Market Update
European Markets Lacked Direction, EU Vehicle Sales Advanced In October
Bridgette Randall
21 Nov, 2023
Frankfurt
European markets traded mixed, and the euro hovered near the three-month high.
Benchmark indexes in Frankfurt, Paris, and London traded sideways ahead of comments from several European Central Bank officials and the release of minutes of the November meeting by the U.S. Federal Reserve.
Positive market sentiment over the last two weeks drove market indexes higher after interest rate hike worries receded, and the stable interest rate outlook also supported market enthusiasm.
Investors also welcomed the increase in vehicle sales in October, suggesting resilient consumer spending.
EU Passenger Vehicle Sales Expanded Fifteenth Consecutive Month
Vehicle sales in the European Union continued to expand as buyers returned to purchase electric vehicles and producers faced a few supply chain issues, the European Automobile Manufacturers Association reported today.
New vehicle sales rose for the fifteenth month in a row.
Passenger vehicle sales in October jumped 14.6% from a year ago to 855,484 units, and the market share of fully electric vehicles increased to 14.2% from 12% in the previous month.
Battery-powered electric vehicle sales for the ten months to October jumped to 14%, surpassing diesel vehicles for the first time.
Three of the four largest vehicle markets in the European Union posted double-digit gains.
Vehicle registration in France rose 21.9%, Italy gained 20%, and Spain advanced 18.1%.
UK Public Sector Borrowing Expands
The UK's public sector net borrowing, excluding banks, increased to £14.9 billion, compared to £10.5 billion a year ago, the Office for National Statistics reported Tuesday.
The net borrowing in October was the second largest in the month since record-keeping began in 1993.
The UK government's total spending increased 7.7% to £99.8 because higher family benefits offset the ending of energy subsidies.
In addition, the government's revenue increased by 3.3% to £85.2 billion, driven by a £2.7 billion increase in central government tax revenue.
Despite the increase in net borrowings in the last three months in a row, borrowing between April and October totaled £98.3 billion, £17 billion less than estimated by the Office for Budget Responsibility.
Europe Indexes and Yields
The DAX index increased 0.1% to 15,915.55, the CAC-40 index fell 0.3% to 7,226.51, and the FTSE 100 index fell 0.5% to 7,461.70.
The yield on 10-year German bonds increased to 2.592%; French bonds traded lower to 3.152%; the UK gilts increased to 4.11%; and Italian bonds inched lower to 4.32%.
The euro continued to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.
The euro rebounded to $1.094, the British pound at $1.253, and the U.S. dollar at 88.38 Swiss cents.
Brent crude decreased $0.43 to $81.91 a barrel, and the Dutch TTF natural gas edged lower by €0.38 to €45.44 per MWh.
Europe Stock Movers
Sonova Holding AG increased 7.5% to CHF 251.40 despite the Swiss hearing aid maker lowering its annual core profit forecast.
CRH PLC increased 1.8% to 4,827.0 pence after the building materials solution provider agreed to acquire a cement plant and 20 ready concrete mix plants in Texas from Martin Marietta Materials, Inc. for $2.1 billion.
International Consolidated Airlines Group decreased 2.4% to 159.85 pence, despite the parent company of British Air reaffirming its annual outlook.
Cranswick plc increased 1.5% to 3,700.0 pence after the meat producer estimated its annual profit near the upper end of the estimated range by analysts.
Rheinmetall AG jumped 4% to €292.80 after the German defense contractor released its mid-term strategy.
Banca Monte dei Paschi di Siena SpA dropped 8.5% to €2.81 after the Italian government sold its 25% stake in the bailed-out bank.
Nasdaq Jumps 1% After Microsoft Hovers Near Record High Amid OpenAI Drama
Barry Adams
20 Nov, 2023
New York City
Benchmark indexes on Wall Street extended the 3-week rally, and growth stocks led the gainers.
U.S. markets will be closed Thursday to celebrate the Thanksgiving holiday, and trading will close early on Friday.
High-growth companies dominated Monday's trading.
Microsoft struck a deal with ousted OpenAI chief executive Sam Altman to lead the company's AI research team, and Nvidia and Zoom were in focus ahead of their earnings results.
In the previous three weeks in a row, investors bid up growth stocks after the Federal Reserve held rates steady for the second time in a row, and markets continued to advance after consumer price, producer price, and import price inflation slowed.
The weakening inflationary forces raised hopes that the central bank has greater-than-expected flexibility in keeping economic growth intact while cooling inflation and supporting labor market expansion.
After consumer price inflation dropped to 3.2% in October, investors raised the possibility of a rate cut in early 2024 and drove growth stocks higher for the third week in a row.
But there are warning signs on the horizon, and despite resilient consumers, retail sales declined 0.1% in October unadjusted for inflation, the first decline in seven months.
Moreover, the largest U.S. retailers, Walmart, Home Depot, and Macy's, also offered a cautious outlook for holiday sales.
German Producer Prices Drop 4th Consecutive Month, China Holds Rates
On the global economic front, the People's Bank of China held its 1-year loan prime rate at 3.45% and its 5-year rate at 4.2%.
The one-year rate has been held steady since August, when it was lowered from 3.55%, and the 5-year rate has been held steady since June, when it was lowered from 4.3%.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
U.S. Indexes and Yields
The S&P 500 index edged up 0.7% to 4,544.49, and the Nasdaq Composite increased 1.1% to 14,278.45.
The yield on 2-year Treasury notes increased to 4.92%, 10-year Treasury notes inched higher to 4.42%, and 30-year Treasury bonds edged higher to 4.57%.
Crude oil increased $2.36 to $78.41 a barrel, and natural gas prices fell 6 cents to $2.90 a thermal unit.
Gold decreased $2.33 to $1,977.48 an ounce on the receding fears of inflation.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.41.
U.S. Stock Movers
Microsoft increased 2.2% to $377.95 after chief executive Satya Nadella said ousted OpenAI chief Sam Altman will lead a new AI research team at Microsoft.
At least 500 OpenAI employees have threatened to resign if the current board fails to resign and reinstate former chief executive Sam Altman.
Nvidia gained 1.6% to $501.0 ahead of the company's quarterly results on Tuesday.
The advanced chipmaker is estimated to report at least $3.08 per diluted share on revenue of $14.89 billion, compared to 58 cents a share and $5.93 billion in revenue a year ago.
Zoom Video Communications Inc. rose 2.5% to $65.70 ahead of the company's quarterly results after the close on Monday.
The video communication company estimated revenue in the fiscal third quarter ending in October between $1.15 billion and $1.2 billion and non-GAAP adjusted earnings between $1.07 and $1.09.
Previously, Zoom had estimated revenue in fiscal 2024 ending in January to range between $4.485 billion and $4.495 billion and adjusted earnings per share between $4.63 and $4.67.
Volatile Trading In European Markets, Euro Approaches 3-moth High
European markets traded with a downward bias in Monday's trading, and bond yields continued to drift lower.
Benchmark indexes in Frankfurt, London, and Paris headed lower following gains in the previous week after inflation in advanced economies fell in October.
The lower inflation supported the case of central banks holding rates steady for a couple of months.
Markets are also awaiting comments later today from the heads of the central banks of France, Spain, and the U.K.
Moreover, the U.S. Federal Reserve is scheduled to release its minutes of the last meeting on Tuesday and provide additional clarity in the policymakers decision.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
The measure of producer inflation decreased for the fourth month in a row due to the sharp decline in energy prices.
The annual decline in inflation in September was 14.7%, which was the largest fall since record-keeping began in 1949.
Europe Indexes and Yields
The DAX index decreased 0.1% to 15,901.33, the CAC-40 index rose 0.2% to 7,246.94, and the FTSE 100 index fell 0.1% to 7,496.36.
In the previous week, the DAX index increased 4.2%, the CAC-40 index advanced 2.2%, and the FTSE 100 index inched higher by 1%.
The yield on 10-year German bonds increased to 2.59%; French bonds traded higher to 3.15%; the UK gilts eased to 4.09%; and Italian bonds inched higher to 4.33%.
The euro continue to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.
The euro rebounded to $1.093, the British pound at $1.248, and the U.S. dollar at 88.32 Swiss cents.
Brent crude increased $2.27 to $82.90 a barrel, and the Dutch TTF natural gas edged higher by €0.74 to €45.82 per MWh.
Europe Stock Movers
Energy stocks traded higher after crude oil prices extended Friday's sharp jump of 4% on reports that Saudi Arabia is looking to extend voluntary production cuts into next year.
BP, Shell, Repsol, Eni, and TotalEnergies gained between 0.4% and 1.5%.
Bayer AG plunged 19.4% to €33.85 after the German pharmaceutical and biotech company lost a key U.S. trial against its weed killer Roundup.
Moreover, the company also stopped the main study of its top experimental drug.
A Missouri jury ordered the company to pay $1.56 billion to four plaintiffs who successfully argued in court that the company's weed killer caused health injuries, including cancer.
After the trial, the jury found the company's Monsanto business liable for negligence, design defects, and the company's failure to inform customers of the potential dangers of using Roundup.
Julius Baer Gruppe AG dropped 10.6% to CHF 49.81 after the Swiss financial service company lowered its annual profit expectations.
The company said its 2023 net income is expected to be lower than in the previous year because of a higher year-to-date effective income tax rate and higher loan loss provisions in November.
Net assets under management in the first ten months to October increased by 3%, or CHF 11 billion, to CHF 435 billion.
Ashtead Group plc dropped 10.1% to 4,712.10 pence after the UK-based power equipment rental company said its annual profit is likely to fall short of market expectations.
Compass Group plc declined 4.5% to 1,999.50 pence after the UK-based catering service provider reported lower-than-expected earnings.
Halma plc advanced 2.4% to 2,101.0 pence after the UK-based safety equipment company agreed to acquire the TeDan group of companies for $89.1 million with additional milestone payments.
U.S. Movers: Best Buy, Deere, Microsoft, Nvidia, Zoom Video
Scott Peters
20 Nov, 2023
New York City
Microsoft increased 1.4% to $374.85 after chief executive Satya Nadella said ousted OpenAI chief Sam Altman will lead a new AI research team at Microsoft.
Nvidia gained 0.7% to $496.51 ahead of the company's quarterly results on Tuesday.
The advanced chipmaker is estimated to report at least $3.08 per diluted share on revenue of $14.89 billion, compared to 58 cents a share and $5.93 billion in revenue a year ago.
Zoom Video Communications Inc. rose 0.6% to $64.50 ahead of the company's quarterly results after the close on Monday.
The video communication company estimated revenue in the fiscal third quarter ending in October between $1.15 billion and $1.2 billion and non-GAAP adjusted earnings between $1.07 and $1.09.
Previously, Zoom had estimated revenue in fiscal 2024 ending in January to range between $4.485 billion and $4.495 billion and adjusted earnings per share between $4.63 and $4.67.
Best Buy Company increased 0.5% to $68.60 ahead of the retailer's quarterly results on Tuesday.
The retailer is expected to report a decline in revenue of at least 6% to $9.8 billion and quarterly earnings per share of $1.14, according to a survey of three analysts by Ticker.com.
Deer & Company fell 0.6% to $68.60 to $382.0 ahead of the company's quarterly results on Wednesday.
Deere reported in the previous quarter total revenue of $15.8 billion, net income of $2.97 billion, and diluted earnings per share of $10.20.
U.S. Stocks On Hold After Rallying In Previous Three Weeks, Open AI and Microsoft In Focus
Barry Adams
20 Nov, 2023
New York City
U.S. stock futures rested near the flatline ahead of the start of holiday-shortened trading this week.
U.S. markets will be closed Thursday to celebrate the Thanksgiving holiday, and trading will close early on Friday.
Investors are looking to extend the three-week rally after consumer price inflation, producer price inflation, and import inflation indexes declined.
The weakening inflationary forces raised hopes that the central bank has greater-than-expected flexibility in keeping economic growth intact while cooling inflation and supporting labor market expansion.
After consumer price inflation dropped to 3.2% in October, investors raised the possibility of a rate cut in early 2024 and drove growth stocks higher for the third week in a row.
But there are warning signs on the horizon, and despite resilient consumers, retail sales declined 0.1% in October unadjusted for inflation, the first decline in seven months.
Moreover, the largest U.S. retailers, Walmart, Home Depot, and Macy's, also offered a cautious outlook for holiday sales.
German Producer Prices Drop 4th Consecutive Month, China Holds Rates
On the global economic front, the People's Bank of China held its 1-year loan prime rate at 3.45% and its 5-year rate at 4.2%.
The one-year rate has been held steady since August, when it was lowered from 3.55%, and the 5-year rate has been held steady since June, when it was lowered from 4.3%.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
The measure of producer inflation decreased for the fourth month in a row due to the sharp decline in energy prices.
The annual decline in inflation in September was 14.7%, which was the largest fall since record-keeping began in 1949.
U.S. Indexes and Yields
The S&P 500 index edged slightly lower to 4,511.02, and the Nasdaq Composite was unchanged at 14,124.93.
The yield on 2-year Treasury notes increased to 4.91%, 10-year Treasury notes inched higher to 4.46%, and 30-year Treasury bonds edged higher to 4.62%.
Crude oil increased $1.06 to $77.11 a barrel, and natural gas prices fell 7 cents to $2.77 a thermal unit.
Gold decreased 0.3%, or $5.42, to $1,977.48 an ounce on the receding fears of inflation.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.51.
U.S. Stock Movers
Microsoft increased 1.4% to $374.85 after chief executive Satya Nadella said ousted OpenAI chief Sam Altman will lead a new AI research team at Microsoft.
Nvidia gained 0.7% to $496.51 ahead of the company's quarterly results on Tuesday.
The advanced chipmaker is estimated to report at least $3.08 per diluted share on revenue of $14.89 billion, compared to 58 cents a share and $5.93 billion in revenue a year ago.
Zoom Video Communications Inc. rose 0.6% to $64.50 ahead of the company's quarterly results after the close on Monday.
The video communication company estimated revenue in the fiscal third quarter ending in October between $1.15 billion and $1.2 billion and non-GAAP adjusted earnings between $1.07 and $1.09.
Previously, Zoom had estimated revenue in fiscal 2024 ending in January to range between $4.485 billion and $4.495 billion and adjusted earnings per share between $4.63 and $4.67.
Europe Movers: Ashtead, Bayer, Compass Group, Energy Stocks, Halma, Julius Baer
Inga Muller
20 Nov, 2023
Frankfurt
European market indexes lacked direction after last week's rally, and bond yields drifted lower on the stable interest rate outlook for the next two months.
The DAX index decreased 0.1% to 15,902.18, the CAC-40 index rose 0.2% to 7,250.84, and the FTSE 100 index fell 0.1% to 7,494.94.
The yield on 10-year German bonds increased to 2.59%; French bonds traded higher to 3.15%; the UK gilts eased to 4.09%; and Italian bonds inched higher to 4.33%.
Energy stocks traded higher after crude oil prices extended Friday's sharp jump of 4% on reports that Saudi Arabia is looking to extend voluntary production cuts into next year.
BP, Shell, Repsol, Eni, and TotalEnergies gained between 0.4% and 1.5%.
Bayer AG plunged 19.4% to €33.85 after the German pharmaceutical and biotech company lost a key U.S. trial against its weed killer Roundup.
Moreover, the company also stopped the main study of its top experimental drug.
A Missouri jury ordered the company to pay $1.56 billion to four plaintiffs who successfully argued in court that the company's weed killer caused health injuries, including cancer.
After the trial, the jury found the company's Monsanto business liable for negligence, design defects, and the company's failure to inform customers of the potential dangers of using Roundup.
Julius Baer Gruppe AG dropped 10.6% to CHF 49.81 after the Swiss financial service company lowered its annual profit expectations.
The company said its 2023 net income is expected to be lower than in the previous year because of a higher year-to-date effective income tax rate and higher loan loss provisions in November.
Net assets under management in the first ten months to October increased by 3%, or CHF 11 billion, to CHF 435 billion.
Ashtead Group plc dropped 10.1% to 4,712.10 pence after the UK-based power equipment rental company said its annual profit is likely to fall short of market expectations.
Compass Group plc declined 4.5% to 1,999.50 pence after the UK-based catering service provider reported lower-than-expected earnings.
Halma plc advanced 2.4% to 2,101.0 pence after the UK-based safety equipment company agreed to acquire the TeDan group of companies for $89.1 million with additional milestone payments.
European Markets Struggle, Euro Approaches 3-month High
Bridgette Randall
20 Nov, 2023
Frankfurt
European markets traded with a downward bias in Monday's trading, and bond yields continued to drift lower.
Benchmark indexes in Frankfurt, London, and Paris headed lower following gains in the previous week after inflation in advanced economies fell in October.
The lower inflation supported the case of central banks holding rates steady for a couple of months.
Markets are also awaiting comments later today from the heads of the central banks of France, Spain, and the U.K.
Moreover, the U.S. Federal Reserve is scheduled to release its minutes of the last meeting on Tuesday and provide additional clarity in the policymakers decision.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
The measure of producer inflation decreased for the fourth month in a row due to the sharp decline in energy prices.
The annual decline in inflation in September was 14.7%, which was the largest fall since record-keeping began in 1949.
Europe Indexes and Yields
The DAX index decreased 0.1% to 15,902.18, the CAC-40 index rose 0.2% to 7,250.84, and the FTSE 100 index fell 0.1% to 7,494.94.
In the previous week, the DAX index increased 4.2%, the CAC-40 index advanced 2.2%, and the FTSE 100 index inched higher by 1%.
The yield on 10-year German bonds increased to 2.59%; French bonds traded higher to 3.15%; the UK gilts eased to 4.09%; and Italian bonds inched higher to 4.33%.
The euro continue to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.
The euro rebounded to $1.093, the British pound at $1.248, and the U.S. dollar at 88.32 Swiss cents.
Brent crude increased $0.77 to $81.37 a barrel, and the Dutch TTF natural gas edged higher by €1.88 to €46.94 per MWh.
Europe Stock Movers
Energy stocks traded higher after crude oil prices extended Friday's sharp jump of 4% on reports that Saudi Arabia is looking to extend voluntary production cuts into next year.
BP, Shell, Repsol, Eni, and TotalEnergies gained between 0.4% and 1.5%.
Bayer AG plunged 19.4% to €33.85 after the German pharmaceutical and biotech company lost a key U.S. trial against its weed killer Roundup.
Moreover, the company also stopped the main study of its top experimental drug.
A Missouri jury ordered the company to pay $1.56 billion to four plaintiffs who successfully argued in court that the company's weed killer caused health injuries, including cancer.
After the trial, the jury found the company's Monsanto business liable for negligence, design defects, and the company's failure to inform customers of the potential dangers of using Roundup.
Julius Baer Gruppe AG dropped 10.6% to CHF 49.81 after the Swiss financial service company lowered its annual profit expectations.
The company said its 2023 net income is expected to be lower than in the previous year because of a higher year-to-date effective income tax rate and higher loan loss provisions in November.
Net assets under management in the first ten months to October increased by 3%, or CHF 11 billion, to CHF 435 billion.
Ashtead Group plc dropped 10.1% to 4,712.10 pence after the UK-based power equipment rental company said its annual profit is likely to fall short of market expectations.
Compass Group plc declined 4.5% to 1,999.50 pence after the UK-based catering service provider reported lower-than-expected earnings.
Halma plc advanced 2.4% to 2,101.0 pence after the UK-based safety equipment company agreed to acquire the TeDan group of companies for $89.1 million with additional milestone payments.
U.S. Movers: Applied Materials, Bath & Body Works, ChargePoint, Gap
Scott Peters
17 Nov, 2023
New York City
Gap Inc. jumped 18.7% to $16.21 after the apparel retailer reported quarterly results.
Revenue in the fiscal third quarter decreased 7% to $3.8 billion from $4.0 billion, net income dropped to $218 million from $282 million, and diluted earnings per share fell to 58 cents from 77 cents a year ago.
The decline in net sales included a negative impact of 2 percentage points on the sales of Gap China.
Comparable sales declined 2%, and online sales fell 8% from the previous year and represented 38% of total sales.
Gross margin improved 390 points to 41.3% after commodity prices eased and the promotional environment improved.
The company is estimating fourth quarter net sales, inclusive of the 14th week, "to be at to slightly negative" compared to last year's net sales of $4.2 billion as positive signs at Old Navy and Gap balance the weakness in Athleta and Banana Republic.
Bath & Body Works edged higher by 0.8% after falling 7% in the previous session to $30.10 after the specialty retailer estimated lower sales in the fiscal year.
Revenue in the third quarter declined 2.6% to $1.56 billion from $1.60 billion, net income advanced to $119 million from $91 million, and diluted earnings per share rose to 52 cents from 40 cents a year ago.
The company estimated full-year sales to decline between 2.5% and 4.0% from $7.56 billion and diluted earnings per share between $2.99 and $3.19.
ChargePoint Holdings plunged 30% to $2.19 after the company lowered its third-quarter revenue estimate and announced a management shakeup.
The company lowered its third-quarter revenue estimate to between $108 million and $113 million from the previous range of between $150 million and $165 million.
The company blamed the revenue shortfall on weak macroeconomic conditions and delays in fleet and commercial electric vehicle delivery.
Applied Materials dropped 7.2% to $143.55 after the company reported quarterly earnings, but a criminal investigation by the Department of Justice for shipments to China weighed on the stock.
Revenue in the fiscal fourth quarter ending in October was flat at $6.7 billion, and gross margin improved to 47.1% from 45.9% a year ago.
Net income advanced to $2.0 billion from $1.6 billion, and diluted earnings per share rose to $2.38 from $1.35 a year ago.
In fiscal 2023, the company generated a record $8.70 billion in cash from operations and distributed $3.16 billion to shareholders, including $2.19 billion in share repurchases and $975 million in dividends.
In the first quarter of fiscal 2024, Applied expects net sales to be approximately $6.47 billion, with a band of $400 million, and adjusted diluted earnings per share between $1.72 and $2.08.
Markets Head for Third Weekly Gains, Crude Oil Drops Fourth Consecutive Week
Barry Adams
17 Nov, 2023
New York City
Benchmark indexes looked higher in early trading, and investors hoped that the recent market advance would hold in Friday's trading.
The S&P 500 index advanced 0.3% and the Nasdaq Composite gained 0.1%, and two widely followed indexes are set to close higher for the third week in a row.
In November, the Nasdaq gained 9.8%, and the S&P 500 index advanced 7.5% to Thursday's close.
Three inflation reports—the consumer price index, the producer price index, and the import price index—showed weakening inflationary pressures, encouraging investors to add exposure to interest rate-sensitive stocks.
Investors were also encouraged by the stable rate outlook for the next two months, and most investors are factoring in that the Federal Reserve is likely to hold rates at the end of the next meeting in December.
Crude oil prices rebounded after dropping more than 5% in the previous session due to rising U.S. supplies, elevated inventories, and worries about an uncertain demand outlook in China.
Crude oil prices are set to close down for the fourth week in a row, and the decline in the period is approaching a bear market plunge.
U.S. Indexes and Yields
The S&P 500 index jumped 0.3% to 4,509.12, and the Nasdaq Composite added 0.1% to 14,107.05.
The yield on 2-year Treasury notes decreased to 4.83%, 10-year Treasury notes inched lower to 4.41%, and 30-year Treasury bonds edged down to 4.59%.
Crude oil increased $0.82 to $73.72 a barrel, and natural gas prices held steady at $3.06 a thermal unit.
Gold increased 0.4%, or $8.64, to $1,989.88 an ounce after bond yields traded down after the interest rate hike worries receded.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.16.
U.S. Stock Movers
Gap Inc. jumped 18.7% to $16.21 after the apparel retailer reported quarterly results.
Revenue in the fiscal third quarter decreased 7% to $3.8 billion from $4.0 billion, net income dropped to $218 million from $282 million, and diluted earnings per share fell to 58 cents from 77 cents a year ago.
The decline in net sales included a negative impact of 2 percentage points on the sales of Gap China.
Comparable sales declined 2%, and online sales fell 8% from the previous year and represented 38% of total sales.
Gross margin improved 390 points to 41.3% after commodity prices eased and the promotional environment improved.
Bath & Body Works edged higher by 0.8% after falling 7% in the previous session to $30.10 after the specialty retailer estimated lower sales in the fiscal year.
Revenue in the third quarter declined 2.6% to $1.56 billion from $1.60 billion, net income advanced to $119 million from $91 million, and diluted earnings per share rose to 52 cents from 40 cents a year ago.
The company estimated full-year sales to decline between 2.5% and 4.0% from $7.56 billion and diluted earnings per share between $2.99 and $3.19.
ChargePoint Holdings plunged 30% to $2.19 after the company lowered its third-quarter revenue estimate and announced a management shakeup.
The company lowered its third-quarter revenue estimate to between $108 million and $113 million from the previous range of between $150 million and $165 million.
The company blamed the revenue shortfall on weak macroeconomic conditions and delays in fleet and commercial electric vehicle delivery.
Applied Materials dropped 7.2% to $143.55 after the company reported quarterly earnings, but a criminal investigation by the Department of Justice for shipments to China weighed on the stock.
Revenue in the fiscal fourth quarter ending in October was flat at $6.7 billion, and gross margin improved to 47.1% from 45.9% a year ago.
Net income advanced to $2.0 billion from $1.6 billion, and diluted earnings per share rose to $2.38 from $1.35 a year ago.
In fiscal 2023, the company generated a record $8.70 billion in cash from operations and distributed $3.16 billion to shareholders, including $2.19 billion in share repurchases and $975 million in dividends.
In the first quarter of fiscal 2024, Applied expects net sales to be approximately $6.47 billion, with a band of $400 million, and adjusted diluted earnings per share between $1.72 and $2.08.
Europe Movers: Luxury Stocks, Hill & Smith, FirstGroup, LSE, Volvo Group
Inga Muller
17 Nov, 2023
Frankfurt
European markets extended a two-week rally after eurozone inflation was confirmed at a two-year low.
The DAX index increased 1.0% to 15,950.76, the CAC-40 index rose 0.1% to 7,244.87, and the FTSE 100 index gained 0.8% to 7,474.0.
In the week, the DAX index increased 4.2%, the CAC-40 index advanced 2.2%, and the FTSE 100 index inched higher 1%.
Luxury stocks in Paris traded higher after tensions eased between China and the U.S. following the meeting between U.S. President Joe Biden and China's President Xi Jinping.
Kering SA increased 1.6% to €405.50, LVMH advanced €711.20, and Richemont SA gained 2.8% to CHF 113.10.
Hill& Smith PLC increased 3% to 1,888.0 pence after the UK-based engineering and construction company agreed to acquire the assets and business of United Fiberglass for $14 million.
FirstGroup plc increased 180.90 pence after the UK-based transportation company announced a partnership with Hitachi ZeroCarbon Limited related to the company's decarbonization program.
London Stock Exchange Group plc added 0.9% to 8,486.0 pence after the trading platform operator and financial data provider reiterated their 2023 outlook.
Volvo Car Corporation dropped 9.6% to 36.72 krona after the largest shareholder in the company, China-based Geely Automobile, announced the sale of 100 million shares at a deep discount.
European Markets Extended a Two-Week Rally, Eurozone Inflation Dropped to a 2-year Low
Bridgette Randall
17 Nov, 2023
Frankfurt
European market indexes advanced after eurozone inflation was confirmed at a two-year low and retail sales in the UK declined for the fourth month in a row.
Benchmark indexes in Frankfurt, Paris, and London gained on the hopes that the decelerating inflation will encourage policymakers to keep interest rates steady.
Positive news on the inflation front was contrasted by worries about consumer spending in the UK after retail sales fell for the fourth month in a row.
The decline in retail sales was largely driven by the fall in energy prices, but consumers focused on essential items and avoided discretionary goods.
Eurozone Inflation Confirmed at a Two-Year Low
Euro Area inflation was confirmed at 2.9% in October, Eurostat reported Friday.
Consumer price inflation was the lowest since July 2021, reflecting a decline in energy prices and a slowdown in food price inflation.
Core inflation, which excludes food and energy prices, dropped to 4.2% in October from 4.5% in September.
The sharp decline in energy prices by 11.2% compared to the 7.6% fall in September and the deceleration in food price inflation to 7.4% from 8.8% contributed to the decline in overall inflation.
However, service inflation changed little, supporting the elevated core inflation.
Service inflation eased to 4.6% from 4.7% in September.
UK Retail Sales Dropped Fourth Consecutive Month
UK retail sales declined 0.3% in October, following a 1.1% decrease in September, the Office for National Statistics reported Friday.
Retail trade sales fell for the second consecutive month after consumers avoided discretionary items, and the 2% fall in fuel sales led to a decline in other categories.
Sales at food stores fell 0.3%, and sales at nonfood stores eased 0.2%.
Europe Indexes and Yields
The DAX index increased 1.0% to 15,950.76, the CAC-40 index rose 0.1% to 7,244.87, and the FTSE 100 index gained 0.8% to 7,474.0.
In the week, the DAX index increased 4.2%, the CAC-40 index advanced 2.2%, and the FTSE 100 index inched higher 1%.
The yield on 10-year German bonds decreased to 2.52%; French bonds traded lower to 3.08%; the UK gilts eased to 4.05%; and Italian bonds inched lower to 4.27%.
The euro rebounded to $1.085, the British pound at $1.239, and the U.S. dollar at 88.75 Swiss cents.
Brent crude increased $0.43 to $77.87 a barrel, and the Dutch TTF natural gas edged higher by €0.26 to €46.09 per MWh.
Europe Stock Movers
Luxury stocks in Paris traded higher after tensions eased between China and the U.S. following the meeting between U.S. President Joe Biden and China's President Xi Jinping.
Kering SA increased 1.6% to €405.50, LVMH advanced €711.20, and Richemont SA gained 2.8% to CHF 113.10.
Hill& Smith PLC increased 3% to 1,888.0 pence after the UK-based engineering and construction company agreed to acquire the assets and business of United Fiberglass for $14 million.
FirstGroup plc increased 180.90 pence after the UK-based transportation company announced a partnership with Hitachi ZeroCarbon Limited related to the company's decarbonization program.
London Stock Exchange Group plc added 0.9% to 8,486.0 pence after the trading platform operator and financial data provider reiterated their 2023 outlook.
Volvo Car AB dropped 9.6% to 36.72 krona after the largest shareholder in the company, China-based Geely Automobile, announced the sale of 100 million shares at a deep discount.
Wall Street Euphoria Turned Cautionary After Weak Quarterly Results, Crude Oil Plunged 5%
Barry Adams
16 Nov, 2023
New York City
Benchmark indexes lacked direction on Wall Street, Treasury yields drifted lower, and crude oil prices surged 5%.
Stock market indexes rested after days of moving higher, and investors reacted to the latest earnings results.
The S&P 500 index and the Nasdaq Composite edged lower in trading after Walmart, Cisco, Palo Alto Networks, and Macy's reported quarterly results.
Walmart declined 7% after the retailer issued a cautious outlook for holiday sales; Cisco plunged nearly 10% after the company offered a weak outlook for the current quarter and full year; Palo Alto Networks estimated weaker growth in new orders; but Macy's jumped more than 8% after the retailer reported better-than-expected earnings.
On the economic front, import prices declined 0.8% from the previous month in October, confirming the disinflation trend reported by two inflation reports released earlier in the week.
Import prices fell the most in seven months following an upwardly revised 0.4% increase in September. The decline was primarily led by a 6.5% fall in petroleum prices and a 5.3% fall in natural gas prices.
Initial jobless claims rose from 13,000 to 231,000 in the week ending November 11, the U.S. Department of Labor reported Thursday.
According to continuing claims, those unemployed for more than four weeks rose by 18,000 to 1.865 million in the previous week.
Crude oil plunged more than 5% after U.S. supplies rose amid stable demand for oil products and worries of weakening demand in China compounded market anxieties.
U.S. Indexes and Yields
The S&P 500 index jumped 0.4% to 4,498.29, and the Nasdaq Composite fell 0.1% to 14,090.22.
The yield on 2-year Treasury notes decreased to 4.84%, 10-year Treasury notes inched lower to 4.44%, and 30-year Treasury bonds edged up to 4.62%.
Gold decreased 1.3% or $25.74 to $1,984.88 an ounce after bond yields traded down following the third inflation report confirmed the easing of inflationary pressures.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.19.
Crude Oil Plunged 5% On Rising Inventories
Crude oil dropped 5% and extended the decline for the second day in a row on the global demand worries and rising supplies in the U.S.
On Wednesday, the U.S. Energy Information Administration said in its weekly inventory report that crude oil inventories rose more than expected by 3.6 million barrels to 439.4 million barrels, and 2% below the five-year average around this time of the year.
U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ending 10, which was 164,000 barrels more than the previous week's average.
The oil inventories data indicated that the supplies are plentiful and amid stable demand for oil products.
Moreover, traders turned bearish after oil refinery throughput in China declined 2.8% in October from the record in September.
Crude oil decreased 5% or $4.08 to $72.57 a barrel, and natural gas prices fell 14 cents to $3.06 a thermal unit.
Market jitters were compounded after the eurozone lowered its 2023 economic growth outlook to 0.6% from previous estimate of 0.8% and the U.S. industrial output fell the most in four months by 0.6% in October.
U.S. Stock Movers
Walmart dropped 6.2% to $159.20 after the retailer reported quarterly results and issued a cautious outlook.
Revenue in the fiscal third quarter increased 5.2% to $160.8 million from $152.8 billion, and the company swung to a profit of $453 million from a loss of $1.8 billion. Diluted earnings per share were 17 cents, compared to a loss of 66 cents a year ago.
Sales at U.S. locations reflected ongoing challenging conditions for consumers; sales of groceries and health and wellness products rose, but discretionary items and general merchandise sales declined "modestly."
Walmart U.S. sales increased 4.4% to $109.4 billion, driven by a 4.9% increase in comparable store sales; transactions rose 3.4%; and average ticket size advanced 1.5% from a year ago.
The retailer also indicated U.S. e-commerce sales rose by 24%, and advertising sales on its online platform rose by 26% from a year ago.
The company guided full-year 2024 consolidated sales to increase between 5% and 5.5% and adjusted earnings per share to be between $6.40 and $6.80.
Cisco Systems plunged 9.6% to $48.16 after the networking equipment maker reported strong quarterly results but said product order growth is likely to slow down.
Palo Alto Networks declined 6.5% to $239.52 after the cyber security company reported better-than-expected quarterly results, but the company's new orders fell short of market expectations.
Macy's jumped 8.2% to $13.64 after the apparel retailer reported better-than-expected earnings because of a decline in inventories and higher margins.
European Markets Closed Mixed, Bond Yields at 2-month Lows
European markets extended weekly gains, and bond yields declined following the easing of inflation in the Euro Area, the U.S., and the U.K.
Benchmark indexes in Frankfurt gained, but in London and Paris they lacked direction, and the euro and the pound hovered near the two-month highs.
Bond yields turned lower in Germany, France, Italy, and the U.K. following the decline in U.S. Treasury yields in overnight trading.
Closer to home, consumer price inflation in the UK and France dropped closer to 4% in October, and wholesale prices declined in Germany, signaling waning inflation pressures in the economy.
The decline in inflation for the last ten months is largely driven by the weakness in crude oil prices and higher interest rates, but despite the multiple rate hikes, prices are still rising at a faster than 2% target rate set by the central banks.
For now, investors remained focused on the rate decision at the next policy meeting, and investors bid up stocks after ECB President Christine Lagarde said a week ago that rates are likely to stay unrevised for "the next couple of quarters."
Europe Indexes and Yields
The DAX index increased 0.2% to 15,786.61, the CAC-40 index fell 0.6% to 7,168.40, and the FTSE 100 index plunged 1.0% to 7,410.97.
The yield on 10-year German bonds increased to 2.61%; French bonds traded higher to 3.21%; the UK gilts eased to 4.16%; and Italian bonds inched lower to 4.38%.
The euro rebounded to $1.084, the British pound at $1.239, and the U.S. dollar at 88.89 Swiss cents.
Brent crude decreased $4.30 to $76.88 a barrel, and the Dutch TTF natural gas edged lower by €1.26 to €45.80 per MWh.
Europe Stock Movers
Energy companies traded down after Brent crude oil declined below $81 a barrel in London trading, the level last seen in July after crude oil supplies rose in the U.S., according to the weekly report from the U.S. Energy Information Administration.
BP plc, Shell plc, TotalEnergies, Eni SpA, and Repsol SA declined between 1% and 2%.
Burberry Group plc dropped 9.4% to 1,580.77 pence after the luxury fashion group issued a revenue warning for the fiscal year 2024.
City Pub Group PLC soared 36.4% to 135.12 pence after the company agreed to be acquired by Young & Company's Brewery, Plc, for £162 million.
Young & Co. agreed to pay 145 pence per share, a 46% premium to the 99 pence closing price of City Pub before the announcement of the deal.
After the merger, Young & Co. shareholders will control 94% of the combined company, and City Pub shareholders will own 6%.
Aviva plc increased 0.6% to 416.60 pence after the UK-based insurance company reiterated its full-year outlook.
Halma plc jumped 4.95% to 2,063.0 pence after the UK-based safety equipment maker reported record first-half results.
French luxury stocks declined following the weak housing market data in China, confirming ongoing demand weakness for French luxury goods.
LVMH decreased 1.9% to €705.20, Kering SA dropped 1.9% to €402.15, and Richemont SA fell 1.3% to CHF 110.55.
Vallourec SA rose 4.2% to €13.03 after the French tubular products maker lifted its 2023 operating earnings outlook after reporting slightly higher third quarter earnings.
Publicis Groupe SA decreased 1.4% to €70.48 after the French advertising and public relations company appointed current CEO of EMEA Loris Nold as group Chief Financial Officer in February 2024.
Siemens AG increased 4.4% to €145.0 after the industrial company reported fiscal fourth quarter earnings ahead of expectations.
Hellofresh SE plunged 22.2% to €15.85 after the meal-kit provider lowered its adjusted earnings outlook and narrowed its revenue growth estimate.
The company lowered its revenue growth estimate to between 2% and 5% from the previous estimate between 2% and 8% and adjusted its earnings outlook to between €430 million and €470 million from the previous estimate between €470 million and €540 million.
The company blamed the weakness on lower-than-expected revenue growth in the U.S. and higher-than-expected expenses at its ready-eat facility in Arizona because of temporary water shortages.
U.S. Movers: Cisco, Macy's, Palo Alto Networks, Walmart
Scott Peters
16 Nov, 2023
New York City
The S&P 500 index jumped 0.4% to 4,512.09, and the Nasdaq Composite rose 0.3% to 14,134.89.
The yield on 2-year Treasury notes decreased to 4.83%, 10-year Treasury notes inched lower to 4.46%, and 30-year Treasury bonds edged up to 4.64%.
Walmart dropped 6.2% to $159.20 after the retailer reported quarterly results and issued a cautious outlook.
Revenue in the fiscal third quarter increased 5.2% to $160.8 million from $152.8 billion, and the company swung to a profit of $453 million from a loss of $1.8 billion. Diluted earnings per share were 17 cents, compared to a loss of 66 cents a year ago.
Sales at U.S. locations reflected ongoing challenging conditions for consumers; sales of groceries and health and wellness products rose, but discretionary items and general merchandise sales declined "modestly."
Walmart U.S. sales increased 4.4% to $109.4 billion, driven by a 4.9% increase in comparable store sales; transactions rose 3.4%; and average ticket size advanced 1.5% from a year ago.
The retailer also indicated U.S. e-commerce sales rose by 24%, and advertising sales on its online platform rose by 26% from a year ago.
The company guided full-year 2024 consolidated sales to increase between 5% and 5.5% and adjusted earnings per share to be between $6.40 and $6.80.
Cisco Systems plunged 9.6% to $48.16 after the networking equipment maker reported strong quarterly results but said product order growth is likely to slow down.
Revenue in the fiscal 2024 first quarter ending in October increased 8% to $14.7 billion, net income advanced 36% to $3.6 billion from $2.7 billion, and diluted earnings per share rose to 89 cents from 65 cents a year ago.
The company guided fiscal second-quarter revenue between $12.6 billion and $12.8 billion and earnings per share between 59 cents and 64 cents.
For the full-year 2024, the company estimated revenue in the range of $52.8 billion and $55.0 billion and earnings per share between $2.97 and $3.08.
The company declared a cash dividend of 39 cents per share payable on January 24 to shareholders on record on January 4.
Palo Alto Networks declined 6.5% to $239.52 after the cyber security company reported better-than-expected quarterly results, but the company's new orders or billing outlook fell short of market expectations.
Revenue in the fiscal first quarter ending in October jumped 20% to $1.9 billion, net income advanced to $194.2 million from $20.0 million, and diluted earnings per share rose to 56 cents from 6 cents a year ago.
The company blamed the weakness in billings growth on rising interest rates.
The company guided total billings in the fiscal second quarter between $2.335 billion and $2.385 billion, representing growth between 15% and 18% a year ago.
For the fiscal year 2024, the company estimated total billings in the range of $10.7 billion and $10.8 billion, an increase between 16% and 17%.
Total revenue in the fiscal year 2024 will range between $8.15 billion and $8.20 billion, an increase between 18% and 19% from a year ago.
Macy's jumped 8.2% to $13.64 after the apparel retailer reported better-than-expected earnings because of a decline in inventories and higher margins.
Revenue in the quarter declined 7% to $4.9 billion from $5.2 billion, net income dropped to $43 million from $108 million, and diluted earnings per share fell to 15 cents from 39 cents a year ago.
Fewer discounts in the quarter improved gross margin to 40.3% from 38.7% a year ago.
The retailer tightened its full-year sales outlook and estimated fiscal year 2023 sales between $22.9 billion and $23.2 billion, up from the previous estimated range between $22.8 billion and $23.2 billion.
The company also guided comparable sales, including license sales, to decline between 7% and 6%, compared to the previous estimate between 7.5% and 6%.
The company revised its adjusted diluted earnings per share range to between $2.88 and $3.13 from the previously estimated range of between $2.70 and $3.20.