Market Update
Global Markets Rally In Frist Half, Nasdaq Delivers Best Performance In Four Decades
Scott Peters
02 Jul, 2023
New York City
World markets rallied in the first half, surprising most experts and market watchers after inflation receded and rate hike worries subsided.
Despite the easing of inflation in the U.S. and Europe, prices are still rising at a rapid clip and faster than 2% target set by central banks around the world.
Central bankers used a gathering in Portugal to remind investors that policymakers are not done with lifting rates, and more restrictive rates are on the way.
The chorus of heads of central banks of the U.S., European Union, UK and Japan reiterated inflation in the Western economies is still too high and rates have a long way to go before central banks will consider pausing.
Market rallied on the final day of the week, month, quarter and the first half.
U.S. Economic Data Show Positive Trends
Key economic evets of the week included GDP, new home sales and durable goods orders and a key measure of inflation in the U.S.
The Price Consumption Expenditure index, a measure of inflation, increased 3.8% in May from a year ago and rose 0.1% from the previous month.
Core PCE index, which excludes food and energy, increased 0.3% as expected and rose 4.6% from a year ago.
The overall inflation and core inflation measures slowed from the previous month and from a year ago, extending the trends seen in the last five months.
In the third estimate, real U.S. economic growth was revised sharply higher to 2.0% from 1.3% in the previous estimate. In the fourth quarter of 2022, real GDP increased 2.6%.
Higher consumer and public spending and exports contributed to the upward revision.
U.S. international goods trade deficit in May declined 6.1% to $91.1 billion from $97.1 billion.
Durable goods orders rose more than expected and new home sales also advanced. Durable goods orders expanded in May 1.7%, faster than upwardly revised 1.2% in April.
New home sales jumped 12.2% to 763,000 units on a seasonally adjusted basis.
The annual rate jumped to a high not seen since February of last year and increased 20% from a year ago when the annual rate was estimates at 636,000 homes.
European Markets Rallied After Inflation Eased
Consumer price inflation in the eurozone eased to 5.5% in June from 6.1% in May and the consumer inflation rate dropped for the third month in a row and fell to the level last seen in January 2022 or 17 months ago.
On a monthly basis, consumer price inflation and core inflation were 0.3% in June.
Investors cheered the steady decline in inflation but the level remained above the European Central Bank's target rate of 2%.
Moreover, core inflation, which excludes volatile food and energy, increased to 5.4% from 5.3% and stayed near the recent peak of 5.7%.
In the currency union, inflation in Germany accelerated to 6.8% from 6.3% but slowed in Austria, the Netherlands, Portugal, Italy and France.
Inflation in Spain, Luxembourg and Belgium dropped below the ECB's target level of 2%.
Spain's retail sales in May surged 6% from a year ago from the revised 5.7% in April and sales in May increased for the sixth month in a row.
Record Low Unemployment In Europe
The seasonally adjusted unemployment rate in the Euro Area held at 6.5% in May and matched previous month's rate but fell from 6.7% in the month a year ago.
The record low unemployment rate highlighted tight labor market conditions and the number of unemployed declined by 57,000 from the previous month to 11 million, the lowest level since record keeping began in 1995.
Compared to a year ago, unemployment decreased by 257,000 in the European Union and 227,000 in the Euro Area.
Jobless rate among young workers, those below the age of 25, held at 13.9% or 2.226 million compared to previous month.
Swedish Krona Dropped to New Low Against Euro
The central bank of Sweden lifted its policy rate by 25 basis points to 3.75%, seventh rate increase in a row.
The central bank raised rates to the level last seen in 2008 and left its inflation outlook to 8.9% in the current year but revised higher to 4.3% from the previous estimate of 4% in 2024.
Swedish krona faced fresh selloff after the central bank lifted rates at a slower pace.
The krona dropped to 10.8 against the dollar and plunged to a record low 11.8 against the euro after weaker-than-expected rate increase and risk aversion kept the currency under pressure.
Sentiment for the currency weakened on the fears that the central bank has little flexibility in lifting rates on the worries of a deepening rout in the property sector, after higher rates plunged property prices by 20% from the peak in March 2022.
China's Manufacturing Contracted Again, Record Youth Unemployment
In Asia, China’s factory activities remained in contraction for third month in a row, according to the official data.
The official composite PMI, which includes both manufacturing and services activity, fell to 52.3 in June, from 52.9 in May.
China’s economic recovery has also been hit by rising youth unemployment as well as disappointing retail sales and industrial production.
Youth unemployment in China rose to a new high of 20.8% in June despite the overall jobless rate remained unchanged at 5.2% in May. Youth jobless rate is expected to rise in coming months as about 11 million college graduates start looking for jobs.
Marriages or wedding registrations in China dropped to 6.8 million in 2022, the lowest level since 1979 after peaking above 11.5 million in 2013.
Japan Inflation Stays Elevated
Turning our attention to Japan, retail sales rose 5.7% in May, an increase above 5% for the fifth month in a row.
Japan’s industrial production declined 1.6% in May and fell for the first time in four months but despite the decline most economists are anticipating production to rebound in the quarter.
Tokyo consumer inflation rose 3.1% in June and accelerated for the second time in three months, raising expectations that the Bank of Japan will revise higher its inflation forecast.
Japanese Yen Level Raises Fears of Intervention
The yen dropped below 145 against the dollar for the first time since November on Friday, inching closer to a level where Japan intervened for the first time since 1998.
Rising Service Exports Improve India's Current Account Deficit
India’s current account deficit declined in the March quarter to $1.5 billion, a sharp fall from the previous quarter after service exports surged and import fell on weaker prices of commodities.
In the financial year 2023 ending in March, the current account deficit increased to $67 billion or 2.0% of GDP from $38.7 billion or 1.2% of GDP in the previous year, reflecting a sharp jump in international trade deficit to $265.3 billion from $189.5 billion.
Global Markets Rallied 2%, Reversing Previous Week's Loss
Stocks market rallied in the U.S., Europe, Japan and India and closed the first half on a high note.
Despite the Federal Reserve, the European Central Bank and the Bank of England strongly reiterating the need to raise rates, markets continued to power ahead.
The S&P 500 index advanced over 5% in June and jumped over 7% in the second quarter and soared 16.5% in the first half.
The Nasdaq Composite increased over 5% in June, advanced over 12% in the second quarter and jumped nearly 33% in the first half.
European markets closed higher on Friday and extended gains in the second quarter and in the first half.
At the end of the first half, the DAX index advanced 14.8%, the CAC-40 index gained 12.2% but the FTSE 100 index fell 0.3%.
Economic Calendar Week Ahead
In the week ahead, the U.S. is set to release non-farm payrolls data for June.
In Europe, France is schedule to release its international trade data, Germany will report foreign trade, factory orders and industrial production for May.
In Asia, India and China are expected to release manufacturing surveys and Japan is set to report Tankan large manufacturers index for the second quarter.
Indonesia and Philippines are set to announce inflation indexes.
Movers: Apple, Constellation Brand, Dominion, Nike, Savers Value Village
Scott Peters
30 Jun, 2023
New York City
Stocks advanced on the final day of the week, quarter and first half.
The S&P 500 index and the Nasdaq Composite index are set to extend weekly gains of near 1% as investors digest the latest news on inflation.
The S&P 500 index increased 0.7% to 4,469.28 and the Nasdaq Composite edged higher 1.1% to 13,709.16.
Apple Inc jumped 1.2% to $191.90 on the optimism that a slow but steady rebound in the Chinese economy and new products in the U.S. will drive sales higher in the remainder of the year.
The stock also got a boost after Citi revised higher its price target on the stock to $240.
Nike Inc declined 2.3% to $110.06 after the company reported weaker-than-expected quarterly results.
Revenue in the fiscal fourth quarter ending in May increased 5% to $12.8 billion, including direct online sales rose 15% to $5.5 billion.
Revenue of NIKE brand sales rose 5% to $12.2 billion and Converse sales fell 1% to $586 million.
Net income declined 28% to $1.0 billion from $1.4 billion and diluted earnings per share dropped to 66 cents from 90 cents a year ago.
In the fourth quarter, the company returned $1.9 billion to shareholders, including $524 million in dividends and repurchased 11.5 million shares for $1.4 billion as a part of the four-year share repurchase program approved in June 2022.
The company declared a dividend of 34 cents a common share.
Savers Value Village edged lower by 2.6% on the second day of trading after surging 27% in the previous session after the for-profit thrift priced its initial public offering at $18 a share and closed at $22.90.
Constellation Brands, Inc declined 2% to $241.90 despite the owner of Corona and Pacifico reporting better-than-expected revenue and earnings in its latest quarter.
Revenue in the fiscal first quarter ending in May increased to $2.5 billion from $2.3 billion and net income declined to $139 million from $399.3 million and diluted earnings per share dropped to 74 cents from $2.06 a year ago.
The board of directors declared a quarterly cash dividend of 89 cents to shareholders on record August 10 payable on August 24.
The company guided fiscal year 2024 earnings per share between $9.35 and $9.65.
Dominion Energy declined 2.5% to $50.55 after the company lowered its operating earnings outlook for the second quarter because of milder-than-usual weather and unplanned outages at the Millstone Nuclear Power Station in Connecticut.
The company lowered its second quarter operating earnings per share forecast to between 44 cents and 50 cents from the previous range between 58 cents and 68 cents .
PCE Index Increase Slowed to 0.1% In May
Brian Turner
30 Jun, 2023
New York City
The Price Consumption Expenditure index, a measure of inflation, increased 3.8% in May from a year ago and rose 0.1% from the previous month, the Bureau of Economic Analysis reported Friday.
Core PCE index, which excludes food and energy, increased 0.3% as expected and rose 4.6% from a year ago.
The overall inflation and core inflation measures slowed from the previous month and from a year ago, extending the trends seen in the last five months.
Investors are torn between a soft landing scenario, where rising interest rates pushes the economy in a shallow recession, and the Federal Reserve, which is struggling to contain inflation to 2% despite ten rate hikes over the last fifteen months.
Personal income increased 0.4% from the previous month to $91.2 billion in May, according to estimates released today by the Bureau of Economic Analysis.
Disposable personal income, personal income less personal current taxes, increased 0.4% to $86.7 billion and personal consumption expenditures or PCE increased 0.1% to $18.9 billion.
Personal outlays, the sum of PCE, personal interest payments, and personal current transfer payments, increased $22.7 billion in May.
Personal saving was $910.3 billion in May and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.6%.
Benign Inflation Measure Powered Another Day Of Market Rally
Barry Adams
30 Jun, 2023
New York City
Stocks advanced on the final day of the week, quarter and first half.
The S&P 500 index and the Nasdaq Composite index are set to extend weekly gains of near 1% as investors digest the latest news on inflation.
Investors debated the rate path and health of the U.S. economy after a measure of inflation cooled in May.
The Price Consumption Expenditure index, a measure of inflation, increased 3.8% in May from a year ago and rose 0.1% from the previous month, the Bureau of Economic Analysis reported Friday.
Core PCE index, which excludes food and energy, increased 0.3% as expected and rose 4.6% from a year ago.
The overall inflation and core inflation measures slowed from the previous month and from a year ago, extending the trends seen in the last five months.
Investors are torn between a soft landing scenario, where rising interest rates pushes the economy in a shallow recession, and the Federal Reserve, which is struggling to contain inflation to 2% despite ten rate hikes over the last fifteen months.
U.S. Indexes & Yields
The S&P 500 index increased 0.7% to 4,469.28 and the Nasdaq Composite edged higher 1.1% to 13,709.16.
The S&P 500 index advanced 5.2% in June and jumped 7% in the second quarter, third quarterly gain in a row and jumped 14.5% in the first half.
The Nasdaq Composite increased 5.1% in June, advanced 11.2% in the second quarter and soared nearly 30% in the first half of 2023.
The yield on 2-year Treasury notes increased to 4.91%, 10-year Treasury notes inched higher to 3.86% and 30-year Treasury bonds edged up to 3.91%.
Crude oil decreased $0.04 to $69.90 a barrel and natural gas prices decreased 3 cents to $2.67 a thermal unit.
U.S. Stock Movers
Apple Inc jumped 1.2% to $191.90 on the optimism that slow but a steady rebound in the Chinese economy and new products in the U.S. will drive sales higher in the remainder of the year.
The stock also got a boost after Citi revised higher its price target on the stock to $240.
Nike Inc declined 2.3% to $110.06 after the company reported weaker-than-expected quarterly results.
Savers Value Village edged lower by 2.6% on the second day of trading after surging 27% in the previous session after the for-profit thrift priced its initial public offering at $18 a share and closed at $22.90.
Constellation Brands, Inc declined 2% to $241.90 despite the owner of Corona and Pacifico reporting better-than-expected revenue and earnings in its latest quarter.
Dominion Energy declined 2.5% to $50.55 after the company lowered its operating earnings outlook for the second quarter because of milder-than-usual weather and unplanned outages at the Millstone Nuclear Power Station in Connecticut.
Europe Movers: Adidas, LEG Immobilien, Puma, Resource Stocks, Sodexo
Bridgette Randall
30 Jun, 2023
Frankfurt
The DAX index increased 1.0% to 16,109.52, the CAC-40 index jumped 1.0% to 7,386.74 and the FTSE 100 index increased 0.7% to 7,524.62.
The yield on 10-year German Bunds inched higher to 2.44%, French bonds traded lower to 2.98%, the UK gilts edged up to 4.44% and Italian bonds increased to 4.12%.
Resource and mining stocks were among the leading gainers after crude oil and copper prices edged higher.
Antofagasta, Glencore and Anglo American advanced between 1% and 2%.
BP plc, Shell Plc, Repsol, Eni SpA and TotalEnergies SE increased between 1% and 3%.
Barratt Developments PLC increased 1% to 416.70 pence after the UK-based homebuilder agreed to sell 604 homes to a unit of Lloyds Banking Group, Citra Living Properties, for £164.8 million.
LEG Immobilien SE jumped 4.7% to €52.82 after the company revised higher its 2023 outlook.
Adidas AG increased 2.2% to €177.26 and Puma SE advanced 3.5% to €55.08.
Sodexo SA declined 2.6% to €99.16 despite the French in-flight catering company lifting higher its benefits and reward services outlook for the second time this year.
Revenue in the fiscal third quarter increased 9.1% to €6 billion, driven by 12.1% revenue growth in North America to €2.6 billion, 4.4% increase in Europe to €2.0 billion and 16.3% in the rest of the world to €1.0 billion.
Indexes in Germany, France Extended First Half Gains After Inflation Eased and Jobless Rate Held at Record Low
Bridgette Randall
30 Jun, 2023
Frankfurt
European markets staged a rally after encouraging news on inflation and the labor market whetted appetite for stocks on the final day of the first half.
Market indexes in Frankfurt, Paris and London jumped as much as 1% after rate hike worries eased following the decline in inflation and record low unemployment.
At the end of first half, the DAX index is up 14.5%, the CAC-40 index has advanced 12.2% and the FTSE 100 index is down 0.4%.
Eurozone Inflation Eased to 5.5%
Consumer price inflation in the eurozone eased to 5.5% in June from 6.1% in May, the statistical agency of the European Union reported Friday.
The consumer inflation rate dropped for the third month in a row and fell to the level last seen in January 2022.
On a monthly basis, consumer price inflation and core inflation was 0.3% in June.
Investors cheered the steady decline in inflation but the level remained above the European Central Bank's target rate of 2%.
Moreover, core inflation, which excluded volatile food and energy, prices increased to 5.4% from 5.3% and stayed near the recent peak of 5.7%.
Energy prices declined at a faster pace of 5.6% compared to 1.8% in the previous month but food, beverages and tobacco inflation weakened to 11.7% from 12.5% and non-energy industrial goods inflation eased to 5.5% from 5.8%.
On the other hand, service inflation accelerated to 5.4% from 5.0% in the previous month.
In the currency union, inflation in Germany accelerated to 6.8% from 6.3% but slowed in Austria, the Netherlands, Portugal, Italy and France.
Inflation in Spain, Luxembourg and Belgium dropped below the ECB's target level of 2%.
Eurozone Jobless Stays at Record Low 6.5%
The seasonally adjusted unemployment rate held at 6.5% in May and matched previous month's rate but fell from 6.7% in the month a year ago, Eurostat reported Friday.
The record low jobless rate highlighted tight labor market conditions and the number of unemployed declined by 57,000 from the previous month to 11.014 million, the lowest level since record keeping began in 1995.
Compared to a year ago, unemployment decreased by 257,000 in the European Union and 227,000 in the Euro Area.
Jobless rate among young workers, those below the age of 25, held at 13.9% or 2,226 million compared to previous month.
Youth unemployment increased 46,000 from a year ago and advanced 11,000 from April.
Youth unemployment in the currency union was the highest in Spain with 28.4%, followed by Greece with 24% and Sweden with 20.5%.
In the four largest economies of the Euro Area, Germany recorded the lowest jobless rate of 2.9%, while Spain led with 12.7% followed by 7.6% in Italy and 7% in France.
Europe Indexes & Yields
The DAX index increased 1.0% to 16,109.52, the CAC-40 index jumped 1.0% to 7,386.74 and the FTSE 100 index increased 0.7% to 7,524.62.
The yield on 10-year German Bunds inched higher to 2.44%, French bonds traded lower to 2.98%, the UK gilts edged up to 4.44% and Italian bonds increased to 4.12%.
The euro edged higher to $1.08, the British pound to $1.265 and the U.S. dollar fetched 90.14 Swiss cents
Brent crude increased $0.31 to $74.82 a barrel and the Dutch TTF natural gas increased €0.12 to €35.20 per MWh.
Europe Stock Movers
Resource and mining stocks were among the leading gainers after crude oil and copper prices edged higher.
Antofagasta, Glencore and Anglo American advanced between 1% and 2%.
BP plc, Shell Plc, Repsol, Eni SpA and TotalEnergies SE increased between 1% and 3%.
Barratt Developments PLC increased 1% to 416.70 pence after the UK-based homebuilder agreed to sell 604 homes to a unit of Lloyds Banking Group, Citra Living Properties, for £164.8 million.
LEG Immobilien SE jumped 4.7% to €52.82 after the company revised higher its 2023 outlook.
Adidas AG increased 2.2% to €177.26 and Puma SE advanced 3.5% to €55.08.
Sodexo SA declined 2.6% to €99.16 despite the French in-flight catering company lifting higher its benefits and reward services outlook for the second time this year.
Revenue in the fiscal third quarter increased 9.1% to €6 billion, driven by 12.1% revenue growth in North America to €2.6 billion, 4.4% increase in Europe to €2.0 billion and 16.3% in the rest of the world to €1.0 billion.
Bullish Undertone Drives Market Averages Higher in U.S. and Europe
Barry Adams
29 Jun, 2023
New York City
Major averages traded higher driven by gains in tech and bank stocks and treasury yields inched up after first quarter GDP was revised higher.
U.S. economic growth was revised sharply higher in the first quarter to 2.0% from 1.3% in the previous estimate, indicating a resilient economy despite multiple rate hikes in the last fifteen months.
Bank stocks advanced after 23 largest banks passed the Federal Reserve's annual stress test and JP Morgan Chase and Wells Fargo are set to announce their revised plans for stock buybacks and dividends later in the day.
In other economic news, initial claims of weekly jobless benefits for the week ending on June 24 declined 26,000 to 239,000.
The decline in jobless claims indicated the ongoing tight market conditions, despite multiple rate hikes by the Federal Reserve.
The four-week moving average of claims increased 1,500 to 257,500.
Tech stocks continued to trend higher as markets approached the end of the second quarter and first half and despite the talks of looming recession market indexes are set to report double digit gains in the year so-far.
The Nasdaq Composite index surged in the last eight weeks after chip stocks rode the wave of optimism surrounding artificial intelligence and the index is set to rise 4% in June and 31% in the first half, its best performance since its inception in 1971, surpassing its previous record gain of 25.2% gain in 2019.
First Quarter U.S. GDP Revised Higher
In the third estimate, real U.S. economic growth was revised sharply higher to 2.0% from 1.3% in the previous estimate, the U.S. Census Bureau reported Thursday.
In the fourth quarter of 2022, real GDP increased 2.6%.
Higher consumer and public spending and exports contributed to the upward revision.
Consumer spending growth rose to 4.2% from 3.8% in the previous estimate and exports increased 7.8% and imports advanced at a slower pace of 2%, resulting in higher net contribution of 0.58 percentage points.
Nonresidential fixed investment growth was 0.6%, smaller than previously estimated 1.4%
The price index for gross domestic purchases increased 3.8% in the first quarter, the same as the previous estimate.
The personal consumption expenditures (PCE) price index increased 4.1%, revised down 0.1 percentage point.
The PCE price index excluding food and energy prices increased 4.9%, a downward revision of 0.1 percentage point.
After the release of the GDP data, U.S. Treasury yields advanced.
U.S. Indexes & Yields
The S&P 500 index decreased 0.1% to 4,373.44 and the Nasdaq Composite fell 0.2% to 13,579.28.
The S&P 500 index advanced 4.7% in June and jumped 6.5% in the second quarter, third quarterly gain in a row.
The yield on 2-year Treasury notes increased to 4.86%, 10-year Treasury notes inched higher to 3.79% and 30-year Treasury bonds edged up to 3.87%.
Crude oil decreased $0.14 to $69.70 a barrel and natural gas prices decreased 1 cent to $2.68 a thermal unit.
U.S. Stock Movers
Micron Technology Inc decreased 1.8% to $65.94 after the company reported quarterly results.
Bank stocks were on the upswing after 23 largest banks passed the annual stress test conducted by the Federal Reserve.
JP Morgan Chase increased 1.9% to $141.20, Wells Fargo advanced 2.9% to $41.83 and Bank of America Corp jumped 2.4% to $28.75.
Joby Aviation Inc soared 28% to $11.22 after the electric vehicle aviation company confirmed a $100 million investment from an existing investor SK Telecom.
On Wednesday, Job's stock jumped more than 38% after the company received permission to test its electric vehicle landing and takeoff.
Occidental Petroleum increased 1.6% to $58.37 after Berkshire Hathaway acquired 2.1 million more shares in the company between June 26 and 28, according to a regulatory filing.
After the purchase, Berkshire Hathaway's stake in the company rose to 25%.
Overstock.com Inc increased 13.5% to $29.15 after the company said it completed the purchase of the Bed Bath & Beyond brand out of bankruptcy.
European Markets Cautious After Central Bankers Talk Rate Hikes
European markets recovered in today's session after hawkish comments from central banks dented sentiment in the previous session.
Investors reviewed a slew of economic data from Sweden, Spain, UK and Eurozone.
The eurozone economic sentiment indicator declined to 95.3 in June from 96.4 in May, the European Commission reported.
The sentiment indicator declined to the lowest level since November and fell for the second month in a row on persistent high inflation and rising interest rates.
The sentiment index deteriorated the most in Germany, the Netherlands, Italy and Spain but recovered in France.
Market indexes in Frankfurt, Paris and London gained in a tentative rebound after heads of central banks of European Union, US and UK reiterated their commitment to reducing inflation to 2%.
Hawkish talks from central banks put investors on alert that the aggressive rate hike campaign is going to continue and interest rates will rise in the US, UK and Europe at next policy meetings over two months.
Swedish krona faced fresh selloff after the central bank lifted rates at a slower pace.
The krona dropped to 10.8 against the dollar and plunged to a record low 11.8 against the euro after weaker-than-expected rate increase and risk aversion kept the currency under pressure.
Sentiment for the currency weakened on the fears that the central bank has little flexibility in lifting rates on the worries of a deepening rout in the property sector after higher rates plunged property prices by 20% from the peak in March 2022.
UK home purchase approvals, which is an indicator of future mortgage borrowing, rose to 50,524 in May from 49,000 in April, the Bank of England said in a report today.
Despite the slight rebound in approvals, the latest data showed weak housing market because of elevated home prices and higher
Sweden Hiked Rates to 3.75%
The central bank of Sweden lifted its policy rate by 25 basis points to 3.75%, a seventh rate increase in a row.
Sveriges Riksbank raised rates to the level last seen in 2008 and left its inflation outlook to 8.9% in the current year but revised higher to 4.3% from the previous estimate of 4% in 2024.
The central bank also lowered its estimate of economic contraction to 0.5% from the previous estimate of 0.7% and forecasted flat economic growth in 2024.
The central bank estimated policy rate at 3.75% in the third quarter from the prior estimate of 3.6% and increase to 4.05% from 3.6% in the second quarter of 2024 and keep rates at that level till the second quarter of 2025 before declining to 3.65% from the previous estimate of 3.35% in the second quarter of 2026.
Investors reviewed the latest inflation data from Spain and Germany.
Spain's Overall Inflation Slowest In Two Years
Spain's consumer price inflation declined to 1.9% in June, the National Statistical Institute reported Thursday.
The preliminary estimate of inflation declined below the 2% target set by the European Central Bank for the first time before March 2021.
On a monthly basis, consumer prices increased 0.6% in June after staying flat in May.
Core inflation, which excludes fresh food and energy, eased slightly to 5.9% in June from 6.1% in May but persistent inflation in services and non-energy products kept prices rising at elevated pace.
Europe Indexes & Yields
The DAX index decreased 0.01% to 15,946.72, the CAC-40 index jumped 0.4% to 7,312.73 and the FTSE 100 index decreased 0.4% to 7,471.69.
The yield on 10-year German Bunds inched higher to 2.34%, French bonds traded lower to 2.87%, the UK gilts edged up to 4.33% and Italian bonds increased to 4.02%.
The euro edged higher to $1.09, the British pound to $1.263 and the U.S. dollar fetched 89.61 Swiss cents
Brent crude increased $0.23 to $74.26 a barrel and the Dutch TTF natural gas increased €1.06 to €35.10 per MWh.
Europe Stock Movers
H & M Hennes & Mauritz AB jumped 16% to SEK 182.60 after the Swedish apparel retailer reported stronger-than-expected results in the quarter ending in May.
Renault SA jumped 6.3% to €38.73 after the French automaker lifted its annual operating margin outlook following the success of recently launched new vehicles.
IWG Plc declined 4.9% to 133.20 pence after the office space provider offered a cautious outlook for the remainder of the year.
Burberry Group Plc decreased 1.9% to 2,097.0 pence after the stock of the luxury apparel and accessories retailer traded ex-dividend.
Serco Group Plc increased 11.3% to 158 pence after the security outsourcing services provider lifted its full-year outlook.
3i Group Plc increased 1.5% to 1,910 pence after Action, the company invested in, reported an increase in sales in the year so-far.
Movers: Bank Stocks, Joby Aviation, Micron Tech, Occidental Petroleum, Overstock.com
Scott Peters
29 Jun, 2023
New York City
The S&P 500 index decreased 0.1% to 4,373.44 and the Nasdaq Composite fell 0.2% to 13,579.28.
The S&P 500 index advanced 4.7% in June and jumped 6.5% in the second quarter, third quarterly gain in a row.
Micron Technology Inc decreased 1.8% to $65.94 after the company reported quarterly results.
Revenue in the fiscal third quarter ending on June 1 dropped to $3.7 billion from $8.7 billion and the company swung to a net loss of $1.9 billion from a profit of $2.6 billion and diluted earnings per share was ($1.73) compared to $2.34 a year ago.
The company forecasted revenue in the fiscal fourth quarter of $3.9 billion with a band of $200 million and gross margin of (12.5%) with a band of 2.5% and diluted loss per share of $1.34 with a band of 7 cents.
The company's board of directors declared a quarterly cash dividend of 11.5 cents a share payable on July 25 to shareholders on record on July 10.
Bank stocks were on the upswing after 23 largest banks passed the annual stress test conducted by the Federal Reserve.
JP Morgan Chase increased 1.9% to $141.20, Wells Fargo advanced 2.9% to $41.83 and Bank of America Corp jumped 2.4% to $28.75.
Joby Aviation Inc soared 28% to $11.22 after the electric vehicle aviation company confirmed a $100 million investment from an existing investor SK Telecom.
On Wednesday, Job's stock jumped more than 38% after the company received permission to test its electric vehicle landing and takeoff.
Occidental Petroleum increased 1.6% to $58.37 after Berkshire Hathaway acquired 2.1 million more shares in the company between June 26 and 28, according to a regulatory filing.
After the purchase, Berkshire Hathaway's stake in the company rose to 25%.
Overstock.com Inc increased 13.5% to $29.15 after the company said it completed the purchase of the Bed Bath & Beyond brand out of bankruptcy.
First Quarter U.S. GDP Revised Higher to 2.0%
Brian Turner
29 Jun, 2023
New York City
In the third estimate, real U.S. economic growth was revised sharply higher to 2.0% from 1.3% in the previous estimate, the U.S. Census Bureau reported Thursday.
In the fourth quarter of 2022, real GDP increased 2.6%.
Higher consumer and public spending and exports contributed to the upward revision.
Consumer spending growth rose to 4.2% from 3.8% in the previous estimate and exports increased 7.8% and imports advanced at a slower pace of 2%, resulting in higher net contribution of 0.58 percentage points.
Nonresidential fixed investment growth was 0.6%, smaller than previously estimated 1.4%
The price index for gross domestic purchases increased 3.8% in the first quarter, the same as the previous estimate.
The personal consumption expenditures (PCE) price index increased 4.1%, revised down 0.1 percentage point.
The PCE price index excluding food and energy prices increased 4.9%, a downward revision of 0.1 percentage point.
After the release of the GDP data, U.S. Treasury yields advanced.
Major Averages In Holding Pattern After Q1 GDP Revised Higher and Annual Bank Stress Test Results
Barry Adams
29 Jun, 2023
New York City
Major averages traded higher driven by gains in tech and bank stocks and investors reassessed the rate path after first quarter GDP was revised higher.
Banks advanced after 23 largest banks passed the Federal Reserve's annual stress test.
JP Morgan Chase and Wells Fargo are set to announce their revised plans for stock buybacks and dividends later in the day.
Tech stocks continued to advance as markets approached the end of the second quarter and first half.
Micron reported better-than-expected quarterly results, providing another boost to chipmakers in pre-market trading but stock eased off after regular trading hours commenced.
In other economic news, initial claims of weekly jobless benefits for the week ending on June 24 declined 26,000 to 239,000.
The decline in jobless claims indicated the ongoing tight market conditions, despite multiple rate hikes by the Federal Reserve.
The four-week moving average of claims increased 1,500 to 257,500.
First Quarter U.S. GDP Revised Higher
In the third estimate, real U.S. economic growth was revised sharply higher to 2.0% from 1.3% in the previous estimate, the U.S. Census Bureau reported Thursday.
In the fourth quarter of 2022, real GDP increased 2.6%.
Higher consumer and public spending and exports contributed to the upward revision.
Consumer spending growth rose to 4.2% from 3.8% in the previous estimate and exports increased 7.8% and imports advanced at a slower pace of 2%, resulting in higher net contribution of 0.58 percentage points.
Nonresidential fixed investment growth was 0.6%, smaller than previously estimated 1.4%
The price index for gross domestic purchases increased 3.8% in the first quarter, the same as the previous estimate.
The personal consumption expenditures (PCE) price index increased 4.1%, revised down 0.1 percentage point.
The PCE price index excluding food and energy prices increased 4.9%, a downward revision of 0.1 percentage point.
After the release of the GDP data, U.S. Treasury yields advanced.
U.S. Indexes & Yields
The S&P 500 index decreased 0.1% to 4,373.44 and the Nasdaq Composite fell 0.2% to 13,579.28.
The S&P 500 index advanced 4.7% in June and jumped 6.5% in the second quarter, third quarterly gain in a row.
The yield on 2-year Treasury notes increased to 4.86%, 10-year Treasury notes inched higher to 3.79% and 30-year Treasury bonds edged up to 3.87%.
Crude oil decreased $0.37 to $69.19 a barrel and natural gas prices decreased 3 cents to $2.63 a thermal unit.
U.S. Stock Movers
Micron Technology Inc decreased 1.8% to $65.94 after the company reported quarterly results.
Bank stocks were on the upswing after 23 largest banks passed the annual stress test conducted by the Federal Reserve.
JP Morgan Chase increased 1.9% to $141.20, Wells Fargo advanced 2.9% to $41.83 and Bank of America Corp jumped 2.4% to $28.75.
Joby Aviation Inc soared 28% to $11.22 after the electric vehicle aviation company confirmed a $100 million investment from an existing investor SK Telecom.
On Wednesday, Job's stock jumped more than 38% after the company received permission to test its electric vehicle landing and takeoff.
Occidental Petroleum increased 1.6% to $58.37 after Berkshire Hathaway acquired 2.1 million more shares in the company between June 26 and 28, according to a regulatory filing.
After the purchase, Berkshire Hathaway's stake in the company rose to 25%.
Overstock.com Inc increased 13.5% to $29.15 after the company said it completed the purchase of the Bed Bath & Beyond brand out of bankruptcy.