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Optimism Rules U.S. and Global Stock Markets

Alexander Garcia
18 Jun, 2024
Miami

Stocks struggled to get their footing ahead of a public holiday on Wednesday, and investors reviewed the weaker-than-expected update on retail sales.

The S&P 500 index and the Nasdaq Composite lacked direction in thin trading as investors assessed the health of the consumer.

Both widely followed indexes closed at new record highs on Monday; they inched higher in Tuesday's trading after struggling at the open but failed to make a significant advance in Tuesday's trading.

Semiconductor stocks led the tech sector to advance and extend gains from the previous week and the previous session.

Nvidia, Qualcomm, and Micron Technology jumped between 2% and 5%, but Broadcom declined 0.2% after surging more than 20% in the previous two sessions following the announcement of a 1-for-1 stock split.

Retail Sales Edged Slightly Higher In May

Retail sales in May rose by 0.1% from the previous month, following a downwardly revised fall of 0.2% in April, the U.S. Census Bureau reported Tuesday.

The weak reading on retail sales offers another sign of cooling consumer spending amid elevated prices and a high cost of living.

Sales at gasoline stations declined 2.2%, food services and drinking places fell 0.4%, and food and beverage stores fell 0.2%.

Excluding gasoline, sales rose 0.3%.

Sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used in the calculation of gross domestic product, rose 0.4% following a drop of 0.5% in the previous month.

On an annual basis, retail sales rose 2.3% in May, following a downwardly revised 2.7% increase in April.

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.2% to 5,483.33, and the Nasdaq Composite fell 0.01% to 17,841.51.

The yield on 2-year Treasury notes edged lower to 4.73%, 10-year Treasury notes decreased to 4.25%, and 30-year Treasury bonds edged higher to 4.40%.

WTI crude oil increased $0.35 to $80.55 a barrel, and natural gas prices fell 4 cents to $2.83 a thermal unit.

Gold decreased by $1.84 to $2,318.83 an ounce, and silver fell 11 cents to $29.27.

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.26.

U.S. Stock Movers

Lennar decreased 3.3% to $151.40 despite the home builder reporting better-than-expected results in the second fiscal quarter.

Chegg soared 17% to $3.05 after the online textbook and education services provider announced a restructuring, including job cuts.

The company plans to reduce its global headcount by 23% and reiterates its commitment to an operating earnings margin of 25%.

La-Z-Boy jumped 18.8% to $40.47 after the furniture maker reported better-than-expected fourth-quarter results.

European Markets Rebounded In Choppy Trading, Inflation Edged Higher

European markets rebounded for the second day in a row, and the yield on French bonds stabilized, but the spread with the German bond remained elevated.

French President Emmanuel Macron's decision to dissolve the lower house of parliament sent shock waves through political circles, not just in France but across the European Union.

The rise of far-right parties is set to alter political agendas, domestic economic priorities, and pension reforms, which could negatively impact bond ratings and interest rate paths.

Last week, investors were on edge after the European Union election, which clearly showed voter anger and frustration over the rising cost of living and persistently elevated prices over the last three years.

The spread between the French and German bonds soared above 70 basis points and stayed at that level for the second week in a row, amid French election uncertainty and the possible rise of the far-right parties into the government.

The annual pace of inflation in the eurozone accelerated to 2.6% in May from 2.4% in April, Eurostat confirmed in its final update on Tuesday.

Inflation also edged higher to 2.7% in the wider European Union region, higher than 2.6% in the previous month.

Europe Indexes and Yields

The DAX index increased by 0.4% to 18,131.97; the CAC-40 index rose by 0.8% to 7,628.80; and the FTSE 100 index advanced by 0.6% to 8,191.29.

The yield on 10-year German bonds edged higher to 2.42%. French bonds inched higher to 3.15%; the UK gilts edged higher to 4.10%; and Italian bonds decreased to 3.90%.

The euro edged lower to $1.071; the British pound inched higher to $1.268; and the U.S. dollar weakened to 88.79 Swiss cents.

Brent crude decreased $0.50 to $84.75 a barrel, and the Dutch TTF natural gas rose by €0.40 to €34.65 per MWh.

Europe Stock Movers

Ashtead Group declined 5% to 5,234.0 pence after the equipment rental company estimated slower revenue growth in the fiscal year 2025.

Whitbread Group advanced 2.5% to 2,974.0 pence after the UK-based hotel group reiterated its annual outlook despite reporting weak first quarter results.

Frasers Group increased 0.3% to 858.0 pence after the retail chain group launched a new stock buyback plan worth as much as £80 million.

Carrefour SA declined 8.3% to €13.32 on a report that the French finance ministry is looking to impose a "record fine" on the hypermarket chain operator.

Schneider Electric rose 1.1% to €225.65, and the French electric equipment and automation system maker was upgraded by Jeffries to "buy" from "hold."

Novonesis increased 6.8% to DKK 428.80 after the Danish biotech company lifted its full-year outlook, citing rising demand for its biosolutions.

Tech Stocks Drive a Rebound In Japan Indexes, Yen Faces Persistent Downward Pressure

Market indexes in Tokyo rebounded and erased most of the losses in the previous session following a rebound in tech stocks in overnight trading in New York.

The Nikkei 225 and the Topix indexes jumped more than 0.4% in Tuesday's trading after tech stocks led the gainers in Tokyo.

Mega-cap tech stocks in New York traded higher, lifting the S&P 500 index and the Nasdaq Composite to new highs despite Treasury yields rebounding in Monday's trading.

The yen edged stabilized at 157.56 against the U.S. dollar after weakening in Friday's trading after the Bank of Japan held its interest rate steady and showed little urgency in tapering government bond purchases.

Governor of the Bank of Japan, Kauzo Ueda, told lawmakers today that the central bank is prepared to raise rates after the next policy meeting in July if future economic data support the move.

Ueda also stressed that a weak yen could increase operating costs for businesses and dampen consumer purchases, but higher wages could also support consumer sentiment and revive retail sales.

The yen has been under pressure and trading near a three-decade low after the Bank of Japan has shown little interest in raising rates or lowering government bond purchases, and the wide and persistent yield gap between the U.S. and Japan has also negatively impacted the currency.

The yen is expected to depreciate further over the next six months, as the finance ministry and the Bank of Japan prefer a steady and slow depreciation of the currency and avoid expensive market interventions.

Japan Stock Movers

The Nikkei 225 stock average rose 0.7% to 38,388.05, and the Topix index advanced 0.4% to 2,710.20.

Takeda Pharmaceuticals declined 3% to ¥4,043.0 after a seizure drug failed in late-stage trials.

Rakuten Group jumped 4.5% to ¥824.0 after the company reached a settlement with IBM for a patent dispute.

TDK Corp. soared 6.9% to ¥9,428.0 after the electronic component and data-storage media maker said that the latest improvement in battery technology will enhance battery life for wearable devices.

Nintendo, Murata, Nexon, Mitsubishi Heavy Industries, Konami Group, and Murata advanced more than 3%.

Mercari Inc. declined 2.5% to ¥2,034.50, and Sony and Mitsubishi Electric declined around 0.3%.

China Stocks Drift Lower Amid Lackluster Trading and Rising Trade Frictions with the EU

Market sentiment was weak in Shanghai and Hong Kong trading amid rising trade tensions between China and the European Union.

The CSI 300 index and the Hang Seng index lacked direction in early afternoon trading after China retaliated with an anti-dumping investigation on pork imports from Europe.

The move comes after the European Union placed an additional tariff of up to 38% on electric vehicle imports from China following a seven-month investigation.

Investors were on the defensive a day after China's statistics bureau reported a flood of mixed economic data, indicating a revival in consumer spending overshadowed by the deepening malaise in the property sector.

Moreover, the People's Bank of China held its one-year medium-term lending rate at 2.5%, dashing hopes of some investors looking for a rate cut to revive property transactions.

China's property sector is battling on two fronts: buyers are holding back amid falling prices, and property developers are struggling amid heavy debt loads and overbuilding.

China's property prices are falling at a rapid pace in the second- and third-tier cities, but prices are still elevated in the top-tier cities like Beijing and Shanghai, raising affordability issues for first-time home buyers.

China Stock Movers

The CSI 300 index increased 0.3% to 3,545.64, and the Hang Seng index fell 0.2% to 17,903.06.

BYD decreased 0.1% to HK$233.20, and Warren Buffett-controlled Berkshire Hathaway lowered its stake in the electric vehicle maker to 6.9% from 7.0%. ahead of the European Union tariffs.

Li Auto declined 3.7% to HK$71.15, and Geely Automobile fell 0.1% to HK$8.86.

Zijin Mining Group declined 2.5% to HK$15.90 after the company announced its plan to sell convertible bond debt and stocks to raise $2.5 billion.

Wuhan Youji Holdings soared more than 78% to HK$9.85 after the maker of toluene derivative products used in oil refining and paints priced its initial public offering at HK$5.50 per share.

U.S. Movers: Chegg, La-Z-Boy, Lennar, Semiconductor Stocks

Scott Peters
18 Jun, 2024
New York City

Lennar decreased 3.3% to $151.40 despite the home builder reporting better-than-expected results in the second fiscal quarter.

Chegg soared 17% to $3.05 after the online textbook and education services provider announced a restructuring, including job cuts.

The company plans to reduce its global headcount by 23% and reiterates its commitment to an operating earnings margin of 25%.

La-Z-Boy jumped 18.8% to $40.47 after the furniture maker reported better-than-expected fourth-quarter results.

Semiconductor stocks advanced and extended gains from the previous week and the previous session.

Nvidia, Qualcomm, and Micron Technology jumped between 2% and 5%, but Broadcom declined 0.2% after surging more than 20% in the previous two sessions following the announcement of a 1-for-1 stock split.

U.S. Major Averages Retain Upward Bias, Weak Bounce In Retail Sales

Barry Adams
18 Jun, 2024
New York City

Stocks lacked direction in early trading, and investors reviewed the latest update on retail sales ahead of a public holiday on Wednesday.

The S&P 500 index and the Nasdaq Composite meandered in thin trading as investors assessed the health of the consumer.

Both widely followed indexes closed at new record highs on Monday; they inched higher in Tuesday's trading after struggling at the open.

Semiconductor stocks advanced and extended gains from the previous week and the previous session.

Nvidia, Qualcomm, and Micron Technology jumped between 2% and 5%, but Broadcom declined 0.2% after surging more than 20% in the previous two sessions following the announcement of a 1-for-1 stock split.

Retail Sales Edged Slightly Higher In May

Retail sales in May rose by 0.1% from the previous month, following a downwardly revised fall of 0.2% in April, the U.S. Census Bureau reported Tuesday.

The weak reading on retail sales offers another sign of cooling consumer spending amid elevated prices and a high cost of living.

Sales at gasoline stations declined 2.2%, food services and drinking places fell 0.4%, and food and beverage stores fell 0.2%.

Excluding gasoline, sales rose 0.3%.

Sales excluding food services, auto dealers, building materials stores, and gasoline stations, which are used in the calculation of gross domestic product, rose 0.4% following a drop of 0.5% in the previous month.

On an annual basis, retail sales rose 2.3% in May, following a downwardly revised 2.7% increase in April.

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.2% to 5,483.33, and the Nasdaq Composite fell 0.01% to 17,841.51.

The yield on 2-year Treasury notes edged lower to 4.73%, 10-year Treasury notes decreased to 4.25%, and 30-year Treasury bonds edged higher to 4.40%.

WTI crude oil increased $0.35 to $80.55 a barrel, and natural gas prices fell 4 cents to $2.83 a thermal unit.

Gold decreased by $1.84 to $2,318.83 an ounce, and silver fell 11 cents to $29.27.

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.26.

U.S. Stock Movers

Lennar decreased 3.3% to $151.40 despite the home builder reporting better-than-expected results in the second fiscal quarter.

Chegg soared 17% to $3.05 after the online textbook and education services provider announced a restructuring, including job cuts.

The company plans to reduce its global headcount by 23% and reiterates its commitment to an operating earnings margin of 25%.

La-Z-Boy jumped 18.8% to $40.47 after the furniture maker reported better-than-expected fourth-quarter results.

Europe Movers: Ashtead, Carrefour, Frasers Group, Novonesis, Schneider Electric, Whitbread

Inga Muller
18 Jun, 2024
Frankfurt

European markets attempted to rebound for the second day in a row after a week of sharp declines following the European Union election results that threw France and Belgium into political turmoil.

The DAX index increased by 0.5% to 18,151.29; the CAC-40 index rose by 0.6% to 7,619.24; and the FTSE 100 index advanced by 0.1% to 8,176.52.

The yield on 10-year German bonds edged higher to 2.42%. French bonds inched higher to 3.15%; the UK gilts edged higher to 4.10%; and Italian bonds decreased to 3.90%.

Ashtead Group declined 5% to 5,234.0 pence after the equipment rental company estimated slower revenue growth in the fiscal year 2025.

Whitbread Group advanced 2.5% to 2,974.0 pence after the UK-based hotel group reiterated its annual outlook despite reporting weak first quarter results.

Frasers Group increased 0.3% to 858.0 pence after the retail chain group launched a new stock buyback plan worth as much as £80 million.

Carrefour SA declined 8.3% to €13.32 on a report that the French finance ministry is looking to impose a "record fine" on the hypermarket chain operator.

Schneider Electric rose 1.1% to €225.65, and the French electric equipment and automation system maker was upgraded by Jeffries to "buy" from "hold."

Novonesis increased 6.8% to DKK 428.80 after the Danish biotech company lifted its full-year outlook, citing rising demand for its biosolutions.

European Markets Rebound In Choppy Trading, Inflation Edges Higher

Bridgette Randall
18 Jun, 2024
Frankfurt

European markets rebounded for the second day in a row, and the yield on French bonds stabilized, but the spread with the German bond remained elevated.

French President Emmanuel Macron's decision to dissolve the lower house of parliament sent shock waves through political circles, not just in France but across the European Union.

The rise of far-right parties is set to alter political agendas, domestic economic priorities, and pension reforms, which could negatively impact bond ratings and interest rate paths.

Last week, investors were on edge after the European Union election, which clearly showed voter anger and frustration over the rising cost of living and persistently elevated prices over the last three years.

The spread between the French and German bonds soared above 70 basis points and stayed at that level for the second week in a row, amid French election uncertainty and the possible rise of the far-right parties into the government.

The annual pace of inflation in the eurozone accelerated to 2.6% in May from 2.4% in April, Eurostat confirmed in its final update on Tuesday.

Inflation also edged higher to 2.7% in the wider European Union region, higher than 2.6% in the previous month.

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,151.29; the CAC-40 index rose by 0.6% to 7,619.24; and the FTSE 100 index advanced by 0.1% to 8,176.52.

The yield on 10-year German bonds edged higher to 2.42%. French bonds inched higher to 3.15%; the UK gilts edged higher to 4.10%; and Italian bonds decreased to 3.90%.

The euro edged lower to $1.071; the British pound inched higher to $1.268; and the U.S. dollar weakened to 88.79 Swiss cents.

Brent crude decreased $0.17 to $84.07 a barrel, and the Dutch TTF natural gas rose by €0.25 to €34.50 per MWh.

Europe Stock Movers

Ashtead Group declined 5% to 5,234.0 pence after the equipment rental company estimated slower revenue growth in the fiscal year 2025.

Whitbread Group advanced 2.5% to 2,974.0 pence after the UK-based hotel group reiterated its annual outlook despite reporting weak first quarter results.

Frasers Group increased 0.3% to 858.0 pence after the retail chain group launched a new stock buyback plan worth as much as £80 million.

Carrefour SA declined 8.3% to €13.32 on a report that the French finance ministry is looking to impose a "record fine" on the hypermarket chain operator.

Schneider Electric rose 1.1% to €225.65, and the French electric equipment and automation system maker was upgraded by Jeffries to "buy" from "hold."

Novonesis increased 6.8% to DKK 428.80 after the Danish biotech company lifted its full-year outlook, citing rising demand for its biosolutions.

Tech Stocks Drive a Rebound In Japan Indexes, Yen Faces Persistent Downward Pressure

Akira Ito
18 Jun, 2024
Tokyo

Market indexes in Tokyo rebounded and erased most of the losses in the previous session following a rebound in tech stocks in overnight trading in New York.

The Nikkei 225 and the Topix indexes jumped more than 0.4% in Tuesday's trading after tech stocks led the gainers in Tokyo.

Mega-cap tech stocks in New York traded higher, lifting the S&P 500 index and the Nasdaq Composite to new highs despite Treasury yields rebounding in Monday's trading.

The yen edged stabilized at 157.56 against the U.S. dollar after weakening in Friday's trading after the Bank of Japan held its interest rate steady and showed little urgency in tapering government bond purchases.

Governor of the Bank of Japan, Kazuo Ueda, told lawmakers today that the central bank is prepared to raise rates after the next policy meeting in July if future economic data support the move.

Ueda also stressed that a weak yen could increase operating costs for businesses and dampen consumer purchases, but higher wages could also support consumer sentiment and revive retail sales.

The yen has been under pressure and trading near a three-decade low after the Bank of Japan has shown little interest in raising rates or lowering government bond purchases, and the wide and persistent yield gap between the U.S. and Japan has also negatively impacted the currency.

The yen is expected to depreciate further over the next six months, as the finance ministry and the Bank of Japan prefer a steady and slow depreciation of the currency and avoid expensive market interventions.

Japan Stock Movers

The Nikkei 225 stock average rose 0.7% to 38,388.05, and the Topix index advanced 0.4% to 2,710.20.

Takeda Pharmaceuticals declined 3% to ¥4,043.0 after a seizure drug failed in late-stage trials.

Rakuten Group jumped 4.5% to ¥824.0 after the company reached a settlement with IBM for a patent dispute.

TDK Corp. soared 6.9% to ¥9,428.0 after the electronic component and data-storage media maker said that the latest improvement in battery technology will enhance battery life for wearable devices.

Nintendo, Murata, Nexon, Mitsubishi Heavy Industries, Konami Group, and Murata advanced more than 3%.

Mercari Inc. declined 2.5% to ¥2,034.50, and Sony and Mitsubishi Electric declined around 0.3%.

China Stocks Drift Lower Amid Lackluster Trading and Rising Trade Frictions with the EU

Li Chen
18 Jun, 2024
Hong Kong

Market sentiment was weak in Shanghai and Hong Kong trading amid rising trade tensions between China and the European Union.

The CSI 300 index and the Hang Seng index lacked direction in early afternoon trading after China retaliated with an anti-dumping investigation on pork imports from Europe.

The move comes after the European Union placed an additional tariff of up to 38% on electric vehicle imports from China following a seven-month investigation.

Investors were on the defensive a day after China's statistics bureau reported a flood of mixed economic data, indicating a revival in consumer spending overshadowed by the deepening malaise in the property sector.

Moreover, the People's Bank of China held its one-year medium-term lending rate at 2.5%, dashing hopes of some investors looking for a rate cut to revive property transactions.

China's property sector is battling on two fronts: buyers are holding back amid falling prices, and property developers are struggling amid heavy debt loads and overbuilding.

China's property prices are falling at a rapid pace in the second- and third-tier cities, but prices are still elevated in the top-tier cities like Beijing and Shanghai, raising affordability issues for first-time home buyers.

China Stock Movers

The CSI 300 index increased 0.3% to 3,545.64, and the Hang Seng index fell 0.2% to 17,903.06.

BYD decreased 0.1% to HK$233.20, and Warren Buffett-controlled Berkshire Hathaway lowered its stake in the electric vehicle maker to 6.9% from 7.0%. ahead of the European Union tariffs.

Li Auto declined 3.7% to HK$71.15, and Geely Automobile fell 0.1% to HK$8.86.

Zijin Mining Group declined 2.5% to HK$15.90 after the company announced its plan to sell convertible bond debt and stocks to raise $2.5 billion.

Wuhan Youji Holdings soared more than 78% to HK$9.85 after the maker of toluene derivative products used in oil refining and paints priced its initial public offering at HK$5.50 per share.

India Movers: Adani Ports, Bharti Airtel, Central Bank of India, IndiGo, Spicejet, TCS, Vodafone

Arun Goswami
18 Jun, 2024
Mumbai

Stocks in Mumbai opened higher, and investors looked ahead to the release of the national budget next month in the absence of near-term catalysts.

The Sensex index increased by 0.1% to 77,113.08, and the Nifty index rose by 0.2% to 23,502.40.

On the Mumbai stock exchange, 117 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 inched lower to 6.99%, and the Indian rupee edged lower at ₹83.52 against the U.S. dollar.

Vodafone Idea jumped 1.5% to ₹16.99, and the company is looking to sell a full or partial stake of its entire stake of $2.3 billion in Indus Tower as early as next week.

Interglobe Aviation Ltd. increased 0.6% to ₹4,297.65, and the aviation regulator said the company's domestic air travel market share increased to 61.6% in May from 60.6% in April.

Spicejet increased 0.1% to ₹55.14, and the company's domestic air travel market share declined to 4.0% in May from 4.7% in April, according to an update by the aviation regulator.

Central Bank of India gained 0.4% to ₹65.66, and the Reserve Bank of India fined the bank ₹1.45 crore for failing to meet compliance requirements for loans and customer information.

Brightcom Group traded at ₹9.38 on June 11, and the company reiterated its commitment to release its financial statements for the third and fourth quarters of the fiscal year 2023 by July 31.

Adani Ports increased 0.7% to ₹1,440.25, and the company said it received approval for the Mundra Port expansion from an environmental agency.

Tata Consultancy decreased 0.1% to ₹3,828.50, and the company lost a case in a court in the U.S. for violating the Defense-related Information Disclosure Act.

The U.S. District Court in Dallas, Texas, fined the company $56.2 million and punitive damages of $112.3 million in a lawsuit filed by Computer Science Corporation and DXC Technology.

Bharti Airtel advanced 0.6% to ₹1,435.50 and paid the final installment of 7,904 crore to the Department of Telecom for the outstanding payment related to the purchase of wireless spectrum acquired between 2012 and 2015.

U.S. Indexes Overcame Morning Doldrums to Advance 1%

Alexander Garcia
17 Jun, 2024
Miami

In a holiday-shortened week, market indexes rested around the flatline in Monday's trading.

The S&P 500 index and the Nasdaq Composite lacked direction on Wall Street but managed to stay above the flatline and extend gains to new record highs in the early afternoon as investors awaited the release of retail sales data on Tuesday and housing starts and completions updates later in the week.

Retail sales in May are expected to rebound by 0.3%, and industrial output is expected to rise by 0.2%.

Investors are hoping that building permits, housing starts, and completions will show sustained increases reflecting the prior month's growth rate.

The S&P500 index and the Nasdaq Composite advanced in seven of the last eight weeks, and market participants are hoping that the benchmark indexes can retain their upward bias.

Last week, market indexes in the U.S. created a series of new highs, political turmoil engulfed many countries in Europe in the wake of the European Union elections, and trade tensions rose between China and the EU.

The U.S. Federal Reserve held steady its key interest rate range as widely expected and also retained its economic growth and jobless rate outlook.

But the central bank also lowered the number of possible rate cuts to only one from the previous estimate of as many as three in March.

Moreover, the pace of consumer price inflation slowed to 3.3% in May, and the core rate of inflation slowed to a three-year low of 3.4%.

Fed policymakers have struggled over the last year in bringing down inflation from over 3% to the Fed’s target rate of 2%, despite eleven rate cuts spread over 2022 and 2023.

On the earnings front, CarMax, Darden Restaurants, Kroger, and Lennar are some of the leading companies scheduled to release earnings this week.

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.8% to 5,474.08, and the Nasdaq Composite rose 1% to 17,870.31.

The yield on 2-year Treasury notes edged lower to 4.74%, 10-year Treasury notes decreased to 4.26%, and 30-year Treasury bonds edged higher to 4.40%.

WTI crude oil increased $0.53 to $78.98 a barrel, and natural gas prices fell 5 cents to $2.82 a thermal unit.

Gold decreased by $14.31 to $2,318.15 an ounce, and silver fell 29 cents to $29.25.

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.56.

U.S. Stock Movers

Autodesk increased 4.5% to $235.03 after activist investor Starboard Value acquired a $500 million stake in the software developer.

Nvidia edged up 0.1% to $131.94 after State Street said its Technology Select SPDR Fund will have nearly 21% weighting in the ETF after the rebalancing from the current 5%.

The Technology Select Fund has about $71 billion, meaning the fund will acquire about $10 billion of Nvidia towards the end of this week.

The ETF will lower its stake in Apple from 21% to 4.5% while rebalancing at the end of this week.

Lennar Corp. declined 0.4% to $154.50 ahead of the company's quarterly results this week.

The home builder reported, in the quarter ending in May 2023, revenue of $8.05 billion, net income of $871.69 million, and diluted earnings per share of $2.94.

European Market Sentiment Remains Weak, French Bond Stabilized

European markets lacked direction in Monday's trading after falling sharply last week amid rising political turmoil in France.

Benchmark indexes in Paris, Frankfurt, and London traded around the flatline, and the French bond yields stabilized after rising to a seven-month high of 3.24% last week.

Investor sentiment was on edge after French President Emmanuel Macros called a snap election, following the European Union election results showing the sharp rise of far-right parties.

Local opinion polls indicate that the National Rally Party is likely to make significant gains in the parliamentary elections scheduled for June 30 and July 7, which could worsen the country's fiscal situation and threaten the stability of the eurozone.

France's debt to gross domestic product is hovering just over 110% and its annual budget deficit is near 5%, which is likely to miss the 3% target in 2027.

On the economic front, wages in the eurozone rose in the first quarter, matching the rate in the final quarter of 2022, Eurostat reported on Monday.

In Europe, the Bank of England is expected to hold steady its key policy rate at 5.25%, and the UK’s consumer price inflation is expected to slow to 2%.

In addition, the Norges Bank and the Swiss National Bank are also scheduled to release their monetary policy decisions.

In other economic news in the region, investors are looking forward to the release of the EU's new car registration, the UK's retail sales, and Germany’s producer price inflation.

Eurozone Wage Growth Accelerated in the First Quarter

Negotiated hourly wages and salaries in the eurozone advanced 5.3% from a year ago in the first quarter, following an upwardly revised 3.2% increase in the previous quarter.

Of the four largest economies in the region, calendar-adjusted wages in Germany accelerated to 6.3% from 2.1% in the previous quarter; Italy rose 3.3% from flat; Spain edged slightly higher to 4.5% from 4.4%; and France slowed to 2.6% from 2.7%, respectively.

Wage growth accelerated in professional scientific and technical activities to 6.7% from 1.6%, construction to 6.1% from 4.4%, manufacturing to 5.8% from 4.7%, and financial and insurance activities to 5.8% from 4.4%, respectively.

Meanwhile, wage growth slowed for the mining and quarrying sector to 7.8% from 11.1% in the previous quarter, water supply and sewage to 5.7% from 5.5%, transport and storage to 5.1% from 5.8%, utilities to 2.3% from 5.3%, and retail trade to 4.6% from 4.9%.

Europe Indexes and Yields

The DAX index increased by 0.4% to 18,068.21; the CAC-40 index rose by 0.9% to 7,571.57; and the FTSE 100 index declined by 0.1% to 8,142.15.

In the last week, the CAC-40 declined 4.3% and fell the most since March 2022, the DAX index dropped 2.4%, and the FTSE 100 index decreased 1.0%.

The yield on 10-year German bonds edged lower to 2.38%. French bonds inched lower to 3.14%; the UK gilts edged lower to 4.07%; and Italian bonds decreased to 3.94%.

The euro edged lower to $1.077; the British pound inched higher to $1.277; and the U.S. dollar weakened to 89.20 Swiss cents.

Brent crude decreased $0.14 to $82.47 a barrel, and the Dutch TTF natural gas rose by €0.72 to €34.24 per MWh.

Europe Stock Movers

China-linked French luxury stocks traded down after a flood of China's economic data showed a fragile and uneven economic recovery.

Retail sales growth accelerated in May, but property prices continued to drift lower in search of a bottom.

LVMH declined 0.7% to €706.80, Kering dropped 0.1% to €302.15, and Hermes fell 0.6% to €2,100.0.

ING Group increased 1.7% to €15.58 after the Dutch bank targeted annual total income growth between 4% and 5% over the next three years to 2027.

Carl Zeiss Meditec AG dropped 15.5% to €71.10 after the medical devices and technology maker said revenue in the first 8 months to May declined 3% from a year ago to €1.26 billion from €1.3 billion a year ago.

The company said that because of weak order flows in April and May, it has lowered its full-year revenue outlook for the current fiscal year.

The company lowered its full-year fiscal 2024 revenue to €2 billion, excluding the recent acquisition of DORC.

Topdanmark soared 22% to DKK 349.20 after the Finland-based insurer Sampo agreed to acquire its rival for DKK 33 billion, or $4.7 billion.

Ascential PLC increased 1.9% to 337.0 pence after the UK-based event management company reiterated its full-year revenue outlook ahead of its presentation to investors on June 19.

The company recently completed its £300 million stock tender offer and £450 million special dividend.

Japan Indexes Plunge Nearly 2%

Stocks in Tokyo faced selling pressure in Monday's trading as investors stepped back, reassessed the Bank of Japan's monetary policy decisions on Friday, and reversed gains in the previous session.

The Nikkei and the Topix indexes dropped as much as 2% on the worry that persistent weakness in the yen in the long term will negatively impact consumer spending and corporate earnings.

The Bank of Japan held its short-term interest rate steady and said it would continue with its purchase of government bonds at the current level until the next meeting in July.

The central bank also said it plans to announce the tapering of its bond purchase at the conclusion of the next meeting in July, in a nod to letting the market decide long-term interest rates.

Governor Kazuo Ueda ended the negative interest rate in March after the central bank kept it in negative territory for 8 years and raised rates for the first time in 17 years. But the wide interest rate gap between the U.S. and Japan has weakened the yen to a 34-year low.

Japan's core machinery orders, which exclude large and volatile orders for ships and power generation equipment, declined seasonally by 2.9% from the previous month to 885.3 billion yen in April, reversing the 2.9% increase in March.

Core machinery orders from a year ago rose 0.7% after rising 2.7% in the previous month, the Cabinet Office said.

Benchmark indexes soared in the first four months, backed by robust corporate earnings and a weaker yen, but the persistent weakness in the yen is now seen as a liability for the economy.

The yen traded at 157.40 against the U.S. dollar in late afternoon trading in Tokyo.

In the week ahead, ministries in Japan are set to release international trade balance data and inflation updates this week.

Japan Movers

The Nikkei 225 stock average declined 1.9% to 38,081.47, and the Topix index dropped 1.7% to 2,700.51.

Tokyo Electron, Advantest, and Screen Holdings declined between 1% and 3%.

Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial fell between 1% and 3%.

Major exporters declined despite the weakness in the yen, and Panasonic, Mitsubishi Electric, Canon, and Sony declined between 2% and 4%.

China's Improving Consumer Spending Overshadowed by Weakening Property Sector

Benchmark indexes in Shanghai and Hong Kong attempted to rebound after consumer spending rose in May, but the weaker-than-expected growth in fixed-investment key investors on edge.

Retail sales in May rose 3.7% from a year ago, accelerating from 2.3% in April. Industrial production growth slowed to 5.6% from 6.7%, the National Bureau of Statistics reported Monday.

The increase in retail sales was supported by the spending during the five-day holiday period, during which tourism revenue rose 12.3% to 166.9 billion yuan, or $23 billion, and surpassed the 2019 level of spending by 13.5%.

Fixed-asset investment growth slowed to 4.0% in the first five months of May as high-tech manufacturing and services expanded by 11.5%, offsetting the 10.1% decrease in property investment.

Residential property developers are experiencing falling demand; the floor space of new homes sold plunged by 20.3% in the first five months to May from a year ago, and the total sales value of new homes plunged by 27.9%, respectively.

“We must acknowledge that it will take some time for the effects of policy measures to be shown and that the real estate market is still in the process of adjustment,” NBS spokeswoman Liu Aihua commented in a press conference on Monday after the release of the data.

New home prices declined by 3.9% in May, accelerating from the 3.1% decrease in April, the government report highlighted.

New home prices declined for the eleventh month in a row and fell at the fastest pace since June 2015, despite property market stimulus announced by regional governments.

Prices declined in Guangzhou to 8.3% from 6.9% in the previous month, in Beijing to 1.8% from 0.5%, but in Shanghai prices advanced at a faster pace of 4.5% compared to 4.2%.

A separate report by the statistical agency showed that the urban jobless rate held steady in May at 5.0%, matching the rate in the previous month.

The People's Bank of China held its one-year medium-term lending rate at 2.5%.

China Movers

The CSI 300 index decreased 0.2% to 3,534.45, and the Hang Seng index inched higher by 0.4% to 17,978.30.

Market sentiment was positive in the early morning after consumer spending growth accelerated, but indexes turned lower in the afternoon amid rising trade tensions with the European Union.

The noodle maker Tingyi Holding Corp. increased 4.2% to HK$9.70, and China Mengniu advanced 2.3% to HK$13.06 on the back of improving retail sales.

China Vanke decreased 3.4% to HK$5.12, Longfor Group Holding fell 2.4% to HK$12.08, and China Resources Land edged up 0.1% to HK$27.05.

U.S. Major Averages Struggle to Advance After a Series of Record Highs Last Week

Barry Adams
17 Jun, 2024
New York City

In a holiday-shortened week, market indexes rested around the flatline in Monday's trading.

The S&P 500 index and the Nasdaq Composite lacked direction on Wall Street as investors awaited the release of retail sales data on Tuesday and housing starts and completions updates later in the week.