Market Update
Europe Movers: Allianz, Diageo, Red Row, Resource Stocks, Richemont, SCOR
Inga Muller
10 Nov, 2023
Frankfurt
European markets trimmed weekly gains after interest rate hikes worries resurfaced following comments from central bankers.
The DAX index decreased 0.7% to 15,251.96, the CAC-40 index fell 0.9% to 7,049.25, and the FTSE 100 index fell 1.2% to 7,365.17.
The yield on 10-year German bonds increased to 2.73%, French bonds traded higher to 3.31%, the UK gilts edged up to 4.34%, and Italian bonds inched lower to 4.59%.'
Resource and mining stocks turned lower after prices of copper, iron ore, gold, and silver declined between 0.2% and 1.0%.
Antofagasta plc fell 2.8% to 1,288.0 pence, Anglo American plc decreased 3.5% to 1,288.0 pence, and Glencore PLC declined 1% to 425.65 pence.
Richemont SA declined 6.3% to CHF 105.40 after the Swiss luxury company reported weaker-than-expected third-quarter results.
Diageo plc plunged 16.2% to 2,720.0 pence after the alcoholic beverage maker said operating profit growth will slow in the first half of the fiscal year.
The company said sales in Latin America and the Caribbean, which account for 11% of total sales, are facing macroeconomic headwinds and customers are preferring cheaper alternatives.
Diego stock plunged after the company made a surprise announcement, reversing the earlier forecast of "gradual improvement" in sales growth.
The company still estimates sales growth improvement in North America, but sales in Europe and Asia Pacific continued to grow at a slower pace than in the previous half.
Redrow plc dropped 5.2% to 492.80 pence after the UK-based homebuilder said revenue and profit would be near the lower end of the previously announced range.
Allianz SE rose 2.2% to €227.40 after the German insurance company confirmed its 2023 operating profit target.
SCOR SE declined 5.5% to €26.46 after the tier 1 reinsurance company said quarterly gross premium declined to €4.87 billion from €5.14 billion a year ago.
European Markets Trimmed Weekly Gains, UK Economy Stalled In Third Quarter
Bridgette Randall
10 Nov, 2023
Frankfurt
European markets fell after rate hike worries resurfaced following hawkish comments from central bankers.
Benchmark indexes in Frankfurt, Paris, and London declined between 0.5% and 1.2%, and bond yields rebounded following comments from Federal Reserve Chairman Jerome Powell.
Powell commented during an IMF panel discussion in Washington, DC, that it is too early to conclude that interest rate hikes are not needed to bring down inflation to the target rate of 2%.
His comments sparked a selloff in U.S. Treasury notes in late Thursday's trading, and European bond yields rebounded in Friday's trading.
UK GDP Stagnates in the Third Quarter
In other economic news, the UK's GDP in the third quarter stagnated from the previous quarter, the Office for National Statistics reported Friday.
A year ago, GDP expanded by 0.6%.
The GDP estimate matched the Bank of England's forecast released earlier in the month.
The economy expanded at the slowest pace in four months, and the service output declined by 0.1%, but the production output was nearly flat.
High interest rates and elevated prices kept consumer spending in check and negatively impacted business investments.
On the expenditure side, an increase in the volume of net trade was offset by a 4.2% decline in business investment, a 0.4% fall in household spending, and a 0.5% decrease in government consumption.
Europe Indexes and Yields
The DAX index decreased 0.7% to 15,251.96, the CAC-40 index fell 0.9% to 7,049.25, and the FTSE 100 index fell 1.2% to 7,365.17.
The yield on 10-year German bonds increased to 2.73%, French bonds traded higher to 3.31%, the UK gilts edged up to 4.34%, and Italian bonds inched lower to 4.59%.
The euro rebounded to $1.067, the British pound at $1.22, and the U.S. dollar at 90.18 Swiss cents.
Brent crude increased $0.88 to $80.89 a barrel, and the Dutch TTF natural gas edged lower by €2.04 to €46.09 per MWh.
Europe Stock Movers
Resource and mining stocks turned lower after prices of copper, iron ore, gold, and silver declined between 0.2% and 1.0%.
Antofagasta plc fell 2.8% to 1,288.0 pence, Anglo American plc decreased 3.5% to 1,288.0 pence, and Glencore PLC declined 1% to 425.65 pence.
Richemont SA declined 6.3% to CHF 105.40 after the Swiss luxury company reported weaker-than-expected third-quarter results.
Diageo plc plunged 16.2% to 2,720.0 pence after the alcoholic beverage maker said operating profit growth will slow in the first half of the fiscal year.
The company said sales in Latin America and the Caribbean, which account for 11% of total sales, are facing macroeconomic headwinds and customers are preferring cheaper alternatives.
Diego stock plunged after the company made a surprise announcement, reversing the earlier forecast of "gradual improvement" in sales growth.
The company still estimates sales growth improvement in North America, but sales in Europe and Asia Pacific continued to grow at a slower pace than in the previous half.
Redrow plc dropped 5.2% to 492.80 pence after the UK-based homebuilder said revenue and profit would be near the lower end of the previously announced range.
Allianz SE rose 2.2% to €227.40 after the German insurance company confirmed its 2023 operating profit target.
SCOR SE declined 5.5% to €26.46 after the tier 1 reinsurance company said quarterly gross premium declined to €4.87 billion from €5.14 billion a year ago.
U.S. Market Rally Pauses and Treasury Yields Turn Higher After Powell Comments
Barry Adams
09 Nov, 2023
New York City
Benchmark indexes drifted into the negative zone, and the indexes are set to halt a near two-week rally.
Stocks struggled as bond yields turned higher after dropping for the second week, and investors turned cautious after several days of market advance.
Treasury yields perked up after comments from Federal Reserve Chairman Powell in a panel discussion today suggested that it is too early to conclude that the rate hike campaign is over.
Chairman Powell was speaking today at a panel hosted by the International Monetary Fund in Washington, D.C.
The S&P 500 index halted the eight-day rally, and the Nasdaq Composite paused nine-day gains as investors reassessed recent market gains and the global economic backdrop.
During the last two weeks, market participants bid up high-growth and tech stocks after the Federal Reserve held short-term rates for the second time in a row earlier this month.
The move also sparked speculation that policymakers will keep rates steady at the next policy meeting in December, supporting rate stability.
Investors wasted no time in bidding up stocks, and the Nasdaq Composite and the S&P 500 index soared more than 5% in the previous and extended gains this week.
Moreover, softer nonfarm payroll data last week also supported the Fed's case for stable rates and reviewed the cumulative effect of multiple rate hikes since March 2022.
On the economic front, initial jobless claims declined to 217,000 last week, down from the two-month high of 220,000 in the week before, reported the U.S. Department of Labor on Thursday.
In international news, China's consumer and producer prices continue to weaken, highlighting weak domestic demand and cautious consumers.
China Battles Deflationary Forces
The Chinese economy is battling an uneven economic recovery after the end of COVID restrictions, and consumers are holding on to their cash because of the ongoing property market woes.
China's consumer price index declined 0.2% in October after a flat reading in September, the National Bureau of Statistics reported Thursday.
Food prices declined for the fourth month in a row and fell at the fastest pace in 25 months to 4%, but nonfood inflation was unchanged at 0.7%.
The producer price index accelerated the decline to 2.6% after a 2.5% decline in September, the statistical agency said in a separate report.
The measure of wholesale prices declined for the 13th month in a row.
Consumer goods prices fell at a faster pace, reflecting larger declines in food and durable goods prices.
U.S. indexes and Yields
The S&P 500 index decreased 0.4% to 4,366.69, and the Nasdaq Composite fell 0.3% to 13,614.25.
The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.60%, and 30-year Treasury bonds edged up to 4.78%.
Crude oil decreased $0.92 to $76.27 a barrel, and natural gas prices rose 2 cents to $3.07 a thermal unit.
Gold increased $14.04 to $1,963.86 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.52.
U.S. Stock Movers
Lyft declined 3.3% to $10.30 after the digital ride hailing company reported weaker-than-expected quarterly results and guided that weak bookings are expected to persist in the current quarter.
Disney jumped 4.3% to $88.12 after the theme park operator and media company reported better-than-expected quarterly results.
Disney also said it plans to expand its cost reduction plans.
Arm dropped 6.2% to $51.0 after the advanced semiconductor chip maker reported mixed quarterly results and offered a muted outlook for the current quarter.
MGM Resorts advanced 3% to $39.85 after the hotel and casino operator reported better-than-expected quarterly results and the company announced its stock repurchase plan.
European Markets Extends Weekly Gains
European market indexes extended the previous week's gains, and bond yields edged lower in choppy trading.
Benchmark indexes in London, Paris, and Frankfurt advanced between 0.3% and 0.6%, and investors snapped up real estate and banking sector stocks.
The CAC 40 index is set to extend weekly gains to the fifth week in a row and the DAX 30 index to the third week in a row.
Investors are bidding up stocks in the hopes that central banks will pause interest rate hikes at the next meeting in December, supporting rate stability till the end of January.
The European Central Bank, the U.S. Federal Reserve Bank, the Bank of England, and the Bank of Japan held their short-term interest rates.
Market participants are hoping that the recent weak retail sales data is likely to support the central bank's case to pause rates as the Eurozone economy adjusts to multiple rate hikes over the last fifteen months.
In listless trading, stocks lacked direction but managed to regain footing in the afternoon. The euro edged higher, and bond yields extended the recent decline to the second week.
Europe Indexes and Yields
The DAX index increased 0.8% to 15,352.54, the CAC-40 index rose 1.1% to 7,113.66, and the FTSE 100 index advanced 0.7% to 7,455.67.
The yield on 10-year German bonds increased to 2.65%, French bonds traded higher to 3.24%, the UK gilts edged up to 4.27%, and Italian bonds inched lower to 4.53%.
The euro rebounded to $1.068, the British pound at $1.22, and the U.S. dollar at 90.07 Swiss cents.
Brent crude increased $0.95 to $80.49 a barrel, and the Dutch TTF natural gas edged higher by €1.52 to €46.13 per MWh.
Europe Stock Movers
Arcelor Mittal SA declined 1.9% to €21.0 after the steel company reported lower revenue and earnings in the third quarter.
Airbus SE decreased 3.1% to €126.40 despite the aircraft maker posting a higher underlying third quarter profit and reiterating its annual delivery target financial outlook.
Flutter Entertainment plc dropped 8.5% to 12,500.0 pence after the online betting platform said it plans to delist its stock from the Irish Stock Exchange and list in the U.S.
AstraZeneca plc gained 2.8% to 10,458.0 pence after the drug company reported better-than-expected third-quarter results.
Taylor Wimpey plc increased 2.2% to 118.19 pence after the UK-based home builder reiterated its annual outlook.
Wizz Air Holdings PLC dropped 6.4% to 1,746.0 pence despite the budget airline estimating a narrower annual loss.
Henkel AG & Co. advanced 2.4% to €69.08 after the German consumer products maker lifted its annual estimate.
Merck KGaA jumped 4.9% to €155.25 after the German pharmaceutical company reported better-than-expected third-quarter results.
U.S. Movers: Arm Holdings, Lyft, MGM Resorts, Walt Disney
Scott Peters
09 Nov, 2023
New York City
Lyft declined 3.3% to $10.30 after the digital ride hailing company reported weaker-than-expected quarterly results and guided that weak bookings are expected to persist in the current quarter.
Revenue in the third quarter increased to $1.15 billion from $1.05 billion, net loss shrank to $12.1 million from $422.2 million, and diluted loss per share dropped to 3 cents from $1.18 a year ago.
Active riders increased to 22.4 million from 20.3 million, and revenue per active rider edged slightly lower to $51.67 from $51.88 a year ago.
The rebound in travel was reflected in the gross bookings for the ride services during the quarter.
Gross bookings jumped to $3.55 billion from $3.08 billion, and the company offered bookings to range between $3.6 billion and $3.7 billion in the fourth quarter.
The company lowered its growth outlook in the current quarter to grow in "mid-single-digits" from the previous quarter, and as a percentage of revenue, the fourth quarter adjusted EBITDA margin will be "roughly in line" with the 4% achieved in the second quarter.
Disney jumped 4.3% to $88.12 after the theme park operator and media company reported better-than-expected quarterly results and added plans to expand its cost reduction plans to $7.5 billion from $5.5 billion.
Revenue in the fiscal fourth quarter ending in September increased 5% to $21.2 billion from $20.2 billion, net income advanced to $694 million from $254 million, and diluted earnings per share rose to 14 cents from 9 cents a year ago.
Revenue in the entertainment segment, which includes television and streaming businesses, increased 2% to $9.5 billion; in the experiences segment, which includes theme parks, vacation clubs, and cruises, it rose 13% to $8.2 billion; and in sports, it was flat at $3.9 billion.
In the direct-to-consumer segment, which includes Disney+, Disney+ Hotstar, and Hulu, revenue increased 12% to $5.0 billion, and operating losses shrank to $420 million from $1.4 billion a year ago.
Arm Holdings dropped 6.2% to $51.0 after the advanced semiconductor chip maker reported mixed quarterly results and offered a muted outlook for the current quarter.
Total revenues in the fiscal second quarter ending in September increased 28% to $806 million from $630 million, but the company swung to a loss of $110 million from a profit of $114 million a year ago.
Diluted loss per share was 11 cents compared to earnings of 11 cents a year ago.
Remaining performance obligations, a measure of backlog, increased by 38% to $2.4 billion from $1.8 billion a year ago.
MGM Resorts advanced 3% to $39.85 after the hotel and casino operator reported better-than-expected quarterly results and the company announced its stock repurchase plan.
Revenue in the quarter increased to $3.97 billion from $3.4 billion, primarily because of a rebound in MGM China operations after the ending of COVID-related travel restrictions.
The company swung to net income of $211.8 million from $1.06 billion, and diluted earnings per share rose to 46 cents from a loss of $1.45 a year ago.
Las Vegas strip revenue, adjusted for the sale of The Mirage, decreased to $2.1 billion from $2.2 billion a year ago.
MGM China revenue soared to $813 million from $87 million, an increase of 829% from a year ago and 10% compared to the third quarter in 2019.
During the quarter, the company repurchased 13 million shares of its common stock for $572 million, and about $806 million are still available in the current stock repurchase plan.
The company's board also approved a new stock repurchase program of $2 billion, in addition to the existing February 2023 stock buyback plan.
Advances In Tech Stocks Extend Longest Rally In Two Years
Barry Adams
09 Nov, 2023
New York City
Stocks continued to advance after bond yields extended recent declines and crude oil edged lower.
The S&P 500 index extended gains to the ninth session in a row, and the Nasdaq Composite edged higher for the tenth consecutive day after interest rate uncertainties receded.
Market participants bid up high-growth and tech stocks after the Federal Reserve held short-term rates for the second time in a row.
The move also sparked speculation that policymakers will keep rates steady at the next policy meeting in December, supporting rate stability.
Investors wasted no time in bidding up stocks, and the Nasdaq Composite and the S&P 500 index soared more than 5% in the previous and extended gains this week.
Moreover, softer nonfarm payroll data last week also supported the Fed's case for stable rates and reviewed the cumulative effect of multiple rate hikes since March 2022.
On the economic front, initial jobless claims declined to 217,000 last week, down from the two-month high of 220,000 in the week before, reported the U.S. Department of Labor on Thursday.
U.S. indexes and Yields
The S&P 500 index increased 0.04% to 4,383.51, and the Nasdaq Composite increased 0.05% to 13,651.09.
The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.54%, and 30-year Treasury bonds edged down to 4.68%.
Crude oil decreased $0.94 to $76.26 a barrel, and natural gas prices rose 2 cents to $3.07 a thermal unit.
Gold increased $4.54 to $1,954.86 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.52.
U.S. Stock Movers
Lyft declined 3.3% to $10.30 after the digital ride hailing company reported weaker-than-expected quarterly results and guided that weak bookings are expected to persist in the current quarter.
Disney jumped 4.3% to $88.12 after the theme park operator and media company reported better-than-expected quarterly results.
Disney also said it plans to expand its cost reduction plans.
Arm dropped 6.2% to $51.0 after the advanced semiconductor chip maker reported mixed quarterly results and offered a muted outlook for the current quarter.
MGM Resorts advanced 3% to $39.85 after the hotel and casino operator reported better-than-expected quarterly results and the company announced its stock repurchase plan.
Europe Movers: Airbus, Arcelor Mittal, AstraZeneca, Flutter Entertainment, Henkel, Merck, Taylor Wimpey, Wizz Air
Inga Muller
09 Nov, 2023
Frankfurt
Benchmark indexes in Europe advanced and extended weekly gains after rate uncertainties receded.
The DAX index increased 0.4% to 15,291.50, the CAC-40 index rose 0.6% to 7,079.90, and the FTSE 100 index advanced 0.3% to 7,420.84.
The yield on 10-year German bonds increased to 2.65%, French bonds traded higher to 3.24%, the UK gilts edged up to 4.27%, and Italian bonds inched lower to 4.53%.
Arcelor Mittal SA declined 1.9% to €21.0 after the steel company reported lower revenue and earnings in the third quarter.
Airbus SE decreased 3.1% to €126.40 despite the aircraft maker posting a higher underlying third quarter profit and reiterating its annual delivery target financial outlook.
Flutter Entertainment plc dropped 8.5% to 12,500.0 pence after the online betting platform said it plans to delist its stock from the Irish Stock Exchange and list in the U.S.
AstraZeneca plc gained 2.8% to 10,458.0 pence after the drug company reported better-than-expected third-quarter results.
Taylor Wimpey plc increased 2.2% to 118.19 pence after the UK-based home builder reiterated its annual outlook.
Wizz Air Holdings PLC dropped 6.4% to 1,746.0 pence despite the budget airline estimating a narrower annual loss.
Henkel AG & Co. advanced 2.4% to €69.08 after the German consumer products maker lifted its annual estimate.
Merck KGaA jumped 4.9% to €155.25 after the German pharmaceutical company reported better-than-expected third-quarter results.