Market Update
Europe Movers: JD Sports Fashion, Ocado
Inga Muller
14 Jan, 2025
Frankfurt
Stock market indexes in the eurozone attempted to rebound, the euro hovered near a two-year low, and bond yields approached multi-year highs amid ongoing political turmoil in France and Germany.
The DAX index increased by 0.8% to 20,289.72; the CAC-40 index rose by 1.1% to 7,485.42; and the FTSE 100 index inched higher by 0.2% to 8,243.07.
The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.45%, the UK gilts increased to 4.87%, and Italian bonds edged lower to 3.80%.
Ocado Group PLC gained 9.4% to 295.30 pence after the UK-based online grocery portal operator and grocery technology company reported a 17.5% surge in quarterly revenue.
Retail revenue increased by 17.5% to £715.8 million from £609.4 million, driven by a 16.9% increase in weekly orders to 476,000 from 407,000 a year ago.
The number of active customers increased 12.1% to 1.1 million from 0.998 million, the average item price was nearly unchanged at £2.75, and average basket value rose 0.2% to £120.85 from £120.62 a year ago.
The company estimated fiscal year 2024 ending on December 1 revenue increased 13.9% to £2.69 billion, and the retailer reiterated its target of reaching "high mid single-digit adjusted EBITDA margin by the end of the first half.
JD Sports Fashion PLC decreased 8.6% to 87.94 pence after the specialty retailer issued a profit warning.
The company said organic comparable sales in December increased 3.4%, but comparable sales over the two-month period to December decreased 1.5% amid "current headwinds" in the market.
The retailer held out for full-year organic revenue growth of 5%, and the company said it will release full financial statements in March.
JD Sports estimated pre-tax earnings before adjustments to range between £915 million and £935 million, and full-year gross margins are expected to be around 48%, matching the level in the year ago.
Europe Movers: JD Sports Fashion, Ocado
Inga Muller
14 Jan, 2025
Frankfurt
Stock market indexes in the eurozone attempted to rebound, the euro hovered near a two-year low, and bond yields approached multi-year highs amid ongoing political turmoil in France and Germany.
The DAX index increased by 0.8% to 20,289.72; the CAC-40 index rose by 1.1% to 7,485.42; and the FTSE 100 index inched higher by 0.2% to 8,243.07.
The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.45%, the UK gilts increased to 4.87%, and Italian bonds edged lower to 3.80%.
Ocado Group PLC gained 9.4% to 295.30 pence after the UK-based online grocery portal operator and grocery technology company reported a 17.5% surge in quarterly revenue.
Retail revenue increased by 17.5% to £715.8 million from £609.4 million, driven by a 16.9% increase in weekly orders to 476,000 from 407,000 a year ago.
The number of active customers increased 12.1% to 1.1 million from 0.998 million, the average item price was nearly unchanged at £2.75, and average basket value rose 0.2% to £120.85 from £120.62 a year ago.
The company estimated fiscal year 2024 ending on December 1 revenue increased 13.9% to £2.69 billion, and the retailer reiterated its target of reaching "high mid single-digit adjusted EBITDA margin by the end of the first half.
JD Sports Fashion PLC decreased 8.6% to 87.94 pence after the specialty retailer issued a profit warning.
The company said organic comparable sales in December increased 3.4%, but comparable sales over the two-month period to December decreased 1.5% amid "current headwinds" in the market.
The retailer held out for full-year organic revenue growth of 5%, and the company said it will release full financial statements in March.
JD Sports estimated pre-tax earnings before adjustments to range between £915 million and £935 million, and full-year gross margins are expected to be around 48%, matching the level in the year ago.
European Stock Markets Attempted, Euro Hovers Near 2-Year Low
Bridgette Randall
14 Jan, 2025
London
European stock market indexes advanced, and bond yields hovered near recent highs amid ongoing rate path uncertainties and political turmoil in France and Germany.
Benchmark indexes in Frankfurt, Paris, Milan, and London rebounded from losses in the previous session as investors awaited the release of the U.S. trade policy.
In the absence of domestic economic news, investors debated the possible rate paths and the impact of new and tougher U.S. sanctions on Russia's energy, shipping, and insurance companies.
The euro and the pound hovered near two-year lows amid reduced expectations of additional rate cuts by the U.S. Federal Reserve, boosting the U.S. dollar.
Moreover, a sluggish economic outlook in the eurozone is likely to keep the European Central Bank on track to lower its reference rate between 100 and 150 basis points over the next six months.
Europe Indexes and Yields
The DAX index increased by 0.8% to 20,289.72; the CAC-40 index rose by 1.1% to 7,485.42; and the FTSE 100 index inched higher by 0.2% to 8,243.07.
The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.45%, the UK gilts increased to 4.87%, and Italian bonds edged lower to 3.80%.
The euro edged lower to $1.02; the British pound inched lower to $1.214; and the U.S. dollar eased to 91.60 Swiss cents.
Brent crude decreased $0.66 to $80.34 a barrel, and the Dutch TTF natural gas fell by €0.12 to €48.15 per MWh.
Europe Stock Movers
Ocado Group PLC gained 9.4% to 295.30 pence after the UK-based online grocery portal operator and grocery technology company reported a 17.5% surge in quarterly revenue.
Retail revenue increased by 17.5% to £715.8 million from £609.4 million, driven by a 16.9% increase in weekly orders to 476,000 from 407,000 a year ago.
The number of active customers increased 12.1% to 1.1 million from 0.998 million, the average item price was nearly unchanged at £2.75, and average basket value rose 0.2% to £120.85 from £120.62 a year ago.
The company estimated fiscal year 2024 ending on December 1 revenue increased 13.9% to £2.69 billion, and the retailer reiterated its target of reaching "high mid single-digit adjusted EBITDA margin by the end of the first half.
JD Sports Fashion PLC decreased 8.6% to 87.94 pence after the specialty retailer issued a profit warning.
The company said organic comparable sales in December increased 3.4%, but comparable sales over the two-month period to December decreased 1.5% amid "current headwinds" in the market.
The retailer held out for full-year organic revenue growth of 5%, and the company said it will release full financial statements in March.
JD Sports estimated pre-tax earnings before adjustments to range between £915 million and £935 million, and full-year gross margins are expected to be around 48%, matching the level in the year ago.
European Stock Markets Attempted, Euro Hovers Near 2-Year Low
Bridgette Randall
14 Jan, 2025
London
European stock market indexes advanced, and bond yields hovered near recent highs amid ongoing rate path uncertainties and political turmoil in France and Germany.
Benchmark indexes in Frankfurt, Paris, Milan, and London rebounded from losses in the previous session as investors awaited the release of the U.S. trade policy.
In the absence of domestic economic news, investors debated the possible rate paths and the impact of new and tougher U.S. sanctions on Russia's energy, shipping, and insurance companies.
The euro and the pound hovered near two-year lows amid reduced expectations of additional rate cuts by the U.S. Federal Reserve, boosting the U.S. dollar.
Moreover, a sluggish economic outlook in the eurozone is likely to keep the European Central Bank on track to lower its reference rate between 100 and 150 basis points over the next six months.
Europe Indexes and Yields
The DAX index increased by 0.8% to 20,289.72; the CAC-40 index rose by 1.1% to 7,485.42; and the FTSE 100 index inched higher by 0.2% to 8,243.07.
The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.45%, the UK gilts increased to 4.87%, and Italian bonds edged lower to 3.80%.
The euro edged lower to $1.02; the British pound inched lower to $1.214; and the U.S. dollar eased to 91.60 Swiss cents.
Brent crude decreased $0.66 to $80.34 a barrel, and the Dutch TTF natural gas fell by €0.12 to €48.15 per MWh.
Europe Stock Movers
Ocado Group PLC gained 9.4% to 295.30 pence after the UK-based online grocery portal operator and grocery technology company reported a 17.5% surge in quarterly revenue.
Retail revenue increased by 17.5% to £715.8 million from £609.4 million, driven by a 16.9% increase in weekly orders to 476,000 from 407,000 a year ago.
The number of active customers increased 12.1% to 1.1 million from 0.998 million, the average item price was nearly unchanged at £2.75, and average basket value rose 0.2% to £120.85 from £120.62 a year ago.
The company estimated fiscal year 2024 ending on December 1 revenue increased 13.9% to £2.69 billion, and the retailer reiterated its target of reaching "high mid single-digit adjusted EBITDA margin by the end of the first half.
JD Sports Fashion PLC decreased 8.6% to 87.94 pence after the specialty retailer issued a profit warning.
The company said organic comparable sales in December increased 3.4%, but comparable sales over the two-month period to December decreased 1.5% amid "current headwinds" in the market.
The retailer held out for full-year organic revenue growth of 5%, and the company said it will release full financial statements in March.
JD Sports estimated pre-tax earnings before adjustments to range between £915 million and £935 million, and full-year gross margins are expected to be around 48%, matching the level in the year ago.
Nikkei 225 Index Down 2% Amid Rate Path and Inflation Anxieties
Akira Ito
14 Jan, 2025
Tokyo
Stock market indexes in Tokyo traded sharply lower after investors returned from a holiday-extended weekend.
The Nikkei 225 stock average fell 2%, and the TOPIX index declined 1.3%, and the market pullback was in line with global market weakness after the stronger-than-expected U.S. jobs growth in December lowered speculation of additional rate cuts by the U.S. Federal Reserve.
Moreover, investors took a cautious view amid growing speculation that the Bank of Japan is likely to revise its estimate of inflation at this month's policy meeting, paving the way for future rate hikes.
Japan Stock Movers
The Nikkei 225 Stock Average declined 2.1% to 38,400.09, and the broader TOPIX index decreased 1.3% to 2,679.44.
Technology stocks led the decliners in Tokyo trading following sharp losses in New York in the previous two sessions.
Tokyo Electron declined 3.8% to ¥26,010.0, Advantest Corp. dropped 8.7% to ¥9,474.0, and Disco Corp. decreased 7.5% to ¥44,460.0.
The yen traded around 157.65 against the U.S. dollar, as the world's reserve currency continued to advance for the second month in a row amid rising U.S. bond yields.
Mitsubishi UFJ Financial Group declined 2.6% to ¥1,854.50, Sumitomo Mitsui Financial decreased 1.3% to ¥3,706.0, and Mizuho Financial Group eased 1.2% to ¥3,838.0.
Fast Retailing Co. Ltd. decreased 2.4% to ¥47,530.0, Seven & I Holdings fell 2.5% to ¥2,429.0, Isetan Mitsukoshi declined 2.2% to ¥2,440.50, and Takashimaya Co. Ltd. eased 0.9% to ¥1,226.0.
Nikkei 225 Index Down 2% Amid Rate Path and Inflation Anxieties
Akira Ito
14 Jan, 2025
Tokyo
Stock market indexes in Tokyo traded sharply lower after investors returned from a holiday-extended weekend.
The Nikkei 225 stock average fell 2%, and the TOPIX index declined 1.3%, and the market pullback was in line with global market weakness after the stronger-than-expected U.S. jobs growth in December lowered speculation of additional rate cuts by the U.S. Federal Reserve.
Moreover, investors took a cautious view amid growing speculation that the Bank of Japan is likely to revise its estimate of inflation at this month's policy meeting, paving the way for future rate hikes.
Japan Stock Movers
The Nikkei 225 Stock Average declined 2.1% to 38,400.09, and the broader TOPIX index decreased 1.3% to 2,679.44.
Technology stocks led the decliners in Tokyo trading following sharp losses in New York in the previous two sessions.
Tokyo Electron declined 3.8% to ¥26,010.0, Advantest Corp. dropped 8.7% to ¥9,474.0, and Disco Corp. decreased 7.5% to ¥44,460.0.
The yen traded around 157.65 against the U.S. dollar, as the world's reserve currency continued to advance for the second month in a row amid rising U.S. bond yields.
Mitsubishi UFJ Financial Group declined 2.6% to ¥1,854.50, Sumitomo Mitsui Financial decreased 1.3% to ¥3,706.0, and Mizuho Financial Group eased 1.2% to ¥3,838.0.
Fast Retailing Co. Ltd. decreased 2.4% to ¥47,530.0, Seven & I Holdings fell 2.5% to ¥2,429.0, Isetan Mitsukoshi declined 2.2% to ¥2,440.50, and Takashimaya Co. Ltd. eased 0.9% to ¥1,226.0.
China Indexes Rebounded 2% After CSRC Vowed to Stabilize Markets
Li Chen
14 Jan, 2025
Hong Kong
Stock market indexes in China and Hong Kong rebounded from multi-month lows after China's securities regulator talked up the market amid promises of steps to stabilize markets.
The Hang Seng index increased 1.4%, and the CSI 300 index advanced 2% following a statement released by the China Securities Regulatory Commission after a conference.
Chinese officials are playing an age-old game of taking up markets while struggling to devise structural reform as top political leaders struggle to adjust to slower economic growth in the years ahead.
Chinese politicians have shown little interest in tackling deep-rooted structural economic reforms, local government corruption amid falling foreign direct investments, and persistent weakness in property markets.
Investors have generally looked beyond record exports and trade surpluses in December and 2024, because the rise in sales has not translated to a corresponding increase in earnings.
Investors are bracing for weak earnings growth in the December quarter and dialing down 2025 earnings growth expectations amid decelerating economic growth and ongoing property market malaise.
China Stock Movers
The Hang Seng index increased 1.4% to 19,145.88, and the mainland-focused CSI 300 index jumped 2% to 3,796.97.
Wuxi AppTec Co. Ltd. increased 3.4% to ¥54.99 after the biotech company sold 86 million shares in a Cayman Islands-registered unit for HK $2.4 billion or $312 million.
WuXi Biologics jumped 5.4% to HK $17.78 after the release of stake sale news.
BYD increased 3.9% to HK $259.0, Li Auto advanced 2.9% to HK $87.75, and Xpeng Inc. increased 6.4% to HK $49.60.
Alibaba Group Holding increased 1.8% to HK $79.50, Tencent Holdings advanced 3.4% to HK $378.60, and Baidu Inc. gained 2.7% to HK $77.55.
China Indexes Rebounded 2% After CSRC Vowed to Stabilize Markets
Li Chen
14 Jan, 2025
Hong Kong
Stock market indexes in China and Hong Kong rebounded from multi-month lows after China's securities regulator talked up the market amid promises of steps to stabilize markets.
The Hang Seng index increased 1.4%, and the CSI 300 index advanced 2% following a statement released by the China Securities Regulatory Commission after a conference.
Chinese officials are playing an age-old game of taking up markets while struggling to devise structural reform as top political leaders struggle to adjust to slower economic growth in the years ahead.
Chinese politicians have shown little interest in tackling deep-rooted structural economic reforms, local government corruption amid falling foreign direct investments, and persistent weakness in property markets.
Investors have generally looked beyond record exports and trade surpluses in December and 2024, because the rise in sales has not translated to a corresponding increase in earnings.
Investors are bracing for weak earnings growth in the December quarter and dialing down 2025 earnings growth expectations amid decelerating economic growth and ongoing property market malaise.
China Stock Movers
The Hang Seng index increased 1.4% to 19,145.88, and the mainland-focused CSI 300 index jumped 2% to 3,796.97.
Wuxi AppTec Co. Ltd. increased 3.4% to ¥54.99 after the biotech company sold 86 million shares in a Cayman Islands-registered unit for HK $2.4 billion or $312 million.
WuXi Biologics jumped 5.4% to HK $17.78 after the release of stake sale news.
BYD increased 3.9% to HK $259.0, Li Auto advanced 2.9% to HK $87.75, and Xpeng Inc. increased 6.4% to HK $49.60.
Alibaba Group Holding increased 1.8% to HK $79.50, Tencent Holdings advanced 3.4% to HK $378.60, and Baidu Inc. gained 2.7% to HK $77.55.
India Movers: Anand Rathi Wealth, Angel One, Delta Corp, Den Networks, HCL Technologies, Himadari Speciality Chemical, Marathon Nextgen Realty
Arun Goswami
14 Jan, 2025
Mumbai
Benchmark indexes on Dalal Street edged slightly higher after trading down for four days in a row, driven by rising foreign funds outflow since September.
The Sensex index increased by 0.5% to 76,741.42, and the Nifty index advanced by 0.6% to 23,223.15.
On the Mumbai stock exchange, 22 stocks traded at their 52-week highs, and 91 stocks traded at their 52-week lows.
HCL Technologies Ltd. declined 8.8% to ₹1,815.40 after the technology and business services provider reported weaker-than-expected results in the fiscal third quarter.
Net income in the December quarter increased to ₹4,590 crore from ₹4,235 crore in the September quarter.
Consolidated revenue increased to ₹30,367 crore from ₹28,816 crore, and net income rose 5.58% from ₹4,351 crore a year ago.
Himadri Speciality Chemical Ltd. declined 1.45% to ₹539.25 after the company reported December quarter results.
Consolidated revenue increased 8.2% to ₹1,152.62 crore from ₹1,062.70 crore and net income advanced to ₹141.15 crore from ₹108.78 crore a year ago.
Delta Corp. Ltd. declined 7.61% to ₹109 after the company reported December quarter results.
Consolidated revenue decreases to ₹206.99 crore from ₹222.86 crore, and net income increased 4% to ₹35.7 crore from ₹34.56 crore a year ago.
Den Networks Ltd. declined 1.31% to ₹37.79 after the company reported December quarter results.
Consolidated revenue decreased 4.5% to ₹315.7 crore from ₹323.8 crore, net income declined 28% to ₹41.9 crore from ₹47.8 crore, and earnings per share fell to 85 paisa from 99 paisa a year ago.
Angel One Ltd. decreased 4.5% to ₹2,334.55 after the financial services provider reported a weaker-than-expected increase in profit in the December quarter.
Net income advanced to ₹280 crore in the fiscal third quarter from ₹260 crore a year ago.
India Movers: Anand Rathi Wealth, Angel One, Delta Corp, Den Networks, HCL Technologies, Himadari Speciality Chemical, Marathon Nextgen Realty
Arun Goswami
14 Jan, 2025
Mumbai
Benchmark indexes on Dalal Street edged slightly higher after trading down for four days in a row, driven by rising foreign funds outflow since September.
The Sensex index increased by 0.5% to 76,741.42, and the Nifty index advanced by 0.6% to 23,223.15.
On the Mumbai stock exchange, 22 stocks traded at their 52-week highs, and 91 stocks traded at their 52-week lows.
HCL Technologies Ltd. declined 8.8% to ₹1,815.40 after the technology and business services provider reported weaker-than-expected results in the fiscal third quarter.
Net income in the December quarter increased to ₹4,590 crore from ₹4,235 crore in the September quarter.
Consolidated revenue increased to ₹30,367 crore from ₹28,816 crore, and net income rose 5.58% from ₹4,351 crore a year ago.
Himadri Speciality Chemical Ltd. declined 1.45% to ₹539.25 after the company reported December quarter results.
Consolidated revenue increased 8.2% to ₹1,152.62 crore from ₹1,062.70 crore and net income advanced to ₹141.15 crore from ₹108.78 crore a year ago.
Delta Corp. Ltd. declined 7.61% to ₹109 after the company reported December quarter results.
Consolidated revenue decreases to ₹206.99 crore from ₹222.86 crore, and net income increased 4% to ₹35.7 crore from ₹34.56 crore a year ago.
Den Networks Ltd. declined 1.31% to ₹37.79 after the company reported December quarter results.
Consolidated revenue decreased 4.5% to ₹315.7 crore from ₹323.8 crore, net income declined 28% to ₹41.9 crore from ₹47.8 crore, and earnings per share fell to 85 paisa from 99 paisa a year ago.
Angel One Ltd. decreased 4.5% to ₹2,334.55 after the financial services provider reported a weaker-than-expected increase in profit in the December quarter.
Net income advanced to ₹280 crore in the fiscal third quarter from ₹260 crore a year ago.
U.S. Movers: Abercrombie & Fitch, American Eagle, Howard Hughes Holdings, Moderna
Scott Peters
13 Jan, 2025
New York City
Abercrombie & Fitch jumped 8% to $147.99 despite the apparel retailer revising its holiday sales outlook slightly higher.
The retailer estimated holiday quarter sales to increase between 7% and 8%, compared to the previous estimate between 5% and 7%, but significantly lower than 21% from a year ago.
Lululemon Athletica increased 1.9% to $403.29 after the specialty apparel retailer lifted its fourth quarter sales outlook.
The company now estimated sales to increase between 11% and 12% to between $3.56 billion and $3.58 billion, higher than the previous range between $3.48 billion and $3.51 billion.
The company is now forecasting its earnings per share to range between $5.81 and $5.85 compared to the previous estimate between $5.56 and $5.64.
American Eagle Outfitters decreased 3.5% to $15.68 despite the retailer raising its fourth quarter outlook.
The company said comparable sales in the quarter ending on January 4 were up in low single digits compared to the previous estimate of a 1% increase.
The company also estimated fourth quarter operating profit of $135 million compared to the previous estimate of $125 million.
Howard Hughes Holdings soared 7.8% to $78.36 after Bill Ackman controlled Pershing Square offered to acquire the residential real estate company for $85 a share.
Moderna Inc. declined 20% to $33.72 after the biotech company lowered its 2025 revenue range to between $1.5 billion and $2.5 billion, a decrease of $1 billion from the previous estimate as the company continues its operating costs.
The revised outlook is lower than the previous outlook between $2.5 billion and $3.5 billion issued in September.
U.S. Movers: Abercrombie & Fitch, American Eagle, Howard Hughes Holdings, Moderna
Scott Peters
13 Jan, 2025
New York City
Abercrombie & Fitch jumped 8% to $147.99 despite the apparel retailer revising its holiday sales outlook slightly higher.
The retailer estimated holiday quarter sales to increase between 7% and 8%, compared to the previous estimate between 5% and 7%, but significantly lower than 21% from a year ago.
Lululemon Athletica increased 1.9% to $403.29 after the specialty apparel retailer lifted its fourth quarter sales outlook.
The company now estimated sales to increase between 11% and 12% to between $3.56 billion and $3.58 billion, higher than the previous range between $3.48 billion and $3.51 billion.
The company is now forecasting its earnings per share to range between $5.81 and $5.85 compared to the previous estimate between $5.56 and $5.64.
American Eagle Outfitters decreased 3.5% to $15.68 despite the retailer raising its fourth quarter outlook.
The company said comparable sales in the quarter ending on January 4 were up in low single digits compared to the previous estimate of a 1% increase.
The company also estimated fourth quarter operating profit of $135 million compared to the previous estimate of $125 million.
Howard Hughes Holdings soared 7.8% to $78.36 after Bill Ackman controlled Pershing Square offered to acquire the residential real estate company for $85 a share.
Moderna Inc. declined 20% to $33.72 after the biotech company lowered its 2025 revenue range to between $1.5 billion and $2.5 billion, a decrease of $1 billion from the previous estimate as the company continues its operating costs.
The revised outlook is lower than the previous outlook between $2.5 billion and $3.5 billion issued in September.
U.S. Inflation and Rate Path Worries Grip Global Financial Markets
Alexander Garcia
13 Jan, 2025
Miami
Stock market indexes struggled to rise above the flatline amid renewed worries about inflation and a shift in interest rate outlook following a string of hotter-than-expected jobs and other economic reports.
The S&P 500 index decreased 0.6%, and the Nasdaq Composite declined 1.2% in Monday's trading, and the dollar extended its advance against the euro, the pound, the yen, the Swiss franc, and the Indian rupee.
Market indexes sold off sharply in Friday’s trading and extended holiday-shortened weekly losses, and the U.S. dollar advanced against major currencies around the world between 2% and 4% last week.
Wall Street sentiment soured amid changing expectations for interest rates in the near future, and investors have been on the defensive after the sudden and sustained increase in yields over the last three months.
The yield on 10-year U.S. Treasury notes jumped from 3.6% in late September to 4.8% in Monday's trading, and the yields are likely to stay elevated amid a rebound in inflation and a strong jobs market.
Last week, a private survey on the service sector confirmed expansion in business activities, but participants lifted inflation outlook in the months ahead.
Moreover, December’s nonfarm payrolls expanded more than expected, confirming that the Federal Reserve could keep higher interest rates for longer and may even consider raising them if stubborn service inflation fails to weaken in the months ahead.
On the economic front this week, investors are looking forward to the release of reports on U.S. inflation, housing market activities, industrial production, and retail sales.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.8% to 5,780.87, the Nasdaq Composite fell 1.6% to 18,861.17, and the Russell 2000 index inched down by 0.9% to 2,169.48.
The yield on 2-year Treasury notes edged higher to 4.40%, 10-year Treasury notes inched up to 4.77%, and 30-year Treasury bonds increased to 4.95%.
WTI crude oil increased $2.55 to $79.11 a barrel, and natural gas prices edged up 3 cents to $3.95 a thermal unit.
Gold decreased by $24.76 to $2,660.85 an ounce, and silver fell by $0.76 to $29.61.
The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.23 to 109.92 and traded at a two-year high.
U.S. Stock Movers
Abercrombie & Fitch jumped 8% to $147.99 despite the apparel retailer revising its holiday sales outlook slightly higher.
The retailer estimated holiday quarter sales to increase between 7% and 8%, compared to the previous estimate between 5% and 7%, but significantly lower than 21% from a year ago.
Lululemon Athletica increased 1.9% to $403.29 after the specialty apparel retailer lifted its fourth quarter sales outlook.
The company now estimated sales to increase between 11% and 12% to between $3.56 billion and $3.58 billion, higher than the previous range between $3.48 billion and $3.51 billion.
The company is now forecasting its earnings per share to range between $5.81 and $5.85 compared to the previous estimate between $5.56 and $5.64.
American Eagle Outfitters decreased 3.5% to $15.68 despite the retailer raising its fourth quarter outlook.
The company said comparable sales in the quarter ending on January 4 were up in low single digits compared to the previous estimate of a 1% increase.
The company also estimated fourth quarter operating profit of $135 million compared to the previous estimate of $125 million.
Sluggish Economic Outlook Contribute to Weakening Euro and Rising Bond Yields
European stock market indexes declined in Monday's trading, and bond yields advanced to seven-month highs amid ongoing political turmoil and a sluggish economic outlook.
Benchmark indexes in Paris, Frankfurt, Milan, and London declined after bond yields rose and the euro and the pound sank 0.5% and approached two-year lows.
Investors turned cautious and shifted expectations of future U.S. rate cuts after December's payrolls growth accelerated, reducing the possibility of an imminent rate cut and boosting the dollar.
Moreover, ongoing political turmoil in Germany and France contributed to market anxieties and supported the increase in bond yields in the currency union.
In the week ahead, investors are looking forward to the release of inflation updates in France, Spain, Italy, and the Euro Area.
In the UK, investors are anticipating the release of retail sales, international trade data, industrial production, and retail sales.
China's exports and trade surplus soared in December and in 2024, and imports edged up about 1%, indicating a decreasing reliance on manufactured products from the West.
Europe Indexes and Yields
The DAX index decreased by 0.6% to 20,137.22; the CAC-40 index fell by 0.3% to 7,408.64; and the FTSE 100 index inched lower by 0.3% to 8,224.19.
In the previous week, the DAX increased 2.2%, the CAC-40 index advanced 2.7%, and the FTSE 100 index gained 0.8%.
The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.43%, the UK gilts increased to 4.86%, and Italian bonds rose to 3.84%.
Currency traders are anticipating the euro to trade below parity with the U.S. dollar as the European Central Bank implements its four rate cuts this year, and the British pound is likely to sink to $1.03 amid worsening economic outlook.
The euro edged lower to $1.02; the British pound inched lower to $1.204; and the U.S. dollar strengthened to 91.67 Swiss cents.
Brent crude increased $1.55 to $81.32 a barrel, and the Dutch TTF natural gas fell by €2.81 to €48.25 per MWh.
Europe Stock Movers
Energy stocks advanced after the U.S. placed additional and tougher sanctions on Russian oil and gas producers and shipping companies doing business with China and India.
BP plc increased 1% to 429.15 pence, Shell PLC added 1% to 2,653.50, and TotalEnergies SE advanced 0.7% to €55.64.
Luxury stocks in Paris and Milan struggled to stay above the flatline after China's imports edged up only 1% in December.
Hermes International SCA increased 1% to €2,335.0, Kering SA decreased 1.1% to €225.15, and LVMH fell 0.8% to €639.80.
Leading automakers in Europe advanced despite China's 2024 electric vehicle exports surging to 6.04 million units in 2024, an increase of 22% from a year ago.
Mercedes-Benz Group advanced 0.8% to €55.49, Volkswagen AG increased 0.1% to €92.70, and Ferrari NV fell 0.9% to €406.30.
Deutsche Bank AG decreased 2.4% to €16.68, Commerzbank AG declined 0.5% to €16.57, Banco Santander eased 1.3% to €4.51, HSBC fell 1.3% to 789.10 pence, and Barclays PLC eased 1%.
China and Hong Kong Indexes Sink Further
Stock market indexes in China and Hong Kong fell and traded at four-month lows after the strong U.S. jobs reports knocked down rate cut expectations and boosted the U.S. dollar.
The Hang Seng index dropped 1.2%, and the CSI 300 index declined 0.5% following the release of December's nonfarm payrolls report.
The U.S. economy added 256,000 jobs in December, faster than 212,000 in the previous month, and accelerated for the second month in a row, according to a report released by the U.S. Bureau of Labor Statistics.
The strong labor market report also supported the case for the Federal Reserve to lower rates by a smaller amount and raised prospects of a pivot to a rate increase later in the year.
The shift in outlook for the U.S. interest rates knocked down market indexes in China, Korea, India, and Australia.
Japan's financial markets are closed for a public holiday.
Investors reviewed the international trade data for December, and exports soared 10.7% and imports advanced 1%.
China's Exports and Trade Surplus Surge to Record Highs In December and 2024
Exports advanced for the ninth month in a row and rose at the fastest pace in four years to $335.6 billion as customers front-loaded orders ahead of possible escalation in U.S. tariffs in the second administration of Donald Trump.
Imports increased 1% to a 27-month high of $230.8 billion, reversing a 3.9% fall in November, according to trade data released by General Administration of Customs on Monday.
China's trade surplus rose to $104.8 billion in December, an increase from $75.31 billion a year ago, and the largest since February after the surge in exports.
For the full year of 2024, exports advanced 5.9% to $3.6 trillion, and imports increased 1.1% to $2.6 trillion, lifting the full-year surplus to a record high of $992.2 billion from $823.2 billion a year ago.
China's exports in the year were driven by a surge in demand for electric vehicles, solar panels, and advanced chips.
Electric vehicle shipments in 2024 soared to a record 6.04 million units, an increase of 22% from a year ago.
In value terms, exports increased 15.5% to a record $117.4 billion from a year ago in 2024.
China Stock Movers
The Hang Seng Index dropped 1.2% to 18,837.39, and the mainland-focused CSI 300 index decreased 0.5% to 3,714.42.
Technology stocks continued to decline for the third week in a row following the rise in U.S. bond yields, lowering the appeal of high-growth companies.
Baidu Inc. declined 3.7% to HK $75.60, Alibaba Group Holding Ltd. dropped 1.9% to HK $78.05, JD.com Inc. fell 2% to HK $128.40, and Meituan closed down 3.2% to HK $135.70.
Yibin City Commercial Bank traded around HK $2.59 after the company listed its stock on the Hong Kong Stock Exchange.
The bank priced its initial public offering at HK $2.59 and raised net proceeds of HK $1.71 billion, or $219 million.
New Gonow Recreational Vehicles plunged 15% to HK $1.10 after the company listed its share on the Hong Kong Stock Exchange and raised HK $305 million, or $39 million.
The vehicle maker sold 240 million shares at a price of HK $1.27 per share, near the bottom end of its pricing range between HK $1.24 and HK $1.64.
U.S. Inflation and Rate Path Worries Grip Global Financial Markets
Alexander Garcia
13 Jan, 2025
Miami
Stock market indexes struggled to rise above the flatline amid renewed worries about inflation and a shift in interest rate outlook following a string of hotter-than-expected jobs and other economic reports.
The S&P 500 index decreased 0.6%, and the Nasdaq Composite declined 1.2% in Monday's trading, and the dollar extended its advance against the euro, the pound, the yen, the Swiss franc, and the Indian rupee.
Market indexes sold off sharply in Friday’s trading and extended holiday-shortened weekly losses, and the U.S. dollar advanced against major currencies around the world between 2% and 4% last week.
Wall Street sentiment soured amid changing expectations for interest rates in the near future, and investors have been on the defensive after the sudden and sustained increase in yields over the last three months.
The yield on 10-year U.S. Treasury notes jumped from 3.6% in late September to 4.8% in Monday's trading, and the yields are likely to stay elevated amid a rebound in inflation and a strong jobs market.
Last week, a private survey on the service sector confirmed expansion in business activities, but participants lifted inflation outlook in the months ahead.
Moreover, December’s nonfarm payrolls expanded more than expected, confirming that the Federal Reserve could keep higher interest rates for longer and may even consider raising them if stubborn service inflation fails to weaken in the months ahead.
On the economic front this week, investors are looking forward to the release of reports on U.S. inflation, housing market activities, industrial production, and retail sales.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.8% to 5,780.87, the Nasdaq Composite fell 1.6% to 18,861.17, and the Russell 2000 index inched down by 0.9% to 2,169.48.
The yield on 2-year Treasury notes edged higher to 4.40%, 10-year Treasury notes inched up to 4.77%, and 30-year Treasury bonds increased to 4.95%.
WTI crude oil increased $2.55 to $79.11 a barrel, and natural gas prices edged up 3 cents to $3.95 a thermal unit.
Gold decreased by $24.76 to $2,660.85 an ounce, and silver fell by $0.76 to $29.61.
The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.23 to 109.92 and traded at a two-year high.
U.S. Stock Movers
Abercrombie & Fitch jumped 8% to $147.99 despite the apparel retailer revising its holiday sales outlook slightly higher.
The retailer estimated holiday quarter sales to increase between 7% and 8%, compared to the previous estimate between 5% and 7%, but significantly lower than 21% from a year ago.
Lululemon Athletica increased 1.9% to $403.29 after the specialty apparel retailer lifted its fourth quarter sales outlook.
The company now estimated sales to increase between 11% and 12% to between $3.56 billion and $3.58 billion, higher than the previous range between $3.48 billion and $3.51 billion.
The company is now forecasting its earnings per share to range between $5.81 and $5.85 compared to the previous estimate between $5.56 and $5.64.
American Eagle Outfitters decreased 3.5% to $15.68 despite the retailer raising its fourth quarter outlook.
The company said comparable sales in the quarter ending on January 4 were up in low single digits compared to the previous estimate of a 1% increase.
The company also estimated fourth quarter operating profit of $135 million compared to the previous estimate of $125 million.
Sluggish Economic Outlook Contribute to Weakening Euro and Rising Bond Yields
European stock market indexes declined in Monday's trading, and bond yields advanced to seven-month highs amid ongoing political turmoil and a sluggish economic outlook.
Benchmark indexes in Paris, Frankfurt, Milan, and London declined after bond yields rose and the euro and the pound sank 0.5% and approached two-year lows.
Investors turned cautious and shifted expectations of future U.S. rate cuts after December's payrolls growth accelerated, reducing the possibility of an imminent rate cut and boosting the dollar.
Moreover, ongoing political turmoil in Germany and France contributed to market anxieties and supported the increase in bond yields in the currency union.
In the week ahead, investors are looking forward to the release of inflation updates in France, Spain, Italy, and the Euro Area.
In the UK, investors are anticipating the release of retail sales, international trade data, industrial production, and retail sales.
China's exports and trade surplus soared in December and in 2024, and imports edged up about 1%, indicating a decreasing reliance on manufactured products from the West.
Europe Indexes and Yields
The DAX index decreased by 0.6% to 20,137.22; the CAC-40 index fell by 0.3% to 7,408.64; and the FTSE 100 index inched lower by 0.3% to 8,224.19.
In the previous week, the DAX increased 2.2%, the CAC-40 index advanced 2.7%, and the FTSE 100 index gained 0.8%.
The yield on 10-year German bonds edged higher to 2.59%, French bonds rose to 3.43%, the UK gilts increased to 4.86%, and Italian bonds rose to 3.84%.
Currency traders are anticipating the euro to trade below parity with the U.S. dollar as the European Central Bank implements its four rate cuts this year, and the British pound is likely to sink to $1.03 amid worsening economic outlook.
The euro edged lower to $1.02; the British pound inched lower to $1.204; and the U.S. dollar strengthened to 91.67 Swiss cents.
Brent crude increased $1.55 to $81.32 a barrel, and the Dutch TTF natural gas fell by €2.81 to €48.25 per MWh.
Europe Stock Movers
Energy stocks advanced after the U.S. placed additional and tougher sanctions on Russian oil and gas producers and shipping companies doing business with China and India.
BP plc increased 1% to 429.15 pence, Shell PLC added 1% to 2,653.50, and TotalEnergies SE advanced 0.7% to €55.64.
Luxury stocks in Paris and Milan struggled to stay above the flatline after China's imports edged up only 1% in December.
Hermes International SCA increased 1% to €2,335.0, Kering SA decreased 1.1% to €225.15, and LVMH fell 0.8% to €639.80.
Leading automakers in Europe advanced despite China's 2024 electric vehicle exports surging to 6.04 million units in 2024, an increase of 22% from a year ago.
Mercedes-Benz Group advanced 0.8% to €55.49, Volkswagen AG increased 0.1% to €92.70, and Ferrari NV fell 0.9% to €406.30.
Deutsche Bank AG decreased 2.4% to €16.68, Commerzbank AG declined 0.5% to €16.57, Banco Santander eased 1.3% to €4.51, HSBC fell 1.3% to 789.10 pence, and Barclays PLC eased 1%.
China and Hong Kong Indexes Sink Further
Stock market indexes in China and Hong Kong fell and traded at four-month lows after the strong U.S. jobs reports knocked down rate cut expectations and boosted the U.S. dollar.
The Hang Seng index dropped 1.2%, and the CSI 300 index declined 0.5% following the release of December's nonfarm payrolls report.
The U.S. economy added 256,000 jobs in December, faster than 212,000 in the previous month, and accelerated for the second month in a row, according to a report released by the U.S. Bureau of Labor Statistics.
The strong labor market report also supported the case for the Federal Reserve to lower rates by a smaller amount and raised prospects of a pivot to a rate increase later in the year.
The shift in outlook for the U.S. interest rates knocked down market indexes in China, Korea, India, and Australia.
Japan's financial markets are closed for a public holiday.
Investors reviewed the international trade data for December, and exports soared 10.7% and imports advanced 1%.
China's Exports and Trade Surplus Surge to Record Highs In December and 2024
Exports advanced for the ninth month in a row and rose at the fastest pace in four years to $335.6 billion as customers front-loaded orders ahead of possible escalation in U.S. tariffs in the second administration of Donald Trump.
Imports increased 1% to a 27-month high of $230.8 billion, reversing a 3.9% fall in November, according to trade data released by General Administration of Customs on Monday.
China's trade surplus rose to $104.8 billion in December, an increase from $75.31 billion a year ago, and the largest since February after the surge in exports.
For the full year of 2024, exports advanced 5.9% to $3.6 trillion, and imports increased 1.1% to $2.6 trillion, lifting the full-year surplus to a record high of $992.2 billion from $823.2 billion a year ago.
China's exports in the year were driven by a surge in demand for electric vehicles, solar panels, and advanced chips.
Electric vehicle shipments in 2024 soared to a record 6.04 million units, an increase of 22% from a year ago.
In value terms, exports increased 15.5% to a record $117.4 billion from a year ago in 2024.
China Stock Movers
The Hang Seng Index dropped 1.2% to 18,837.39, and the mainland-focused CSI 300 index decreased 0.5% to 3,714.42.
Technology stocks continued to decline for the third week in a row following the rise in U.S. bond yields, lowering the appeal of high-growth companies.
Baidu Inc. declined 3.7% to HK $75.60, Alibaba Group Holding Ltd. dropped 1.9% to HK $78.05, JD.com Inc. fell 2% to HK $128.40, and Meituan closed down 3.2% to HK $135.70.
Yibin City Commercial Bank traded around HK $2.59 after the company listed its stock on the Hong Kong Stock Exchange.
The bank priced its initial public offering at HK $2.59 and raised net proceeds of HK $1.71 billion, or $219 million.
New Gonow Recreational Vehicles plunged 15% to HK $1.10 after the company listed its share on the Hong Kong Stock Exchange and raised HK $305 million, or $39 million.
The vehicle maker sold 240 million shares at a price of HK $1.27 per share, near the bottom end of its pricing range between HK $1.24 and HK $1.64.