Market Update
Europe Movers: Aegon, BAE Systems, Geberit, GN Store Nord, Rank Group
Inga Muller
17 Aug, 2023
Frankfurt
European markets struggled and bond yields rose following the rising expectations of another rate hike in the U.S.
The DAX index increased 0.05% to 15,782.45, the CAC-40 index fell 0.05% to 7,257.09 and the FTSE 100 index fell 0.2% to 7,340.56.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds increased to 2.68%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.60% and Italian bonds increased to 4.39%.
The U.S. dollar traded near a 2-month high after the minutes of the meeting held on July 25-26 raised the prospect of another rate hike at the next policy meeting.
BAE Systems declined 4.5% to 961.40 pence after the company said it agreed to acquire aerospace business of Ball Corp for $5.55 billion in cash.
Geberit AG declined 4.5% to CHF 445.60 after the Swiss plumbing supplies company lowered its 2023 outlook.
Aegon NV declined 3.2% to €4.81 after the Dutch insurer swung to a net loss in the first-half of 2023.
Rank Group declined 1.5% to 88.10 pence after the gambling company said revenue in the fiscal year 2023 jumped 5.9% but reported a statutory net loss on the account of higher impairment charges.
GN Store Nord plunged as much as 20% and recovered to a loss of 7.9% to DKK 152.30 after the hearing aid company said marketing conditions are challenging and cited macroeconomic headwinds.
European Bond Yields Perked Up and U.S. Dollar Traded at 2-month High
Bridgette Randall
17 Aug, 2023
Frankfurt
European markets struggled to advance in the face of growing U.S. rate path uncertainties and sluggish economic recovery in China.
In cautious trading, stocks lacked direction and bond yields rose and the euro and the pound edged lower on the worries that the U.S. rates are likely to go higher.
The latest minute of the Fed's policy meeting on July 25-26 showed that several participants were concerned about the elevated inflation despite multiple rate hikes.
Policymakers worried that interest rates may have to be revised higher to bring down inflation which has stayed above the Fed's preferred rate of 2% despite eleven rate hikes over the last fifteen months.
Europe Indexes & Yields
The DAX index increased 0.05% to 15,782.45, the CAC-40 index fell 0.05% to 7,257.09 and the FTSE 100 index fell 0.2% to 7,340.56.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds increased to 2.68%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.60% and Italian bonds increased to 4.39%.
The U.S. dollar traded near a 2-month high after the minutes of the meeting held on July 25-26 raised the prospect of another rate hike at the next policy meeting.
The euro edged lower to $1.081, the British pound to $1.277 and the U.S. dollar fetched 87.87 Swiss cents.
Brent crude increased $0.87 to $84.34 a barrel and the Dutch TTF natural gas increased €0.82 to €38.61 per MWh.
Stock Movers
BAE Systems declined 4.5% to 961.40 pence after the company said it agreed to acquire aerospace business of Ball Corp for $5.55 billion in cash.
Geberit AG declined 4.5% to CHF 445.60 after the Swiss plumbing supplies company lowered its 2023 outlook.
Aegon NV declined 3.2% to €4.81 after the Dutch insurer swung to a net loss in the first-half of 2023.
Rank Group declined 1.5% to 88.10 pence after the gambling company said revenue in the fiscal year 2023 jumped 5.9% but reported a statutory net loss on the account of higher impairment charges.
GN Store Nord plunged as much as 20% and recovered to a loss of 7.9% to DKK 152.30 after the hearing aid company said marketing conditions are challenging and cited macroeconomic headwinds.
Rate Hike Worries Resurfaced After Fed Minutes, Nasdaq Dropped 1%
Boris Petrov
16 Aug, 2023
New York City
Market averages on Wall Street traded down after rate path worries resurfaced.
The S&P 500 and the Nasdaq Index declined around 1% after investors reviewed the Fed's minutes of meeting conducted in July.
Policymakers decided to increase the rate hike by 25 basis points at the end of two-day meeting in mid-July but many market participants forecast the Fed to pause for a while.
But the minutes of the latest meeting showed that most participants worried that inflation is too high and rates may have to be lifted to curb economic activities.
“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” Fed's minutes of meeting noted after the rate decision.
After the rate increase, Fed funds rate range was increased 25 basis points to between 5.25% and 5.0%.
Despite the multiple rate hikes, inflation has still hovered well above the Fed's 2% target rate and several policy committee members noted.
“In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time,” the latest minutes of the meeting noted.
Several policy members expressed the view that the economic outlook remains highly uncertain and the full impact of the cumulative rate hike is not fully felt by the economy.
U.S. Indexes & Yields
The S&P 500 index traded down 0.8% to 4,404.33 and the Nasdaq Composite fell 1.1% to 13,474.63.
The yield on 2-year Treasury notes increased to 4.98%, 10-year Treasury notes inched higher to 4.26% and 30-year Treasury bonds edged down to 4.38%.
Crude oil increased $1.86 to $79.11 a barrel and natural gas prices decreased 6 cents to $2.66 a thermal unit.
U.S. Stock Movers
Target Corp increased 3% to $128.75 despite the company reporting revenue that fell short of market expectations and the company lowering earnings for the full-year.
TJX Companies Inc jumped 4.1% to $89.31 after the discount retailer reported second quarter adjusted earnings of 85 cents and revenue of $12.76 billion.
VinFast Auto declined 19% to $30.11, a day after the stock soared more than 250% after the company completed its listing on the Nasdaq through a merger with the SPAC Black Spade.
Intel Corp declined 3.5% to $33.53 after the company decided to terminate its merger agreement to acquire Tower Semiconductor.
As a part of the merger agreement, Intel will pay $353 million to Tower Semiconductor.
Tower Semiconductor declined 10.7% to $30.17.
Europe Movers: Admiral Group, Alcon, Carlsberg, Essentra, Mining Companies
Inga Muller
16 Aug, 2023
Frankfurt
European markets rebounded after the Euro Area industrial production unexpectedly rose and second quarter GDP expanded.
The DAX index increased 0.2% to 15,802.60, the CAC-40 index rose 0.2% to 7,279.98 and the FTSE 100 index fell 0.5% to 7,357.73.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
Carlsberg AS declined 2.4% to DKK 996.80 despite the company slightly lifting its 2023 annual outlook.
Alcon AG declined 1.1% to CHF 69.88 despite the Swiss eye-care firm reporting an increase in second quarter revenue and the company lifting its 2023 full-year outlook.
Mining companies extended losses for the second week in a row after China reported weak new home sales data today following weak retail sales, industrial production and unemployment data a day earlier.
Anglo American declined and extended this year's loss to 39% and Glencore fell 0.1% and 23% respectively.
Admiral Group Plc soared 5.8% to 2,327.0 pence after the insurance company reported a rise in first-half profit.
Essentra PLC declined 0.9% to 154.40 pence after the plastics and fiber products maker said first-half revenue declined 5.5% from a year ago.
Euro Area Economy Expanded In Second Quarter, UK Inflation Eased
Bridgette Randall
16 Aug, 2023
Frankfurt
European markets traded higher and investors reviewed the latest industrial production data in the Euro Area.
Industrial production in the eurozone unexpectedly rose 0.5% in June from the upwardly revised flat reading in the previous month, the Eurostat reported Wednesday.
In a separate report the statistical agency for the currency union confirmed that the economy expanded 0.3% in the second quarter from the previous quarter, matching the expectations set by some economists.
The UK consumer price inflation slowed to 6.8% in July from 7.9% in June, following weaker energy prices, the Office for National Statistics reported Wednesday.
Despite the weakening of the overall inflation, core inflation stayed at 6.9%, sending a signal to investors that the Bank of England may have to continue with its aggressive rate hike stance.
Europe Indexes & Yields
The DAX index increased 0.2% to 15,802.60, the CAC-40 index rose 0.2% to 7,279.98 and the FTSE 100 index fell 0.5% to 7,357.73.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds decreased to 2.64%, French bonds traded lower to 3.19%, the UK gilts edged down to 4.60% and Italian bonds decreased to 4.30%.
The euro edged lower to $1.091, the British pound to $1.271 and the U.S. dollar fetched 88.06 Swiss cents.
Brent crude increased $0.25 to $85.28 a barrel and the Dutch TTF natural gas decreased €0.80 to €38.01 per MWh.
Stock Movers
Carlsberg AS declined 2.4% to DKK 996.80 despite the company slightly lifting its 2023 annual outlook.
Alcon AG declined 1.1% to CHF 69.88 despite the Swiss eye-care firm reporting an increase in second quarter revenue and the company lifting its 2023 full-year outlook.
Mining companies extended losses for the second week in a row after China reported weak new home sales data today following weak retail sales, industrial production and unemployment data a day earlier.
Anglo American declined and extended this year's loss to 39% and Glencore fell 0.1% and 23% respectively.
Admiral Group Plc soared 5.8% to 2,327.0 pence after the insurance company reported a rise in first-half profit.
Essentra PLC declined 0.9% to 154.40 pence after the plastics and fiber products maker said first-half revenue declined 5.5% from a year ago.
Market Averages Dropped 1% After Fitch Signaled Possible Bank Downgrades
Barry Adams
15 Aug, 2023
New York City
Market averages in New York closed down after banks led decliners and lingering uneven recovery in China dominated market sentiment.
The S&P 500 and the Nasdaq Composite indexes declined as much as 1.5% after China's retail sales and industrial output rose less-than-expected and jobless rate rose in July.
The ongoing weakness in the property market is at the heart of China's uneven economic recovery and weakness in imports of commodities and energy products.
Property buyers are increasingly staying on the sidelines on the expectation of further price declines, further denting the market liquidity and exacerbating property developer's debt-heavy balance sheets.
In other news in Asia, Japan's second quarter GDP soared at an annual pace of 6% largely because of a jump in net exports and sharp rebound in international tourist arrivals.
Business investment was flat and private consumption unexpectedly declined 0.5% in the second quarter.
Private consumption accounts for about 50% of Japan's economy and domestic demand is negatively impacted by the weakening of yen which is lifting the cost of imports.
Closer to home, preliminary U.S. retail and food services sales rose 0.7% in July, and sales rose for the fourth month in a row.
Seasonally adjusted but not adjusted for price inflation, retail sales rose 3.2% from a year earlier, the U.S. Commerce Department reported Tuesday.
The rise in retail sales showed resilient consumer spending despite rate hikes and price increases but investors worry lagging wage growth may finally catch up with consumers amid rising personal debts.
Banks dropped between 2% and 3% after Fitch Ratings signaled a possible downgrade for the banking sector and a possible rating downgrades for several banks, including large banks.
Bank of America, BONY Mellon, Citigroup and JPMorgan Chase fell between 2% and 3%.
Investors are worried that a rating cut will further increase cost of capital for banks and weaken net interest margin and may even cut off some banks from their abilities to borrow in the bond market.
U.S. Indexes & Yields
The S&P 500 index traded down 1.2% to 4,437.1786 and the Nasdaq Composite fell 1.2% to 13,631.05.
The yield on 2-year Treasury notes increased to 4.95%, 10-year Treasury notes inched higher to 4.21% and 30-year Treasury bonds edged down to 4.31%.
Crude oil increased $1.36 to $81.44 a barrel and natural gas prices decreased 6 cents to $2.66 a thermal unit.
U.S. Stock Movers
Home builders were in focus after Berkshire Hathaway acquired positions in NVR, Lennar and DR Horton, according to a regulatory filing.
DR Horton gained 2.2% to $125.97, Lennar jumped 0.6% to $124.61 and NVR gained 1.7% to $6,262.79 after the diversified conglomerate Berkshire Hathaway took stakes in home builders.
According to a regulatory filing with the SEC, Berkshire acquired a $726 million stake in DR Horton, $70 million in NVR and $17.2 million in Lennar.
Discover Financial Services dropped 7.7% to $94.66 after the company announced the resignation of chief executive Roger Hochschild.
The company's board appointed John Owen as interim president and chief executive and Hochschild will remain as an advisor through the end of the year.
Home Depot Inc jumped 2.2% to $126.0 after the do-it-yourself retailer reported sales declined 2% to $42.9 billion and comparable sales in the period across the company and in the U.S. declined 2%.
Sales were under pressure after customers delayed bid-ticket purchases.
Net income in the quarter declined 9.9% to $4.6 billion from $5.2 billion and diluted earnings per share fell to $4.65 from $5.05 a year ago.
The retailer reaffirmed its 2023 sales and comparable sales to decline between 2% and 5% and diluted earnings per share to fall between 7% and 13% from a year earlier.
European Markets Turn Volatile After Weak China Data
European markets inched higher amid growing worries of worsening economic conditions in China.
European bond yields edged up and UK gilts traded above 4.6% for the second day in a row and French bond yield jumped stayed above 3% for the second week in a row.
The ruble rebounded after the Bank of Russia lifted its key lending rate after the currency plunged in the previous session.
The central bank lifted interest rates by 350 basis points to 12% to shore up the currency after an emergency meeting.
The ruble rebounded from as low as 102 against the U.S. dollar to 95.56 after the rate hike announcement.
Investors are also awaiting U.S. retail sales data for July and the last batch of earnings from major retailers and tech companies.
Japan GDP Expanded On Positive International Trade
Japan's GDP expanded for the second quarter in a row on rising exports and falling imports, the government data showed.
GDP in the second quarter accelerated to 1.5% from the upwardly revised 0.9% increase in the first quarter.
The economy has been on the mend despite the weak consumer spending but it was the international trade that drove most of the gain.
Exports in the second quarter rose 3.2% from the previous quarter and imports fell 4.3% in the period, contributing 1.8 percentage point growth.
Market sentiment was cautious after China reported weaker-than-expected retail sales, investment and unemployment data.
The People's Bank of China lowered its key lending rates as the property market faces confidence crisis and byers stayed on the sidelines hoping prices to fall further.
China Cut Rates After Weak Economic Data Show Deepening Property Market Stress
The People's Bank of China unexpectedly lowered its one-year medium term lending facility rate by 15 basis points to 2.5%.
The central bank also lowered its seven-day reverse repo rate by 10 basis points to 1.8%, responding to weakening economic backdrop.
Property investments declined at a faster pace in January to July of 8.5% after falling at 7.9% in January to June, the National Bureau of Statistics reported Tuesday.
Weak property investment dragged down growth in fixed-asset investment to 3.4% in the first seven months to July from 3.8% in June.
Property accounts for one-fifth of all fixed-asset investment and contributes to about 14% of GDP growth.
Private investment continues to remain subdued and declined 0.5% in the first seven months, compared to an increase of 7.6% by state owned enterprises.
From a year ago, industrial production increased 3.7% in July, slower than 4.4% in June and retail sales slowed to 2.5% in July from 3.1% increase in June from a year ago.
Urban jobless rate rose to 5.3% in July from 5.2% in June and the statistical agency said it will no longer provide youth jobless rate data.
Youth unemployment rate among 16 to 24 years rose to record high of 21.3% in June from 20.8% in May.
Europe Indexes & Yields
The DAX index increased 0.9% to 15,767.28, the CAC-40 index fell 1.1% to 7,267.70 and the FTSE 100 index fell 1.6% to 7,389.64.
The yield on German government bonds traded at a new one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds increased to 2.67%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.62% and Italian bonds increased to 4.33%.
The euro edged lower to $1.093, the British pound to $1.261 and the U.S. dollar fetched 87.76 Swiss cents.
Brent crude decreased $1.01 to $85.07 a barrel and the Dutch TTF natural gas decreased €4.32 to €38.81 per MWh.
Movers: Banks, DR Horton, Discover Financial, Home Depot, Lennar, NVR
Scott Peters
15 Aug, 2023
New York City
Home builders were in focus after Berkshire Hathaway acquired positions in NVR, Lennar and DR Horton, according to a regulatory filing.
DR Horton gained 2.2% to $125.97, Lennar jumped 0.6% to $124.61 and NVR gained 1.7% to $6,262.79 after the diversified conglomerate Berkshire Hathaway took stakes in home builders.
According to a regulatory filing with the SEC, Berkshire acquired a $726 million stake in DR Horton, $70 million in NVR and $17.2 million in Lennar.
Discover Financial Services dropped 7.7% to $94.66 after the company announced the resignation of chief executive Roger Hochschild.
The company's board appointed John Owen as interim president and chief executive and Hochschild will remain as an advisor through the end of the year.
Home Depot Inc jumped 2.2% to $126.0 after the do-it-yourself retailer reported sales declined 2% to $42.9 billion and comparable sales in the period across the company and in the U.S. declined 2%.
Sales were under pressure after customers delayed bid-ticket purchases.
Net income in the quarter declined 9.9% to $4.6 billion from $5.2 billion and diluted earnings per share fell to $4.65 from $5.05 a year ago.
The retailer reaffirmed its 2023 sales and comparable sales to decline between 2% and 5% and diluted earnings per share to fall between 7% and 13% from a year earlier.
Large and region banks were under pressure after Fitch is looking to downgrade the entire banking sector on the weakening earnings outlook and worsening outlook for loan portfolios.
Fitch tracks about 70 banks and the rating agency is expected to downgrade some of the largest banks including Wells Fargo, Bank of America, Citigroup and JPMorgan Chase.
“What we don’t know is, where does the Fed stop? Because that is going to be a very important input into what it means for the banking system,” Fitch Ratings analyst Chris Wolfe said in an interview with CNBC on Monday.
Price Unadjusted Retail and Food Services Sales Rose 0.7%, Gasoline Station Sales Dropped
Brian Turner
15 Aug, 2023
New York City
U.S. retail and food services sales rose 0.7% in July, marking the fourth monthly sales increase in a row.
Seasonally adjusted but not adjusted for price inflation, retail sales rose 3.2% from a year earlier, the U.S. Census Bureau reported Tuesday.
The rise in sales showed resilient consumer spending despite rate hikes and price increases.
Online retail sales increased 1.9%, sporting goods and related stores jumped 1.5% and food services and beverages stores advanced 1.4%.
On the downside, furniture sales decreased 1.8% from the previous month and appliances and electronics stores sales fell 1.3% but sales at gas stations rose only 0.4% from the previous month but plunged 20.8% from a year ago, despite a jump in gasoline prices.
According to the preliminary estimates, total sales at retail stores, online stores and restaurants and bars rose 0.7% from the previous month and increased 3.2% from a year earlier to $696.4 billion.
From a year ago, nonretail stores which are dominated by online retail stores jumped 10.3% and food services and drinking places jumped 11.9% but department store sales declined 2.3% and building materials and garden equipment stores fell 1.5%.
Global Economic Worries Keep Popular Averages In Check On Wall Street
Barry Adams
15 Aug, 2023
New York City
Market averages in New York tracked lower world markets after the latest indicators from China showed weaker-than-expected economic conditions.
The S&P 500 and the Nasdaq Composite indexes declined as much as 0.7% after China's retail sales and industrial output rose less-than-expected and jobless rate rose in July.
The weakness in the property market is at the heart of China's economic weakness after years of building.
Buyers are increasingly staying on the sidelines on the expectation of more price weakness, further denting the market liquidity and exacerbating property developer's debt-heavy balance sheets.
In other news in Asia, Japan's second quarter GDP soared at an annual pace of 6% largely because of a jump in net exports and sharp rebound in international tourist arrivals.
Business investment was flat and private consumption unexpectedly declined 0.5% in the second quarter.
Private consumption accounts for about 50% of Japan's economy and domestic demand is negatively impacted by the weakening of yen which is lifting the cost of imports.
Closer to home, preliminary U.S. retail and food services sales rose 0.7% in July, and sales rose for the fourth month in a row.
Seasonally adjusted but not adjusted for price inflation, retail sales rose 3.2% from a year earlier, the U.S. Census Bureau reported Tuesday.
The rise in sales showed resilient consumer spending despite rate hikes and price increases.
Online retail sales increased 1.9%, sporting goods and related stores jumped 1.5% and food services and beverages stores advanced 1.4%.
On the downside, furniture sales decreased 1.8% from the previous month and appliances and electronics stores sales fell 1.3% but sales at gas stations rose only 0.4% from the previous month but plunged 20.8% from a year ago, despite a jump in gasoline prices.
U.S. Indexes & Yields
The S&P 500 index traded down 0.4% to 4,477.17 and the Nasdaq Composite fell 0.5% to 13,426.12.
The yield on 2-year Treasury notes increased to 4.98%, 10-year Treasury notes inched higher to 4.23% and 30-year Treasury bonds edged down to 4.33%.
Crude oil increased $1.25 to $81.28 a barrel and natural gas prices decreased 6 cents to $2.73 a thermal unit.
U.S. Stock Movers
Home builders were in focus after Berkshire Hathaway acquired positions in NVR, Lennar and DR Horton, according to a regulatory filing.
DR Horton gained 2.2% to $125.97, Lennar jumped 0.6% to $124.61 and NVR gained 1.7% to $6,262.79 after the diversified conglomerate Berkshire Hathaway took stakes in home builders.
According to a regulatory filing with the SEC, Berkshire acquired a $726 million stake in DR Horton, $70 million in NVR and $17.2 million in Lennar.
Discover Financial Services dropped 7.7% to $94.66 after the company announced the resignation of chief executive Roger Hochschild.
The company's board appointed John Owen as interim president and chief executive and Hochschild will remain as an advisor through the end of the year.
Home Depot Inc jumped 2.2% to $126.0 after the do-it-yourself retailer reported sales declined 2% to $42.9 billion and comparable sales in the period across the company and in the U.S. declined 2%.
Sales were under pressure after customers delayed bid-ticket purchases.
Net income in the quarter declined 9.9% to $4.6 billion from $5.2 billion and diluted earnings per share fell to $4.65 from $5.05 a year ago.
The retailer reaffirmed its 2023 sales and comparable sales to decline between 2% and 5% and diluted earnings per share to fall between 7% and 13% from a year earlier.
European Markets Trade Volatile In Cautious Trading After Weak China Data
Bridgette Randall
15 Aug, 2023
Frankfurt
European markets inched higher amid growing worries of worsening economic conditions in China.
European bond yields edged up and UK gilts traded above 4.6% for the second day in a row and French bond yield jumped stayed above 3% for the second week in a row.
The ruble rebounded after the Bank of Russia lifted its key lending rate after the currency plunged in the previous session.
The central bank lifted interest rates by 350 basis points to 12% to shore up the currency after an emergency meeting.
The ruble rebounded from as low as 102 against the U.S. dollar to 95.56 after the rate hike announcement.
Investors are also awaiting U.S. retail sales data for July and the last batch of earnings from major retailers and tech companies.
Japan GDP Expanded On Positive International Trade
Japan's GDP expanded for the second quarter in a row on rising exports and falling imports, the government data showed.
GDP in the second quarter accelerated to 1.5% from the upwardly revised 0.9% increase in the first quarter.
The economy has been on the mend despite the weak consumer spending but it was the international trade that drove most of the gain.
Exports in the second quarter rose 3.2% from the previous quarter and imports fell 4.3% in the period, contributing 1.8 percentage point growth.
Market sentiment was cautious after China reported weaker-than-expected retail sales, investment and unemployment data.
The People's Bank of China lowered its key lending rates as the property market faces confidence crisis and byers stayed on the sidelines hoping prices to fall further.
China Cut Rates After Weak Economic Data Show Deepening Property Market Stress
The People's Bank of China unexpectedly lowered its one-year medium term lending facility rate by 15 basis points to 2.5%.
The central bank also lowered its seven-day reverse repo rate by 10 basis points to 1.8%, responding to weakening economic backdrop.
Property investments declined at a faster pace in January to July of 8.5% after falling at 7.9% in January to June, the National Bureau of Statistics reported Tuesday.
Weak property investment dragged down growth in fixed-asset investment to 3.4% in the first seven months to July from 3.8% in June.
Property accounts for one-fifth of all fixed-asset investment and contributes to about 14% of GDP growth.
Private investment continues to remain subdued and declined 0.5% in the first seven months, compared to an increase of 7.6% by state owned enterprises.
From a year ago, industrial production increased 3.7% in July, slower than 4.4% in June and retail sales slowed to 2.5% in July from 3.1% increase in June from a year ago.
Urban jobless rate rose to 5.3% in July from 5.2% in June and the statistical agency said it will no longer provide youth jobless rate data.
Youth unemployment rate among 16 to 24 years rose to record high of 21.3% in June from 20.8% in May.
Europe Indexes & Yields
The DAX index increased 0.05% to 15,911.80, the CAC-40 index rose 0.05% to 7,351.19 and the FTSE 100 index fell 0.6% to 7,461.20.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds increased to 2.67%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.62% and Italian bonds increased to 4.33%.
The euro edged lower to $1.093, the British pound to $1.261 and the U.S. dollar fetched 87.76 Swiss cents.
Brent crude decreased $0.04 to $86.27 a barrel and the Dutch TTF natural gas decreased €1.62 to €36.05 per MWh.
U.S. Stocks Closed higher, China Property Woes Deepen and Argentina Devalues Peso
Barry Adams
14 Aug, 2023
New York City
Popular market averages rebounded after stocks scaled higher in the final hour of the session.
In early trading, popular averages hovered near flatline and Treasury yields inched slightly higher as investors reviewed last week's market performance and awaited corporate earnings.
But market indexes staged a reversal after one hour of trading and continued to advance in steady climb and never looked back as investors stepped up to buy familiar stocks in the tech space.
But the on-again-off-again recession debate raged on Wall Street as investors focused on the looming global economic slowdown after China's property market woes worsened.
In addition, domestic inflation worries lingered on as investors reviewed consumer price and wholesale price inflation last week showing a slight acceleration but staying near the 12-month lows.
But the overall and core inflation are still significantly ahead of the Fed's 2% target level despite eleven rate hikes over the last fifteen months.
Moreover, labor market conditions remain tight but wage prices are rising at moderate rates.
The recent hike in crude oil prices and elevated home prices are sending alerts to policymakers that the overall inflation may be on the rise again in the months ahead.
This week on the earnings front, Walmart, Target, Home Depot and Cisco are among 300 companies scheduled to release earnings.
On the economic calendar, investors are awaiting July retail sales data and building permits, starts and completions data.
Russian Ruble Extended Losses
The Russian ruble plunged to 101.0 against the U.S. dollar, and extended this year's decline to 38% on the growing list of negative factors.
Rising government deficit, mismatch of imports and exports receipts and the expectations of weakening demand for energy from China and India contributed to the negative sentiment for the ruble.
Russia's current account surplus plunged 85% in the period between January and July from a year ago, denting the sentiment further.
Argentine Devalues Peso by 18%
Argentine central bank devalued peso by 18% to 350 against the U.S. dollar and lifted interest rates by a whopping 21 percentage points to 118%.
The central bank was forced to devalue after financial markets turned volatile and investors dumped stocks and currency following a surprise victory of far-right congressman Javier Milei in presidential primary
Presidential primary winner Milei won about 30%, leading all other candidates after voters dumped traditional candidates as the resource rich nation lurches from one recession to another.
U.S. Indexes & Yields
The S&P 500 index traded up 0.4% to 4,489.80 and the Nasdaq Composite rose 0.8% to 13,788.33.
The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.19% and 30-year Treasury bonds edged down to 4.29%.
Crude oil increased $0.65 to $82.53 a barrel and natural gas prices increased 2 cents to $2.79 a thermal unit.
U.S. Stock Movers
U.S. Steel Corporation surged 26.9% to $28.76 after the steelmaker rejected a buyout offer of $7.3 billion from Cleveland-Cliffs over the weekend.
Cleveland-Cliffs increased 2.5% to $14.99 after U.S. Steel said it is reviewing its strategic options.
Tesla Inc decreased 2.3% to #237.10 after the electric vehicle maker announced additional savings in China to support faltering sales amid weaker-than-expected economic rebound.
Nikola Corp declined 11.3% to $1.73 after the company recalled 209 electric trucks
PayPal Inc increased 1.7% to $62.52 after the payment processing company's board appointed Intuit executive Alex Chriss as the new chief executive replacing long-time chief executive Dan Schulman in September.
Schulman plans to remain as a director till the end of May 2024.
European Markets Lacked Direction Amid Global Slowdown Worries
European markets traded sideways and gains were muted after bond yields advanced for the second week in a row and commodities and crude oil prices edged lower.
The benchmark indexes in Frankfurt, Paris and London traded higher in choppy trading on the hopes that inflation will stay near recent lows and the Euro Area economy may avoid a deeper recession.
The rise in bond yields suggested that the bond market is looking for rates to go higher, contrary to the stock market expectations.
German wholesale prices declined 2.8% in July after falling at an annual rate of 2.9% in June, the Federal Statistics Office reported Monday.
Wholesale prices declined for the fourth month in a row and on a monthly basis prices fell 0.2%, matching the rate in June.
Europe Indexes & Yields
The DAX index increased 0.5% to 15,904.25, the CAC-40 index rose 0.1% to 7,348.14 and the FTSE 100 index fell 0.2% to 7,507.15.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds increased to 2.60%, French bonds traded higher to 3.14%, the UK gilts edged up to 4.52% and Italian bonds increased to 4.22%.
The euro edged lower to $1.03, the British pound to $1.263 and the U.S. dollar fetched 87.73 Swiss cents.
Brent crude decreased $0.61 to $86.19 a barrel and the Dutch TTF natural gas decreased €0.87 to €34.43 per MWh.
Europe Stock Movers
Antofagasta, Glencore and Anglo America declined more than 1% on the no end in sight of property woes in China, reiterating fears that the expected rebound in Chinese demand is not likely to materialize.
Weakening crude oil prices dragged energy companies Shell PLC, TotalEnergies and BP Plc down by 1 %.
Adesso SE jumped 9.2% to €111.20 after the information processing outsourcing services company reported a rise in its first-half operating earnings and the company reiterated its 2023 outlook.
Koninklijke Philips NV jumped 3.9% to €19.16 after the Dutch investment company Exor controlled by Italy-based Agnelli family invested $2.8 billion or 15% stake in the embattled healthcare technology company.
Yen Crossed 145 and China Property Market Woes Worsens
In Asia, markets were under pressure after the Japanese yen traded above 145 against the U.S. dollar and China's two best-known property developers missed bond payments.
Country Garden halted trading in at least dozen on-shore bonds and the state-controlled Sino-Ocean suspended trading in debt notes due next year after the company missed interest payments of $21 million.
The woes of China's property market dragged commodities prices lower in London trading.
Asian Markets Extend Weekly Losses
In Monday's trading in Asia, the Nikkei index decreased 1.3%, the SSE Composite index declined 0.3%, the Hang Seng index decreased 1.8% and the KOSPI index decreased 0.2%.
In the previous week, Asian markets declined except the Nikkei index in Japan but market indexes reversed today after the yen dropped below 145 against the U.S. dollar.
The Nikkei 225 index gained 1.3% in the week and extended weekly gains to 26.2% after Japan reviewed machine tools orders, inflation and current account surplus data this week.
The Hang Seng index in Hong Kong declined 1.7% in the week and extended this year's losses to 5.4% on the property sector woes and weak international trade and inflation data in China.
Movers: Cleveland-Cliffs, Nikola, PayPal, Tesla, U.S. Steel
Scott Peters
14 Aug, 2023
New York City
U.S. Steel Corporation surged 26.9% to $28.76 after the steelmaker rejected a buyout offer of $7.3 billion from Cleveland-Cliffs over the weekend.
Cleveland-Cliffs increased 2.5% to $14.99 after U.S. Steel said it is reviewing its strategic options.
Tesla Inc decreased 2.3% to #237.10 after the electric vehicle maker announced additional savings in China to support faltering sales amid weaker-than-expected economic rebound.
Nikola Corp declined 11.3% to $1.73 after the company recalled 209 electric trucks following an independent investigation of a fire incidence.
The company said according to preliminary findings from Exponent, a third-party investigator, a coolant leak inside a single battery pack was found to be the probable cause of the truck fire at the company's headquarters in Phoenix, Ariz. on June 23.
The findings were further corroborated by a minor thermal incident that impacted one pack on an engineering validation truck parked at the company's Coolidge, Ariz. plant on Aug. 10, the company added in a release to investors.
No one was injured in either incident.
The company put battery electric vehicles sales on hold until a resolution is in place.
PayPal Inc increased 1.7% to $62.52 after the payment processing company's board appointed Intuit executive Alex Chriss as the new chief executive replacing long-time chief executive Dan Schulman in September.
Schulman plans to remain as a director till the end of May 2024.
Stocks Lack Direction With Earnings Releases In Final Phase and Ahead of Retail Sales Data
Barry Adams
14 Aug, 2023
New York City
Stocks on Wall Street traded flat as investors debated rate path and global economic health.
Popular averages hovered near flatline and Treasury yields inched slightly higher as investors reviewed last week's market performance and awaited corporate earnings.
Consumer price and wholesale price inflation indexes showed acceleration but stayed near the lows over the last one year. But the overall and core inflation are still significantly ahead of the Fed's 2% target level despite eleven rate hikes over the last fifteen months.
Moreover, labor market conditions remain tight but wage prices are rising at moderate rates.
The recent hike in crude oil prices and elevated home prices are sending alerts to policymakers that the overall inflation may be on the rise again in the months ahead.
This week on the earnings front, Walmart, Target, Home Depot and Cisco are among 300 companies scheduled to release earnings.
On the economic calendar, investors are awaiting July retail sales data and building permits, starts and completions data.
Russian Ruble Extended Losses
The Russian ruble plunged to 101.0 against the U.S. dollar, and extended this year's decline to 38% on the growing list of negative factors.
Rising government deficit, mismatch of imports and exports receipts and the expectations of weakening demand for energy from China and India contributed to the negative sentiment for the ruble.
Russia's current account surplus plunged 85% in the period between January and July from a year ago, denting the sentiment further.
Yen Crosses 145 and China Property Market Woes Worsens
In Asia, markets were under pressure after the Japanese yen traded above 145 against the U.S. dollar and China's two best-known property developers missed bond payments.
Country Garden halted trading in at least dozen on-shore bonds and the state-controlled Sino-Ocean suspended trading in debt notes due next year after the company missed interest payments of $21 million.
The woes of China's property market dragged commodities prices lower in London trading.
U.S. Indexes & Yields
The S&P 500 index traded up 0.1% to 4,469.17 and the Nasdaq Composite rose 0.2% to 13,666.52.
The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.19% and 30-year Treasury bonds edged down to 4.29%.
Crude oil increased $0.45 to $82.73 a barrel and natural gas prices increased 1 cent to $2.77 a thermal unit.
U.S. Stock Movers
U.S. Steel Corporation surged 26.9% to $28.76 after the steelmaker rejected a buyout offer of $7.3 billion from Cleveland-Cliffs over the weekend.
Cleveland-Cliffs increased 2.5% to $14.99 after U.S. Steel said it is reviewing its strategic options.
Tesla Inc decreased 2.3% to #237.10 after the electric vehicle maker announced additional savings in China to support faltering sales amid weaker-than-expected economic rebound.
Nikola Corp declined 11.3% to $1.73 after the company recalled 209 electric trucks
PayPal Inc increased 1.7% to $62.52 after the payment processing company's board appointed Intuit executive Alex Chriss as the new chief executive replacing long-time chief executive Dan Schulman in September.
Schulman plans to remain as a director till the end of May 2024.
European Markets Struggled Amid Weakening Global Economic Backdrop
Bridgette Randall
14 Aug, 2023
Frankfurt
European markets traded sideways and gains were muted after bond yields advanced for the second week in a row and commodities and crude oil prices edged lower.
The benchmark indexes in Frankfurt, Paris and London traded higher in choppy trading on the hopes that inflation will stay near recent lows and the Euro Area economy may avoid a deeper recession.
The rise in bond yields suggested that the bond market is looking for rates to go higher, contrary to the stock market expectations.
German wholesale prices declined 2.8% in July after falling at an annual rate of 2.9% in June, the Federal Statistics Office reported Monday.
Wholesale prices declined for the fourth month in a row and on a monthly basis prices fell 0.2%, matching the rate in June.
In other news closer to the region, the Russian ruble plunged to 101.0 against the U.S. dollar, and extended this year's decline to 38% on the growing list of negative factors.
Rising government deficit, mismatch of imports and exports receipts and the expectations of weakening demand for energy from China and India contributed to the negative sentiment for the ruble.
Russia's current account surplus plunged 85% in the period between January and July from a year ago, denting the sentiment further.
In Asia, markets were under pressure after the Japanese yen traded above 145 against the U.S. dollar and China's two best-known property developers missed bond payments.
Country Garden halted trading in at least dozen on-shore bonds and the state-controlled Sino-Ocean suspended trading in debt notes due next year after the company missed interest payments of $21 million.
The woes of China's property market dragged commodities prices lower in London trading.
Europe Indexes & Yields
The DAX index increased 0.5% to 15,915.80, the CAC-40 index rose 0.2% to 7,357.19 and the FTSE 100 index fell 0.4% to 7,494.84.
The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks.
The yield on 10-year German bonds increased to 2.60%, French bonds traded higher to 3.14%, the UK gilts edged up to 4.52% and Italian bonds increased to 4.22%.
The euro edged lower to $1.03, the British pound to $1.263 and the U.S. dollar fetched 87.73 Swiss cents.
Brent crude decreased $0.21 to $86.60 a barrel and the Dutch TTF natural gas decreased €0.58 to €35.88 per MWh.
Europe Stock Movers
Antofagasta, Glencore and Anglo America declined more than 1% on the no end in sight of property woes in China, reiterating fears that the expected rebound in Chinese demand is not likely to materialize.
Weakening crude oil prices dragged energy companies Shell PLC, TotalEnergies and BP Plc down by 1 %.
Adesso SE jumped 9.2% to €111.20 after the information processing outsourcing services company reported a rise in its first-half operating earnings and the company reiterated its 2023 outlook.
Koninklijke Philips NV jumped 3.9% to €19.16 after the Dutch investment company Exor controlled by Italy-based Agnelli family invested $2.8 billion or 15% stake in the embattled healthcare technology company.
Movers: Illumina, Maxeon Solar, MercadoLibre, Savers Value Village, UBS
Scott Peters
11 Aug, 2023
New York City
Savers Value Village Inc jumped 9.5% to $25.73 after the online platform for second hand merchandise reported better-than-sales in the second quarter.
UBS Group AG jumped 4.5% to $23.24 after the Swiss bank voluntarily terminated its loss protection agreement signed at the time of Credit Suisse purchase with the Swiss National Bank and Swiss government saying the bank does not need it.
Separately, the bank said Credit Suisse fully repaid an emergency liquidity loan of 50 billion Swiss francs to the Swiss National Bank.
MercadoLibre Inc decreased 2.1% to $1,358.57 after the Latin America focused e-commerce platform appointed a new chief financial officer Thursday.
Illumina, Inc decreased 4% to $177.53 after the company said in a regulatory filing that the U.S. Securities and Exchange Commission is investigating the company over its acquisition of cancer test developer Grail.
Maxeon Solar Technologies Ltd dropped 32.5% to $15.05 after the company missed its own sales outlook for the second quarter and forecasted even lower sales in the third quarter.
The clean energy company reported second quarter revenue of $348 million compared to $228 million a year ago and forecasted revenue between $280 million and $320 million in the third quarter.
Maxeon guided full-year 2023 sales between $1.25 billion and $1.35 billion and adjusted operating earnings between $80 million and $100 million and capital expenditure between $150 million and $170 million.
Net loss in the quarter declined to $1.5 million from $87.5 million and diluted loss per share shrank to 3 cents from $2.15 a year ago.
Solar shipments increased to 807 MW from 521 MW a year ago and the Singapore headquartered company guided between 700 MW and 740 MW in the third quarter.