Market Update
India Movers: Adani Power, HDFC Bank, ONGC, SBI Cards, SJVN, Shriram Finance
Arun Goswami
29 Jan, 2024
Mumbai
Stocks in Mumbai advanced ahead of the release of vehicle sales, the fiscal deficit, and the release of the interim budget.
The Sensex index increased 639.59 points to 71,340.26, and the Nifty index rose 185.90 points to 21,538.50.
On the Mumbai stock exchange, 258 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.
HDFC Bank increased 1.2% to ₹1,453.35 after the Reserve Bank of India permitted Life Insurance Corporation to increase its stake in the bank from 5.19% to up to 9.99%.
SBI Cards and Payment Services dropped 7.2% to ₹713.50 after two brokerage firms lowered their views on the stock, citing the "weak" quality of the company's loan portfolio.
Adani Power jumped 3.8% to ₹564.0 after the company reported a surge in quarterly revenue and earnings.
Consolidated revenue in the December quarter soared 67.3%. ₹12,991 crore, and net profit advanced to ₹2,738 crore from ₹8.8 crore a year ago.
ONGC jumped 4.2% to ₹244.0 after Brent crude oil prices advanced in international trading by 1% to $84.38 a barrel.
Moreover, oil supplies from Russia are expected to fall sharply after several refineries are undergoing repairs following drone attacks last week.
In addition, a missile launched by Yemen-based Houthi group in the Red Sea struck an oil tanker controlled by the commodities trader Trafigura on Saturday.
SJVN Ltd. jumped 12.9% to ₹130.80 after the company was deemed the lowest bidder in an auction conducted by Gujarat Urja Vikas Nigam to build a 100 MW power plant.
Shriram Finance jumped 3.5% to ₹2,386.15 after the company reported muted quarterly results.
Net income in the December quarter rose 15% to ₹5,093.9 crore, and net profit increased 2.3% to ₹1,818.3 crore from a year ago.
Stocks on Wall Street Turn Lower, Inflation Measure Shows Cooling Trend
Barry Adams
26 Jan, 2024
New York City
Stocks on Wall Street declined in early trading, and investors reviewed another batch of earnings and inflation updates.
Benchmark indexes lacked direction, and semiconductor stocks dropped after Intel estimated sharply lower-than-expected revenue in the current quarter.
Moreover, market sentiment was dented after Visa Inc. said U.S. transaction volume growth is slowing and American Express said provision for credit losses soared 40% to $1.4 billion at the end of the fourth quarter.
On the economic front, a closely watched alternative measure of inflation eased, as expected by market watchers.
U.S. Personal Spending Rises, Inflation Measured by PCE Prices Slowed
Personal income increased $60.0 billion, or 0.3%, from the previous month in December, according to estimates released today by the Bureau of Economic Analysis.
Disposable personal income, personal income less personal current taxes, increased $51.8 billion, or 0.3%, and personal consumption expenditures increased $133.9 billion, or 0.7%, from the previous month, respectively.
The Personal Consumption Expenditure Index increased by 0.2% in December from the previous month and was steady at 2.6% on an annual basis.
Prices for goods increased less than 0.1%, and prices for services increased 3.9%.
Food prices increased 1.5% and energy prices decreased 2.2% from the previous month, respectively.
Core PCE, which excludes food and energy, rose to 0.2% from 0.1% on a monthly basis, and the annual core rate fell to 2.9% from 3.2%, the lowest level since March 2021.
The core rate of inflation declined for the eleventh month in a row.
U.S. Indexes and Yields
The S&P 500 index increased 0.04% to 4,927.73, and the Nasdaq Composite decreased 0.2% to 15,651.03.
The yield on 2-year Treasury notes increased to 4.36%. 10-year Treasury notes declined to 4.14%, and 30-year Treasury bonds edged down to 4.38%.
WTI crude oil increased $0.53 to $75.66 a barrel, and natural gas prices increased 18 cents to $2.82 a thermal unit.
Gold increased by $1.37 to $2,013.92 an ounce and extended this 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 103.27.
U.S. Stock Movers
Intel Corp. declined 10.5% to $44.36 after the advanced chipmaker reported weaker-than-expected quarterly results and issued a cautious outlook.
Revenue in the December quarter rose 10% to $15.4 billion from $14.0 billion, and the company swung to a net income of $2.7 billion from a loss of $664 million, and diluted earnings per share were 63 cents compared to a loss of 16 cents.
For the full year 2023, revenue increased 14% to $54.2 billion. $63.1 billion, net income plunged to $1.7 billion from $8.0 billion, and diluted earnings per share dropped to 40 cents from $1.94 a year ago.
The company guided first-quarter 2024 revenue to range between $12.2 billion and $13.2 billion, with a diluted loss per share of 25 cents and a gross margin of 40.7%.
KLA Corp. fell 3.9% to $616.96 after the semiconductor equipment company reported better-than-expected quarterly results.
Revenue in the fiscal second quarter ending in December dropped to $2.48 billion from $2.98 billion, net income plunged to $583 million from $979 million, and diluted earnings per share fell to $4.28 from $6.89 a year ago.
Visa Inc. dropped 2.7% to $265.30 after the payment processing platform reported strong quarterly results driven by robust consumer spending; however, the company signaled weakening U.S. spending volume.
Revenue in the fiscal 2024 first quarter increased 9% to $8.6 billion, net income rose 17% to $4.9 billion from $4.2 billion, and diluted earnings per share advanced 20% to $2.39 from $1.99 a year ago.
Among the key business drivers, payment volume rose 8%, processed transactions rose 9%, and cross-border volume, including intra-Europe, advanced 16%.
American Express Company rose 3.2% to $194.10 after the company reported mixed quarterly results.
Total revenue net of interest expense increased 11% to $15.8 billion from $14.1 billion, net income rose 23% to $1.93 billion from $1.57 billion, and diluted earnings per share advanced 27% to $2.62 from $2.02 a year ago.
Business billed in the quarter increased by 6% to $379.8 billion from $357.4 billion a year ago.
Total provision for credit losses increased by 40% to $1.4 billion from $1.0 billion a year ago.
Full-year 2023 revenue increased 14% to $60.5 billion, and net income rose to $8.4 billion, or $11.21 per share, compared with net income of $7.5 billion, or $9.85 per share, a year ago.
U.S. Movers: American Express, Intel, KLA Corp, Visa
Scott Peters
26 Jan, 2024
New York City
Intel Corp. declined 10.5% to $44.36 after the advanced chipmaker reported weaker-than-expected quarterly results and issued a cautious outlook.
Revenue in the December quarter rose 10% to $15.4 billion from $14.0 billion, and the company swung to a net income of $2.7 billion from a loss of $664 million, and diluted earnings per share were 63 cents compared to a loss of 16 cents.
For the full year 2023, revenue increased 14% to $54.2 billion. $63.1 billion, net income plunged to $1.7 billion from $8.0 billion, and diluted earnings per share dropped to 40 cents from $1.94 a year ago.
The company guided first-quarter 2024 revenue to range between $12.2 billion and $13.2 billion, with a diluted loss per share of 25 cents and a gross margin of 40.7%.
KLA Corp. fell 3.9% to $616.96 after the semiconductor equipment company reported better-than-expected quarterly results.
Revenue in the fiscal second quarter ending in December dropped to $2.48 billion from $2.98 billion, net income plunged to $583 million from $979 million, and diluted earnings per share fell to $4.28 from $6.89 a year ago.
The company estimated total revenues in the fiscal third quarter in a range of $2.30 billion, and GAAP gross margin is expected to be around 59.4%.
Diluted earnings per share is expected to be in a range of $4.93, and Non-GAAP diluted EPS is expected to be in a range of $5.26.
Visa Inc. dropped 2.7% to $265.30 after the payment processing platform reported strong quarterly results driven by robust consumer spending; however, the company signaled weakening U.S. spending volume.
Revenue in the fiscal 2024 first quarter increased 9% to $8.6 billion, net income rose 17% to $4.9 billion from $4.2 billion, and diluted earnings per share advanced 20% to $2.39 from $1.99 a year ago.
Among the key business drivers, payment volume rose 8%, processed transactions rose 9%, and cross-border volume, including intra-Europe, advanced 16%.
American Express Company rose 3.2% to $194.10 after the company reported mixed quarterly results.
Total revenue net of interest expense increased 11% to $15.8 billion from $14.1 billion, net income rose 23% to $1.93 billion from $1.57 billion, and diluted earnings per share advanced 27% to $2.62 from $2.02 a year ago.
Business billed in the quarter increased by 6% to $379.8 billion from $357.4 billion a year ago.
Total provision for credit losses increased by 40% to $1.4 billion from $1.0 billion a year ago.
Full-year 2023 revenue increased 14% to $60.5 billion, and net income rose to $8.4 billion, or $11.21 per share, compared with net income of $7.5 billion, or $9.85 per share, a year ago.
Europe Movers: KONE, Lonza Group, Louis Vuitton, Remy Cointreau, Volvo
Inga Muller
26 Jan, 2024
Frankfurt
European markets advanced in Friday's trading, and luxury stocks soared after Louis Vuitton and Remy Cointreau reported better-than-expected financial results.
The DAX index decreased 0.04% to 16,896.12, the CAC-40 index rose 1.7% to 7,588.71, and the FTSE 100 index inched higher by 1.1% to 7,612.82.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.74%; the UK gilts edged lower to 3.95%; and Italian bonds inched lower to 3.77%.
Volvo AB declined 1.1% to SEK 248.25 after the company reported mixed quarterly results.
Net sales in the fourth quarter increased by 10% to SEK 148.1 billion from SEK 134.3 billion and rose by 8% in constant currency.
Adjusted operating income increased to SEK 18,384 million from SEK 12,171 million, indicating an adjusted operating margin of 12.4% compared to 9.1%.
Adjusted operating income excludes the negative effects of SEK 1,490 million.
Earnings per share increased to SEK 5.93 from SEK 3.26 a year ago.
"The Board of Directors proposes an ordinary dividend of SEK 7.50 per share and an extra dividend of SEK 10.50 per share,” said Martin Lundstedt, President and CEO, in an update to investors.
Lonza Group soared 13% to CHF 420.0 after the Swiss pharmaceutical group reported better-than-expected earnings and revenues.
2023 sales increased 8% to 6.72 billion Swiss francs from 6.22 billion Swiss francs and rose 10.9% at constant currency rates.
Biologics division sales rose 13.6% to 3.7 billion francs, small molecule division sales rose 10% to 901 million francs, cell and gene division sales edged up 0.4% to 696 million francs, but capsules and health ingredients division sales dropped 8.3% to 1.2 billion francs.
Fiscal 2023 operating earnings, or EBITDA, fell 9.3% to 1.94 billion francs from 2.14 billion francs a year ago, and the EBITDA margin declined to 28.9% from 34.4% a year ago.
Core EBITDA increased 0.2% from the previous year to 2 billion francs, resulting in a margin of 29.8%, down from 32.1% a year ago.
The company estimated flat sales in constant currencies and core EBITDA margins in the "high twenties."
The company proposed a 14% increase in dividends to 4.0 francs from 3.50 francs a year ago.
KONE oyj increased 3.2% to €46.18 after the Finnish elevator group reported better-than-expected results.
Sales in the fourth quarter declined by 3.5% to €2,809.9 from €2,911.5 million and rose 0.7% on comparable exchange rates.
Net income was flat at €276.3 million, and basic earnings per share were flat at 53 cents.
Orders received increased by 5.4% to €2,049.2 from €1,944.2 million a year ago. On comparable exchange rates, orders rose by 10.5%.
Sales in 2023 increased 0.4% to €10.95 billion from €10.90 billion, net income increased 18.8% to €931.6 million from €784.5 million, and basic earnings per share rose 15% to €1.79 from €1.50 a year ago.
"KONE expects its sales to be stable or to grow slightly at comparable exchange rates in 2024. The improvement in adjusted EBIT margin is expected to continue in 2024, albeit with fewer tailwinds than in 2023," the company noted in an update to investors released Friday.
Remy Cointreau SA jumped 13.2% to €100.10 after the alcoholic beverage maker reported better-than-estimated sales.
Sales declined in the first nine months of fiscal year 2024 ending in December, partly because of the calendar shift in China and because consumers in the EMEA region avoid high-priced items because of high inflation.
Sales dropped 22.7% to €956.6 million, and cognac sales plunged 35.6% because of significant destocking of inventories in China ahead of earlier-than-normal Lunar Year holidays.
Cognac sales in the U.S. were down because of the intense promotional environment during the year-end holiday period and ongoing inventory reductions.
For the full fiscal year 2024, the company anticipates sales weakness in the U.S. to persist before improving in the next financial year, sales growth to be moderated by a "persistent inflationary environment," and sales in APAC to be tempered by a slower economic recovery in China.
The company estimated fiscal year 2024 sales to decline by about 20% on an organic basis, near the low end of its previous estimated range.
Louis Vuitton soared 11.4% to €763.20 after the French luxury group reported better-than-expected financial results, indicating resilient demand for luxury products.
Total revenue in 2023 increased 9% to €86.2 billion, and net income soared 8% to €22.8 billion, but operating cash flow fell 20% to €81 billion.
Fashion and leather goods sales increased 9% to €42.2 billion, watches & jewelry sales advanced 3% to €10.9 billion, perfumes & cosmetics sales rose 7% to €8.2 billion, but wines & spirits sales declined 7% to €6.6 billion.
Selective Retailing division sales surged 20% to €17.9 billion.
"All business groups reported strong organic revenue growth, with the exception of Wines & Spirits, which was faced with a high basis of comparison and high inventory levels," the company said in its earnings update released Friday.
Europe, Japan, and the rest of Asia achieved double-digit organic growth.
In the fourth quarter, organic revenue growth came to 10% to €23.9 billion.
European Markets Advance, Louis Vuitton and Remy Cointreau Boost Luxury Peers
Bridgette Randall
26 Jan, 2024
Frankfurt
European markets advanced and bond yields declined in Friday's trading as investors digested the European Central Bank's stance on inflation.
Benchmark indexes in Paris and London advanced but struggled in Frankfurt after German consumer morale unexpectedly fell.
The CAC-40 index soared more than 2% after Louis Vuitton and Remy Cointreau reported strong financial results.
On Thursday, the European Central Bank left its key lending rates unrevised and signaled that interest rates will remain restrictive as long as necessary, without giving any clarity if and when rates may be cut.
Moreover, investors also reviewed the faster-than-expected economic growth in the U.S. in the fourth quarter while inflation slowed.
Investors are also looking ahead to the release of the personal consumption expenditure price index, an alternative measure of inflation preferred by policymakers.
On the earnings front, investors are looking forward to results from Volvo, Lonza Group, KONE, 3i Group, Sartorius Stedim, Telia Company, and HEXPOL.
Europe Indexes and Yields
The DAX index decreased 0.04% to 16,896.12, the CAC-40 index rose 1.7% to 7,588.71, and the FTSE 100 index inched higher by 1.1% to 7,612.82.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.74%; the UK gilts edged lower to 3.95%; and Italian bonds inched lower to 3.77%.
The euro edged lower to $1.084, the British pound inched higher to $1.272, and the U.S. dollar gained to 86.46 Swiss cents.
Brent crude decreased $0.41 to $82.02 a barrel, and the Dutch TTF natural gas decreased by €0.72 to €27.06 per MWh.
Europe Stock Movers
Volvo AB declined 1.1% to SEK 248.25 after the company reported mixed quarterly results.
Net sales in the fourth quarter increased by 10% to SEK 148.1 billion from SEK 134.3 billion and rose by 8% in constant currency.
Adjusted operating income increased to SEK 18,384 million from SEK 12,171 million, indicating an adjusted operating margin of 12.4% compared to 9.1%.
Adjusted operating income excludes the negative effects of SEK 1,490 million.
Earnings per share increased to SEK 5.93 from SEK 3.26 a year ago.
"The Board of Directors proposes an ordinary dividend of SEK 7.50 per share and an extra dividend of SEK 10.50 per share,” said Martin Lundstedt, President and CEO, in an update to investors.
Lonza Group soared 13% to CHF 420.0 after the Swiss pharmaceutical group reported better-than-expected earnings and revenues.
2023 sales increased 8% to 6.72 billion Swiss francs from 6.22 billion Swiss francs and rose 10.9% at constant currency rates.
Biologics division sales rose 13.6% to 3.7 billion francs, small molecule division sales rose 10% to 901 million francs, cell and gene division sales edged up 0.4% to 696 million francs, but capsules and health ingredients division sales dropped 8.3% to 1.2 billion francs.
Fiscal 2023 operating earnings, or EBITDA, fell 9.3% to 1.94 billion francs from 2.14 billion francs a year ago, and the EBITDA margin declined to 28.9% from 34.4% a year ago.
Core EBITDA increased 0.2% from the previous year to 2 billion francs, resulting in a margin of 29.8%, down from 32.1% a year ago.
The company estimated flat sales in constant currencies and core EBITDA margins in the "high twenties."
The company proposed a 14% increase in dividends to 4.0 francs from 3.50 francs a year ago.
KONE oyj increased 3.2% to €46.18 after the Finnish elevator group reported better-than-expected results.
Sales in the fourth quarter declined by 3.5% to €2,809.9 from €2,911.5 million and rose 0.7% on comparable exchange rates.
Net income was flat at €276.3 million, and basic earnings per share were flat at 53 cents.
Orders received increased by 5.4% to €2,049.2 from €1,944.2 million a year ago. On comparable exchange rates, orders rose by 10.5%.
Sales in 2023 increased 0.4% to €10.95 billion from €10.90 billion, net income increased 18.8% to €931.6 million from €784.5 million, and basic earnings per share rose 15% to €1.79 from €1.50 a year ago.
"KONE expects its sales to be stable or to grow slightly at comparable exchange rates in 2024. The improvement in adjusted EBIT margin is expected to continue in 2024, albeit with fewer tailwinds than in 2023," the company noted in an update to investors released Friday.
Tech Weakness and Growth Worries Hobble Stocks In China and Japan
Arjun Pandit
26 Jan, 2024
Mumbai
Benchmark indexes in Asia struggled in Friday's trading, and tech stocks led the decliners in Japan, China, and Korea.
Market indexes fell after Intel offered a cautious sales outlook in the current quarter, blaming ongoing macroeconomic headwinds.
Electronic equipment makers, semiconductor developers, and manufacturers fell sharply in Tokyo, Seoul, Shanghai, and Hong Kong.
The Nikkei dropped more than 1%, and the benchmark indexes in mainland China and Hong Kong declined more than 0.8%.
The KOSPI index edged higher by 0.7%, the ASX 200 index added 0.5%, and financial markets in India were closed to celebrate Republic Day.
Broad Selloff in Japan Stocks
Stocks in Tokyo turned lower in a broad decline and erased gains from the previous session.
The Nikkei index dropped 1.4% to 35,739.63, and tech stocks led the decliners after Intel forecasted weak sales in the current quarter.
Renesas Electronics plunged 6.9%, Tokyo Electron decreased 2.4%, and Avantest plunged 5.5%.
For the week, the Nikkei index is set to decline more than 2% after the weakness in tech stocks spread to the broader market.
Toyota Motor decreased 0.6%, Sony Group fell 2%, and Mitsubishi UFJ fell 2.4%.
Tokyo Inflation Eased in January
Investors also reviewed the latest inflation data in the Tokyo area, a leading indicator of nationwide price trends that eased more than expected in January.
Overall inflation decreased to 1.6% from 2.4% in December, largely reflecting a weakness in energy prices.
Core inflation in Ku-Area declined to 1.6% from 2.1% in December, the lowest since March 2022.
The inflation rate fell below the 2% target set by the Bank of Japan after staying above the level for 19 months in a row, easing pressure on the central bank to end its ultra-loose policy soon.
China Stocks Turn Lower, Trim Weekly Gains
Stocks in China resumed their slide after initial enthusiasm over China's measures to stabilize financial markets faded.
Market indexes halted a three-day rally that saw benchmark indexes in Hong Kong jump over 8% and in Shanghai surge over 4%.
Market sentiment turned cautious on long-term growth worries and the government's inability to provide additional fiscal measures because of sky-high debt and no end in sight for China's property bubble.
Foreign investors added about $1.5 billion to their China stock holdings in the four-day period to Thursday this week.
The latest measures from the People's Bank of China revived flagging interest in Chinese stocks after foreign investors sold about $30 billion worth of stocks in the last six months.
The CSI 300 index declined 0.8% to 3,318.26, and the Hang Seng index decreased 1.0% to 16,050.98.
For the week, the CSI 300 index rose 1.7% and the Hang Seng index advanced 4.7%, the first weekly rise in 2024.
Alibaba Group fell 2.7%, Meituan eased 3.5%, and Tencent dropped 1.7%.
Electric vehicle makers also traded lower after Tesla forecast a notable decline in sales volume in 2024.
BYD declined 3.5%, Li Auto dropped 4%, Xpeng fell 3.4%, and NIO eased 1.7%.
Lenovo Group plunged 8.2% after retired U.S. General James Marks supported legislation in an opinion piece published by Newsweek banning computers made in China on espionage worries.
U.S. Stocks Extended Gains to 6th Day After GDP Growth Accelerated and Inflation Slowed
Barry Adams
25 Jan, 2024
New York City
Benchmark indexes traded higher after the release of the GDP report, and investors reviewed another batch of financial results.
The U.S. economy expanded at a faster pace in 2023, defying loud predictions of a recession, driven by sustained consumer spending and robust hiring by businesses.
The report also noted slowing inflation, as both the headline and core rate of an alternative measure of price changes slowed in the month.
New home sales rose in December and in 2023, despite elevated home prices and mortgage rates, as buyers struggled with affordability issues, the U.S. Census Bureau report showed Thursday.
New orders for manufactured durable goods were unchanged after an increase of 5.5% in November, a separate report from the government agency noted.
The S&P 500 index and the Nasdaq Composite advanced, and both indexes are set to close higher for the sixth session in a row.
Better-than-expected earnings from Netflix supported the market advance, but in Thursday's trading Tesla dropped sharply after the company warned that vehicle sales volume may lag in 2024 compared to 2023.
Airlines were in focus as well after American Airlines and Southwest reported better-than-expected quarterly results.
American jumped 4%, Alaska Air Group advanced 0.4%, Southwest Airlines gained 1.5%.
Alaska Air said grounding of Boeing 737 Max 9 will cost the company $150 million and reported fourth-quarter loss of $2 million compared to a profit of $22 million a year ago.
U.S. GDP Growth Surpassed Expectations
The U.S. economy expanded at a faster-than-expected pace of 3.3% in the final quarter of 2023, the U.S. Bureau of Economic Analysis reported Thursday.
The interest rate tightening campaign is taking a toll on economic growth, but tight labor market conditions are still supporting the increase in wage and consumer spending.
The growth in the fourth quarter slowed from 4.9% in the third quarter.
For the full year 2023, the U.S. economy expanded 2.5% from the previous year.
U.S. Indexes and Yields
The S&P 500 index increased 0.3% to 4,880.53, and the Nasdaq Composite rose 0.2% to 15,514.78.
The yield on 2-year Treasury notes increased to 4.36%. 10-year Treasury notes declined to 4.14%, and 30-year Treasury bonds edged down to 4.38%.
WTI crude oil increased $1.29 to $76.36 a barrel, and natural gas prices decreased 2 cents to $2.62 a thermal unit.
Gold increased by $1.07 to $2,013.66 an ounce and extended this 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 103.27.
U.S. Stock Movers
Tesla declined 8% to $191.10 after the company reported quarterly results and issued a weak 2024 unit sales outlook.
The company said the vehicle volume growth rate in 2024 may be notably lower than the growth rate achieved in 2023 as the company prepares to launch the next-generation vehicle built at its factory in Texas.
Boeing declined 4.2% to $205.11 after the Federal Aviation Authority halted the company's plan to expand its production of 737 Max jets but also approved the company's plan to bring the Max 9 back into service.
IBM increased 7.3% to $186.59 after the technology company reported better-than-expected quarterly results.
American Airlines increased 4.3% to $14.53 after the international carrier reported quarterly results.
Full-year revenue surged 7.8% to record $52.8 billion from $48.9 billion, net income jumped to $822 million from $127 million, and diluted earnings per share advanced to $1.21 from 19 cents a year ago.
Alaska Air increased 0.5% to $36.02 after the regional airline reported mixed quarterly results.
Revenue in the fourth-quarter increased 3% to $2.6 billion from $2.5 billion, net income swung to a loss of $2 million from a profit of $22 million, and diluted earnings per share were (0.02) cents compared to 17 cents a year ago.
European Markets In Holding Pattern After ECB Rate Decisions
Stocks in Europe gyrated ahead of an interest rate announcement and monetary policy direction by the European Central Bank.
The ECB held rates steady for the third time in a row, and the central bank provided no new insight in the future direction of rates.
Benchmark indexes traded around the flatline, but managed to close higher and bond yields edged up.
Brent crude oil jumped to $80 a barrel on the expectation of a demand growth recovery after the People's Bank of China injected liquidity into the financial system and politicians vowed for more "forceful" measures to stabilize financial markets.
On the earnings front, investors are looking ahead to quarterly results from Louis Vuitton, Christian Dior, SEB, Epiroc, Tryg, STMicroelectronics, and Givaudan.
ECB Holds Rates Steady Third Time
The European Central Bank held its key interest rates at 22-year highs for the third consecutive time in a row.
The move was widely anticipated, and the accompanying statement noted that inflation has been on a declining trend and previous interest rate increases are affecting financial conditions.
The central bank held its deposit facility rate at 4% and its main refinancing lending facility rate at a 22-year high of 4.5%.
Investors were disappointed after ECB President Lagarde failed to provide any clear direction for the future rate path and if and when the central bank is likely to cut rates this year.
Spain's PPI Declined 10th Consecutive Month
Spain's producer price inflation declined for the 10th month in a row in December, the National Statistics Institute, or INE, reported Thursday.
Producer prices declined by 6.3% in December from a year ago and fell from the upwardly revised 7.6% in the previous month.
The decline in energy costs drove the fall in overall producer prices, and energy prices fell by 20.6% in the month after falling by 23.5% in the previous month.
Europe Indexes and Yields
The DAX index increased 0.1% to 16,906.92, the CAC-40 index rose 0.1% to 7,464.20, and the FTSE 100 index inched higher by 0.03% to 7,529.73.
The yield on 10-year German bonds edged up to 2.36%; French bonds inched higher to 2.86%; the UK gilts edged higher to 4.05%; and Italian bonds inched higher to 3.94%.
The euro edged lower to $1.089, the British pound inched higher to $1.272, and the U.S. dollar gained to 86.39 Swiss cents.
Brent crude increased $1.39 to $81.43 a barrel, and the Dutch TTF natural gas decreased by €1.17 to €27.78 per MWh.
Europe Stock Movers
Givaudan SA rose 4.6% to CHF 3,470.0 after the maker of flavors and fragrances reported results that met market expectations.
2023 sales increased 4.1% to CHF6.9 billion, net income rose 4.3% to CHF893 million, and free cash flow jumped 92% to CHF920 million.
The company proposed a cash dividend of CHF 68 per share, an increase of 1.5% from a year ago.
Epiroc AB decreased 1.8% to SEK184.20 after the company reported mixed quarterly results.
Revenue in the fourth quarter increased 12% to SEK 15.6 billion from SEK 13.9 billion, and orders received increased 5% to SEK 14.7 billion from SEK 13.7 billion a year ago.
Profit after tax decreased 5% to SEK 2.2 billion from SEK 2.4 billion, and diluted earnings per share fell to SEK 1.87 from SEK 1.98 a year ago.
STMicroelectronics declined 2.3% to €41.63 after the semiconductor company reported revenue and earnings slightly below expectations.
Revenue in the fourth quarter declined 3.2% to $4.3 billion from $4.4 billion, net income dropped 13.8% to $1.07 billion from $1.09 billion, and diluted earnings per share fell to $1.14 from $1.32 a year ago.
The company forecast first-quarter revenue of $3.6 billion, a decline of 15.2% from a year ago and 15.9% from the previous quarter.
Full-year 2024 revenue is expected to range between $15.9 billion and $16.9 billion, and gross margin percentage is estimated between the lows and mid-40s.
Capital expenditure in 2024 is expected to be around $2.5 billion.
China Stocks Ride Higher On Stimulus Hopes, Tesla Suppliers and EV Makers Turn Lower In Asia
Asian markets generally advanced in Thursday's trading on the hopes that the People's Bank of China and Chinese government will soon announce more concrete policy measures to support financial markets.
In overnight trading, market indexes on Wall Street closed higher after a tech rally supported the rise of the S&P 500 index and the Nasdaq 100 index to record levels.
Electric vehicle components and electric display makers in Tokyo, Shanghai, and Seoul declined after Tesla reported weaker-than-expected earnings in the fourth quarter.
Moreover, Tesla guided a "notable decline in sales volume" in 2024 on global macroeconomic headwinds and rising competition from low-priced Chinese electric vehicle makers.
European markets also advanced following the rise in U.S. stocks, and tech stocks soared by as much as 5%.
Crude oil prices traded higher amid ongoing tensions in the Middle East and Red Sea, and merchant ships continued to avoid transporting through troubled waters.
Nikkei Struggled to Get Traction on BoJ Policy Shift Worries
The Nikkei 225 advanced 0.2% to 36,290.62 after falling as much as 0.2% in the morning session.
The Nikkei has been volatile over the last two days, hovering near a 34-year high on the basis of growing worries that the Bank of Japan is likely to end its ultra-loose monetary policy sooner than expected.
The Japanese yen edged higher near 147 against the U.S. dollar, and investors are awaiting the release of Tokyo inflation data on Friday.
Electric vehicle components and suppliers declined after Tesla reported weaker-than-expected earnings in the fourth quarter and guided a sharp decline in unit sales volume in 2024.
Nidec Corp. declined 3.7%, Disco Corp. jumped 1.7%, and Panasonic Holdings dropped 2.2%.
South Korea's 2023 GDP Growth Slowed
South Korea's gross domestic product growth was unchanged from the previous quarter, after government spending accelerated but consumer spending growth remained muted.
The gross domestic product in the fourth quarter increased by 0.6% from the previous quarter, matching the rate in the third and second quarters, the Bank of Korea reported Thursday.
On an annual basis, the economy expanded at a faster pace of 2.2% from the 1.4% rate increase in the previous quarter.
Government spending accelerated to 0.4% from 0.2% in the previous quarter, and consumer spending edged up 0.2% from unchanged.
Export growth slowed to 2.6% from 3.4% in the previous quarter, and import growth eased to 1% from 2.3%, respectively.
For all of 2023, the economy expanded by 1.4%, and economic growth slowed for the second year in a row, after expanding at 2.2% in 2022 and 4.3% in 2021.
In stock trading, the KOSPI index decreased 0.07% to 2,468.0 and extended this year's loss to 7.5%.
China Indexes Extended Rally to Third Day
China stocks rebounded for the third day in a row after investors put more faith in the recently announced stimulus measures.
The CSI index advanced 1.8% to 3,334.94, and the Hang Seng index soared 1.9% to 16,193.49 and extended the 3-day gain to over 5%.
The People's Bank of China lowered its bank reserve requirement for the first time in four months, injecting as much as $140 billion of liquidity into its financial system.
Moreover, the central bank also permitted banks to accept commercial real estate as collateral to seek funding to repay existing debts.
The move was widely welcomed by investors, but the measures are likely to fall short of reviving consumer confidence and market sentiment in the long term.
Alibaba Group advanced 0.8%, Tencent jumped 2.8%, Baidu advanced 3.2%, China Resources Land added 1.4%, and Longfor Group advanced 4.8%.
Li Auto, Xpeng, and Nio declined between 1.5% and 4.9% after Tesla earnings were below market expectations and the electric vehicle maker guided a decline in sales volume in 2024.
India Indexes Faced Headwinds After Mixed Quarterly Results
Stocks in Mumbai edged lower, and investors reviewed a flood of corporate earnings results.
The Nifty and the Sensex indexes traded down, and banks were in focus after Canara Bank, Bank of Baroda, and Indian Bank reported strong quarterly results.
Tech Mahindra dropped following the decline in revenue and profit, and Bajaj Auto faced headwinds from the persistent weakness in export sales growth.
The Sensex index decreased 287.67 points to 70,772.64, and the Nifty index fell 63.20 points to 21,390.75.
On the Mumbai stock exchange, 156 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee edged lower to ₹83.13 against the U.S. dollar.
Financial markets in India are closed on Friday to mark the Republic Day.
December Rebound Lifts 2023 New Home Sales, Median and Average Home Prices Fell
Brian Turner
25 Jan, 2024
New York City
New home sales rose in December, and buyers struggled to find homes amid elevated home prices and mortgage rates.
Seasonally adjusted home sales rose 8% to an annual rate of 664,000 in December, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced.
Home sales rebounded from an upwardly revised 9% decline in November.
Sales soared in the Northeast by 32% to 33,000, in the South by 10.6% to 419,000, and in the Midwest by 9.2% to 71,000, but fell in the West by 3.4% to 141,000.
The median price of a new home sold in the month decreased to $413,200 from $479,000, and the average price of a home sold fell to $487,300 from $568,700 a year ago, respectively.
At the same time, there were 453,000 homes listed for sale by the end of December, equivalent to a supply of 8.2 months at the latest sales rate.
An estimated 668,000 new homes were sold in 2023, 4.2% higher than 641,000 in 2022.
U.S. GDP Growth Accelerated and Inflation Slowed In 2023
Brian Turner
25 Jan, 2024
New York City
The U.S. economy expanded at a faster-than-expected pace of 3.3% in the final quarter of 2023, the U.S. Bureau of Economic Analysis reported Thursday.
The interest rate tightening campaign is taking a toll on economic growth, but tight labor market conditions are still supporting the increase in wage and consumer spending.
The annual pace of growth in the fourth quarter slowed from 4.9% in the third quarter, according to a preliminary estimate released by the government agency.
For the full year 2023, the U.S. economy expanded by 2.5% from the previous year after growing by 1.9% in 2022.
The increase in real GDP reflected increases in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, private inventory investment, and residential fixed investment.
Consumer spending slowed to 2.8% from 3.1% in the previous quarter, led by goods consumption rising by 3.8% compared to 4.9%, while consumption of services rose faster by 2.4% compared to 2.2%, led by food services, accommodations, and health care.
In addition, private inventories added only 0.07 percentage points to growth, slower than 1.27 percentage points in the third quarter.
Government spending rose at a slower pace of 3.3% compared to a 5.8% increase in the previous quarter.
Imports, which are a subtraction in the calculation of GDP, increased.
Exports accelerated to an increase of 6.3% compared to 5.4% in the previous quarter, and imports grew less by 1.9% compared to 4.2%.
The price index for gross domestic purchases increased 1.9% in the fourth quarter, compared with an increase of 2.9% in the third quarter.
As a sign of decelerating inflation, the prices paid by consumers continued to rise at a slower pace.
The personal consumption expenditures (PCE) price index increased 1.7%, compared with an increase of 2.6%.
Excluding food and energy prices, the PCE price index increased by 2.0%, the same change as the third quarter.
The price index for gross domestic purchases increased 3.4% in 2023, compared with an increase of 6.8% in 2022.
The PCE price index increased 3.7%, compared with an increase of 6.5%. Excluding food and energy prices, the core PCE price index increased 4.1%, compared with an increase of 5.2%.