Market Update
U.S. Major Averages Trade Sideways Ahead of Inflation Reports
Barry Adams
09 Apr, 2024
New York City
Stocks traded sideways, and Treasury yields edged slightly lower in Tuesday's trading.
The S&P 500 index and the Nasdaq Composite inched higher as investors awaited the release of the consumer price index report on Wednesday.
Investors are estimating overall consumer price inflation to increase 3.4% from a year ago and advance 0.35% on the month in March, according to a survey of ten economists conducted by Ticker.com.
Investors are also anticipating the producer price inflation report on Thursday.
The yield on 10-year Treasury notes edged higher for the third day in a row after Friday's nonfarm payrolls surpassed market expectations and the U.S. economy added more-than-expected 330,000 net new jobs in March.
The jobs report was the last of several reports over the last two weeks that highlighted strong U.S. economic and labor market conditions.
U.S. Indexes and Yields
The S&P 500 index increased 0.2% to 5,242.13, and the Nasdaq Composite rose 0.4% to 16,314.26.
The yield on 2-year Treasury notes edged higher to 4.78%, 10-year Treasury notes inched down to 4.39%, and 30-year Treasury bonds edged up to 4.53%.
WTI crude oil decreased $0.17 to $86.52 a barrel, and natural gas prices increased 3 cents to $1.88 a thermal unit.
Gold increased by $15.09 to $2,354.51 an ounce, and silver rose 14 cents to $26.04.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.08.
U.S. Stock Movers
Boeing Co. declined 0.9% to $181.56, and Southwest Airline's flight lost engine cover during flight takeoff from Denver, Colorado, to Houston, Texas, on Sunday.
Southwest Flight 2695 Boeing 737 800 jet plane safely returned to the ground after reaching a height of 3,140 meters with 135 passengers and six crew members.
Boeing has been under intense scrutiny from aviation regulators and airlines after a series of mishaps and safety lapses over the last four years.
Ally Financial increased 1.3% to $39.26, and Discover Financial Services chief executive Michael Rhodes was appointed as chief executive of the company.
Europe Movers: Atos, BP, HSBC, Imperial Brands, Nordex, Siemens
Inga Muller
09 Apr, 2024
Frankfurt
Investors in Europe turned cautious and dialed back rate-cut expectations ahead of the European Central Bank's policy announcement on Thursday.
The DAX index decreased by 0.7% to 18,198.56, the CAC-40 index fell by 0.6% to 8,072.06, and the FTSE 100 index inched higher by 0.1% to 7,952.90.
The yield on 10-year German bonds edged down to 2.39%; French bonds inched lower to 2.89%; the UK gilts edged higher to 4.08%; and Italian bonds inched lower to 3.73%.
Atos declined 15% to €1.96, after the struggling French IT company announced its restructuring plan details.
Nordex SE gained 2.5% to Є12.88 after the German wind turbine company won an order to supply 295 MW wind turbines to EDF Renewables in South Africa.
Siemens AG declined a fraction to Є173.68 after the German engineering company said its Supervisory Board extended the contract for President and Chief Executive Officer Roland Busch for five years, starting April 1, 2025.
Imperial Brands inched up 0.4% to 1,737.50 pence after the UK-based tobacco company reiterated its revenue and earnings outlook for fiscal 2024.
Mining companies advanced in London trading after the copper price in Shanghai traded at a record high on the expectation of rising demand for manufactured goods in developed economies and in China.
Anglo American, Antofagasta, and Glencore advanced between 1% and 2%.
BP plc increased 1.5% to 516.30 pence after the company said it anticipates strong performance in the first quarter.
HSBC Holdings gained 0.3% to 646.40 pence after the UK- and China-based bank said it plans to sell its banking operation in Argentina to Grupo Financiero Gallicia for about $550 million.
European Investors Turned Cautious Ahead of the ECB Meeting, French Trade Deficit Shrank
Bridgette Randall
09 Apr, 2024
Frankfurt
European market indexes traded lower, bond yields declined, and the euro hovered near its two-month average.
Benchmark indexes in Frankfurt, Paris, and London edged lower amid cautious trading ahead of the European Central Bank's monetary policy decisions on Thursday.
Market participants are worried that policymakers may not follow through on the possible rate cut as early as June, as signaled at the end of the last meeting on March 7.
Moreover, investors are also concerned that the U.S. Federal Reserve Bank is more likely to delay its advertised rate cut later than previously expected, with spillover effects in global bond market.
France's Goods Trade Deficit Shrank In February
France's international goods trade deficit shrank to Є5.2 billion from Є7.2 billion in January after exports rose faster than imports, according to the latest data released by the general directorate of customs on Tuesday.
Exports in February rose 4.7% to Є51.1 billion from Є48.8 billion in January, and imports advanced 0.5% to Є56.3 billion from Є56.0 billion in the previous month.
The goods trade deficit in February decreased to Є5.2 billion from Є7.2 billion in the previous month, and the cumulative deficit improved to Є90.9 billion.
Trade deficit dropped to the lowest since January 2021, after exports rose and the energy deficit declined in the month to Є3.8 billion from Є4.5 billion in the previous month.
Excluding energy, the trade deficit shrank to Є2.8 billion from Є4.0 billion in January.
In the manufacturing sector, trade deficit shrank to Є3.3 billon from Є4.0 billion; after consumer goods surplus rose to Є0.8 billion from Є0.7 billion, intermediate goods deficit shrank to Є0.9 billion from Є1.8 billion, and capital goods deficit expanded to Є3.2 billion from Є2.9 billion.
Europe Indexes and Yields
The DAX index decreased by 0.7% to 18,198.56, the CAC-40 index fell by 0.6% to 8,072.06, and the FTSE 100 index inched higher by 0.1% to 7,952.90.
The yield on 10-year German bonds edged down to 2.39%; French bonds inched lower to 2.89%; the UK gilts edged higher to 4.08%; and Italian bonds inched lower to 3.73%.
The euro edged higher to $1.086, the British pound inched higher to $1.267, and the U.S. dollar edged lower to 90.35 Swiss cents.
Brent crude decreased $0.09 to $90.60. a barrel, and the Dutch TTF natural gas rose by €0.12 to €28.04 per MWh.
Europe Stock Movers
Atos declined 15% to €1.96, after the struggling French IT company announced its restructuring plan details.
Nordex SE gained 2.5% to Є12.88 after the German wind turbine company won an order to supply 295 MW wind turbines to EDF Renewables in South Africa.
Siemens AG declined a fraction to Є173.68 after the German engineering company said its Supervisory Board extended the contract for President and Chief Executive Officer Roland Busch for five years, starting April 1, 2025.
Imperial Brands inched up 0.4% to 1,737.50 pence after the UK-based tobacco company reiterated its revenue and earnings outlook for fiscal 2024.
Mining companies advanced in London trading after the copper price in Shanghai traded at a record high on the expectation of rising demand for manufactured goods in developed economies and in China.
Anglo American, Antofagasta, and Glencore advanced between 1% and 2%.
BP plc increased 1.5% to 516.30 pence after the company said it anticipates strong performance in the first quarter.
HSBC Holdings gained 0.3% to 646.40 pence after the UK- and China-based bank said it plans to sell its banking operation in Argentina to Grupo Financiero Gallicia for about $550 million.
Asian Markets Advance, China's Inflation and International Trade Data In Spotlight
Li Chen
09 Apr, 2024
Hong Kong
Stocks in Asia generally advanced as investors shifted their focus to the start of the earnings season.
Market sentiment was positive in Asia, ahead of the release of key economic data in China.
In Asia, market indexes in Tokyo advanced 0.4%, Hong Kong advanced 0.6%, and Shanghai and Seoul declined 0.3%.
Tech Stocks Lead Japan Indexes Higher
Stocks in Tokyo rebounded for the second day in a row, led by a surge in tech stocks.
The yen approached the 152 mark against the U.S. dollar as nervous traders worried about government intervention in the currency market.
The yen has been hovering at a multi-year high after the Bank of Japan ended its negative rate policy after eight years and lifted interest rates for the first time since February 2007.
Policymakers were hoping that the yen would strengthen after the end of the negative rate regime on March 19, but the currency has continued to weaken.
The Nikkei 225 Stock Average jumped 0.9% to 39,713.49, and the Topix index advanced 0.8% to 2,750.40.
Among the most active tech stocks, SoftBank, Tokyo Electron, Advantest, Disco Corp., Renesas Electronics, and Shin-Etsu Chemical advanced between 1% and 3%.
Financial stocks also participated in the market rally.
Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial advanced between 0.2% and 0.4%.
Cautious Trading in China Ahead of Inflation and Foreign Trade Data
Stocks in Shanghai and Hong Kong diverged, and investors looked forward to the release of inflation and foreign trade data later in the week.
Stocks in Shanghai remained under pressure ahead of the release of consumer price data on Wednesday, and investors are hoping prices edged higher by 0.4% in March, the second monthly increase in a row.
Moreover, investors are anticipating exports to decline between 1% and 2% in March, and trade surplus to expand.
China's exports in the January–February period rose 7.1% and imports rose 3.1% from a year ago, respectively, according to the customs agency.
The CSI 300 index decreased 0.3% to 3,526.63, and the Hang Seng Index advanced 0.8% to 16,861.38.
Net Ease increased 4.7% to HK$158.50, after the National Press and Publication Administration approved 15 foreign computer games for the Chinese market.
Electric vehicle makers advanced in the hopes of higher domestic and international sales in the second quarte.
Li Auto increased 2.2% to HK$123.40, BYD added 2.5% to $207.0, and Xiamo Corp. jumped 2.9% to HK$15.94.
Property stocks were in focus after Country Garden reported a sharp decline in sales in March.
Contracted sales in March plunged 83% to 4.3 billion yuan, and when measured by area, they dropped 85% to 450,000 square meters.
China Vanke, China Resources Land, and Henderson Land edged higher between 0.2% and 0.6%.
The Guangdong-based Country Garden's stock is suspended from trading on the Hong Kong Stock Exchange, as the company missed Thursday's deadline to file its annual report.
India Indexes Inch Higher in Record Zone Ahead of Earnings Season
Stocks in Mumbai edged higher in subdued trading, as the earnings season gained momentum.
The Sensex and the Nifty indexes struggled to advance in early trading as investors looked forward to the release of corporate earnings from tech services providers.
Stocks in Mumbai are struggling to advance in the second quarter ahead of the general election next month, and there are worries about high valuations in the small and mid-cap sectors.
Moreover, the recent rise in commodity and metal prices has rekindled the fear of resurgent inflation, negatively impacting vehicle sales.
Brent crude oil price decreased 1.6% to $89.70 a barrel, after tensions eased in the Middle East after negotiations between Israel and Hamas resumed in Egypt.
However, Israel stressed that its army is ready to launch a military strike in Rafah City, Gaza, if a settlement is not reached soon.
The Sensex index increased 0.5% to 74,635.23, and the Nifty index edged higher by 0.3% to 22,621.95.
On the Mumbai stock exchange, 266 stocks traded at their 52-week highs, and 12 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.15%, and the Indian rupee edged lower at ₹83.26 against the U.S. dollar.
Axis Bank rose 1.7% to ₹1,077.0 after the private equity firm Bain Capital plans to sell its remaining stake in the bank through a block trade in the price range between ₹1,071 and ₹1,076 per share.
Tata Motors increased 0.6% to ₹1,012.70 after the company's Jaguar Land Rover unit said vehicle sales in the March quarter increased 11% to 114,038.
For the fiscal year ending in March 2024, vehicle sales advanced 22% to 431,733 units.
Earnings Take Center Stage as Rate Cut Expectations Fade
Barry Adams
08 Apr, 2024
New York City
Stocks wavered on Wall Street, and Treasury yields edged higher for the second day in a row, as investors adjusted their rate-path expectations.
The S&P 500 index and the Nasdaq Composite edged slightly higher as investors awaited the start of the earnings season, with leading banks set to announce earnings.
Last week, market indexes closed on a positive note after nonfarm payrolls advanced, wages gained, and more people sought employment.
Investors weighed the positive impact of an expanding labor market on the U.S. economy, which will support higher corporate earnings despite interest rates staying higher for longer.
However, market enthusiasm was kept in check, after Treasury yields edged higher for the second session in a row.
This week, the U.S. Bureau of Labor Statistics is set to release the consumer price index on Wednesday, and the producer price index on Thursday.
The consumer price index for March is expected to increase at annual pace of 3.4% and advance 0.35% from the previous month, according to a poll of ten economists conducted by ticker.com.
The consumer price index advanced 3.2% in February, higher than most economists were looking for.
U.S. Indexes and Yields
The S&P 500 index increased 0.2% to 5,212.74, and the Nasdaq Composite rose 0.3% to 16,294.02.
The yield on 2-year Treasury notes edged higher to 4.78%, 10-year Treasury notes inched down to 4.42%, and 30-year Treasury bonds edged up to 4.54%.
WTI crude oil decreased $1.21 to $85.61 a barrel, and natural gas prices increased 8 cents to $1.82 a thermal unit.
Gold decreased by $2.95 to $2,327.49 an ounce, and silver rose 2 cents to $27.50.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.18.
U.S. Stock Movers
Tesla jumped 4% to $171.50 after the company's chief executive, Elon Musk, said the company is ready to release its robotaxi design on August 8.
Oil companies traded down after crude oil prices eased more than 1% following the easing of tensions in the Middle East.
Exxon Mobil, Chevron, Hess, and Marathon Oil declined around 0.6%.
Popular tech stocks also drifted lower in early trading.
Apple, Microsoft, Meta, Netflix, Amazon, Alphabet, and Amazon declined between 0.1% and 0.4%.
Semiconductor stocks drifted downward, and Intel, AMD, Nvidia, Broadcom, and Qualcomm declined around 0.2%.
European Markets Extend Gains
Stocks in Europe extended the previous week's gains, and investors reviewed the latest economic updates from Germany.
In cautious trading, investors bid up stocks in the hopes that the European Central Bank will hold rates steady later this week and provide an update on its rate path views.
Investors are hoping that the central bank is still on track to lower rates as early as June.
However, investor expectations may be dashed.
Crude oil prices have rebounded to a five-month high in the last two months, and service sector inflation is near 4% and shows no sign of easing after multiple rate hikes over the last two years.
German Industrial Output Increased In February
German industrial output rose monthly by 2.1% in February and accelerated from a 1.3% increase in January, Destatis reported Monday.
Industrial output, adjusted for seasonal and calendar factors, rose at the fastest pace since January 2023, after increase in activities in automotive, chemical, and construction industries.
The output increased in the automotive industry by 5.7%, in the chemical industry by 4.6%, and in the construction industry by 7.9%.
However, the decline in energy generation sector production by 6.5%, significantly negatively impacted the overall output.
The annual decline in industrial output softened to 4.9% from a decrease of 5.3% in January.
Seasonally and calendar-adjusted industrial production, excluding energy and construction, increased by 1.9% in February from the previous month but fell 5.5% from a year ago.
German Trade Surplus Shrank In February
Germany's trade surplus shrank from the previous month in February after imports rose and exports fell, Destatis reported Monday.
Adjusted for seasonal and calendar factors, exports in February decreased 2.2% to €132.9 billion and imports rose 3.2% to €111.5 billion from the previous month, respectively.
Germany's foreign trade was negatively impacted by elevated interest rates and rising macroeconomic uncertainty; however, lower energy prices supported the decline in overall imports.
Exports decreased by 4.4% and imports declined by 8.7% compared to the same month a year ago.
The trade balance shrank to €21.4 billion from €27.6 billion in January but rose from €16.9 billion in the corresponding month a year ago.
Exports to the European Union contracted 3.9% to €72.9 billion, and imports from the region decreased 5.7% to €57.5 billion.
Germany's three main trading partners outside the European Union showed mixed performance.
Exports to the U.S. increased by 10.2% from the previous month to €13.8 billion, but fell to China by 0.6% to €8 billion and to the U.K. by 2.0% to €6.6 billion. in the same period.
Imports from China surged 16% from the previous month to €12.1 billion; imports from the U.S. declined by 5.2% to €7.4 billion; and imports from the U.K. declined by 4.6% to €3.1 billion.
Europe Indexes and Yields
The DAX index increased by 0.8% to 18,318.97, the CAC-40 index rose by 0.7% to 8,119.30, and the FTSE 100 index inched higher by 0.4% to 7,943.47.
The yield on 10-year German bonds edged up to 2.44%; French bonds inched lower to 2.93%; the UK gilts edged higher to 4.14%; and Italian bonds inched higher to 3.80%.
The euro edged higher to $1.083, the British pound inched higher to $1.263, and the U.S. dollar edged higher to 90.57 Swiss cents.
Brent crude decreased $1.17 to $89.99. a barrel, and the Dutch TTF natural gas rose by €1.17 to €27.92 per MWh.
Europe Stock Movers
Mining companies in London traded higher after the price of copper in Shanghai jumped to a record on the expectation of a demand rebound and supply constraints.
Antofagasta, Anglo American, and Glencore rose between 1.2% and 1.6%.
Entain PLC rose 4.7% to 821.20 pence on speculation that private equity companies are looking to make a bid for the troubled online gambling and sports betting company.
Energy companies edged lower after the crude oil price declined more than 1% in London trading after tensions eased in the Middle East following the start of negotiations between Israel and Hamas in Egypt.
Asian Rebound Tracking Friday's Wall Street Gains
Asian markets attempted to rebound in Monday's trading following better-than-expected U.S. economic data on Friday.
For now, investors set aside the expectations of a U.S. rate cut as early as June and its likely impact on the world bond market.
Benchmark indexes in Japan, India, South Korea, and Australia advanced.
Gold miners in China and Australia traded higher after the bullion price soared to a new record high amid speculation about the U.S. rate path, elevated tensions in the Middle East, and persistent buying by the central banks, including the People's Bank of China.
The People's Bank of China lifted its declared gold holding for the 17th month in a row, according to the official figures released on Sunday.
The central bank increased its holding by 0.2% in March to 72.74 million troy ounces, the smallest monthly purchase since the latest buying spree began in November 2022.
Nikkei 225 Rebounds Tracking Friday's Wall Street Gains
Benchmark indexes in Japan advanced in Monday's trading and rebounded from a three-week low, tracking gains on Wall Street in Friday's trading.
The U.S. economy added more-than-expected 303,000 jobs in March, higher than 270,000 jobs in February, and at the fastest pace in ten months.
The Nikkei 225 Stock Average added 0.8% to 39,293.52, and the Topix index gained 0.7% to 2,723.59.
The yen hovered near 151.64 against the U.S. dollar as traders speculated on the timing and amount of government intervention in the currency market.
Tech and financial services stocks were among the leading gainers in Monday's trading.
SoftBank, Tokyo Electron, Advantest, Screen Holdings, and Disco Corp. gained between 1.4% and 3.2%.
Socionext jumped 6.1% to ¥4,896.0, and Fujitsu advanced 3.8% to ¥2,476.0.
Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial gained around 1.5%.
China Stocks Struggle Ahead of Inflation and Trade Data
Benchmark indexes in Shanghai and Hong Kong struggled to hold morning gains as investors awaited the release of economic data later in the week.
China is scheduled to release its overall inflation data on Thursday and its international trade data on Friday.
In addition, this week, the People's Bank of China is also likely to provide information on money supply and new loan updates.
Stocks opened higher but quickly lost ground as foreign investors stayed on the sidelines.
U.S. Treasury Secretary Janet Yellen said talks with Chinese Premier Li Qiang were "extensive and productive" after the two met on Sunday.
Electric vehicle makers advanced after China's Commerce Minister Wang Wentao refuted the allegation of overcapacity and added that vehicle makers are not reliant on government subsidies.
Li Auto jumped 3.3% to HK$119.90, and BYD jumped 2.1% to HK$202.0.
The CSI 300 index decreased 0.5% to 3,551.93 and the Hang Seng index declined 0.1% to 16,709.68.
Zijin Mining Group advanced 1.7% to HK$17.06 after yellow metal's price soared to a record high of $2,339.35 an ounce in New York.
India Indexes Advance Amid Elevated Geopolitical Tension
Stocks in Mumbai opened higher after benchmark indexes extended the previous week's gains.
Crude oil edged lower in international trading but hovered near a five-month high amid the prospect of a wider war between Israel and Iran.
Israel withdrew its military from South Gaza and returned to negotiations with Hamas in Egypt amid rising international pressure.
About two weeks ago, Israel bombed Iran's embassy in Syria and killed seven people, including three military advisors.
Military experts in the region worry that Iran will conduct a retaliatory strike targeting Israeli embassies.
On Friday, the Reserve Bank of India held its repo rate at 6.5% and projected India's economy to expand at an annual pace of 7.0% in fiscal 2025.
However, the central bank did not provide clear indications on rate paths and inflation, citing elevated macroeconomic headwinds and global market uncertainty.
Moreover, investors worried about the spillover effects of the higher-for-longer U.S. interest rates after the latest data showed stronger-than-expected payroll growth and economic conditions.
This week, investors are looking ahead to the release of industrial output in March and overall inflation data in February.
On the earning front, Tata Consultancy Services is scheduled to release its March quarter earnings after the close of trading hours in Mumbai.
The Sensex index increased 0.5% to 74,635.23, and the Nifty index edged higher by 0.3% to 22,621.95.
On the Mumbai stock exchange, 151 stocks traded at their 52-week highs, and 4 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.12%, and the Indian rupee edged lower at ₹83.28 against the U.S. dollar.
U.S. Major Averages Looked Higher In Cautious Trading Ahead of Earnings Releases
Barry Adams
08 Apr, 2024
New York City
Benchmark indexes traded around the flatline in early trading on Monday, and investors remained positive ahead of the start of the earnings season.
The S&P 500 index and the Nasdaq Composite edged slightly higher as investors awaited the start of the earnings season, with leading banks set to announce earnings.
Last week, market indexes trimmed losses following the gains on Friday after nonfarm payrolls advanced, wages gained, and more people sought employment.
Investors weighed the positive impact of an expanding labor market on the U.S. economy, which will support higher corporate earnings despite interest rates staying higher for longer.
However, market enthusiasm was kept in check after Treasury yields edged higher.
This week, investors are looking ahead to the release of consumer price and producer price indexes.
The consumer price index for March is expected to increase at annual pace of 3.4% and advance 0.35% from the previous month, according to a poll of ten economists conducted by ticker.com.
U.S. Indexes and Yields
The S&P 500 index increased 0.2% to 5,212.74, and the Nasdaq Composite rose 0.3% to 16,294.02.
The yield on 2-year Treasury notes edged higher to 4.78%, 10-year Treasury notes inched down to 4.42%, and 30-year Treasury bonds edged up to 4.54%.
WTI crude oil decreased $1.21 to $85.61 a barrel, and natural gas prices increased 8 cents to $1.82 a thermal unit.
Gold decreased by $2.95 to $2,327.49 an ounce, and silver rose 2 cents to $27.50.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.18.
U.S. Stock Movers
Tesla jumped 4% to $171.50 after the company's chief executive, Elon Musk, said the company is ready to release its robotaxi design on August 8.
Oil companies traded down after crude oil prices eased more than 1% following the easing of tensions in the Middle East.
Exxon Mobil, Chevron, Hess, and Marathon Oil declined around 0.6%.
Popular tech stocks also drifted lower in early trading.
Apple, Microsoft, Meta, Netflix, Amazon, Alphabet, and Amazon declined between 0.1% and 0.4%.
Semiconductor stocks drifted downward, and Intel, AMD, Nvidia, Broadcom, and Qualcomm declined around 0.2%.
Europe Movers: German Automakers, Entain, Oil Stocks, UK Mining Companies
Inga Muller
08 Apr, 2024
Frankfurt
European markets extended the previous week's gains ahead of the European Central Bank's monetary policy decisions later this week.
The DAX index increased by 0.6% to 18,281.97, the CAC-40 index rose by 0.6% to 8,105.36, and the FTSE 100 index inched higher by 0.1% to 7,918.41.
The yield on 10-year German bonds edged up to 2.44%; French bonds inched lower to 2.93%; the UK gilts edged higher to 4.14%; and Italian bonds inched higher to 3.80%.
Mining companies in London traded higher after the price of copper in Shanghai jumped to a record on the expectation of a demand rebound and supply constraints.
Antofagasta, Anglo American, and Glencore rose between 1.2% and 1.6%.
Entain PLC rose 4.7% to 821.20 pence on speculation that private equity companies are looking to make a bid for the troubled online gambling and sports betting company.
Energy companies traded volatile after the crude oil price declined more than 1% in London trading after tensions eased in the Middle East following the start of negotiations between Israel and Hamas in Egypt.
BP plc gained 1% to 511.40 pence, Shell PLC added 1.1% to 2,808.0 pence, and TotalEnergies SE advanced 1.3% to €67.67.
German automakers advanced after the release of industrial output data.
Mercedes Benz gained 2.5% to €76.58, Volkswagen Group advanced 0.7% to €127.30, and BMW AG increased 1.5% to €114.20.
European Markets Advance, German Industrial Output Rebounds and Trade Surplus Shrinks
Bridgette Randall
08 Apr, 2024
Frankfurt
Stocks in Europe extended the previous week's gains, and investors reviewed the latest economic updates from Germany.
In cautious trading, investors bid up stocks in the hopes that the European Central Bank will hold rates steady later this week and provide an update on its rate path views.
Investors are hoping that the central bank is still on track to lower rates as early as June.
However, investor expectations may be dashed.
Crude oil prices have rebounded to a five-month high in the last two months, and service sector inflation is near 4% and shows no sign of easing after multiple rate hikes over the last two years.
German Industrial Output Increased In February
German industrial output rose monthly by 2.1% in February and accelerated from a 1.3% increase in January, Destatis reported Monday.
Industrial output, adjusted for seasonal and calendar factors, rose at the fastest pace since January 2023, after increase in activities in automotive, chemical, and construction industries.
The output increased in the automotive industry by 5.7%, in the chemical industry by 4.6%, and in the construction industry by 7.9%.
However, the decline in energy generation sector production by 6.5%, significantly negatively impacted the overall output.
The annual decline in industrial output softened to 4.9% from a decrease of 5.3% in January.
Seasonally and calendar-adjusted industrial production, excluding energy and construction, increased by 1.9% in February from the previous month but fell 5.5% from a year ago.
German Trade Surplus Shrank In February
Germany's trade surplus shrank from the previous month in February after imports rose and exports fell, Destatis reported Monday.
Adjusted for seasonal and calendar factors, exports in February decreased 2.2% to €132.9 billion and imports rose 3.2% to €111.5 billion from the previous month, respectively.
Germany's foreign trade was negatively impacted by elevated interest rates and rising macroeconomic uncertainty; however, lower energy prices supported the decline in overall imports.
Exports decreased by 4.4% and imports declined by 8.7% compared to the same month a year ago.
The trade balance shrank to €21.4 billion from €27.6 billion in January but rose from €16.9 billion in the corresponding month a year ago.
Exports to the European Union contracted 3.9% to €72.9 billion, and imports from the region decreased 5.7% to €57.5 billion.
Germany's three main trading partners outside the European Union showed mixed performance.
Exports to the U.S. increased by 10.2% from the previous month to €13.8 billion, but fell to China by 0.6% to €8 billion and to the U.K. by 2.0% to €6.6 billion. in the same period.
Imports from China surged 16% from the previous month to €12.1 billion; imports from the U.S. declined by 5.2% to €7.4 billion; and imports from the U.K. declined by 4.6% to €3.1 billion.
Europe Indexes and Yields
The DAX index increased by 0.6% to 18,281.97, the CAC-40 index rose by 0.6% to 8,105.36, and the FTSE 100 index inched higher by 0.1% to 7,918.41.
The yield on 10-year German bonds edged up to 2.44%; French bonds inched lower to 2.93%; the UK gilts edged higher to 4.14%; and Italian bonds inched higher to 3.80%.
The euro edged higher to $1.083, the British pound inched higher to $1.263, and the U.S. dollar edged higher to 90.57 Swiss cents.
Brent crude decreased $0.80 to $90.36. a barrel, and the Dutch TTF natural gas rose by €0.39 to €27.0 per MWh.
Europe Stock Movers
Mining companies in London traded higher after the price of copper in Shanghai jumped to a record on the expectation of a demand rebound and supply constraints.
Antofagasta, Anglo American, and Glencore rose between 1.2% and 1.6%.
Entain PLC rose 4.7% to 821.20 pence on speculation that private equity companies are looking to make a bid for the troubled online gambling and sports betting company.
Energy companies edged lower after the crude oil price declined more than 1% in London trading after tensions eased in the Middle East following the start of negotiations between Israel and Hamas in Egypt.
Asian Markets Trade Higher, China Indexes Ease Ahead of Inflation Data
Li Chen
08 Apr, 2024
Hong Kong
Asian markets attempted to rebound in Monday's trading following better-than-expected U.S. economic data on Friday.
For now, investors set aside the expectations of a U.S. rate cut as early as June and its likely impact on the world bond market.
Benchmark indexes in Japan, India, South Korea, and Australia advanced.
Gold miners in China and Australia traded higher after the bullion price soared to a new record high amid speculation about the U.S. rate path, elevated tensions in the Middle East, and persistent buying by the central banks, including the People's Bank of China.
The People's Bank of China lifted its declared gold holding for the 17th month in a row, according to the official figures released on Sunday.
The central bank increased its holding by 0.2% in March to 72.74 million troy ounces, the smallest monthly purchase since the latest buying spree began in November 2022.
Nikkei 225 Rebounds Tracking Friday's Wall Street Gains
Benchmark indexes in Japan advanced in Monday's trading and rebounded from a three-week low, tracking gains on Wall Street in Friday's trading.
The U.S. economy added more-than-expected 303,000 jobs in March, higher than 270,000 jobs in February, and at the fastest pace in ten months.
The Nikkei 225 Stock Average added 0.8% to 39,293.52, and the Topix index gained 0.7% to 2,723.59.
The yen hovered near 151.64 against the U.S. dollar as traders speculated on the timing and amount of government intervention in the currency market.
Tech and financial services stocks were among the leading gainers in Monday's trading.
SoftBank, Tokyo Electron, Advantest, Screen Holdings, and Disco Corp. gained between 1.4% and 3.2%.
Socionext jumped 6.1% to ¥4,896.0, and Fujitsu advanced 3.8% to ¥2,476.0.
Mitsubishi UFJ, Sumitomo Mitsui Financial, and Mizuho Financial gained around 1.5%.
China Stocks Struggle Ahead of Inflation and Trade Data
Benchmark indexes in Shanghai and Hong Kong struggled to hold morning gains as investors awaited the release of economic data later in the week.
China is scheduled to release its overall inflation data on Thursday and its international trade data on Friday.
In addition, this week, the People's Bank of China is also likely to provide information on money supply and new loan updates.
Stocks opened higher but quickly lost ground as foreign investors stayed on the sidelines.
U.S. Treasury Secretary Janet Yellen said talks with Chinese Premier Li Qiang were "extensive and productive" after the two met on Sunday.
Electric vehicle makers advanced after China's Commerce Minister Wang Wentao refuted the allegation of overcapacity and added that vehicle makers are not reliant on government subsidies.
Li Auto jumped 3.3% to HK$119.90, and BYD jumped 2.1% to HK$202.0.
The CSI 300 index decreased 0.5% to 3,551.93 and the Hang Seng index declined 0.1% to 16,709.68.
Zijin Mining Group advanced 1.7% to HK$17.06 after yellow metal's price soared to a record high of $2,339.35 an ounce in New York.
India Indexes Advance Amid Elevated Geopolitical Tension
Stocks in Mumbai opened higher after benchmark indexes extended the previous week's gains.
Crude oil edged lower in international trading but hovered near a five-month high amid the prospect of a wider war between Israel and Iran.
Israel withdrew its military from South Gaza and returned to negotiations with Hamas in Egypt amid rising international pressure.
About two weeks ago, Israel bombed Iran's embassy in Syria and killed seven people, including three military advisors.
Military experts in the region worry that Iran will conduct a retaliatory strike targeting Israeli embassies.
On Friday, the Reserve Bank of India held its repo rate at 6.5% and projected India's economy to expand at an annual pace of 7.0% in fiscal 2025.
However, the central bank did not provide clear indications on rate paths and inflation, citing elevated macroeconomic headwinds and global market uncertainty.
Moreover, investors worried about the spillover effects of the higher-for-longer U.S. interest rates after the latest data showed stronger-than-expected payroll growth and economic conditions.
This week, investors are looking ahead to the release of industrial output in March and overall inflation data in February.
On the earning front, Tata Consultancy Services is scheduled to release its March quarter earnings after the close of trading hours in Mumbai.
The Sensex index increased 0.5% to 74,635.23, and the Nifty index edged higher by 0.3% to 22,621.95.
On the Mumbai stock exchange, 151 stocks traded at their 52-week highs, and 4 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.12%, and the Indian rupee edged lower at ₹83.28 against the U.S. dollar.
Friday Rebound Trims Weekly Decline In U.S. Indexes, Markets In Europe and Japan Extend Losses
Barry Adams
05 Apr, 2024
New York City
Benchmark indexes on Wall Street soared as investors cheered the latest jobs report and looked beyond rate uncertainty.
The S&P 500 index and the Nasdaq Composite advanced 1% after the U.S. economy added more than expected jobs in March, indicating a resilient economy.
The jobless rate edged slightly lower, but wages rose at a faster pace, making the Federal Reserve's task harder in balancing economic growth and moderating inflation.
Investors prefer the U.S. economy to grow at a healthy pace of 2% because that supports corporate earnings growth, but at the same time, they prefer job market conditions to weaken, driving wage inflation below 2%.
So far, wages have been rising at an annual pace of around 4%, and the U.S. economy is expanding at an above-average long-term annual growth rate of 2%.
The latest jobs report supports the case for the Federal Reserve to hold rates steady at the next meeting, as more investors anticipate the no landing scenario, where policymakers hold rates steady till the end of the year.
Despite the market bonce in Friday's trading, for the week, the S&P 500 index decreased 1.1% and the Nasdaq Composite declined 1.3% after investors struggled to balance hawkish comments from Fed officials with stronger-than-expected economic data.
Nonfarm Payrolls Rise the most in 10 Months
The U.S. economy added more than expected: 303,000 jobs in March, more than 270,000 jobs in February, and at the fastest pace in ten months.
The jobless rate eased to 3.8% in March from a two-year high of 3.9% in February. the U.S. Bureau of Labor Statistics noted in its monthly nonfarm payrolls report.
The average hourly wage for all employees on private nonfarm payrolls rose 0.3%, or 12 cents, to $34.69.
Over the last 12 months, average hourly earnings increased by 4.1% in March after rising by 4.3% in February.
U.S. Indexes and Yields
The S&P 500 index increased 1.1% to 5,204.34, and the Nasdaq Composite rose 1.2% to 16,248.52.
The yield on 2-year Treasury notes edged lower to 4.70%, 10-year Treasury notes inched down to 4.35%, and 30-year Treasury bonds edged up to 4.51%.
WTI crude oil increased $0.19 to $86.77 a barrel, and natural gas prices increased 1 cent to $1.78 a thermal unit.
Precious metal prices rose for the third week in a row on speculation that the Federal Reserve is still committed to lowering rates and driving the U.S. dollar lower.
Moreover, the latest job market data suggests that the resilient U.S. economy and expanding labor market conditions may lead to higher-than-estimated inflation.
The weaker dollar supports higher gold prices because gold and silver metals are priced in the U.S. dollar in international markets.
Gold decreased by $40.09 to $2,329.52 an ounce, and silver rose 55 cents to $27.48.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.42.
U.S. Stock Movers
Teladoc Health declined 0.5% to $14.17 after the company said chief executive officer Jason Gorevic unexpectedly departed.
The company's board appointed chief financial officer Mala Murthy as temporary chief executive while the company conducted a search for a permanent replacement.
European Markets Trade Sideways Amid Mixed Economic Data
European markets dropped sharply on the final day of a holiday-shortened trading week.
Benchmark indexes in Frankfurt, Paris, and London declined more than 1% after investors lowered expectations of rate cuts in the U.S. following hawkish comments from Federal Reserve officials.
Closer to home, Euro Area retail sales declined in February and extended the downturn to the 17th month in a row due to the persistently high cost of living and elevated interest rates.
UK Monthly Home Prices Declined In February
The Halifax House Price Index in the UK rose 0.3% from a year ago in February, Halifax and the Bank of Scotland reported Friday.
The home price index increased for the fourth month in a row; however, the pace of an annual increase eased to the slowest pace in the month.
Despite the market volatility, underlying demand for homes remains strong amid elevated rental costs across the nation.
Home prices declined 1% on a monthly basis, and an average UK home now costs £288,430, around £2,900 less than last month.
“Affordability constraints continue to be a challenge for prospective buyers, while existing homeowners on cheaper fixed-term deals are yet to feel the full effect of higher interest rates," Kim Kinnaird, Director, Halifax Mortgages, said.
The UK's housing market is still in a state of flux, as most existing home owners have yet to feel the full brunt of higher interest rates.
Eurozone Retail Sales Extend Annual Decline Streak to 17th Month
Eurozone retail sales declined in February, highlighting a challenging environment for consumers amid elevated interest rates and high inflation.
Retail sales in the currency union decreased 0.5% from the previous month in February after staying unchanged in January, Eurostat reported Friday.
Sales of food, drinks, and tobacco fell by 0.4% after a 0.3% rise the previous month, while non-food product sales decreased by 0.2% after a 0.4% increase.
Meanwhile, sales of automotive fuel shrank by 1.4%, the largest decline in seven months.
Retail sales on an annual basis declined 0.7% in February, extending the decline to the 17th month in a row after consumers retrenched on basic necessities and avoided discretionary items.
German factory Orders Rebound Slightly from Previous Month in February
Germany's factory orders increased monthly by 0.2% in February, following the revised 11.4% fall in January, Destatis reported Friday.
Calendar-adjusted orders from a year ago dropped 10.6%.
In a less volatile three-month comparison, incoming orders from December 2023 to February 2024 were 2.8% higher than in the previous three months.
However, the increase is mainly due to a large order in December.
Excluding large orders, incoming orders from December 2023 to February 2024 were 2.0% lower than in the previous three months.
Orders rose for manufacturing electrical equipment by 10.7% after falling for two months in a row, pharmaceuticals by 6.6%, and the chemical industry by 3.1%.
In contrast, new orders declined for automotive by 8.1% and for manufacturing metal products by 5.3%.
Incoming orders for capital goods declined by 0.6% and rose for both intermediate goods by 1.0% and consumer goods by 2.2% in February compared to the previous month.
Domestic orders increased 1.5%, but foreign orders eased 0.7%, with demand from the eurozone falling 13.1% and orders from outside the currency union advanced 7.8%.
Europe Indexes and Yields
The DAX index decreased by 1.3% to 18,175.04, the CAC-40 index fell by 1.1% to 8,061.31, and the FTSE 100 index inched lower by 0.8% to 7,911.16.
The yield on 10-year German bonds edged down to 2.36%; French bonds inched lower to 2.87%; the UK gilts edged lower to 4.08%; and Italian bonds inched higher to 3.73%.
The euro edged higher to $1.083, the British pound inched higher to $1.263, and the U.S. dollar edged higher to 90.30 Swiss cents.
Brent crude increased $0.22 to $90.86. a barrel, and the Dutch TTF natural gas rose by €0.80 to €26.96 per MWh.
Europe Stock Movers
Travel and leisure stocks declined after crude oil prices jumped to near $91 a barrel on the rising tensions in the Middle East following the escalation of tensions between Iran and Israel.
TUI AG declined 2.3% to €7.56, easyJet declined 2.5% to 554.80 pence, and the parent company of British Air, International Consolidated Airlines Group, fell 2.8% to 171.55 pence.
UK home builders declined after home prices rose at the slowest pace in four months.
Barratt Developments, Taylor Wimpey, and Persimmon declined between 12% and 1.7%.
Asian Markets Extended Weekly Losses, China Indexes Rebound
Market indexes in Tokyo dropped 2%, and in Hong Kong, Seoul, and Sydney declined around 1%.
The latest decline in indexes was sparked by a growing realization that U.S. policymakers are not in a hurry lower rates after a string of positive economic data.
Those comments are in sharp contrast to the expectations of as many as three rate cuts just two months ago.
“If we continue to see inflation moving sideways, then that would make me question whether we need to do those rate cuts at all,” said Kashkari, president of the Minneapolis Federal Reserve Bank, in an interview with Pensions & Investments on Thursday.
Last month, Kashkari projected two rate cuts in 2024 but turned cautious following the recent economic data.
The latest update on manufactured goods orders, construction spending, the personal consumption expenditures price index, and job openings suggested resilient economic and labor market conditions.
The comments of U.S. policymakers over the last two days suggested that policymakers are more likely to hold interest rates higher for longer.
Japan Indexes Extend Weekly Losses, Yen Rally Falters
Stocks in Japan traded down, and the benchmark indexes extended weekly losses to more than 2%, after investors lowered rate-cut expectations in the U.S.
The yen traded above 151 against the U.S. dollar on the worry that the rate differential with the U.S. rates may remain high longer than previously anticipated.
Moreover, investors worry that the Bank of Japan's rate hike last month may not be enough to stabilize the yen.
The Japanese yen has been hovering near 152 level against the yen, prompting verbal intervention by the ministry of finance.
The Japanese corporations are still not likely to increase profit repatriation because of the persistent and large interest rate gap between the rates in Japan, the U.S., and the Euro Area.
The average household spending in Japan was down 0.5% from a year ago to 279,868 yen, or $1,866, in February, the Ministry of Internal Affairs and Communications said on Friday.
The decline in February follows the 6.3% slide in January.
The Nikkei 225 Stock Average decreased 2% to 38,955.19, and the Topix index dropped 1.3% to 2,698.30.
The Nikkei 225 index declined below 39,000 for the first time in three weeks.
Crude oil prices approached a five-month high after conflict in the Middle East escalated following a deadly bombing raid by Israel on Monday.
Israel bombed Iran's embassy in Syria, killing three senior commanders among seven military advisors.
Dubai crude oil for June delivery rose $1.05 to $90.85 a barrel after Israel stepped up its bombing campaign this week, raising speculation of a wider war in the Middle East.
Tokyo Electric Power declined 6.5% to ¥946.60, and Inpex Corp. declined 0.2% to ¥2,466.0.
Tech stocks were among the leading decliners in Tokyo.
Tokyo Electron, Screen Holdings, Advantest, and SoftBank dropped between 2.5% and 4%.
Sumitomo Mitsui Financial, Mizuho Financial, and Mitsubishi UFJ decreased around 2%, after investors lowered rate-cut expectations in the U.S.
Hong Stocks Extend Weekly Losses
The market index in Hong Kong reversed earlier gains in the day and closed down amid rate worries.
Financial markets in China are closed for a public holiday on Friday.
The Hang Seng Index declined 0.7% to 16,606.26 after investors pared back rate-cut expectations, and the index advanced 0.4% in a holiday-shortened week following the rise of 0.3% in the previous week.
Despite the market intervention by Chinese government-controlled funds in financial markets, the Hang Seng index is the worst-performing market among the top 10 leading world markets.
The Hang Seng index extended this year's decline to 1%, and extended five-year losses to 44%.
Alibaba Group, Tencent Holdings, JD.com, Trip.com, Baidu.com, and Meituan declined between 0.2% and 2.2%.
Xiaomi declined 2.2% to HK$15.14 after the initial enthusiasm faded following the launch of a new electric vehicle in a crowded passenger car market.
India Stocks Trim Weekly Gains, RBI Holds Rates
Stocks in Mumbai lacked direction and the Reserve Bank of India held its repo rate for the seventh time in a row.
The Sensex and the Nifty indexes struggled to stay above the flatline as investors looked ahead to the monetary policy decision and inflation and economic growth projections from the Reserve Bank of India.
The Reserve Bank of India held the repo rate at 6.5% and projected fiscal year 2025 economic growth at 7.0%.
Governor Shaktikanta Das held out for inflation to ease in the second quarter of the fiscal year, supporting the case for a rate cut later in the year.
The RBI last cut the repo rate by 40 basis points to 4% in May 2020, and two years later, the central bank commenced the lifting of the interest rate after overall inflation picked up following a rise in energy and food prices.
Market sentiment was cautious in early trading after benchmark indexes on Wall Street declined more than 1%.
The Sensex index increased 0.03% to 74,248.22, and the Nifty index decreased a fraction to 22,513.70.
For the week to Thursday's close, the Sensex gained 0.9% and the Nifty index advanced 1.3%.
On the Mumbai stock exchange, 214 stocks traded at their 52-week highs, and 7 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held steady at 7.09%, and the Indian rupee held steady at ₹83.46 against the U.S. dollar.
U.S. Stocks Rebound and Treasury Yields Hold Steady After Hiring Accelerates In March
Barry Adams
05 Apr, 2024
New York City
Stocks on Wall Street advanced as investors reacted to the latest nonfarm payrolls report.
The S&P 500 index and the Nasdaq Composite advanced more than 0.4% after the U.S. economy added more than expected jobs in March, indicating a resilient economy.
The jobless rate edged slightly lower, but wages rose at a faster pace, making the Federal Reserve's task harder in balancing economic growth while moderating inflation.
Investors are looking for the U.S. economy to grow at a faster pace because that supports corporate earnings growth, but at the same time, they prefer job market conditions to weaken so that wage inflation falls below 2%.
So far, wages have been rising at an annual pace of around 4%, and the U.S. economy is expanding at an above-average long-term annual growth rate of 2%.
The latest jobs report supports the case for the Federal Reserve to hold rates steady at the next meeting, as more investors anticipate the no landing scenario, where policymakers hold rates steady till the end of the year.
Nonfarm Payrolls Rise the most in 10 Months
The U.S. economy added more than expected: 303,000 jobs in March, more than 270,000 jobs in February, and at the fastest pace in ten months.
The jobless rate eased to 3.8% in March from a two-year high of 3.9% in February. the U.S. Bureau of Labor Statistics noted in its monthly nonfarm payrolls report.
The average hourly wage for all employees on private nonfarm payrolls rose 0.3%, or 12 cents, to $34.69.
Over the last 12 months, average hourly earnings increased by 4.1% in March after rising by 4.3% in February.
U.S. Indexes and Yields
The S&P 500 index increased 0.5% to 5,170.64, and the Nasdaq Composite rose 0.8% to 16,173.02.
The yield on 2-year Treasury notes edged lower to 4.70%, 10-year Treasury notes inched down to 4.35%, and 30-year Treasury bonds edged up to 4.51%.
WTI crude oil increased $0.15 to $86.73 a barrel, and natural gas prices increased 1 cent to $1.77 a thermal unit.
Gold decreased by $17.89 to $2,308.28 an ounce, and silver fell 21 cents to $27.05.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.42.
U.S. Stock Movers
Teladoc Health declined 0.5% to $14.17 after the company said chief executive officer Jason Gorevic unexpectedly departed.
The company's board appointed chief financial officer Mala Murthy as temporary chief executive while the company conducted a search for a permanent replacement.
Europe Movers: Neste, Shell, SoftwareOne, TUI, UK Home Builders
Inga Muller
05 Apr, 2024
Frankfurt
European markets fell more than 1% after investors dialed down rate-cut expectations in the U.S., with a spillover effect in the eurozone.
Benchmark indexes in France and Paris are set to decline more than 2.5%, and the FTSE 100 index in the UK is expected to fall 0.6% after a week of trading.
The DAX index decreased by 1.5% to 18,130.88, the CAC-40 index fell by 1.4% to 8,034.74, and the FTSE 100 index inched lower by 1.0% to 7,894.95.
The yield on 10-year German bonds edged down to 2.36%; French bonds inched lower to 2.87%; the UK gilts edged lower to 4.08%; and Italian bonds inched higher to 3.73%.
Travel and leisure stocks declined after crude oil prices jumped to near $91 a barrel on the rising tensions in the Middle East following the escalation of tensions between Iran and Israel.
TUI AG declined 2.3% to €7.56, easyJet declined 2.5% to 554.80 pence, and the parent company of British Air, International Consolidated Airlines Group, fell 2.8% to 171.55 pence.
UK home builders declined after home prices rose at the slowest pace in four months.
Barratt Developments, Taylor Wimpey, and Persimmon declined between 12% and 1.7%.
SoftwareOne Holding declined 1.1% to CHF 16.56 after all proxy advisors opposed the company's plan to replace its entire slate of directors.
Neste Oyj soared 6.2% to €26.58, and the Finnish energy company announced a shut-down of its Porvoo refinery for maintenance.
Shell PLC increased 0.6% to 2,780.84 pence, and the company said its integrated gas division is expected to show a substantial decline in the first quarter results compared to the previous quarter due to the price weakness.
Eurozone Retail Sales Extended Declining Trend, UK Home Price Growth Slowed
Bridgette Randall
05 Apr, 2024
Frankfurt
European markets dropped sharply on the final day of a holiday-shortened trading week.
Benchmark indexes in Frankfurt, Paris, and London declined more than 1% after investors lowered expectations of rate cuts in the U.S. following hawkish comments from Federal Reserve officials.
Closer to home, Euro Area retail sales declined in February and extended the downturn to the 17th month in a row due to the persistently high cost of living and elevated interest rates.
UK Monthly Home Prices Declined In February
The Halifax House Price Index in the UK rose 0.3% from a year ago in February, Halifax and the Bank of Scotland reported Friday.
The home price index increased for the fourth month in a row; however, the pace of an annual increase eased to the slowest pace in the month.
Despite the market volatility, underlying demand for homes remains strong amid elevated rental costs across the nation.
Home prices declined 1% on a monthly basis, and an average UK home now costs £288,430, around £2,900 less than last month.
“Affordability constraints continue to be a challenge for prospective buyers, while existing homeowners on cheaper fixed-term deals are yet to feel the full effect of higher interest rates," Kim Kinnaird, Director, Halifax Mortgages, said.
The UK's housing market is still in a state of flux, as most existing home owners have yet to feel the full brunt of higher interest rates.
Eurozone Retail Sales Extend Annual Decline Streak to 17th Month
Eurozone retail sales declined in February, highlighting a challenging environment for consumers amid elevated interest rates and high inflation.
Retail sales in the currency union decreased 0.5% from the previous month in February after staying unchanged in January, Eurostat reported Friday.
Sales of food, drinks, and tobacco fell by 0.4% after a 0.3% rise the previous month, while non-food product sales decreased by 0.2% after a 0.4% increase.
Meanwhile, sales of automotive fuel shrank by 1.4%, the largest decline in seven months.
Retail sales on an annual basis declined 0.7% in February, extending the decline to the 17th month in a row after consumers retrenched on basic necessities and avoided discretionary items.
German factory Orders Rebound Slightly from Previous Month in February
Germany's factory orders increased monthly by 0.2% in February, following the revised 11.4% fall in January, Destatis reported Friday.
Calendar-adjusted orders from a year ago dropped 10.6%.
In a less volatile three-month comparison, incoming orders from December 2023 to February 2024 were 2.8% higher than in the previous three months.
However, the increase is mainly due to a large order in December.
Excluding large orders, incoming orders from December 2023 to February 2024 were 2.0% lower than in the previous three months.
Orders rose for manufacturing electrical equipment by 10.7% after falling for two months in a row, pharmaceuticals by 6.6%, and the chemical industry by 3.1%.
In contrast, new orders declined for automotive by 8.1% and for manufacturing metal products by 5.3%.
Incoming orders for capital goods declined by 0.6% and rose for both intermediate goods by 1.0% and consumer goods by 2.2% in February compared to the previous month.
Domestic orders increased 1.5%, but foreign orders eased 0.7%, with demand from the eurozone falling 13.1% and orders from outside the currency union advanced 7.8%.
Europe Indexes and Yields
The DAX index decreased by 1.5% to 18,130.88, the CAC-40 index fell by 1.4% to 8,034.74, and the FTSE 100 index inched lower by 1.0% to 7,894.95.
The yield on 10-year German bonds edged down to 2.36%; French bonds inched lower to 2.87%; the UK gilts edged lower to 4.08%; and Italian bonds inched higher to 3.73%.
The euro edged higher to $1.083, the British pound inched higher to $1.263, and the U.S. dollar edged higher to 90.30 Swiss cents.
Brent crude increased $0.25 to $90.90. a barrel, and the Dutch TTF natural gas rose by €0.26 to €26.37 per MWh.
Europe Stock Movers
Travel and leisure stocks declined after crude oil prices jumped to near $91 a barrel on the rising tensions in the Middle East following the escalation of tensions between Iran and Israel.
TUI AG declined 2.3% to €7.56, easyJet declined 2.5% to 554.80 pence, and the parent company of British Air, International Consolidated Airlines Group, fell 2.8% to 171.55 pence.
UK home builders declined after home prices rose at the slowest pace in four months.
Barratt Developments, Taylor Wimpey, and Persimmon declined between 12% and 1.7%.
Nikkei 225 Extends Weekly Losses, Hong Kong Stocks Trade Volatile After U.S. Rate-cut Enthusiasm Wanes
Akira Ito
05 Apr, 2024
Tokyo
Market indexes in Tokyo dropped 2%, and in Hong Kong, Seoul, and Sydney declined around 1%.
The latest decline in indexes was sparked by a growing realization that U.S. policymakers are not in a hurry lower rates after a string of positive economic data.
Those comments are in sharp contrast to the expectations of as many as three rate cuts just two months ago.
“If we continue to see inflation moving sideways, then that would make me question whether we need to do those rate cuts at all,” said Kashkari, president of the Minneapolis Federal Reserve Bank, in an interview with Pensions & Investments on Thursday.
Last month, Kashkari projected two rate cuts in 2024 but turned cautious following the recent economic data.
The latest update on manufactured goods orders, construction spending, the personal consumption expenditures price index, and job openings suggested resilient economic and labor market conditions.
The comments of U.S. policymakers over the last two days suggested that policymakers are more likely to hold interest rates higher for longer.
Japan Indexes Extend Weekly Losses, Yen Rally Falters
Stocks in Japan traded down, and the benchmark indexes extended weekly losses to more than 2%, after investors lowered rate-cut expectations in the U.S.
The yen traded above 151 against the U.S. dollar on the worry that the rate differential with the U.S. rates may remain high longer than previously anticipated.
Moreover, investors worry that the Bank of Japan's rate hike last month may not be enough to stabilize the yen.
The Japanese yen has been hovering near 152 level against the yen, prompting verbal intervention by the ministry of finance.
The Japanese corporations are still not likely to increase profit repatriation because of the persistent and large interest rate gap between the rates in Japan, the U.S., and the Euro Area.
The average household spending in Japan was down 0.5% from a year ago to 279,868 yen, or $1,866, in February, the Ministry of Internal Affairs and Communications said on Friday.
The decline in February follows the 6.3% slide in January.
The Nikkei 225 Stock Average decreased 2% to 38,955.19, and the Topix index dropped 1.3% to 2,698.30.
The Nikkei 225 index declined below 39,000 for the first time in three weeks.
Crude oil prices approached a five-month high after conflict in the Middle East escalated following a deadly bombing raid by Israel on Monday.
Israel bombed Iran's embassy in Syria, killing three senior commanders among seven military advisors.
Dubai crude oil for June delivery rose $1.05 to $90.85 a barrel after Israel stepped up its bombing campaign this week, raising speculation of a wider war in the Middle East.
Tokyo Electric Power declined 6.5% to ¥946.60, and Inpex Corp. declined 0.2% to ¥2,466.0.
Tech stocks were among the leading decliners in Tokyo.
Tokyo Electron, Screen Holdings, Advantest, and SoftBank dropped between 2.5% and 4%.
Sumitomo Mitsui Financial, Mizuho Financial, and Mitsubishi UFJ decreased around 2%, after investors lowered rate-cut expectations in the U.S.
Hong Stocks Extend Weekly Losses
The market index in Hong Kong reversed earlier gains in the day and closed down amid rate worries.
Financial markets in China are closed for a public holiday on Friday.
The Hang Seng Index declined 0.7% to 16,606.26 after investors pared back rate-cut expectations, and the index advanced 0.4% in a holiday-shortened week following the rise of 0.3% in the previous week.
Despite the market intervention by Chinese government-controlled funds in financial markets, the Hang Seng index is the worst-performing market among the top 10 leading world markets.
The Hang Seng index extended this year's decline to 1%, and extended five-year losses to 44%.
Alibaba Group, Tencent Holdings, JD.com, Trip.com, Baidu.com, and Meituan declined between 0.2% and 2.2%.
Xiaomi declined 2.2% to HK$15.14 after the initial enthusiasm faded following the launch of a new electric vehicle in a crowded passenger car market.
India Stocks Trim Weekly Gains Ahead of the RBI's Rate Decisions
Stocks in Mumbai lacked direction ahead of the rate decision later in the day.
The Sensex and the Nifty indexes struggled to stay above the flatline as investors looked ahead to the monetary policy decision and inflation and economic growth projections from the Reserve Bank of India.
Market sentiment was cautious in early trading after benchmark indexes on Wall Street declined more than 1%.
The Sensex index decreased 0.03% to 73,876.83, and the Nifty index edged down 0.08% to 22,434.65.
For the week to Thursday's close, the Sensex gained 0.9% and the Nifty index advanced 1.3%.
On the Mumbai stock exchange, 214 stocks traded at their 52-week highs, and 7 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds held steady at 7.09%, and the Indian rupee held steady at ₹83.46 against the U.S. dollar.