Market Update
Movers: Black Rock, Citigroup, JPMorgan Chase, UnitedHealth Group, Wells Fargo
Scott Peters
14 Jul, 2023
New York City
Market indexes scaled new peaks in the year after worries inflation and rate hikes eased.
The S&P 500 index futures traded higher 0.3% to 4,521.33 and the Nasdaq Composite edged higher 0.4% to 14,191.93.
The yield on 2-year Treasury notes decreased to 4.70%, 10-year Treasury notes inched lower to 3.80% and 30-year Treasury bonds edged down to 3.91%.
Citigroup declined 2.1% to $46.68 despite the company reporting better-than-expected quarterly earnings.
Total revenues, net of interest expenses, declined 1% to $19.4 billion from $19.6 billion and net income declined 36% to $2.9 billion from $4.5 billion and diluted earnings per share fell to $1.33 from $2.19 a year ago.
Total assets at the end of the quarter increased 2% to $2.43 trillion from $2.38 trillion and deposits were stable at $1.3 trillion from a year ago.
Citigroup's allowance for credit losses at the end of the quarter increased to $17.5 billion from the previous year.
During the quarter, the company returned a total of $2.0 billion to shareholders in the form of $1.04 billion in dividends and $1.0 billion in share repurchases.
JPMorgan Chase gained 0.5% to $149.70 and the New York-based bank reported higher earnings on bond trading income.
Revenue in the second quarter increased 34% to $41.3 billion from $30.7 billion and net income soared 67% to $14.4 billion from $8.6 billion and diluted earnings per share rose to $4.75 from 2.76 a year ago.
Return on common equity surged to 20% from 13% a year ago and provision of credit losses surged to $2.9 billion from $1.1 billion respectively.
BlackRock Inc declined 2.1% to $724.51 after the asset management company reported earnings ahead of market expectation and robust fund inflows.
Revenue in the second quarter declined 1% to $4.46 billion from $4.52 billion and net income soared 27% to $1.36 billion from $1.07 billion and diluted earnings per share expanded to $9.06 from $7.06 a year ago.
Assets under management increased 11% to $9.4 trillion from $8.4 trillion a year ago and quarterly inflow of assets was $80 billion with positive asset flows across client types and regions.
UnitedHealth Group soared 6.8% to $478.29 after the insurance company reported better-than-expected earnings on lower-than-expected costs and rising premiums.
Net income in the quarter increased to $5.47 billion from $5.07 billion and diluted earnings per share rose to $5.82 from $5.34 a year ago.
Medical care ratio in the quarter increased to 83.2% from 81.5% a year ago
The insurance company lifted its adjusted annual earnings estimate to between $24.70 and $25.0 from the previous estimate between $24.0 and $25.0.
Wells Fargo & Company gained 0.6% to $43.95 after the bank reported better-than-expected quarterly results.
Total revenue in the second quarter ending in June rose to $20.5 billion from $17.1 billion and net income advanced to $4.9 billion from $3.1 billion and diluted earnings per share expanded to $1.25 from 75 cents a year ago.
In the quarter, average loans increased to $945.9 billion from $926.6 billion and average deposit decreased to $1.35 trillion from $1.45 trillion from a year ago.
Provision for credit losses rose sharply to $1.7 billion from $580 million a year ago, indicating growing worries about commercial real estate loans and higher credit card balances.
The company repurchased 100.2 million shares for $4.0 billion in the second quarter.
The company proposed to increase its quarterly dividend per share to 35 cents per from 30 cents a year ago.
Third Inflation Report Indicates Cooling Trend, S&P 500 and Nasdaq Extend Weekly and Yearly Gains
Barry Adams
14 Jul, 2023
New York City
Stocks on Wall Street advanced after banks reported better-than-expected earnings but market indexes lost early momentum.
Market averages extended halted a 4-day rally as earnings season kicked off and investors focused on cooling inflation trend.
JPMorgan Chase, Wells Fargo and Citigroup met or exceeded quarterly earnings estimates, fueling market advance in Friday's trading.
Market averages opened higher for the fifth day in a row after inflation worries eased following three reports this week.
Consumer price inflation dropped to 3% in June , wholesale inflation dropped to 0.1% and import prices dropped 6.1% after prices of petroleum products continued to decline.
Wholesale price inflation declined for the eleventh month in a row and consumer price inflation dropped to the lowest level last seen since March 2021.
Import price inflation also declined 6.1% from a year ago in June, supporting that price pressures are ebbing.
Market averages sold off in the final hour of trading as investors focused on a sharp rise in credit loss reserves in the latest quarterly results of JPMorgan Chase.
U.S. Indexes & Yields
The S&P 500 index futures traded higher 0.3% to 4,521.33 and the Nasdaq Composite edged higher 0.4% to 14,191.93.
The yield on 2-year Treasury notes decreased to 4.70%, 10-year Treasury notes inched lower to 3.80% and 30-year Treasury bonds edged down to 3.91%.
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
Citigroup declined 2.1% to $46.68 despite the company reporting better-than-expected quarterly earnings.
JPMorgan Chase gained 0.5% to $149.70 and the New York-based bank reported higher earnings on bond trading income.
Black Rock Inc declined 2.1% to $724.51 after the asset management company reported earnings ahead of market expectation and robust fund inflows.
UnitedHealth Group soared 6.8% to $478.29 after the insurance company reported better-than-expected earnings on lower-than-expected costs and rising premiums.
The insurance company also lifted its annual outlook.
Europe Movers: Ashmore, Ericsson, Nokia, SBB, Zoo Digital
Inga Muller
14 Jul, 2023
New York City
European markets gained 4% this week after inflation and interest rates worries eased.
The euro jumped to a 16-month high after the dollar eased on the expectations that the U.S. Federal Reserve may pause following steady decline in consumer and wholesale price inflation indexes.
The DAX index decreased 0.2% to 16,103.98, the CAC-40 index advanced 0.3% to 7,394.75 and the FTSE 100 index increased 0.2% to 7,454.87.
The yield on 10-year German Bunds inched higher to 2.44%, French bonds traded lower to 3.0%, the UK gilts edged up to 4.39% and Italian bonds increased to 4.14%.
Ericsson declined 9..9% to 52.73 kronor after the Swedish multinational company in the second quarter swung to a net loss of 0.6 billion kronor compared to a profit of 4.7 billion a year ago.
Nokia Oyj plunged 10% to €3.54 after the Finnish telecom company lowered its annual earnings outlook.
SBB AB plunged 11% to 5.34 kronor after the Swedish property company reported a wider-than-expected quarterly loss.
Ashmore Group plc declined 6% to 203.80 pence after the UK-based asset management company reported a 3% decline in asset management.
Zoo Digital Group Plc plunged 33% to 70.0 pence after the cloud services provider said revenue in the fiscal first quarter is likely to be lower than in the comparable period a year ago.
European Markets Jumped 4% This Week After Inflation Worries Eased
Bridgette Randall
14 Jul, 2023
Frankfurt
European markets advanced after inflation and rate worries eased and investors looked ahead to the start of earnings season.
The euro jumped to a 16-month high but yields on government bonds of Germany, France and Italy were little changed after rallying in two previous sessions.
Market indexes extended weekly gain in Europe following a rise in global markets this week.
Market indexes in the U.S. advanced for the fifth day in a row and indexes in China, India and Japan also traded higher this week.
In economic news, the Euro Area trade deficit declined sharply after imports fell faster than exports following the sharp decline in energy prices.
Euro Area Trade Deficit Dropped After Imports Plunged
The Euro Area trade deficit fell sharply in May after imports plunged and exports advanced, Eurostat reported Friday.
Trade deficit declined to €0.3 billion in May from the revised €30.3 billion in April.
Exports declined 2.3% to €241.9 billion and imports plunged 12.8% to €242.2 billion, resulting in a trade deficit of €0.3 billion.
In January to May 2023, euro area exports of goods to the rest of the world rose 3.7% to €1 181.9 billion, and imports fell 5.1% to €1,199.5 billion compared to a year ago.
As a result the euro area recorded a deficit of €17.6 billion, compared with €124.7 billion in the period a year ago.
In the period, trade surplus with the U.S. declined to €58.1 from 6€6.9 billion, rose with the UK to €59.2 billion from €48.5 billion, surged with Switzerland to €22.5 billion from €12.4 billion, and swung to a surplus with Turkey to €7.1 billion from a deficit of €2.4 billion.
Europe Indexes & Yields
The DAX index decreased 0.2% to 16,103.98, the CAC-40 index advanced 0.3% to 7,394.75 and the FTSE 100 index increased 0.2% to 7,454.87.
The yield on 10-year German Bunds inched higher to 2.44%, French bonds traded lower to 3.0%, the UK gilts edged up to 4.39% and Italian bonds increased to 4.14%.
The euro edged higher to $1.21, the British pound to $1.31 and the U.S. dollar fetched 85.90 Swiss cents
Crude oil prices rose for the third week in a row but natural gas prices eased more than 10% in European trading.
Brent crude decreased $0.20 to $81.27 a barrel and the Dutch TTF natural gas increased €1.52 to €28.13 per MWh.
Europe Stock Movers
Ericsson declined 9..9% to 52.73 kronor after the Swedish multinational company in the second quarter swung to a net loss of 0.6 billion kronor compared to a profit of 4.7 billion a year ago.
Nokia Oyj plunged 10% to €3.54 after the Finnish telecom company lowered its annual earnings outlook.
SBB AB plunged 11% to 5.34 kronor after the Swedish property company reported a wider-than-expected quarterly loss.
Ashmore Group plc declined 6% to 203.80 pence after the UK-based asset management company reported a 3% decline in asset management.
Zoo Digital Group Plc plunged 33% to 70.0 pence after the cloud services provider said revenue in the fiscal first quarter is likely to be lower than in the comparable period a year ago.
4-Day Rally Lifts S&P 500 and Nasdaq to 2023 Highs
Barry Adams
13 Jul, 2023
New York City
Stocks advanced on the hopes that inflation is inching closer to the Fed's target level stoking expectation that the Federal Reserve may back off from its hawkish stance.
Two inflation reports in as many days lifted market sentiment and the yield on Treasuries edged lower after wholesale and consumer price inflation continued their downward path.
The S&P 500 and the Nasdaq Composite indexes closed at their 2023's highs and extended weekly gains after the producer price index eased.
The measure of the wholesale price index decreased 0.1% in June. following an upwardly revised 0.4% increase in May, the U.S. Bureau of Labor Statistics reported Thursday.
Core wholesale price inflation, which strips out volatile food and energy prices, also declined 0.1% in June.
On a year basis, producer price index rose at a slower pace of 0.1% in June after rising 0.9% in May,
In overseas economic news, the UK's GDP in May shrank less than expected and inflation in France eased in June.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
In other economic news, the UK economy contracted less than expected in May.
Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday.
China's exports declined 12.4% to $285.3 billion in June, worse than the 7.5% fall in May, General Administration of Customs reported Thursday.
Imports fell 6.9% in the month to $214.7 billion.
Exports to the U.S. declined 23.7% to $42.7 billion, to the EU fell 12.9% and to the ASEAN region dropped 16.9% to $43.3 billion from a year ago. But exports to Russia soared 90.9% from a year ago.
Exports to the U.S. fell for the eleventh month in a row on the ongoing political tensions between two largest economies oof the world.
In the first half, exports declined 3.2% from a year ago in 2022.
China's trade surplus declined to $70.6 billion in June from $65.7 billion in May.
U.S. Indexes & Yields
The S&P 500 index futures traded higher 0.9% to 4,510.07 and the Nasdaq Composite edged higher 1.5% to 14,138.57.
The yield on 2-year Treasury notes decreased to 4.62%, 10-year Treasury notes inched lower to 3.73% and 30-year Treasury bonds edged down to 3.90%.
Crude oil decreased $1.39 to $77.14 a barrel and natural gas prices decreased 6 cents to $2.55 a thermal unit.
Stock Movers
Delta Air Lines rose 3.5% to $49.75 after the international air carrier reported record quarterly earnings and sales and also lifted its 2023 earnings estimate.
MillerKnoll Inc increased 1.1% to $16.65 after the furniture maker reported better-than-expected earnings.
The company reported earnings of 41 cents a share and revenue of $957 million.
PepsiCo increased 1.1% to $185.22 after the food and beverage company reported better-than-expected revenue of $22.32 billion and adjusted net income of $1.96 a share.
European Markets Extend Weekly Gains
European markets extended weekly gains and investors reviewed industrial output data in the Euro Area.
Major averages in Frankfurt, Paris and London advanced on hopes that the European Central Bank may be nearing its rate hike cycle following the easing of inflation.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
In other economic news, the UK economy contracted less than expected in May.
Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday.
Euro Area Industrial Output Slowed In May
Industrial production in the Euro Area eased to 0.2% increase in May from 1.0% rise in April, Eurostat reported Thursday.
On a yearly basis, industrial production declined 2.2% in May after rising 0.2% in April.
Capital goods production increased 1.0% in May following a 14.7% surge in April, and intermediate goods output rose 0.5%, rebounding from a 0.9% decline in the previous month.
Durable goods output rose 0.5% compared to a decline of 2.8% in the previous month and non-durable consumer goods output rebounded 0.3% from a decline of 3.6%.
Europe Indexes & Yields
The DAX index increased 0.7% to 16,141.09, the CAC-40 index advanced 0.5% to 7,369.80 and the FTSE 100 index advanced 0.3% to 7,440.21.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded lower to 2.99%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.13%.
The euro edged higher to $1.117, the British pound to $1.304 and the U.S. dollar fetched 90.04 Swiss cents
Brent crude increased $1.57 to $81.68 a barrel and the Dutch TTF natural gas increased €0.03 to €26.61 per MWh.
Europe Stock Movers
Enel SpA rose 1.4% to €6.32 after the Italian energy generator and electricity grid operator said its subsidiary Enel Green Power SpA has agreed to sell 50% stake in its two subsidiaries Enel Green Power Australia Pty Ltd and Enel Green Power Australia Trust.
The company agreed to sell stakes to Inpex Corporation for €400 million.
Homebuilders in London traded lower after Barratt Developments after the company warned of a challenging market environment and further slowdown in demand.
Barratt Developments PLC dropped 2.5% to 407.70 pence, Persimmons declined Persimmon Plc declined 0.6% to 1,044 pence and Taylor Wimpey Plc declined 1.7% to 103.10 pence.
Casino Guichard Perrachon SA declined 5.2% to €3.15 after the estimated comparable sales in the second quarter fell 6.6% because of price cuts reflecting a tough market environment.