Market Update
Stocks Extend Rally After Wholesale Inflation and Retail Sales Reports
Barry Adams
15 Nov, 2023
New York City
Market indexes extended this week's rally after softer inflation in October encouraged investors.
For months, stocks declined on worries of rate path uncertainties, and investors lightened positions in interest rate-sensitive sectors including banks, commercial real estate, and technology.
However, after the Federal Reserve held rates steady for the second time in a row, it cleared the path for the market indexes to advance.
The S&P 500 index and the Nasdaq Composite staged strong comebacks in November, 7% and 9%, respectively, after fears of higher rates receded and softer inflation in October contributed to the market's advance.
The latest data on wholesale inflation and retail sales also supported to the market's gains in today's session.
Wholesale Prices Post Largest Monthly Drop Since April 2020
The producer price index, a measure of wholesale inflation, declined 0.5% from the previous month in October, the U.S. Bureau of Labor Statistics reported Wednesday.
On an annual basis, the producer price index increased by 1.3%.
Wholesale price inflation fell at the fastest pace in a single month since April 2020, after good prices declined 1.4% following a rise since May and service prices were unchanged after advancing for six consecutive months.
Retail Sales Declined After Rising Six Consecutive Months
After rising for six months in a row, retail and food services sales declined 0.1% in October from the previous month, the U.S. Census Bureau reported Wednesday.
Retail sales data adjusted for calendar and seasonal factors but not for inflation, suggesting higher prices are keeping consumer spending in check.
On an annual basis, retail sales rose 2.5% in October from an upwardly revised 4.1% in September.
Sales in the three-month period between August and October rose 3.1% from the same period a year ago.
Retail trade sales decreased 0.2% from September and increased 1.6% from a year ago; gasoline station sales were down 7.5% from a year ago; and sales at nonstore retailers increased 7.6% from a year ago.
U.S. Indexes and Yields
The S&P 500 index jumped 0.5% to 4,519.29, and the Nasdaq Composite rose 0.6% to 14,183.29.
The yield on 2-year Treasury notes increased to 4.88%, 10-year Treasury notes inched higher to 4.49%, and 30-year Treasury bonds edged up to 4.66%.
Crude oil decreased $0.66 to $77.61 a barrel, and natural gas prices rose 9 cents to $3.20 a thermal unit.
Gold increased $3.21 to $1,965.64 an ounce after bond yields traded in a narrow range.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.25.
U.S. Stock Movers
Target Corp. soared 14.2% to $126.65 after the retailer reported positive quarterly results.
Comparable sales in the third quarter declined 4.9%, and declines in discretionary categories were partially offset by an increase in daily necessities categories, including beauty.
Total revenue declined 4.2% to $25.4 billion, net income in the quarter advanced 36.3% to $971 million from $712 million, and diluted earnings per share rose to $2.10 from $1.54 a year ago.
Inventory at the end of the quarter was 14% lower than a year ago, after a 19% decline in discretionary category inventories.
The company guided fourth-quarter comparable store sales to decline in a wider range around the mid-single digit, reflecting uncertainties about holiday spending.
Advance Auto Parts declined 4.8% to $55.50 after the specialty retailer reported mixed quarterly results.
TJX Companies fell 2.5% to $90.20 after the apparel and household goods retailer reported positive quarterly results, but the company's guidance fell short of some investors' expectations.
Revenue in the third quarter ending in October rose 9% to $13.3 billion from $12.2 billion, net income advanced to $1.2 billion from $1.1 billion, and diluted earnings per share rose to $1.03 from 91 cents a year ago.
Comparable store sales in the quarter increased by 6%, slower than 14% a year ago.
U.S. comparable stores at Home Goods chain rose 9% compared to a decline of 16%, and Marmaxx stores (TJ Maxx and Marshall stores) increased 7% compared to 3% increase a year ago, respectively.
Total inventories at the end of the quarter were $8.3 billion, flat compared to a year ago.
During the quarter, the company repurchased $650 million of its own shares, retired 7.2 million shares, and paid $380 million in shareholder dividends.
The company now expects to repurchase approximately $2.25 billion to $2.5 billion of its stock during the fiscal year ending on February 3, 2024.
Europe Movers: Alcon, Alstom, Experian, Infineon Technologies, Siemens Energy, Tullow Oil
Inga Muller
15 Nov, 2023
Frankfurt
European stock market indexes advanced following the global rally after U.S. inflation weakened in October.
The DAX index increased 0.4% to 15,681.48, the CAC-40 index advanced 0.5% to 7,220.87, and the FTSE 100 index rose 0.9% to 7,507.89.
The yield on 10-year German bonds declined to 2.59%; French bonds traded lower to 3.16%; the UK gilts eased to 4.17%; and Italian bonds inched lower to 4.40%.
Alstom SA plunged 20.4% to €11.29 after the company struggled with rising inventories and challenges integrating recent acquisitions.
The French train maker is expected to cut as many as 1,500 jobs, lower its debt by €2 billion, and sell some of its key assets.
Chief executive Henri Poupart-Lafarge said that the company may consider raising capital through an equity offering after exhausting other alternatives.
Net sales in the first half increased 5% to €8.44 billion from €8.05 billion and net profit was €1 million compared to a loss of €21 million a year ago.
Negative free cash flow in the period increased to €1.12 billion from €45 million a year ago, and the company said it plans to sell assets between €0.5 billion and €1.0 billion and use proceeds to lower its debt.
Infineon Technologies AG increased 6.7% to €32.67 after the company reported better-than-expected quarterly results in the fiscal fourth quarter and also held out for higher sales in the current quarter.
Revenue in the fiscal fourth quarter ending in September was flat at €4.2 billion, net income advanced to €753 million from €735 million, and diluted earnings per share rose to 57 cents from 56 cents a year ago.
The advanced chipmaker estimated fiscal year 2024 first quarter revenue of €3.8 billion and full-year revenue of €17 billion, compared to €16.3 billion in fiscal year 2023 and capital expenditure of €3.3 billion.
The company highlighted sustained demand for its chips in the renewable energy and mobility sectors in China, offset by weaker demand in communication, computing, and IoT applications.
Siemens Energy AG advanced 4.6% to €10.72 after the company secured €7.5 billion in project-related guarantees from the German government.
Tullow Oil plc gained 7.3% to 35.96 pence after the company lifted its 2023 cash flow outlook.
Experian plc increased 6.8% to 2,865.0 pence after the credit card data company reported an increase in first-half profit.
Alcon AG declined 6.5% to CHF 63.94 after the Swiss eye-care company reported weaker-than-expected third-quarter sales.
Revenue in the third quarter rose 8% to $2.3 billion from $2.1 billion, net income advanced to $204 million from $116 million, and diluted earnings per share rose to 41 cents from 23 cents a year ago.
The Swiss eye-care company tightened its 2023 sales range to between $9.3 billion and $9.4 billion from the previous estimate of between $9.3 billion and $9.5 billion in August.
The company also tightened its core earnings per share estimate to between $2.70 and $2.75 from the previous estimate of between $2.70 and $2.80.
European Stocks Extend Rally, Euro Jumped to 2-month High, France and UK Inflation Eased
Bridgette Randall
15 Nov, 2023
Frankfurt
European stocks extended weekly gains, and bond yields in the region continued to drift lower.
Benchmark indexes in Frankfurt, Paris, and London advanced following the softer inflation report in the U.S.
The weakening of inflation in October to 3.2% from 3.7% in September supported the case for the U.S. Federal Reserve to hold rates steady at the next meeting and remove rate path uncertainties for the next two months.
Closer to home, investors reviewed the Eurozone GDP growth outlook, consumer inflation in France and the UK, and wholesale inflation in Germany.
Euro Area GDP Growth Estimate Lowered
The economic growth in the Euro Area was lowered to 0.6% from the previous estimate of 0.8%, according to the European Commission's Autumn 2023 Economic Forecast.
High inflation and interest rates and weak external demand in the currency union are negatively impacting consumers and businesses.
Among the larger economies in the region, Germany is expected to shrink by 0.3%, but France will grow by 1%, Spain by 2.4%, and Italy by 0.7%.
The commission also held its 2023 inflation estimate at 5.6%, but the slightly higher 2024 estimate was revised to 3.2% from the previous estimate of 2.9%.
UK consumer Price Inflation Dropped to 2-year Low
Consumer price inflation in the UK dropped to a two-year low in October, according to the Office for National Statistics.
The annual inflation rate in the UK dropped to 4.6% in October from 6.7% in September, reflecting the sharp decline in energy and utility costs.
Inflation fell at the fastest pace in a month since 1992 after food price inflation eased to 10.1% from 12.2% in September and a 23% fall in energy price cap to £1,923 from £2,500 a year ago.
Despite the decline in inflation, prices are still rising at a faster pace than the 2% target set by the Bank of England.
French Inflation Eased in October
In France, consumer price inflation declined to 4% in October from 4.9% in September, the statistical agency INSEE reported on Wednesday.
Weaker energy prices and rising interest rates played a key role in weakening inflation.
Energy price inflation slowed to 5.2% from 11.9%, reflecting a decline in gas prices and fuel prices.
Food price inflation eased to 7.8% from 9.7% in September, and inflation slowed for the seventh consecutive month.
However, the core rate of inflation, which excludes volatile food and energy prices, declined to a 16-month low of 4.2% from 4.6%.
Europe Indexes and Yields
The DAX index increased 0.4% to 15,681.48, the CAC-40 index advanced 0.5% to 7,220.87, and the FTSE 100 index rose 0.9% to 7,507.89.
The yield on 10-year German bonds declined to 2.59%; French bonds traded lower to 3.16%; the UK gilts eased to 4.17%; and Italian bonds inched lower to 4.40%.
The euro rebounded to $1.086, the British pound at $1.246, and the U.S. dollar at 88.79 Swiss cents.
Brent crude decreased $0.36 to $82.10 a barrel, and the Dutch TTF natural gas edged higher by €0.29 to €47.90 per MWh.
Europe Stock Movers
Alstom SA plunged 20.4% to €11.29 after the company struggled with rising inventories and challenges integrating recent acquisitions.
The French train maker is expected to cut as many as 1,500 jobs, lower its debt by €2 billion, and sell some of its key assets.
Chief executive Henri Poupart-Lafarge said that the company may consider raising capital through an equity offering after exhausting other alternatives.
Infineon Technologies AG increased 6.7% to €32.67 after the company reported better-than-expected quarterly results in the fiscal fourth quarter and also held out for higher sales in the current quarter.
Siemens Energy AG advanced 4.6% to €10.72 after the company secured €7.5 billion in project-related guarantees from the German government.
Tullow Oil plc gained 7.3% to 35.96 pence after the company lifted its 2023 cash flow outlook.
Experian plc increased 6.8% to 2,865.0 pence after the credit card data company reported an increase in first-half profit.
Alcon AG declined 6.5% to CHF 63.94 after the Swiss eye-care company reported weaker-than-expected third-quarter sales.
Tech, Real Estate, and Solar Stocks Led the Surge on Wall Street
Barry Adams
14 Nov, 2023
New York City
Stocks advanced after a weaker-than-expected inflation report bolstered investor enthusiasm, and interest rate-sensitive stocks led gainers.
The S&P500 index and the Nasdaq Composite index jumped 2% after consumer price inflation resumed its slide for the third month in a row and core inflation dropped to a two-year low.
The weaker-than-expected inflation sparked debate about whether policymakers should consider the possibility of lowering interest earlier than expected.
Treasury yields fell sharply after the release of the inflation report, and 10-year Treasury yields dropped below 4.5%, sharply lower than the 16-year high reached in October.
On Wall Street, tech, solar energy, and real estate sector stocks were among the leading gainers following the release of the inflation report.
Solar inverter and panel makers and installers surged between 10% and 20% in the hopes that the Federal Reserve would halt its rate increase campaign, spurring more demand for solar installations.
Enphase Energy soared 15.5%, SolarEdge Technologies jumped 12%, and First Solar advanced 12%. Sunrun gained 19%, Sun Power increased 16%, and Sunnova Energy catapulted 15.9%.
Amazon, Apple, Airbnb, Microsoft, Meta Platforms, Google-parent Alphabet, and Netflix jumped between 2% and 5%.
Boston Properties, Prologis, Simon Property Group, Vornado Realty Trust, and CBRE Group jumped between 3% and 14%.
Core Inflation Dropped to Two-year Low
The consumer price index, the measure of consumer inflation, slowed to 3.2% in October, the U.S. Bureau of Labor Statistics reported Tuesday.
The annual rate of inflation in October fell from 3.7% in September and August, but the monthly inflation measure was unchanged from the previous month.
Inflation eased largely because of a sharp decline in energy prices of 4.5%, compared to a decline of 0.5% in September.
Core inflation, which strips off volatile food and energy prices, rose 4.0% from a year ago and edged up 0.2% from the previous month, indicating stubborn and well-anchored inflation in the broader economy.
U.S. indexes and Yields
The S&P 500 index jumped 1.9% to 4,494.65, and the Nasdaq Composite advanced 2.3% to 14,085.03.
The yield on 2-year Treasury notes increased to 4.85%, 10-year Treasury notes inched higher to 4.46%, and 30-year Treasury bonds edged up to 4.63%.
Crude oil increased $1.19 to $79.19 a barrel, and natural gas prices fell 3 cents to $3.15 a thermal unit.
Gold increased $13.46 to $1,959.14 an ounce after bond yields traded in a narrow range.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.65.
U.S. Stock Movers
Home Depot Inc. advanced 3.5% to $299.23 after the specialty retailer reported quarterly results and issued a muted outlook.
Revenue in the third quarter declined 3% to $37.7 billion from $38.9 billion, net income dropped 12.2% to $3.8 billion from $4.2 billion, and diluted earnings per share dropped to $3.81 from $4.24 a year ago.
Comparable store sales in the quarter decreased by 3.1%, and comparable sales at U.S. locations declined by 3.5%.
The company estimated sales and comparable sales to decline between 3% and 4%, operating rate margins between 14.2% and 14.1%, and diluted earnings per share to fall between 9% and 11%.
European Markets Extend Gains, Euro at 2-year High
European markets traded higher for the second day in a row, and investors reviewed local economic news.
Benchmark stock indexes in Frankfurt, London, and Paris advanced, and bond yields held firm near the two-month low level.
European bonds lacked direction in choppy trading after investors mulled over comments from ECB President Christine Lagarde that rates are expected to remain stable for at least "the next couple of quarters."
Moreover, other policymakers, in public comments, pushed back against rate cuts at the next rate setting meeting.
In other economic news, the number of employed persons in the Euro Area increased by 0.3% to 168.7 million in the third quarter, Eurostat reported Tuesday.
The increase in number of employed people accelerated from the downwardly revised 0.1% in the second quarter.
Employment growth picked up to 1.4% on an annual basis from the 1.3% increase in the second quarter.
Europe Indexes and Yields
The DAX index increased 1.4% to 15,614.43, the CAC-40 index advanced 1.4% to 7,185.68, and the FTSE 100 index rose 0.2% to 7,440.47.
The yield on 10-year German bonds was unchanged at 2.70%; French bonds traded higher to 3.27%; the UK gilts held at 4.29%; and Italian bonds inched higher to 4.55%.
The euro rebounded to $1.082, the British pound at $1.241, and the U.S. dollar at 88.90 Swiss cents.
Brent crude increased $0.22 to $82.77 a barrel, and the Dutch TTF natural gas edged lower by €0.05 to €47.80 per MWh.
Europe Stock Movers
Glencore PLC increased 2.8% to 442.35 pence after the UK-based resource company agreed to acquire coal business owned by Teck Resources Ltd for $6.93 billion.
Informa PLC gained 5.2% to 738.79 pence after the event manager lifted its full-year outlook.
The event and textbook company said revenue in the 10-month period increased by 31.7%, raised its full-year revenue estimate to £3.15 billion from £3.05 billion, and revised its adjusted operating profit to £840 million from £790 million.
The company expanded its stock repurchase plan by £150 million to £1.15 billion through March 7, 2024.
Hill & Smith PLC increased 2% to 1,789.59 pence after the engineering services provider said revenue in the four-month period to October 31 increased 15% in constant currencies.
The company said it anticipates full-year operating earnings toward the upper end of the analyst consensus estimate between £116.0 million and £118.6 million.
Vodafone Group plc declined 3.6% to 74.62 pence after the UK-based telecom operator swung to a loss on a decline in revenue, reflecting adverse foreign exchange rates and discontinued business operations.
The results reflect the disposal of Vantage Towers, Vodafone Hungary, and Vodafone Ghana in the prior financial year.
Group revenue in the fiscal first half decreased 4.3 to €21.95 billion from €22.9 billion, and the company swung to a loss of €155 million from €1.2 billion. Basic earnings per share were a loss of 1.28 cents compared to a profit of 3.37 cents.
Net debt declined to €36.2 billion from €45.5 billion a year ago.
The company announced an interim dividend of 4.5 euro cents to shareholders on November 24.
RWE AG advanced 1.7% to €36.91 after the German utility company reported an 82% surge in core profit for the first nine months.
Delivery Hero SE increased 4.1% to €28.0 after the Germany-based online food delivery company raised its full-year outlook.
U.S. Movers: Aramark, Henry Schein, Home Depot, Sally Beauty Holdings
Scott Peters
14 Nov, 2023
New York City
Home Depot Inc. advanced 3.5% to $299.23 after the specialty retailer reported quarterly results and issued a muted outlook.
Revenue in the third quarter declined 3% to $37.7 billion from $38.9 billion, net income dropped 12.2% to $3.8 billion from $4.2 billion, and diluted earnings per share dropped to $3.81 from $4.24 a year ago.
Comparable store sales in the quarter decreased by 3.1%, and comparable sales at U.S. locations declined by 3.5%.
The company estimated sales and comparable sales to decline between 3% and 4%, operating rate margins between 14.2% and 14.1%, and diluted earnings per share to fall between 9% and 11%.
Aramark declined 6.6% to $26.63 after the company reported quarterly results.
Revenue in the fiscal fourth quarter ending in September increased 12% to $4.9 billion from $4.4 billion, net income advanced to $673.5 million from $194.5 million, and diluted earnings per share rose to $2.57 from 57 cents a year ago.
Consolidated revenue in the fiscal year 2023 increased 15% to $18.9 billion, and the company completed the spinoff of its Uniform Services business, renamed Vestis, and received $1.5 billion in cash payments for debt associated with the company.
The company guided fiscal year 2024 revenue to grow between 7% and 9% from $16.1 billion, adjusted for the recent spinoff, and adjusted earnings per share to increase between 25% and 35% from $1.16 in fiscal year 2023.
Sally Beauty Holdings jumped 17.7% to $9.59 after the specialty retailer reported a slight decline in quarterly revenue.
Revenue in the fiscal fourth quarter ending in September declined 4.3% to $921 million, and comparable sales fell 1.6% from a year ago.
Net income increased to $42.5 million from $21.3 million, and diluted earnings per share rose to 39 cents from 20 cents a year ago.
Revenue in the fiscal year 2023 declined 2.3% to $3.7 billion from $3.8 billion, net income increased to $184.5 million from $183.5 million, and diluted earnings per share edged up to $1.69 from $1.66 a year ago.
The retailer estimated fiscal 2024 net sales and comparable sales to be flat from the previous year and gross margins above 50%.
Henry Schein increased 0.6% to $67.88 after the company reported quarterly results that met investor expectations.
Revenue in the third quarter rose 3.1% to $3.2 billion, net income declined to $137 million from $150 million, and diluted earnings per share fell to $1.05 from $1.09 a year ago.
The company said sales in full-year 2023 are expected to decline between 1% and 3%, revised from the previous guidance of an increase between 1% and 3%, reflecting the drag from the recent cyberattack incidence.
The company experienced a cyberattack on October 14, and the company said that it has contained the incident, restored most of its business-critical systems, and expects to file an insurance claim in 2024.
U.S. Averages Surge 2% After Softer Inflation Report
Barry Adams
14 Nov, 2023
New York City
Stocks advanced after a weaker-than-expected inflation report bolstered investor enthusiasm.
The S&P500 index and the Nasdaq Composite index jumped more than 1% after consumer price inflation resumed its slide for the third month in a row and core inflation dropped to a two-year low.
The weaker-than-expected inflation sparked debate about whether policymakers should consider the possibility of lowering interest earlier than expected.
Treasury yields fell sharply after the release of the inflation report, and 10-year Treasury yields dropped below 4.5%, sharply lower than the 16-year high reached in October.
Core Inflation Dropped to Two-year Low
The consumer price index, the measure of consumer inflation, slowed to 3.2% in October, the U.S. Bureau of Labor Statistics reported Tuesday.
The annual rate of inflation in October fell from 3.7% in September and August, but the monthly inflation measure was unchanged from the previous month.
Inflation eased largely because of a sharp decline in energy prices of 4.5%, compared to a decline of 0.5% in September.
Core inflation, which strips off volatile food and energy prices, rose 4.0% from a year ago and edged up 0.2% from the previous month, indicating stubborn and well-anchored inflation in the broader economy.
U.S. indexes and Yields
The S&P 500 index jumped 1.8% to 4,492.19, and the Nasdaq Composite rose 2.0% to 14,072.22.
The yield on 2-year Treasury notes increased to 4.85%, 10-year Treasury notes inched higher to 4.46%, and 30-year Treasury bonds edged up to 4.63%.
Crude oil increased $1.19 to $79.19 a barrel, and natural gas prices fell 3 cents to $3.15 a thermal unit.
Gold increased $13.46 to $1,959.14 an ounce after bond yields traded in a narrow range.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.65.
U.S. Stock Movers
Home Depot Inc. advanced 3.5% to $299.23 after the specialty retailer reported quarterly results and issued a muted outlook.
Revenue in the third quarter declined 3% to $37.7 billion from $38.9 billion, net income dropped 12.2% to $3.8 billion from $4.2 billion, and diluted earnings per share dropped to $3.81 from $4.24 a year ago.
Comparable store sales in the quarter decreased by 3.1%, and comparable sales at U.S. locations declined by 3.5%.
The company estimated sales and comparable sales to decline between 3% and 4%, operating rate margins between 14.2% and 14.1%, and diluted earnings per share to fall between 9% and 11%.
Europe Movers: Delivery Hero, Glencore, Hill & Smith, Informa, RWE, Vodafone
Inga Muller
14 Nov, 2023
New York City
European markets extended gains, and bond yields hovered near two-month lows after policymakers signaled stable rates for the next couple of quarters.
The DAX index increased 0.3% to 15,392.26, the CAC-40 index advanced 0.06% to 7,091.70, and the FTSE 100 index fell 0.2% to 7,405.97.
The yield on 10-year German bonds was unchanged at 2.70%; French bonds traded higher to 3.27%; the UK gilts held at 4.29%; and Italian bonds inched higher to 4.55%.
Glencore PLC increased 2.8% to 442.35 pence after the UK-based resource company agreed to acquire a coal business owned by Canada-based Teck Resources Ltd. for $6.93 billion.
Glencore agreed to acquire a 77% stake in Elk Valley Resource; Japan-based Nippon Steel Corporation plans to increase its stake to 20%; and South Korea-based POSCO agreed to hold the remaining 3% stake in the company.
Elk Valley Resource's steel-making coal production in 2022 was 21.5 million tons, and 17.3 million tons in the nine months to September 2023.
Profit before tax in 2022 was C$6.0 billion and C$3.1 billion in the first nine months to September 2023.
Informa PLC gained 5.2% to 738.79 pence after the event manager lifted its full-year outlook.
The event and textbook company said revenue in the 10-month period increased by 31.7%, raised its full-year revenue estimate to £3.15 billion from £3.05 billion, and revised its adjusted operating profit to £840 million from £790 million.
The company expanded its stock repurchase plan by £150 million to £1.15 billion through March 7, 2024.
Hill & Smith PLC increased 2% to 1,789.59 pence after the engineering services provider said revenue in the four-month period to October 31 increased 15% in constant currencies.
The company said it anticipates full-year operating earnings toward the upper end of the analyst consensus estimate between £116.0 million and £118.6 million.
Vodafone Group plc declined 3.6% to 74.62 pence after the UK-based telecom operator swung to a loss on a decline in revenue, reflecting adverse foreign exchange rates and discontinued business operations.
The results reflect the disposal of Vantage Towers, Vodafone Hungary, and Vodafone Ghana in the prior financial year.
Group revenue in the fiscal first half decreased 4.3 to €21.95 billion from €22.9 billion, and the company swung to a loss of €155 million from €1.2 billion. Basic earnings per share were a loss of 1.28 cents compared to a profit of 3.37 cents.
Net debt declined to €36.2 billion from €45.5 billion a year ago.
The company announced an interim dividend of 4.5 euro cents to shareholders on November 24.
RWE AG advanced 1.7% to €36.91 after the German utility company reported an 82% surge in core profit for the first nine months.
Delivery Hero SE increased 4.1% to €28.0 after the Germany-based online food delivery company raised its full-year outlook.
Stable Rate Outlook Drives European Markets Higher, Employment Growth Picks Up
Bridgette Randall
14 Nov, 2023
Frankfurt
European markets traded higher for the second day in a row, and investors reviewed local economic news.
Benchmark stock indexes in Frankfurt, London, and Paris advanced, and bond yields held firm near the two-month low level.
European bonds lacked direction in choppy trading after investors mulled over comments from ECB President Christine Lagarde that rates are expected to remain stable for at least "the next couple of quarters."
Moreover, other policymakers, in public comments, pushed back against rate cuts at the next rate setting meeting.
In other economic news, the number of employed persons in the Euro Area increased by 0.3% to 168.7 million in the third quarter, Eurostat reported Tuesday.
The increase in number of employed people accelerated from the downwardly revised 0.1% in the second quarter.
Employment growth picked up to 1.4% on an annual basis from the 1.3% increase in the second quarter.
Europe Indexes and Yields
The DAX index increased 0.3% to 15,392.26, the CAC-40 index advanced 0.06% to 7,091.70, and the FTSE 100 index fell 0.2% to 7,405.97.
The yield on 10-year German bonds was unchanged at 2.70%; French bonds traded higher to 3.27%; the UK gilts held at 4.29%; and Italian bonds inched higher to 4.55%.
The euro rebounded to $1.072, the British pound at $1.231, and the U.S. dollar at 90.08 Swiss cents.
Brent crude increased $0.06 to $82.59 a barrel, and the Dutch TTF natural gas edged lower by €1.35 to €46.52 per MWh.
Europe Stock Movers
Glencore PLC increased 2.8% to 442.35 pence after the UK-based resource company agreed to acquire coal business owned by Teck Resources Ltd for $6.93 billion.
Informa PLC gained 5.2% to 738.79 pence after the event manager lifted its full-year outlook.
The event and textbook company said revenue in the 10-month period increased by 31.7%, raised its full-year revenue estimate to £3.15 billion from £3.05 billion, and revised its adjusted operating profit to £840 million from £790 million.
The company expanded its stock repurchase plan by £150 million to £1.15 billion through March 7, 2024.
Hill & Smith PLC increased 2% to 1,789.59 pence after the engineering services provider said revenue in the four-month period to October 31 increased 15% in constant currencies.
The company said it anticipates full-year operating earnings toward the upper end of the analyst consensus estimate between £116.0 million and £118.6 million.
Vodafone Group plc declined 3.6% to 74.62 pence after the UK-based telecom operator swung to a loss on a decline in revenue, reflecting adverse foreign exchange rates and discontinued business operations.
The results reflect the disposal of Vantage Towers, Vodafone Hungary, and Vodafone Ghana in the prior financial year.
Group revenue in the fiscal first half decreased 4.3 to €21.95 billion from €22.9 billion, and the company swung to a loss of €155 million from €1.2 billion. Basic earnings per share were a loss of 1.28 cents compared to a profit of 3.37 cents.
Net debt declined to €36.2 billion from €45.5 billion a year ago.
The company announced an interim dividend of 4.5 euro cents to shareholders on November 24.
RWE AG advanced 1.7% to €36.91 after the German utility company reported an 82% surge in core profit for the first nine months.
Delivery Hero SE increased 4.1% to €28.0 after the Germany-based online food delivery company raised its full-year outlook.
Stocks and Bonds Hold Firm, Investors Overlook Debt Outlook Downgrade
Barry Adams
13 Nov, 2023
New York City
Stocks on Wall Street lacked momentum, and investors looked beyond the latest U.S. credit rating downgrade.
Moody's Investors Service, one of the three key rating agencies, lowered its outlook to "negative" from "stable" but retained the U.S. debt rating at AAA, the highest level.
Three months ago, Fitch Ratings lowered its U.S. log-term credit default rating to AA+ from AAA, citing rising debt levels and interest rates, increasing polarization, and a lack of a stable budget process.
The U.S. federal government is expected to run out of cash on November 17, and lawmakers are struggling to pass even a short-term budget.
The U.S. House of Representatives, controlled by the Republican Party, is struggling to propose a spending bill to cover expenses for the next three months.
Rising interest rates and outsized defense budgets are expected to increase federal government spending in the current fiscal year, forcing the federal government to sell more debt and push interest rates even higher.
But the bond market took the latest debt rating views in strides, and Treasury yields were nearly unchanged in Monday's trading.
Investors are looking ahead to the release of the consumer price inflation index on Tuesday and the producer price index on Thursday.
U.S. indexes and Yields
The S&P 500 index was nearly unchanged at 4,414.09, and the Nasdaq Composite fell 0.1% to 13,786.19.
The yield on 2-year Treasury notes increased to 5.05%, 10-year Treasury notes inched higher to 4.63%, and 30-year Treasury bonds edged up to 4.76%.
Crude oil increased $1.14 to $78.29 a barrel, and natural gas prices rose 14 cents to $3.16 a thermal unit.
Gold increased $9.47 to $1,946.12 an ounce after bond yields traded in a narrow range.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.89.
U.S. Stock Movers
Boeing Co. jumped 3.8% to $204.0 after the airplane maker won an order for 95 planes from Emirates Airline.
The order is worth $52 billion at the list price.
The state-controlled airline, a subsidiary of Emirates Group, increased its order to 35 from 30 for 787 Dreamliners and ordered an additional 90 777X planes, increasing its order for widebody jets to 205 planes.
General Electric Co. edged up to $115.35 after Emirates Air confirmed an additional order for 202 GE9X engines, which will power 777X planes.
Monday.com soared 10.4% to $154.25 after the project management software company reported better-than-expected third-quarter results.
The company also raised its full-year sales estimate to between $723 million and $725 million, compared to its previous estimate of between $713 million and $717 million.
European Markets Advanced, Bond Yields Edged Lower
European markets advanced on the first day of this week, and bond yields hovered near two-month lows.
Benchmark indexes in Frankfurt, London, and Paris edged higher after mixed trading in the previous week.
The CAC-40 index declined for the first time after advancing for seven weeks in a row, and market indexes in Frankfurt struggled to extend this year's gain.
Investors also looked ahead to inflation data from the U.S. and Eurozone later in the week.
German Current Account Surplus Expanded
Germany's current account surplus widened to €28.1 billion from €12.5 billion a year ago, the Bundesbank reported Monday.
The goods surplus soared to €22.5 billion from €11.1 billion, reflecting an 18.6% decline in imports and a 9.2% fall in exports, but the service sector deficit declined to €6.1 billion from €6.5 billion.
The primary income surplus rose to €15.8 billion from €12.4 billion, and the secondary income deficit fell to €4.0 billion from €4.5 billion a year ago.
Europe Indexes and Yields
The DAX index increased 0.7% to 15,345.0, the CAC-40 index advanced 0.6% to 7,087.06, and the FTSE 100 index added 0.9% to 7,425.83.
The yield on 10-year German bonds increased to 2.70%, French bonds traded higher to 3.27%, the UK gilts edged up to 4.31%, and Italian bonds inched lower to 4.53%.
The euro rebounded to $1.069, the British pound at $1.22, and the U.S. dollar at 90.20 Swiss cents.
Brent crude increased $1.20 to $82.61 a barrel, and the Dutch TTF natural gas edged higher by €1.24 to €47.87 per MWh.
Europe Stock Movers
Bilfinger SE added 1.9% to €36.02 after the civil and industrial construction and engineering company reiterated its annual outlook.
Salzgitter AG jumped 3% to €26.06 after the specialty steel company confirmed its fiscal year 2023 annual estimate.
Q.Beyond AG decreased 1.6% to €0.60 after the German software company reported a wider loss in the first nine months of the year.
The British Land Company soared 4.8% to 328.70 pence after the real estate company reported strong first-half results.
Tullow Oil plc soared 8% to 32.84 pence after the oil explorer entered into a five-year loan agreement with Glencore Energy UK Ltd.
Phoenix Group Holdings PLC advanced 6% to 492.40 pence after the UK-based insurance company lifted its cash generation target.
The company estimated cash generation at the upper end of the previously announced range between £1.3 billion and £1.4 billion.
The company declared a cash dividend of 26 pence per share, an increase of 5% from a year ago.
Insurance revenue increased to £2.9 billion from £2.6 billion, and loss attributable to shareholders declined to £245 million from £1.2 billion, and diluted loss per share fell to 27.1 pence from 130.4 pence a year ago.
Novo Nordisk AS advanced 3.2% to DKK 713.50 on a report that a trial showed its obesity drug Wegovy lowered the death risk.
The company announced the overall results of the trial in August but released details of the trial on Saturday at an industry conference organized by the American Heart Association.
The company asserted that overall cardiovascular problems declined by 20%, cardiovascular-related death by 15%, and heart strokes by 7%.
The trial covered 17,600 patients with obesity and existing heart disease without diabetes, and the trial did not look at the reasons for cardiovascular benefits and how much of that was contributed by weight loss.
U.S. Stocks Turned Lower, Moody's Follows Fitch In Lowering U.S. Debt Rating Outlook
Barry Adams
13 Nov, 2023
New York City
Stocks struggled in early trading after Moody's lowered its U.S. credit rating outlook, citing rising debt and fiscal deterioration.
The credit rating agency lowered its outlook to "negative" from "stable" but retained the debt rating at AAA, the highest level.
Three months ago, Fitch Ratings lowered its U.S. log-term credit default rating to AA+ from AAA, citing rising debt levels and interest rates, increasing polarization, and a lack of a stable budget process.
The U.S. federal government is expected to run out of cash on November 17, and lawmakers are struggling to pass even a short-term budget.
The U.S. House of Representatives, controlled by the Republican Party, is struggling to propose a spending bill to cover expenses for the next three months.
Rising interest rates and outsized defense budgets are expected to increase federal government spending in the current fiscal year, forcing the federal government to sell more debt and push interest rates even higher.
U.S. indexes and Yields
The S&P 500 index decreased 0.4% to 4,396.09, and the Nasdaq Composite fell 0.6% to 13,711.95.
The yield on 2-year Treasury notes increased to 5.05%, 10-year Treasury notes inched higher to 4.63%, and 30-year Treasury bonds edged up to 4.76%.
Crude oil increased $0.32 to $77.39 a barrel, and natural gas prices rose 7 cents to $3.19 a thermal unit.
Gold increased $0.37 to $1,937.60 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.89.
U.S. Stock Movers
Boeing Co. jumped 3.8% to $204.0 after the airplane maker won an order for 95 planes from Emirates Airline.
The order is worth $52 billion at the list price.
The state-controlled airline, a subsidiary of Emirates Group, increased its order to 35 from 30 for 787 Dreamliners and ordered an additional 90 777X planes, increasing its order for widebody jets to 205 planes.
General Electric Co. edged up to $115.35 after Emirates Air confirmed an additional order for 202 GE9X engines, which will power 777X planes.
Monday.com soared 10.4% to $154.25 after the project management software company reported better-than-expected third-quarter results.
The company also raised its full-year sales estimate to between $723 million and $725 million, compared to its previous estimate of between $713 million and $717 million.