Market Update
Euro In Focus as Sharp Divisions Keep French Parties From Forming the Next Government
Bridgette Randall
11 Jul, 2024
London
European markets advanced for the second day in a row after falling in three previous sessions as investors attempted to look beyond the brewing political crisis in France.
Benchmark indexes in Paris, London, and Frankfurt edged up more than 0.3%, and France's political turmoil shows no sign of easing.
President Emmanuel Macron's Renaissance party appears to be heading for a division, and the newly formed Popular Front is heading for infighting as lawmakers haggle to agree on a new government.
Moreover, President Macron's letter published in regional newspapers reiterated that "no one" won the snap election and urged parties to form a "broad" coalition, confirming sharp divisions among members of parliament.
France's hung parliament has forced parties of various ideologies to set aside their differences to form a coalition government.
The Centrist-Renaissance party and its Ensemble bloc (168 seats) are likely to form an alliance with Les Republicains (66 seats), and five independent candidates, totaling 239, could form a minority government in France's 577-member parliament.
French political turmoil is likely to worsen in the weeks ahead as the nation prepares for the Summer Olympics, but the ongoing political crisis also stokes fears of France weakening its influence in the European Union.
On the economic front, Germany's consumer price inflation was confirmed at 2.2% in June, following a 3-month high of 2.4% in May, the Federal Statistical Office, or Destatis, confirmed Thursday.
Real GDP in the UK edged up 0.4% in May after showing no growth in April, the Office for National Statistics reported Thursday.
Europe Indexes and Yields
The DAX index increased by 0.3% to 18,452.74; the CAC-40 index rose by 0.4% to 7,607.24; and the FTSE 100 index rose by 0.2% to 8,211.63.
The yield on 10-year German bonds edged higher to 2.54%. French bonds inched higher to 3.20%; the UK gilts inched higher to 4.16%; and Italian bonds increased to 3.86%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.82 Swiss cents.
Brent crude increased $0.22 to $85.29 a barrel, and the Dutch TTF natural gas rose by €0.58 to €31.24 per MWh.
Europe Stock Movers
Hugo Boss increased 1.4% to €39.92, and Frasers Group increased its stake in the fashion company.
Suedzucker AG fell 6.3% to €12.81 after the sugar producer reported a first-quarter profit decline of 45% from a year earlier.
Fielmann Group AG increased 3.3% to €43.05 after the German eyewear company reported positive first-half results and estimated an improved operating earnings margin in 2024 and 2025.
Severn Trent rose 4.2% to 2,727.0 pence after the water management and distribution company said its financial performance is in line with management expectations.
The company also confirmed its capital investment plan for the current year to range between £1.3 billion and £1.5 billion.
John Wood Group decreased 0.9% to 205.20 pence after the oil service company reported a 6% decline in the first half ending in June.
Nikkei 225 Hits Third Consecutive High, Core Machinery Orders Unexpectedly Declined in May
Akira Ito
11 Jul, 2024
Tokyo
The Nikkei 225 index closed at a new record high, and the Topix index inched higher to a new 34-year high as investors backed up tech stocks.
The enthusiasm surrounding artificial intelligence-linked chip and equipment stocks and expectations that the Federal Reserve is closer to cutting rates supported the market advance.
Traders also bet that the Bank of Japan is more likely to taper its monthly Japanese government bond buying to 3 trillion yen from the current 6 trillion yen purchase amid pushbacks from large banks.
The yen drifted lower to a new record three-decade low of 161.62 against the U.S. dollar on the worry that the Bank of Japan is still not ready to adjust rates higher and close the yield gap with U.S. bonds.
The sharp decline in the yen has got small and medium-sized businesses worried because they can't pass on higher prices to consumers and have to import at a at a higher cost, denting their profit margins.
On the economic front, Japan's core machinery orders, which exclude large-ticket orders like ships and power-generating equipment, rose 10.8% from a year ago in May, when orders rose paltry 0.7%.
Orders declined 3.2% from the previous month and accelerated the fall from 2.9% in April to 857.8 billion yen, the Cabinet Office reported Thursday.
For the second quarter ending in June, orders are likely to decline 1.6% from the previous quarter and fall 2.8% from a year ago to 2.58 trillion yen.
Japan Stock Movers
The Nikkei 225 closed at a record new high and crossed 42,000 for the first time, and the stock average and the Topix index advanced for the third consecutive day in a row this week.
The Nikkei 225 stock average increased 0.9% to 42,224.02, and the Topix index rose 0.7% to 2,929.17.
Tech stocks traded mixed, and Tokyo Electron gained 0.6%, but Advantest and Screen Holdings declined more than 1.5%.
Softbank Group added 0.8% to ¥11,920.0 after artificial intelligence-linked stocks, including Broadcom, Nvidia, and Qualcomm, jumped as much as 2% in overnight trading in New York.
NTN, Trend Micro, and Nitto Denko gained more than 3%.
Mercari Inc. declined 3% to ¥2,324.0.
China Stocks Rebound After Regulators Imposed Additional Curbs On Short Sellers
Li Chen
11 Jul, 2024
Hong Kong
Stocks in Shanghai and Hong Kong jumped after securities regulators took additional steps to support markets amid weak economic data and a lackluster earnings outlook.
The Hang Seng index and the CSI 300 index jumped between 1% and 2% after the China Securities Regulatory Commission lifted the margin requirement for short selling.
The new margin requirement was raised to 100% from the current 80% for individual investors and to 120% for hedge funds.
The regulatory agency also places additional restrictions on quant-trading firms to root out market speculators.
The move from the regulatory agency comes after the state-backed financial firm's intervention petered out and the Hang Seng index dropped 11% from its peak in May, wiping out most of the gains since late January.
Despite the current move by the regulatory agency, benchmark indexes are expected to resume their downward slide amid weak earnings expectations, a protracted property market slump, and weak consumer demand.
Chinese Communist Party policymakers are scheduled to meet Monday for the four-day third plenum, where party leader Xi Jinping is expected to announce the policy framework for the next five years.
The much-delayed policy meeting is likely to deliver a broader outline for economic reforms, a boost for technology development, and new incentives for foreign investors.
However, market expectations for deep economic reforms are low.
China Stock Movers
The Hang Seng index soared 1.8% to 17,792.04, and the CSI 300 index added 1% to 3,464.53.
Electric vehicle makers soared in active trading, and Li Auto, BYD, and Xpeng jumped between 2% and 7%.
Baidu, Meituan, Alibaba Group, JD.com, and Tencent Holding advanced between 1.5% and 4%.
India Movers: Bartronics, Glenmark Life, IRB Infrastructure, Kesoram, Nykaa, SBI, Tata Elxsi, Yes Bank
Arun Goswami
11 Jul, 2024
Mumbai
Benchmark indexes in Mumbai edged lower ahead of the start of the earnings season.
Tech services providers are expected to report a moderate increase in revenue in the latest quarter amid weak demand in the U.S.
The Sensex index decreased by 0.4% to 79,652.20, and the Nifty index declined by 0.4% to 24,259.95.
On the Mumbai stock exchange, 192 stocks traded at their 52-week highs, and 13 stocks traded at their 52-week lows.
Yes Bank jumped 5% to ₹26.21 on a report that First Abu Dhabi Bank is considering acquiring a 51% stake in the bank.
Separately, the U.S.-based rating agency Moody's revised its outlook for the company's long-term debt rating to "positive" from "stable" on the expectations of a gradual improvement in its depositor base and lending network.
State Bank of India increased 0.4% to ₹852.50, and the bank completed its ₹10,000 core infrastructure bond offering at a coupon rate of 7.36%.
The ₹5,000 crore offering was oversubscribed by 3.6 times, according to the company's filing with exchanges.
FSN E-Commerce Ventures, the parent company of Nykka, gained 1.2% to ₹177.21, and the ICICI Prudential Mutual Fund acquired on Wednesday 1.5 crore shares in the company at an average price of ₹174.04 per share.
The Canada Pension Plan Investment Board sold its stake in a block deal to ICICI Prudential Mutual Fund.
Glenmark Life Sciences declined 2.5% to ₹853.20, and Glenmark Pharma and Glen Saldhana plan to sell up to a 7.85% stake in the company at a minimum price of ₹810 per share.
Tata Elxsi declined 2% to ₹6,979.60, and the company said its revenue increased by 2.3% from the previous quarter to ₹926.5 crore and net profit dropped 6.5% to ₹184.1 crore.
IRB Infrastructure Developers inched higher 0.5% to ₹68.34, and the company said gross toll collection in June jumped 35% from a year ago to ₹517 crore.
Bartronics India Ltd. gained 1.4% to ₹20.99, and a key investor, Kinex India Pvt Ltd., plans to sell 1.35 crore shares, or 4.43% stake, in the company to meet the minimum public shareholding regulatory requirement for listed companies.
Power Grid Corporation decreased 0.4% to ₹344.85, and the company plans to increase its borrowing limit to ₹15,000 core from the existing ₹12,000 crore in the current financial year.
Kesoram Industries declined 0.8% to ₹209.55, and the company reported a wider loss in the June quarter.
Revenue in the quarter declined 12% to ₹209.55, and net loss expanded to ₹62 crore from ₹32.4 crore a year ago.
S&P 500 and Nasdaq Scale New Peaks as Market Rally Extends to Sixth Consecutive Week
Alexander Garcia
10 Jul, 2024
Miami
Optimism ruled stock markets on Wall Street as investors looked ahead to the start of earnings season amid positive economic backdrop.
Stocks on Wall Street advanced on Wednesday as investors looked forward to inflation data and digested the latest comments from Fed Chair Powell.
The S&P 500 index and the Nasdaq Composite advanced in the previous five consecutive weeks and extended their gains in the sixth week so far.
The S&P 500 index advanced for the fifth session, and the Nasdaq Composite edged higher for the seventh session in a row amid expectations of weakening consumer price and producer price inflation.
Consumer price inflation data is scheduled to be released on Thursday and producer price inflation on Friday.
The Federal Reserve policymakers are struggling to bring down inflation to its 2% target rate after several indicators show consumer prices are still rising at closer to 3%, despite eleven rate hikes over 2022 and 2023.
Moreover, interest rates are not restrictive enough to slow down the economy and moderate wage gains, which is also contributing to higher inflation.
Fed Chair Powell reiterated, in a testimony to the U.S. Senate Banking Committee, the central bank's commitment to lower interest but said "more good data on inflation" is needed to determine that inflation is on the downward path.
Chairman Powell is likely to reiterate his views to the U.S. House Financial Services Committee later today, but he is not expected to shed any light on the timeline for withdrawing the pandemic-era stimulus.
The root cause of the latest bout of high inflation over the past three years is the Federal Reserve's reckless money printing during the COVID-19 pandemic, pumping more than four trillion dollars into the U.S. economy.
On the earnings front, investors are anticipating positive quarterly results this week from JPMorgan Chase, PepsiCo, Morgan Stanley, Wells Fargo, Morgan Stanley, and Bank of New York Mellon.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.5% to 5,603.34, and the Nasdaq Composite rose 0.6% to 18,541.15.
The yield on 2-year Treasury notes edged higher to 4.62%, 10-year Treasury notes increased to 4.29%, and 30-year Treasury bonds edged lower to 4.48%.
WTI crude oil decreased $0.08 to $81.47 a barrel, and natural gas prices edged up 1 cent to $2.34 a thermal unit.
Gold decreased by $15.42 to $2,380.45 an ounce, and silver rose 20 cents to $31.20.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.05.
U.S. Stock Movers
3M declined 0.2% to $99.55 after the company said its chief financial officer, Monish Patolawala, is leaving the company to "pursue other opportunities" effective July 31.
Taiwan Semiconductor Manufacturing jumped 1.3% to $188.60, and the advanced semiconductor chip maker reported better-than-expected revenue in June.
Consolidated revenue in June was approximately NT$207.87 billion, a decrease of 9.5% from May and an increase of 32.9% from June 2023.
Revenue in the first half of 2024 totaled NT$1,266.15 billion, an increase of 28% compared to the same period a year earlier.
LegalZoom.com plunged 28% to $5.66 after the company said its chief executive, Dan Wernikoff, has resigned from the office.
The company also lowered its annual revenue outlook to between $675 million and $685 million from the previous guidance of between $700 million and $720 million.
European Stocks Halted 3-Day Slump, Political Turmoil In France Deepens
European markets rebounded from a three-day slump, but political uncertainty loomed in France as lawmakers struggled to form an alliance after a heated snap election.
Benchmark indexes in Paris, London, and Frankfurt jumped as much as 0.8% as investors overlooked the brewing political malaise in France and focused on the upcoming earnings season.
French President Emmanuel Macron, breaking tradition, allowed ministers of the recently resigned government to hold positions and conduct daily activities after a change of majority in parliament.
With a hung parliament, France's leading position in the European Union is diminished, allowing it to influence political outcomes and nudge policies in its favor.
In addition, political disarray in Germany is also negatively impacting sentiment for the euro.
On the economic front, investors are also looking forward to the release of inflation data from France, Italy, and Spain this week.
Europe Indexes and Yields
The DAX index increased by 0.96% to 18,410.75; the CAC-40 index rose by 0.9% to 7,573.55; and the FTSE 100 index rose by 0.7% to 8,193.51.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.10%; and Italian bonds decreased to 3.85%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.80 Swiss cents.
Brent crude increased $0.92 to $85.55 a barrel, and the Dutch TTF natural gas fell by €0.39 to €30.70 per MWh.
Europe Stock Movers
BMW increased 0.9% to €88.40, despite the German luxury automaker reporting weak vehicle sales in the second quarter.
Volkswagen AG decreased 0.8% to €105.75 after the German automaker said it plans to close its facility in Brussels for Audi due to an ongoing decline in sales of electric vehicles.
Evotec SE soared 4% to €9.76 after the company announced a collaboration with Pfizer to accelerate drug discovery efforts in France.
Enagas gained 4.3% to €13.36 after the Spanish natural gas distribution grid operator said it agreed to sell its 30.2% stake in the Tallgrass to Blackstone for $1.1 billion.
Enagas and Blackstone teamed up in 2019 to acquire a 10.93% initial stake in Tallgrass Energy, a US energy infrastructure company founded in 2012.
It owns three inter-state gas pipelines regulated by the Federal Energy Regulatory Commission, with a total of 11,000 km of gas transmission pipelines, 2,400 km of gas gathering pipelines, and a 1,300 km oil pipeline.
Barratt Developments PLC declined 1.4% to 484.40 pence after the UK-based home builder said it is lowering its home sales estimate in the second half, citing elevated mortgage rates and challenging macroeconomic conditions.
Travis Perkins jumped 6.5% to 853.0 pence after the construction materials maker appointed a new chief executive.
Travis Perkins appointed Pete Redfern as Director and Chief Executive Officer on September 16, succeeding Nick Roberts, who will resign from the office on the same day.
Another High In Nikkei 225, Yen Drifts to a New 38-year Low
Market indexes in Tokyo advanced to new record highs following the market gains in New York.
The Nikkei 225 index and the Topix index gained to close at new record highs after the producer price index rose for the 41st month in a row.
Producer price index increased at an annual pace of 2.9% in June, following the upwardly revised 2.6% gain in the previous month.
Prices rose at the fastest pace since August 2023 as input costs and import costs continued to climb, and producer inflation was positive for the 41st month in a row.
The acceleration in inflation supported the case for the Bank of Japan to adjust its benchmark rate higher after the next policy meeting at the end of July.
The central bank is also scheduled to release its bond purchase tapering plan, which could increase confidence that policymakers are serious about narrowing the yield gap between the U.S. and Japan.
The yen resumed its upward march and traded at 141.36 against the U.S. dollar amid the persistently wide yield differential between the U.S. and Japanese bonds.
Japan Stock Movers
The Nikkei 225 stock averages increased by 0.6% to 41,831.99, and the Topix index advanced by 0.5% to 2,909.20.
Recruit Holdings jumped 3.6% to ¥9,484.0 after the company said it plans to buyback up to 5.7% of its outstanding shares over the next 12 months.
Tech stocks were among the most active, and Tokyo Electron, Advantest, Disco Corp., and SoftBank hovered around the flatline.
Tokio Marine jumped 4.8% to ¥6,596.0, MS&AD rose 4.2% to ¥3,930.0, and Mitsubishi Motors jumped 8.6% to ¥493.30.
GS Yuasa declined 5.9% to ¥2,938.0 and Lasertec Corp. declined 2.6% to ¥33,610.0.
China's Weak Consumer Inflation Highlights Broader Economic Malaise
Stocks traded volatile in Shanghai and Hong Kong after sluggish inflation data signaled weak consumer demand.
The Hang Seng index and the CSI 300 index declined as much as 0.5% after rallying in the morning hours in the hopes of additional market-supportive measures from policymakers.
Consumer price inflation slowed to an annual pace of 0.2% in June from 0.3% in May, the National Bureau of Statistics reported on Wednesday.
Consumer prices rose for the fifth month in a row, but the price increase slowed, suggesting weak consumer demand amid job market uncertainty and a protracted property market slump.
Core consumer price inflation, which excludes food and energy prices, rose 0.6% from a year earlier.
Consumer price inflation has stayed near zero since April last year, the longest period of deflation since the 2009 global financial crisis.
Annual inflation is expected to hover between 0.5% and 0.6%, sharply lower than the 3.0% target set by the central government's policymakers.
Producer prices declined 0.8% in June, and the measure of wholesale prices eased for the 21st month in a row as factory order growth remained weak, the statistical agency said in a separate report released on Wednesday.
China Stock Movers
The Hang Seng index decreased 0.05% to 17,516.64, and the CSI 300 index declined 0.2% to 3,432.29.
Baidu jumped 11.4% to HK$96.35, and the company's driverless robotaxi won early popularity in Wuhan, Hubei.
Additionally, Beijing city authorities are likely to permit the use of robots in ride-sharing services in the near future.
Nongfu Spring soared 4% to HK $35.10 on a report suggesting that the founder, Zhong Shanshan, is looking to increase his stake in the company by purchasing HK $2 billion or $256 million worth of stocks over the next six months.
Nongfu Spring is one of the largest bottled-water companies in China, and in the previous full-year, the company posted revenue of 42.6 billion yuan and net income of 12 billion yuan.
Four companies started trading on Hong Kong and mainland exchanges today.
Ruichang International, a maker of petroleum refining equipment, priced its initial public offering at HK $1.36 per share and raised HK $131.6 million.
Chenqi Technology priced its initial public offering at HK $35 per share and raised HK $1.01 billion, but the stock dropped as much as 15% in early trading.
Shanghai Voicecomm, the developer of conversational artificial intelligence technology, raised HK $572 million in its initial public offering and priced its stock at HK $152 per share.
Jirfine Intelligence Equipment soared to 57.30 yuan; the maker of CNC machines listed its stock at 26.50 yuan per share on the Shenzhen Stock Exchange and raised 800 million yuan.
U.S. Movers: 3M, LegalZoom.com, TSMC
Scott Peters
10 Jul, 2024
New York City
3M declined 0.2% to $99.55 after the company said its chief financial officer, Monish Patolawala, is leaving the company to "pursue other opportunities" effective July 31.
Taiwan Semiconductor Manufacturing jumped 1.3% to $188.60, and the advanced semiconductor chip maker reported better-than-expected revenue in June.
Consolidated revenue in June was approximately NT$207.87 billion, a decrease of 9.5% from May and an increase of 32.9% from June 2023.
Revenue in the first half of 2024 totaled NT$1,266.15 billion, an increase of 28% compared to the same period a year earlier.
LegalZoom.com plunged 28% to $5.66 after the company said its chief executive, Dan Wernikoff, has resigned from the office.
The company also lowered its annual revenue outlook to between $675 million and $685 million from the previous guidance of between $700 million and $720 million.
S&P 500 and Nasdaq Extend Rally to Fifth Consecutive Session
Barry Adams
10 Jul, 2024
New York City
Stocks on Wall Street advanced in early trading as investors looked forward to inflation data and digested the latest comments from Fed Chair Powell.
The S&P 500 index extended gains for the fifth session, and the Nasdaq Composite edged higher for the seventh session in a row amid expectations of weakening consumer price and producer price inflation.
Consumer price inflation data is scheduled to be released on Thursday and producer price inflation on Friday.
The Federal Reserve policymakers are struggling to bring down inflation to its 2% target rate after several indicators show consumer prices are still rising at closer to 3%, despite eleven rate hikes over 2022 and 2023.
Moreover, interest rates are not restrictive enough to slow down the economy and moderate wage gains, which is also contributing to higher inflation.
Fed Chair Powell reiterated, in a testimony to the U.S. Senate Banking Committee, the central bank's commitment to lower interest but said "more good data on inflation" is needed to determine that inflation is on the downward path.
Chairman Powell is likely to reiterate his views to the U.S. House Financial Services Committee later today, but he is not expected to shed any light on the timeline for withdrawing the pandemic-era stimulus.
The root cause of the latest bout of high inflation over the past three years is the Federal Reserve's reckless money printing during the COVID-19 pandemic, pumping more than four trillion dollars into the U.S. economy.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,588.12, and the Nasdaq Composite rose 0.4% to 18,496.05.
The yield on 2-year Treasury notes edged higher to 4.62%, 10-year Treasury notes increased to 4.29%, and 30-year Treasury bonds edged lower to 4.48%.
WTI crude oil decreased $0.08 to $81.47 a barrel, and natural gas prices edged up 1 cent to $2.34 a thermal unit.
Gold decreased by $15.42 to $2,380.45 an ounce, and silver rose 20 cents to $31.20.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.05.
U.S. Stock Movers
3M declined 0.2% to $99.55 after the company said its chief financial officer, Monish Patolawala, is leaving the company to "pursue other opportunities" effective July 31.
Taiwan Semiconductor Manufacturing jumped 1.3% to $188.60, and the advanced semiconductor chip maker reported better-than-expected revenue in June.
Consolidated revenue in June was approximately NT$207.87 billion, a decrease of 9.5% from May and an increase of 32.9% from June 2023.
Revenue in the first half of 2024 totaled NT$1,266.15 billion, an increase of 28% compared to the same period a year earlier.
LegalZoom.com plunged 28% to $5.66 after the company said its chief executive, Dan Wernikoff, has resigned from the office.
The company also lowered its annual revenue outlook to between $675 million and $685 million from the previous guidance of between $700 million and $720 million.
Europe Movers: BMW, Barratt Developments, Enagas, Evotec, Travis Perkins, VW
Inga Muller
10 Jul, 2024
Frankfurt
With rising political turmoil and leading nations of the European Union, the euro may face an uncertain future in the months ahead.
French lawmakers struggled to form an alliance amid deep divisions, which could force President Macron to appoint a technocrat as the next prime minister.
The DAX index increased by 0.8% to 18,373.27; the CAC-40 index rose by 0.9% to 7,574.88; and the FTSE 100 index rose by 0.6% to 8,186.21.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.10%; and Italian bonds decreased to 3.85%.
BMW increased 0.9% to €88.40, despite the German luxury automaker reporting weak vehicle sales in the second quarter.
Vehicle sales in the second quarter decreased 1.3% from a year ago to 618,826 units, and electric vehicle sales rose 8.5% to 146,483 units.
Volkswagen AG decreased 0.8% to €105.75 after the German automaker said it plans to close its facility in Brussels for Audi due to an ongoing decline in sales of electric vehicles.
Evotec SE soared 4% to €9.76 after the company announced a collaboration with Pfizer to accelerate drug discovery efforts in France.
Enagas gained 4.3% to €13.36 after the Spanish natural gas distribution grid operator said it agreed to sell its 30.2% stake in the Tallgrass to Blackstone for $1.1 billion.
Enagas and Blackstone teamed up in 2019 to acquire a 10.93% initial stake in the Kansas-based Tallgrass Energy, a US energy infrastructure company founded in 2012.
It owns three inter-state gas pipelines regulated by the Federal Energy Regulatory Commission, with a total of 11,000 km of gas transmission pipelines, 2,400 km of gas gathering pipelines, and a 1,300 km oil pipeline.
Barratt Developments PLC declined 1.4% to 484.40 pence after the UK-based home builder said it is lowering its home sales estimate in the second half, citing elevated mortgage rates and challenging macroeconomic conditions.
Travis Perkins jumped 6.5% to 853.0 pence after the construction materials maker appointed a new chief executive.
Travis Perkins appointed Pete Redfern as Director and Chief Executive Officer on September 16, succeeding Nick Roberts, who will resign from the office on the same day.
European Stocks Halted 3-Day Slump, Euro In Focus Amid Growing Political Turmoil In France
Bridgette Randall
10 Jul, 2024
London
European markets rebounded from a three-day slump, but political uncertainty loomed in France as lawmakers struggled to form an alliance after a heated snap election.
Benchmark indexes in Paris, London, and Frankfurt jumped as much as 0.8% as investors overlooked the brewing political malaise in France and focused on the upcoming earnings season.
French President Emmanuel Macron, breaking tradition, allowed ministers of the recently resigned government to hold positions and conduct daily activities after a change of majority in parliament.
With a hung parliament, France's leading position in the European Union is diminished, allowing it to influence political outcomes and nudge policies in its favor.
In addition, political disarray in Germany is also negatively impacting sentiment for the euro.
On the economic front, investors are also looking forward to the release of inflation data from France, Italy, and Spain this week.
Europe Indexes and Yields
The DAX index increased by 0.8% to 18,373.27; the CAC-40 index rose by 0.9% to 7,574.88; and the FTSE 100 index rose by 0.6% to 8,186.21.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.10%; and Italian bonds decreased to 3.85%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.80 Swiss cents.
Brent crude decreased $0.14 to $84.51 a barrel, and the Dutch TTF natural gas rose by €0.33 to €31.42 per MWh.
Europe Stock Movers
BMW increased 0.9% to €88.40, despite the German luxury automaker reporting weak vehicle sales in the second quarter.
Volkswagen AG decreased 0.8% to €105.75 after the German automaker said it plans to close its facility in Brussels for Audi due to an ongoing decline in sales of electric vehicles.
Evotec SE soared 4% to €9.76 after the company announced a collaboration with Pfizer to accelerate drug discovery efforts in France.
Enagas gained 4.3% to €13.36 after the Spanish natural gas distribution grid operator said it agreed to sell its 30.2% stake in the Tallgrass to Blackstone for $1.1 billion.
Enagas and Blackstone teamed up in 2019 to acquire a 10.93% initial stake in Tallgrass Energy, a US energy infrastructure company founded in 2012.
It owns three inter-state gas pipelines regulated by the Federal Energy Regulatory Commission, with a total of 11,000 km of gas transmission pipelines, 2,400 km of gas gathering pipelines, and a 1,300 km oil pipeline.
Barratt Developments PLC declined 1.4% to 484.40 pence after the UK-based home builder said it is lowering its home sales estimate in the second half, citing elevated mortgage rates and challenging macroeconomic conditions.
Travis Perkins jumped 6.5% to 853.0 pence after the construction materials maker appointed a new chief executive.
Travis Perkins appointed Pete Redfern as Director and Chief Executive Officer on September 16, succeeding Nick Roberts, who will resign from the office on the same day.
Another Day, Another High In Japan's Nikkei 225 as the Yen Drifts to a New 38-year Low
Akira Ito
10 Jul, 2024
Tokyo
Market indexes in Tokyo advanced to new record highs following the market gains in New York.
The Nikkei 225 index and the Topix index gained to close at new record highs after the producer price index rose for the 41st month in a row.
Producer price index increased at an annual pace of 2.9% in June, following the upwardly revised 2.6% gain in the previous month.
Prices rose at the fastest pace since August 2023 as input costs and import costs continued to climb, and producer inflation was positive for the 41st month in a row.
The acceleration in inflation supported the case for the Bank of Japan to adjust its benchmark rate higher after the next policy meeting at the end of July.
The central bank is also scheduled to release its bond purchase tapering plan, which could increase confidence that policymakers are serious about narrowing the yield gap between the U.S. and Japan.
The yen resumed its upward march and traded at 141.36 against the U.S. dollar amid the persistently wide yield differential between the U.S. and Japanese bonds.
Japan Stock Movers
The Nikkei 225 stock averages increased by 0.6% to 41,831.99, and the Topix index advanced by 0.5% to 2,909.20.
Recruit Holdings jumped 3.6% to ¥9,484.0 after the company said it plans to buyback up to 5.7% of its outstanding shares over the next 12 months.
Tech stocks were among the most active, and Tokyo Electron, Advantest, Disco Corp., and SoftBank hovered around the flatline.
Tokio Marine jumped 4.8% to ¥6,596.0, MS&AD rose 4.2% to ¥3,930.0, and Mitsubishi Motors jumped 8.6% to ¥493.30.
GS Yuasa declined 5.9% to ¥2,938.0 and Lasertec Corp. declined 2.6% to ¥33,610.0.
China's Weak Consumer Inflation Highlights Broader Economic Malaise
Li Chen
10 Jul, 2024
Hong Kong
Stocks traded volatile in Shanghai and Hong Kong after sluggish inflation data signaled weak consumer demand.
The Hang Seng index and the CSI 300 index declined as much as 0.5% after rallying in the morning hours in the hopes of additional market-supportive measures from policymakers.
Consumer price inflation slowed to an annual pace of 0.2% in June from 0.3% in May, the National Bureau of Statistics reported on Wednesday.
Consumer prices rose for the fifth month in a row, but the price increase slowed, suggesting weak consumer demand amid job market uncertainty and a protracted property market slump.
Core consumer price inflation, which excludes food and energy prices, rose 0.6% from a year earlier.
Consumer price inflation has stayed near zero since April last year, the longest period of deflation since the 2009 global financial crisis.
Annual inflation is expected to hover between 0.5% and 0.6%, sharply lower than the 3.0% target set by the central government's policymakers.
Producer prices declined 0.8% in June, and the measure of wholesale prices eased for the 21st month in a row as factory order growth remained weak, the statistical agency said in a separate report released on Wednesday.
China Stock Movers
The Hang Seng index decreased 0.05% to 17,516.64, and the CSI 300 index declined 0.2% to 3,432.29.
Baidu jumped 11.4% to HK$96.35, and the company's driverless robotaxi won early popularity in Wuhan, Hubei.
Additionally, Beijing city authorities are likely to permit the use of robots in ride-sharing services in the near future.
Nongfu Spring soared 4% to HK $35.10 on a report suggesting that the founder, Zhong Shanshan, is looking to increase his stake in the company by purchasing HK $2 billion or $256 million worth of stocks over the next six months.
Nongfu Spring is one of the largest bottled-water companies in China, and in the previous full-year, the company posted revenue of 42.6 billion yuan and net income of 12 billion yuan.
Four companies started trading on Hong Kong and mainland exchanges today.
Ruichang International, a maker of petroleum refining equipment, priced its initial public offering at HK $1.36 per share and raised HK $131.6 million.
Chenqi Technology priced its initial public offering at HK $35 per share and raised HK $1.01 billion, but the stock dropped as much as 15% in early trading.
Shanghai Voicecomm, the developer of conversational artificial intelligence technology, raised HK $572 million in its initial public offering and priced its stock at HK $152 per share.
Jirfine Intelligence Equipment soared to 57.30 yuan; the maker of CNC machines listed its stock at 26.50 yuan per share on the Shenzhen Stock Exchange and raised 800 million yuan.
India Movers: Adani Port, Adani Power, Angel One, Delhivery, Mankind Pharma, Shilpa Medicare, Tata Motors
Arun Goswami
10 Jul, 2024
Mumbai
Benchmark indexes traded down, and investors turned cautious ahead of the release of inflation data and the start of the earnings season.
The Sensex index decreased by 0.8% to 79,721.50, and the Nifty index declined by 0.8% to 24,244.15.
On the Mumbai stock exchange, 156 stocks traded at their 52-week highs, and 12 stocks traded at their 52-week lows.
Angel One increased 0.8% to ₹2,258.95, despite reports suggesting that a hacker has leaked personal information of 79 lakh account holders of the Mumbai-based brokerage firm, including contact details and account size, on a website.
Adani Ports gained 0.4% to ₹1,484.20 after the company won a concession to develop and operate a terminal located at Deendayal Port, Kandla, Gujarat, for 30 years through a competitive bidding process.
Adani Power advanced 0.3% to ₹726.40, and the company's subsidiary signed a 20-year agreement to sell 500 MW of power to Reliance Industries.
Reliance Industries agreed to acquire a 26% stake in the 600 MW thermal power plant operated by the subsidiary Mahan Energen Ltd.
Mankind Pharma jumped 2.5% to ₹2,153.40, and an affiliate of Capital Group plans to sell a 0.9% stake for ₹763 crore in the company at a price of ₹2,061 per share.
Delhivery declined 0.5% to ₹389.75, and several news reports suggested that the Canada Pension Plan Investment Board plans to sell its entire 3.18% stake in the company for ₹886 crore through a block trade seeking a price between ₹378 and ₹389 per share.
Shilpa Medicare decreased 0.6% to ₹655.15 despite the pharmaceutical company's Raichur facility meeting the manufacturing standard required by Brazil's drug agency.
Tata Motors declined 0.3% to ₹1,011.45, and the company said it revised down the selling price for Harrier and Safari SUVs by as much as ₹1.5 lakh.
The automaker's revised price for the Harrier is lowered to ₹15 lakh and the Safari to ₹15.5 lakh.
HG Infra Engineering gained 0.4% to ₹1,706.10, and the company won solar energy projects worth ₹465 crore from Ultra Vibrant Solar Energy Pvt. Ltd., according to a filing with exchanges.
Powell Comments Shed Little Light on Rate Path, Markets In Europe and China Struggle
Alexander Garcia
09 Jul, 2024
Miami
Benchmark indexes on Wall Street inched higher as investors reviewed comments from Federal Reserve Chair Jerome Powell.
Stock market indexes continued to advance higher for the sixth week in a row ahead of earnings season and optimism about artificial intelligence applications-linked spending.
The S&P 500 index and the Nasdaq Composite advanced more than 0.3% and traded at new record highs after mega-cap stocks inched higher.
Nvidia advanced 3%, Apple gained 0.6%, Meta gained 0.9%, and Amazon added 0.3%, but Microsoft decreased 0.3%.
Fed Chair Powell delivered his semiannual testimony on monetary policy before the Senate Banking Committee, and reiterated the central bank's commitment to finely balance the policy to support economic activities and employment.
In prepared remarks, Fed Chair Powell stressed that inflation has slowed but prices are still rising faster than 2% target rate, and lowering rates too soon could stall or reverse the progress made so far.
On the other hand, "reducing policy restraint too late or too little could unduly weaken economic activity and employment," Powell added.
Fed Chair Powell is scheduled to appear on Wednesday before the U.S. House Financial Services Committee.
Powell's remarks come before the release of consumer price inflation data on Thursday and producer price inflation on Friday.
Despite eleven rate hikes over 2022 and 2023, inflation has still stayed well above the 2% target rate and shows no signs of easing, and record high food, transportation, and home prices have pushed millions of families into cost-of-living crises.
While Fed Chair Powell talks tough on inflation, the surge in inflation and record prices were started by the Federal Reserve by pumping trillions of dollars during the pandemic years in the name of avoiding economic depression.
Earnings season kicks off this week with earnings from PepsiCo, and leading banks including JP Morgan, Citigroup, Wells Fargo, and Bank of New York Mellon are set to report.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,584.31, and the Nasdaq Composite rose 0.4% to 18,466.78.
The yield on 2-year Treasury notes edged higher to 4.65%, 10-year Treasury notes increased to 4.29%, and 30-year Treasury bonds edged lower to 4.48%.
WTI crude oil decreased $0.38 to $81.83 a barrel, and natural gas prices edged up 3 cents to $2.40 a thermal unit.
Gold decreased by $2.47 to $2,364.57 an ounce, and silver rose 17 cents to $31.02.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.04.
U.S. Stock Movers
BP plc declined 4% to $35.01 after the British oil company announced an impairment charge of up to $2 billion and weaker refining margin in the second quarter.
The oil explorer and refiner said the after-tax impact of the charge could be between $1 billion and $2 billion, primarily linked to a review of a refinery in Germany and other worldwide assets.
The company added weaker refining margins are likely to negatively impact earnings between $500 million and $700 million, primarily because of the narrower margin differential in the U.S. refining.
Refining margins are likely to be adversely impacted "mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, and a higher level of turnaround activity, partially offset by the absence of the first quarter Whiting refinery outage of around $0.5 billion.
The oil trading result is expected to be weak following a strong result in the first quarter," the company said in a regulatory filing in the U.K.
The company said its capital expenditure plans of $16 billion are likely to be evenly split between the first and second half, and it estimated $1.2 billion of payment in 2024 related to the Gulf of Mexico oil spill.
Nvidia Corp. soared 3.9% to $132.88 after KeyBanc increased its target price for the stock to $180.
Europe Indexes Turns Lower Amid Political Uncertainty and Debt Worries
European markets turned lower after investors reassessed the political landscape in the UK and France, and bond yields stayed near two-month highs.
Benchmark indexes in London, Paris, and Frankfurt eased on the worry that the hung parliament in France may lead to political gridlock for several months.
The centrist alliance led by President Emmanuel Macron, the recently formed Popular Front, and the National Rally Party formed three leading blocs, but neither group won a clear majority.
Market participants are worried that if the political impasse drags on beyond a month, the CAC-40 index may decline between 5% and 20% from its current level, putting additional pressure on the euro.
The euro held stable and the French bond yield hovered near a two-week high, but France is likely to go through several months of political instability before a new government is established.
If parties fail to agree on a prime minister, President Macron may appoint a technocrat leader, avoiding a political impasse.
On the economic front this week, France, Germany, and Spain are set to release their inflation updates.
Europe Indexes and Yields
The DAX index decreased by 1.4% to 18,223.94; the CAC-40 index fell by 1.6% to 7,508.66; and the FTSE 100 index declined by 0.7% to 8,139.81.
The yield on 10-year German bonds edged lower to 2.54%. French bonds inched lower to 3.16%; the UK gilts inched lower to 4.16%; and Italian bonds decreased to 3.92%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.82 Swiss cents.
Brent crude increased $1.12 to $84.62 a barrel, and the Dutch TTF natural gas fell by €0.97 to €31.17 per MWh.
Europe Stock Movers
Saint Gobain SA decreased 2.2% to €76.06, and the construction material maker said it has completed the acquisition of Australia-based building materials maker CSR for A$4.3 billion.
CSR is saddled with at least $187 million of asbestos-related liabilities, as the company was a leading blue asbestos miner.
Dassault Systems declined 4.5% to €33.75 after the engineering software company lowered its 2024 earnings outlook.
PageGroup declined 5.7% to 398.37 pence after the UK-based recruitment company said fiscal year earnings in the current year are likely to drop as much as 50% from a year earlier.
Indivior plunged 35% to 760.0 pence after the UK-based drug maker lowered its annual earnings outlook and said it was discontinuing production of Perseris, a schizophrenia drug.
The drugmaker revised down its 2024 revenue outlook to between $1.15 billion and $1.22 billion from the earlier guidance range of between $1.24 billion and $1.33 billion.
The company lowered its adjusted operating profit range between $285 million and $320 million from the previous estimate of between $330 million and $380 million.
Strength In Tech Stocks and Weakness In Yen Pushes Japan Indexes to New Highs
Japan's benchmark indexes soared to new record highs, pushed by tech stocks and persistent weakness in the yen.
The Nikkei 225 gained 2% and the Topix index jumped 1% following the enthusiasm about artificial intelligence and related technologies.
Market sentiment was also bolstered after the S&P 500 and the Nasdaq Composite closed at new record highs in overnight trading in New York.
Investors also digested the current account surplus and the persistent weakness in real wages in May, released on Monday.
The Bank of Japan said M2 money supply increased 1.5% to 1.257 trillion yen in June from a year earlier, and M3 money supply rose 1.0% to 1.63 trillion yen, slower than 1.3% in the previous month.
Investors are looking forward to the release of machinery orders later in the week amid high expectations of a rebound in new orders.
The yen traded around 160.65 against the U.S. dollar, and the yield on 10-year Japanese government bonds was near 1.09%.
Investors are hoping that the Bank of Japan will provide clarity about the future interest rate path and the central bank's government bond purchase plan at the end of the two-day next policy meeting on July 31.
Japan Stock Movers
The Nikkei 225 stock average jumped 2% to 41,580.17, and the Topix index gained 1% to 2,895.55.
Tech stocks were among the leading gainers in Tokyo's trading on Tuesday.
Tokyo Electron, Advantest, Disco Corp., and Screen Holdings jumped between 2% and 4%.
Hitachi Ltd. jumped 5.4% to ¥3,834.0 after the conglomerate announced its plans to integrate artificial intelligence-based industrial solutions.
Leading exporters traded mixed amid weakness in the yen.
Canon advanced 1.8% to ¥4,511.0, and Sony Group jumped 5.2% to ¥14,605.0.
However, Panasonic declined 0.2% to ¥1,319.0, and Mitsubishi Electric edged up a fraction to ¥2,740.50.
Fujikura Holdings soared 11.3% to ¥3,439.0, and Furukawa Electric gained 4.4% to ¥4,081.0.
China Deflation Worries Dominate Shanghai and Hong Kong Trading
China stocks were under pressure ahead of the release of several key economic indicators, including inflation updates, this week.
The Hang Seng index and CSI 300 index struggled to get their footing amid market jitters before the release of closely watched inflation updates released by the statistics bureau on Wednesday.
China's consumer price inflation is estimated to increase by at least 0.3%, and the producer price index decreased by 0.7% in June, according to a survey conducted by Ticker.com.
Producer prices are likely to decline for the 21st month in a row as manufacturers struggle with overcapacity in several key industries and weak domestic demand.
Later in the week, the National Bureau of Statistics is scheduled to release international trade, money supply, and foreign direct investment data.
The Chinese economy is struggling amid weak consumer sentiment, sustained capital flight, and ongoing weakness in the property and job markets.
Meanwhile, Chinese policymakers are scheduled to meet on Monday for the much-delayed third plenum, which could lead to the announcement of new economic reforms and market-supportive measures.
Investors have lowered their expectations for deep and meaningful reforms that could stop the capital outflow and revive consumer sentiment.
China Stock Movers
The Hang Seng Index declined 0.3% to 17,478.72, and the CSI 300 index rose 0.1% to 3,406.16.
Tingyi Holding decreased 3% to HK $9.83 after the maker of instant noodles raised prices on 12 products.
Investors are worried that the price hike may backfire because of weak consumer demand amid high job market uncertainty.
Anta Sports declined 2.7% to HK $69.55 after cautious comments from Citigroup raised the prospects of a lower stock price.
Three new companies were listed on stock exchanges in China.
Fangzhou Inc. increased to HK $4.82, and the online disease management platform priced its initial public offering at HK $4.50 per share.
Baiwang Co. Ltd. increased a fraction to HK$36.05, and the enterprise software solution provider priced its initial public offering at HK$36 per share and raised HK$228.87 million.
China Shenzhen International Warehouse Logistics Closed-end Infrastructure Fund, a real estate investment trust, priced its public offering and raised 1.2 billion yuan, or $160 million.
China Shenzhen International traded at 2.45 yuan on the first day of its trading in Shenzhen.
U.S. Movers: BP, indivior, Nvidia
Scott Peters
09 Jul, 2024
New York City
BP plc declined 4% to $35.01 after the British oil company announced an impairment charge of up to $2 billion and weaker refining margin in the second quarter.
The oil explorer and refiner said the after-tax impact of the charge could be between $1 billion and $2 billion, primarily linked to a review of a refinery in Germany and other worldwide assets.
The company added weaker refining margins are likely to negatively impact earnings between $500 million and $700 million, primarily because of the narrower margin differential in the U.S. refining.
Refining margins are likely to be adversely impacted "mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, and a higher level of turnaround activity, partially offset by the absence of the first quarter Whiting refinery outage of around $0.5 billion.
The oil trading result is expected to be weak following a strong result in the first quarter," the company said in a regulatory filing in the U.K.
The company said its capital expenditure plans of $16 billion are likely to be evenly split between the first and second half, and it estimated $1.2 billion of payment in 2024 related to the Gulf of Mexico oil spill.
Nvidia Corp. soared 3.9% to $132.88 after KeyBanc increased its target price for the stock to $180.
Indivior PLC plunged 35% to $9.85 after the UK-based drug maker lowered its annual earnings outlook and said it was discontinuing production of Perseris, a schizophrenia drug.
The drugmaker revised down its 2024 revenue outlook to between $1.15 billion and $1.22 billion from the earlier guidance range of between $1.24 billion and $1.33 billion.
The company lowered its adjusted operating profit range between $285 million and $320 million from the previous estimate of between $330 million and $380 million.
U.S. Major Averages Inch Further In Record Territory Ahead of Fed Chair Powell Comments
Barry Adams
09 Jul, 2024
New York City
Stock market indexes continued to advance higher for the sixth week in a row ahead of earnings season and optimism about artificial intelligence applications-linked spending.
The S&P 500 index and the Nasdaq Composite advanced more than 0.3% and traded at new record highs after mega-cap stocks inched higher.
Nvidia advanced 4%, Apple gained 0.6%, Meta gained 0.9%, and Amazon added 0.3%, but Microsoft decreased 0.3%.
Fed Chair Powell is scheduled to deliver his semiannual testimony on monetary policy before the Senate Banking Committee on Tuesday, followed by a presentation on Wednesday to the U.S. House Financial Services Committee.
Powell's remarks come before the release of consumer price inflation data on Thursday and producer price inflation on Friday.
Earnings season kicks off this week with earnings from PepsiCo, and leading banks including JP Morgan, Citigroup, Wells Fargo, and Bank of New York Mellon are set to report.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,584.31, and the Nasdaq Composite rose 0.4% to 18,466.78.
The yield on 2-year Treasury notes edged higher to 4.65%, 10-year Treasury notes increased to 4.29%, and 30-year Treasury bonds edged lower to 4.48%.
WTI crude oil decreased $0.38 to $81.83 a barrel, and natural gas prices edged up 3 cents to $2.40 a thermal unit.
Gold decreased by $2.47 to $2,364.57 an ounce, and silver rose 17 cents to $31.02.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.04.
U.S. Stock Movers
BP plc declined 4% to $35.01 after the British oil company announced an impairment charge of up to $2 billion and weaker refining margin in the second quarter.
The oil explorer and refiner said the after-tax impact of the charge could be between $1 billion and $2 billion, primarily linked to a review of a refinery in Germany and other worldwide assets.
The company added weaker refining margins are likely to negatively impact earnings between $500 million and $700 million, primarily because of the narrower margin differential in the U.S. refining.
Refining margins are likely to be adversely impacted "mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, and a higher level of turnaround activity, partially offset by the absence of the first quarter Whiting refinery outage of around $0.5 billion.
The oil trading result is expected to be weak following a strong result in the first quarter," the company said in a regulatory filing in the U.K.
The company said its capital expenditure plans of $16 billion are likely to be evenly split between the first and second half, and it estimated $1.2 billion of payment in 2024 related to the Gulf of Mexico oil spill.
Nvidia Corp. soared 3.9% to $132.88 after KeyBanc increased its target price for the stock to $180.