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Mixed European Markets, German Wholesale Inflation Fell for 5th Consecutive Month

Bridgette Randall
12 Sep, 2023
Frankfurt

European markets traded mixed and investors awaited interest rate decisions from the European Central Bank and the U.S. inflation data.

Investors looked for bargains in cautious trading amid uncertainty about the interest rate policy and looming global economic slowdown.

German wholesale inflation declined for the fifth month in a row, the Federal Statistics Office or Destatis reported Tuesday.

Producer price index declined 2.7% in August from a year ago because of a 15.8% decline in mineral oil products after prices eased from elevated prices compared to the previous year.

Producer prices rose 0.2% from the previous month, reversing a 0.2% decline in July.

On a monthly basis, mineral oil products prices rose 6.9% in August.

The U.K. jobless rate rose to 4.3% in the three months to July from 4.2% in the previous three months, the Office for National Statistics reported Tuesday.

UK weekly average earnings excluding bonuses rose 7.8% from a year ago to £617 in the three months to July 2023, the Office for National Statistics reported Tuesday.

The weekly average wage growth rose by the same amount as in the previous period, matching the highest regular annual growth rate since comparable records began in 2001.

Finance and business services reported the largest increase of 9.5%, followed by the manufacturing sector with 8.1%, one of the largest annual regular growth rates for the manufacturing sector since 2001.

Europe Indexes & Yields

The DAX index decreased 0.3% to 15,748.48, the CAC-40 index eased 0.1% to 7,270.28 and the FTSE 100 index inched up 0.6% to 7,540.95.

In the previous week, the DAX declined 1.6%, the CAC 40 fell 2.0% and the FTSE index dropped 0.3%.

The yield on 10-year German bonds increased to 2.63%, French bonds traded lower to 3.17%, the UK gilts edged up to 4.43% and Italian bonds rose to 4.38%.

The euro edged lower to $1.071, the British pound to $1.246 and the U.S. dollar fetched 89.19 Swiss cents.

Brent crude decreased $0.71 to $91.35 a barrel and the Dutch TTF natural gas decreased €0.56 to €35.27 per MWh.

Europe Stock Movers

Smurfit Kappa Group Plc declined 9.7% to 2,772.0 pence after the packaging company announced a merger deal with the U.S. based WestRock.

Vallourec SA increased 0.2% to €12.32 after the French geothermal company reiterated its operating earnings outlook for the full-year 2023.

SAP SE declined 2.9% to €125.20 after the U.S. rival Oracle reported weaker-than-expected software license and hardware revenue in the fiscal first quarter.

Associated British Foods plc soared 7.0% to 2,141.04 pence after the company raised its full-year profit estimate for the second time in four months.

Indexes In New York, Europe and Asia Advanced Ahead of Rate Decisions

Barry Adams
11 Sep, 2023
New York City

Tech stocks rebounded and investors searched for bargains after a selloff in the previous week.

Market indexes rebounded on Monday and awaited the release of inflation data later in the week.

Popular market indexes declined around 2% last week and trimmed year's solid advance on the ongoing uncertainty related to Fed's interest rate policy.

Market participants are divided about the interest rate direction and most economists are forecasting the Federal Reserve to pause rate hike at the end of its next policy meeting ending on September 20.

The S&P 500 and the Nasdaq Composite index added 0.4% in early trading and tech stocks led gainers.

Apple, Qualcomm and Tesla were in news and traded higher as companies focus on improving technology and developing new products.

Apple was in focus ahead of the its annual product launch event on Tuesday and the popular computing devices maker is expected to release iPhone 15.

In merger news, J.M. Smucker revved up its deal making and agreed to acquire Hostess Brands for as much as $5.6 billion.

U.S. Indexes & Yields

The S&P 500 index traded up 0.7% to 4,489.11 and the Nasdaq Composite advanced 1.2% to 13,816.10.

The yield on 2-year Treasury notes decreased to 4.98%, 10-year Treasury notes inched lower to 4.28% and 30-year Treasury bonds edged down to 4.36%.

Crude oil increased $0.26 to $87.24 a barrel and natural gas prices increased 0.001 cent to $2.60 a thermal unit.

The dollar index edged lower to 104.4 mark and edged lower from the 105 mark reached last week but traded higher from the low of 99.85 reached on July 13.

Last week, the dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally Friday but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates.

U.S. Stock Movers

J.M. Smucker, the maker of peanut butter, jelly, coffee and pet foods, said it agreed to acquire Twinkies maker Hostess Brands for $34.25 a share in stock and cash.

The offer valued Hostess Brands for $5.6 billion including debt and the purchase is expected to close by the end of January 2024.

J.M. Smucker Co declined 6.8% to $132.0 and Hostess Brands Inc soared 19.1% to $33.47.

RTX Corp declined 6.6% to $77.90 after the company said it plans to take a pre-tax charge of $3 billion in its current quarter results because of issues related to some of Pratt & Whitney aircraft engine manufacturing that power Airbus A320 neo.

Tesla Inc jumped 7.4% to $266.81 after Morgan Stanley analyst made positive comments and said that the company has made significant breakthrough in its software for autonomous vehicle.

Analyst Adam Jonas said that stock could rally as much as 60% and add as much as $500 billion in market cap as the company makes advances in its supercomputing project Dojo.

Qualcomm Inc jumped 3.2% to $110.29 after the company said it will provide modems for smartphones made by Apple through 2026.

Apple has been working for more than four years to develop its own modem chipsets and purchased Intel's modem division in 2019.

European Indexes Rebounded After 8 Days of Slump, Eurozone Growth Estimate Lowered

European markets traded higher on Monday and investors looked for bargains beaten down tech and China-exposed stocks.

Market indexes in London, Paris and Frankfurt gained after eight days of decline in a row after China reported a slight rise in inflation in August after prices fell in the previous month.

The European Central Bank is set to lift its three policy rates higher by at least 25 basis points on Thursday as policymakers battle persistent inflation.

The Euro Area economic growth was revised lower to 0.8% from the previous estimate of 1.1%, the European Commission's Summer 2023 Economic Forecast noted.

The commission also lowered its 2024 economic growth outlook to 1.3% from the earlier estimate of 1.6%.

Economy in Germany is expected to contract 0.4% in the current year and recover by 1.1% in 2024 and France slow to 1% and rebound to 1.2% in 2024.

The commission also lowered its 2023 inflation estimate to 5.6% from the previous estimate of 5.8% but revised higher its 2024 estimate to 2.9% from 2.8%.

Industrial Production in Italy fell 0.70% in July from the previous month, the National Institute of Statistics or ISTAT reported Monday.

The annual inflation rate in Norway eased to 4.8% in August from 5.4% in the previous month, Statistics Norway reported Monday.

This was the slowest increase since March 2022, with housing & utilities costs falling 1% after rising 2.7% in July.

In Asian markets, the yen rebounded to 146.23 against the U.S. dollar but traded near a 25-year low after the Bank of Japan's Governor Kazuo Ueda left door open to lift rates higher if inflation rebounds to 2% level on a sustained basis.

The People's Bank of China warned currency speculators and said that the central bank is ready to defend the yuan after the currency dropped to a 16-year low of 7.35 in Friday's trading.

Europe Indexes & Yields

The DAX index increased 0.4% to 15,800.99, the CAC-40 index advanced 0.6% to 7,278.27 and the FTSE 100 index inched up 0.1% to 7,496.87.

In the previous week, the DAX declined 1.6%, the CAC 40 fell 2.0% and the FTSE index dropped 0.3%.

The yield on 10-year German bonds increased to 2.63%, French bonds traded lower to 3.17%, the UK gilts edged up to 4.48% and Italian bonds rose to 4.39%.

The euro edged lower to $1.071, the British pound to $1.250 and the U.S. dollar fetched 89.20 Swiss cents.

Brent crude decreased $0.23 to $90.43 a barrel and the Dutch TTF natural gas increased €1.34 to €35.87 per MWh.

Europe Stock Movers

Societe Generale SA increased 1.3% to €25.62 after the French bank struck announced a strategic partnership with Brookfield Asset Management to originate and distribute private credit investments through a private investment grade debt fund.

Hannover Re added 1.3% to €204.90 after the company forecasted increase in premium rates in reinsurance market citing rising frequency and severity of natural catastrophe losses and elevated inflation.

Restaurant Group PLC gained 2.8% to 48.83 pence after the company said it signed an agreement to sell its leisure business including trading sites and associated restaurants to Big Table Group.

Covestro AG increased 4.5% to €53.86 after the maker of advanced polymer said it has entered into merger talks with Abu Dhabi National Oil Company which may lead to an offer.

AstraZeneca declined 4.3% to 10,406.0 despite the company reporting encouraging preliminary results from the TROPION-Lung04 Phase Ib study evaluating datopotamab deruxtecan plus Imfinzi for the treatment of advanced non-small cell lung cancer.

In Asian Trading Yen and Yuan In Focus, India Marches Ahead

Markets in Asia traded mixed and the Japanese yen and China's inflation data dominated market sentiment.

The Nikkei index in Tokyo traded down and extended losses of the last two sessions after a weakness in tech stocks overwhelmed strength in financial stocks.

SoftBank, Screen Holdings, Advantest, Tokyo Electron and Mitsubishi Electric declined between 1% and 3% but Sumitomo Mitsui Financial, UFJ Financial and Mizuho Financial advanced between 1% and 2%.

M2 money stock in Japan was up 2.5% from a year ago to 1,238.6 trillion yen in August, the Bank of Japan said on Monday.

That was steady from the July level following an upward revision from 2.4%.

The M3 money stock increased at an annual 1.9% rate for the second month in a row at 1,594.7 trillion yen, while the L money stock increased 2.2% on year to 2,121.1 trillion yen.

The adjusted money stock was up 1.6% from a year ago at 2,114.6 trillion yen.

The yen jumped to a one-week high and traded at 146.23 against the U.S. dollar after the Bank of Japan Governor Kazuo Ueda said that Japan could end its negative interest rate policy after sustainable inflation rate of 2% is reached.

China's consumer price inflation rebounded to 0.1% from a year ago in August, the National Bureau of Statistics reported Monday.

Inflation rebounded from a decline of 0.3% in July, the first negative inflation in over two years.

But the market weakness persisted in mainland China and Hong Kong index traded at two-week low after Alibaba cloud unit chief Daniel Zhang surprisingly resigned amid leadership shakeup.

Alibaba Group declined 2.8% to HK$88.25 after the Zhang's resignation.

China's central bank warned currency speculators that it will defend its currency after the yuan dropped to a 16-year low of 7.351 in Friday's trading.

“We will not hesitate on taking actions when necessary to firmly correct the one-sided and pro-cyclical market moves, to resolutely address the actions which disturb market order, and to unswervingly avoid the overshooting risks in the exchange rate," said the People's Bank of China in a statement released after a meeting with the foreign exchange regulatory body.

Asia Market Indexes

In Monday's trading, the Nikkei index decreased 0.4% to 32,467.7, the Shanghai SSE Composite index jumped 0.8% to 3,142.78, the Hang Seng index declined 0.6% to 18,092.55 and the KOSPI index increased 0.4% to 2,556.88

Stocks in Mumbai advanced in a broad market advance as investors hunt for bargains ahead of the earnings season in three weeks.

The Sensex index increased 333.33 points to 66,932.24 and the Nifty index rose 110.45 points to 19,930.40.

On the Mumbai stock exchange, 311 stocks traded at their 52-week highs and 12 traded at their 52-week lows.

In August, the Nikkei index fell 0.6%, the SSE Composite index declined 5.2%, the Hang Seng index fell 8.2% and the KOSPI index decreased 4.2%.

U.S. Movers: Apple, JM Smucker, Hostess Brands, RTX Corp, Tesla, Qualcomm

Scott Peters
11 Sep, 2023
New York City

Market indexes rebounded on Monday after investors searched for bargains in tech stocks and awaited the release of inflation data later in the week.

The S&P 500 index traded up 0.3% to 4,472.41 and the Nasdaq Composite advanced 0.4% to 13,816.10.

J.M. Smucker, the maker of peanut butter, jelly, coffee and pet foods, said it agreed to acquire Twinkies maker Hostess Brands for $34.25 a share in stock and cash.

The offer valued Hostess Brands for $5.6 billion including debt and the purchase is expected to close by the end of January 2024.

J.M. Smucker Co declined 6.8% to $132.0 and Hostess Brands Inc soared 19.1% to $33.47.

RTX Corp declined 6.6% to $77.90 after the company said it plans to take a pre-tax charge of $3 billion in its current quarter results because of issues related to some of Pratt & Whitney aircraft engine manufacturing that power Airbus A320 neo.

Tesla Inc jumped 7.4% to $266.81 after Morgan Stanley analyst made positive comments and said that the company has made significant breakthrough in its software for autonomous vehicle.

Analyst Adam Jonas said that stock could rally as much as 60% and add as much as $500 billion in market cap as the company makes advances in its supercomputing project Dojo.

Qualcomm Inc jumped 3.2% to $110.29 after the company said it will provide modems for smartphones made by Apple Inc through 2026.

Apple has been working for more than four years to develop its own modem chipsets and purchased Intel's modem division in 2019.

Tech Advance Lifts S&P 500 and Nasdaq Higher, Oil at 10-week High

Barry Adams
11 Sep, 2023
New York City

Market indexes rebounded on Monday after investors searched for bargains in tech stocks and awaited the release of inflation data later in the week.

Popular market indexes declined around 2% last week and trimmed year's solid advance on the ongoing uncertainty related to Fed's interest rate policy.

Market participants are divided about the interest rate direction and most economists are forecasting the Federal Reserve to pause rate hike at the end of its next policy meeting ending on September 20.

The S&P 500 and the Nasdaq Composite index added 0.4% in early trading and tech stocks led gainers.

Apple, Qualcomm and Tesla were in news and traded higher as companies focus on improving technology and developing new products.

Apple was in focus ahead of the its annual product launch event on Tuesday and the popular computing devices maker is expected to release iPhone 15.

In merger news, J.M. Smucker revved up its deal making and agreed to acquire Hostess Brands for as much as $5.6 billion.

U.S. Indexes & Yields

The S&P 500 index traded up 0.3% to 4,472.41 and the Nasdaq Composite advanced 0.4% to 13,816.10.

The yield on 2-year Treasury notes decreased to 4.98%, 10-year Treasury notes inched lower to 4.28% and 30-year Treasury bonds edged down to 4.36%.

Crude oil increased $0.35 to $87.85 a barrel and natural gas prices increased 0.001 cent to $2.60 a thermal unit.