Market Update
Europe Movers: BP, Fresnillo, HSBC, JD Sports, TeamViewer
Inga Muller
01 Aug, 2023
Frankfurt
The DAX index decreased 0.9% to 16,307.85, the CAC-40 index fell 0.9% to 7,433.94 and the FTSE 100 index declined 0.3% to 7,680.95.
JD Sports Fashion Plc declined 2.5% to 153.60 pence after the U.K.'s Competition and Markets Authority said the retailer and Leicester City Football Club broke competition law
HSBC Holdings Plc increased 1.1% to 654 pence and the UK and Kong-based bank said second quarter profit increased 12% to $6.64 billion from $5.49 billion a year ago, ahead of market expectations on higher interest rates.
Revenue rose 37% to $16.7 billion in the second quarter and net interest income advanced 35% to $9.31 billion.
The bank announced its plan to pay a quarterly dividend of 10 U.S. cents and announced stock buyback of $2 billion.
The bank resumed paying quarterly dividends in the first quarter, following the suspension of dividend payment in 2020.
“We have delivered a strong first half performance and are confident of achieving our revised mid-teens return on tangible equity target in 2023 and 2024,” CEO Noel Quinn said in a stock exchange filing.
Fresnillo Plc declined 3.5% 596.50 pence after the silver mining company forecasted weaker-than-expected 2023 outlook.
BP Plc rose 1.7% to 491.38 pence after the energy company hiked its quarterly dividend.
TeamViewer SE soared 7.4% to €16.59 after the software company reported higher earnings in the second quarter supported by higher sales and lower financing costs.
Stable Unemployment Rate In Euro Area, Weak Manufacturing Activities In UK and Eurozone
Bridgette Randall
01 Aug, 2023
Frankfurt
European markets traded down after investors reviewed latest unemployment data in the region and corporate earnings releases.
Market indexes in London, Paris and Frankfurt turned lower on the first day of a new month after the DAX gained about 1.5% in July and CAC-40 added 0.8% and the FTSE 100 index jumped 2.2%.
Looming recession worries coupled with the expected rise in interest rates have kept investors on the sidelines following the market rally of the last seven months.
Market indexes are hovering near record highs and investors are debating the future path of indexes in the face of rising rates and restrained consumer spending because of elevated prices.
Euro Area Jobless Rate Held Stable In June
In the region's economic news, the seasonally adjusted unemployment rate in the Euro Area held stable at 6.4% in June matching the rate in the previous month, Eurostat reported Tuesday.
The number of unemployed declined by 62,000 from the previous month to 10.814 million and the jobless rate among people younger than 25 years old fell to a record low of 13.8% from 14.0% in the previous month.
Among the economies of the Euro Area, the jobless rate was highest in Spain with 11.7%, followed by Italy with 7.4% and France with 7.1%.
Germany recorded the lowest unemployment rate of 3%.
Separately, the German bureau of labor statistics said the jobless rate fell to 5.6% in July from 5.7% in the previous month.
The agency reported demand for labor remained cautious because of weak economic conditions and summer break.
The unemployment declined by 4,000 to 2.604 million, but excluding Ukrainian nationals, the total unemployed would have been higher, the government report said.
From a year ago, the total unemployed rose by 147,000.
Weak Manufacturing Activities In Euro Area and UK
In other economic news in the region, the HCOB Eurozone Manufacturing PMI declined to 42.7 in July from 43.4 in the previous month, the lowest in three years.
Manufacturing activities were also under pressure in the Euro Area. and declined for twelve consecutive months in a row because higher interest rates and higher prices negatively impacted demand for manufactured goods.
The HCOB Eurozone Manufacturing PMI declined to 42.7 in July from 43.4 in the previous month, the lowest in three years.
UK factory output fell at the fastest pace in July after higher interest rates and inflation kept demand weak.
The S&P Global/CIPS UK Manufacturing PMI was revised higher to 45.3 in July from the preliminary estimate of 45.0.
The latest reading was the lowest in the year and the weakest since May 2020.
Europe Indexes & Yields
The DAX index decreased 0.9% to 16,307.85, the CAC-40 index fell 0.9% to 7,433.94 and the FTSE 100 index declined 0.3% to 7,680.95.
The yield on 10-year German bonds increased to 2.46%, French bonds traded lower to 3.02%, the UK gilts edged down to 4.32% and Italian bonds decreased to 4.10%.
The euro edged lower to $1.09, the British pound to $1.281 and the U.S. dollar fetched 87.58 Swiss cents
Brent crude decreased $0.48 to $84.95 a barrel and the Dutch TTF natural gas increased €0.23 to €28.60 per MWh.
Europe Stock Movers
JD Sports Fashion Plc declined 2.5% to 153.60 pence after the U.K.'s Competition and Markets Authority said the retailer and Leicester City Football Club broke competition law
HSBC Holdings Plc increased 1.1% to 654 pence and the UK and Kong-based bank said second quarter profit increased 12% to $6.64 billion from $5.49 billion a year ago, ahead of market expectations on higher interest rates.
Revenue rose 37% to $16.7 billion in the second quarter and net interest income advanced 35% to $9.31 billion.
The bank announced its plan to pay a quarterly dividend of 10 U.S. cents and announced stock buyback of $2 billion.
The bank resumed paying quarterly dividends in the first quarter, following the suspension of dividend payment in 2020.
“We have delivered a strong first half performance and are confident of achieving our revised mid-teens return on tangible equity target in 2023 and 2024,” CEO Noel Quinn said in a stock exchange filing.
Fresnillo Plc declined 3.5% 596.50 pence after the silver mining company forecasted weaker-than-expected 2023 outlook.
BP Plc rose 1.7% to 491.38 pence after the energy company hiked its quarterly dividend.
TeamViewer SE soared 7.4% to €16.59 after the software company reported higher earnings in the second quarter supported by higher sales and lower financing costs.
Euro Area Unemployment Stable, Weaker Manufacturing Activities In UK and Eurozone
Bridgette Randall
01 Aug, 2023
New York City
European markets traded down after investors reviewed latest unemployment data in the region and corporate earnings releases.
Market indexes in London, Paris and Frankfurt turned lower on the first day of a new month after the DAX gained about 1.5% in July and CAC-40 added 0.8% and the FTSE 100 index jumped 2.2%.
Looming recession worries coupled with the expected rise in interest rates have kept investors on the sidelines following the market rally of the last seven months.
Market indexes are hovering near record highs and investors are debating the future path of indexes in the face of rising rates and restrained consumer spending because of elevated prices.
Euro Area Jobless Rate Held Stable In June
In the region's economic news, the seasonally adjusted unemployment rate in the Euro Area held stable at 6.4% in June matching the rate in the previous month, Eurostat reported Tuesday.
The number of unemployed declined by 62,000 from the previous month to 10.814 million and the jobless rate among people younger than 25 years old fell to a record low of 13.8% from 14.0% in the previous month.
Among the economies of the Euro Area, the jobless rate was highest in Spain with 11.7%, followed by Italy with 7.4% and France with 7.1%.
Germany recorded the lowest unemployment rate of 3%.
Separately, the German bureau of labor statistics said the jobless rate fell to 5.6% in July from 5.7% in the previous month.
The agency reported demand for labor remained cautious because of weak economic conditions and summer break.
The unemployment declined by 4,000 to 2.604 million, but excluding Ukrainian nationals, the total unemployed would have been higher, the government report said.
From a year ago, the total unemployed rose by 147,000.
Weak Manufacturing Activities In Euro Area and UK
In other economic news in the region, the HCOB Eurozone Manufacturing PMI declined to 42.7 in July from 43.4 in the previous month, the lowest in three years.
Manufacturing activities were also under pressure in the Euro Area. and declined for twelve consecutive months in a row because higher interest rates and higher prices negatively impacted demand for manufactured goods.
The HCOB Eurozone Manufacturing PMI declined to 42.7 in July from 43.4 in the previous month, the lowest in three years.
UK factory output fell at the fastest pace in July after higher interest rates and inflation kept demand weak.
The S&P Global/CIPS UK Manufacturing PMI was revised higher to 45.3 in July from the preliminary estimate of 45.0.
The latest reading was the lowest in the year and the weakest since May 2020.
Europe Indexes & Yields
The DAX index decreased 0.9% to 16,307.85, the CAC-40 index fell 0.9% to 7,433.94 and the FTSE 100 index declined 0.3% to 7,680.95.
The yield on 10-year German bonds increased to 2.46%, French bonds traded lower to 3.02%, the UK gilts edged down to 4.32% and Italian bonds decreased to 4.10%.
The euro edged lower to $1.09, the British pound to $1.281 and the U.S. dollar fetched 87.58 Swiss cents
Brent crude decreased $0.48 to $84.95 a barrel and the Dutch TTF natural gas increased €0.23 to €28.60 per MWh.
Europe Stock Movers
JD Sports Fashion Plc declined 2.5% to 153.60 pence after the U.K.'s Competition and Markets Authority said the retailer and Leicester City Football Club broke competition law
HSBC Holdings Plc increased 1.1% to 654 pence and the UK and Hong Kong-based bank said second quarter profit increased 12% to $6.64 billion from $5.49 billion a year ago, ahead of market expectations on higher interest rates.
Revenue rose 37% to $16.7 billion in the second quarter and net interest income advanced 35% to $9.31 billion.
The bank announced its plan to pay a quarterly dividend of 10 U.S. cents and announced stock buyback of $2 billion.
The bank resumed paying quarterly dividends in the first quarter, following the suspension of dividend payment in 2020.
“We have delivered a strong first half performance and are confident of achieving our revised mid-teens return on tangible equity target in 2023 and 2024,” CEO Noel Quinn said in a stock exchange filing.
Fresnillo Plc declined 3.5% 596.50 pence after the silver mining company forecasted weaker-than-expected 2023 outlook.
BP Plc rose 1.7% to 491.38 pence after the energy company hiked its quarterly dividend.
TeamViewer SE soared 7.4% to €16.59 after the software company reported higher earnings in the second quarter supported by higher sales and lower financing costs.
S&P 500, Nasdaq Jumped 3% and Crude Oil Advanced 15% In July
Barry Adams
31 Jul, 2023
New York City
Market averages were in a holding pattern on Wall Street as investors looked ahead to a busy week of earnings and debated Fed's next move and health of the U.S. economy.
With overall inflation cooling for about nine months in a row, tracking lower energy prices, investors have stepped up to add more stocks in the hope that the resilient economy will avoid a recession.
The stronger-than-expected second quarter GDP growth of 2.4% also emboldened investors and most companies have reported earnings ahead of market expectations.
In addition, regional banks have been able to retain deposits despite rising interest rates and so-far avoided the talks of wider bailout in the industry.
The S&P 500 index gained 2.9% and the index traded higher for the fifth month in a row and the Nasdaq Composite index advanced 3.8% in July, and the index increased for the fifth month in a row also.
The Dow Jones Industrial Average, the index tracking mega-cap stocks, gained 3.2% in July after a 13-rally boosted its performance in the year so-far.
Activities in the crude oil patch dominated trading in July after WTI crude oil price advanced 15% and Brent crude oil jumped 17% in July.
Crude oil prices matched the monthly gains in January 2022 and traded near their highest level in 14 weeks.
In Asia, China's official manufacturing activity survey showed declining activities for the fourth month in a row, the National Bureau of Statistics reported Monday.
The PMI Index for manufacturing industry edged slightly higher to 49.3 in July from 49.0 in June on weak domestic demand recovery and falling exports orders.
U.S. Indexes & Yields
The S&P 500 index traded down 0.05% to 4,579.51 and the Nasdaq Composite rose 0.4% to 14,322.01.
The yield on 2-year Treasury notes decreased to 4.88%, 10-year Treasury notes inched lower to 3.95% and 30-year Treasury bonds edged down to 4.02%.
Crude oil increased $1.42 to $82.0 a barrel and natural gas prices increased 1 cent to $2.64 a thermal unit.
U.S. Stock Movers
Apple, Amazon, CVS Healthcare and Starbucks are among the 1,300 companies scheduled to report earnings this week.
Arista Networks, Avis Budget Group, ON Semiconductor, Lowes Corp, CNA Group and ZoomInfo Technologies are expected to release earnings on Monday.
Oil companies traded higher following the recent rise in price of oil and gas and oil service stocks registered the largest monthly gain since October 2022.
Oil service sector led the gainers in the oil patch with a rise of 18% in July after Helix Energy, Nabors Industries Ltd and Helmerich & Payne advancing more than 25% in the month.
Exxon Mobil, Chevron, Valero and Occidental Petroleum and Marathon Oil extended the recent sector rally as the price of Brent crude approaches closer to $90 a barrel.
Euro Area Q2 GDP Accelerated, Inflation Eased in July
Market averages across Europe traded higher and investors reviewed the latest updates on GDP and inflation.
Benchmark indexes in Frankfurt, Paris and London advanced after the Euro Area core inflation eased and GDP improved and net mortgage approvals rose the U.K.
Euro Area Core Inflation Above Overall Inflation In July
The Euro Area inflation slowed for the third month in a row to 5.3% in July from 5.5% in June, the statistical agency Eurostat reported Monday.
The ongoing decline in energy prices drove the overall inflation lower, but service inflation rose and core inflation was above overall inflation for the first time since 2021.
Energy prices declined at a faster pace of 6.1% in July compared to 5.6% decline in June, service inflation accelerated to 5.6% from 5.4% respectively.
Core inflation which excludes food, energy, alcohol and tobacco, was unchanged at 5.5% in the month.
Despite the cooling of inflation, prices are still rising at a faster pace than the level of 2% preferred by the European Central Bank, suggesting an aggressive rate hike campaign to continue.
Euro Area Economic Growth Accelerated In Second Quarter
The Euro Area economy expanded by 0.3% in the second quarter from the previous quarter, after waning inflation supported a slight rise in consumer spending, Eurostat reported today.
From a year ago, the eurozone economy rose 0.6%, the weakest pace of expansion since the recession over two quarters ending in the first quarter of 2021.
The economic growth picked up in the quarter after flat growth in the first quarter and Germany's economy stagnated and growth in France accelerated but slowed in Spain.
Italy's economy contracted by 0.3% in the second quarter following a rise of 0.6% in the previous period, the statistical agency ISTAT said Monday.
On an annual basis, the economy expanded at 0.6%, extending the advance to the 10th quarter in a row but at the slowest pace.
Prior to the announcement, the Bank of Italy forecasted annual economic growth to rise 1.3%, higher than 1.2% growth projected by the Prime Minister Giorgia Meloni's government.
UK Mortgage Approvals Increased in June
Home mortgage approvals rose in June in the UK, as buyers rushed to lock in rates ahead of the rise in interest rates over the next several months.
Net home mortgage approvals increased to 54,700 in June, higher than the revised 51,100 in May, the Bank of England reported Monday.
However, the approvals for mortgage refinancing with a different lender increased to 39,100 from 34,100 in the respective periods.
The effective mortgage rate on a new contract increased 7 basis points to 4.63% in June and the rate on the outstanding mortgage stock rose 10 basis points to 2.92%.
Europe Indexes & Yields
The DAX index decreased 0.1% to 16,446.83, the CAC-40 index jumped 0.3% to 7,497.78 and the FTSE 100 index increased 0.06% to 7,699.41.
The yield on 10-year German bonds increased to 2.48%, French bonds traded higher to 3.05%, the UK gilts edged up to 4.34% and Italian bonds increased to 4.12%.
The euro edged lower to $1.10, the British pound to $1.281 and the U.S. dollar fetched 87.02 Swiss cents
Brent crude increased $1.25 to $85.67 a barrel and the Dutch TTF natural gas increased €2.53 to €28.37 per MWh.
Europe Stock Movers
Heineken NV declined 7.1% to €89.98 after the brewing company lowered its 2023 earnings outlook.
Diageo and Anheuser Busch InBev fell more than 1% after Heineken lowered its earnings guidance.
Novo Nordisk AS advanced 0.7% to $157.82 after the company launched its weight loss drug Wegovy in Germany.
Senior Plc declined 2.1% to 166.80 pence despite the automobile and aircraft parts supplier reporting higher profit in the first-half profit.
Marshalls Plc fell 5.2% to 261.72 pence after the building and roofing products company lowered its annual outlook.
BT Group declined 1.9% to 121.70 pence after the company appointed Allison Kirkby as its new chief executive.
S&P 500 and Nasdaq Set to Extend 5-month Rally In July
Barry Adams
31 Jul, 2023
New York City
Market averages traded higher in New York on the final day of July amid rising optimism about inflation and rate path.
With overall inflation cooling for about nine months in a row, tracking lower energy prices, investors have stepped up to add more stocks in the hope that the resilient economy will avoid a recession.
The stronger-than-expected second quarter GDP growth of 2.4% also emboldened investors and most companies have reported earnings ahead of market expectations.
In addition, regional banks have been able to retain deposits despite rising interest rates and so-far avoided the talks of wider bailout in the industry.
The S&P 500 and the Nasdaq Composite index advanced more than 0.2% and both indexes are set to extend monthly gains.
The S&P 500 index is up 3.0% and the index is set to close for the fifth month in a row and the Nasdaq Composite index has advanced 3.6% in July, and the index is expected to close higher for the fifth month in a row.
The Dow Jones Industrial Average, the index tracking mega-cap stocks, has gained 3.1% in July after a 13-rally boosted its performance in the year sofar.
In overseas news, China's official manufacturing activity survey showed declining activities for the fourth month in a row, the National Bureau of Statistics reported Monday.
The PMI Index for manufacturing industry edged slightly higher to 49.3 in July from 49.0 in June on weak domestic demand recovery and falling exports orders.
U.S. Indexes & Yields
The S&P 500 index traded up 0.2% to 4,589.23 and the Nasdaq Composite rose 0.3% to 14,359.19.
The yield on 2-year Treasury notes decreased to 4.88%, 10-year Treasury notes inched lower to 3.95% and 30-year Treasury bonds edged down to 4.02%.
Crude oil increased $0.67 to $81.23 a barrel and natural gas prices increased 1 cent to $2.62 a thermal unit.
U.S. Stock Movers
Apple, Amazon, CVS Healthcare and Starbucks are among the 1,300 companies scheduled to report earnings this week.
Arista Networks, Avis Budget Group, ON Semiconductor, Lowes Corp, CNA Group and ZoomInfo Technologies are expected to release earnings on Monday.
Oil companies are also expected to trade higher following the recent rise in price of oil and gas.
Exxon Mobil, Chevron, Valero and Occidental Petroleum and Marathon Oil are expected to extend the recent market rally as the price of Brent crude approaches $90 a barrel.
Europe Movers: BT Group, Heineken, Marshalls, Novo Nordisk, Senior Plc
Inga Muller
31 Jul, 2023
Frankfurt
European stocks advanced after the second quarter GDP rose in the eurozone and inflation in July eased but core inflation stayed higher than the overall inflation.
The DAX index increased 0.1% to 16,484.34, the CAC-40 index jumped 0.5% to 7,510.99 and the FTSE 100 index decreased 0.06% to 7,689.35.
The yield on 10-year German bonds increased to 2.48%, French bonds traded higher to 3.05%, the UK gilts edged up to 4.34% and Italian bonds increased to 4.12%.
Heineken NV declined 7.1% to €89.98 after the brewing company lowered its 2023 earnings outlook.
Revenue in the six-months ending in June increased 2% of £354 million from £348 a year ago, which includes revenue for four months from the recent acquisition of Marley.
Excluding Marley, comparable revenue declined 13% from a year ago.
Adjusted pre-tax profit in the first-half declined to £33 million from £45 million a year ago.
Diageo and Anheuser Busch InBev fell more than 1% after Heineken lowered its earnings guidance.
Novo Nordisk AS advanced 0.7% to $157.82 after the company launched its weight loss drug Wegovy in Germany.
Senior Plc declined 2.1% to 166.80 pence despite the automobile and aircraft parts supplier reporting higher profit in the first-half profit.
Marshalls Plc fell 5.2% to 261.72 pence after the building and roofing products company lowered its annual outlook.
BT Group declined 1.9% to 121.70 pence after the company appointed Allison Kirkby as its new chief executive.
Euro Area GDP Accelerated In Second Quarter, Inflation Eased In July
Bridgette Randall
31 Jul, 2023
Frankfurt
Market averages across Europe traded higher and investors reviewed the latest updates on GDP and inflation.
Benchmark indexes in Frankfurt, Paris and London advanced after the Euro Area core inflation eased and GDP improved and net mortgage approvals rose the U.K.
Euro Area Core Inflation Above Overall Inflation In July
The Euro Area inflation slowed for the third month in a row to 5.3% in July from 5.5% in June, the statistical agency Eurostat reported Monday.
The ongoing decline in energy prices drove the overall inflation lower, but service inflation rose and core inflation was above overall inflation for the first time since 2021.
Energy prices declined at a faster pace of 6.1% in July compared to 5.6% decline in June, service inflation accelerated to 5.6% from 5.4% respectively.
Core inflation which excludes food, energy, alcohol and tobacco, was unchanged at 5.5% in the month.
Despite the cooling of inflation, prices are still rising at a faster pace than the level of 2% preferred by the European Central Bank, suggesting an aggressive rate hike campaign to continue.
Euro Area Economic Growth Accelerated In Second Quarter
The Euro Area economy expanded by 0.3% in the second quarter from the previous quarter, after waning inflation supported a slight rise in consumer spending, Eurostat reported today.
From a year ago, the eurozone economy rose 0.6%, the weakest pace of expansion since the recession over two quarters ending in the first quarter of 2021.
The economic growth picked up in the quarter after flat growth in the first quarter and Germany's economy stagnated and growth in France accelerated but slowed in Spain.
Italy's economy contracted by 0.3% in the second quarter following a rise of 0.6% in the previous period, the statistical agency ISTAT said Monday.
On an annual basis, the economy expanded at 0.6%, extending the advance to the 10th quarter in a row but at the slowest pace.
Prior to the announcement, the Bank of Italy forecasted annual economic growth to rise 1.3%, higher than 1.2% growth projected by the Prime Minister Giorgia Meloni's government.
UK Mortgage Approvals Increased in June
Home mortgage approvals rose in June in the UK, as buyers rushed to lock in rates ahead of the rise in interest rates over the next several months.
Net home mortgage approvals increased to 54,700 in June, higher than the revised 51,100 in May, the Bank of England reported Monday.
However, the approvals for mortgage refinancing with a different lender increased to 39,100 from 34,100 in the respective periods.
The effective mortgage rate on a new contract increased 7 basis points to 4.63% in June and the rate on the outstanding mortgage stock rose 10 basis points to 2.92%.
Europe Indexes & Yields
The DAX index increased 0.1% to 16,484.34, the CAC-40 index jumped 0.5% to 7,510.99 and the FTSE 100 index decreased 0.06% to 7,689.35.
The yield on 10-year German bonds increased to 2.48%, French bonds traded higher to 3.05%, the UK gilts edged up to 4.34% and Italian bonds increased to 4.12%.
The euro edged lower to $1.10, the British pound to $1.281 and the U.S. dollar fetched 87.02 Swiss cents
Brent crude increased $0.71 to $85.12 a barrel and the Dutch TTF natural gas increased €1.47 to €27.32 per MWh.
Europe Stock Movers
Heineken NV declined 7.1% to €89.98 after the brewing company lowered its 2023 earnings outlook.
Diageo and Anheuser Busch InBev fell more than 1% after Heineken lowered its earnings guidance.
Novo Nordisk AS advanced 0.7% to $157.82 after the company launched its weight loss drug Wegovy in Germany.
Senior Plc declined 2.1% to 166.80 pence despite the automobile and aircraft parts supplier reporting higher profit in the first-half profit.
Marshalls Plc fell 5.2% to 261.72 pence after the building and roofing products company lowered its annual outlook.
BT Group declined 1.9% to 121.70 pence after the company appointed Allison Kirkby as its new chief executive.