Market Update
Europe Movers: JD Sports, Porsche Automobil, Prosus, Naspers, Wise
Bridgette Randall
27 Jun, 2023
New York City
European markets erased morning gains after rate hike worries resurfaced.
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%.
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.
The DAX index increased 0.03% to 15,818.32, the CAC-40 index declined 0.05% to 7,180.93 and the FTSE 100 index dropped 0.3% to 7,433.84.
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%.
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 2023 ending in March.
Revenue in the year jumped 51% to £846.1 million from £559.9 million and profit before-tax soared 234% to £146.5 million from £43.9 million a year ago.
Active customer base increased 34% to 10 million and transaction volume increased 37% to £104.5 billion.
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.
European Markets Nosedived After Hawkish Comments from ECB President
Bridgette Randall
27 Jun, 2023
Frankfurt
European markets erased morning gains after rate hike worries resurfaced.
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 0.03% to 15,818.32, the CAC-40 index declined 0.05% to 7,180.93 and the FTSE 100 index dropped 0.3% to 7,433.84.
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 $1.78 to $72.38 a barrel and the Dutch TTF natural gas increased €0.65 to €32.63 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.
U.S. Market Averages Struggle, Home Builders Extend Yearly Gains, Global Indexes Slide
Barry Adams
26 Jun, 2023
New York City
Stocks on Wall Street looked down after major indexes declined 1% in the previous week.
The S&P 500 index and the Nasdaq Composite index turned lower as investors assessed the implications of higher rates staying longer and looming economic slowdown.
The tech stocks driven eight-week rally halted last week after Fed Chairman Powell reminded investors that the central bank is not done with raising rates.
The Federal Reserve is expected to raise rates at least by 25 basis points two times before the end of 2023, according to the latest projections provided by the central bank while announcing its rate decision on June 14.
Crude Oil and Natgas Volatile After Russian Mutiny Aborted
Over the weekend, crude oil traded volatile and natural gas prices shot up more than 10% in European trading after Russia's mercenary forces ended its rebellion.
Yevgeny Prigozhin led Wagner Group gave up on its plan to march to Moscow, but not before challenging Russian president Vladimir Putin's 23-year hold on power.
Prigozhin agreed to exile in Belarus, according to Kremlin controlled news services Pravda.
Crude oil jumped 2% before its retreat and the Russian ruble plunged to a 13-month low of 87 against the U.S. dollar before recovering to 84.40..
U.S. Indexes & Yields
The S&P 500 index decreased 0.3% to 43,36.92 and the Nasdaq Composite declined 0.9% to 13,378.61.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.79%.
Crude oil increased $0.64 to $69.80 a barrel and natural gas prices increased 3 cents to $2.76 a thermal unit.
U.S. Stock Movers
Lucid Group jumped 9.4% to $5.47 after the company signed an agreement with the UK-based Aston Martin to supply power train and battery systems.
Aston also agreed to sell 3.7% stake in the company to Lucid for $232 million.
Carnival Corp plunged 9.7% to $14.20 after release of the company's quarterly results.
Revenue in the quarter ending in May increased to $4.9 billion from $2.4 billion and net loss shrank to $407 million from $1.8 billion and diluted loss per share dropped to 32 cents from $1.61 a year ago.
For the full year 2023, the company forecasted adjusted EBITDA of $4.10 billion to $4.25 billion, above March guidance's range and with a midpoint increase of $175 million.
Cruise stocks have been on upswing since April on the expectations of a rebound in reservations after travel demand recovered following the Covid-19 pandemic.
PacWest Bancorp jumped 7% to $7.71 after the company sold a $3.5 billion specialty finance portfolio of senior and secured maturities to Ares Management.
Home builder continued to climb for the second week in a row and extend 2023 gains.
NVR Inc gained 0.6% to $6,196.51 and extended this year's gain to 35% and PulteGroup, Inc advanced 0.3% to $76.47 and extended this year's gains to 65.5%.
Palo Alto Networks Inc increased 0.6% to $245.50 and extended this year's gains to 77%.
European Markets Trade In tight Range, Natural Gas Turns Volatile
European markets struggled on Monday after investors reviewed energy markets and bond yields held steady following the events over the weekend.
The Russian paramilitary Wagner group gave up their threat to advance to Mosco and avoided a potentially bloody confrontation with the Russian military.
Despite the ending of mutiny by the Russian rebel group, worries persisted about the security of the nuclear arsenal.
The Wagner group's threat to march to Mosco unnerved energy markets and natural gas prices shot up as much as 10% in Amsterdam trading.
Crude oil prices soared as much as 2% before retreating to the level last seen on Friday.
The Russian ruble dropped to as low as 87 against the U.S. dollar and extended this year's loss to 17%.
German Business Confidence Drops to 6-month Low
The German IFO Business Climate Index declined to 88.5 in June from the downwardly revised 91.5 in May, the IFO Institute reported Monday.
The business confidence index dropped to the lowest level since December on persistent worries about economic uncertainties and manufacturing reported falling new orders after rates around the world continued to advance.
Spain's Wholesale Inflation Declined for 3rd Month In a Row
Spain's producer price index declined 6.9% in May following the fall of 4.5% in April, the National Statistics Institute reported Monday.
The measure of wholesale prices declined for the third month in a row after energy prices plunged 24.9% and intermediate goods decreased 4% but prices for consumer goods rose 10.5%.
On a monthly basis, the producer price index declined 1.6% following 1.9% fall in April.
Europe Indexes & Yields
The DAX index decreased 0.2% to 15,813.06, the CAC-40 index gained 0.3% to 7,1814.35 and the FTSE 100 index dropped 0.1% to 7,453.38.
The yield on 10-year German Bunds inched lower to 2.31%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.30% 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 89.32 Swiss cents.
The ruble recovered to 84.40 after falling sharply over the weekend after the paramilitary Wagner group threatened to march to Moscow, challenging President Putin's 23-year rule.
Brent crude increased $0.49 to $74.34 a barrel and the Dutch TTF natural gas increased €0.53 to €33.98 per MWh.
Europe Stock Movers
Bank stocks were hit the hardest in today's session after political turmoil heightened energy supply worries and stoked fears of renewed inflation.
Commerzbank, Deutsche Bank, Lloyds Banking Credit Agricole and BNP Paribas declined between 2% and 3%.
Aston Martin Lagonda Global Holdings Plc soared 9.4% to 358 pence after the luxury automaker struck a deal with the U.S.-based Lucid Group to manufacture "high performance" electric vehicles.
Associated British Foods plc decreased 0.9% to 1,934.50 pence despite the company lifting its outlook for the fiscal year.
Euronext NV declined 0.6% to €63.05 after the stock exchange group agreed to sell its 11.1% stake in LCH SA to LCH Group Holdings Limited for €111 million.
SCOR SE increased 0.8% to €24.95 after the company appointed Fabrice Bregier as chairman of the company's board.
SBB Group soared 11.6% to SKK 3.67 after the embattled Swedish property group said it is actively looking to sell its remaining 51% stake in its education unit.
China Stocks Extend Losses
Chinese stocks extended losses for the seventh day in a row after trading resumed following an extended weekend to celebrate Dragon Boat Festival.
The CSI 300 index closed down 1.4% and extended decline to 9.3% from a high in January on the ongoing economic worries, demographic challenges and high level of debt across all levels of government.
Amedisys Accepts $3.3 Billion Cash Offer from Optum
Scott Peters
26 Jun, 2023
New York City
Amedisys agreed to merge with a subsidiary of UnitedHealth Group, upending its plan to just six weeks ago.
The home-healthcare, hospice and high-acuity care provider accepted an all-cash $101 a share or $3.29 billion offer from Optum.
The merger agreement is conditional based on regulatory approval and shareholder approval and customary closing conditions.
On May 3, Amedisys and Option Care Health agreed to combine in an all-stock deal that valued Amedisys at $3.6 billion or $97.38 a share.
On June 5, Optum made an unsolicited offer to acquire Amedisys for $100 a share.
Amedisys board of directors accepted a slightly lower but all-cash deal.
Compensation committee approved one-time equity award grants of time-based restricted stock units that vest ratably over three years.
Amedisys CEO Richard Ashworth will receive $2.5 million grant date value, and CFO Scott Ginn will receive $1.5 million grant date value, effective from the date of merger in exchange for not agreeing to leave the company for six months after the completion of the merger.
Movers: Carnival Corp, Lucid Group, Pacwest Bancorp, Energy Stocks
Scott Peters
26 Jun, 2023
New York City
The S&P 500 index futures decreased 0.01% and the Nasdaq Composite declined 0.03%.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.79%.
Crude oil increased $0.22 to $69.38 a barrel and natural gas prices increased 1 cent to $2.73 a thermal unit.
Lucid Group jumped 9.4% to $5.47 after the company signed an agreement with the UK-based Aston Martin to supply power train and battery systems.
Aston also agreed to sell 3.7% stake in the company to Lucid for $232 million.
Carnival Corp increased 1.9% to $16.10 ahead of the release of the company's quarterly results.
Revenue in the quarter ending in May increased to $4.9 billion from $2.4 billion and net loss shrank to $407 million from $1.8 billion and diluted loss per share dropped to 32 cents from $1.61 a year ago.
For the full year 2023, the company forecasted adjusted EBITDA of $4.10 billion to $4.25 billion, above March guidance's range and with a midpoint increase of $175 million.
Cruise stocks have been on upswing since April on the expectations of a rebound in reservations after travel demand recovered following the Covid-19 pandemic.
PacWest Bancorp jumped 7% to $7.71 after the company sold a $3.5 billion specialty finance portfolio of senior and secured maturities to Ares Management.
U.S. and World Markets Remain Under Pressure After 2% Selloff Previous Week
Barry Adams
26 Jun, 2023
New York City
Stocks on Wall Street looked down after major indexes declined 1% in the previous week.
The S&P 500 index and the Nasdaq Composite index turned lower in early trading as investors assessed the implications of higher rates staying longer and looming economic slowdown.
The tech stocks driven eight-week rally halted last week after Fed Chairman Powell reminded investors that the central bank is not done with raising rates.
The Federal Reserve is expected to raise rates at least by 25 basis points two times before the end of 2023, according to the latest projections provided by the central bank while announcing its rate decision on June 14.
Over the weekend, crude oil traded volatile and natural gas prices shot up more than 10% in European trading after Russia's mercenary forces ended its rebellion.
Yevgeny Prigozhin led Wagner Group gave up on its plan to march to Moscow, but not before challenging Russian president Vladimir Putin's 23-year hold on power.
Prigozhin agreed to exile in Belarus, according to Kremlin controlled news services Pravda.
Crude oil jumped 2% before its retreat and the Russian ruble plunged to a 13-month low of 87 against the U.S. dollar before recovering to 84.40..
In Europe, market indexes struggled to advance after dropping 2% in the previous week when central banks of the UK, Norway, Turkey and Switzerland lifted key lending rates.
The 50-basis point rate hike in the UK also fueled worries that as many as 800,000 mortgage borrowers may face higher monthly payments at the time of repricing loans in the second half of 2023, further dampening economic activities.
Most mortgages in the UK are either 2-year or 5-year terms, unlike 15-year or 30-year mortgages in the U.S.
Chinese stocks extended losses for the seventh day in a row after trading resumed following an extended weekend to celebrate Dragon Boat Festival.
The CSI 300 index closed down 1.4% and extended decline to 9.3% from a high in January on the ongoing economic worries, demographic challenges and high level of debt across all levels of government.
U.S. Indexes & Yields
The S&P 500 index futures decreased 0.01% and the Nasdaq Composite declined 0.03%.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.79%.
Crude oil increased $0.22 to $69.38 a barrel and natural gas prices increased 1 cent to $2.73 a thermal unit.
U.S. Stock Movers
Lucid Group jumped 9.4% to $5.47 after the company signed an agreement with the UK-based Aston Martin to supply power train and battery systems.
Aston also agreed to sell 3.7% stake in the company to Lucid for $232 million.
Carnival Corp increased 1.9% to $16.10 ahead of the release of the company's quarterly results.
Cruise stocks have been on upswing since April on the expectations of a rebound in reservations after travel demand recovered following the Covid-19 pandemic.
PacWest Bancorp jumped 7% to $7.71 after the company sold a $3.5 billion specialty finance portfolio of senior and secured maturities to Ares Management.
Europe Movers: Associated British Foods, Aston Martin, Euronext, SBB, SCOR
Bridgette Randall
26 Jun, 2023
New York City
The DAX index decreased 0.3% to 15,782.42, the CAC-40 index declined 0.02% to 7,162.62 and the FTSE 100 index dropped 0.3% to 7,437.15.
The yield on 10-year German Bunds inched lower to 2.31%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.30% and Italian bonds decreased to 3.94%.
Bank stocks were hit the hardest in today's session after political turmoil heightened energy supply worries and stoked fears of renewed inflation.
Commerzbank, Deutsche Bank, Lloyds Banking Credit Agricole and BNP Paribas declined between 2% and 3%.
Aston Martin Lagonda Global Holdings Plc soared 9.4% to 358 pence after the luxury automaker struck a deal with the U.S.-based Lucid Group to manufacture "high performance" electric vehicles.
Associated British Foods plc decreased 0.9% to 1,934.50 pence despite the company lifting its outlook for the fiscal year and said adjusted operating profit for the full year to be "moderately ahead of last year."
Group revenue in the third quarter ending on May 27 increased 16% from a year ago to £4,7 billion, driven by 13% in retail segment to £2.0 billion and 18% in food segment to £2.7 billion.
The company also completed £319 million of £500 million its stock repurchase program.
Euronext NV declined 0.6% to €63.05 after the stock exchange group agreed to sell its 11.1% stake in LCH SA to LCH Group Holdings Limited for €111 million.
SCOR SE increased 0.8% to €24.95 after the company appointed Fabrice Bregier as chairman of the company's board.
SBB Group soared 11.6% to SKK 3.67 after the embattled Swedish property group said it is actively looking to sell its remaining 51% stake in its education unit.
German Business Confidence Weakened, Spain's Producer Prices Fall, Ruble Volatile
Barry Adams
26 Jun, 2023
New York City
European markets struggled on Monday after investors reviewed energy markets and bond yields held steady following the events over the weekend.
The Russian paramilitary Wagner group gave up their threat to advance to Mosco and avoided a potentially bloody confrontation with the Russian military.
Despite the ending of mutiny by the Russian rebel group, worries persisted about the security of the nuclear arsenal.
The Wagner group's threat to march to Mosco unnerved energy markets and natural gas prices shot up as much as 10% in Amsterdam trading.
Crude oil prices soared as much as 2% before retreating to the level last seen on Friday.
The Russian ruble dropped to as low as 87 against the U.S. dollar and extended this year's loss to 17%.
German Business Confidence Drops to 6-month Low
The German IFO Business Climate Index declined to 88.5 in June from the downwardly revised 91.5 in May, the IFO Institute reported Monday.
The business confidence index dropped to the lowest level since December on persistent worries about economic uncertainties and manufacturing reported falling new orders after rates around the world continued to advance.
Spain's Wholesale Inflation Declined for 3rd Month In a Row
Spain's producer price index declined 6.9% in May following the fall of 4.5% in April, the National Statistics Institute reported Monday.
The measure of wholesale prices declined for the third month in a row after energy prices plunged 24.9% and intermediate goods decreased 4% but prices for consumer goods rose 10.5%.
On a monthly basis, the producer price index declined 1.6% following 1.9% fall in April.
Europe Indexes & Yields
The DAX index decreased 0.3% to 15,782.42, the CAC-40 index declined 0.02% to 7,162.62 and the FTSE 100 index dropped 0.3% to 7,437.15.
The yield on 10-year German Bunds inched lower to 2.31%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.30% 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 89.32 Swiss cents.
The ruble recovered to 84.40 after falling sharply over the weekend after the paramilitary Wagner group threatened to march to Moscow, challenging President Putin's 23-year rule.
Brent crude increased $0.48 to $74.35 a barrel and the Dutch TTF natural gas increased €1.64 to €34.15 per MWh.
Europe Stock Movers
Bank stocks were hit the hardest in today's session after political turmoil heightened energy supply worries and stoked fears of renewed inflation.
Commerzbank, Deutsche Bank, Lloyds Banking Credit Agricole and BNP Paribas declined between 2% and 3%.
Aston Martin Lagonda Global Holdings Plc soared 9.4% to 358 pence after the luxury automaker struck a deal with the U.S.-based Lucid Group to manufacture "high performance" electric vehicles.
Associated British Foods plc decreased 0.9% to 1,934.50 pence despite the company lifting its outlook for the fiscal year.
Euronext NV declined 0.6% to €63.05 after the stock exchange group agreed to sell its 11.1% stake in LCH SA to LCH Group Holdings Limited for €111 million.
SCOR SE increased 0.8% to €24.95 after the company appointed Fabrice Bregier as chairman of the company's board.
SBB Group soared 11.6% to SKK 3.67 after the embattled Swedish property group said it is actively looking to sell its remaining 51% stake in its education unit.
Movers: Accenture, CarMax, Starbucks
Scott Peters
23 Jun, 2023
New York City
CarMax, Inc increased 9% to $85.37 after the used car retailer reported better-than-expected quarterly results.
Revenue in the fiscal first quarter 2024 ending in May decreased 17.4% to $7.7 billion after retail unit sales fell 9.6% and same store unit sales dropped 11.4% and wholesale unit eased 13.6% from a year ago.
Net earnings declined to $228.3 million from $252.2 million and diluted earnings per share fell to $1.44 from $1.56 a year ago.
Average selling retail price of a used car decreased 5.5% to $27,258 from $28,844 and wholesale price fell 17.9% to $9,024 from $10,996 a year ago.
During the first quarter, the company did not repurchase its common stock and still had $2.45 billion available in its stock repurchase plan.
Starbucks Corporation declined 2.4% to $98.42 after a union representing workers said about 150 stores are ready to strike beginning Friday after the company disallowed Pride month decor in its stores.
Accenture Plc declined 1.9% to 301.38 a day after the information technology services provider reported better-than-expected sales and earnings but trimmed its annual revenue growth outlook slightly.
Revenue in the fiscal third quarter ending in May increased 3% to $16.6 billion and 5% in local currency.
New bookings in the quarter totaled $17.2 billion, including consulting bookings of $8.9 billion and managed services bookings of $8.3 billion.
Net income increased to $2.0 billion from $1.78 billion and diluted earnings per share rose to $3.15 from $2.79 a year ago.
The company forecasted fiscal fourth quarter revenue between $15.75 billion and $16.35 billion, an increase between 2% and 6% in local currency.
The company trimmed its full-year revenue growth estimate to a new range between 8% and 9%, from the previous range between 8% and 10%.
The company increased its quarterly dividend by 15% to $1.12 a share to holders of stock on July 13 payable on August 15.
Accenture repurchased 2.8 million of its own shares for $789 million during the fiscal third quarter and about $3.5 billion are still available for its stock repurchase at the end of May.
Global Markets Stall and Wall Street Rally Halts After Rate Hike Worries Resurface
Barry Adams
23 Jun, 2023
New York City
Stocks extended weekly decline after tech rebound in Thursday's session fizzled.
The S&P 500 index and the Nasdaq Composite index extended weekly losses on the rate hikes worries following the comments from Federal Reserve Chairman Jerome Powell.
Powell stressed inflation is still too high and the Fed is not done raising rates in his comments to the Senate committee on finance and banking.
Inflation has halved since reaching a peak of 9% last August but much of the easing is driven by the sharp fall in energy prices and normalizing of supply chains.
The Federal Reserve has limited impact on goods prices and supply chain driven inflation, but the central bank has a greater influence on service sector inflation.
Service sector inflation has shown no sign of easing and Powell suggested that the full impact of multiple rate hikes has not been fully felt.
Market indexes also traded lower on the worries that the Fed is likely to raise rates at least one or two times this year and keep rates higher longer to cool down inflation,
But in order to cool inflation to 2%, the Fed may be forced to dip the economy into a recession.
European markets are set to close the week down with a loss of 2% and tech heavy Hang Seng index in Hong Kong plunged more than 3% this week.
The Nikkei index in Tokyo dropped 2.3% after Consumer price inflation in May declined to 3.2% from a three-month high of 3.5% in April.
U.S. Indexes & Yields
The S&P 500 index increased 0.8% to 4,347.88 and the Nasdaq Composite declined 1.1% to 13,479.05.
The yield on 2-year Treasury notes increased to 4.71%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.80%.
Crude oil decreased $1.37 to $68.13 a barrel and natural gas prices decreased 5 cents to $2.54 a thermal unit.
U.S. Stock Movers
CarMax, Inc increased 9% to $85.37 after the used car retailer reported better-than-expected quarterly results.
Starbucks Corporation declined 2.4% to $98.42 after a union representing workers said about 150 stores are ready to strike beginning Friday after the company disallowed Pride month decor in its stores.
Accenture Plc declined 1.9% to 301.38 a day after the information technology services provider reported better-than-expected sales and earnings but trimmed its annual revenue growth outlook slightly.
Europe Movers: Capgemini, Eni, GSK, Siemens Energy, ThyssenKrupp, UK Homebuilders
Bridgette Randall
23 Jun, 2023
New York City
U.K. home builders fell on the worries that rising mortgage rates will impact demand for new homes in the second-half of the year when more than 800,000 mortgages are set to repriced at sharply higher interest rates.
Taylor Wimpey plc decreased 2.4% to 110.30 pence, Persimmons dropped 3.5% to 1,064.50 pence and Barratt Developments Plc fell 2.5% to
Siemens Energy AG plunged 34% to €15.38 after the company withdrew its annual earnings outlook citing a significant rise in wind turbine component failures built by Siemens Gamesa.
GSK plc increased 5.6% to 1,435.40 pence after the company said it settled a lawsuit related to its discontinued drug Zantac that was alleged to contain chemicals that increased risk of cancer.
The confidential settlement avoids the case going to a trial next month in California and the drugmaker said it spent £45 million in legal fees last year.
Eni SpA declined 0.4% to €12.84 after the Italian energy company agreed to acquire private-equity owned Neptune Energy for $4.9 billion.
The Eni-Neptune deal is believed to be the largest deal in the European energy sector in about a decade.
Capgemini SE declined 0.1% to €169.75 after the French IT service company agreed to acquire Japan-based cloud computing services provider BTC Corp for undisclosed terms.
ThyssenKrupp AG increased 0.2% to €6.86 on reports that its Nucera hydrogen division is looking to list the company in a public offering and raise as much as €566 million.
European Markets Extend Weekly Losses to 2%
Bridgette Randall
23 Jun, 2023
Frankfurt
European markets extended weekly losses and investors reacted to mixed economic data in the region.
Eurozone bond yields edged lower and the euro and the pound weakened after preliminary business activity growth index showed a decline in May.
The Purchasing Managers' Composite Index in June eased to 50.3 from 52.8 in May.
At the eod of the week, benchmark indexes in Frankfurt declined 2.5%, Paris fell 2.2% and in London dropped 2.1%
Inflation and interest rate jitters drove market sentiment all week and investors sold stocks after the central bank in the UK, Norway, Switzerland and Turkey raised rates.
The Turkish Lira declined to a new low of 25.10 against the U.S. dollar after the central bank in a monetary policy U-turn lifted interest rates by 650 basis points to 15%.
The sharp reversal in monetary approach lifted rates to the level last seen in January 2021 but fell short of investors expectations of higher rates of 21%.
UK Retail Sales Advanced In May
UK retail sales unexpectedly rose in May after warm weather and bank holidays boosted demand for summer clothes and outdoor-living related goods.
Retail sales in May increased 0.3% from the previous month but slower than 0.5% in April, the Office for National Statistics reported Friday.
On an annual basis, sales declined 2.1% from a year ago after falling at a 3.4% rate in April.
Europe Indexes & Yields
The DAX index decreased 0.6% to 15,890.66, the CAC-40 index declined 0.3% to 7,183.85 and the FTSE 100 index dropped 0.2% to 7,490.85.
The yield on 10-year German Bunds inched lower to 2.37%, French bonds traded lower to 2.91%, the UK gilts edged down to 4.27% and Italian bonds decreased to 4.01%.
The euro edged lower to $1.08, the British pound to $1.271 and the U.S. dollar fetched 89.91 Swiss cents.
Brent crude decreased $0.55 to $73.85 a barrel and the Dutch TTF natural gas increased €1.70 to €32.40 per MWh.
Europe Stock Movers
U.K. home builders fell on the worries that rising mortgage rates will impact demand for new homes in the second-half of the year when more than 800,000 mortgages are set to repriced at sharply higher interest rates.
Taylor Wimpey plc decreased 2.4% to 110.30 pence, Persimmons dropped 3.5% to 1,064.50 pence and Barratt Developments Plc fell 2.5% to
Siemens Energy AG plunged 34% to €15.38 after the company withdrew its annual earnings outlook citing a significant rise in wind turbine component failures built by Siemens Gamesa.
GSK plc increased 5.6% to 1,435.40 pence after the company said it settled a lawsuit related to its discontinued drug Zantac that was alleged to contain chemicals that increased risk of cancer.
The confidential settlement avoids the case going to a trial next month in California and the drugmaker said it spent £45 million in legal fees last year.
Eni SpA declined 0.4% to €12.84 after the Italian energy company agreed to acquire private-equity owned Neptune Energy for $4.9 billion.
The Eni-Neptune deal is believed to be the largest deal in the European energy sector in about a decade.
Capgemini SE declined 0.1% to €169.75 after the French IT service company agreed to acquire Japan-based cloud computing services provider BTC Corp for undisclosed terms.
ThyssenKrupp AG increased 0.2% to €6.86 on reports that its Nucera hydrogen division is looking to list the company in a public offering and raise as much as €566 million.
Crude Oil Plunged 4% but Stocks Look Beyond Hawkish Comments from Powell
Barry Adams
22 Jun, 2023
New York City
Stocks turned around from the morning losses and tech stocks led the gainers after falling for four days in a row.
Market averages traded in a tight range and investors remained divided about the future rate path.
Major averages turned lower in the morning a day after Federal Reserve Chairman Powell stressed the need to continue the central bank's monetary tightening after last week's rate pause.
Chairman Powell reiterated his views on the economy and said fighting inflation is a long battle and rates have to be raised to cool inflation to 2% target rate.
The central bank's chief highlighted stubborn inflation for the second day in his Semiannual Monetary Policy Report to the U.S. Senate Banking Committee on Thursday.
Crude oil plunged 4% and dropped to a new 18-month after Powell's hawkish comments raised the prospects of higher rates for longer, adding more pressures on demand weakness.
Tech stocks rebounded in the afternoon after investors snapped up stocks that suffered losses last week.
Tesla Inc, Microsoft Corp and Alphabet Inc jumped more than 1% and Amazon.com, Inc jumped 3%.
In other economic news, initial claims of jobless benefits for the week ending on June 17 were unchanged at 264,000 and continuing claims declined to 1.759 million from 1.772 at the end of the previous week.
Existing home sales in the U.S. increased 2.3% from the previous month to 4.3 million annual rate in May, the National Association of Realtors reported Thursday.
Higher mortgage rated and elevated home prices have kept demand weak and fewer homes for sales also negatively impacted overall sales volume.
The median existing home price for all home types declined 3.1% from a year ago to $396,100.
U.S. Indexes & Yields
The S&P 500 index increased 0.3% to 4,375.82 and the Nasdaq Composite advanced 0.6% to 13,583.55.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.71% and 30-year Treasury bonds edged down to 3.83%.
Crude oil decreased $3.36 to $69.17 a barrel and natural gas prices increased 1 cent to $2.60 a thermal unit.
U.S. Stock Movers
Darden Restaurants, Inc declined 2.7% to $161.80 after the parent of Olive Garden and Longhorn Steakhouse reported better-than-expected quarterly results but forecasted mixed annual outlook.
Overstock.com Inc increased 7% to $22.66 after the company acquired digital assets and intellectual property of Bed Bath & Beyond at the floor price of $21.5 million in an auction.
Spirit AeroSystems Holdings Inc dropped 9.2% to $26.95 after the company stopped production at its Kansas plant following workers voting to strike from Saturday.
Spirit is one of the key parts suppliers to aviation company Boeing.
Boeing Co declined 2.7% to $206.25 following the strike news Spirit AeroSystems.
Rate Hikes In Europe Put Investors On Alert
European markets remained under pressure on rate path and economic slowdown worries.
Major averages in Frankfurt, Paris and London traded down for the fourth day in a row this week.
Market sentiment soured after the Federal Reserve Bank Chairman Jerome Powell hinted more rate hikes ahead to cool inflation down to 2% in his presentation to the U.S. lawmakers.
Powell's comments brought back the rate hike worries to the center after last week's rate pause suggested to some investors that the central bank is nearing its rate tightening cycle.
In addition, the central banks in the UK, Norway and Switzerland hiked rates.
The Swiss National Bank held out for more rate hikes in the year and the Norges Bank also hikes its estimate of peak rates citing stubborn inflation.
Bank of England Hikes Rates Again
The Bank of England lifted its key rate by 50 basis points to tackle inflation that is hovering near 9%.
After the thirteenth rate hike, the Bank of England's key lending rate was revised higher to 5.0% following the consumer price inflation held at 8.7% in May and core inflation accelerated to 7.1%.
The Monetary Policy Committee in a 7-2 vote decided to revise the rate higher by a larger-than-expected amount as the central bank struggled to bring down sky high inflation rate to 2%.
The policy rates are now at their highest levels since the 2008 financial crisis and financial markets are now forecasting rates to rise to 6.0% by the year's end.
Higher interest rates spell difficult times ahead for millions of mortgage borrowers.
About 2 million homeowners are likely to face sharply higher monthly payments upon refinancing in the next two years, as most mortgages in the UK are variable length less than five years.
Switzerland Slowed Rate Hike
The Swiss National Bank lifted its rate but at a slower pace and held out for more rate hikes in future.
The Swiss central bank lifted its policy rate by 25 basis points to 1.75% effective June 23.
The SNB lifted its rate for the fifth time in a row after hiking the rate by 50 basis points in March and December 2022, and by 75 basis points in September 2022.
The central bank also lowered its inflation estimate to 2.2% from the previous estimate of 2.6% but lifted the estimate for the next year to 2.2% from the earlier forecast of 2.0%.
Norway Accelerated Rate Increase
The Norges Bank lifted its deposit rate by 50 basis points to 3.75% and forecasted more than hikes may be necessary in the remainder of the year.
The policy rate is now at a 15-year high and the central bank is set to increase its rate again in August.
The central bank also revised higher its peak rate forecast to 4.25%, significantly higher than the previous estimate of 3.5% in March.
The Norwegian crown jumped to 11.55 from 11.687 against the euro and 10.52 from 10.67 against the U.S. dollar before the announcement respectively.
“If we do not raise the policy rate, prices and wages could continue to rise rapidly and inflation become entrenched. It may then become more costly to bring inflation down again”, Governor Ida Wolden Bache said in a statement released by the central bank.
Turkey Monetary Policy U-turn
Turkey in a surprise monetary policy U-turn decided to lift rates by a whopping 650 basis points.
Turkey's central bank lifted its policy rate to 15% from 8.5% as the new administration of the re-elected prime minister Recep Tayyip Erdogan tackled 40% inflation in May.
The Turkish lira fell 2.5% to 24.11 against the U.S. dollar and dropped to a new low because investors feared that the interest rate hike did not go far enough .
Many investors were hoping for rates to rise to as much as 21%.
“The Committee decided to begin the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behavior," the newly appointed Governor Hafize Gaye Erkan said in a statement.
Erdogan appointed Mehmet Simsek as the new Treasury and Finance Minister to arrest surging inflation and cost of living crisis after the Turkish lira lost 80% of its value in the last five years.
Europe Indexes & Yields
The DAX index decreased 0.2% to 15,988.16, the CAC-40 index declined 0.8% to 7,203.28 and the FTSE 100 index dropped 0.8% to 7,502.03.
The yield on 10-year German Bunds inched higher to 2.41%, French bonds traded higher to 2.99%, the UK gilts edged down to 4.41% and Italian bonds decreased to 4.09%.
The euro edged lower to $1.10, the British pound to $1.278 and the U.S. dollar fetched 89.27 Swiss cents.
Brent crude decreased $3.05 to $74.08 a barrel and the Dutch TTF natural gas declined €2.65 to €34.10 per MWh.
Europe Stock Movers
Ocado Group jumped 28.7% to 553.80 pence and surged as much as 42% on a speculation that the company may be an acquisition target according to a report in the newspaper the Times.
Whitbread declined 1% to 3,362.0 pence after the owner of Premier inn reported its trading update.
Novo Nordisk AS dropped 1.9% to DKK 1,072.60 after the Danish drug company said the European Union's drug regulator had last month raised thyroid cancer safety alert for several of its drugs.
SES SA increased 4.9% to €5.09 in Paris trading after the Luxembourg-based company confirmed it has terminated its merger talks with Intelsat.
Movers: Boeing, Overstock.com, Darden Restaurants, Spirit AeroSystems
Scott Peters
22 Jun, 2023
New York City
The S&P 500 index futures decreased 0.3% to 4,355.13 and the Nasdaq Composite futures declined 0.4% to 13,532.17.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.71% and 30-year Treasury bonds edged down to 3.83%.
Darden Restaurants, Inc declined 3.8% to $160.0 after the parent of Olive Garden and Longhorn Steakhouse reported better-than-expected quarterly results but forecasted mixed annual outlook.
Revenue in the fiscal fourth quarter ending in May increased 6.4% to $2.8 billion, driven by same-store sales increase of 4.0% and sales from 47 net new restaurants.
Same store sales at Olive Garden restaurants increased 4.0% and Longhorn Steakhouse surged 7.1%.
Net income in the quarter increased to $315.1 million from 281.7 million and diluted earnings per share advanced to $2.58 from $2.44 a year ago.
Total sales in the fiscal year 2023 increased to $10.5 billion from $9.6 billion and net income soared to $981.9 million from $952.8 million and diluted earnings per share increased to $7.99 from $7.39 a year ago.
The company increased its quarterly dividend by 8% to $1.31 a share payable on August 1 to shareholders on record on July 10.
During the quarter, Darden repurchased 0.2 million shares for a total of $35.2 million and at the end of the quarter the company had $652 million available under its $1.0 billion stock repurchase program.
Overstock.com Inc increased 7% to $22.66 after the company acquired digital assets and intellectual property of Bed Bath & Beyond at the floor price of $21.5 million in an auction.
Spirit AeroSystems Holdings Inc dropped 9.2% to $26.95 after the company stopped production at its Kansas plant following workers voting to strike from Saturday.
Spirit is one of the key parts suppliers to aviation company Boeing.
Boeing Co declined 2.7% to $206.25 following the strike news Spirit AeroSystems.
Market Rally Stalls as Investors Shift Focus to Rate Path Trajectory
Barry Adams
22 Jun, 2023
New York City
Stocks continued to slide for the fourth day in a row and third day this week on persistent rate path worries and looming economic slowdown.
Major averages turned lower a day after Federal Reserve Chairman Powell stressed the need to continue the central bank's monetary tightening after last week's rate pause.
Chairman Powell is set to offer his views on the economy in his Semiannual Monetary Policy Report to the U.S. Senate Banking Committee on Thursday.
Investors are looking forward to hearing Powell's view on interest rates and inflation.
In other economic news, initial claims of jobless benefits for the week ending on June 17 were unchanged at 264,000 and continuing claims declined to 1.759 million.
Across Europe, central banks lifted rates and held out for more rate hikes in the remainder of the year.
The Bank of England lifted its policy rate by higher-than-expected 50 basis points to 5% to tackle inflation hovering at 8.7%.
The Norges Bank lifted its key lending rate by 50 basis points to 3.75% and the Swiss National Bank slowed its rate hike by 25 basis points to 1.75%.
Turkey also lifted its rate by a whopping 8.5% to 15% in a policy U-turn as the nation battles 40% inflation rate.
U.S. Indexes & Yields
The S&P 500 index futures decreased 0.3% to 4,355.13 and the Nasdaq Composite futures declined 0.4% to 13,532.17.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.71% and 30-year Treasury bonds edged down to 3.83%.
Crude oil decreased $1.46 to $71.07 a barrel and natural gas prices increased 1 cent to $2.60 a thermal unit.
U.S. Stock Movers
Darden Restaurants, Inc declined 3.8% to $160.0 after the parent of Olive Garden and Longhorn Steakhouse reported better-than-expected quarterly results but forecasted mixed annual outlook.
Overstock.com Inc increased 7% to $22.66 after the company acquired digital assets and intellectual property of Bed Bath & Beyond at the floor price of $21.5 million in an auction.
Spirit AeroSystems Holdings Inc dropped 9.2% to $26.95 after the company stopped production at its Kansas plant following workers voting to strike from Saturday.
Spirit is one of the key parts suppliers to aviation company Boeing.
Boeing Co declined 2.7% to $206.25 following the strike news Spirit AeroSystems.