ticker

European Markets Edged Higher, Eurozone Business Activities Fall

Bridgette Randall
24 Jan, 2024
Frankfurt

European markets advanced after investors digested a fresh batch of corporate earnings, the business activities report, and Beijing's latest stimulus measures.

Market indexes in Paris, London, and Frankfurt gained in cautious trading amid a flood of corporate earnings reports.

The semiconductor equipment maker ASML reported a higher-than-expected fourth quarter report, SAP estimated a double-digit increase in its cloud computing segment, and Siemens Energy's preliminary quarterly results were ahead of market expectations.

French train maker Alstom reported new orders that exceeded market expectations, but the company missed its quarterly sales outlook.

Private Sector Activities Remain Subdued in the Eurozone

On the economic front, eurozone business activities continued to decline at the beginning of the year, S&P Global reported in its monthly survey on Wednesday.

The HCOB Eurozone PMI Composite Index edged slightly higher to 47.9 in January from 47.6 in December.

The latest data suggested that business activities in the currency zone dropped for the eighth month in a row, but at the slowest pace since last July.

The pace of new incoming orders continued to decline, and the fall in export order growth eased to the slowest pace in nine months, with order backlogs falling sharply.

However, the German private sector contracted at a faster pace in January amid ongoing broad weakness.

The HCOB German PMI Composite Index decreased to 47.1 in January from 47.4 in December.

On the other hand, the UK's private sector activity gained momentum in January, and the S&P Global UK Composite PMI rose to 52.5 in January from 52.1 in December.

China Injects Liquidity

In other economic news, the People's Bank of China lowered its bank reserve requirement ratio, or RRR, by 50 basis points to support flagging financial markets and inject liquidity into the financial system.

The central bank lowered its reserve requirement for the first time after cutting it by 25 basis points in September, and the latest cut is expected to add about 1 trillion yuan, or $140 billion, to the financial system.

Europe Indexes and Yields

The DAX index increased 1.0% to 16,792.86, the CAC-40 index rose 0.5% to 7,425.52, and the FTSE 100 index inched higher by 0.3% to 7,503.08.

The yield on 10-year German bonds edged up to 2.31%; French bonds inched higher to 2.81%; the UK gilts edged higher to 4.01%; and Italian bonds inched lower to 3.86%.

The euro edged lower to $1.090, the British pound inched higher to $1.276, and the U.S. dollar gained to 86.52 Swiss cents.

Brent crude increased $0.39 to $79.94 a barrel, and the Dutch TTF natural gas increased by €0.77 to €28.0 per MWh.

Europe Stock Movers

Alstom SA decreased 5.5% to €11.27 after the French train and mobility solutions provider reported weaker-than-expected fiscal third quarter sales.

SAP SE soared 6% to €158.28 after the German information system company reported fourth-quarter results.

Revenue in the fourth quarter rose 5% to €8.5 billion from €8.0 billion, net profit soared to 1.2 billion from 326 million, and diluted earnings per share rose to €1.01 from 46 cents a year ago.

The company estimated 2024 cloud segment revenue between €17.0 billion and €17.3 billion, an increase between 24% and 27% in constant currencies.

The company said its restructuring, which will involve about 8,000 employees, is likely to cost €2 billion in 2024.

Fresnillo Plc advanced 5.5% to 505.0 pence after the precious metal mining company said silver production rose in 2023.

Siemens Energy increased 7.5% to €13.35 after the company reported better-than-expected fiscal first quarter results.

Tullow Oil advanced 5.1% to 31.74 pence after the company said its 2023 energy production is expected to exceed its previous estimate.

ASML Holding increased 6.3% to €751.80 after the Dutch semiconductor equipment maker reported fourth-quarter earnings ahead of market expectations.

Revenue in the quarter ending in December increased to €7.2 billion from €6.4 billion, net income advanced to €2.0 billion from €1.8 billion, and diluted earnings per share rose to €5.20 from €4.60 a year ago.

Japan Records Third Consecutive Annual Trade Deficit, Alibaba Insiders Increase Stake

Arjun Pandit
24 Jan, 2024
Mumbai

Markets in Asia lacked momentum, and investors focused on local economic data and corporate earnings.

Crude oil traded volatile in international markets, and shipping companies continue to avoid Red Sea Lanes amid ongoing Houthi rebel attacks in the region.

The Houthi attacks are impacting India's petroleum product shipments; about 25% of all fuel exports are destined for Europe via the Red Sea lanes.

Shipping companies have rerouted most of the container ships from the region along the coast of South Africa, increasing cost and shipping time.

The container ship rate from Shanghai to Rotterdam surged more than 80% from a year ago at the end of the last week to $3,777 per 40-foot container.

The average composite index for the year-to-date is $3,173 for a 40-foot container, $495 higher than the 10-year average rate of $2,678, according to Drewry's World Container Index.

Japan Record Third Consecutive Annual Trade Deficit

The Nikkei index decreased 0.8% to 36,221.68 after Japan unexpectedly swung to a trade surplus in December.

Japan's exports rose 9.8% to a new record high of 9.64 trillion yen, and imports fell 6.8% to 9.58 trillion yen, the Ministry of Finance reported Wednesday.

In 2023, exports rose 2.8% to 100.89 trillion yen and imports contracted 7% to 110.18 trillion yen, resulting in a trade deficit of 9.29 trillion yen.

Japan reported a trade deficit for the third year in a row after energy prices soared and exports struggled with weakening global demand.

China Offers Verbal Support to Stabilize Financial Markets

Stocks in China advanced for the second day in a row, and Chinese securities regulators pledged more support to stabilize financial markets.

We are going to put all our efforts into "maintaining the stable operation of the capital market," China Securities Regulatory Commission chairman Yi Huiman said during a meeting on Tuesday, according to the government-controlled Securities Times.

The CSI 300 index added 0.9% to 3,261.97, and the Hang Seng Index advanced 1.6% to 15,606.62.

Alibaba Group soared 5.5% to HK$71.35 after Chairman Joe Tsai acquired $151 million of its U.S.-listed shares in the last quarter, according to a SEC filing on January 22.

Co-founder Jack Ma acquired $50 million of the company's Hong Kong-listed stock, according to leading stock brokers in Hong Kong.

India Stocks Rebound, Foreign Investors Lighten Holdings

Stocks lacked direction in early trading, and investors reacted to domestic earnings amid heightened geopolitical tensions in the Middle East.

The Sensex and the Nifty indexes struggled to stay in the positive zone, and banks were in focus after foreign investors lightened holdings in the sector.

Foreign investors have stepped up their selling of stocks in India because of the high valuation and rising U.S. bond yields.

In the last five trading sessions, foreign investors have sold about ₹28,000 crore, or $3.2 billion worth of stocks, according to data available from the exchanges.

The Sensex index decreased 53.25 points to 70,322.71, and the Nifty index fell 14.60 points to 21,224.20.

On the Mumbai stock exchange, 105 stocks traded at their 52-week highs and 21 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee edged lower to ₹83.14 against the U.S. dollar.

India Movers: Axis Bank, Karnataka Bank, REC, Zee Entertainment

Arun Goswami
24 Jan, 2024
Mumbai

Stocks on Dalal Street rebounded after power sector stocks led the gainers.

Banks remained in focus after Axis Bank and Karnataka Bank reported weakening net interest margin.

The Sensex index decreased 53.25 points to 70,322.71, and the Nifty index fell 14.60 points to 21,224.20.

On the Mumbai stock exchange, 216 stocks traded at their 52-week highs and 25 stocks traded at their 52-week lows.

REC Limited jumped 6.4% to ₹464.50 after the power company reported stronger-than-expected quarterly results.

Revenue in the December quarter rose 21% to ₹4,350 crore, and net income advanced 13% to ₹3,269 crore from a year ago, respectively.

Axis Bank decreased 2.4% to ₹1,063.0 after the financial services company reported weaker-than-expected quarterly results.

Net income in the December quarter increased 4% to 6,071 crore, and the net interest margin decreased 10 basis points to 4.01%.

Karnataka Bank dropped 9.5% to ₹241.50 after the regional bank reported a decline in its net interest margin in its latest quarter.

Net income in the December quarter rose 10% to 3331 crore, the net interest margin eased 35 basis points to 3.46%, and the net non-performing asset ratio inched lower by 11 basis points to 1.55%.

Zee Entertainment Enterprises rebounded 2.5% to ₹159.80 and recovered from a 31% fall in the previous session after Sony Pictures Network canceled its plan to acquire the company.

U.S. Major Averages Struggle After Mixed Earnings

Barry Adams
23 Jan, 2024
New York City

U.S. stocks were little changed in early trading, and investors turned cautious after three leading indexes hovered near record highs.

The Dow Jones Industrial Average surpassed 38,000 for the first time in Monday's trading, and the S&P 500 and the Nasdaq 100 traded near their record highs.

But the Dow was down today after 3M fell more than 10% following its weaker-than-expected quarterly and annual earnings outlook.

Earnings dominated trading today, and DR Horton dropped 10% after the home builder reported weaker-than-expected quarterly earnings. GE eased after the company's first quarter earnings estimate fell short of market expectations.

Crude oil was in focus after the U.S. and U.K. carried out additional military strikes targeting Houthi rebel bases in Yemen.

The attacks on Monday, supported by Australia, Bahrain, Canada, and the Netherlands, targeted eight sites used for arms and supply storage and missile surveillance capabilities.

Trading activities across Europe were muted ahead of the European Central Bank's rate decision on Thursday.

Investors are expecting the central bank to hold rates steady and provide more clarity about the future direction of interest rates, despite policymakers pushing back against rate-cut expectations this year.

U.S. Indexes and Yields

The S&P 500 index increased 0.03% to 4,854.75 and the Nasdaq Composite rose 0.2% to 15,383.21.

The yield on 2-year Treasury notes increased to 4.41%. 10-year Treasury notes advanced to 4.13%, and 30-year Treasury bonds edged up to 4.35%.

WTI crude oil decreased $0.66 to $74.09 a barrel, and natural gas prices decreased 1 cents to $2.40 a thermal unit.

Gold increased by $4.65 to $2,025.65 an ounce after declining in the previous week following the general strength in the U.S. dollar.

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.40.

U.S. Stock Movers

Airline stocks were higher after United Airlines reported strong fourth quarter results, but the company forecasted a loss in the first quarter after the aviation regulator ordered the grounding of 737 Max 9 planes for emergency inspection following the Alaska Airlines midair door incident.

United Airlines jumped 6% to $40.97.

American Airlines rose 3% to $14.02, and Delta Air Lines advanced 2.4% to $37.85 after United reported strong quarterly results.

General Electric declined 3% to $127.30 after the industrial engineering company estimated weaker-than-expected first quarter results.

The company's fourth-quarter results were ahead of market expectations, but investors focused on the current quarter's business conditions.

Procter & Gamble gained 1.5% to $150.0 after the consumer products maker reported mixed quarterly results.

3M declined 6.6% to $100.86 after the company estimated weak current quarter and full-year earnings estimates.

The diversified conglomerate estimated earnings per share in the first quarter between $2.0 and $2.15 and for the full year between $9.35 and $9.75.

Halliburton Company increased 1.5% to $34.95 after the oil field service provider reported mixed quarterly results for its fourth quarter.

Logitech International dropped 6.5% to CHF 77.56 after the computer accessories maker estimated an annual sales decline between 6% and 7%.

Revenue in the fiscal third quarter ending in December declined 1% to $1.26 billion, net income rose to $247.7 million from $140.5 million, and diluted earnings per share rose to $1.57 from 87 cents a year ago.

The company revised its sales outlook for the fiscal year 2024 to range between $4.2 billion and $4.25 billion, a decline between 6% and 7% compared to the previous estimate of between $4.0 and $4.15 billion, a decline between 9% and 12%.

Subdued Trading In Europe, ECB Rate Action Awaited

European markets lacked direction, and investors debated the rate path and the prospect of economic growth and cooler inflation amid global economic uncertainties and elevated geopolitical tensions.

Market indexes in Frankfurt, London, and Paris trade around the flat line, and investors are worried that the European Central Bank may keep higher rates for longer and dash hopes of rate cuts later in the year.

Policymakers are set to announce rate decisions and monetary policy direction on Thursday, and investors are hoping to get more insights about the future rate path.

In Asia, the Bank of Japan held its short-term interest rate at -0.1% and kept the yield around zero on 10-year Japanese government bonds.

The central bank also lowered its 2024 inflation outlook to 2.4% from its previous estimate of 2.8% released in October.

Market indexes in Shanghai and Hong Kong advanced, and the yuan jumped to 7.18 against the U.S. dollar after China's cabinet pledged to take more "forceful" measures to stabilize financial markets.

UK Public Sector Borrowing Declined In December

The UK public sector borrowing fell sharply in December from a year ago and dropped to the lowest level since 2019, the Office for National Statistics reported Tuesday.

Public sector borrowing, excluding public sector banks, dropped to £7.8 billion from £16.2 billion in December.

Total public sector receipts increased 5.9% to £89.5 billion because of higher collection of VAT and income tax, and spending declined 3.4% to £97.3 billion, driven down in part by lower interest payments.

Total borrowing in the nine-month period to December of the current financial year rose by £11.1 billion to £119.1 billion, the fourth highest borrowing in the period on record.

Europe Indexes and Yields

The DAX index decreased 0.4% to 16,627.09, the CAC-40 index fell 0.4% to 7,388.04, and the FTSE 100 index inched down 0.03% to 7,485.73.

The yield on 10-year German bonds edged up to 2.30%; French bonds inched lower to 2.80%; the UK gilts edged higher to 3.93%; and Italian bonds inched higher to 3.87%.

The euro edged lower to $1.088, the British pound inched higher to $1.272, and the U.S. dollar gained to 86.81 Swiss cents.

Brent crude decreased $0.85 to $79.20 a barrel, and the Dutch TTF natural gas increased by €0.04 to €27.23 per MWh.

Europe Stock Movers

Marston's PLC declined 0.2% to 33.25 pence, despite the pub house operator reporting a solid holiday sales increase.

Associated British Foods increased 1.4% to 2,300.0 pence after the company announced its trading update for 16 weeks ending on January 6.

The company said its discount apparel store chain, Primark, benefited from cash-strapped consumers looking for discounts, but added underlying sales growth slowed in the last quarter.

L. M. Ericsson declined a fraction to kr61.26 in Stockholm trading after the telecom equipment maker said challenging market conditions are likely to persist in 2024.

Sanofi SA declined 1.7% to €92.63 after the French pharmaceutical company agreed to acquire the U.S. biotech company Inhibrx Inc. for as much as $2.2 billion.

Inhibrx shareholders will receive $30 in cash for each share held, a contingent value right of $5.0, and 0.25 shares of a new publicly traded company that will retain Inhibrx’s non-INBRX-101 assets, the immuno-oncology drug pipeline.

Sanofi will retain an 8% stake in the new Inhibrx.

Asian Markets Diverged Reflecting Local Realities

Market indexes rebounded in China, accelerated in Japan, and struggled to advance in India in Tuesday's trading.

In overnight trading in New York, the tech-powered rally extended to the second week after investors bid up semiconductor and mega-cap tech stocks.

Crude oil was also in focus after the U.S. and U.K. carried out additional military strikes targeting Houthi rebel bases in Yemen.

The attacks on Monday, supported by Australia, Bahrain, Canada, and the Netherlands, targeted eight sites used for arms and supply storage and missile surveillance capabilities.

Market indexes in Shanghai and Hong Kong advanced, and the yuan jumped to 7.18 against the U.S. dollar after China's cabinet pledged to take more "stronger and more effective" measures to "stabilize financial markets" and "improve market confidence."

Japan Holds Interest Rates

Market indexes in Tokyo advanced after the Bank of Japan held its benchmark interest rate as expected.

The Nikkei 225 Average jumped 1.2% to a new 34-year high of 36,981.80 and extended gains for the third consecutive session.

The Bank of Japan held its short-term lending rate to -0.1% and the yield around zero for 10-year Japanese government bonds by a unanimous vote.

The central bank also lowered its 2024 inflation outlook to 2.4% from its previous estimate of 2.8% released in October.

Market enthusiasm was supported by a higher closing in New York in overnight trading, and tech stocks extended their rally in the second week.

China Stocks Rebound On Stimulus Hopes

The Hang Seng index soared 2.5% to 15,333.01, and tech stocks led the gainers after the indexes rebounded from a near-15-month low.

Chinese policymakers have struggled to provide meaningful support to financial markets after years of reckless spending on infrastructure driven by a surge in government debt.

By some measures, the Chinese government debt-to-GDP ratio is nearing 300%, the highest among large economies in the world.

Pessimism in Chinese markets is not likely to reverse in the near term as Chinese consumers retrench from spending, avoid pumping additional savings into the property market, and increase cash savings in the face of economic and labor market uncertainties.

Earnings Growth Expectations Power India Indexes

Stocks in Mumbai advanced in morning but sold off sharply in the final hour of trading on Tuesday, and the Nifty and Sensex indexes faced heavy selling after investors returned from the Monday holiday.

Travel stocks were in focus after Ram Mandir Pran Pratistha of Ram Temple in Ayodhya.

The religious site is expected to attract as many as 10 crore, or 100 million, travelers to the city in Uttar Pradesh this year.

The Sensex index decreased 1.5% to 70,370.55, and the Nifty index dropped 1.5% to 21,238.80.

On the Mumbai stock exchange, 468 stocks traded at their 52-week highs and 36 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.18%, and the Indian rupee edged lower to ₹83.11 against the U.S. dollar.

In other markets in the region, the KOSPI index in Seoul added 0.4% to 2,473.54, and the ASX200 index in Sydney advanced 0.5% to 7,517.30.

U.S. Movers: 3M, General Electric, Halliburton, Logitech, Procter & Gamble, United Airlines

Scott Peters
23 Jan, 2024
New York City

Airline stocks were higher after United Airlines reported strong fourth quarter results, but the company forecasted a loss in the first quarter after the aviation regulator ordered the grounding of 737 Max 9 planes for emergency inspection following the Alaska Airlines midair door incident.

Revenue in the fourth quarter increased 9.9% to $13.6 billion from $12.4 billion, net income declined 28.8% to $600 million from $843 million, and diluted earnings per share dropped to $1.81 from $2.55 a year ago.

For the full-year 2023, revenue increased 19.5% to $53.7 billion, net income soared nearly four-fold to $2.6 billion, and diluted earnings per share advanced to $7.89 from $2.23 a year ago.

The airline estimated a loss in the first quarter between 85 cents and 35 cents and revenue per available seat mile to be flat from the previous year.

United Airlines jumped 6% to $40.97.

American Airlines rose 3% to $14.02, and Delta Air Lines advanced 2.4% to $37.85 after United reported strong quarterly results.

General Electric declined 3% to $127.30 after the industrial engineering company estimated weaker-than-expected first quarter results.

The company's fourth-quarter results were ahead of market expectations, but investors focused on the current quarter's business conditions.

Total revenue in the fourth quarter increased 15% to $19.4 billion from $16.8 billion, net income declined 28% to $1.6 billion from $2.2 billion, and diluted earnings per share dropped to $1.44 from $1.53 a year ago.

For the first quarter of 2024, GE expects to deliver "high-single-digit" revenue growth, adjusted earnings per share of 60 cents to 65 cents, and free cash flow "in-line with net income growth."

The company repurchased approximately 2.2 million common shares for $0.3 billion in the fourth quarter, bringing the total common shares repurchased under the program in 2023 to approximately 10.6 million shares for $1.1 billion.

In addition, the company redeemed all outstanding preferred stock for $5.8 billion during 2023.

Procter & Gamble gained 1.5% to $150.0 after the consumer products maker reported mixed quarterly results.

3M declined 6.6% to $100.86 after the company estimated weak current quarter and full-year earnings estimates.

Revenue in the fourth quarter was flat at $8.0 billion, net income jumped to $945 million from $541 million, and diluted earnings per share rose to $1.70 from 98 cents a year ago.

The diversified conglomerate estimated earnings per share in the first quarter between $2.0 and $2.15 and for the full year between $9.35 and $9.75.

Halliburton Company increased 1.5% to $34.95 after the oil field service provider reported mixed quarterly results for its fourth quarter.

Logitech International dropped 6.5% to CHF 77.56 after the computer accessories maker estimated an annual sales decline between 6% and 7%.

Revenue in the fiscal third quarter ending in December declined 1% to $1.26 billion, net income rose to $247.7 million from $140.5 million, and diluted earnings per share rose to $1.57 from 87 cents a year ago.

The company revised its sales outlook for the fiscal year 2024 to range between $4.2 billion and $4.25 billion, a decline between 6% and 7% compared to the previous estimate of between $4.0 and $4.15 billion, a decline between 9% and 12%.

U.S. Major Averages Hover Near Record Highs as Earnings Roll In

Barry Adams
23 Jan, 2024
New York City

U.S. stocks were little changed in early trading, and investors turned cautious after three leading indexes hovered near record highs.

The Dow Jones Industrial Average surpassed 38,000 for the first time in Monday's trading, and the S&P 500 and the Nasdaq 100 traded near their record highs.

Airline stocks were higher after United Airlines reported strong fourth quarter results, but the company forecasted a loss in the first quarter after the aviation regulator ordered the grounding of 737 Max 9 planes for emergency inspection following the Alaska Airlines midair door incident.

United Airlines jumped 6% to $40.97.

Crude oil was also in focus after the U.S. and U.K. carried out additional military strikes targeting Houthi rebel bases in Yemen.

The attacks on Monday, supported by Australia, Bahrain, Canada, and the Netherlands, targeted eight sites used for arms and supply storage and missile surveillance capabilities.

Trading activities across Europe were muted ahead of the European Central Bank's rate decision on Thursday.

Investors are expecting the central bank to hold rates steady and provide more clarity about the future direction of interest rates, despite policymakers pushing back against rate-cut expectations this year.

In Asia, the Bank of Japan held its short-term interest rate at -0.1% and kept the yield around zero, with the upper limit near 1% on 10-year Japanese government bonds.

The central bank also lowered its 2024 inflation outlook to 2.4% from its previous estimate of 2.8% released in October.

Market indexes in Shanghai and Hong Kong advanced, and the yuan jumped to 7.18 against the U.S. dollar after China's cabinet pledged to take more "stronger and more effective" measures to "stabilize financial markets" and "improve market confidence."

U.S. Indexes and Yields

The S&P 500 index increased 0.3% to 4,855.85, and the Nasdaq Composite rose 0.5% to 15,381.77.

The yield on 2-year Treasury notes increased to 4.41%. 10-year Treasury notes advanced to 4.13%, and 30-year Treasury bonds edged up to 4.35%.

WTI crude oil decreased $0.63 to $74.11 a barrel, and natural gas prices decreased 2 cents to $2.39 a thermal unit.

Gold increased by $5.22 to $2,026.25 an ounce after declining in the previous week following the general strength in the U.S. dollar.