overnight trading.
The Nikkei 225 and the Topix index fell more than 0.6% on the worry that U.S. interest rates are likely to stay higher than previously anticipated.
Closer to home, investors overlooked the decline in inflation and core inflation, and the yen weakened to a one-week low.
Consumer price inflation in April eased to 2.5% in April from 2.7% in March, the Ministry of Internal Affairs and Communication reported Friday.
Inflation eased for the second month in a row after food prices advanced at a slower pace, and core inflation, which excludes food prices but does not exclude energy prices, eased to 2.2% from 2.6% in March.
Despite the easing of inflation in recent months, consumer prices are still rising at a faster than 2% annual rate since March 2022.
The yen weakened to 157.05 against the U.S. dollar in late afternoon trading, and the Japanese government bond yield topped 1% for the first time since May 2013.
Bond traders have been betting that the Bank of Japan is likely to increase rates later in the year amid elevated inflation and narrow the bond yield gap with the U.S. Treasury notes.
Japan Indexes and Stock Movers
The Nikkei 225 Stock Average declined 1.3% to 38,590.19, and the Topix index dropped 0.6% to 2,738.78.
Tech stocks dropped sharply following the weakness in New York, despite Nvidia reporting a sharp jump in revenue and earnings in its latest quarter.
Tokyo Electron, Advantest, Screen Holdings, SoftBank, Lasrtec, and Socionext fell between 2.5% and 4.5%.
Bank stocks were also down after the Japanese government bond yield jumped above 1% for the first time since 2013.
Mizuho Financial, Mitsubishi UFJ, and Sumitomo Mitsui declined between 0.3% and 0.7%.
Kawasaki Heavy Industries, Shiseido, and Fujikura gained more than 3%.
Fuji Electric plunged 11.1% to ¥8,814.0, Yamaha Corp. fell 2.9% to ¥3,372.0, and Tokyo Tatemono fell 2.4% to ¥2,442.50.
Weak Earnings Outlook and Piecemeal Policy Response Drag China Indexes Down, Hang Seng Drops 5%
Li Chen
24 May, 2024
Hong Kong
Benchmark indexes in Shanghai and Hong Kong traded down in Friday's trading and extended weekly losses amid a lack of economic catalysts and widespread disappointment with earnings growth.
Market indexes fell for the fourth day in a row on the worry that the latest policy measures announced by regulators and the People's Bank of China are not likely to be enough to revive the property market.
Moreover, weak earnings from industrial companies, technology leaders, capital equipment makers, and electric vehicle makers suggested continued price pressure and elevated costs.
Market indexes in Hong Kong and Shanghai dropped more than 0.7% after stocks of technology companies and property developers fell on worries of higher interest in staying longer in the U.S.
The U.S. Federal Reserve's latest policy meeting minutes showed that policymakers are unhappy with the lack of progress on inflation in recent months.
Moreover, policymakers said more solid evidence is needed that inflation is on a sustained path towards the 2% target level before rate cuts are put in place.
The three-month market rally appears to have lost its momentum following the earnings growth weakness and lack of additional buying by state-controlled financial institutions.
The Hang Seng market index is down 5% in the week and up 11% in the year so far, and the CSI 300 index is down 2.5% and up 7.0%, respectively.
China Indexes and Movers
The CSI 300 index declined 0.7% to 3,616.22, and the Hang Seng Index dropped 1.4% to 18,619.13.
Property developers extended weekly losses after China Vanke decided to borrow US$1.1 billion from its two real estate subsidiaries a day after Fitch Ratings lowered the company's local and foreign debt rating to BB- from BB+.
China Vanke plunged 8.8% to HK$6.26, China Resources Land decreased 4.5% to HK$30.30, and Henderson Development dropped 2.5% to HK$25.50.
Tech stocks were also among the leading decliners, and Baidu, JD.com, Tencent Holdings, and Meituan declined between 1.5% and 3.5%.
Alibaba Group Holding dropped 0.6% to HK$78.10 after the company announced its plans to raise US$4.5 billion through a convertible note offering and fund its stock repurchase plan.
India Movers: Bikaji Foods, CESC, Precision Camshafts, Mangalore Chemicals, Time Technoplast
Arun Goswami
24 May, 2024
Mumbai
Stocks in Mumbai struggled to advance in Friday's trading, and market indexes are set to close higher by 2% after a week of choppy trading..
The Sensex index decreased by 0.1% to 75,368.18, and the Nifty index fell by 0.1% to 22,946.05.
On the Mumbai stock exchange, 108 stocks traded at their 52-week highs, and 10 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.99%, and the Indian rupee edged lower at ₹83.22 against the U.S. dollar.
Bikaji Foods soared 6.6% to ₹569.0 after the packaged food product maker reported a surge in earnings in the March quarter.
Revenue in the quarter increased by 33% to ₹614.4 crore from ₹462.3 crore, and net income soared by 200% to ₹116.3 crore from ₹38.7 crore a year ago.
Mangalore Chemicals & Fertilizers declined 3.1% to ₹108.30 after the company reported a sharp decline in net profit in the March quarter.
Net income in the quarter plunged 93% to ₹4.8 crore from ₹67.9 crore, and revenue dropped to ₹799.2 crore from ₹1,174.97 crore a year ago, respectively.
Diluted earnings per share dropped to 41 paisa from ₹5.73 a year ago.
The company recommended ₹1.50 per share as the final and total dividend for the fiscal year 2024.
CESC declined 1.7% to ₹143.60 after the electric utility in Kolkata reported a decline in profit in the March quarter.
Revenue in the quarter rose 9.2% to ₹3,387 crore from ₹3,102 crore, and net income fell 6.7% to ₹415 crore from ₹455 crore a year ago.
Precision Camshafts dropped 6.1% to ₹203.65 after the automotive products maker reported a decline in revenue and earnings in the March quarter.
Revenue fell 8% to ₹256.2 crore from ₹278.6 crore, and net income dropped 70% to ₹3.35 crore from ₹11.1 crore a year ago.
Time Technolplast Ltd. dropped by 1.4% to ₹283.50 despite the molded plastic product maker reporting an increase in revenue and earnings in the March quarter.
Revenue in the quarter increased 17% to 1,394.3 crore from 1,192.4 crore, and net income soared 44.5% to 94.3 crore from 65.2 crore a year ago, respectively.