Market Update
Mega-Cap Tech and Semiconductor Stocks Extend Market Rally
Barry Adams
19 Jan, 2024
New York City
Stocks gained in early trading on Friday as investors piled into mega-cap stocks.
A tech-powered rally on Thursday supported a broader advance as investors continue to believe that strong economic labor market conditions are helping the Federal Reserve engineer a soft landing while attempting to lower inflation to 2%.
The S&P 500 index and the Nasdaq Composite are set to wipe off losses in the year so far.
Stocks have been on an upswing since October 2023, and mega-cap tech and semiconductor stocks have led gains, but stocks in other sectors have lagged behind the market advance.
Investors are hoping that the market rally will broaden to include more sectors once the Federal Reserve pivots to lowering interest rates.
So far, investors have built expectations of as many as six interest rate cuts of 25 basis points in 2024, and if those expectations of rate cuts are not met, then market indexes are likely to face sharp headwinds.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 4,831.05, and the Nasdaq Composite rose 0.8% to 15,196.05.
The yield on 2-year Treasury notes increased to 4.36%. 10-year Treasury notes advanced to 4.13%, and 30-year Treasury bonds edged up to 4.36%.
WTI crude oil decreased $0.27 to $73.76 a barrel, and natural gas prices decreased 6 cents to $2.63 a thermal unit.
Gold increased by $11.35 to $2,033.87 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.33.
U.S. Stock Movers
Super Micro Computer soared 12% to $349.76 after the information technology company said strong demand for its rack-scale AI and total IT solutions is driving its sales and earnings ahead of its previous guidance.
Sales in the fiscal second quarter ending in December are likely to be in the range of $3.6 billion and $3.65 billion, ahead of its previous estimates of $2.7 billion and $2.9 billion.
GAAP diluted earnings per share are expected to be between $4.90 and $5.05, compared to its previous estimate of between $3.75 and $4.24.
iRobot Corporation plunged 37% to $14.81 after the European Union's antitrust agency is expected to block Amazon's purchase of the popular home vacuum cleaners.
The news was reported by the Wall Street Journal, citing unnamed officials at the agency.
Wendy's Company increased 0.7% to $19.40 after the fast food chain operator named PepsiCo executive as its next chief executive.
Kirk Tanner heads the North American beverage business of PepsiCo and has been with the company for more than three decades.
Meta Platform gained 1% to $380.0, and Nvidia jumped 1.8% to $581.30 after Meta's CEO, Mark Zuckerberg, said the company is spending billions of dollars to support its artificial intelligence efforts.
Zuckerberg, without elaborating on its purchase dollar volume, said that the company is planning to purchase 350,000 H100 graphics cards from Nvidia in the current year.
U.S. Movers: Ally Financial, iRobot, Meta, Nvidia, Super Micro Computer, Regions Financial, Wayfair
Scott Peters
19 Jan, 2024
New York City
Super Micro Computer soared 12% to $349.76 after the information technology company said strong demand for its rack-scale AI and total IT solutions is driving its sales and earnings ahead of its previous guidance.
Sales in the fiscal second quarter ending in December are likely to be in the range of $3.6 billion and $3.65 billion, ahead of its previous estimates of $2.7 billion and $2.9 billion.
GAAP diluted earnings per share are expected to be between $4.90 and $5.05, compared to its previous estimate of between $3.75 and $4.24.
iRobot Corporation plunged 37% to $14.81 after the European Union's antitrust agency is expected to block Amazon's purchase of the popular home vacuum cleaners.
The news was reported by the Wall Street Journal, citing unnamed officials at the agency.
Wendy's Company increased 0.7% to $19.40 after the fast food chain operator named PepsiCo executive as its next chief executive.
Kirk Tanner heads the North American beverage business of PepsiCo and has been with the company for more than three decades.
Meta Platform gained 1% to $380.0, and Nvidia jumped 1.8% to $581.30 after Meta's CEO, Mark Zuckerberg, said the company is spending billions of dollars to support its artificial intelligence efforts.
Zuckerberg, without elaborating on its purchase dollar volume, said that the company is planning to purchase 350,000 H100 graphics cards from Nvidia in the current year.
Wayfair increased 8% to $55.0 after the online furniture retailer said it plans to lay off 1,650 staff, or 13% of its global staff, as a part of its restructuring.
The third restructuring, in less than two years, is expected to save the company about $280 million.
Macy's Inc. decreased 1% to $17.75 after the department store operator said it plans to close three stores and lay off 2,300 of its staff as the company looks to improve its lagging sales growth and turnaround its business performance.
Ally Financial soared 8.8% to $34.61 after the company reported better-than-expected quarterly results.
Net financing revenue in the fourth quarter decreased to $1.5 billion from $1.7 billion, net income dropped to $49 million from $256 million, and diluted earnings per share fell to 45 cents from $1.08 a year ago.
The financial services company attracted 52,000 net new customers and increased its retail deposits from the previous quarter by $2.2 billion.
In 2023, the company issued 13.8 million auto loans, and about 40% of the loans were issued at an origination yield of 10.7%.
Regions Financial increased 2.7% to $18.43 after the bank reported a decline in quarterly profit.
Net interest income in the December quarter declined to $1.2 billion from $1.4 billion, net income dropped to $367 million from $660 million, and diluted earnings per share fell to 39 cents from 70 cents a year ago.
The company paid a special charge of $147 million from the FDIC related to the regional banking crisis in 2023.
Net interest margin at the end of the fourth quarter declined to 3.6% from 3.99%, and the tier-1 capital ratio increased to 11.5% from 10.9% a year ago, respectively.
Europe Movers: 4imprint, BASF, Banks, Deliveroo, Richemont
Inga Muller
19 Jan, 2024
Frankfurt
European markets advanced for the second day in a row and bond yields rebounded.
Investors shifted their attention away from the rate path debate and focused on the flood of economic reports and corporate news released this week.
The DAX index increased 0.4% to 16,638.77, the CAC-40 index rose 0.4% to 7,429.14, and the FTSE 100 index increased 0.5% to 7,499.01.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.84%; the UK gilts edged lower to 3.91%; and Italian bonds held at 3.90%.
BASF SE increased 0.4% to €43.68 after the German chemical company estimated a swing to a net income of €225 million in 2023.
Deliveroo PLC decreased 0.7% to 133.60 pence after the UK-based food delivery company said 2023 earnings are expected to be slightly ahead of its estimate.
4imprint Group soared 14.4% to 5,300.0 pence after the direct seller of promotional products said its sales and earnings for the full year are likely to exceed the previous year.
Richemont gained 0.6% to CHF 116.80, and the Swiss luxury goods company advanced for the second day.
In the previous session, stock soared more than 10% after December quarter sales jumped 8% to €5.6 billion, ahead of analyst expectations.
Banks were in focus after rate-cut hopes receded this week.
UBS, Barclays, Deutsche Bank decreased between 0.1% and 1.5% but Banco Santander, UniCredit, and Societe Generale gained between 0.2% and 0.4%.
UK Retail Sales Fall Stokes Recession Worries, German Producer Price Fall Extends to Sixth Month
Bridgette Randall
19 Jan, 2024
Frankfurt
European markets advanced for the second day in a row in Friday's trading, and bond yields edged higher.
Investors shifted their attention to the latest economic data after a week of hawkish comments from policymakers pushing against the rate-cut narrative.
Investors are also awaiting comments from European Central Bank president Christine Lagarde delivered at a gathering of political and business leaders in Davos, Switzerland.
Lagarde is expected to reiterate the need to keep higher interest rates for longer until inflation is on a sustained path towards the 2% level.
German Producer Price Declined Sixth Consecutive Month
The German producer price index declined for the sixth month in a row in December after energy prices declined.
Producer prices declined 8% in December after falling at a 7.9% annual rate in the previous month, Destatis reported Friday.
Energy prices declined 23.5% and electricity prices fell 35.6%, driving fertilizer prices down by 37.3%.
On the other hand, prices of consumer durable goods increased by 3.2%, food prices rose by 2.8%, and capital goods advanced by 3.9%.
In all of 2023, producer prices decreased by 2.4%.
UK Retail Sales Decline Raises Recession Risk
UK retail sales declined the most in nearly three years in December from the previous month, the Office for National Statistics reported Friday.
Retail sales in December declined 3.2% from the previous month, reversing the 1.4% gain in November. which was driven by early Christmas shopping.
On a yearly basis, retail sales declined 2.4% after increasing at an annual pace of 0.2% in the previous month and dropping to their lowest level since 2018.
Non-food store sales declined 3.9%, partly because consumers advanced their purchases earlier than usual in November.
The cost of living crisis and the surge in inflation have negatively impacted the real income of consumers, and consumers have reacted by keeping their spending on basic items and avoiding discretionary purchases.
Consumer spending was weak across several categories of products, and department store sales declined 7.1%, household goods store sales fell 3.0%, and apparel sales decreased 1.5%.
Food store sales declined by 3.1%, and automotive fuel sales fell by 1.9%.
The broad decline covering food and non-food items in the month stoked fears of a recession, and the statistical agency said that the retail sales weakness could push the UK economy into a technical recession in the fourth quarter.
Europe Indexes and Yields
The DAX index increased 0.4% to 16,638.77, the CAC-40 index rose 0.4% to 7,429.14, and the FTSE 100 index increased 0.5% to 7,499.01.
The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.84%; the UK gilts edged lower to 3.91%; and Italian bonds held at 3.90%.
The euro edged lower to $1.087, the British pound inched lower to $1.267, and the U.S. dollar gained to 86.91 Swiss cents.
Brent crude advanced $0.63 to $79.67 a barrel, and the Dutch TTF natural gas increased by €0.52 to €28.51 per MWh.
Europe Stock Movers
BASF SE increased 0.4% to €43.68 after the German chemical company estimated a swing to a net income of €225 million in 2023.
Deliveroo PLC decreased 0.7% to 133.60 pence after the UK-based food delivery company said 2023 earnings are expected to be slightly ahead of its estimate.
4imprint Group soared 14.4% to 5,300.0 pence after the direct seller of promotional products said its sales and earnings for the full year are likely to exceed the previous year.
Persistent Selling by Foreign Investors Push China Stocks Down, Indexes in Japan and India Advance
Arjun Pandit
19 Jan, 2024
Mumbai
Asian markets traded higher after Taiwan Semiconductor reported flat quarterly revenue growth and a decline in earnings, but the company signaled that demand is expected to improve in the current quarter.
Optimism about AI-fueled demand lifted semiconductor stocks in New York.
Moreover, a steady flow of positive updates on retail sales, jobless claims, and housing market activities supported investor enthusiasm.
The rebound in U.S. stocks supported the increase in the final hour of trading in Europe and powered the market advance across Asia in Friday's trading.
European markets gained for the first time in three days as investors reacted to positive earnings reports.
In addition, the latest ECB's policy meeting minutes showed most members supported keeping interest rates restrictive until inflation is on a sustainable path towards the 2% level.
Tech Stocks Power Market Rally in Tokyo
Stocks in Tokyo advanced, and tech stocks led the gainers following a tech rally in New York in overnight trading.
The Nikkei index jumped 1.2% to 35,892.20 and extended its weekly increase to 0.6%, and this year's increase to 7.7%.
The Japanese yen dropped to a seven-week low of 148.8 against the U.S. dollar after inflation fell to 2.6% in December from 2.8% in the previous month.
Core inflation, which excludes fresh food and not fuel, declined to 2.3%, the lowest level in 18 months, largely because of the high base effect and weaker prices of energy imports, said the Ministry of Internal Affairs and Communication on Friday.
The yen has declined about 5% in the year so far, and the latest weakness in the currency prompted Finance Minister Shunichi Suzuki to warn that the government is prepared to act to keep financial markets stable.
The yen has been under pressure in hopes that the Bank of Japan is likely to keep its monetary policy intact after the fall in inflation and strong earthquake in central Japan.
In stock trading, three leading semiconductor companies, Advantest, Screen Holdings, and Tokyo Electron, rose between 3% and 8%.
SoftBank gained 1.2%, and Fast Retailing added 0.2%.
Automakers closed mixed, but banks edged slightly higher in Friday's trading.
China Stocks Extend Weekly Losses
Stocks in Shanghai and Hong Kong gave up early gains and turned lower in afternoon trading, and foreign investors continued to lower their exposure to the second-largest economy.
The Hang Seng index decreased 0.2% to 15,355.61, and the CSI 300 index declined 0.3% to 3,263.54.
The CSI 300 index is set to close down 0.2% in the week and fall 3.7% in the year so far.
The Hang Seng index is set to fall 5.5% in the week and 8.6% in the year so far.
Foreign investors have sold 6.6 billion yuan, or $917 million, of Chinese shares in the year so far, according to data available from Stock Connect.
This selloff is in addition to the $26 billion of stocks sold by foreign investors in the five-month period last year between August and December.
Benchmark indexes in mainland China and Hong Kong declined for four years in a row and dropped about 42% from their highs in 2020 on the worries that corporate earnings will continue to decline on the slowing economic growth, protracted property market slump, and rising tensions with the U.S.
India Indexes Rebound
Stocks in Mumbai opened sharply higher after tech stocks rallied in an overnight rally in New York, sparking a rally in Asian markets.
The Nifty and the Sensex indexes gained more than 0.8% in early trading and cut losses from the previous two sessions.
The Sensex index decreased 396.62 points to 71,104.14, and the Nifty index fell 132.25 points to 21,439.70.
Two widely followed indexes are set to close down about 1.6% in the week.
On the Mumbai stock exchange, 304 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 increased to 7.19%, and the Indian rupee edged lower to ₹83.14 against the U.S. dollar.
India Movers: Finolex Industries, IndusInd Bank, Magnum Ventures, Mastek, Metro Brands, Shalby, Supreme Petrochem
Arun Goswami
19 Jan, 2024
Mumbai
Stocks in Mumbai rebounded in Friday's trading after falling for two days in a row, following a rally in global markets.
The Sensex index decreased 396.62 points to 71,104.14, and the Nifty index fell 132.25 points to 21,439.70.
Two widely followed indexes are set to close down about 1.6% in the week.
On the Mumbai stock exchange, 94 stocks traded at their 52-week highs and 1 stock traded at their 52-week lows.
IndusInd Bank decreased 1.4% to ₹1,591.0, and the financial services company reported a stable gross non-performing assets ratio in the latest quarter.
Net interest income in the December quarter increased 17.8% to ₹5,295.7 crore, and net profit advanced 17% to ₹2,297.9 crore from a year ago, respectively.
The gross non-performing asset ratio was stable at 1.92% compared to the previous quarter, and the net non-performing asset ratio was flat at 0.57%.
Supreme Petrochem declined 0.1% to ₹536.85 after the company reported a decline in profit in the latest quarter.
December quarter sales increased to ₹1,183.32 crore from ₹1,177.39 crore, and net income dropped 25% to ₹67.7 crore from ₹89.9 crore a year ago, respectively.
Magnum Ventures increased 3.2% to ₹72.80, and the company's board set January 25 as the record date for ₹48.9 crore rights issues.
Finolex Industries rose 1% to ₹234.70 after the company reported mixed quarterly results.
Revenue in the December quarter decreased 8.5% to ₹1,054.8 crore, but net income advanced 20% to ₹95.4 crore.
Mastek increased 0.9% to ₹2,929.0 after the company's board declared an interim dividend of 7 per share to shareholders on January 27.
Metro Brands decreased 4.3% to ₹1,161.10, and the company reported a decline in profit of 12.6% to ₹97.8 crore.
The company's board also announced an interim dividend of ₹2.75 per share to shareholders on record on January 31.
Shalby Ltd. advanced 1.4% to ₹308.50 after the multi-discipline hospital operator said it plans to acquire an 87.26% stake in PK Healthcare for ₹102 crore.
Tech Powered Rally Lifts U.S. Stocks as Investor Shift Focus Away from Fed
Barry Adams
18 Jan, 2024
New York City
A tech-powered rally on Wall Street lifted broader indexes back-to-back after two days of selloff.
The S&P 500 index and the Nasdaq Composite traded higher after semiconductor and travel-related stocks led the gainers in Thursday's trading.
Investors bid up stocks after the latest weekly jobless claims indicated persistently resilient labor market conditions, and housing market activities also showed strong activity in the sector.
Despite the recent drumbeat of policymakers pushing against the near-term rate-cut possibilities, investors focused on resilient consumer spending, the housing market, and supporting labor market conditions.
Marriott International, Hilton Worldwide, Boston Scientific, Intuitive Surgical, and ServiceNow traded at their all-time highs.
The yield on the 10-year Treasury note rose above 4.1% after retail sales were ahead of market expectations, stoking speculation that the Federal Reserve may hold rates steady.
The market has rallied nine weeks in a row since early November 2023 in the hopes that the Federal Reserve is likely to lower rates sooner than expected and that the first rate cut may start as early as March.
However, investors have been dialing down on those expectations after policymakers carried out concerted efforts in the last two weeks, suggesting that market enthusiasm may be misplaced.
But the steady flow of economic data covering inflation, weekly jobless claims, GDP growth, retail sales, building permits, and existing home sales in the last three weeks has kept investor confidence high.
Moreover, quarterly results from banks and financial services companies have also supported the enthusiasm for corporate earnings.
Jobless Claims Show Persistent Tight Labor Market Conditions
Initial jobless claims for the week ending January 13 declined 16,000 to 187,000, the U.S. Department of Labor reported Thursday.
Continuing claims fell by 26,000 to 1,806,000 in the previous week, suggesting persistent tight labor market conditions.
The four-week moving average, which reduces week-to-week volatility, decreased by 4,750 to 203,250.
U.S. Indexes and Yields
The S&P 500 index increased 0.2% to 4,746.36, and the Nasdaq Composite rose 0.5% to 14,933.75.
The yield on 2-year Treasury notes increased to 4.33%. 10-year Treasury notes advanced to 4.09%, and 30-year Treasury bonds edged up to 4.32%.
WTI crude oil increased $1.54 to $74.06 a barrel, and natural gas prices decreased 18 cents to $2.68 a thermal unit.
Gold increased by $14.03 to $2,019.77 an ounce, and investors debated the future interest rate path
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.35.
U.S. Stock Movers
Discover Financial dropped 9.6% to $97.25 after the credit card company reported a higher net charge-off in its latest quarterly results.
Revenue in the fourth quarter increased 13% to $4.2 billion from $3.7 billion, net income declined 62% to $388 million from $1.0 billion, and diluted earnings per share dropped to $1.54 from $3.74 a year ago.
Total net charge-off jumped 198 basis points to 4.11%, reflecting "seasoning of recent vintages with higher delinquency trends."
Apple Inc. increased 2.2% to $186.64 after the stock received an upgrade to "buy" from "neutral" from Bank of America.
The bank said that the company is likely to benefit from a multi-year hardware upgrade cycle supported by generative AI features.
The bank sees more than 20% upside for the stock from the current price level.
Alcoa Inc. decreased 1.0% to $26.80 after the aluminum company reported a narrower-than-expected quarterly loss of 56 cents per share.
Sales in the fourth quarter were flat at $2.6 billion, net loss attributable to shareholders declined to $150 million from $350 million, and diluted loss per share fell to 84 cents from $2.24 a year ago.
Alumina production decreased 1% sequentially to 2.79 million metric tons on lower production from the Australian refineries.
In aluminum, Alcoa produced 541,000 metric tons, a 2% increase from the third quarter's strong output.
Taiwan Semiconductor soared 6.6% to $109.83 after the company reported quarterly results that exceeded market expectations.
Revenue in the fourth quarter was flat at NT$ 625.5 million, but net income declined 19.3% to NT$ 237.8 million from NT$ 295.9 million, and diluted earnings per share dropped to NT$ 9.21 from NT$ 11.41 a year ago.
In U.S. dollars, fourth quarter revenue was $19.62 billion, which decreased 1.5% year-over-year but increased 13.6% from the previous quarter.
The company guided first quarter 2024 revenue between $18.0 billion and $18.8 billion, based on the exchange rate of 31.1 NT for one U.S. dollar.
Gross margin in the quarter is expected to range between 52% and 54%, and operating margin between 40% and 42%.
Capital expenditure in 2024 is estimated to range between $28 billion and $32 billion.
European Markets Halt a 3-day Slide
European markets traded higher after falling for three days in a row amid rising tensions in the Middle East and fading rate expectations.
Benchmark indexes in Paris, Frankfurt, and London advanced in Thursday's trading, and investors reviewed car registration data in the European Union and the eurozone current account surplus.
Eurozone Current Account Surplus Widens
The current account surplus in the Euro Area in November soared to Є31.7 billion from a revised Є6.6 billion a year ago, Eurostat reported Thursday.
The goods surplus rose to Є38.1 billion from Є7.5 billion, and the services surplus increased to Є12.6 billion from Є7.9 billion from a year ago, respectively.
For the January–November period, the currency union's surplus widened to ±225.8 billion from a deficit of ±90.2 billion in the same period in 2022.
EU Passenger Car Registration Rises In 2023
Passenger car registration in the European Union in December decreased for the first time after rising for 16 months in a row, the European Automobile Manufacturers Association reported Thursday.
December passenger car registration declined 3.3% to 867,052 units, driven by a 23% plunge in Germany.
However, registrations rose in France by 14.5% and in Spain by 10.6%.
For the 2023 full year, passenger car registration increased 13.9% to 10.5 million, driven by an increase in all EU markets except for a fall of 3.4% in Hungary.
Double-digit sales were recorded in most countries, including 18.9% in Italy, 16.7% in Spain, and 16.1% in France, the three largest markets in the Union.
Petrol cars retained their top spot with a 35.3% market share, followed by hybrid-electric cars with a share of 25.8% and battery-powered cars with 14.6%, surpassing diesel cars with 13.6%.
Europe Indexes and Yields
The DAX index increased 0.8% to 16,567.35, the CAC-40 index rose 1.1% to 7,401.35, and the FTSE 100 index increased 0.2% to 7,459.09.
The yield on 10-year German bonds edged up to 2.28%; French bonds inched higher to 2.81%; the UK gilts edged higher to 3.94%; and Italian bonds increased to 3.90%.
The euro edged higher to $1.089, the British pound inched lower to $1.268, and the U.S. dollar eased to 86.44 Swiss cents.
Brent crude advanced $0.98 to $78.86 a barrel, and the Dutch TTF natural gas decreased by €0.19 to €27.89 per MWh.
Europe Stock Movers
Automakers were in focus after car registration in the European Union declined for the first time in December after rising for 16 months in a row.
Volkswagen Group increased 0.2% to €108.90, Mercedes-Benz Group gained 0.8% to €59.78, Renault gained 2.2% to €34.53, Peugeot Invest SA added 0.8% to €99.40, and Stellantis NV inched up 0.6% to €19.76.
Richemont soared 9.3% to CHF 115.20 after the Swiss luxury-goods company reported a rebound in sales in its fiscal third quarter.
Telefonica SA decreased 0.7% after the Spanish telecom company completed the sale of a green bond worth €1.75 billion.
J. Sainsbury plc added 0.5% to 286.70 pence after the company said it is exploring business alternatives for its financial service unit.
BHP Group decreased 0.6% to 2,369.85 pence after the company said it may write down assets in its nickel mining unit.
Kier Group advanced 7% to 120.0 pence after the construction company said performance in its first half of the fiscal year was better than in the comparable period in the previous year.
Watches of Switzerland Group plunged 31% to 399.40 pence after the UK-based retailer lowered its fiscal year 2024 guidance.
Mixed Markets In Asia as Investors Navigate Rate Uncertainties
In Asia, market indexes in China continued to drift lower, and indexes in Japan and Korea advanced.
Tensions remained high in the Middle East, and Pakistan recalled its ambassador from Tehran and expelled the Iranian envoy in Islamabad, a day after Iran carried out a missile strike in Panjgur, Balochista
The U.S. military carried out strikes on 14 missiles that were ready to be launched from Yemen by Houthi rebels, the Central Command said in a post on its social media channel on X.
In Hong Kong, the Hang Seng index rebounded 0.5% to 15,343.88 after falling in the previous four sessions in a row and extended 2024 losses to 10%, the worst start since 2016.
Alibaba Group, Baidu, and Netease advanced between 1.4% and 2.0% amid a rise in tech stocks.
In mainland China trading, the CSI 300 index declined 0.6% to 3,208.91 as foreign investors continued to lower their holdings of Chinese stocks on protracted property market woes and a weakening economic growth backdrop.
The Nikkei 225 index in Tokyo declined 0.1% to 35,440.01 after investors continued to unwind bets on rate-cut hopes in the U.S. and Europe and focus on domestic corporate earnings.
The Nikkei extended losses to the third day in a row, but tech stocks rebounded after falling in two previous sessions and the yen struggled near 148 against the U.S. dollar.
Core machinery orders in Japan declined seasonally by 4.9% from the previous month in November to 816.7 billion yen, the Cabinet Office said on Thursday.
That was well shy of expectations of a 0.8% decrease following the 0.7 percent increase in October.
On a yearly basis, orders declined 5.0% in the month after falling 2.2% in the previous month.
Advantest jumped 3.5% to ¥5,351.0, Screen Holdings added 0.5% to 12,895.0, and Tokyo Electron gained 0.7% to ¥26,575.0.
SoftBank declined 0.8% to ¥6,471.0, and Uniqlo operator Fast Retailing edged slightly lower, 0.07% to ¥38,720.0.
Elsewhere in the region, the KOSPI index in Seoul added 0.2% to 2,440.38, and the ASX 200 index in Sydney fell 0.6% to 7,346.50.
India Stocks Extend Losses After Mixed Quarterly Results
Stocks in Mumbai edged lower for the second day in a row, and investors confronted elevated tensions in the Middle East, mixed corporate earnings results, and the latest comments from RBI Governor Das.
Reserve Bank of India Governor Shaktikanta Das said economic growth in the current fiscal year is likely to reach 7%, and the central bank is confident of inflation reaching its target rate of 4% in the near term.
Governor Das commented on the sidelines of the World Economic Forum in Davos, Switzerland, an annual four-day gathering of 2,800 business and world leaders and policymakers.
Governor Das added that when inflation is close to 6%, it is premature to talk about lowering the interest rate, and the central bank's policy has to remain "actively disinflationary."
The central bank also plans to build its foreign exchange reserve from the current level of $617 billion to meet sudden and unpredictable capital outflows witnessed during the global bond market jitters of 2013, when the U.S. Federal Reserve announced its plan to taper off its monetary stimulus.
India Targets $100 Billion In Annual FDI Flow
India is looking to attract more foreign investment as the country's economic growth picks up and the government ramps up infrastructure investment.
India is looking to increase its foreign direct investment to $100 billion over the next few years as the government targets electronics manufacturing and advanced technology-driven projects, Information Technology Minister Ashwini Vaishnaw said on the sidelines of the World Economic Forum in Davos, Switzerland.
India attracted $71 billion in the financial year ending in March 2023 and has attracted $66 billion in the fiscal first half ending in September 2023.
Housing Starts, Completions and Building Permits Show Resilient Housing Activities In 2023
Brian Turner
18 Jan, 2024
New York City
Seasonally adjusted building permits, housing starts, and completions rose in December, the U.S. Census Bureau reported Thursday.
Building Permits
Permits for all housing units, including single and multi-family, rose 1.9% from the previous month and advanced 6.1% from a year ago to 1,495 million.
Single-family authorizations in December increased 1.7% to an annual rate of 994,000; authorizations of units in buildings with five units or more were at a rate of 449,000.
For the entire year 2023, permits increased 11.7% to 1,469,800 housing units.
Housing Starts
Housing starts in December were at a seasonally adjusted annual rate of 1,460,000, 4.3% below the revised November estimate of 1,525,000 but 7.6% above the December 2022 rate of 1,357,000.
Single-family housing starts in December were at a rate of 1,027,000, a decline of 8.6% from the revised November rate of 1,124,000.
The December rate for units in buildings with five units or more was 417,000.
For the entire year 2023, housing starts declined 9% to 1,413,100 units from 1,552,600 in 2022.
Housing completion
Housing completions in December were at a seasonally adjusted annual rate of 1,574,000, an increase of 8.7% from the revised November estimate of 1,448,000 and 13.2% above the December 2022 rate of 1,390,000.
Single-family housing completions in December were at a rate of 1,056,000, an increase of 8.4% from the revised November rate of 974,000.
The December rate for units in buildings with five units or more was 509,000.
For the entire year 2023, housing completions rose 4.5% to 1,452,500 units from 1,390,500 in 2022.
U.S. Retail Sales Advanced In December
Brian Turner
17 Jan, 2024
New York City
Retail sales, adjusted for seasonal and calendar factors but not price changes, increased 5.6% from a year ago in December, the U.S. Census Bureau reported Wednesday.
Advance estimates of U.S. retail and food services sales for December 2023, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $709.9 billion, up 0.6% from the previous month.
Retail sales rose the most in eleven months, following a downwardly revised 4% rise in November.
Retail sales, unadjusted for price changes or inflation, increased 3.2% in the full year 2023.
Retail trade sales were up 0.6% from November 2023, and up 4.8% above last year.
Nonstore retailers were up 9.7% from last year, while food services and drinking places were up 11.1% from December 2022.
U.S. Movers: Alcoa, Apple, Discover Financial, HB Fuller, Taiwan Semiconductor
Scott Peters
18 Jan, 2024
New York City
Discover Financial dropped 9.6% to $97.25 after the credit card company reported a higher net charge-off in its latest quarterly results.
Revenue in the fourth quarter increased 13% to $4.2 billion from $3.7 billion, net income declined 62% to $388 million from $1.0 billion, and diluted earnings per share dropped to $1.54 from $3.74 a year ago.
Total net charge-off jumped 198 basis points to 4.11%, reflecting "seasoning of recent vintages with higher delinquency trends."
Apple Inc. increased 2.2% to $186.64 after the stock received an upgrade to "buy" from "neutral" from Bank of America.
The bank said that the company is likely to benefit from a multi-year hardware upgrade cycle supported by generative AI features.
The bank sees more than 20% upside for the stock from the current price level.
Alcoa Inc. decreased 1.0% to $26.80 after the aluminum company reported a narrower-than-expected quarterly loss of 56 cents per share.
Sales in the fourth quarter were flat at $2.6 billion, net loss attributable to shareholders declined to $150 million from $350 million, and diluted loss per share fell to 84 cents from $2.24 a year ago.
Alumina production decreased 1% sequentially to 2.79 million metric tons on lower production from the Australian refineries.
In aluminum, Alcoa produced 541,000 metric tons, a 2% increase from the third quarter's strong output.
HB Fuller decreased 0.2% to $76.45 after the adhesive manufacturer reported mixed quarterly results.
Revenue in the December quarter declined 5.8% to $902.8 million from $958.2 million, net income attributable to shareholders declined to $45 million from $48.3 million, diluted earnings per share declined to 80 cents from 87 cents a year ago.
Taiwan Semiconductor soared 6.6% to $109.83 after the company reported quarterly results that exceeded market expectations.
Revenue in the fourth quarter was flat at NT$ 625.5 million, but net income declined 19.3% to NT$ 237.8 million from NT$ 295.9 million, and diluted earnings per share dropped to NT$ 9.21 from NT$ 11.41 a year ago.
In U.S. dollars, fourth quarter revenue was $19.62 billion, which decreased 1.5% year-over-year but increased 13.6% from the previous quarter.
The company guided first quarter 2024 revenue between $18.0 billion and $18.8 billion, based on the exchange rate of 31.1 NT for one U.S. dollar.
Gross margin in the quarter is expected to range between 52% and 54%, and operating margin between 40% and 42%.
Capital expenditure in 2024 is estimated to range between $28 billion and $32 billion.