Market Update
U.S. Economy Added Jobs At Brisk Pace In September
Brian Turner
06 Oct, 2023
New York City
Nonfarm payroll additions in all levels of government and private sector soared 336,000 in September, the U.S. Bureau of Labor Statistics reported Friday.
Moreover, employment in July and August were revised higher by a combined 119,000.
The July employment change was revised higher by 79,000, from 157,000 to 236,000, and for August was revised up by 40,000, from 187,000 to 227,000.
The surge in employment reflected the widening demand for employees in the service sector.
Jobless rate in the month increased to 3.8% and average hourly wages rose 0.2% from the previous month and jumped 4.2% from a year ago.
Despite the surge in hiring over the last two years, the labor force participation rate has remained nearly unchanged, indicating a steady and elevated level of employees retiring or choosing to leave the labor force.
Both the labor force participation rate, at 62.8%, and the employment-population ratio, at 60.4%, were unchanged over the month.
U.S. Movers: Aehr Test Systems, Levi Strauss, Philips, Tesla
Scott Peters
06 Oct, 2023
New York City
Stocks struggled after employers added staff at a brisk pace in September.
The S&P 500 index decreased 0.7% to 4,228.04 and the Nasdaq Composite fell 0.7% to 13,126.42.
The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.84% and 30-year Treasury bonds edged down to 5.0%.
Koninklijke Philips NV declined 9.4% to $17.86 after the U.S. FDA said the Dutch medical devices company's sleep apnea product recall fell short of the agency's expectations.
Levi Strauss & Company decreased 1% to $13.08 after the apparel maker reported third-quarter revenue below market's expectations and the company also lowered its full-year revenue outlook.
Tesla Inc fell 2.5% to $255.14 after the electric vehicle maker lowered prices on its Model 3 and Model Y vehicles in the U.S.
The move follows the recent weakness in U.S. sales after the company reported weaker-than-expected sales in the third quarter.
Aehr Test Systems plunged 16.1% to $37.06 despite the company reporting quarterly earnings and revenue ahead of expectations set by analysts.
The semiconductor testing equipment maker said net revenue in the fiscal first quarter ending in August jumped 93% to $20.6 million and net income advanced to $4.7 million from $.0.59 million and diluted earnings per share rose to 16 cents from 2 cents a year ago.
The company reiterated its revenue in the fiscal year 2024 ending in May 2024 of $100 million and net income of $28 million.
Treasury Yields Jumped Back to 16-year Highs After Hiring Surged In September
Barry Adams
06 Oct, 2023
New York City
Stocks headed lower and extended weekly losses after nonfarm payrolls surged in September.
The S&P 500 index and the Nasdaq Composite are set to extend weekly losses for the fifth week in a row and Treasury yields jumped more than 12 basis points after the release of a hotter-than-expected employment report.
Nonfarm Payroll Surged In September
Nonfarm payroll additions at all levels of government and by private sector soared 336,000 in September, the U.S. Bureau of Labor Statistics reported Friday.
Moreover, employment in July and August were revised higher by a combined 119,000.
The July employment change was revised higher by 79,000, from 157,000 to 236,000, and for August was revised up by 40,000, from 187,000 to 227,000.
The surge in employment reflected the widening demand for employees in the service sector.
Jobless rate in the month increased to 3.8% and average hourly wages rose 0.2% from the previous month and jumped 4.2% from a year ago.
Despite the surge in hiring over the last two years, the labor force participation rate has remained nearly unchanged, indicating a steady and elevated level of employees retiring or choosing to leave the labor force.
Both the labor force participation rate, at 62.8%, and the employment-population ratio, at 60.4%, were unchanged over the month.
U.S. Indexes & Yields
The S&P 500 index decreased 0.7% to 4,228.04 and the Nasdaq Composite fell 0.7% to 13,126.42.
The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.84% and 30-year Treasury bonds edged down to 5.0%.
Crude oil decreased $0.01 to $82.31 a barrel and natural gas prices increased 6 cents to $3.23 a thermal unit.
The dollar index edged lower to 106.80, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Koninklijke Philips NV declined 9.4% to $17.86 after the U.S. FDA said the Dutch medical devices company's recall of sleep apnea product recall fell short of the agency's expectations.
Levi Strauss & Company decreased 1% to $13.08 after the apparel maker reported third-quarter revenue below market's expectations and the company also lowered its full-year revenue outlook.
Tesla Inc fell 2.5% to $255.14 after the electric vehicle maker lowered prices on its Model 3 and Model Y vehicles in the U.S.
The move follows the recent weakness in U.S. sales after the company reported weaker-than-expected sales in the third quarter.
Aehr Test Systems plunged 16.1% to $37.06 despite the company reporting quarterly earnings and revenue ahead of expectations set by analysts.
The semiconductor testing equipment maker said net revenue in the fiscal first quarter ending in August jumped 93% to $20.6 million and net income advanced to $4.7 million from $.0.59 million and diluted earnings per share rose to 16 cents from 2 cents a year ago.
The company reiterated its revenue in the fiscal year 2024 ending in May 2024 of $100 million and net income of $28 million.
Movers: De La Rue, JD Wetherspoon, Metro Bank, Philips, Renault, Shell, Volvo
Inga Muller
06 Oct, 2023
New York City
European stocks edged higher on the final day of the week and investors reacted to corporate news and factory orders rebound in Germany and the home prices decline in the U.K.
The DAX index increased 0.8% to 15,193.87, the CAC-40 index rose 0.7% to 7,050.02 and the FTSE 100 index rose 0.5% to 7,488.54.
The yield on 10-year German bonds increased to 2.90%, French bonds traded higher to 3.49%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
Koninklijke Philips NV dropped 8.7% to €16.93 after the U.S. Food and Drug Administration said it is not happy with how the Dutch healthcare company handled its recent product recall.
Volvo AB Class B increased 0.5% to kr 224.15 and Renault SA advanced 0.1% to €35.10 after the two vehicle makers announced a plan to form a new company to make electric vans.
Metro Bank Holdings Plc soared 20% to 45.0 pence after the UK-based bank initiated talks to sell £3 billion of mortgage loans it held in its portfolio.
De La Rue Plc increased 1.7% to 61.50 pence after the security solutions provider said its adjusted first-half profit is likely to be slightly higher than its previous estimate of breakeven.
J D Wetherspoon Plc decreased 6.9% to 648.50 pence despite the UK-based pub chain operator returning to annual profit for the first time after three years since the coronavirus pandemic.
Shell Plc advanced 1.7% to 2,575.50 after the integrated oil and natural gas company revised its third-quarter natural gas production forecast.
German Factory Orders Rebounded, UK Home Prices Extended Decline to 5th Consecutive Month
Bridgette Randall
06 Oct, 2023
Frankfurt
European markets advanced on the final day of the week and bond yields edged higher.
Benchmark indexes in Paris, London and Frankfurt edged higher after crude oil prices extended weekly losses above 11%.
Market sentiment also improved after Germany's factory orders rebounded at a stronger-than-expected rate in August.
German Factory Orders Rebounded In August
Orders adjusted for seasonal and calendar factors jumped 3.9% in August from the previous month and rebounded from a sharp fall of revised 11.3% in July, Destatis reported Friday.
However, orders declined 4.2% from a year ago and July orders were revised to a decline of 11.3% from the fall of 11.7% in the previous estimate.
Excluding large scale orders, generally from the transportation and defense industry, orders rose 3.9% from the previous month.
Despite the talks of economic slowdown, orders from domestic customers, the Eurozone and international destinations rose.
Foreign orders increased by 3.9% and orders from the Eurozone and orders from outside the Eurozone rose 3.9% and domestic orders rose 4.0%.
When measured on a three-month average basis which smoothes out month-to-month volatility, orders surged 4.9% from the previous three-month period.
The rebound in orders in August was driven by the 37.9% increase in demand for electronic, optical and data processing equipment, 8.7% in electrical equipment and 4% rise in pharmaceutical industry.
UK Home Prices Declined In September
Home prices continued to decline in the U.K. for the fifth month in a row, according to the data released by Halifax, a division of Bank of Scotland.
The Halifax House Price Index decreased 4.7% from a year in September, following a slightly revised 4.5% decline in August.
The home price decline was the largest fall since August 2009 and on a monthly basis home prices decreased 0.4% in September compared to 1.8% decline in August.
“Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales.
Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability. Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market," said Kim Kinnard, director of Halifax Mortgages.
The average home now costs £278,601, a drop of around £1,200 since last month and remains £39,400 higher than in March 2020, reflecting a sharp jump in home prices since the pandemic.
Europe Indexes & Yields
The DAX index increased 0.8% to 15,193.87, the CAC-40 index rose 0.7% to 7,050.02 and the FTSE 100 index rose 0.5% to 7,488.54.
The yield on 10-year German bonds increased to 2.90%, French bonds traded higher to 3.49%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.055, the British pound to $1.222 and the U.S. dollar fetched 91.23 Swiss cents.
Brent crude increased $0.22 to $84.31 a barrel and the Dutch TTF natural gas edged lower by €0.69 to €36.91 per MWh.
Europe Stock Movers
Koninklijke Philips NV dropped 8.7% to €16.93 after the U.S. Food and Drug Administration said it is not happy with how the Dutch healthcare company handled its recent product recall.
Volvo AB Class B increased 0.5% to kr 224.15 and Renault SA advanced 0.1% to €35.10 after the two vehicle makers announced a plan to form a new company to make electric vans.
Metro Bank Holdings Plc soared 20% to 45.0 pence after the UK-based bank initiated talks to sell £3 billion of mortgage loans it held in its portfolio.
De La Rue Plc increased 1.7% to 61.50 pence after the security solutions provider said its adjusted first-half profit is likely to be slightly higher than its previous estimate of breakeven.
J D Wetherspoon Plc decreased 6.9% to 648.50 pence despite the UK-based pub chain operator returning to annual profit for the first time after three years since the coronavirus pandemic.
Shell Plc advanced 1.7% to 2,575.50 after the integrated oil and natural gas company revised its third-quarter natural gas production forecast.
Investors Await Jobs Report, Crude Oil Extended Weekly Losses
Barry Adams
05 Oct, 2023
New York City
Market indexes on Wall Street traded around flatline in cautious trading ahead nonfarm payrolls data on Friday.
Stocks have been under pressure for three weeks in a row after Treasury yields suddenly began to rise, crude oil soared and fears of higher-for-longer drove market sentiment.
The U.S. labor market is expected to add about 185,000 net new jobs in September, according to estimates of some economists tracked by Ticker.com.
The U.S. economy is on track to add net new 2 million jobs in 2023, if the current pace of hiring continues in the fourth quarter.
Initial claims of jobless benefits increased 2,000 to 207,000 in the week ending on September 30, the U.S. Department of Labor reported in its weekly update on Thursday.
The jobless claims dropped near the seven-month low of 202,000 in March, suggesting that labor market conditions remain tight.
Crude oil prices are on track to decline and extend weekly loss to more than 10%.
West Texas Intermediate crude futures declined 7.5% in the week so-far and Brent crude prices are down 11% in the period.
The sharp reversal in crude oil prices reflected change in market sentiment on the worries that the expected global demand growth is not likely to materialize on the ongoing uneven economic rebound in China.
U.S. Trade Deficit Dropped to 3-year Low
The U.S. international goods and services deficit declined in August after exports expanded and imports shrank in the month.
Export in the month rose 1.6% from the previous month to $256 billion and imports eased 0.7% to $314.3 billion, resulting in a 9.9% decline in trade deficit to $58.3 billion, the Bureau of Economic Analysis reported Thursday.
From a year ago, the goods and services deficit decreased $137.6 billion, or 20.7%, from the same period in 2022, after exports increased 1.1% to $22 billion and Imports decreased 4.3% to $115.6 billion.
Increases in sales of capital goods, consumer goods, automotive vehicles and crude oil led the increase in exports.
Declines in purchases of cell phones, semiconductor chips and petroleum products led to the decline in imports.
Politically sensitive trade deficit with China decreased $1.3 billion to a five-month low of $22.7 billion, after exports declined $0.2 billion to $10.9 billion and imports fell $1.4 billion to $33.7 billion.
U.S. Indexes & Yields
The S&P 500 index decreased 0.03% to 4,259.04 and the Nasdaq Composite fell 0.08% to 13,226.52.
The yield on 2-year Treasury notes increased to 5.02%, 10-year Treasury notes inched lower to 4.72% and 30-year Treasury bonds edged down to 4.88%.
The United States exported more natural gas in the first half of 2023 than it did in the same period of any previous year.
Natural gas exports averaged 20.4 billion cubic feet per day, 4% more than in the previous year period, according to the released by the government agency U.S. Energy Information Administration.
LNG exports averaged 11.6 Bcf/d in the first-half, making the United States the largest natural gas exporter.
LNG exports in the first-half increased 4% compared with the same period in 2022, despite declining in May and June.
Crude oil decreased $1.99 to $82.23 a barrel and natural gas prices increased 2 cents to $3.18 a thermal unit.
The dollar index edged lower to 106.35, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Energy stocks continued to decline for the second day in a row.
ExxonMobil, Chevron, Marathon Petroleum, Hess Corp and Occidental Petroleum declined between 1% and 2%.
Rivian Automotive Inc dropped 16.5% to $19.78 after the company said it plans to raise $1.5 billion through the sale of convertible bonds.
The electric vehicle maker also estimated third quarter sales between $1.29 billion and $1.31 billion and reported decline in cash and cash equivalent.
Clorox Co dropped 7.6% to $121.69 after the company forecasted weaker-than-expected fiscal first quarter outlook.
The consumer products maker said that the recent cyber attack costs outweighed benefits achieved through better pricing and supply chain improvements.
On September 25, Clorox began the process of transitioning back to automated order processing, helping the company to increase its shipment and rebuild inventories for retailers.
Net sales in the fiscal first quarter is expected to decline between 28% and 23% from a year ago and diluted loss per share between 75 cents and 35 cents.
European Stocks Struggled and Bond Yields Advanced
European markets lacked direction and investors reviewed economic data in the Euro Area.
Market indexes in Frankfurt, Paris and London struggled to advance after a slow of mixed economic data added to market anxieties linked to economic growth worries and interest rate uncertainties.
Bond yields in the region also stayed elevated and currencies traded near six month lows after the dollar indexes edged higher.
Spain's industrial output declined for the fifth month in a row in August to 3.4% and fell 0.8% from the previous month, the statistical agency INE reported Thursday.
French industrial production declined 0.3% from the previous month in August and from the downwardly revised 0.5% increase in July, the statistical agency INSEE reported Thursday.
Industrial production decreased 0.5% from the previous month and reversed 2.5% increase in the previous month.
German Trade Surplus Widened In August
Germany's trade surplus widened to Є16.6 billion in August from Є15.9 billion in the previous month, DeStatis reported Thursday.
Calendar and seasonally adjusted exports decreased 1.2% to Є127.9 billion, the lowest in five months, and imports fell 0.4% to Є111.4 billion, the lowest since January 2022,
Exports declined 5.8% and imports fell 16.8% and trade surplus soared from Є4.3 billion or calendar and seasonally adjusted Є2 billion from a year ago.
In August 2023, calendar and seasonally adjusted goods worth Є69.6 billion were exported to the member states of the European Union and goods worth Є60 billion euros were imported from the region.
Compared to July 2023, calendar and seasonally adjusted exports to EU countries fell by 1.5% and imports increased by 1.9%.
Most exports outside the European Union went to the United States and most imports came from the People's Republic of China.
Exports to the United States fell 1.3% to Є13.3 billion, to China increased 1.2% to Є8.4 billion, and to the United Kingdom fell 4.2% to Є6.0 billion.
Imports from China declined 2.0% to Є13.0 billion, from the U.S fell 13.1% to Є7.6 billion and the U.K. dropped to Є3.0 billion.
In nominal terms, not calendar and seasonally adjusted, August exports were Є121.8 billion euros and imports Є107.4 billion.
Exports fell by 5.8% and imports declined 16.7% from a year ago.
The unadjusted foreign trade surplus soared to Є14.4 billion from Є0.4 billion a year ago.
Europe Indexes & Yields
The DAX index decreased 0.2% to 15,070.22, the CAC-40 index fell 0.02% to 6,998.25 and the FTSE 100 index rose 0.5% to 7,451.54.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.64% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.051, the British pound to $1.213 and the U.S. dollar fetched 91.58 Swiss cents.
Brent crude decreased $1.73 to $84.08 a barrel and the Dutch TTF natural gas edged lower by €2.21 to €36.21 per MWh.
Europe Stock Movers
Imperial Bands Plc rose 3.8% to 1,640.50 pence after the cigarettes maker reaffirmed annual outlook and announced a $1.3 billion of stock repurchase plan.
RM plc soared 0..7% to 59.40 pence after the supplier of technology to education sector agreed to sell its intellectual property for $2.2 million to Hilco Streambank.
Thales SA decreased 0.3% to €128.25 after the defense technology company signed a contract with Polska Grupa Zbrojeniowa, a Polish arms holding company, for the delivery of multiple combat systems for the Polish Navy.
Nordex SE 1.7% to €10.13 after the wind energy company received an order for 45 MW wind turbines from Enerfin, a renewable energy division of Elecnor Group, the Spanish engineering company.
Alstom SA plunged 37% to €13.54 after the rail transportation company lowered its free cash flow target because of higher production costs and delays in new orders.
SMA Solar Technology AG rose 10% to €61.60 after the company lifted its annual outlook citing improvements in its large scale and commercial divisions.
U.S. Trade Deficit Dropped to 3-year Low
Brian Turner
05 Oct, 2023
New York City
The U.S. international goods and services deficit declined in August after exports expanded and imports shrank in the month.
Export in the month rose 1.6% from the previous month to $256 billion and imports eased 0.7% to $314.3 billion, resulting in a 9.9% decline in trade deficit to $58.3 billion, the Bureau of Economic Analysis reported Thursday.
From a year ago, the goods and services deficit decreased $137.6 billion, or 20.7%, from the same period in 2022, after exports increased 1.1% to $22 billion and Imports decreased 4.3% to $115.6 billion.
Increases in sales of capital goods, consumer goods, automotive vehicles and crude oil led the increase in exports.
Declines in purchases of cell phones, semiconductor chips and petroleum products led to the decline in imports.
U.S. Movers: Clorox, Energy Stocks, Rivian Automotive
Scott Peters
05 Oct, 2023
New York City
Stocks faced headwinds as investors awaited an update on nonfarm payrolls data on Friday and crude continued its weeklong slide on Friday.
The S&P 500 index decreased 0.3% to 4,253.14 and the Nasdaq Composite fell 0.3% to 13,200.32.
The yield on 2-year Treasury notes increased to 5.02%, 10-year Treasury notes inched lower to 4.72% and 30-year Treasury bonds edged down to 4.88%.
Crude oil decreased $0.82 to $83.38 a barrel and natural gas prices increased 6 cents to $3.02 a thermal unit.
Energy stocks continued to decline for the second day in a row.
ExxonMobil, Chevron, Marathon Petroleum, Hess Corp and Occidental Petroleum declined between 1% and 2%.
Rivian Automotive Inc dropped 16.5% to $19.78 after the company said it plans to raise $1.5 billion through the sale of convertible bonds.
The electric vehicle maker also estimated third quarter sales between $1.29 billion and $1.31 billion and reported decline in cash and cash equivalent.
Clorox Co dropped 7.6% to $121.69 after the company forecasted weaker-than-expected fiscal first quarter outlook.
The consumer products maker said that the recent cyber attack costs outweighed benefits achieved through better pricing and supply chain improvements.
On September 25, Clorox began the process of transitioning back to automated order processing, helping the company to increase its shipment and rebuild inventories for retailers.
Net sales in the fiscal first quarter is expected to decline between 28% and 23% from a year ago and diluted loss per share between 75 cents and 35 cents.
Stocks and Treasury Yields Volatile Ahead of Nonfarm Payrolls Data On Friday
Barry Adams
05 Oct, 2023
New York City
Market indexes on Wall Street edged lower in cautious trading ahead nonfarm payrolls data on Friday.
Investors have been cautious and stocks have been under pressure for three weeks in a row after Treasury yields suddenly began to rise, crude oil soared and fears of higher-for-longer drove market sentiment.
The U.S. labor market is expected to add about 185,000 net new jobs in September, according to estimates of some economists tracked by Ticker.com.
The U.S. economy is on track to add net new 2 million jobs in 2023, if the current pace of hiring continues in the fourth quarter.
Initial claims of jobless benefits increased 2,000 to 207,000 in the week ending on September 30, the U.S. Department of Labor reported in its weekly update on Thursday.
The jobless claims dropped near the seven-month low of 202,000 in March, suggesting that labor market conditions remain tight.
Crude oil prices are on track to decline and extend weekly loss to more than 10%.
West Texas Intermediate crude futures declined 7.5% in the week so-far and Brent crude prices are down 11% in the period.
The sharp reversal in crude oil prices reflected change in market sentiment on the worries that the expected global demand growth is not likely to materialize on the ongoing uneven economic rebound in China.
U.S. Indexes & Yields
The S&P 500 index decreased 0.3% to 4,253.14 and the Nasdaq Composite fell 0.3% to 13,200.32.
The yield on 2-year Treasury notes increased to 5.02%, 10-year Treasury notes inched lower to 4.72% and 30-year Treasury bonds edged down to 4.88%.
Crude oil decreased $0.82 to $83.38 a barrel and natural gas prices increased 6 cents to $3.02 a thermal unit.
The dollar index edged lower to 106.65, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Energy stocks continued to decline for the second day in a row.
ExxonMobil, Chevron, Marathon Petroleum, Hess Corp and Occidental Petroleum declined between 1% and 2%.
Rivian Automotive Inc dropped 16.5% to $19.78 after the company said it plans to raise $1.5 billion through the sale of convertible bonds.
The electric vehicle maker also estimated third quarter sales between $1.29 billion and $1.31 billion and reported decline in cash and cash equivalent.
Clorox Co dropped 7.6% to $121.69 after the company forecasted weaker-than-expected fiscal first quarter outlook.
The consumer products maker said that the recent cyber attack costs outweighed benefits achieved through better pricing and supply chain improvements.
On September 25, Clorox began the process of transitioning back to automated order processing, helping the company to increase its shipment and rebuild inventories for retailers.
Net sales in the fiscal first quarter is expected to decline between 28% and 23% from a year ago and diluted loss per share between 75 cents and 35 cents.
Europe Movers: Alstom, Imperial Brands, RM Plc, SMA Solar, Thales
Inga Muller
05 Oct, 2023
Frankfurt
European market indexes traded higher but lacked direction amid economic growth worries and rising bond yields.
The DAX index decreased 0.03% to 15,093.02, the CAC-40 index fell 0.04% to 6,994.09 and the FTSE 100 index rose 0.5% to 7,449.10.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.64% and Italian bonds rose to 4.93%.
Imperial Bands Plc rose 3.8% to 1,640.50 pence after the cigarettes maker reaffirmed annual outlook and announced a $1.3 billion of stock repurchase plan.
RM plc soared 0..7% to 59.40 pence after the supplier of technology to education sector agreed to sell its intellectual property for $2.2 million to Hilco Streambank.
Thales SA decreased 0.3% to €128.25 after the defense technology company signed a contract with Polska Grupa Zbrojeniowa, a Polish arms holding company, for the delivery of multiple combat systems for the Polish Navy.
Nordex SE 1.7% to €10.13 after the wind energy company received an order for 45 MW wind turbines from Enerfin, a renewable energy division of Elecnor Group, the Spanish engineering company.
Alstom SA plunged 37% to €13.54 after the rail transportation company lowered its free cash flow target because of higher production costs and delays in new orders.
SMA Solar Technology AG rose 10% to €61.60 after the company lifted its annual outlook citing improvements in its large scale and commercial divisions.
Europe Stocks Struggled and Bond Yields Advanced, German Trade Surplus Soared In August
Bridgette Randall
05 Oct, 2023
Frankfurt
European markets lacked direction and investors reviewed economic data in the Euro Area.
Market indexes in Frankfurt, Paris and London struggled to advance after a slow of mixed economic data added to market anxieties linked to economic growth worries and interest rate uncertainties.
Bond yields in the region also stayed elevated and currencies traded near six month lows after the dollar indexes edged higher.
Spain's industrial output declined for the fifth month in a row in August to 3.4% and fell 0.8% from the previous month, the statistical agency INE reported Thursday.
French industrial production declined 0.3% from the previous month in August and from the downwardly revised 0.5% increase in July, the statistical agency INSEE reported Thursday.
Industrial production decreased 0.5% from the previous month and reversed 2.5% increase in the previous month.
German Trade Surplus Widened In August
Germany's trade surplus widened to Є16.6 billion in August from Є15.9 billion in the previous month, DeStatis reported Thursday.
Calendar and seasonally adjusted exports decreased 1.2% to Є127.9 billion, the lowest in five months, and imports fell 0.4% to Є111.4 billion, the lowest since January 2022,
Exports declined 5.8% and imports fell 16.8% and trade surplus soared from Є4.3 billion or calendar and seasonally adjusted Є2 billion from a year ago.
In August 2023, calendar and seasonally adjusted goods worth Є69.6 billion were exported to the member states of the European Union and goods worth Є60 billion euros were imported from the region.
Compared to July 2023, calendar and seasonally adjusted exports to EU countries fell by 1.5% and imports increased by 1.9%.
Most exports outside the European Union went to the United States and most imports came from the People's Republic of China.
Exports to the United States fell 1.3% to Є13.3 billion, to China increased 1.2% to Є8.4 billion, and to the United Kingdom fell 4.2% to Є6.0 billion.
Imports from China declined 2.0% to Є13.0 billion, from the U.S fell 13.1% to Є7.6 billion and the U.K. dropped to Є3.0 billion.
In nominal terms, not calendar and seasonally adjusted, August exports were Є121.8 billion euros and imports Є107.4 billion.
Exports fell by 5.8% and imports declined 16.7% from a year ago.
The unadjusted foreign trade surplus soared to Є14.4 billion from Є0.4 billion a year ago.
Europe Indexes & Yields
The DAX index decreased 0.03% to 15,093.02, the CAC-40 index fell 0.04% to 6,994.09 and the FTSE 100 index rose 0.5% to 7,449.10.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.64% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.051, the British pound to $1.213 and the U.S. dollar fetched 91.58 Swiss cents.
Brent crude decreased $1.41 to $84.12 a barrel and the Dutch TTF natural gas edged lower by €1.12 to €37.22 per MWh.
Europe Stock Movers
Imperial Bands Plc rose 3.8% to 1,640.50 pence after the cigarettes maker reaffirmed annual outlook and announced a $1.3 billion of stock repurchase plan.
RM plc soared 0..7% to 59.40 pence after the supplier of technology to education sector agreed to sell its intellectual property for $2.2 million to Hilco Streambank.
Thales SA decreased 0.3% to €128.25 after the defense technology company signed a contract with Polska Grupa Zbrojeniowa, a Polish arms holding company, for the delivery of multiple combat systems for the Polish Navy.
Nordex SE 1.7% to €10.13 after the wind energy company received an order for 45 MW wind turbines from Enerfin, a renewable energy division of Elecnor Group, the Spanish engineering company.
Alstom SA plunged 37% to €13.54 after the rail transportation company lowered its free cash flow target because of higher production costs and delays in new orders.
SMA Solar Technology AG rose 10% to €61.60 after the company lifted its annual outlook citing improvements in its large scale and commercial divisions.
Tech Stocks Rebounded, Crude Oil Plunged 5%,Treasury Yields Edged Lower
Barry Adams
04 Oct, 2023
New York City
Tech stocks rebounded after a weaker-than-expected private payrolls data edged bond yields lower.
Worries of higher interest rates dragging the U.S. economy into a recession kept buyers' enthusiasm in check on Wall Street.
Moreover, mortgage rates inching closer to 8% dampened the demand for mortgages to the level last seen in 1996.
The average mortgage contract interest rate for conforming loan balances jumped 12 basis points to 7.53% in the week ended on September 29, the Mortgage Bankers Association reported Wednesday.
A year ago, mortgage rates were one percentage point lower at 6.75%.
For two months the direction of interest rates has been determining the direction of stock prices, and that trend was in full-display again today.
The S&P 500 index and the Nasdaq Composite struggled to advance and yields on Treasury notes and bonds edged lower from 2007-highs reached in the previous session.
Private sector payrolls data released by the ADP suggested weaker-than-expected jobs gain of 89,000 in September.
The increase in payrolls fell sharply from 180,000 in July.
The ADP data series is highly volatile and the monthly estimates are subject to significant revisions, but the gains fell short of expectations of an increase of as much 155,000 by economists surveyed by Ticker.com.
Investors shifted attention to the upcoming earnings season and banks were in focus.
Investors are looking to get more clues about the impact of higher interest rates and new capital requirements at banks of all sizes amid rising losses in Treasury securities held-to-maturity and available-for-sale.
Manufactured Goods Orders Increased In August
New orders for manufactured goods in August, up five of the last six months, increased $6.7 billion or 1.2% to $586.1 billion, the U.S. Census Bureau reported Wednesday.
New orders rose at a slower pace after rising 2.1% in July.
Durable goods orders increase in August was revised lower to 0.1% from the previous estimate of an increase of 0.2%.
Excluding transportation, new orders increased 1.4% and excluding volatile defense orders rose 0.8%.
U.S. Indexes & Yields
The S&P 500 index gained 0.7% to 4,265.33 and the Nasdaq Composite rose 1.5% to 13,246.53.
The yield on 2-year Treasury notes increased to 5.12%, 10-year Treasury notes inched lower to 4.77% and 30-year Treasury bonds edged down to 4.89%.
Crude oil decreased $4.39 to $84.83 a barrel and natural gas prices increased 6 cents to $3.11 a thermal unit.
The dollar index edged lower to 106.71, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Cal-Maine Foods Inc plunged 7.7% to $44.05 after the egg producer reported sharply lower sales in its latest quarter after prices declined.
The company also reported earnings of 2 cents per share, lower than the estimate of as high as 30 cents set by some analysts.
Intel Corporation declined 0.4% to $35.57 after the advanced chipmaker said it plans to operate its programmable chip division as a standalone unit in preparation of a public offering in the next two years.
European Markets Rebounded After Wholesale Inflation Data
European market indexes reversed early losses in the session and investors reviewed the latest batch of economic data in the region.
Market indexes opened lower tracking losses on Wall Street and bond yields in the region advanced after the U.S. Treasury yields jumped to 16-year highs.
Market averages traded around flatline after the European Central Bank president Christine Lagarde reiterated today that interest rates are likely to stay elevated for some time to cool inflation.
Tough talk from central bank president rang hollow as central bank has no timeline in bringing down inflation to its target rate of 2%.
Moreover the decline in wholesale price index also supported market advance in today's session.
Euro Area Retail Sales Declined In August
Retail sales in the Euro Area decreased 1.2% from the previous month in August, Eurostat reported Wednesday.
Automotive fuel sales declined 3% in the month compared to 0.6% fall in July after prices rose.
Sales of food, drink and tobacco decreased 1.2% after staying flat in the previous month and sales of non-food products fell 0.9% after rising for four months in a row.
Retail sales declined 2.1% from a year ago, following a 1% decline in July and extended fall for the 11th month in a row.
Record Fall In Wholesale Inflation
Wholesale price index or producer prices declined 11.5% from a year ago in August. Eurostat reported Wednesday.
The measure of wholesale inflation declined at the fastest pace on record after energy prices dropped 30.6% compared to 24.2% in July and intermediate goods prices decreased 4.5% compared to 4% in the previous month.
Prices rose at a slower pace for capital goods at 4.3% compared to 4.7%, for durable goods at 4.7% from 5.1% and non-durable goods at 6.7% from 7.6% in the previous month respectively.
Excluding energy, core producer prices decreased 1% compared to 1.6% in July.
Europe Indexes & Yields
The DAX index increased 0.1% to 15,099.99, the CAC-40 index decreased 0.005% to 6,996.73 and the FTSE 100 index dropped 0.7% to 7,412.25.
The yield on 10-year German bonds increased to 2.94%, French bonds traded higher to 3.52%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.05, the British pound to $1.21 and the U.S. dollar fetched 91.76 Swiss cents.
Brent crude decreased $5.05 to $86.34 a barrel and the Dutch TTF natural gas edged lower by €1.44 to €38.24 per MWh.
Europe Stock Movers
Novartis AG decreased 4.5% to CHF 88.01 after the Swiss pharmaceutical company completed the spinoff of its generic pharma division Sandoz though a dividend-in-kind distribution to its shareholders and American Deposit Receipt holders.
Tesco Plc rose 3.9% to 269.60 pence after the British grocery retailer lifted its annual earnings outlook.
Spirent Communications Plc plunged 31.3% to 90.35 pence after the British Telecom controlled testing services provider lowered its outlook.
Superdry Plc soared 20% to 52.06 pence after the struggling fashion retailer said it plans to sell its digital and intellectual assets in South Asia to Reliance Retail.
SAS AB plunged 82.5% to 0.053 Swedish kronor after the Scandinavian airline announced restructuring plan late Tuesday that wipes out shareholders and hybrid bond holders.
After the restructuring, U.S. investment group Castlelake will control 32% stake in the airline followed by 20% held by Air France-KLM Group.
The Danish government is expected to hold 26% stake in the airline and the Danish investment company Lind will own 8.6% stake.
U.S. Movers: Cal-Maine Foods, Cruise Stocks, Energy Stocks, Insulet, Intel
Scott Peters
04 Oct, 2023
New York City
Cal-Maine Foods Inc plunged 7.7% to $44.05 after the egg producer reported sharply lower sales in its latest quarter after prices declined.
Revenue in the fiscal first quarter ending in September decreased to $459.3 million from $658.3 million and net income plunged to $926,000 from $125.1 million and diluted earnings per share plunged to 2 cents from 2 cents from $2.57 a year ago.
Dozens eggs sold declined to 273.1 million from 275.3 million and net average selling price per dozen plunged to $1.58 from $2.27 a year ago.
Intel Corporation declined 0.4% to $35.57 after the advanced chipmaker said it plans to operate its programmable chip division as a standalone unit in preparation of a public offering in the next two years.
Energy stocks declined in active trading after crude oil prices fell $5 to $84.27 a barrel.
Exxon Mobil decreased 4.5% to $110.54, Chevron Corp declined 3% to $161.93, Marathon Petroleum dropped fell4% to $141.32 and Hess Corp plunged 5% to $141.92.
Insulet Corporation dropped 3.5% to $151.21 after the company said Wayde McMillan would step down from the office of chief financial officer.
Cruise lines operators advanced after crude oil prices fell sharply.
Carnival Corp rose 2.5% to $13.06, Royal Caribbean Cruises Ltd added 2.4% to $88.87 and Norwegian Cruise Line Holdings added 2.6% to $16.31.