Market Update
Movers: China Stocks, Charles Schwab, U.S. Bancorp, Tesla
Scott Peters
17 Jan, 2024
New York City
Charles Schwab decreased 1.3% to $63.51 after the financial services provider reported better-than-expected earnings but revenue fell short of market expectations.
Net revenue in the fourth quarter declined 19% to $4.5 billion from $5.5 billion, net income dropped 47% to $1.1 billion from $1.98 billion, and diluted earnings per share fell to 51 cents from 97 cents a year ago.
The company added 3.8 million net new accounts and increased its total client base to 34.8 million.
U.S. Bancorp gained 0.3% to $41.49 after the regional bank reported lower-than-expected quarterly earnings.
Total net revenue increased 6.7% to $6.7 billion from $6.4 billion, net income declined 7.4% to $861 million from $930 million, and diluted earnings per share dropped to 49 cents from 57 cents a year ago.
The common equity tier 1 capital ratio rose to 9.9% at the end of the December quarter from 9.7% at the end of the September quarter.
Average total deposit growth was 4.3% and average total loan growth was 3.6% from a year ago, respectively.
China-linked stocks continued to drift lower for the second week this year after economic growth in the fourth quarter was below expectations.
JD.com, PDD Holdings, Alibaba Group Holdings, and Tencent Holdings declined between 4% and 6%.
Tesla decreased 1.9% to $215.75 after the electric vehicle maker lowered the price of its model Y in Germany.
Middle East War Worries and Receding Near-term Rate-cut Hopes Keep U.S. Major Averages Down
Barry Adams
17 Jan, 2024
New York City
U.S. stock extended yesterday's losses in pre-market trading, and investors confront multiple headwinds.
The S&P 500 index and the Nasdaq Composite futures declined 0.4%, and investors reassessed their rate-cut outlook after policymakers in the U.S. and Europe pushed back against expectations.
Moreover, the prospect of a wider war in the Middle East also sapped market enthusiasm after Iran launched missile attacks in Syria, Iraq, and Pakistan.
Houthi rebels backed by Iran also continued their attacks on merchant ships traveling through the Red Sea, forcing most shipping companies to divert shipments along the coast of Africa, increasing costs and shipment times.
China reported the slowest economic growth in nearly three years, and GDP expanded at a slower-than-expected 5.2% in 2023, following the growth of 3.0% in 2022.
China's retail sales growth of 7.0% fell short of market expectations, but industrial output accelerated to 6.8%, reaching a 22-month high in December.
China-exposed stocks traded down after the release of economic updates, and the Hang Seng index plunged 3.5% in Wednesday's trading.
Tesla declined 1.5% after the company lowered the price of its model Y in Germany, and Alibaba fell 3%.
U.S. Retail Sales Advanced In December
Retail sales, adjusted for seasonal and calendar factors but not price changes, increased 5.6% from a year ago in December, the U.S. Census Bureau reported Wednesday.
Retail sales rose the most in eleven months, following a downwardly revised 4% rise in November.
Retail sales, unadjusted for price changes or inflation, increased 3.2% in the full year 2023.
U.S. Mortgage Applications Rebound
Mortgage applications surged 10.4% in the week ending January 12, faster than 9.9% in the previous week, the Mortgage Bankers Association reported Wednesday.
Mortgage applications to purchase a new home jumped 9% from the 6% increase the previous week, and applications to refinance a home loan advanced by 11% as lower rates lured home buyers back to the market.
The average contract rate for 30-year fixed-rate mortgages with loan balances of less than $726,200 decreased to 6.75% from 6.81% with a down payment of 20% and points rising to 0.62 from 0.61.
Commercial Property Mortgage Delinquency Rate Advanced
The delinquency rate for mortgages backed by commercial properties rose in the fourth quarter of 2023, MBA reported in a separate report released on Wednesday.
Delinquency rates jumped to 6.5% of balances for loans backed by office properties and to 6.1% for lodging-backed loans.
Delinquencies for loans backed by retail properties remain elevated at 5.0%, matching the rate from the previous quarter and staying elevated since the onset of the pandemic.
About 96.8% of outstanding loan balances were current or less than 30 days late at the end of the third quarter, down from 97.3% at the end of the third quarter of 2023.
U.S. Indexes and Yields
The S&P 500 index decreased 0.4% to 4,773.12, and the Nasdaq Composite fell 0.7% to 14,843.08.
The yield on 2-year Treasury notes increased to 4.29%. 10-year Treasury notes advanced to 4.07%, and 30-year Treasury bonds edged up to 4.29%.
WTI crude oil decreased $1.40 to $71.03 a barrel, and natural gas prices decreased 11 cents to $2.78 a thermal unit.
Gold increased by $0.02 to $2,027.65 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.40.
U.S. Stock Movers
Charles Schwab decreased 1.3% to $63.51 after the financial services provider reported better-than-expected earnings but revenue fell short of market expectations.
U.S. Bancorp gained 0.3% to $41.49 after the regional bank reported lower-than-expected quarterly earnings.
China-linked stocks continued to drift lower for the second week this year after economic growth in the fourth quarter was below expectations.
JD.com, PDD Holdings, Alibaba Group Holdings, and Tencent Holdings declined between 4% and 6%.
Europe Movers: 888 Holdings, Antofagasta, Enel, Just Eat, Luxury Stocks, Renault, Wizz Air
Inga Muller
17 Jan, 2024
New York City
European markets declined more than 1% after rate-cut hopes receded, China's GDP growth slowed to a three-decade low, and the prospect of a regional war in the Middle East rose after Iran stepped up attacks.
The DAX index decreased 1.1% to 16,397.04, the CAC-40 index fell 1.1% to 7,314.56, and the FTSE 100 index dropped 1.6% to 7,433.07.
The yield on 10-year German bonds edged up to 2.23%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.87%; and Italian bonds increased to 3.84%.
Just Eat Takeaway.com NV decreased 0.4% to 1,139.0 pence in a weak market after the food delivery company lifted its full-year core profit outlook.
Enel SpA declined 1.9% to €6.62 after the company launched a €1.75 billion bond offering.
Antofagasta plc declined 2.6% to 1,579.50 pence after the mining company released its annual production estimates.
Wizz Air Holdings fell 3.4% to 1,952.14 pence after the discount airline said it would pay an additional £1.2 million to customers in compensation.
Renault SA dropped 1.8% to €33.85 in a weak market, and the automaker reported global sales volume rose 9% from a year ago to 2.23 million in 2023.
In the year, passenger car sales increased 6.9% from a year ago to 1.83 million and light commercial vehicle sales soared 20% to 397,594 vehicles.
In France, Renault brand passenger car sales jumped 18% to 277,914 sales and light commercial vehicle sales advanced 13% to 112,569.
Luxury fashion houses with significant sales in China declined after China's economy expanded at the slowest pace in nearly three decades.
Kering SA declined 2.6% to €349.55, LVMH dropped 2% to €652.90, and Hermes International fell 1.1% to €1,805.20.
888 Holdings PLC dropped 7.4% to 75.03 pence after the international sports betting and gambling company reported weak revenue in the fourth quarter and fiscal 2023.
European Markets Drop 1%, UK Inflation Accelerate In December
Bridgette Randall
17 Jan, 2024
Frankfurt
Stock market sentiment in Europe turned negative after policymakers in the region pushed back against the timing of rate cuts.
Moreover, market sentiment was weak at the opening after China's GDP in the fourth quarter expanded at a slower-than-expected pace of 5.2% in the fourth quarter.
China's GDP for 2023 also rose at the same rate of 5.2%, the slowest pace in three decades amid a protracted property crisis, weak consumer spending growth, and global uncertainties.
While China's economy is still growing at a faster rate than the economies of the eurozone and the U.S., growth has steadily declined from as high as 7% enjoyed in the 2010s.
Benchmark indexes in Frankfurt, Paris, and London declined more than 1% on the economic uncertainties and interest rate outlook.
UK Consumer Inflation Accelerated In December
The UK's annual inflation in December rose to 4% from 3.9% in November, the Office for National Statistics reported on Wednesday.
Inflation perked up for the first time in ten months after prices of tobacco and alcohol jumped 12.9% from 10.2%, reflecting a higher duty on tobacco, and recreation and culture inflation advanced to 5.7% from 5.2% in the previous month, respectively.
However, inflation for food and non-alcoholic beverages eased to 8% from 9.2% and for restaurants and hotels to 7% from 7.5%.
Europe Indexes and Yields
The DAX index decreased 1.1% to 16,397.04, the CAC-40 index fell 1.1% to 7,314.56, and the FTSE 100 index dropped 1.6% to 7,433.07.
The yield on 10-year German bonds edged up to 2.23%; French bonds inched higher to 2.76%; the UK gilts edged higher to 3.87%; and Italian bonds increased to 3.84%.
The euro edged lower to $1.087, the British pound inched lower to $1.267, and the U.S. dollar eased to 86.21 Swiss cents.
Brent crude advanced $1.67 to $76.64 a barrel, and the Dutch TTF natural gas decreased by €0.80 to €28.86 per MWh.
Europe Stock Movers
Just Eat Takeaway.com NV decreased 0.4% to 1,139.0 pence in a weak market after the food delivery company lifted its full-year core profit outlook.
Enel SpA declined 1.9% to €6.62 after the company launched a €1.75 billion bond offering.
Antofagasta plc declined 2.6% to 1,579.50 pence after the mining company released its annual production estimates.
Wizz Air Holdings fell 3.4% to 1,952.14 pence after the discount airline said it would pay an additional £1.2 million to customers in compensation.
Renault SA dropped 1.8% to €33.85 in a weak market, and the automaker reported a rise in global sales volume.
Luxury fashion houses with significant sales in China declined after China's economy expanded at the slowest pace in nearly three decades.
Kering SA declined 2.6% to €349.55, LVMH dropped 2% to €652.90, and Hermes International fell 1.1% to €1,805.20.
888 Holdings PLC dropped 7.4% to 75.03 pence after the international sports betting and gambling company reported weak revenue in the fourth quarter and fiscal 2023.
Weak Growth Drags Down China Stocks, and Prospects of a Wider Middle East War Overhangs Asian Markets
Arjun Pandit
17 Jan, 2024
Mumbai
Stocks in Asia dropped sharply after China reported weaker-than-expected GDP growth and Iran launched drone strikes in Pakistan, Syria, and Iraq as the Israel-Hamas war spiraled into a wider war in the Middle East.
Market indexes in China declined sharply after a government report showed the economy expanded at a slower-than-expected pace and home prices fell.
The weaker-than-expected growth rate raised the prospect of downward earnings revisions.
The Hang Seng Index in Hong Kong plunged 3.2% to 15,362.56, and the CSI 300 index dropped 1% to 3,268.69.
GDP in the fourth quarter expanded 5.2% from the previous year and rose at the same rate in the full-year 2023, the National Bureau of Statistics reported Wednesday.
The economy accelerated in the fourth quarter after expanding by 4.9% in the third quarter.
In full-year 2023, the economy expanded at a faster pace than the 3% increase in 2022, but expectations of faster growth at the start of the year ran high.
Protracted property market slumps and weak growth in consumer spending held back the economy from recovering from the pandemic era.
Economists and investors were anticipating China's economy to expand at a faster pace of 5.3% to 5.5% in the fourth quarter.
Retail sales in December rose 7.4% from a year ago, and industrial output accelerated to 6.8% in the month from 6.6% in the prior month, the statistics bureau noted in separate reports released Wednesday.
New home prices in major cities in mainland China declined by 0.45% from the previous month, the sharpest decline since February 2015.
Alibaba Group, Tencent, and JD.com declined between 3% and 4%, and property developers extended losses of 4% after new home prices fell.
Longfor Group, China Resources Land, and China Overseas Land declined between 4% and 6%.
Iran conducted a "combination of missiles and drone strikes" targeting bases belonging to the Jaysh al-Dhulm, also known as the Jeysh al-Adl terrorist group, on Tuesday.
Iran said in mid-December that Jaish al-Adl stormed a police station in Sistan and Balouchestan province’s city of Rask, southeast of Iran, killing 11 Iranian police forces, according to Iran's state-aligned Tasnim news agency report today.
On Monday, Iran launched missile attacks in northern Iraq and Syria, and Iran-backed Houthi rebels stepped up their attacks in the Red Sea.
The prospect of a wider war disrupting crude oil supplies and merchant ship passage in the Red Sea kept investors in India and Asia on edge.
In Mumbai trading, the Nifty and Sensex indexes dropped as much as 1% in early trading after Iran conducted strikes in the southwest Baluchistan province of Pakistan.
The Nikkei index in Tokyo edged up 0.2% to 35,671.79, the ASX index in Sydney fell 0.3% to 7,393.10, and the KOSPI index dropped 2.3% to 2,440.10.
India Movers: HDFC Bank, ICICI Securities, ICICI Lombard, L&T, LTTS, PNC Infratech, TV18
Arun Goswami
17 Jan, 2024
Mumbai
Stocks in Mumbai dropped sharply on the worries of a wider war in the Middle East after Iran stepped up attacks on its neighbors and Houthi rebels continued their attacks on merchant ships in Red Sea lanes.
The Sensex index decreased 1,062.91 points to 72,065.86, and the Nifty index fell 293.80 points to 21,739.90.
On the Mumbai stock exchange, 112 stocks traded at their 52-week highs and 13 stocks traded at their 52-week lows.
HDFC Bank declined 5.7% to ₹1,582.25 after the largest private sector bank reported a weaker-than-expected quarterly profit.
Net income in the December quarter rose 34% to ₹16,373 crore, and net interest margin jumped 24% to ₹28,471 crore, missing the market estimate.
L&T Technology Service said consolidated operating revenue increased 12% to 2,422 crore and net income advanced to 336 crore from 297 crore a year ago.
ICICI Securities declined 2.5% to ₹764.95 after the brokerage firm reported quarterly results.
Revenue in the December quarter rose 50% to ₹1,322 crore, and net income soared 67% to ₹465 crore from a year ago, respectively.
ICICI Lombard General Insurance increased 6% to ₹1,458.55 after the company reported a sharp jump in premiums and investment income.
Net premium in the December quarter increased 13.5% from a year ago to ₹4,305 crore, and net profit rose 22.4% from a year ago to ₹431 crore.
TV18 Broadcast jumped 8.8% to ₹66.10 after the company swung to net profit in the latest quarter after the company stepped up investment in digital and sports channels.
Consolidated revenue in the December quarter decreased 5.2% to ₹1,676.19 crore, and the company suffered a loss of ₹55.83 crore compared to a profit of ₹37.81 crore a year ago.
PNC Infratech advanced 1.8% to ₹412.55 after the company received a 1,174 crore order from a Madhya Pradesh government agency for several projects.
Larsen & Toubro increased 0.5% to ₹3,593.90 after the company said it won several significant orders in India, including a railway electrification project worth at least ₹10,000 crore and orders from a private company in Oman.
Sensex and Nifty Drop 1% After Iran Attacks Pakistan
Arjun Pandit
17 Jan, 2024
Mumbai
Stocks in Mumbai dropped sharply after Iran launched drone strikes in Pakistan, Syria, and Iraq as the Israel-Hamas war spiraled into a wider war in the Middle East.
The Nifty and Sensex indexes dropped as much as 1% in early trading after Iran conducted strikes in the southwest Baluchistan province of Pakistan.
Iran conducted a "combination of missiles and drone strikes" targeting bases belonging to the Jaysh al-Dhulm, also known as the Jeysh al-Adl terrorist group, on Tuesday.
Iran said in mid-December that Jaish al-Adl stormed a police station in Sistan and Balouchestan province’s city of Rask, southeast of Iran, killing 11 Iranian police forces, according to Iran's state-aligned Tasnim news agency report today.
On Monday, Iran launched missile attacks in northern Iraq and Syria, and Iran-backed Houthi rebels stepped up their attacks in the Red Sea.
The prospect of a wider war disrupting crude oil supplies and merchant ship passage in the Red Sea kept investors in India and Asia on edge.
India Indexes and Yields
The Sensex index decreased 838.67 points to 72,290.10, and the Nifty index fell 231.80 points to 21,800.50.
On the Mumbai stock exchange, 112 stocks traded at their 52-week highs and 13 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds eased 7.15%, and the Indian rupee edged lower to ₹83.14 against the U.S. dollar.
The gold price decreased by 0.1% to ₹61,995 per ten grams, and silver fell by 0.3% to ₹71,867 per kilo.
Crude oil decreased by 0.2% to ₹6,023 per barrel, and natural gas fell by 3.9% to ₹255.50 per thermal unit.
India Stock Movers
HDFC Bank declined 5.7% to ₹1,582.25 after the largest private sector bank reported a weaker-than-expected quarterly profit.
Net income in the December quarter rose 34% to ₹16,373 crore, and net interest margin jumped 24% to ₹28,471 crore, missing the market estimate.
L&T Technology Service said consolidated operating revenue increased 12% to 2,422 crore and net income advanced to 336 crore from 297 crore a year ago.
ICICI Securities declined 2.5% to ₹764.95 after the brokerage firm reported quarterly results.
Revenue in the December quarter rose 50% to ₹1,322 crore, and net income soared 67% to ₹465 crore from a year ago, respectively.
TV18 Broadcast jumped 8.8% to ₹66.10 after the company swung to net profit in the latest quarter after the company stepped up investment in digital and sports channels.
Consolidated revenue in the December quarter decreased 5.2% to ₹1,676.19 crore, and the company suffered a loss of ₹55.83 crore compared to a profit of ₹37.81 crore a year ago.
U.S. and World Markets Turn Lower Amid Rising Economic Uncertainties and Geopolitical Tensions
Barry Adams
16 Jan, 2024
New York City
U.S. market averages turned lower after investors returned from a three-day holiday, and Treasury yields advanced as investors reviewed the latest earnings reports and debated the future direction of interest rates.
The S&P 500 index and the Nasdaq Composite edged down about 0.4% as investors debated future rate cuts and their timing.
Investors were also worried about the possibility of another bout of inflation amid rising supply chain disruptions for shipments between Asia and Europe.
Houthi rebels stepped up their attacks on merchant ships for the second day in a row in the Red Sea, forcing shipments to be diverted away from the Suze Canal.
Investors also bid up Morgan Stanley and Goldman Sachs stocks after the financial services companies reported better-than-expected quarterly results.
Spirit Airlines and JetBlue faced a new hurdle after a federal judge blocked the $3.8 billion merger plan between the two airlines.
Spirit Airlines plunged 50% to $7.43, and JetBlue advanced 4% to $5.08.
"The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares,” U.S. District Court Judge William Young said in his decision.
U.S. Indexes and Yields
The S&P 500 index decreased 0.5% to 4,760.08, and the Nasdaq Composite fell 0.4% to 14,909.30.
The yield on 2-year Treasury notes decreased to 4.22%. 10-year Treasury notes held steady at 4.0%, and 30-year Treasury bonds edged up to 4.23%.
WTI crude oil increased $0.55 to $72.06 a barrel, and natural gas prices decreased 14 cents to $2.94 a thermal unit.
Gold decreased by $28.51 to $2,025.92 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.12.
U.S. Stock Movers
Goldman Sachs rose 1.1% to $382.04 after the financial services company reported better-than-expected quarterly results on the back of strong performance in the asset management group.
Morgan Stanley increased 0.8% to $90.40 after the financial services company reported quarterly results that topped market expectations and were supported by strength in its investment banking unit.
European Markets Turn Lower After Rate Cut Hopes Fade
European markets declined after investors scaled back hopes of rate cuts in the near future.
Benchmark indexes in Frankfurt, Paris, and London traded down amid growing worries of a wider war in the Middle East, fading hopes of rate cuts, and persistent economic growth worries.
European policymakers drummed up their campaign against rate-cut hopes, and French central bank Governor Francois Villeroy de Galhau said it is too early to declare victory over inflation.
ECB policymaker Joachim Nagel said it was too early to discuss rate cuts, emphasizing that inflation remains too high, while delivering his prepared remarks at a gathering in Davos. Switzerland.
But the central bank's next move is likely to cut rates at some point this year, Villeroy de Galhau added during his comments delivered in Davos.
Yesterday, Austria's central bank governor, Robert Holzmann, said investors should not count on the European Central Bank cutting rates at all this year.
Investors reviewed the latest update on German inflation and UK wage growth.
Germany's December Inflation Rate Confirmed
Germany's consumer price inflation accelerated to 3.7% in December from 3.2% in November, the Federal Statistics Office, or Destatis, confirmed Tuesday the preliminary estimate released on January 4.
UK Wage Growth Slowed
Regular pay for UK wage earners increased 6.6% from a year ago in three months to November, the Office for National Statistics reported Tuesday.
The increase in wages, excluding bonuses, slowed from the downwardly revised 7.2% in the previous three-month period.
Wages, including bonuses, rose 6.5% in the three months to November.
The unemployment rate held steady at 4.2%, matching the rate in the previous three-month period.
Europe Indexes and Yields
The DAX index decreased 0.3% to 16,571.68, the CAC-40 index fell 0.2% to 7,3098.0, and the FTSE 100 index inched lower by 0.5% to 7,558.34.
The yield on 10-year German bonds edged up to 2.18%; French bonds inched higher to 2.76%; the UK gilts decreased slightly to 3.78%; and Italian bonds increased to 3.80%.
The euro edged lower to $1.08, the British pound inched lower to $1.267, and the U.S. dollar eased to 86.04 Swiss cents.
Brent crude advanced $0.07 to $78.07 a barrel, and the Dutch TTF natural gas decreased by €0.27 to €29.66 per MWh.
Europe Stock Movers
Energy and mining companies traded mixed after crude oil and metal prices turned higher in volatile trading.
BP plc rose 0.4% to 454.05 pence, and Shell plc decreased 0.5% to 2,447.90 pence.
Glencore PLC dropped 0.8% to 441.30 pence, Anglo American increased 0.3% to 1,830.40 pence, and Antofagasta decreased 0.4% to 1,617.0 pence.
Banks headed lower after European policymakers pushed back against the timing of rate cuts this year.
Deutsche Bank declined 1.2% to €11.79, Banco Santander declined 1.7% to €3.70, and UniCredit fell 0.6% to €25.46.
Asian Markets Turned Lower Ahead of China GDP and Retail Sales Data
Benchmark indexes in Asia traded down amid rising geopolitical tensions in the Middle East.
Market indexes in Tokyo, Shanghai, Hong Kong, Seoul, and Mumbai fell after Houthi rebels launched attacks in the Red Sea targeting U.S.-controlled ships.
Moreover, more shipping companies are avoiding the Red Sea shipping lanes to the Suez Canal and diverting shipments along the coast of South Africa.
But the shipment rerouting is disrupting supply chains between Asia and Europe and increasing the cost and time of shipments from India and Asia.
On the economic front, investors reviewed the latest update on international trade and the wholesale price index by India.
The trade deficit in December declined to a three-month low of $19.8 billion, the Commerce Ministry said late Monday.
A separate report showed that India's wholesale inflation increased to 0.73% in December, the office of the Economic Adviser reported on Monday.
Wholesale inflation edged higher after food prices rose 5.4%, primary article prices increased 5.8%, but fuel and power prices edged down 2.4%.
The Sensex index increased 0.08% to 73,384.57, and the Nifty index rose 0.07% to 22,112.70.
On the Mumbai stock exchange, 273 stocks traded at their 52-week highs and 7 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds eased 7.15%, and the Indian rupee edged lower to ₹82.94 against the U.S. dollar.
The Hang Seng index in Hong Kong fell 2.2% to 15,864.20 after property developers dropped a new low on debt default worries and a lack of government stimulus to spur demand.
The Hang Seng index dropped to a 14-month low and extended 2024 losses by 6%, after falling 14% in 2023 and for the fourth year in a row after foreign investors sold their holdings and avoided exposure to Chinese stocks.
The CSI 300 index in Shanghai traded down 0.2% to 3,275.57 ahead of the release of retail sales, GDP, and gross investment data on Wednesday.
China's economy is expected to expand at least 5.0% in 2023, according to economists interviewed by Ticker.com.
In Tokyo, the Nikkei index declined 0.5% to 35,721.08, and the index hovered near its 34-year high and traded in a tight range.
In Sydney, Australia, the ASX 200 index decreased 1% to 7,414.80 and dropped to a four-week low after energy and mining-related stocks led the decline.
U.S. Movers: Carrols Restaurant, Goldman Sachs, Morgan Stanley, Restaurant Brands
Scott Peters
16 Jan, 2024
New York City
Goldman Sachs rose 1.1% to $382.04 after the financial services company reported better-than-expected quarterly results on the back of strong performance in the asset management group.
Morgan Stanley increased 0.8% to $90.40 after the financial services company reported quarterly results that topped market expectations and were supported by strength in its investment banking unit.
Tesla decreased 1.4% to $215.86 after chief executive Elon Musk sough to increase its voting control to 25% from the current 13%.
“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control.
Enough to be influential, but not so much that I can’t be overturned,” Musk urged in a post on social media platform X on Monday.
Musk's post indicated unless he is compensated for his work in AI, robotics, and other emerging technologies, he prefers to build these businesses outside of Tesla.
Restaurant Brands International increased 0.4% to $78.45 after the company said it plans to acquire the largest franchisee of Burger King for $1 billion in cash.
Carrols Restaurant Group operates 1,000 Burger King locations and 60 Popeyes locations across the U.S.
Restaurant Brands offered $9.55 per share, 12% than Friday's close price of $8.42.
Middle East Tensions Weigh On U.S. Market Sentiment, Major Averages Trend Lower
Barry Adams
16 Jan, 2024
New York City
U.S. stocks inched lower and Treasury yields advanced as investors reviewed the latest earnings reports after returning from a three-day holiday.
The S&P 500 index and the Nasdaq Composite edged up fractions as investors debated future rate cuts and their timings and possibilities of another bout of inflation amid rising supply chain disruptions for shipments between Asia and Europe.
Houthi rebels stepped up their attacks on merchant ships for the second day in a row in the Red Sea, forcing shipments to be diverted away from the Suze Canal.
Investors also bid up Morgan Stanley and Goldman Sachs stocks after the financial services companies reported better-than-expected quarterly results.
In overseas trading, European markets turned lower after policymakers pushed back on the hopes of rate cuts in the near future.
Market indexes in London, Paris, and Frankfurt decreased more than 0.5%, and the euro dropped to a five-week low against the U.S. dollar.
In Asia, market indexes in Hong Kong dropped to a new 14-month low and extended the losses of the last four years, and the CSI 300 index edged down ahead of the release of the GDP and retail sales data.
U.S. Indexes and Yields
The S&P 500 index decreased 0.3% to 4,799.92, and the Nasdaq Composite fell 0.4% to 15,041.60.
The yield on 2-year Treasury notes decreased to 4.22%. 10-year Treasury notes held steady at 4.0%, and 30-year Treasury bonds edged up to 4.23%.
WTI crude oil increased $0.45 to $73.08 a barrel, and natural gas prices decreased 4 cents to $3.04 a thermal unit.
Gold decreased by $16.16 to $2,038.42 an ounce, and investors debated the future interest rate path.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.12.
U.S. Stock Movers
Goldman Sachs rose 1.1% to $382.04 after the financial services company reported better-than-expected quarterly results on the back of strong performance in the asset management group.
Morgan Stanley increased 0.8% to $90.40 after the financial services company reported quarterly results that topped market expectations and were supported by strength in its investment banking unit.
Europe Movers: Air France KLM, Banks, Hugo Boss, Ocado, Resource Stocks, Spirent Communications
Inga Muller
16 Jan, 2024
Frankfurt
European stocks turned lower amid rising tensions in the Middle East and worries of resurgent inflation after supply chains were disrupted for shipments between Asia and Europe following the persistent attacks in the Red Sea lanes.
The DAX index decreased 0.6% to 16,515.75, the CAC-40 index fell 0.5% to 7,376.57, and the FTSE 100 index inched lower by 0.6% to 7,552.54.
The yield on 10-year German bonds edged up to 2.18%; French bonds inched higher to 2.76%; the UK gilts decreased slightly to 3.78%; and Italian bonds increased to 3.80%.
Energy and mining companies traded mixed after crude oil and metal prices turned higher in volatile trading.
BP plc rose 0.4% to 454.05 pence, and Shell plc decreased 0.5% to 2,447.90 pence.
Glencore PLC dropped 0.8% to 441.30 pence, Anglo American increased 0.3% to 1,830.40 pence, and Antofagasta decreased 0.4% to 1,617.0 pence.
Banks headed lower after European policymakers pushed back against the timing of rate cuts this year.
Deutsche Bank declined 1.2% to €11.79, Banco Santander declined 1.7% to €3.70, and UniCredit fell 0.6% to €25.46.
Air France KLM declined 2.8% to €11.69 after the company withdrew from its existing air cargo arrangements with the French shipping and logistics company CMA CMG.
Hugo Boss AG plunged 12% to €58.06 after the German fashion group reported lower-than-expected fourth-quarter operating earnings in its preliminary results.
Ocado Group gained 5.5% to 653.20 pence after the online grocery shopping company reported a 10.9% increase in its fourth quarter revenue and estimated profit in the full year.
Spirent Communications plc increased 7% to 123.90 pence after the telecom testing company said it has started the new year with a growing order book and conditions are favorable for the full-year outlook.
European Markets Turn Lower After Rate Cut Hopes Fade, UK Wage Growth Slowed
Bridgette Randall
16 Jan, 2024
Frankfurt
European markets declined after investors scaled back hopes of rate cuts in the near future.
Benchmark indexes in Frankfurt, Paris, and London traded down amid growing worries of a wider war in the Middle East, fading hopes of rate cuts, and persistent economic growth worries.
European policymakers drummed up their campaign against rate-cut hopes, and French central bank Governor Francois Villeroy de Galhau said it is too early to declare victory over inflation.
ECB policymaker Joachim Nagel said it was too early to discuss rate cuts, emphasizing that inflation remains too high, while delivering his prepared remarks at a gathering in Davos. Switzerland.
But the central bank's next move is likely to cut rates at some point this year, Villeroy de Galhau added during his comments delivered in Davos.
Yesterday, Austria's central bank governor, Robert Holzmann, said investors should not count on the European Central Bank cutting rates at all this year.
Investors reviewed the latest update on German inflation and UK wage growth.
Germany's December Inflation Rate Confirmed
Germany's consumer price inflation accelerated to 3.7% in December from 3.2% in November, the Federal Statistics Office, or Destatis, confirmed Tuesday the preliminary estimate released on January 4.
UK Wage Growth Slowed
Regular pay for UK wage earners increased 6.6% from a year ago in three months to November, the Office for National Statistics reported Tuesday.
The increase in wages, excluding bonuses, slowed from the downwardly revised 7.2% in the previous three-month period.
Wages, including bonuses, rose 6.5% in the three months to November.
The unemployment rate held steady at 4.2%, matching the rate in the previous three-month period.
Europe Indexes and Yields
The DAX index decreased 0.6% to 16,515.75, the CAC-40 index fell 0.5% to 7,376.57, and the FTSE 100 index inched lower by 0.6% to 7,552.54.
The yield on 10-year German bonds edged up to 2.18%; French bonds inched higher to 2.76%; the UK gilts decreased slightly to 3.78%; and Italian bonds increased to 3.80%.
The euro edged lower to $1.08, the British pound inched lower to $1.267, and the U.S. dollar eased to 86.04 Swiss cents.
Brent crude advanced $0.78 to $78.90 a barrel, and the Dutch TTF natural gas decreased by €0.26 to €29.67 per MWh.
Europe Stock Movers
Energy and mining companies traded mixed after crude oil and metal prices turned higher in volatile trading.
BP plc rose 0.4% to 454.05 pence, and Shell plc decreased 0.5% to 2,447.90 pence.
Glencore PLC dropped 0.8% to 441.30 pence, Anglo American increased 0.3% to 1,830.40 pence, and Antofagasta decreased 0.4% to 1,617.0 pence.
Banks headed lower after European policymakers pushed back against the timing of rate cuts this year.
Deutsche Bank declined 1.2% to €11.79, Banco Santander declined 1.7% to €3.70, and UniCredit fell 0.6% to €25.46.