Market Update
Europe Movers: Novo Nordisk, Ocado Group, SES, Whitbread
Bridgette Randall
22 Jun, 2023
Frankfurt
The DAX index decreased 0.6% to 15,927.63, the CAC-40 index declined 1.3% to 7,167.14 and the FTSE 100 index dropped 0.9% to 7,494.51.
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.
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 plc 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.
European Markets Drop After UK, Switzerland and Norway Lift Rates
Bridgette Randall
22 Jun, 2023
Frankfurt
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 by 50 Basis Points
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 Lifts Rate by 650 basis Points in a 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 0.6% to 15,927.63, the CAC-40 index declined 1.3% to 7,167.14 and the FTSE 100 index dropped 0.9% to 7,494.51.
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 $1.30 to $75.85 a barrel and the Dutch TTF natural gas increased €0.16 to €36.90 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.
Market Averages Turned Lower After Rate Path and Valuation Worries Resurfaced
Barry Adams
21 Jun, 2023
New York City
Stocks struggled on Wall Street and Treasury yields traded volatile following comments from Fed Chairman Powell.
In his prepared remarks for his testimony to be delivered to the House Financial Services Committee, Powell said that the latest rate pause is likely to be followed by rate hikes as inflation remains too high for the central bank's comfort.
"Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go," Chairman Powell noted in his prepared remark for lawmakers.
"Despite elevated inflation, longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets," highlighted Powell while reviewing the current economic situation.
Nearly all FOMC participants expect that "it will be appropriate to raise interest rates somewhat further by the end of the year."
The Federal Reserve's hawkish stance has failed to bring down inflation to its target rate of 2% despite the increase in rates by five percentage points over the last fifteen months.
Overall inflation has cooled in the last six months but that is largely because of the sharp fall in crude oil and natural gas prices but housing prices are still 50% to 150% above the pre-Covid 2019 levels in the most urban areas.
Crude oil traded in a tight range not far from its 15-month low as demand growth following the ending of China's "zero Covid" remains uncertain and weaker-than-expected.
Tech stocks took a breather from the previous week's market rally fueled by optimism surrounding the new business cycle driven by AI spending.
U.S. Indexes & Yields
The S&P 500 index futures decreased 0.1% to 4,382.73 and the Nasdaq Composite futures declined 0.7% to 13,574.97.
The yield on 2-year Treasury notes increased to 4.72%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds edged up to 3.84%.
Crude oil decreased $0.02 to $71.54 a barrel and natural gas prices decreased 1 cent to $2.45 a thermal unit.
U.S. Stock Movers
FedEx Corp declined 3% to $224.01 after the parcel delivery company grounded additional planes because of lack of demand.
FedEx reported weaker-than-expected quarterly revenue but adjusted earnings were ahead of market expectations.
Rivian Automotive Inc increased 1.6% to $15.70 after the company announced that its customers will be able to charge vehicles made by the company using Tesla electric charging stations next year.
Winnebago Industries, Inc declined 8.1% to $59.01 after the maker of RVs reported sales declined 38% in its latest quarter because of heavier discounting and macroeconomic headwinds.
Cryptocurrencies linked stocks advanced after Bitcoin continued to scale higher.
Coinbase Global increased 2.5% to $58.41, MicroStrategy advanced 3.3% to $323.31 and Riot Platforms Inc surged 4.4% to $11.79.
Rate Worries Keep European Markets In Check
European markets traded down for the third day in a row on valuation worries and economic uncertainties.
Benchmark indexes in Frankfurt and Paris edged lower but traded near record highs.
The benchmark index in London declined after the latest inflation data reinforced additional tightening by the Bank of England and core inflation accelerated to a 31-year high.
The latest inflation data also led many to forecast that the Bank of England may lift interest rates by 50 basis points rather than 25 basis points as had been expected on Thursday.
Higher interest rates are expected to affect 800,000 mortgages due for refinancing in the second half of this year, according to the financial service industry association UK Finance.
Higher UK mortgage rates will force most borrowers to cut spending elsewhere, affecting overall household spending and GDP growth.
Automakers were in focus after new car registration rose for the tenth month in a row.
UK Inflation Held Steady at 8.7%
The consumer price inflation in May matched the April level of 8.7%, the Office for National Statistics reported Wednesday.
Core inflation, which excludes food, energy, alcohol and tobacco, accelerated to 7.1%, the highest level since March 1992.
The inflation remained at a 13-month low but significantly above the 2% target set by the Bank of England, adding more urgency to policymakers' tightening campaign.
Food inflation slowed to 18.3% from 19.0% and energy price decline increased to 13.1% from 8.9% offsetting air travel inflation to 31.4% from 12.6% and recreational and cultural goods and services to 6.7% from 6.3%.
EU Passenger Car Registration Up 18.5% in May
Passenger car registration in the European Union increased for the tenth month in a row, the European Automobiles Manufacturers Association reported Wednesday.
Passenger car registration increased 18.5% to 938,950 units, and all four largest markets reported an increase.
Registration in Italy increased 23.1%, in Germany 19.2%, in France 14.8% and in Spain 8.3%.
Battery powered cars soared 70.9% to 129,847 units, lifting its market share by four percentage points from a year ago to 13.8%.
Automobile registration in the first five months increased 18% to 4.4 million but still 23% below 5.7 million in the period a year ago.
Europe Indexes & Yields
The DAX index decreased 0.6% to 16,023.13, the CAC-40 index declined 0.5% to 7,260.97 and the FTSE 100 index increased 0.1% to 7,559.18.
The yield on 10-year German Bunds inched lower to 2.41%, French bonds traded lower to 2.96%, the UK gilts edged down to 4.41% and Italian bonds decreased to 4.05%.
The euro edged lower to $1.09, the British pound to $1.27 and the Swiss franc to 89.75 cents.
Brent crude increased $1.32 to $77.30 a barrel and the Dutch TTF natural gas decreased €1.97 to €36.79 per MWh.
Europe Stock Movers
Automakers were in focus after new passenger car registration in May increased 18.5% following a 17.2% rise in April.
BMW AG increased 0.6% to €111.20, Stellantis NV added 1.1% to €15.55 and Renault SA jumped 2.6% to €36.44.
Banks traded higher in the region after UK inflation was ahead of expectations and bond yields advanced on the hopes of a rate hike cycle to continue.
Deutsche Bank AG increased 1.6% to €9.48, Commerzbank advanced 1.8% to €10.38, BNP Paribas jumped 1.1% to €57.34, Barclays inched lower 0.9% to 152.88 pence and HSBC Holdings Plc advanced 0.4% to 617.50 pence.
Deutsche Lufthansa AG increased 1.1% to €9.37 after the German airline sold its travel solution business Lufthansa AirPlus Servicekarten GmbH to Sweden-based SEB Kort Bank AB for €450 million.
VEON Ltd declined 1.4% to 72 euro cents after the company announced its plan to invest $600 million in its Ukrainian subsidiary Kyivstar, the largest mobile telecom network in Ukraine.
Movers: Cryptocurrencies, FedEx, Pandora, Rivian Automotive, Winnebago
Scott Peters
21 Jun, 2023
New York City
FedEx Corp declined 3% to $224.01 after the parcel delivery company grounded additional planes because of lack of demand.
FedEx reported weaker-than-expected quarterly revenue but adjusted earnings were ahead of market expectations.
Revenue in the fiscal fourth quarter ending in May declined 10% to $21.9 billion from $24.3 billion and net income increased to $1.5 billion from $558 million and diluted earnings per share rose to $6.05 from $2.13 a year ago.
For the fiscal year 2023, revenue declined 4% to $90 billion from $93.5 billion and net income increased 8% to $3.9 billion from $3.8 billion and diluted earnings per share increased to $15.48 from $14.33 a year ago.
The company forecasted capital spending of $5.7 billion in the fiscal 2024 and estimated diluted earnings per share between $15.0 and $17.0 before accounting for mark-to-market retirement plans adjustments and estimated revenue percentage growth between "flat to low single digit" from the previous year.
Rivian Automotive Inc increased 1.6% to $15.70 after the company announced that its customers will be able to charge vehicles made by the company using Tesla electric charging stations next year.
Winnebago Industries, Inc declined 8.1% to $59.01 after the maker of RVs reported sales declined 38% in its latest quarter because of heavier discounting and macroeconomic headwinds.
Revenue in the fiscal third quarter ending in May declined 38.2% to $900.8 million from $1.5 billion and net income declined 49% to $59.6 million from $117.2 million and diluted earnings per share fell to $1.71 from $3.57 a year ago.
On May 17 the company declared a quarterly cash dividend of 27 cents per share payable on June 28 to shareholders on record June 14.
The company completed repurchases of $20 million shares during the third quarter.
Cryptocurrencies linked stocks advanced after Bitcoin continued to scale higher.
Coinbase Global increased 2.5% to $58.41, MicroStrategy advanced 3.3% to $323.31 and Riot Platforms Inc surged 4.4% to $11.79.
Pandora AS increased 2.7% to DKK 580.80 after the Danish jewelry designer launched a DKK 2.6 billion or $381 million stock buyback plan following the ending of DKK 2.4 billion.
Powell Says Cooling Inflation Will Take Time
Brian Turner
21 Jun, 2023
New York City
Treasury yields perked up and stocks on Wall Street turned lower after the Fed Chairman Powell sounded an alarm on inflation.
In his prepared remarks for his testimony to be delivered to the House Financial Services Committee, Powell said that the latest rate pause is likely to be followed by rate hikes as inflation remains too high for the central bank's comfort.
"Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go," Chairman Powell noted in his prepared remark for lawmakers.
"Despite elevated inflation, longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets," highlighted Powell while reviewing the current economic situation.
Nearly all FOMC participants expect that "it will be appropriate to raise interest rates somewhat further by the end of the year."
The Federal Reserve's hawkish stance has failed to bring down inflation to its target rate of 2% despite the increase in rates by five percentage points over the last fifteen months.
Overall inflation has cooled in the last six months but that is largely because of the sharp fall in crude oil and natural gas prices but housing prices are still 50% to 150% above the pre-Covid 2019 levels in the most urban areas.
Market Averages Turn Lower After Powell Reiterates Need for Rate Hikes
Barry Adams
21 Jun, 2023
New York City
Stocks on Wall Street remained under pressure for the second day this week after Fed Chairman Powell sounded an alarm on inflation.
In his prepared remarks for his testimony to be delivered to the House Financial Services Committee, Powell said that the latest rate pause is likely to be followed by rate hikes as inflation remains too high for the central bank's comfort.
"Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go," Chairman Powell noted in his prepared remark for lawmakers.
"Despite elevated inflation, longer-term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets," highlighted Powell while reviewing the current economic situation.
Nearly all FOMC participants expect that "it will be appropriate to raise interest rates somewhat further by the end of the year."
Crude oil drifted lower to a 15-month low as demand growth following the ending of China's "zero Covid" remains uncertain and weaker-than-expected.
U.S. Indexes & Yields
The S&P 500 index futures decreased 0.4% to 4,373.83 and the Nasdaq Composite futures declined 0.4% to 13,619.85.
The yield on 2-year Treasury notes increased to 4.72%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds edged up to 3.84%.
Crude oil decreased $0.02 to $71.54 a barrel and natural gas prices decreased 1 cent to $2.45 a thermal unit.
U.S. Stock Movers
FedEx Corp declined 3% to $224.01 after the parcel delivery company grounded additional planes because of lack of demand.
FedEx reported weaker-than-expected quarterly revenue but adjusted earnings were ahead of market expectations.
Rivian Automotive Inc increased 1.6% to $15.70 after the company announced that its customers will be able to charge vehicles made by the company using Tesla electric charging stations next year.
Winnebago Industries, Inc declined 8.1% to $59.01 after the maker of RVs reported sales declined 38% in its latest quarter because of heavier discounting and macroeconomic headwinds.
Cryptocurrencies linked stocks advanced after Bitcoin continued to scale higher.
Coinbase Global increased 2.5% to $58.41, MicroStrategy advanced 3.3% to $323.31 and Riot Platforms Inc surged 4.4% to $11.79.
Europe Movers: Automakers, Banks, Lufthansa, VEON
Bridgette Randall
21 Jun, 2023
Frankfurt
Automakers were in focus after new passenger car registration in May increased 18.5% following a 17.2% rise in April.
BMW AG increased 0.6% to €111.20, Stellantis NV added 1.1% to €15.55 and Renault SA jumped 2.6% to €36.44.
Banks traded higher in the region after UK inflation was ahead of expectations and bond yields advanced on the hopes of a rate hike cycle to continue.
Deutsche Bank AG increased 1.6% to €9.48, Commerzbank advanced 1.8% to €10.38, BNP Paribas jumped 1.1% to €57.34, Barclays inched lower 0.9% to 152.88 pence and HSBC Holdings Plc advanced 0.4% to 617.50 pence.
Deutsche Lufthansa AG increased 1.1% to €9.37 after the German airline sold its travel solution business Lufthansa AirPlus Servicekarten GmbH to Sweden-based SEB Kort Bank AB for €450 million.
VEON Ltd declined 1.4% to 72 euro cents after the company announced its plan to invest $600 million in its Ukrainian subsidiary Kyivstar, the largest mobile telecom network in Ukraine.
EU Car Registration Jumped 18.5%, UK Inflation Held at 8.7%
Bridgette Randall
21 Jun, 2023
Frankfurt
European markets traded down for the third day in a row on valuation worries and economic uncertainties.
Benchmark indexes in Frankfurt and Paris edged lower but traded near record highs.
The benchmark index in London declined after the latest inflation data reinforced additional tightening by the Bank of England and core inflation accelerated to a 31-year high.
The latest inflation data also led many to forecast that the Bank of England may lift interest rates by 50 basis points rather than 25 basis points as had been expected on Thursday.
Higher interest rates are expected to affect 800,000 mortgages due for refinancing in the second half of this year, according to the financial service industry association UK Finance.
Higher UK mortgage rates will force most borrowers to cut spending elsewhere, affecting overall household spending and GDP growth.
Automakers were in focus after new car registration rose for the tenth month in a row.
UK Inflation Held Steady at 8.7%
The consumer price inflation in May matched the April level of 8.7%, the Office for National Statistics reported Wednesday.
Core inflation, which excludes food, energy, alcohol and tobacco, accelerated to 7.1%, the highest level since March 1992.
The inflation remained at a 13-month low but significantly above the 2% target set by the Bank of England, adding more urgency to policymakers' tightening campaign.
Food inflation slowed to 18.3% from 19.0% and energy price decline increased to 13.1% from 8.9% offsetting air travel inflation to 31.4% from 12.6% and recreational and cultural goods and services to 6.7% from 6.3%.
EU Passenger Car Registration Up 18.5% in May
Passenger car registration in the European Union increased for the tenth month in a row, the European Automobiles Manufacturers Association reported Wednesday.
Passenger car registration increased 18.5% to 938,950 units, and all four largest markets reported an increase.
Registration in Italy increased 23.1%, in Germany 19.2%, in France 14.8% and in Spain 8.3%.
Battery powered cars soared 70.9% to 129,847 units, lifting its market share by four percentage points from a year ago to 13.8%.
Automobile registration in the first five months increased 18% to 4.4 million but still 23% below 5.7 million in the period a year ago.
Europe Indexes & Yields
The DAX index increased 0.1% to 16,132.61, the CAC-40 index declined 0.04% to 7,289.96 and the FTSE 100 index increased 0.1% to 7,575.18.
The yield on 10-year German Bunds inched lower to 2.41%, French bonds traded lower to 2.96%, the UK gilts edged down to 4.41% and Italian bonds decreased to 4.05%.
The euro edged lower to $1.09, the British pound to $1.27 and the Swiss franc to 89.75 cents.
Brent crude increased $0.30 to $76.20 a barrel and the Dutch TTF natural gas decreased €0.82 to €37.89 per MWh.
Europe Stock Movers
Automakers were in focus after new passenger car registration in May increased 18.5% following a 17.2% rise in April.
BMW AG increased 0.6% to €111.20, Stellantis NV added 1.1% to €15.55 and Renault SA jumped 2.6% to €36.44.
Banks traded higher in the region after UK inflation was ahead of expectations and bond yields advanced on the hopes of a rate hike cycle to continue.
Deutsche Bank AG increased 1.6% to €9.48, Commerzbank advanced 1.8% to €10.38, BNP Paribas jumped 1.1% to €57.34, Barclays inched lower 0.9% to 152.88 pence and HSBC Holdings Plc advanced 0.4% to 617.50 pence.
Deutsche Lufthansa AG increased 1.1% to €9.37 after the German airline sold its travel solution business Lufthansa AirPlus Servicekarten GmbH to Sweden-based SEB Kort Bank AB for €450 million.
VEON Ltd declined 1.4% to 72 euro cents after the company announced its plan to invest $600 million in its Ukrainian subsidiary Kyivstar, the largest mobile telecom network in Ukraine.
Market Rally Stalled After Stocks Hit Valuation Ceiling
Barry Adams
20 Jun, 2023
New York City
Stocks lacked direction and market indexes declined after advancing for weeks.
U.S. market indexes opened lower and spent today's session in red following the Juneteenth holiday on Monday.
Investors also digested the unexpected surge in housing starts in May despite elevated home prices and rising mortgage rates.
For weeks, markets extended rally on the expectations that the Federal Reserve is more likely to pause rate hikes and continued to rally after the Fed's decision.
The rally continued on the hopes that the central bank is nearing the end of its monetary tightening cycle despite the Fed Chairman Jerome Powell saying future rate path is data dependent.
At the end of last week, the S&P 500 index advanced for the fifth week in a row by 2.6% and the Nasdaq Composite index gained for the eighth week and added 3.2%.
Tech stocks rally powered the two-month rally on the expectations of AI fueled demand for semiconductor chips and software platforms.
The narrow rally of the last two months has relied on the hopes of rising sales and earnings at tech companies in the belief that demand for AI services will kick off a new business and consumer spending cycle.
Investors are hoping that the latest rate-pause is likely to be extended at the next policy meeting in July and the U.S. economy is resilient enough to avoid recession this year, two large assumptions that may not prove to be correct.
In addition, market gains are muted because of the decline in energy prices.
In overseas news, China trimmed its loan prime rate by 10 basis points for 1-year to 3.65% and 5-year to 4.2%.
Despite the expected marginal rate cuts, market indexes in Hong Kong and Shanghai declined after the government did not announce deeper structural reforms to revive the weak economic recovery.
The Hang Seng index declined 1.5% and the Shanghai Composite index dropped 0.5% after a cabinet meeting on Friday failed to provide additional stimulus measures.
U.S. Indexes & Yields
The S&P 500 index futures decreased 0.3% and the Nasdaq Composite futures declined 0.4%.
The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds eased to 3.85%.
Crude oil increased $1.30 to $70.68 a barrel and natural gas prices increased 1 cent to $2.66 a thermal unit.
U.S. Stock Movers
Alibaba Group Holding Ltd declined 2.2% to $90.10 after the company announced management shakeup.
Co-founder Eddie Wu will succeed Daniel Zhang as chief executive of the company.
European Markets Extend 2-day Losses
European markets eased and investors focused on the region's economic health and digested the latest news from China.
Benchmark indexes in Frankfurt, London and Paris declined for the second day this week after the widely anticipated rate cut in China failed to mist market sentiment.
The Peoples' Bank of China lowered its loan prime rate by 10 basis points for 1-year to 3.65% and 5-year to 4.2%.
Investors are also anticipating a 25-basis points rate hike by the Bank of England on Thursday.
Closer to home, producer price inflation in Germany declined for the eighth month in a row 1.0% and dropped to the level last seen in January 2021.
The European Central Bank said adjusted current account surplus of 20-nation dropped to Є4 billion in April from Є31 billion in the previous month.
German Producer Price Inflation Slowed to 28-month Low
Producer price inflation on an annual basis eased to 1% in May from 4.1% in April, the Federal Statistics Office or Destatis reported Tuesday.
The inflation rate was the slowest since January 2021, after energy prices declined 3.3% from a year ago and fell 3.5% from the previous month.
The sharp fall in energy prices by 34% since September 2022, helped to cushion price increases in capital goods and intermediate goods.
On a monthly basis, inflation from April decreased 1.4%
Prices for non-durable consumer goods were 10.1% higher in May and rose 0.1% from the previous month. Food prices were 11.9% from a year ago.
Prices of durable consumer goods increased 7.9% compared to May 2022, mainly driven by an 8.8% increase in furniture prices and domestic appliances by 9.1%.
The 10.9% decline in metals prices drove down intermediate goods prices by 2.3% in May from a year ago.
Swiss Trade Surplus Advanced to 15-month High
Swiss trade surplus rose to CHF 4.3 billion in May from the revised 2.1 billion surplus in April, the Federal Customs Administration said Tuesday.
The trade surplus was the largest since February 2022 because exports rose 7.8% to CHF 22.3 billion and imports declined 3.1% to a 17-month low of CHF 18.0 billion.
Exports of chemicals and pharmaceuticals increased 15.1%, machinery and electronics 0..2%, watches 3.8%, food and beverages 5.6% and vehicles by 9.1%.
Exports to the U.S. increased 7% to CHF 4.2 billion, China jumped 11% to CHF 1.4 billion, Germany 4% to CHF 3.5 billion and Slovenia soared 39% to CHF 1.5 billion and to India decreased 2.5% to CHF 152 million.
Imports from Germany declined 5.1% to CHF 4.6 billion, Italy increased 0.3% to CHF 1.8 billion, declined 1.6% to CHF 1.5 billion, the U.S. jumped 9.8% to 1.2 billion and declined 12.9% to CHF194 billion.
Europe Indexes & Yields
The DAX index decreased 0.6% to 16,111.30, the CAC-40 index declined 0.4% to 7,294.18 and the FTSE 100 index dropped 0.3% to 7569.31.
The yield on 10-year German Bunds inched higher to 2.49%, French bonds traded lower to 3.00%, the UK gilts edged down to 4.46% and Italian bonds increased to 4.08%.
The euro edged lower to $1.09, the British pound to $1.27 and the Swiss franc to 89.70 cents.
Brent crude decreased $0.80 to $75.25 a barrel and the Dutch TTF natural gas decreased €2.28 to €37.19 per MWh.
Europe Stock Movers
Stellantis NV declined 2.2% to €15.39 after the Italian vehicle maker struck a 50:50 partnership with Foxconn to design and sell semiconductors for the automotive industry from 2026.
Braemar Plc dropped 3.5% to 278.0 pence after the company said chief finance officer Nick Stone will step down on July 31.
Abrdn Plc declined 1.1% to 213.20 pence after the company sold its 10% stake or 21.8 million shares in the India-based HDFC Asset Management Company.
Monks Investment Trust Plc declined 0.1% to 994 pence after the company posted a smaller loss in the fiscal year 2023.
Renault SA declined 3.9% to €35.45 and the company assigned additional responsibilities to group chief executive Luca de Meo as chairman and CEO of its electric vehicle unit Ampere.
Renault is still considering listing Ampere on the stock market.
Sanofi SA increased 3.5% to €97.75 after the company won an international arbitration case related to claims by Boehringer Ingelheim in connection with cancer lawsuits linked to Zantac in the U.S.
Housing Permits, Starts and Completions Increased in May
Brian Turner
20 Jun, 2023
New York City
Housing market showed resilience despite elevated home prices, rising interest rates and tight market conditions.
Building permits, housing starts and completions rose in May from the previous month, the U.S. .Census Bureau and the U.S. Department of Housing and Urban Development reported Tuesday.
Seasonally adjusted residential building permits annual rate increased 5.2% to 1..49 million from 1.417 million in April but declined 12.7% from a year ago.
Single family resident permit increased 4.8% from April to 897,000 and multi-unit permits rose to 542,000.
Seasonally adjusted housing starts annual rate increased 21.7% from the April level to 1.631 million from 1.34 million and 5.7% from a year ago level of 1.543 million.
Housing starts were downwardly revised in April to 1.34 million from the previous estimate of 1.401 million units.
Single-family housing starts increased 18.5% to 997,000 units from April and multi-family rate was 624,000 units.
Housing completions annual rate increased 9.5% to 1,518 million from April and 5.0% from a year ago rate of 1.386 million.
Single-family housing completion rate in May increased 3.9% from April to 1.518 million and multi-family rate was 493,000.
Stocks Face Headwinds On Wall Street After Rallying for Two Months
Barry Adams
20 Jun, 2023
New York City
Stocks struggled to advance after rallying in the previous week and Treasury bond yields traded mixed.
U.S. financial markets were closed Monday due to the Juneteenth holiday.
Markets extended rally after the Federal Reserve left its key lending rates unrevised and raised hopes that the monetary tightening cycle is nearing end.
The S&P 500 index advanced for the fifth week in a row by 2.6% and the Nasdaq Composite index gained for the eighth by 3.2%.
Much of the market rally is powered by leading tech stocks on the expectations of AI fueled demand for semiconductor chips and software platforms.
The narrow rally of the last two months has relied on the hopes of rising sales and earnings at tech companies in the hopes that the AI services will lead to the next round of business and consumer spending following the latest cloud computing cycle.
Investors are hoping that the latest rate hike pause is likely to be extended at the next policy meeting in July and the U.S. economy is resilient enough to avoid recession this year.
In addition, the sharp fall in energy prices this year has tampered market gains and tech fueled rally has failed to broaden to multiple sectors.
In overseas news, China trimmed its loan prime rate by 10 basis points for 1-year rate to 3.65% and 5-year rate to 4.2%.
Despite the marginal rate cuts as expected, market indexes in Hong Kong and Shanghai declined on the worries that the government may need to announce deeper structural reforms to revive the weak economic recovery.
The Hang Seng index declined 1.5% and the Shanghai Composite index dropped 0.5% after a cabinet meeting on Friday failed to provide additional stimulus measures.
U.S. Indexes & Yields
The S&P 500 index futures decreased 0.3% and the Nasdaq Composite futures declined 0.4%.
The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds eased to 3.85%.
Crude oil increased $0.04 to $71.88 a barrel and natural gas prices increased 1 cent to $2.66 a thermal unit.
U.S. Stock Movers
Alibaba Group Holding Ltd declined 2.2% to $90.10 after the company announced management changes.
Co-founder Eddie Wu will succeed Daniel Zhang as chief executive of the company.
Movers: Abrdn, Braemar, Lanxess, Monks Investment, Renault, Sanofi, Stellantis
Bridgette Randall
20 Jun, 2023
Frankfurt
Stellantis NV declined 2.2% to €15.39 after the Italian vehicle maker struck a 50:50 partnership with Foxconn to design and sell semiconductors for the automotive industry from 2026.
Lanxess AG declined 16.3% to €26.38 after the German specialty chemical company lowered its second quarter and full-year 2023 adjusted operating earnings outlook.
Braemar Plc dropped 3.5% to 278.0 pence after the company said chief finance officer Nick Stone will step down on July 31.
Abrdn Plc declined 1.1% to 213.20 pence after the company sold its 10% stake or 21.8 million shares in the India-based HDFC Asset Management Company.
Monks Investment Trust Plc declined 0.1% to 994 pence after the company posted a smaller loss in the fiscal year 2023.
Renault SA declined 3.9% to €35.45 and the company assigned additional responsibilities to group chief executive Luca de Meo as chairman and CEO of its electric vehicle unit Ampere.
Renault is still considering listing Ampere on the stock market.
Sanofi SA increased 3.5% to €97.75 after the company won an international arbitration case related to claims by Boehringer Ingelheim in connection with cancer lawsuits linked to Zantac in the U.S.
European Market Declined On Economic Jitters, German Wholesale Inflation Eased, Swiss Trade Surplus Expanded
Bridgette Randall
20 Jun, 2023
Frankfurt
European markets eased and investors focused on the region's economic health and digested the latest news from China.
Benchmark indexes in Frankfurt, London and Paris declined for the second day this week after the widely anticipated rate cut in China failed to mist market sentiment.
The Peoples' Bank of China lowered its loan prime rate by 10 basis points for 1-year to 3.65% and 5-year to 4.2%.
Investors are also anticipating a 25-basis points rate hike by the Bank of England on Thursday.
Closer to home, producer price inflation in Germany declined for the eighth month in a row 1.0% and dropped to the level last seen in January 2021.
The European Central Bank said adjusted current account surplus of 20-nation dropped to Є4 billion in April from Є31 billion in the previous month.
German Producer Price Inflation Slowed to 28-month Low
Producer price inflation on an annual basis eased to 1% in May from 4.1% in April, the Federal Statistics Office or Destatis reported Tuesday.
The inflation rate was the slowest since January 2021, after energy prices declined 3.3% from a year ago and fell 3.5% from the previous month.
The sharp fall in energy prices by 34% since September 2022, helped to cushion price increases in capital goods and intermediate goods.
On a monthly basis, inflation from April decreased 1.4%
Prices for non-durable consumer goods were 10.1% higher in May and rose 0.1% from the previous month. Food prices were 11.9% from a year ago.
Prices of durable consumer goods increased 7.9% compared to May 2022, mainly driven by an 8.8% increase in furniture prices and domestic appliances by 9.1%.
The 10.9% decline in metals prices drove down intermediate goods prices by 2.3% in May from a year ago.
Swiss Trade Surplus Advanced to 15-month High
Swiss trade surplus rose to CHF 4.3 billion in May from the revised 2.1 billion surplus in April, the Federal Customs Administration said Tuesday.
The trade surplus was the largest since February 2022 because exports rose 7.8% to CHF 22.3 billion and imports declined 3.1% to a 17-month low of CHF 18.0 billion.
Exports of chemicals and pharmaceuticals increased 15.1%, machinery and electronics 0..2%, watches 3.8%, food and beverages 5.6% and vehicles by 9.1%.
Exports to the U.S. increased 7% to CHF 4.2 billion, China jumped 11% to CHF 1.4 billion, Germany 4% to CHF 3.5 billion and Slovenia soared 39% to CHF 1.5 billion and to India decreased 2.5% to CHF 152 million.
Imports from Germany declined 5.1% to CHF 4.6 billion, Italy increased 0.3% to CHF 1.8 billion, declined 1.6% to CHF 1.5 billion, the U.S. jumped 9.8% to 1.2 billion and declined 12.9% to CHF194 billion.
Europe Indexes & Yields
The DAX index decreased 0.8% to 16,073.30, the CAC-40 index declined 0.4% to 7,284.28 and the FTSE 100 index was nearly unchanged at 7589.04.
The yield on 10-year German Bunds inched higher to 2.49%, French bonds traded lower to 3.00%, the UK gilts edged down to 4.46% and Italian bonds increased to 4.08%.
The euro edged lower to $1.09, the British pound to $1.27 and the Swiss franc to 89.70 cents.
Brent crude increased $0.72 to $76.82 a barrel and the Dutch TTF natural gas decreased €1.49 to €36.49 per MWh.
Europe Stock Movers
Stellantis NV declined 2.2% to €15.39 after the Italian vehicle maker struck a 50:50 partnership with Foxconn to design and sell semiconductors for the automotive industry from 2026.
Braemar Plc dropped 3.5% to 278.0 pence after the company said chief finance officer Nick Stone will step down on July 31.
Abrdn Plc declined 1.1% to 213.20 pence after the company sold its 10% stake or 21.8 million shares in the India-based HDFC Asset Management Company.
Monks Investment Trust Plc declined 0.1% to 994 pence after the company posted a smaller loss in the fiscal year 2023.
Renault SA declined 3.9% to €35.45 and the company assigned additional responsibilities to group chief executive Luca de Meo as chairman and CEO of its electric vehicle unit Ampere.
Renault is still considering listing Ampere on the stock market.
Sanofi SA increased 3.5% to €97.75 after the company won an international arbitration case related to claims by Boehringer Ingelheim in connection with cancer lawsuits linked to Zantac in the U.S.
Movers: Astra Zeneca, BAT, Coca Cola HBC, MTU Aero Engines, Sartorius, Spectris, Surface Transforms
Bridgette Randall
19 Jun, 2023
Frankfurt
The DAX index decreased 0.5% to 16,272.18, the CAC-40 index declined 0.5% to 7,350.17 and the FTSE 100 index fell 0.3% to 7,622.64.
Coca Cola HBC AG declined 2.3% to €26.78 after the company agreed to acquire the Finlandia Vodka brand for $220 million from Brown-Forman.
AstraZeneca Plc declined 0.9% to 11,684.0 pence on the news that the company is looking to spin off its China business.
MTU Aero Engines AG increased 3.4% to €234.40 after the company revised higher its 2023 annual outlook.
Resource companies traded down on the worries of weakening demand from metal manufacturing companies.
Glencore, Antofagasta, and Anglo American declined between 1% and 2%.
Luxury stocks declined after China's State Council failed to announce no new measures to boost economic growth after a meeting on Friday.
Hermes International SCA declined 0.8% to €1,969.80 and LVMH dropped 1.1% to €859.10.
Spectris plc edged up 0.08% to 3,708.25 pence after the company signed an agreement to acquire MicroStrain Sensing Systems Business for 37.6 million.
Sartorius AG plunged 16.3% to €247.50 after the lab equipment maker lowered its 2023 outlook on weaker-than-expected demand in the second half.
British American Tobacco added 0.5% to 2,592.50 pence after the company announced significant changes to its board.
Surface Transforms Plc decreased 1.5% to 32.50 pence after the company appointed Isabelle Maddock as new Chief Financial Officer from September 4.
European Stocks Turn Lower, Bond Yields at 12-year Highs, Euro and Pound 14-month Highs
Bridgette Randall
19 Jun, 2023
Frankfurt
European markets turned lower after setting milestones in the previous week.
Benchmark indexes in Frankfurt, London and Paris declined as investors reassessed the economy's health in the face of elevated interest rates.
The Bank of England is set to lift its interest rate by 25 basis points to a 15-year high of 4.75% at the end of its policy meeting on Thursday.
Thursday's rate hike will be the 13th in a row and is expected to cool down inflation that has been hovering above 9%.
Investors are also awaiting rate increase decision in China on Tuesday and the People's Bank of China is expected to lift its loan prime rate on Tuesday by 10 basis points.
Trading volumes are expected to light today as the U.S. markets are closed for the Juneteenth holiday.
Europe Indexes & Yields
The DAX index decreased 0.5% to 16,272.18, the CAC-40 index declined 0.5% to 7,350.17 and the FTSE 100 index fell 0.3% to 7,622.64.
The yield on 10-year German Bunds inched higher to 2.49%, French bonds traded higher to 3.02%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.08%.
The euro edged lower to $1.09, the British pound to $1.28 and the Swiss franc to 89.47 cents.
Brent crude decreased $0.34 to $74.26 a barrel and the Dutch TTF natural gas decreased €2.70 to €32.31 per MWh.
Europe Stock Movers
Coca Cola HBC AG declined 2.3% to €26.78 after the company agreed to acquire the Finlandia Vodka brand for $220 million from Brown-Forman.
AstraZeneca Plc declined 0.9% to 11,684.0 pence on the news that the company is looking to spin off its China business.
MTU Aero Engines AG increased 3.4% to €234.40 after the company revised higher its 2023 annual outlook.
Resource companies traded down on the worries of weakening demand from metal manufacturing companies.
Glencore, Antofagasta, and Anglo American declined between 1% and 2%.
Luxury stocks declined after China's State Council failed to announce no new measures to boost economic growth after a meeting on Friday.
Hermes International SCA declined 0.8% to €1,969.80 and LVMH dropped 1.1% to €859.10.
Spectris plc edged up 0.08% to 3,708.25 pence after the company signed an agreement to acquire MicroStrain Sensing Systems Business for 37.6 million.
Sartorius AG plunged 16.3% to €247.50 after the lab equipment maker lowered its 2023 outlook on weaker-than-expected demand in the second half.
British American Tobacco added 0.5% to 2,592.50 pence after the company announced significant changes to its board.
Surface Transforms Plc decreased 1.5% to 32.50 pence after the company appointed Isabelle Maddock as new Chief Financial Officer from September 4.