Market Update
Europe Movers: 3i Group, Burberry, H&M, IWG, Renault, Serco
Bridgette Randall
29 Jun, 2023
New York City
The DAX index increased 0.1% to 15,968.48, the CAC-40 index jumped 0.8% to 7,342.16 and the FTSE 100 index decreased 0.2% to 7,482.67.
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%.
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.
Net sales in the quarter increased 6% to SEK 57,626 million and operating profit declined to SEK 4.7 million from SEK 4.9 million and currency-adjusted inventories declined 20% from a year ago.
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.
For the full-year 2023, the company lifted its operating margin range to between 7% and 8% from the previous estimate of 6% or better and automotive "operational free cash flow" equal to or more than €2.5 billion compared to the previous estimate "superior or equal to €2 billion previously."
In the first-half 2023, the company estimated operating margin of 7% plus and operational free cash flow of €1.5 billion, including dividend of €600 million from Mobilize Financial Services.
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.
The company guided revenue in the first-half to increase 13% to around £2.5 billion and underlying profit to increase at least 8% to £140 million from £130 million a year ago.
The company guided full-year revenue growth of 4% on an organic basis to £4.8 billion and underlying trading profit of £245 million compared to £237 million in the previous year.
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.
European Markets Edged Higher, New Low In Swedish Krona, Spanish Inflation Below 2%
Bridgette Randall
29 Jun, 2023
Frankfurt
European markets edged higher after hawkish comments from central banks in the previous session dented sentiment.
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.
Sweden Hiked Rates to 3.75%
The central bank of Sweden lifted its policy rate by 25 basis points to 3.75%, 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 increased 0.1% to 15,968.48, the CAC-40 index jumped 0.8% to 7,342.16 and the FTSE 100 index decreased 0.2% to 7,482.67.
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 $0.11 to $74.11 a barrel and the Dutch TTF natural gas increased €1.09 to €33.04 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.
Market Rally Paused After Central Bankers Supported Additional Rate Hikes
Barry Adams
28 Jun, 2023
New York City
Market indexes traded near flatline after central bankers discussed monetary policies and future rate path and investors reviewed holdings ahead of the end of the second quarter.
Market gains were capped after Federal Reserve Chairman Jerome Powell forcefully suggested more "restrictive" rates are on the way.
Powell and central bank heads of UK, Japan and Europe at a forum in Portugal reiterated their commitment in bringing down inflation to 2%.
Despite multiple rate hikes in the U.S., Europe and European Union, rates are still lagging inflation and not restrictive enough.
But policymakers have argued that rates have a lagging effect on the economy and the full impact of rate hikes have not been felt yet.
Policymakers are still not sure whether additional rate hikes are needed because rate hikes take time to work through the economy and additional hikes may push the U.S. economy into a recession.
Powell's tough talk on inflation got attention of traders and investors but investors are growing increasingly skeptical of the Fed's ability to bring down inflation.
Overall inflation has declined but that is driven by a sharp fall in energy prices and core inflation has remained stubbornly high because of tight labor market conditions and service sector inflation.
Fed Chairman Powell commented at today's forum that rates are likely to rise again this year, echoing comments at the time of rate decision June 14.
Powell showed urgency to lift rates and said rates are likely to go higher at next policy meetings in July and September because of "a very strong labor market" and cautioned "it's certainly possible" that the U.S. economy may see "a significant downturn."
The S&P 500 index and the Nasdaq Composite index are set to close higher in the first-half following a rally in mega-cap tech stocks riding on a wave of optimism around artificial intelligence.
The Nasdaq index is up 29% in the year so far, its best first-half performance in four decades and the S&P 500 index is up 14%.
The Nasdaq Composite index traded around flatline and jumped as much as 0.7% in early trading before beginning its descent.
Earlier in trading, the S&P 500 index advanced on the back of strength in the housing market but dipped into negative territory after Comments from Fed Chairman Powell.
Yesterday, the U.S. Census Bureau reported new home sales jumped in May and today Mortgage Bankers Association said mortgage application volume rebounded despite higher rates and elevated home prices.
Mortgage Applications Edged Higher
Mortgage loan application volume increased 3% on an adjusted basis from the previous in the week ending June 23. On an unadjusted basis, application volume declined 8%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less increased to 6.75%, an increase of 2 basis points from the previous week.
Despite the recent rebound, mortgage application for a new home declined 21% and refinance dropped 32% from a year ago.
U.S. International Goods Deficit Shrank
U.S. international goods trade deficit declined 6.1% to $91.1 billion from $97.1 billion, the U.S. Census Bureau reported Tuesday.
Exports in May declined 0.6%, reflecting 14.2% decline in food, feed and beverage exports and 3.0% fall in industrial supplies.
Imports dropped 2.7%, reflecting a decline in purchase of consumer goods by 7.3% and 5.9% fall in industrial supplies.
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 yield on 2-year Treasury notes increased to 4.75%, 10-year Treasury notes inched lower to 3.75% and 30-year Treasury bonds edged down to 3.83%.
Crude oil increased $2.04 to $69.75 a barrel and natural gas prices decreased 11 cents to $2.67 a thermal unit.
U.S. Stock Movers
Chip stocks were in focus on the worries that the U.S. may impose more exports restrictions to China including a ban on sale of AI chips.
Nvidia Corp declined 2.2% to $409.98, AMD dropped 1.6% to $108.57 and Intel Corporation fell 2.5% to $33.23.
General Mills Inc declined 4.4% to $77.16 after the food company reported weaker than expected quarterly results.
AeroVironment, Inc jumped 5.4% to $95.20 after the military drone maker reported better-than-expected quarterly results and forecasted higher-than-expected full-year revenue.
European Markets Extended 2-day Gains, Central Bankers Talk Tough
Stocks surged in Europe and investors digested inflation and consumer confidence data in the region.
Market indexes reversed the previous week's weakness despite mixed economic data in the euro zone but reacted positively to the U.S. data.
Investors also overlooked the slowest annual growth in bank lending to households in the eurozone to 2.1% to 6.87 trillion in May, the lowest growth rate since May 2016, the European Central Bank said Tuesday.
U.S. new home sales jumped in May despite elevated home prices and rising interest rates and durable goods orders accelerated to 1.7% in the month indicating a resilient economy.
Investors are looking ahead to comments from a group of central bankers later today at a forum in Sintra, Portugal and gain a broader overview of global economic developments trends.
European Central Bank President Christine Lagarde, Federal Reserve Chair Jerome Powell, Bank of Japan Governor Kazuo Ueda and Bank of England's Andrew Bailey are scheduled to participate in the forum.
German and French Confidence Indexes Diverge
Consumer confidence index declined to minus 25.4 points in July from 24.4 points in June, GfK Group reported Tuesday.
The consumer climate index declined for the first time in nine months, reflecting weakening economic and income expectations.
However, consumer confidence in France increased in June to 85 from 83 in May, the statistical agency INSEE reported Tuesday.
The confidence index improved because more people expressed optimism about improving living standards, saving expectations and personal financial situation.
Italy's Inflation Slowed In June
Italy's annual inflation rate slowed to 6.4% in June, falling sharply from 7.6% in May, the statistical office ISTAT said Tuesday.
The inflation rate declined to a 14-month low and dropped for a sixth month in a row barring a rise in April.
The persistent and large decline in energy prices contributed the decline in inflation.
Non-regulated energy inflation slowed to 8.4% from 20.3%, processed food inflation decreased to 11.9% from 13.2% but unprocessed food increased to 9.6% from 8.8% a year ago.
Spain's Retail Sales Surged In May
Spain's retail sales in May surged 6% from a year ago, the National Statistical Institute reported Tuesday.
Retail sales data in April was revise =d higher to 5.7% and sales in May increased for the sixth month in a row.
On a monthly basis, retail sales increased at a modest pace of 0.3% following a 0.9% rise in April.
Sales of non-food products increased 12.8%, and in large chain stores rose 12.2%, driven by personal equipment sales increase of 10.9% and other goods sales rise of 12.3%.
Europe Indexes & Yields
The DAX index increased 0.6% to 15,949.0, the CAC-40 index jumped 1.0% to 7,286.32 and the FTSE 100 index advanced 0.5% to 7,500.49.
The yield on 10-year German Bunds inched higher to 2.31%, French bonds traded lower to 2.84%, the UK gilts edged up to 4.32% and Italian bonds decreased to 3.96%.
The euro edged higher to $1.09, the British pound to $1.268 and the U.S. dollar fetched 89.63 Swiss cents.
Brent crude increased $1.77 to $74.02 a barrel and the Dutch TTF natural gas decreased €0.38 to €34.13 per MWh.
Europe Stock Movers
Equinor ASA increased 0.3% to €26.23 after Norwegian regulators approved the energy company's plan to develop subsea fields, Irpa and Verdande, and the production well Andvare.
UBS Group advanced 0.8% to CHF 17.70 after the company said it plans to cut more than half of Credit Suisse's staff and unveiled its plan to integrate the recently acquired bank.
Swiss Life Holding AG decreased 2.5% to CHF 521.40 after the insurance company said it is on track to achieve its financial goals in 2024.
Mulberry Group jumped 1.9% to 256.70 pence after the company reiterated its full-year outlook.
Airline stocks advanced following the strong U.S. economic data on the hopes of higher demand for air travel.
Lufthansa, EasyJet, Ryan Air, Wizz Air and Air France KLM advanced between 0.5% and 2%.
Movers: AeroVironment, General Mills, Chip Stocks
Scott Peters
28 Jun, 2023
New York City
Chip stocks were in focus on the worries that the U.S. may impose more exports restrictions to China including a ban on sale of AI chips.
Nvidia Corp declined 2.2% to $409.98, AMD dropped 1.6% to $108.57 and Intel Corporation fell 2.5% to $33.23.
General Mills Inc declined 4.4% to $77.16 after the food company reported weaker than expected quarterly results.
Net sales in the fiscal fourth quarter ending in May increased 3% to $5.03 billion and sales rose on organic basis 5%.
Net earnings in the quarter declined 25% to $615 million from $822.8 million and diluted earnings per share fell to $1.04 from $1.36 a year ago.
For the full-year revenue increased to $20 billion from $19 billion and net income edged lower to $2.6 billion from $2.7 billion and diluted earnings per share to $4.31 from $4.42 a year ago.
In the year, the company hiked dividend per share to $2.16 from $2.04 in the previous year.
The company forecasted fiscal 2024 organic sales to increase between 3% and 4% and adjusted operating profit to increase between 4% and 6% from the base of $3.5 billion reported in fiscal 2023.
The company guided adjusted diluted EPS to increase 4% to 6% in constant currency from the base of $4.30 in fiscal 2023 and free cash flow conversion is expected to be at least 95% of adjusted after-tax earnings.
AeroVironment, Inc jumped 5.4% to $95.20 after the military drone maker reported better-than-expected quarterly results and forecasted higher-than-expected full-year revenue.
Revenue in the fiscal fourth quarter increased 40% to $186.0 million from $132.6 million and the company swung to a net loss of $160.5 million from a profit of $7.3 million and diluted earnings per share was ($6.31) from 29 cents a year ago.
At the end of April, funded backlog increased to $424.1 million from $210.8 million a year ago.
For fiscal year 2024, the company expects revenue between $630 million and $660 million, net income of between $50 and $58 million.
The company estimated non-GAAP adjusted EBITDA of between $110 million and $120 million, earnings per diluted share of between $1.91 and $2.21.
Non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses and equity securities investments gains or losses, of between $2.30 and $2.60.
U.S. International Goods Deficit Shrank
Brian Turner
28 Jun, 2023
New York City
U.S. international goods trade deficit declined 6.1% to $91.1 billion from $97.1 billion, the U.S. Census Bureau reported Tuesday in its preliminary estimate.
Exports in May declined 0.6%, reflecting 14.2% decline in food, feed and beverage exports and 3.0% fall in industrial supplies.
Imports dropped 2.7%, reflecting a decline in purchase of consumer goods by 7.3% and 5.9% fall in industrial supplies.
Mortgage Applications Edged Higher for 3rd Week
Brian Turner
28 Jun, 2023
New York City
Mortgage loan application volume increased 3% on an adjusted basis from the previous in the week ending June 23.
On an unadjusted basis, application volume declined 8%, Mortgage Bankers Association's weekly survey showed.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less increased to 6.75%, an increase of 2 basis points from the previous week.
Mortgage loan application volume increased for the third week in a row and rose to the highest level since early May but remained 20% below from a year ago.
Despite the recent rebound, mortgage application for a new home declined 21% and refinance dropped 32% from a year ago.
U.S. Stocks Traded Down, International Deficit Shrank, Powell Talks Tough On Inflation
Barry Adams
28 Jun, 2023
New York City
Stocks opened lower after a surge in several sectors in the previous session as investors chase market rally.
The S&P 500 index and the Nasdaq Composite index are set to close higher in the first-half following AI-fueled tech rally.
The Nasdaq index is up 29% in the year so far, its best first-half performance in four decades and the S&P 500 index is up 14%.
Market optimism was also supported by the strength in the housing market and despite rising interest rates and elevated home prices, new home sales expanded in May.
Investors are looking ahead to comments from central bankers at a gathering in Portugal and get deeper insights in broader economic trends, health of the U.S. economy and rate path.
European Central Bank President Christine Lagarde, Federal Reserve Chair Jerome Powell, Bank of Japan Governor Kazuo Ueda and Bank of England's Andrew Bailey are scheduled to participate in the forum.
Despite multiple rate hikes in the U.S., Europe and European Union, rates are still lagging inflation and not restrictive enough.
Policymakers have argued that rates have lagging effect on the economy and full impact of rate hikes have not been felt yet and central bankers are still not sure whether additional rate hikes are needed.
Fed Chairman Powell said rates may be revised higher at next policy meetings because of "a very strong labor market" and cautioned "it's certainly possible" that the U.S. economy may see "a significant downturn."
Mortgage Applications Edged Higher
Mortgage loan application volume increased 3% on an adjusted basis from the previous in the week ending June 23. On an unadjusted basis, application volume declined 8%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less increased to 6.75%, an increase of 2 basis points from the previous week.
Despite the recent rebound, mortgage application for a new home declined 21% and refinance dropped 32% from a year ago.
U.S. International Goods Deficit Shrank
U.S. international goods trade deficit declined 6.1% to $91.1 billion from $97.1 billion, the U.S. Census Bureau reported Tuesday.
Exports in May declined 0.6%, reflecting 14.2% decline in food, feed and beverage exports and 3.0% fall in industrial supplies.
Imports dropped 2.7%, reflecting a decline in purchase of consumer goods by 7.3% and 5.9% fall in industrial supplies.
U.S. Indexes & Yields
The S&P 500 index increased 1.1% to 4,380.21 and the Nasdaq Composite rose 1.7% to 13,559.48.
The yield on 2-year Treasury notes increased to 4.75%, 10-year Treasury notes inched lower to 3.75% and 30-year Treasury bonds edged down to 3.83%.
Crude oil increased $0.94 to $67.85 a barrel and natural gas prices increased 4 cents to $2.79 a thermal unit.
U.S. Stock Movers
Chip stocks were in focus on the worries that the U.S. may impose more exports restrictions to China including a ban on sale of AI chips.
Nvidia Corp declined 2.2% to $409.98, AMD dropped 1.6% to $108.57 and Intel Corporation fell 2.5% to $33.23.
General Mills Inc declined 4.4% to $77.16 after the food company reported weaker than expected quarterly results.
AeroVironment, Inc jumped 5.4% to $95.20 after the military drone maker reported better-than-expected quarterly results and forecasted higher-than-expected full-year revenue.
Europe Movers: Airlines Stocks, Equinor, Mulberry Group, Swiss Life, UBS
Bridgette Randall
28 Jun, 2023
Frankfurt
European markets jumped after investors ignored mixed economic data and focused on the U.S. economic data indicating a resilient economy.
The DAX index increased 0.8% to 15,973.21, the CAC-40 index jumped 0.9% to 7,277.08 and the FTSE 100 index advanced 0.7% to 7,510.69.
The yield on 10-year German Bunds inched higher to 2.31%, French bonds traded lower to 2.84%, the UK gilts edged up to 4.32% and Italian bonds decreased to 3.96%.
Equinor ASA increased 0.3% to €26.23 after Norwegian regulators approved the energy company's plan to develop subsea fields, Irpa and Verdande, and the production well Andvare.
UBS Group advanced 0.8% to CHF 17.70 after the company said it plans to cut more than half of Credit Suisse's staff and unveiled its plan to integrate the recently acquired bank.
Swiss Life Holding AG decreased 2.5% to CHF 521.40 after the insurance company said it is on track to achieve its financial goals in 2024.
Mulberry Group jumped 1.9% to 256.70 pence after the company reiterated its full-year outlook.
Group revenue in the year ending in April increased 4% to £159.1 million and statutory profit before tax decreased to £13.2 million from £21.3 million a year ago.
Digital sales increased to 30% in the year from 20% in 2020 but edged slightly lower from 31% in 2022.
The luxury products retailer said revenue is up 6% in the first 12 weeks of new financial year and the company has full-control of its Japan unit as of June 27.
Airline stocks advanced following the strong U.S. economic data on the hopes of higher demand for air travel.
Lufthansa, EasyJet, Ryan Air, Wizz Air and Air France KLM advanced between 0.5% and 2%.
Italian Inflation Weakened, Spanish Retail Sales Surged, Eurozone Bank Lending Growth Slowed
Bridgette Randall
28 Jun, 2023
Frankfurt
Stocks surged in Europe and investors digested inflation and consumer confidence data in the region.
Market indexes reversed the previous week's weakness despite mixed economic data in the euro zone but reacted positively to the U.S. data.
Investors also overlooked the slowest annual growth in bank lending to households in the eurozone to 2.1% to 6.87 trillion in May, the lowest growth rate since May 2016, the European Central Bank said Tuesday.
U.S. new home sales jumped in May despite elevated home prices and rising interest rates and durable goods orders accelerated to 1.7% in the month indicating a resilient economy.
Investors are looking ahead to comments from a group of central bankers later today at a forum in Sintra, Portugal and gain a broader overview of global economic developments trends.
European Central Bank President Christine Lagarde, Federal Reserve Chair Jerome Powell, Bank of Japan Governor Kazuo Ueda and Bank of England's Andrew Bailey are scheduled to participate in the forum.
German and French Confidence Indexes Diverge
Consumer confidence index declined to minus 25.4 points in July from 24.4 points in June, GfK Group reported Tuesday.
The consumer climate index declined for the first time in nine months, reflecting weakening economic and income expectations.
However, consumer confidence in France increased in June to 85 from 83 in May, the statistical agency INSEE reported Tuesday.
The confidence index improved because more people expressed optimism about improving living standards, saving expectations and personal financial situation.
Italy's Inflation Slowed In June
Italy's annual inflation rate slowed to 6.4% in June, falling sharply from 7.6% in May, the statistical office ISTAT said Tuesday.
The inflation rate declined to a 14-month low and dropped for a sixth month in a row barring a rise in April.
The persistent and large decline in energy prices contributed the decline in inflation.
Non-regulated energy inflation slowed to 8.4% from 20.3%, processed food inflation decreased to 11.9% from 13.2% but unprocessed food increased to 9.6% from 8.8% a year ago.
Spain's Retail Sales Surged In May
Spain's retail sales in May surged 6% from a year ago, the National Statistical Institute reported Tuesday.
Retail sales data in April was revise =d higher to 5.7% and sales in May increased for the sixth month in a row.
On a monthly basis, retail sales increased at a modest pace of 0.3% following a 0.9% rise in April.
Sales of non-food products increased 12.8%, and in large chain stores rose 12.2%, driven by personal equipment sales increase of 10.9% and other goods sales rise of 12.3%.
Europe Indexes & Yields
The DAX index increased 0.8% to 15,973.21, the CAC-40 index jumped 0.9% to 7,277.08 and the FTSE 100 index advanced 0.7% to 7,510.69.
The yield on 10-year German Bunds inched higher to 2.31%, French bonds traded lower to 2.84%, the UK gilts edged up to 4.32% and Italian bonds decreased to 3.96%.
The euro edged higher to $1.09, the British pound to $1.268 and the U.S. dollar fetched 89.63 Swiss cents.
Brent crude decreased $0.10 to $72.12 a barrel and the Dutch TTF natural gas increased €0.56 to €35.07 per MWh.
Europe Stock Movers
Equinor ASA increased 0.3% to €26.23 after Norwegian regulators approved the energy company's plan to develop subsea fields, Irpa and Verdande, and the production well Andvare.
UBS Group advanced 0.8% to CHF 17.70 after the company said it plans to cut more than half of Credit Suisse's staff and unveiled its plan to integrate the recently acquired bank.
Swiss Life Holding AG decreased 2.5% to CHF 521.40 after the insurance company said it is on track to achieve its financial goals in 2024.
Mulberry Group jumped 1.9% to 256.70 pence after the company reiterated its full-year outlook.
Airline stocks advanced following the strong U.S. economic data on the hopes of higher demand for air travel.
Lufthansa, EasyJet, Ryan Air, Wizz Air and Air France KLM advanced between 0.5% and 2%.
Tech Stocks In Favor Again After Two Economic Reports Lift Sentiment
Barry Adams
27 Jun, 2023
New York City
Stocks turned higher after falling sharply on Monday and investors digested the latest economic data.
Market indexes advanced after durable goods orders rose unexpectedly and capital goods orders, an indicator of business spending, also expanded suggesting a resilient economy.
New home sales also advanced despite elevated mortgage rates and home prices, but buyers stepped up to acquire new homes in all regions of the United States.
Tech stocks lifted market indexes after Meta Platforms extended this year's gains on the expectations of higher advertising revenues. Walgreens turned lower after the company lowered its full-year outlook.
In overseas trading, the European Central Bank president Christine Lagarde reiterated the central bank's commitment in lowering inflation to 2% and continuing aggressive rate hikes.
But crude oil turned lower on the demand growth worries after weak economic rebound in China following the ending of Covid-lockdowns.
The Chinese premier said second-half economic growth is estimated to be faster than the expansion in the first-half but failed to provide specific measures.
Durable Goods Orders Accelerated In May
Durable goods orders rose more than expected and new home sales also advanced.
Durable goods orders expanded in May 1.7%, faster than 1.2% in April, the Commerce Department reported Tuesday.
Excluding transportation equipment orders, durable goods orders rose 0.6% in May after dropping by a revised 0.6% in April.
Excluding defense orders, which declined 14.7%, durable goods orders rose 3%.
New Home Sales Jumped In May
New home sales jumped 12.2% to 763,000 on a seasonally adjusted basis, U.S. Census Bureau reported Tuesday.
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 estimate was 636,000.
The median sales price of new houses sold in May was $416,300 and the average sales price was $487,300 compared to $450,700 and $521,500 respectively a year ago.
Home sales in the Northeast increased 17.6% to 40,000, in the West rose 17.4% to 175,000, in the Midwest increased 4.1% to 77,000 and in the South jumped 11.3% to 471,000.
U.S. Indexes & Yields
The S&P 500 index increased 1.1% to 4,380.21 and the Nasdaq Composite rose 1.7% to 13,559.48.
The yield on 2-year Treasury notes increased to 4.69%, 10-year Treasury notes inched lower to 3.71% and 30-year Treasury bonds edged down to 3.82%.
Crude oil decreased $1.94 to $67.40 a barrel and natural gas prices decreased 3 cents to $2.75 a thermal unit.
U.S. Stock Movers
Lordstown Motors Corp plunged 33.8% to $1.79 after the U.S. electric truck maker filed for bankruptcy protection.
Separately, the company also sued Taiwan-based Foxconn for a financing deal that fell apart.
Walgreens Boots Alliance Inc dropped 8.9% to $28.97 after the pharmacy retail chain reported lower-than-expected fiscal third quarter earnings.
The company also lowered its full-year earnings outlook.
Home builders continued it extend gains after new home sales rose more than expected in May.
PulteGroup, Inc advanced 2.7% to $78.06, Toll Brothers added 2.5% to $77.80 and NVR Inc gained 2% to $6,270.11.
Energy stocks were in focus after crude extended this year's loss.
Exxon Mobil decreased 0.4% to $103.05, Chevron Corp declined 0.1% to $153.99 and Hess Corp fell 0.8% to $133.99.
Tech stocks were under pressure on the persistent worries of rate hike at the next meeting.
Meta Platforms increased 2% to $284.07, Alphabet Inc declined 0.6% to $116.95 and Microsoft Inc increased 0.3% to $330.85.
Google's parent Alphabet was under pressure after UBS and Bernstein downgraded the stock on the worries of rising competition from AI-powered chat bots.
European Markets In Choppy Trading Closed Higher
European markets erased morning gains after rate hike worries resurfaced but managed to rebound following the advance in New York.
Major averages in Paris and Frankfurt turned lower after European Central Bank President Christine Lagarde reiterated the central bank's commitment in lowering inflation to 2%.
The European Central Bank will continue to increase rates at the next meeting in July, barring any material geopolitical event, Lagarde reiterated her stance.
President Lagarde said at the ECB Forum that inflation is too high and rates are likely to go higher and it is too early to predict peak rates.
Market sentiment sapped after hawkish comments from Lagarde but earlier in trading indexes advanced on the hopes of more targeted stimulus announcement from Chinese leaders.
Resource stocks advanced before erasing most of the session's gains and auto sector stocks turned lower but financial services and banks traded higher.
Europe Indexes & Yields
The DAX index increased 0.2% to 15,846.86, the CAC-40 index added 0.4% to 7,215.58 and the FTSE 100 index gained 0.1% to 7,461.46.
The yield on 10-year German Bunds inched lower to 2.29%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.31% and Italian bonds decreased to 3.94%.
The euro edged higher to $1.09, the British pound to $1.273 and the U.S. dollar fetched 89.42 Swiss cents.
Brent crude decreased $2.13 to $72.08 a barrel and the Dutch TTF natural gas increased €2.53 to €34.53 per MWh.
Europe Stock Movers
Resource stocks were in focus on hopes that China will offer more targeted stimulus measures to revive faltering economic recovery soon.
However, fears of higher rates also negatively impacted the metals and mining sector stocks.
Antofagasta Plc declined 0.4% to 1,464.50 pence and Glencore plc dropped 0.2% to 436.55 pence.
Wise Plc soared 633.20 pence after the company reported a surge in profit in the financial year ending in March.
Prosus NV increased 5.5% to €66.49 and Naspers Limited jumped 8.3% to €31.60 after the company received an approval from South African regulators to eliminate cross holding structure.
Sanofi SA declined 0.4% to €53.50 despite the drugmaker reporting positive results from its phase 2B study of Amlitelimab in adults with moderate-to-severe Atopic Dermatitis, a condition that causes dry, itchy and inflamed skin.
JD Sports Fashion Plc declined 5.6% t0 138.40 pence after the specialty retailer reported a slowdown in sales in May.
Porsche Automobil Holding SE declined 1.4% to €53.50 and the company signed a 5-year revolving credit for €2.5 billion to improve its liquidity position.