Market Update
Europe Movers: Direct Line, Deutsch Tel, Nestle, Resource Stocks, SAP, Smurfit Kappa, ThyssenKrupp
Inga Muller
07 Sep, 2023
Frankfurt
European markets extended decline for the seventh day in a row and the Euro Area economic growth was revised lower in the second quarter.
The DAX index increased 0.05% to 15,748.90, the CAC-40 index increased 0.3% to 7,216.67 and the FTSE 100 index inched up 0.3% to 7,444.17.
Resource companies traded volatile with a downward bias after China's exports and imports declined in August.
Glencore, Antofagasta and Anglo America declined between 1% and 2%.
Nestle SA increased 0.5% to CHF 104.76 and the company agreed to acquire Brazilian chocolate brand Kopenhagen.
Direct Line Insurance Group Plc soared 16% to 174.15 pence after the home and automobile insurance company posted an operating loss in the first-half but forecasted improved earnings in 2024.
Deutsche Telekom AG declined 0.3% to €19.87 after its subsidiary T-Mobile U.S. announced a stock repurchase plan of up to $19 billion between the fourth quarter 2023 and the end of 2024.
Smurfit Kappa Group Plc decreased 1.6% to 3,168.0 pence after the UK-based packaging company is in potential merger discussion with the U.S. rival WestRock.
The combined value of the company could reach $20 billion and news of the potential deal was reported by the Wall Street Journal.
SAP SE jumped 0.7% to €129.88 after the German software company said it acquired software management company LeanIX without disclosing terms.
ThyssenKrupp AG decreased 1.8% to €7.08 after the company said chief financial officer Klaus Keysberg will step down from management duties next year.
European Markets Looked Down 7th Consecutive Day, GDP Growth Revised Lower
Bridgette Randall
07 Sep, 2023
Frankfurt
European markets turned slightly higher after investors returned for bargain hunting.
Market indexes in London, Paris and Frankfurt attempted to rebound after six days of losses in a row amid worries of looming global economic slowdown and rate hikes.
China's exports and imports shrank and trade surplus declined in August after exports to the European Union, ASEAN region and the U.S. fell in double digits.
Euro Area First Quarter GDP Growth Revised Lower
The Euro Area GDP growth in the second quarter was revised lower to 0.1% from the previous quarter, Eurostat reported Thursday.
The economic growth was downwardly revised from the initial estimate of 0.3%.
On an annual basis, the GDP growth was revised lower to 0.5% from the initial estimate of 0.6% and slower than 1.1% in the first quarter ending in March.
From the previous quarter GDP stalled in Germany, expanded 0.5% in France, rose 0.4% in Spain but contracted 0.4% in Italy.
The currency bloc's economy is likely to dip into a recession with the weak outlook for the German economy.
German industrial production declined 0.8% from the previous month in July following a downwardly revised 1.4% fall in June, the Federal Statistics Office or DeStatis reported Thursday.
Industrial production declined after output for capital goods fell 2.9%, consumer goods eased 1% and industrial goods decreased 0.7%.
On an annual basis, production fell 2.2% after falling 1.5% in June.
Europe Indexes & Yields
European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession.
The DAX index increased 0.05% to 15,748.90, the CAC-40 index increased 0.3% to 7,216.67 and the FTSE 100 index inched up 0.3% to 7,444.17.
The yield on 10-year German bonds increased to 2.63%, French bonds traded higher to 3.16%, the UK gilts edged up to 4.47% and Italian bonds rose to 4.36%.
The euro edged lower to $1.076, the British pound to $1.246 and the U.S. dollar fetched 89.23 Swiss cents.
Brent crude decreased $0.63 to $89.93 a barrel and the Dutch TTF natural gas increased €1.34 to €34.42 per MWh.
Europe Stock Movers
Resource companies traded volatile with a downward bias after China's exports and imports declined in August.
Glencore, Antofagasta and Anglo America declined between 1% and 2%.
Nestle SA increased 0.5% to CHF 104.76 and the company agreed to acquire Brazilian chocolate brand Kopenhagen.
Direct Line Insurance Group Plc soared 16% to 174.15 pence after the home and automobile insurance company posted an operating loss in the first-half but forecasted improved earnings in 2024.
Deutsche Telekom AG declined 0.3% to €19.87 after its subsidiary T-Mobile U.S. announced a stock repurchase plan of up to $19 billion between the fourth quarter 2023 and the end of 2024.
Smurfit Kappa Group Plc decreased 1.6% to 3,168.0 pence after the UK-based packaging company is in potential merger discussion with the U.S. rival WestRock.
The news was first reported by the Wall Street Journal.
SAP SE jumped 0.7% to €129.88 after the German software company said it acquired software management company LeanIX without disclosing terms.
ThyssenKrupp AG decreased 1.8% to €7.08 after the company said chief financial officer Klaus Keysberg will step down from management duties next year.
Japanese Yen Traded Down, China Exports Declined 8.8%
Arjun Pandit
07 Sep, 2023
Mumbai
Market indexes in Asia traded down after the U.S. Treasury yields advanced and on going property woes in China.
The yen traded above 147 against the U.S. dollar for the second day in a row after the short term U.S. Treasury yields advanced following the worries of a rebound in inflation.
A private survey showed that prices are still accelerating in the service sector in August and the recent rebound in crude oil prices fed the fears of a rebound in overall inflation.
The widening yield gap between the U.S. Treasury bonds and the Japanese government bonds dragged the market indexes lower, halting the market advance in previous eight sessions in a row.
Market indexes in China declined on the ongoing worries of the property sector woes and contagion fears to banks and steel and cement producers.
China Exports Fall 4th Consecutive Month In August
China's exports declined for the fourth month in a row by 8.8% in August and imports declined 7.3%. General Administration of Customs reported Thursday.
Trade surplus declined to$68.4 billion from $80.6 billion in July after exports declined 8.8% to $284.9 billion and imports decreased 7.3% to $216.5 billion.
Exports fell at a slower pace in August after a 14.5% decline in July and imports declined 7.3% following the decrease of 12.4% in the previous month.
Exports to three largest trading partners declined in the month.
Shipments to ASEAN or Association of Southeast Nations, China's largest trading partner, declined 13.3, to European Union dropped 19.6% and to the United States decreased 9.5%.
Export growth to Russia increased 16% in August after rising 52% in July and 91% in June.
Rare earth metals exports surged 30% to 4,775 metric tons on the rising global demand and weakening yuan against the U.S. dollar.
Despite the month-to-month international trade volatility, exports for the first eight months to August declined 5.6% to $2.2 trillion.
Asia Market Indexes
In Thursday's trading, the Nikkei index decreased 0.8% to 32,991.08, the Shanghai SSE Composite index dropped 1.1% to 3,122.07, the Hang Seng index declined 1.3% to 18,207.17 and the KOSPI index decreased 2,544.40.
India stocks struggled in Mumbai after foreign institutional investors were net sellers of stocks in August. The yield on Indian government bonds edged higher and silver and gold traded volatile with a downward bias.
Market indexes in Mumbai lacked direction and investors reviewed rising global bond yields and resurgent dollar.
The Sensex and the Nifty indexes edged slightly higher in cautious trading but new 52-week highs remained above 200 for the third day in a row.
The Sensex index increased 4.69 points to 65,885.21 and the Nifty index rose 4.61 points to 19,615.20.
Despite the weak international market sentiment, domestic retail investors continue to pour money into large and mid cap stocks.
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%.
Movers: Asana, AeroVironment, GitLab, Roku, Southwest Airlines
Scott Peters
06 Sep, 2023
New York City
Asana Inc declined 12.4% to $18.94 despite the work management reporting strong quarterly results and revised higher its full-year outlook.
Revenue in the second quarter increased 20% to $162.5 million from $134.9 million and net loss shrank to $71.4 million from $113 million and diluted loss per share declined to 33 cents from 55 cents a year earlier.
The company revised higher its third quarter revenue to between $163.5 million and $164.5 million, an increase of 16% and full-year 2024 revenue between $642 million to $648 million, an increase of 17% from a year ago.
Southwest Airlines Co declined 3.2% to $29.82 after the regional airline estimated August bookings were near the "lower-end" of the company's expectations.
The airline also added third quarter revenue per seat mile is likely to be near the low end of its previous estimate.
AeroVironment, Inc jumped 27% to $121.39 after the company reported fiscal first quarter revenue of $152 million and adjusted earnings per share surged to $1.0.
Roku Inc soared 6.8% to $88.86 after the company lifted its third quarter revenue to a new range between $835 million and $875 million from the previous estimate of $815 million.
The company also announced its plan to lay off 10% of its staff and review its aggregated content to trim costs and consolidate its office space.
Gitlab Inc increased 0.7% to $50.10 after the database platform developer reported better-than-expected second quarter results.
Second quarter revenue increased 38% to $139.6 million from $101 million and net loss shrank to $51.2 million from $61.5 million and diluted loss per share decreased to 33 cents from 40 cents.
The company guided third quarter revenue between $140 million and $141 million and fiscal year 2024 revenue between $555 million and $557 million.
U.S. Good and Service Trade Deficit Widened In July
Brian Turner
06 Sep, 2023
New York City
The US goods and services trade deficit widened to $65 billion in July from a downwardly revised $63.7 billion in June, the Bureau of Economic Analysis reported Wednesday.
The July increase in the goods and services deficit reflected a rise in the goods deficit of $2 billion to $90 billion and an increase in the services surplus of $0.7 billion to $25 billion.
Exports rose 1.6% to a four-month high of $251.7 billion, led by sales of vehicles, pharmaceutical preparations and a surge in tourist arrivals.
Moreover, imports advanced 1.7% to $316.7 billion, driven by higher imports of household goods, semiconductors and computing and communication devices.
On an annual basis, the overall trade deficit declined 21.4% to $128.3 billion, from the same period a year ago. Exports increased $27.3 billion or 1.6% and imports decreased $101 billion or 4.3%.
The politically sensitive deficit with China in July rose to $1.2 billion to $24 billion and the surplus with Hong Kong declined $1 billion to $1.5 billion.
The deficit with Mexico increased $3.1 billion to $42.1 billion in the second quarter after exports declined $5.7 billion to $87.4 billion and imports decreased $2.6 billion to $129.5 billion.
The deficit with the European Union decreased $6.2 billion to $30.1 billion in the second quarter after exports fell $3.2 billion to $153.9 billion and imports decreased $9.4 billion to $184.1 billion
The deficit with mainland China was $65 billion in the second quarter.
Resurgent Inflation Worries Dragged U.S, Indexes Lower, Trade Deficit Expanded
Barry Adams
06 Sep, 2023
New York City
Market indexes were under pressure and tech stocks led decliners after Treasury yields rose.
Short term Treasury yields advanced following the release of services survey indicating prices are still rising at a faster pace than anticipated.
The ISM Services Purchasing Managers' Index unexpectedly advanced to 54.5 in August, pointing to the strongest growth in the services sector in six months, compared to 52.7 in July, the Institute for Supply Management reported Wednesday.
The reading above 50 indicated expansion and below that level showed contraction.
Business activities and new orders accelerated, leading to faster gains in employment and inventories.
However, market participants focused on price pressures in the services sector after the price index accelerated to 58.9 from 56.8 while the backlog of orders contracted.
Higher price pressure drove market indexes lower on the worries that the Fed may pause at the next meeting this month but rates are likely to stay elevated longer than previously estimated.
U.S. Trade Deficit Widened In July
The US goods and services trade deficit widened to $65 billion in July from a downwardly revised $63.7 billion in June, the Bureau of Economic Analysis reported Wednesday.
The July increase in the goods and services deficit reflected a rise in the goods deficit of $2 billion to $90 billion and an increase in the services surplus of $0.7 billion to $25 billion.
Exports rose 1.6% to a four-month high of $251.7 billion, led by sales of vehicles, pharmaceutical preparations and a surge in tourist arrivals.
Moreover, imports advanced 1.7% to $316.7 billion, driven by higher imports of household goods, semiconductors and computing and communication devices.
On an annual basis, the overall trade deficit declined 21.4% to $128.3 billion, from the same period a year ago. Exports increased $27.3 billion or 1.6% and imports decreased $101 billion or 4.3%.
The politically sensitive deficit with China in July rose to $1.2 billion to $24 billion and the surplus with Hong Kong declined $1 billion to $1.5 billion.
The deficit with Mexico increased $3.1 billion to $42.1 billion in the second quarter after exports declined $5.7 billion to $87.4 billion and imports decreased $2.6 billion to $129.5 billion.
The deficit with the European Union decreased $6.2 billion to $30.1 billion in the second quarter after exports fell $3.2 billion to $153.9 billion and imports decreased $9.4 billion to $184.1 billion
The deficit with mainland China was $65 billion in the second quarter.
U.S. Indexes & Yields
The S&P 500 index traded down 0.7% to 4,464.91 and the Nasdaq Composite fell 0.9% to 13,891.14.
The yield on 2-year Treasury notes increased to 5.03%, 10-year Treasury notes inched higher to 4.29% and 30-year Treasury bonds edged down to 4.36%.
Crude oil reached a 10-month high after Saudi Arabia and Russia extended their voluntary production cuts to the end of the year.
Crude oil increased $0.45 to $86.27 a barrel and natural gas prices decreased 5 cents to $2.53 a thermal unit.
U.S. Stock Movers
Southwest Airlines Co declined 3.2% to $29.82 after the regional airline estimated August bookings were near the "lower-end" of the company's expectations.
The airline also added third quarter revenue per seat mile is likely to be near the low end of its previous estimate.
AeroVironment, Inc jumped 27% to $121.39 after the company reported fiscal first quarter revenue of $152 million and adjusted earnings per share surged to $1.0.
Roku Inc soared 6.8% to $88.86 after the company lifted its third quarter revenue to a new range between $835 million and $875 million from the previous estimate of $815 million.
The company also announced its plan to lay off 10% of its staff and review its aggregated content to trim costs and consolidate its office space.
Europe Movers: Idrosia, InPost, Luxury Stocks, Resource Stocks, WH Smith
Inga Muller
06 Sep, 2023
Frankfurt
European markets turned lower after German factory orders dropped and the Euro Area retail sales declined for the tenth month in a row.
The DAX index decreased 0.3% to 15,771.71, the CAC-40 index was unchanged at 7,254.72 and the FTSE 100 index fell 0.6% to 7,393.29.
Energy stocks traded higher after crude oil prices edged up after Saudi Arabia and Russia extended voluntary production cuts to the year's end.
BP Plc, TotalEnergies SE and Eni SpA gained between 0.2% and 1%.
Resource stocks traded down on the worries about the uneven economic recovery in China.
Antofagasta, Glencore and Anglo American declined around 1%.
Luxury stocks in Paris were unchanged and traded near their one-week lows as China economic growth woes were in focus in global trading.
LVMH, Hermes and Kering traded in a tight range with a downward bias.
WH Smith Plc dropped 7% to 1,380.0 pence after the company reiterated its annual outlook in its investor update.
InPost SA soared 10% to €10.72 after the Polish parcel locker company reported higher second quarter results.
Idorsia Ltd. fell 8.1% to CHF 5.01 after the company revised its pact with Janssen Biotech Inc., a Johnson & Johnson affiliate, for the return of rights for aprocitentan.
In return, Idorsia will pay up to CHF 306 million, subject to marketing application approval by the US drug regulator and the EMA in Europe.
European Retail Sales Declined, Germany Factory Orders Plunged
Bridgette Randall
06 Sep, 2023
Frankfurt
European markets remained under pressure on the ongoing economic slowdown worries.
Market indexes in Paris, London and Frankfurt declined and traded near one-month lows amid new economic data highlighting growth struggles.
The Euro Area retail sales decreased 1% from a year ago and eased 0.2% from the previous month in July, Eurostat reported Wednesday.
Retail sales declined for the tenth month in a row, and fuel sales fell 1.2% on higher prices impacting overall sales.
Factory orders in Germany dropped 11.7% from the previous month in July and orders were revised higher to an increase of 7.6% in June, the Federal Statistics Office or Destatis said Wednesday.
Factory orders are dominated by large scale orders for transportation and capital goods and tend to be volatile.
Orders declined for the first time since March largely because of a decline in transportation orders.
Europe Indexes & Yields
European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession.
The DAX index decreased 0.3% to 15,771.71, the CAC-40 index was unchanged at 7,254.72 and the FTSE 100 index fell 0.6% to 7,393.29.
The yield on 10-year German bonds increased to 2.61%, French bonds traded higher to 3.14%, the UK gilts edged up to 4.51% and Italian bonds rose to 4.33%.
The euro edged to the lowest level since mid-June on the hopes that the central bank is more likely to pause its rate hike campaign and assess the impact of the multiple rate hikes on the economy.
The euro edged lower to $1.076, the British pound to $1.253 and the U.S. dollar fetched 89.20 Swiss cents.
Brent crude decreased $0.62 to $89.61 a barrel and the Dutch TTF natural gas declined €0.35 to €34.10 per MWh.
Europe Stock Movers
Energy traded higher after crude oil prices edged up after Saudi Arabia and Russia extended voluntary production cuts to the year's end.
BP Plc, TotalEnergies SE and Eni SpA gained between 0.2% and 1%.
Resource stocks traded down on the worries about the uneven economic recovery in China.
Antofagasta, Glencore and Anglo American declined around 1%.
Luxury stocks in Paris were unchanged and traded near their one-week lows as China economic growth woes were in focus in global trading.
LVMH, Hermes and Kering traded in a tight range with a downward bias.
WH Smith Plc dropped 7% to 1,380.0 pence after the company reiterated its annual outlook in its investor update.
InPost SA soared 10% to €10.72 after the Polish parcel locker company reported higher second quarter results.
Idorsia Ltd. fell 8.1% to CHF 5.01 after the company revised its pact with Janssen Biotech Inc., a Johnson & Johnson affiliate, for the return of rights for aprocitentan.
In return, Idorsia will pay up to CHF 306 million, subject to marketing application approval by the US drug regulator and the EMA in Europe.
Japanese Yen Dropped to 10-month Low, Chinese Listed Companies Profit Dropped 10%
Arjun Pandit
06 Sep, 2023
Mumbai
Market indexes in Asia traded down after higher crude oil prices and the rise in the U.S. Treasury yields added to China property woes in the region.
Market indexes in Tokyo traded higher for the eighth session in a row amid growing interests from foreign investors.
The Japanese yen declined to 147 against the U.S. dollar and dropped to a 10-month low as interest rate gap between the Japanese government bonds and the U.S. Treasury widened.
In overnight trading in New York, Treasury yields spiked up near 16-year high after crude oil price jumped 1%.
The sharp decline in the yen prompted the call for a possible government intervention if currency speculation persists, Vice Minister of International Affairs Masando Kanda said to reporters.
Chinese markets traded mixed and foreign investors continued to lighten positions in large banks and property sectors.
Profits at 5,000 plus listed companies in Shanghai and Shenzhen declined 9.6% in the second quarter ending in June from a year ago, Haitong Securities said in a report.
Profit rose 1.3% in the previous quarter.
Chinese real estate developers rebounded after the government-controlled Securities Times published a front-page opinion editorial urging more cities to remove residential property sales hurdles.
The Chinese economy is struggling on several fronts, including weak property market sentiment, record youth unemployment, slow and uneven economic recovery and falling international exports.
The Caixin China General Service PMI eased to 51.8 in August from 51.9 in July, S&P Global reported Tuesday.
The services sector activity growth was the weakest since the beginning of the year, amid persistent downward pressure on the economy.
New order growth slowed while export sales fell for the first time since December and at the same time sentiment index declined to a 9-month low.
The weakness in the construction sector and falling exports are negatively impacting services related to these industries. Moreover, the expected sharp rebound in travel related services is weaker than expected.
In Wednesday's trading, the Nikkei index increased 0.6%, the Shanghai SSE Composite index rose 0.2%, the Hang Seng index rose 0.05% and the KOSPI index decreased 0.7%.
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. Markets Eased After Oil Jumped to 10-month High
Barry Adams
05 Sep, 2023
New York City
Market indexes traded down on the first day of holiday-shortened week after oil prices rose.
Market indexes were under pressure as investors debated the rate path amid growing evidence of global economic slowdown and the rise in oil price only raised worries of inflation rebound.
Commodities prices traded down after China's service sector growth dropped to an eight-month low in August as new orders fell and exports declined.
Business activity growth in the Euro Area declined in August to the lowest level since November 2020 as the weakness in the economy spread to the service sector.
The moderate jobs expansion in the U.S. in August raised hopes that the Federal Reserve may avoid a recession and guide the economy into a soft landing amid resilient consumer spending and healthy labor market.
Despite the two jobs reports showing moderating labor market expansion, the report on core PCE index, an alternative measure of inflation, showed the stubborn nature of inflation.
Investors are divided into two camps, one looking for the Fed to pause rate at its next meeting ending on Sep 20 and the other hoping for the Fed to lift rates one last time in the year.
Investors are lowering the odds of a recession in 2023 amid moderating labor market expansion and weakening inflation.
On the economic front, new orders for manufactured goods decreased 2.1% in July from the revised 2.1% increase in June, the U.S. Census Bureau reported Tuesday.
U.S. Indexes & Yields
The S&P 500 index traded down 0.02% to 4,500.56 and the Nasdaq Composite fell 0.02% to 14,031.06.
The yield on 2-year Treasury notes decreased to 4.91%, 10-year Treasury notes inched higher to 4.23% and 30-year Treasury bonds edged down to 4.35%.
Crude oil turned higher and reached a 10-month high after Saudi Arabia extended its voluntary one million barrels a day production cut to the end of the year, according to a release by the Saudi Press Agency.
Crude oil increased $0.64 to $86.57 a barrel and natural gas prices decreased 5 cents to $2.58 a thermal unit.
U.S. Stock Movers
Airbnb Inc jumped 6.3% to $140.81 after the S&P Dow Jones Indices announced Friday that the short term rental platform operator will be included in the S&P 500 index from Sep 18.
Blackstone and Airbnb will replace Newell Brands and Deere & Company.
Brady Corp soared 11.1% to $56.48 after the company posted quarterly results and reported adjusted earnings per share of $1.04.
Warner Bros Discovery Inc decreased 0.5% to $11.52 after the company said that the current strikes from writers and actors could negatively impact adjusted operating earnings between $300 million and $500 million.
The company provided the latest projections in a filing with the SEC.
The movie studio operator is expecting lower adjusted operating earnings for the full year in the range of $10.5 to $11 billion, reflecting impact from strikes.
The company revised higher its full-year free cash flow expectations to at least $5 billion and third quarter free cash flow of $1.7 billion, in part due to strong performance of Barbie.
SoftBank controlled chip design firm Arm said it plans to list its stock on the New York Stock Exchange at a price between $47 and $51 a share, valuing the British company at $52 billion.
SoftBank acquired the advanced chip design firm for $32 billion in 2016 and plans to sell 9.4% of the company and raise between $4.5 billion and $4.9 billion.
European Markets Traded Near One-week Low
European market indexes traded at a one-week low on global economic slowdown worries and future rate hike worries.
Market indexes in London, Paris and Frankfurt eased after business activity growth weakened more in August as the manufacturing slowdown expanded to the service sector.
HCOB's final Composite Purchasing Managers' Index declined to 46.7 in August from 48.6 in July, S&P Global reported today.
The index dropped to the lowest level since November 2020 as service sector weakness added to the manufacturing sector.
The U.K. services PMI fell to 49.50 from 51.50 in July, the lowest reading since January.
Producer prices in the Euro Area accelerated to a decline of 7.6% from a year ago in July from the 3.4% decrease in the previous month, the Eurostat reported Tuesday.
The measure of wholesale prices declined for the third consecutive month and fell at the fastest pace since 2009, largely due to base effects after energy prices soared following Russia's invasion of Ukraine.
Energy prices plunged 24.2% from the 16.4% in the previous month, while producer costs declined at a slower pace for intermediate goods.
However, inflation slowed for industries producing capital goods to 4.7% from 5.3%, durable consumer goods to 5.1% from 5.9%, and non-durable consumer goods to 7.6% from 8.8%.
On a monthly basis, producer prices in the Euro Area decreased 0.5%, the seventh monthly decline in a row, extending the 0.4% drop in the previous month.
Europe Indexes & Yields
European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession.
The DAX index decreased 0.3% to 15,771.71, the CAC-40 index fell 0.3% to 7,254.72 and the FTSE 100 index fell 0.2% to 7,437.93.
The yield on 10-year German bonds increased to 2.60%, French bonds traded higher to 3.12%, the UK gilts edged up to 4.49% and Italian bonds rose to 4.32%.
The euro edged lower to $1.070, the British pound to $1.255 and the U.S. dollar fetched 88.90 Swiss cents.
Brent crude decreased $0.87 to $89.87 a barrel and the Dutch TTF natural gas declined €0.88 to €34.45 per MWh.
Europe Stock Movers
Renault SA jumped 2% to €35.50 after the electric vehicle unit may be valued as high as €10 billion in its initial public offering, chief executive Luca de Meo said.
Ashtead Group decreased 2.7% to 5,322.0 pence after the UK-based equipment rental company lowered its UK revenue outlook.
Headlam Group Plc increased 2.7% to 224.84 pence after the floorcoverings distributor reported higher first-half revenue and reiterated its full-year revenue outlook.
Luxury companies LVMH and Hermes in Paris traded down between 1% and 2% on the worries of uneven economic recovery.
China's service sector growth dropped to the lowest level in eight months after exports weakened and new orders growth slowed.
Skanska AB increased 4.3% to kr 166.20 after the Swedish construction company won a $834 million highway improvement project in the U.S.
ABN AMRO Bank NV increased 0.2% to €13.59 and the Dutch bank said it plans to appoint current interim chief financial officer Ferdinand Vaandrager permanently.
Movers: Airbnb, Arm, Blackstone, Brady Corp, SoftBank, Warner Bros
Scott Peters
05 Sep, 2023
New York City
Market averages struggled and stocks traded near flatlines after investors returned from a three-day weekend.
The S&P 500 index traded down 0.02% to 4,507.02 and the Nasdaq Composite fell 0.02% to 14,003.02.
The yield on 2-year Treasury notes decreased to 4.91%, 10-year Treasury notes inched higher to 4.23% and 30-year Treasury bonds edged down to 4.35%.
Airbnb Inc jumped 6.3% to $140.81 after the S&P Dow Jones Indices announced Friday that the short term rental platform operator will be included in the S&P 500 index from Sep 18.
Blackstone and Airbnb will replace Newell Brands and Deere & Company.
Brady Corp soared 11.1% to $56.48 after the company posted quarterly results and reported adjusted earnings per share of $1.04.
Sales in the fiscal fourth quarter ending in July increased 6.8% to $345 .9 million from $324 million and net income rose to $49.4 million from $41 million and diluted earnings per share advanced to $1.0 from 81 cents a year ago.
During the quarter and year ended July 31, the company returned $56.4 million and $120.4 million, respectively, to shareholders in the form of dividends and share repurchases.
On August 30, the Board of Directors authorized an additional $100 million of shares for repurchase, about 2 million shares based on current share price and approximately 4.4% of total outstanding shares.
The industrial printer maker forecasted diluted earnings per share in the fiscal 2024 to range between $3.70 and $3.95.
Warner Bros Discovery Inc decreased 0.5% to $11.52 after the company said that the current strikes from writers and actors could negatively impact adjusted operating earnings between $300 million and $500 million.
The company provided the latest projections in a filing with the SEC.
The movie studio operator is expecting lower adjusted operating earnings for the full year in the range of $10.5 to $11 billion, reflecting impact from strikes.
The company revised higher its full-year free cash flow expectations to at least $5 billion and third quarter free cash flow of $1.7 billion, in part due to strong performance of Barbie.
SoftBank controlled chip design firm Arm said it plans to list its stock on the New York Stock Exchange at a price between $47 and $51 a share, valuing the British company at $52 billion.
SoftBank acquired the advanced chip design firm for $32 billion in 2016 and plans to sell 9.4% of the company and raise between $4.5 billion and $4.9 billion.
U.S. Index Rested After Two Consecutive Weekly Advances, Arm IPO Seeks $52 Billion Valuation
Barry Adams
05 Sep, 2023
New York City
On Wall Street stocks were little changed as investors returned after a three-day weekend on Tuesday.
Market indexes were under pressure as investors debated the rate path amid growing evidence of global economic slowdown.
Commodities prices traded down after China's service sector growth dropped to an eight-month low in August as new orders fell and exports declined.
Business activity growth in the Euro Area declined in August to the lowest level since November 2020 as the weakness in the economy spread to the service sector.
The moderate jobs expansion in the U.S. in August raised hopes that the Federal Reserve may avoid a recession and guide the economy into a soft landing amid resilient consumer spending and healthy labor market.
Despite the two jobs reports showing moderating labor market expansion, the report on core PCE index, an alternative measure of inflation, showed the stubborn nature of inflation.
Investors are divided into two camps, one looking for the Fed to pause rate at its next meeting ending on Sep 20 and the other hoping for the Fed to lift rates one last time in the year.
U.S. Indexes & Yields
The S&P 500 index traded down 0.02% to 4,507.02 and the Nasdaq Composite fell 0.02% to 14,003.02.
The yield on 2-year Treasury notes decreased to 4.91%, 10-year Treasury notes inched higher to 4.23% and 30-year Treasury bonds edged down to 4.35%.
Crude oil turned volatile after Saudi Arabia extended its voluntary one million barrels a day production cut to the end of the year, according to a release by the Saudi Press Agency.
Crude oil increased $0.73 to $86.76 a barrel and natural gas prices decreased 6 cents to $2.57 a thermal unit.
U.S. Stock Movers
Airbnb Inc jumped 6.3% to $140.81 after the S&P Dow Jones Indices announced Friday that the short term rental platform operator will be included in the S&P 500 index from Sep 18.
Blackstone and Airbnb will replace Newell Brands and Deere & Company.
Brady Corp soared 11.1% to $56.48 after the company posted quarterly results and reported adjusted earnings per share of $1.04.
Warner Bros Discovery Inc decreased 0.5% to $11.52 after the company said that the current strikes from writers and actors could negatively impact adjusted operating earnings between $300 million and $500 million.
The company provided the latest projections in a filing with the SEC.
The movie studio operator is expecting lower adjusted operating earnings for the full year in the range of $10.5 to $11 billion, reflecting impact from strikes.
The company revised higher its full-year free cash flow expectations to at least $5 billion and third quarter free cash flow of $1.7 billion, in part due to strong performance of Barbie.
SoftBank controlled chip design firm Arm said it plans to list its stock on the New York Stock Exchange at a price between $47 and $51 a share, valuing the British company at $52 billion.
SoftBank acquired the advanced chip design firm for $32 billion in 2016 and plans to sell 9.4% of the company and raise between $4.5 billion and $4.9 billion.
Europe Movers: ABN AMRO, Ashtead Group, Headlam Group, Luxury Stocks, Renault, Skanska AB
Inga Muller
05 Sep, 2023
Frankfurt
European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession.
The DAX index decreased 0.1% to 15,804.41, the CAC-40 index fell 0.3% to 7,260.80 and the FTSE 100 index advanced 0.1% to 7,459.99.
The yield on 10-year German bonds increased to 2.60%, French bonds traded higher to 3.12%, the UK gilts edged up to 4.49% and Italian bonds rose to 4.32%.
Renault SA jumped 2% to €35.50 after the electric vehicle unit may be valued as high as €10 billion in its initial public offering, chief executive Luca de Meo said.
Ashtead Group decreased 2.7% to 5,322.0 pence after the UK-based equipment rental company lowered its UK revenue outlook.
Headlam Group Plc increased 2.7% to 224.84 pence after the floorcoverings distributor reported higher first-half revenue and reiterated its full-year revenue outlook.
Luxury companies LVMH and Hermes in Paris traded down between 1% and 2% on the worries of uneven economic recovery.
China's service sector growth dropped to the lowest level in eight months after exports weakened and new orders growth slowed.
Skanska AB increased 4.3% to kr 166.20 after the Swedish construction company won a $834 million highway improvement project in the U.S.
ABN AMRO Bank NV increased 0.2% to €13.59 and the Dutch bank said it plans to appoint current interim chief financial officer Ferdinand Vaandrager permanently.
European Markets Traded Near One-week Low, Producer Price Inflation Accelerated Decline
Bridgette Randall
05 Sep, 2023
Frankfurt
European market indexes traded at a one-week low on global economic slowdown worries and future rate hike worries.
Market indexes in London, Paris and Frankfurt eased after business activity growth weakened more in August as the manufacturing slowdown expanded to the service sector.
HCOB's final Composite Purchasing Managers' Index declined to 46.7 in August from 48.6 in July, S&P Global reported today.
The index dropped to the lowest level since November 2020 as service sector weakness added to the manufacturing sector.
The U.K. services PMI fell to 49.50 from 51.50 in July, the lowest reading since January.
Producer prices in the Euro Area accelerated to a decline of 7.6% from a year ago in July from the 3.4% decrease in the previous month, the Eurostat reported Tuesday.
The measure of wholesale prices declined for the third consecutive month and fell at the fastest pace since 2009, largely due to base effects after energy prices soared following Russia's invasion of Ukraine.
Energy prices plunged 24.2% from the 16.4% in the previous month, while producer costs declined at a slower pace for intermediate goods.
However, inflation slowed for industries producing capital goods to 4.7% from 5.3%, durable consumer goods to 5.1% from 5.9%, and non-durable consumer goods to 7.6% from 8.8%.
On a monthly basis, producer prices in the Euro Area decreased 0.5%, the seventh monthly decline in a row, extending the 0.4% drop in the previous month.
Europe Indexes & Yields
European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession.
The DAX index decreased 0.1% to 15,804.41, the CAC-40 index fell 0.3% to 7,260.80 and the FTSE 100 index advanced 0.1% to 7,459.99.
The yield on 10-year German bonds increased to 2.60%, French bonds traded higher to 3.12%, the UK gilts edged up to 4.49% and Italian bonds rose to 4.32%.
The euro edged to the lowest level since mid-June on the hopes that the central is more likely to pause its rate hike campaign and assess the impact of the multiple rate hikes on the economy.
The euro edged lower to $1.070, the British pound to $1.255 and the U.S. dollar fetched 88.90 Swiss cents.
Brent crude decreased $0.55 to $88.54 a barrel and the Dutch TTF natural gas declined €0.12 to €33.45 per MWh.
Europe Stock Movers
Renault SA jumped 2% to €35.50 after the electric vehicle unit may be valued as high as €10 billion in its initial public offering, chief executive Luca de Meo said.
Ashtead Group decreased 2.7% to 5,322.0 pence after the UK-based equipment rental company lowered its UK revenue outlook.
Headlam Group Plc increased 2.7% to 224.84 pence after the floorcoverings distributor reported higher first-half revenue and reiterated its full-year revenue outlook.
Luxury companies LVMH and Hermes in Paris traded down between 1% and 2% on the worries of uneven economic recovery.
China's service sector growth dropped to the lowest level in eight months after exports weakened and new orders growth slowed.
Skanska AB increased 4.3% to kr 166.20 after the Swedish construction company won a $834 million highway improvement project in the U.S.
ABN AMRO Bank NV increased 0.2% to €13.59 and the Dutch bank said it plans to appoint current interim chief financial officer Ferdinand Vaandrager permanently.
China Property Woes Keep Asian Markets In Check
Arjun Pandit
05 Sep, 2023
Mumbai
Market indexes in Asia traded in tight range as China property sector worries dominated bond and stock market sentiment.
Moreover, China's additional stimulus measures to support the property market and cut mortgage rates for first home buyers fell short of market expectations.
Economists are increasingly worried that China will be forced to consolidate property developers and may have to either nationalize or rescue a few large developers and remove all price barriers for future property transactions.
Chinese real estate developers led decliners, with China Resources Land falling 5% and China Overseas Land and Investment dropping 3%.
On Friday, China announced new measures to support the property market and yuan.
Minimum down payments for mortgages will be cut to 20% for first-time home buyers and 30% for the second-time buyers, according to joint statements by the People’s Bank of China and National Administration of Financial Regulations.
In addition, the central bank also lowered interest rates on new mortgage rates by 40 basis points for the premium to its benchmark loan prime rate.
Regulators also said mortgage rates on existing loans can be renegotiated starting as early as September 25.
The lowered rates are likely to help 40 million home buyers, or about two thirds of housing loans in the country.
The PBOC announced foreign exchange reserve requirements to 4% from 6% for banks, to support the weakening yuan which has been under pressure for the last five months.
The yuan has dropped around 6% as foreign investors pulled out of China amid deepening real estate crisis.
A private survey of the service industry highlighted uneven recovery as the growth slowed.
The Caixin China General Service PMI eased to 51.8 in August from 51.9 in July, S&P Global reported Tuesday.
The services sector activity growth was the weakest since the beginning of the year, amid persistent downward pressure on the economy.
New order growth slowed while export sales fell for the first time since December and at the same time sentiment index declined to a 9-month low.
The weakness in the construction sector and falling exports are negatively impacting services related to these industries. Moreover, the expected sharp rebound in travel related services is weaker than expected.
In Tuesday's trading, the Nikkei index increased 0.1%, the Shanghai SSE Composite index fell 0.5%, the Hang Seng index fell 1.5% and the KOSPI index decreased 0.08%.
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%.