Market Update
Movers: Bank of America, Bank of New York Mellon, Lockheed Martin, Morgan Stanley, PNC Financial
Scott Peters
18 Jul, 2023
New York City
The S&P 500 index traded higher 0.1% to 4,521.87 and the Nasdaq Composite futures edged up 0.9% to 14,232.68.
Morgan Stanley gained 3% to $88.88 after the financial services provider reported a smaller-than-expected decline in earnings in its latest quarter.
Net revenues in the second quarter increased 2% to $13.5 billion and net income declined 13% to $2.2 billion from $2.5 billion and diluted earnings per share dropped to $1.24 from $1.39 a year ago.
Revenue in the wealth management segment revenue increased 16% to $6.6 billion from $5.7 billion, institutional securities segment declined 8% to $5.6 billion from $6.1 billion and investment management dropped 9% to $1.3 billion from $1.4 billion.
Return on average tangible common equity decreased to 12.1% from 13.8% and tangible book value edged up to $40.79 from $40.07.
The company increased its quarterly dividend by 7.5% to 85 cents a common share. payable to shareholders on record on July 31 on August 15.
Bank of America jumped 2.5% to $30.01 after the bank reported better-than-expected revenue and earnings in its latest quarter results.
Revenue, net of interest expense, increased 11% to $25.2 billion from $22.7 billion and net income rose 19% to $7.4 billion from $6.2 billion and diluted earnings per share increased to 88 cents from 72 cents a year ago.
Provision of credit losses increased by $602 million to $1.1 billion. average deposit balance declined 7% to $1.9 trillion and average loan and lease balance increased 3% to $1.0 trillion.
PNC Financial Services declined 0.6% to $126.25 after the regional bank reported lower-than-expected revenue in its latest quarter.
Revenue increased to $5.3 billion from $5.1 billion and net income edged up $1.5 billion from $1.49 billion and diluted earnings per share edged down to $3.36 from $3.39 a year ago.
Tangible book value per share increased to $77.80 from $74.39 from a year ago.
Average loans in the quarter increased to $324.5 billion from $304.8 billion and average deposits declined to $425.7 billion from $446.5 billion from a year ago.
Net interest rate margin expanded to 2.79% from 2.5%.
The bank lowered its annual net interest income increase range between 5% and 6% from the previous range between 6% and 8%.
Bank of New York Mellon Corp increased 4.5% to $45.52 after the bank reported better-than-expected quarterly results.
Revenue increased 5% to $4.5 billion and net interest income rose 33% to $1.1 billion from $824 million a year ago. Net income rose 24% to $1.06 billion from $864 million and diluted earnings per share advanced to $1.30 from $1.03 a year ago.
Provision for credit losses declined to $5 million from $47 million a year ago.
Average loans declined 8% to $63.4 billion from $69.0 billion and average deposits fell 11% to $277 billion from $311 billion a year ago.
The company returned $745 million to shareholders, including $448 million common stock repurchase.
Lockheed Martin Corp fell 0.04% to $469.76 after the defense contractor reported quarterly results met some investors' expectations.
Revenue in the second quarter edged up 8% to $16.7 billion from $15.4 billion and net income rose to $1.7 billion from $309 million and diluted earnings per share advanced to $6.63 from $1.16 a year ago.
Order backlog increased to record high $158 billion.
Free cash flow declined to $771 million from $1.027 billion a year ago.
The company revised higher its annual sales range to between $66.25 billion and $66.75 billion from the previous estimate between $65.0 billion and $66.0 billion released in April.
S&P 500 and Nasdaq Jump Ahead After Investors Overlook Weak Retail Sales
Barry Adams
18 Jul, 2023
New York City
Stocks lacked direction in early trading as investors reviewed a fresh batch of corporate earnings and retail sales data.
Retail sales, not adjusted for inflation, rose in June, but increased less than expected.
Consumer spending has been resilient despite prices staying higher than pre-Covid level.
On the earnings front, Morgan Stanley reported better-than-expected earnings but lower than a year ago, Bank of America advanced after reporting better-than-expected revenue and earnings and Lockheed Martin after quarterly results were ahead of expectations.
June Retail Sales Jumped 0.2%
U.S. retail sales rose 0.2% in June following an upwardly revised 0.5% increase in May, the U.S. Census Bureau reported Tuesday.
Retail sales data are not adjusted for inflation and consumer spending continues to remain resilient in the face of inflation falling to a two-year low.
Core retail sales, which excludes automobiles, gasoline, food services and building materials rose 0.6%.
Furniture sales rose 1.4%, electronic appliance sales increased 1.1% and sales at non-store retailers and miscellaneous stores jumped 1.9% and 2.0% respectively.
Apparel store sales increased 0.6% and motor vehicle parts sales inched higher 0.3%.
However, gasoline station sales declined 1..1%, building materials and garden equipment sales fell 1.2%, food and beverage store sales decreased 0.7% and sports, music and book store sales eased 1.0%.
U.S. Indexes & Yields
The S&P 500 index traded higher 0.1% to 4,521.87 and the Nasdaq Composite futures edged up 0.9% to 14,232.68.
The yield on 2-year Treasury notes decreased to 4.71%, 10-year Treasury notes inched lower to 3.78% and 30-year Treasury bonds edged down to 3.91%.
Crude oil decreased $0.27 to $74.41 a barrel and natural gas prices increased 8 cents to $2.59 a thermal unit.
Stock Movers
Morgan Stanley gained 3% to $88.88 after the financial services provider reported a smaller-than-expected decline in earnings in its latest quarter.
The company increased its quarterly dividend by 7.5% to 85 cents a common share. payable to shareholders on record on July 31 on August 15.
Bank of America jumped 2.5% to $30.01 after the bank reported better-than-expected revenue and earnings in its latest quarter results.
PNC Financial Services declined 0.6% to $126.25 after the regional bank reported lower-than-expected revenue in its latest quarter.
The bank lowered its annual net interest income increase range between 5% and 6% from the previous range between 6% and 8%.
Europe Movers: AstraZeneca, Danone, Novartis, SEB
Inga Muller
18 Jul, 2023
Frankfurt
European markets lacked direction and investors remained focused on the start of the corporate earnings season.
The DAX index decreased 0.05% to 16,060.51, the CAC-40 index advanced 0.02% to 7,293.26 and the FTSE 100 index increased 0.05% to 7,410.06.
The yield on 10-year German Bunds inched higher to 2.37%, French bonds traded lower to 2.92%, the UK gilts edged up to 4.37% and Italian bonds increased to 4.02%.
Novartis AG gained 3% to CHF 87.52 after the company lifted its annual earnings outlook and mapped out a plan to spin off its generic pharmaceutical division in the fourth quarter.
The company board also approved the repurchase of $1.5 billion of its stock.
SEB AB declined 0.6% to kr 122.65 in Stockholm trading and the Swedish bank reported earnings ahead of market expectations.
Danone SA declined 0.3% to €55.06 and a day ago Russia announced to takeover a stake held by the company in its Russian subsidiary.
AstraZeneca plc gained 0.5% to 10,250 pence on a report that the U.S. Food and Drug Administration has approved the company and its partner Sanofi's antibody therapy to prevent respiratory syncytial virus in infants and toddlers.
European Markets Trade Sideways, Euro and Pound Traded 16-month Highs
Bridgette Randall
18 Jul, 2023
Frankfurt
European markets were nearly unchanged and investors awaited the release of key economic data and corporate earnings later today.
Market indexes extended lackluster trading for the second day in a row after China reported weaker-than-expected economic data.
Market sentiment was also cautious on the growing worries that the European Central Bank is likely to keep its aggressive rate hike stance despite the raft of cooling inflation data.
Luxury stocks traded lower in Paris and resources stocks edged down in London for the second day following the mixed economic data.
Investors looking ahead to the start of corporate earnings season this week.
Large and small banks are in focus and investors are looking for insights in how banks are handling the stress of rising deposit costs and losses in government bonds held by banks.
Europe Indexes & Yields
The DAX index decreased 0.05% to 16,060.51, the CAC-40 index advanced 0.02% to 7,293.26 and the FTSE 100 index increased 0.05% to 7,410.06.
The yield on 10-year German Bunds inched higher to 2.37%, French bonds traded lower to 2.92%, the UK gilts edged up to 4.37% and Italian bonds increased to 4.02%.
The euro edged higher to $1.12, the British pound to $1.31 and the U.S. dollar fetched 85.80 Swiss cents
Brent crude decreased $0.17 to $78.67 a barrel and the Dutch TTF natural gas decreased €0.17 to €25.28 per MWh.
Europe Stock Movers
Novartis AG gained 3% to CHF 87.52 after the company lifted its annual earnings outlook and mapped out a plan to spin off its generic pharmaceutical division in the fourth quarter.
The company board also approved the repurchase of $1.5 billion of its stock.
SEB AB declined 0.6% to kr 122.65 in Stockholm trading and the Swedish bank reported earnings ahead of market expectations.
Danone SA declined 0.3% to €55.06 and a day ago Russia announced to takeover a stake held by the company in its Russian subsidiary.
AstraZeneca plc gained 0.5% to 10,250 pence on a report that the U.S. Food and Drug Administration has approved the company and its partner Sanofi's antibody therapy to prevent respiratory syncytial virus in infants and toddlers.
Tech Stocks Power Narrow Market Rally with Earnings from Regional Banks in Focus
Barry Adams
17 Jul, 2023
New York City
Market averages picked up pace after a slow start on Monday ahead of a busy week of corporate earnings.
Investors are awaiting earnings this week from Tesla, Netflix, IBM, Bank of America, Morgan Stanley, Goldman Sachs and Las Vegas Sands.
Regional banks have been in focus after the rise in interest rates have dented values of Treasury bonds held by banks and how banks are handling rising costs deposits.
Many regional banks are expected to seek more capital from shareholders or access lending facilities set by the Federal Reserve.
Investors are also awaiting earnings from regional banks including M&T Bank, Zions Bancorp, First Horizon National Bank, East West Bancorp and Associated Bancorp.
Major averages climbed higher on hopes that the Federal Reserve will be able to engineer soft landing and avoid dipping the economy into a recession.
Stocks advanced and built on the gains of previous two weeks in a row after three inflation reports confirmed cooling of inflation forces.
Stronger-than-expected earnings from bank bolstered market advances last week and cooler-than-expected inflation raised hopes that the Federal Reserve may be able to engineer a soft landing of the economy and avoid a recession.
Investors also reviewed weaker-than-expected second quarter GDP growth in China and mixed retail sales and fixed investment data in June.
Copper and crude oil declined 1% and European markets fell as much as 1.3% following China's economic updates.
Treasury yields edged slightly lower and investors assessed the U.S. economy's health and looked ahead to the rate decision after a two-day policy meeting ending on July 26.
Market participants are anticipating the Federal Reserve to lift rates by 25 basis points, despite the cooling of overall inflation but core inflation remains stubbornly high and well above the Fed's target rate of 2%.
The Federal Reserve signaled after the last rate decision that policymakers are looking to raise by 50 basis points before the year's end.
U.S. Indexes & Yields
The S&P 500 index traded higher 0.1% to 4,521.87 and the Nasdaq Composite futures edged up 0.9% to 14,232.68.
The yield on 2-year Treasury notes decreased to 4.74%, 10-year Treasury notes inched lower to 3.84% and 30-year Treasury bonds edged down to 3.92%.
Crude oil decreased $0.81 to $76.10 a barrel and natural gas prices decreased 1 cent to $2.54 a thermal unit.
Stock Movers
United Airlines Holdings Inc edged slightly up to $53.88 after the company and the union representing pilots agreed to a pay hike of as much as 40% over the next four year.
The preliminary agreement was announced on Saturday following a wage deal announced by Delta Air Lines a month ago.
Tesla Inc soared 1.8% to $286.66 after the company said it built its first electric pick up truck dubbed "cybertruck" after a delay of two years.
Ford Motor Company declined 0.9% to $14.85 after the company announced a price reduction of as much as $10,000 for its electric F150 pickup truck.
Activision Blizzard jumped 4% to $93.60 after Microsoft and Sony reached an agreement to keep Activision's "Call of Duty" on Sony's PlayStation gaming console after the purchase by Microsoft.
European Markets Turned Lower On China Growth Worries
European markets fell on Monday following the weakness in metals and energy markets after China reported weaker than expected GDP growth data.
Major averages declined between 0.5% and 1.4% in Paris, Frankfurt and London after China's GDP in the second quarter rose at a slower pace of 0.2% from the previous quarter.
China also reported other economic data indicating weak economic recovery and investors are losing hopes of immediate stimulus measures.
Europe Indexes & Yields
The DAX index decreased 0.2% to 16,068.65 16,103.98, the CAC-40 index dropped 1.1% to 7,291.66 and the FTSE 100 index decreased 0.4% to 7,406.42.
The yield on 10-year German Bunds inched higher to 2.42%, French bonds traded lower to 2.98%, the UK gilts edged up to 4.38% and Italian bonds increased to 4.13%.
European currencies were stable after the dollar index declined 2% in the previous week and extended four month loss to 4%.
The euro edged higher to $1.12, the British pound to $1.30 and the U.S. dollar fetched 85.87 Swiss cents
Crude oil prices eased after Libya resumed its production over the weekend.
Brent crude decreased $1.45 to $78.41 a barrel and the Dutch TTF natural gas decreased €0.86 to €25.10 per MWh.
Europe Stock Movers
Mining and resource companies traded lower in London after China reported weaker-than-expected economic growth.
Anglo American, Glencore, Antofagasta declined between 1.5% and 3% after crude oil prices declined 1% and copper fell 3%.
Luxury stocks in Paris also declined following the weak retail sales growth in China.
Kering SA declined 1.9% to €490.70, Hermes International SCA dropped 3.9% to €1,916.80 and LVMH fell 4.2% to €854.30.
Carlsberg SA declined 1.2% to €136.60 after the Russian government took control of its stake in a local brewery.
UK home builders resumed the decline after the property listing platform Rightmove said that average newly listed property price declined by £905 to £371,907.
Taylor Wimpey decreased 0.6% to 104.20 pence, Barratt Developments dropped 0.7% to 410.60 pence and Persimmon Plc fell 0.7% to 1,052.80 pence.
Richemont SA plunged 9% to CHF 140.0 after the Swiss luxury company reported a decline in U.S. demand in its latest quarter.
Sales in the first quarter ending in June rose 14% to €5.3 billion, or rose 19% in constant exchange rate.
Sales in Europe increased 10% to €1.1 billion, in Asia Pacific soared 32% t0 €2.2 billion, Japan advanced 6% to €424 million, but fell 4% in the Americas to €1.1 billion.
Entain Plc declined 1,262.0 pence after the UK-based company agreed to acquire the U.S.-based Angstrom Sports for £122 million or 160 million.
China GDP Growth Slowed In June Quarter
GDP in the second quarter rose 6.3% from a year ago and advanced faster than 4.5% in the first quarter, the National Bureau of Statistics reported Monday.
Retail sales rose 3.1% in June from a year ago, slower than 12.7% in May and industrial production advanced 4.4% compared to 3.5% in May.
Private sector investment, a widely watched indicator for confidence in the private sector, declined 0.2% from a year ago in the six-month period to June, from 0.1% in the first five-month period ending in May.
Fixed asset investment, the government's primary focus in ramping up infrastructure development, rose 3.8% from a year ago in the first six-month period to June, down from the growth of 4.0% in the five months to May.
Jobless rate among the 16-24 age group jumped to a new high of 21.8% in June from 20.8% in May.
Higher youth unemployment levels suggested weakening demand from the manufacturing sector.
Movers: Activision Blizzard, Ford Motor, Tesla, United Airlines
Scott Peters
17 Jul, 2023
New York City
Market averages on Wall Street rested and investors looked ahead to a busy week of corporate earnings.
Bank of America, Morgan Stanley, Goldman Sachs, IBM, Tesla and Netflix are among 190 companies scheduled to release earnings this week.
The S&P 500 index futures traded higher 0.1% to 4,510.19 and the Nasdaq Composite futures edged up 0.4% to 14,179.59.
The yield on 2-year Treasury notes decreased to 4.74%, 10-year Treasury notes inched lower to 3.84% and 30-year Treasury bonds edged down to 3.92%.
United Airlines Holdings Inc edged slightly up to $53.88 after the company and the union representing pilots agreed to a pay hike of as much as 40% over the next four year.
The preliminary agreement was announced on Saturday following a wage deal announced by Delta Air Lines a month ago.
Tesla Inc soared 1.8% to $286.66 after the company said it built its first electric pick up truck dubbed "cybertruck" after a delay of two years.
Ford Motor Company declined 0.9% to $14.85 after the company announced a price reduction of as much as $10,000 for its electric F150 pickup truck.
Activision Blizzard jumped 4% to $93.60 after Microsoft and Sony reached an agreement to keep Activision's "Call of Duty" on Sony's PlayStation gaming console after the purchase by Microsoft.
U.S. Market Averages Rest and Treasury Yields Edge Lower Ahead of Earnings
Barry Adams
17 Jul, 2023
New York City
Market averages hugged the flatline in Monday's trading and investors looked ahead to the release of corporate earnings this week.
Investors are awaiting earning this week from Tesla, Netflix, IBM, Bank of America, Morgan Stanley and Goldman Sachs.
Major averages were nearly unchanged following the advance for the second week in a row after three inflation reports confirmed cooling of inflation forces.
Stronger-than-expected earnings from bank bolstered market advances last week and cooler-than-expected inflation raised hopes that the Federal Reserve may be able to engineer a soft landing of the economy and avoid a recession.
Investors were cautious this morning following weaker-than-expected second quarter GDP growth in China.
Copper and crude oil declined 1% and European markets fell as much as 1.3% following China's economic updates.
Treasury yields edged slightly lower and investors assessed the U.S. economy's health and looked ahead to the rate decision after a two-day policy meeting ending on July 26.
Market participants are anticipating the Federal Reserve to lift rates by 25 basis points, despite the cooling of overall inflation but core inflation remains stubbornly high and well above the Fed's target rate of 2%.
U.S. Indexes & Yields
The S&P 500 index traded higher 0.1% to 4,510.11 and the Nasdaq Composite futures edged down 0.4% to 14,166.16.
The yield on 2-year Treasury notes decreased to 4.74%, 10-year Treasury notes inched lower to 3.84% and 30-year Treasury bonds edged down to 3.92%.
Crude oil decreased $0.81 to $76.10 a barrel and natural gas prices decreased 1 cent to $2.54 a thermal unit.
Stock Movers
United Airlines Holdings Inc edged slightly up to $53.88 after the company and the union representing pilots agreed to a pay hike of as much as 40% over the next four year.
The preliminary agreement was announced on Saturday following a wage deal announced by Delta Air Lines a month ago.
Tesla Inc soared 1.8% to $286.66 after the company said it built its first electric pick up truck dubbed "cybertruck" after a delay of two years.
Ford Motor Company declined 0.9% to $14.85 after the company announced a price reduction of as much as $10,000 for its electric F150 pickup truck.
Activision Blizzard jumped 4% to $93.60 after Microsoft and Sony reached an agreement to keep Activision's "Call of Duty" on Sony's PlayStation gaming console after the purchase by Microsoft.
Movers: Carlsberg, Entain, Luxury Stocks, Resource Stocks, Richemont, UK Homebuilders
Inga Muller
17 Jul, 2023
Frankfurt
European markets traded down on Monday on global growth worries and looming recession in the Euro Area.
China reported a mixed bag of economic data for the second quarter and GDP growth slowed, private sector investment faltered and retail sales growth was weak in June.
The DAX index decreased 0.5% to 16,020.29 16,103.98, the CAC-40 index advanced 1.2% to 7,283.26 and the FTSE 100 index decreased 0.3% to 7,412.09.
The yield on 10-year German Bunds inched higher to 2.42%, French bonds traded lower to 2.98%, the UK gilts edged up to 4.38% and Italian bonds increased to 4.13%.
Mining and resource companies traded lower in London after China reported weaker-than-expected economic growth.
Anglo American, Glencore, Antofagasta declined between 1.5% and 3% after crude oil prices declined 1% and copper fell 3%.
Luxury stocks in Paris also declined following the weak retail sales growth in China.
Kering SA declined 1.9% to €490.70, Hermes International SCA dropped 3.9% to €1,916.80 and LVMH fell 4.2% to €854.30.
Carlsberg SA declined 1.2% to €136.60 after the Russian government took control of its stake in a local brewery.
UK home builders resumed the decline after the property listing platform Rightmove said that average newly listed property price declined by £905 to £371,907.
Taylor Wimpey decreased 0.6% to 104.20 pence, Barratt Developments dropped 0.7% to 410.60 pence and Persimmon Plc fell 0.7% to 1,052.80 pence.
Richemont SA plunged 9% to CHF 140.0 after the Swiss luxury company reported a decline in U.S. demand in its latest quarter.
Sales in the first quarter ending in June rose 14% to €5.3 billion, or rose 19% in constant exchange rate.
Sales in Europe increased 10% to €1.1 billion, in Asia Pacific soared 32% t0 €2.2 billion, Japan advanced 6% to €424 million, but fell 4% in the Americas to €1.1 billion.
Entain Plc declined 1,262.0 pence after the UK-based company agreed to acquire the U.S.-based Angstrom Sports for £122 million or 160 million.
European Markets Dropped 1% Dragged by Luxury and Resource Stocks After Weak China Economic Data
Bridgette Randall
17 Jul, 2023
Frankfurt
European markets fell on Monday following the weakness in metals and energy markets after China reported weaker than expected GDP growth data.
Major averages declined between 0.5% and 1.4% in Paris, Frankfurt and London after China's GDP in the second quarter rose at a slower pace of 0.2% from the previous quarter.
China also reported other economic data indicating weak economic recovery and investors are losing hopes of immediate stimulus measures.
China GDP Growth Slowed In June Quarter
GDP in the second quarter rose 6.3% from a year ago and advanced faster than 4.5% in the first quarter, the National Bureau of Statistics reported Monday.
Retail sales rose 3.1% in June from a year ago, slower than 12.7% in May and industrial production advanced 4.4% compared to 3.5% in May.
Private sector investment, a widely watched indicator for confidence in the private sector, declined 0.2% from a year ago in the six-month period to June, from 0.1% in the first five-month period ending in May.
Fixed asset investment, the government's primary focus in ramping up infrastructure development, rose 3.8% from a year ago in the first six-month period to June, down from the growth of 4.0% in the five months to May.
Jobless rate among the 16-24 age group jumped to a new high of 21.8% in June from 20.8% in May.
Higher youth unemployment levels suggested weakening demand from the manufacturing sector.
Europe Indexes & Yields
The DAX index decreased 0.5% to 16,020.29 16,103.98, the CAC-40 index advanced 1.2% to 7,283.26 and the FTSE 100 index decreased 0.3% to 7,412.09.
The yield on 10-year German Bunds inched higher to 2.42%, French bonds traded lower to 2.98%, the UK gilts edged up to 4.38% and Italian bonds increased to 4.13%.
European currencies were stable after the dollar index declined 2% in the previous week and extended four month loss to 4%.
The euro edged higher to $1.12, the British pound to $1.30 and the U.S. dollar fetched 85.87 Swiss cents
Crude oil prices eased after Libya resumed its production over the weekend.
Brent crude decreased $1.60 to $78.76 a barrel and the Dutch TTF natural gas decreased €0.86 to €25.10 per MWh.
Europe Stock Movers
Mining and resource companies traded lower in London after China reported weaker-than-expected economic growth.
Anglo American, Glencore, Antofagasta declined between 1.5% and 3% after crude oil prices declined 1% and copper fell 3%.
Luxury stocks in Paris also declined following the weak retail sales growth in China.
Kering SA declined 1.9% to €490.70, Hermes International SCA dropped 3.9% to €1,916.80 and LVMH fell 4.2% to €854.30.
Carlsberg SA declined 1.2% to €136.60 after the Russian government took control of its stake in a local brewery.
UK home builders resumed the decline after the property listing platform Rightmove said that average newly listed property price declined by £905 to £371,907.
Taylor Wimpey decreased 0.6% to 104.20 pence, Barratt Developments dropped 0.7% to 410.60 pence and Persimmon Plc fell 0.7% to 1,052.80 pence.
Richemont SA plunged 9% to CHF 140.0 after the Swiss luxury company reported a decline in U.S. demand in its latest quarter.
Sales in the first quarter ending in June rose 14% to €5.3 billion, or rose 19% in constant exchange rate.
Sales in Europe increased 10% to €1.1 billion, in Asia Pacific soared 32% t0 €2.2 billion, Japan advanced 6% to €424 million, but fell 4% in the Americas to €1.1 billion.
Entain Plc declined 1,262.0 pence after the UK-based company agreed to acquire the U.S.-based Angstrom Sports for £122 million or 160 million.