Market Update
U.S. Markets Set To Close Higher 6th Consecutive Week
Barry Adams
16 Jun, 2023
New York City
Stocks opened higher and major averages extended gains of the week where several new milestones were created.
The S&P 500 index is up for the sixth week in a row and the Nasdaq Composite index advanced for the eighth week in a row.
Both indexes are up for the sixth session in a row after the consumer price and wholesale price inflation receded in May and the Federal Reserve paused its monetary tightening cycle.
Stocks are expected to be volatile today as several indexes and options expire for the second quarter.
Despite the hawkish stance of the Federal Reserve after the latest rate hikes, many investors are estimating that the central bank may be nearing its rate tightening cycle.
The Fed has suggested in its accompanying statement that rates may go up by another 50 basis points by the year's end.
The Federal Reserve has increased interest rates ten times in a row since March 2022 before pausing this week, and multiple rate hikes have not cooled the economy into a recession and tempered tight labor market conditions.
The central bank is estimating the economy to grow at 1.1% in the current year, below its long term average of 1.8%, but higher rates for longer may keep economic growth near 1% than its long term average for years to come.
U.S. Indexes & Yields
The S&P 500 index increased 0.2% to 4,436.21 and the Nasdaq Composite increased 0.7% to 13,797.93.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds eased to 3.85%.
Crude oil increased $0.51 to $71.14 a barrel and natural gas prices increased 7 cents to $2.60 a thermal unit.
U.S. Stock Movers
Adobe Inc increased 5.7% to $490.91 after the company reported better-than-expected quarterly results.
The company's guidance for the current quarter and 2023 exceeded market expectations.
Luxury stocks advanced on the hopes that China will provide a more targeted stimulus program next week.
China linked luxury stocks Hermes SCA, LVMH, Ralph Lauren, Oxford Industries and Tesla Inc gained between 0.5% and 3%.
Exxon Mobil, Chevron, Occidental Petroleum, EQT increased about 1% after natural gas prices extended weekly gains following the supply worries in Europe.
The Netherlands plans to temporarily shut down a LNG terminal and energy supplies from Norway were curtailed for regular maintenance.
European Markets Extended Gains, Eurozone Inflation Confirmed at 6.1%
Bridgette Randall
16 Jun, 2023
Frankfurt
European markets traded higher a day after the central bank lifted its benchmark rate.
Market indexes in Frankfurt, London and Paris edged higher after a week of volatile trading as investors remained focused on the health of the economy and pace of future rate hikes.
Bond yields in the region traded near recent highs, and the U.S. dollar index weakened 1.2% on the hopes that the U.S. Federal Reserve will remain on hold at its next policy meeting in July.
The eurozone inflation was confirmed flat from the previous month in May, Eurostat reported on Friday.
The annual pace of inflation was 6.1%, slower than 7.0% in April and lower than 8.1% in the month a year ago.
Overall inflation in May was driven by food, alcohol & tobacco inflation of 2.54%, followed by services inflation of 2.15%, non-energy industrial goods 1.51% and energy price declined of 0.09%.
The Bank of Japan kept its ultra-loose monetary policy intact, bucking the hawkish trend in the Euro Area and the U.S.
The BOJ left its key lending rate at minus 0..1% and kept its Yield Curve Control policy framework in place and 10-year Japanese government bond yield around zero.
Expectations of additional stimulus in China rose after the People's Bank of China decreased its medium term lending facility rate by 10 basis points to 2.65%.
Earlier in the week, fixed-assets investments, retail sales, property investments, and youth unemployment data suggested uneven and weak economic conditions in China.
The Chinese government is expected to announce economic stimulus measures in the form of infrastructure spending in addition to lowering interest rates.
Europe Indexes & Yields
The DAX index increased 0.2% to 16,327.07, the CAC-40 index advanced 0.7% to 7,346.60 and the FTSE 100 index increased 0.3% to 7,650.25.
For the week, the DAX index added 1.5%, the CAC-40 advanced 1.9% and the FTSE 100 index increased 1.3%.
The yield on 10-year German Bunds inched lower to 2.47%, French bonds traded lower to 2.98%, the UK gilts edged up to 4.34% and Italian bonds decreased to 4.08%.
The euro edged lower to $1.09, the British pound to $1.28 and the Swiss franc to 89.14 cents.
Brent crude decreased $0.40 to $75.27 a barrel and the Dutch TTF natural gas decreased €8.10 to €35.05 per MWh.
Europe Stock Movers
Solvay SA declined 2.9% to €104.20 and the company is in the process of splitting itself into two companies - Solvay and Syensqo.
The company said it plans to repay 1.3 billion of hybrid bonds before the completion of the proposed split by the end of 2023.
The ratings agency Moody's placed Solvay's debt rating on review for downgrade.
Tesco Plc declined 1.3% to 261.0 pence and the discount grocery retailer said sales in the UK rose 9% in the latest quarter.
Travis Perkins Plc declined 5.7% to 816.80 pence after the UK-based home improvement retailer lowered its annual profit outlook citing the difficult housing market.
Longer Rate-Pause Expectations Extends Market Rally to 6th Day
Barry Adams
15 Jun, 2023
New York City
Major averages accelerated gains for the sixth session in a row as tech stocks led gainers.
The S&P 500 index advanced for the sixth day in a row and closed at a new 13-month high after tech and growth stocks led gainers.
Investors bid up stocks on the hopes that the Federal Reserve is nearing its tightening cycle and a resilient economy and job market are likely to provide a sustained boost to corporate earnings this quarter and in 2023.
The Federal Reserve held the federal funds rate as expected but sent clear signals that its inflation fight is not done yet and policymakers are prepared to lift rates to cool inflation to 2%.
In a balancing act, the central bank is attempting to cool inflation while avoiding the economy from slipping into a recession and avoiding widespread unemployment.
The tough act of keeping the economic expansion at a steady pace and enlarging job market without fueling too strong price pressures, got easier after crude oil prices dropped 40% in the year so far and supply chain issues largely under control.
The Federal Reserve is not in a position to influence supply chain issues or commodities prices but has a significant impact on the aggregate demand.
Microsoft hit a new record high after optimism surrounding AI driven demand lifted several stocks for the second week in a row.
Investors also digested the latest jobless claims and retail sales data.
Jobless Claims Held at Elevated Levels
Initial jobless claims for the week ending on June 10 were 262,000, matching the previous week's level, the U.S. Department of Labor reported Thursday.
Continuing claims for four weeks increased 20,000 from the previous week to 1,775 million.
Retail Sales Unexpectedly Rose In May
U.S. retail sales rose 0.3% in May following a 0.4% rise in April, the U.S. Census Bureau reported Thursday.
Retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.6 billion, up 0.3% from the previous month, and up 1.6% from a year ago.
Retail trade sales were up 0.3% from April 2023, and up 0.7 percent (±0.5 percent) above last year.
Nonstore retailers were up 6.5% while food services and drinking places were up 8.0% from a year ago.
U.S. Indexes & Yields
The S&P 500 index increased 1.2% to 4,426.01 and the Nasdaq Composite increased 1.2% to 13,782.82.
The yield on 2-year Treasury notes decreased to 4.65%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds eased to 3.83%.
Crude oil increased $2.38 to $70.59 a barrel and natural gas prices increased 22 cents to $2.56 a thermal unit.
U.S. Stock Movers
Cava Group soared more than 110% and traded as high as $45 after the restaurant company completed its initial public offering.
Cava sold 14.4 million shares at $22 each and raised $318 million.
Toyota Motor Corp increased 1.9% to $168.72 and the stock extended its weekly gain after shareholders reelected company chairman Akio Toyoda yesterday.
Kroger Co declined 2.8% to $45.88 after the company reiterated its same store sales excluding gasoline sales for the year.
Lennar Corp advanced 3.5% to $118.78 after the home builder reported better-than-expected fiscal second quarter results and the company lifted its unit sales outlook for the year.
European Markets Lacked Direction, ECB Signaled More Rate Hikes
European markets remained under pressure and the central bank lifted rates higher.
Market averages in London, Paris and Frankfurt traded down after the rate decision was announced and more rate hike worries dragged the indexes lower.
“We are not thinking about pausing," said ECB president Christine Lagarde at a press conference after the rate decision.
The central bank also revised higher its estimate of the headline inflation and core inflation for 2023 and lowered its economic growth outlook.
Investors largely ignore the improvement in international goods trade deficit data in April after imports fell at a faster pace than expected.
Tech stocks led decliners in trading across the region followed by declines in construction and telecom stocks.
In other news, China lowered its medium term lending facility rate by 10 basis points to revive the faltering economic growth.
The People's Bank of China lowered its one-year medium term rate following the decision to lower short term 7-day reverse repo rate by 10 basis points to 1.9% on Tuesday.
The central bank is expected to lower its loan prime rate by a similar amount on June 20.
ECB Lifted Reference Rates 0.25%
The European Central Bank decided to lift its lending rate for the eighth time in a row and revised its annual inflation outlook and lowered its annual economic growth estimate for 2023.
The Governing Council decided to lift the three key ECB interest rates by 25 basis points.
The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively, with effect from June 21.
The central bank also estimated average annual inflation of 5.4% in 2023 before it cools to 3.0% in 2024 and 2.2% in 2025.
Core inflation, excluding food and energy, is estimated to average 5.1% in 2023 and 3.0% in 2024.
Economic growth was revised slightly lower to 0.9% in 2023 and to 1.5% in 2024.
Eurozone Trade Deficit Shrank In April
The Euro Area international goods trade deficit in April shrank to €11.7 billion from €34.5 billion a year ago.
Exports declined 3.6% to €216.0 billion and imports dropped 11.9% to €227.7 billion.
In January to April 2023, euro area exports of goods to the rest of the world rose 5.4% from a year ago to €940.0 billion, and imports fell 2.9% to €957.2 billion.
Exports to the U.S. increased 2.5%, to China advanced 2.5%, to Turkey soared 26% and the UK jumped 6% but shipments to Russia declined 32% and Japan dropped 12.5%.
Imports from Russia plunged 73% and from China declined 10.5%.
Europe Indexes & Yields
The DAX index decreased 0.6% to 16,205.64, the CAC-40 index declined 0.8% to 7,270.65 and the FTSE 100 index increased 0.07% to 7,608.02.
The yield on 10-year German Bunds inched higher to 2.50%, French bonds traded higher to 3.03%, the UK gilts edged up to 4.42% and Italian bonds increased to 4.18%.
The euro edged lower to $1.08, the British pound to $1.26 and the Swiss franc to 90.26 cents.
Brent crude increased $2.32 to $75.54 a barrel and the Dutch TTF natural gas increased €2.80 to €41.15 per MWh.
Europe Stock Movers
Informa PLC increased 2.5% to 722.0 pence after the publisher and event organizer lifted its annual outlook.
Origin Enterprises Plc gained 1.7% to €3.51 after the agriculture services provider said revenue in the fiscal year 2023 increased to €1.9 billion.
Halma Plc declined 4.90% to 2,310.0 pence after the company posted lower net income attributable to stockholders.
H&M Group increased 3.3% to kr150.50 after the Swedish apparel retailer said net sales increased 6% in the three months to May.
Legal & General Group Plc declined 2.4% to 231.97 pence after the company appointed an outsider as its next chief executive.
Siemens AG added 0.3% to €164.82 after the German industrial conglomerate said it plans to invest €2 billion and build a new manufacturing plant in Singapore and expand its production facility in Chengdu, China.
Hugo Boss AG declined 2% to €68.70 after the German apparel designer and retailer said it is ahead on its target to reach €4 billion in sales by two years.
Movers: Autozone, Cava Group, John Wiley, Kroger, Lennar, Toyota Motor
Scott Peters
15 Jun, 2023
New York City
Cava Group soared more than 110% and traded as high as $45 after the restaurant company completed its initial public offering.
Cava sold 14.4 million shares at $22 each and raised $318 million.
Toyota Motor Corp increased 1.9% to $168.72 and the stock extended its weekly gain after shareholders reelected company chairman Akio Toyoda yesterday.
Kroger Co declined 2.8% to $45.88 after the company reiterated its same store sales excluding gasoline sales for the year.
Sales in the first quarter increased to $45.1 billion from $44.6 billion and net income increased $962 million and diluted earnings per share increased to $1.32 from 90 cents a year ago.
The company reaffirmed Identical sales excluding gasoline sales to grow between 1.0% and 2.0%, with underlying growth between 2.5% and 3.5% after adjusting for the effect of Express Scripts.
Adjusted net earnings per diluted share between $4.45 and $4.60, including an estimated benefit from the 53rd week of approximately $0.15.
Lennar Corp advanced 3.5% to $118.78 after the home builder reported better-than-expected fiscal fourth quarter results and the company lifted its unit sales outlook for the year.
Total revenue increased 21% to $10.2 billion from $8.4 billion and net income edged up to $1.3 billion from $1.2 billion and diluted earnings per share advanced to $4.55 from $3.91 a year ago.
Homes delivered increased 13% to 20,064 and order backlog dropped 21% to 18,869 and backlog order value dropped 23% to $8.7 billion.
The company guided new orders and home deliveries in the quarter between 12,000 and 13,500 and average sales price between $440,000 and $450,000 and gross margin of 21%.
Autozone Inc jumped 3.5% to $2,489.51 after the specialty retailer expanded its stock repurchase program by $2 billion.
John Wiley & Sons Inc dropped 13.5% to $31.43 after the company reported a decline in quarterly sales and management announced a restructuring plan including the sale of non-core education businesses.
Revenue in the fiscal fourth quarter ending in April declined 4% to $526 million and net income increased to $68.3 million from $43.2 million and diluted earnings per share advanced to $1.22 from 76 cents a year ago.
U.S. Retail Sales Unexpectedly Advanced In May
Brian Turner
15 Jun, 2023
New York City
U.S. retail sales rose 0.3% in May following a 0.4% rise in April, the U.S. Census Bureau reported Thursday.
Retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.6 billion, up 0.3% from the previous month, and up 1.6% from a year ago.
Retail trade sales were up 0.3% from April 2023, and up 0.7 percent (±0.5 percent) above last year.
Nonstore retailers were up 6.5% while food services and drinking places were up 8.0% from a year ago.
U.S. Averages Traded Higher, Retail Sales Advanced, Jobless Claims Held Steady
Barry Adams
15 Jun, 2023
New York City
Stocks on Wall Street overcame morning doldrums and extended gains a day after the Federal Reserve paused its monetary tightening cycle.
The Federal Reserve held the federal funds rate as expected but sent clear signals that its inflation fight is not done yet and policymakers are prepared to lift rates to cool inflation to 2%.
In a balancing act, the central bank is attempting to cool inflation while avoiding the economy to slip into a recession and not cause widespread unemployment.
Investors also digested the latest jobless claims and retail sales data.
Jobless Claims Held at Elevated Levels
Initial jobless claims for the week ending on June 10 were 262,000, matching the previous week's level, the U.S. Department of Labor reported Thursday.
Continuing claims for four weeks increased 20,000 from the previous week to 1,775 million.
Retail Sales Unexpectedly Rose In May
U.S. retail sales rose 0.3% in May following a 0.4% rise in April, the U.S. Census Bureau reported Thursday.
Retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.6 billion, up 0.3% from the previous month, and up 1.6% from a year ago.
Retail trade sales were up 0.3% from April 2023, and up 0.7 percent (±0.5 percent) above last year.
Nonstore retailers were up 6.5% while food services and drinking places were up 8.0% from a year ago.
U.S. Indexes & Yields
The S&P 500 index increased 0.9% to 4,410.29 and the Nasdaq Composite increased 0.7% to 13,726.93.
The yield on 2-year Treasury notes decreased to 4.65%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds eased to 3.83%.
Crude oil increased $0.92 to $69.19 a barrel and natural gas prices increased 8 cents to $2.42 a thermal unit.
U.S. Stock Movers
Cava Group soared more than 110% and traded as high as $45 after the restaurant company completed its initial public offering.
Cava sold 14.4 million shares at $22 each and raised $318 million.
Toyota Motor Corp increased 1.9% to $168.72 and the stock extended its weekly gain after shareholders reelected company chairman Akio Toyoda yesterday.
Kroger Co declined 2.8% to $45.88 after the company reiterated its same store sales excluding gasoline sales for the year.
Lennar Corp advanced 3.5% to $118.78 after the home builder reported better-than-expected fiscal second quarter results and the company lifted its unit sales outlook for the year.
European Markets Trended Lower After ECB Signaled More Rate Hikes
Bridgette Randall
15 Jun, 2023
Frankfurt
European markets remained under pressure and the central bank lifted rates higher.
Market averages in London, Paris and Frankfurt traded down after the rate decision was announced and more rate hike worries dragged the indexes lower.
“We are not thinking about pausing," said ECB president Christine Lagarde at a press conference after the rate decision.
The central bank also revised higher its estimate of the headline inflation and core inflation for 2023 and lowered its economic growth outlook.
Investors largely ignore the improvement in international goods trade deficit data in April after imports fell at a faster pace than expected.
Tech stocks led decliners in trading across the region followed by declines in construction and telecom stocks.
In other news, China lowered its medium term lending facility rate by 10 basis points to revive the faltering economic growth.
The People's Bank of China lowered its one-year medium term rate following the decision to lower short term 7-day reverse repo rate by 10 basis points to 1.9% on Tuesday.
The central bank is expected to lower its loan prime rate by a similar amount on June 20.
ECB Lifted Reference Rates 0.25%
The European Central Bank decided to lift its lending rate for the eighth time in a row and revised its annual inflation outlook and lowered its annual economic growth estimate for 2023.
The Governing Council decided to lift the three key ECB interest rates by 25 basis points.
The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively, with effect from June 21.
The central bank also estimated average annual inflation of 5.4% in 2023 before it cools to 3.0% in 2024 and 2.2% in 2025.
Core inflation, excluding food and energy, is estimated to average 5.1% in 2023 and 3.0% in 2024.
Economic growth was revised slightly lower to 0.9% in 2023 and to 1.5% in 2024.
Eurozone Trade Deficit Shrank In April
The Euro Area international goods trade deficit in April shrank to €11.7 billion from €34.5 billion a year ago.
Exports declined 3.6% to €216.0 billion and imports dropped 11.9% to €227.7 billion.
In January to April 2023, euro area exports of goods to the rest of the world rose 5.4% from a year ago to €940.0 billion, and imports fell 2.9% to €957.2 billion.
Exports to the U.S. increased 2.5%, to China advanced 2.5%, to Turkey soared 26% and the UK jumped 6% but shipments to Russia declined 32% and Japan dropped 12.5%.
Imports from Russia plunged 73% and from China declined 10.5%.
Europe Indexes & Yields
The DAX index decreased 0.6% to 16,205.64, the CAC-40 index declined 0.8% to 7,270.65 and the FTSE 100 index increased 0.07% to 7,608.02.
The yield on 10-year German Bunds inched higher to 2.50%, French bonds traded higher to 3.03%, the UK gilts edged up to 4.42% and Italian bonds increased to 4.18%.
The euro edged lower to $1.08, the British pound to $1.26 and the Swiss franc to 90.26 cents.
Brent crude increased $0.82 to $74.02 a barrel and the Dutch TTF natural gas increased €7.60 to €46.0 per MWh.
Europe Stock Movers
Informa PLC increased 2.5% to 722.0 pence after the publisher and event organizer lifted its annual outlook.
Origin Enterprises Plc gained 1.7% to €3.51 after the agriculture services provider said revenue in the fiscal year 2023 increased to €1.9 billion.
Halma Plc declined 4.90% to 2,310.0 pence after the company posted lower net income attributable to stockholders.
H&M Group increased 3.3% to kr150.50 after the Swedish apparel retailer said net sales increased 6% in the three months to May.
Legal & General Group Plc declined 2.4% to 231.97 pence after the company appointed an outsider as its next chief executive.
Siemens AG added 0.3% to €164.82 after the German industrial conglomerate said it plans to invest €2 billion and build a new manufacturing plant in Singapore and expand its production facility in Chengdu, China.
Hugo Boss AG declined 2% to €68.70 after the German apparel designer and retailer said it is ahead on its target to reach €4 billion in sales by two years.
Cooler but Elevated Inflation Worries Fed, More Rate Hikes After Today's Pause
Barry Adams
14 Jun, 2023
New York City
Stocks and Treasury yields turned volatile after the Federal Reserve paused its monetary tightening cycle but forecasted more hikes in the year.
As widely expected on Wall Street, the Federal Reserve decided to hold rates but continue to sell its holding of government debt.
Despite ten multiple rate hikes in a row over the last fifteen months, the economy has been resilient, labor market conditions are still tight and inflation is significantly above the Fed's target rate of 2%.
Fed Chairman Jerome Powell said in a speech after the rate decision that the full impact of cumulative rate hikes are still not fully felt by the economy.
“We have been seeing the effects of our policy tightening and demand in the most interest rate sensitive sectors of the economy, especially housing and investment," Powell commented in a presentation after the rate decision.
“It will take time however, for the full effects of monetary restraint to be realized, especially on inflation,” highlighting lagged effects of the rate decisions over the last one year.
The Federal Reserve 2023 GDP growth rate was revised higher to 1.1% from the previous estimate of 0.4% in March and the unemployment rate estimate was revised lower to 4.1% from 4.5%.
The PCE inflation was revised to 3.2% from 3.3% in March but core PCE was revised higher to 3.9% from 3.6%.
The federal funds rate at the end of 2023 was revised higher to 5.6% from 5.1%, suggesting as many as two likely rate hikes in the second half of the year.
Fed Holds Rates for Now, More Hikes to Follow
The Federal Reserve in an unanimous decision agreed to leave the target range for the federal funds unchanged at 5% to 5.25%.
The Federal Open Market Committee paused rates for the first time after lifting rates for ten times in a row since March 2022, when rates were revised higher by 500 basis points over the last fifteen months.
The Fed left the door open for future rate hikes and added that the central bank will continue to reduce its holding of Treasury securities and agency debt and agency mortgage-backed securities.
The Federal Reserve is hoping that multiple rate hikes since March 15 will impact broader economic activities and slowdown inflation forces to the Fed's target rate of 2%.
"The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the accompanying statement noted.
Wholesale Inflation Declined In May
Producer prices for final demand declined 0.3% in May from the previous month, following a 0.2% rise in April, the U.S. Bureau of Labor Statistics reported Wednesday.
Goods prices declined 1.6%, the largest decline since July 2022 and services prices increased 0.2%.
Most of the May decline is attributable to the index for final demand energy, which dropped 6.8%. Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8% drop in prices for gasoline.
Prices for final demand foods moved down 1.3%.
In contrast, the index for final demand goods less foods and energy increased 0.1%.
Service inflation increased 0.2% in May and over 40 percent of the increase in prices can be attributed to margins for automobiles and automobile parts retailing, which rose 4.2%.
On an annual basis, core inflation, which excludes food, energy and trade, eased to 2.8% in May from 3.3% in April and 6.8% a year ago.
U.S. Indexes & Yields
The S&P 500 index was unchanged at 4,370.65 and the Nasdaq Composite increased 0.2% to 13,594.84.
The yield on 2-year Treasury notes decreased to 4.69%, 10-year Treasury notes edged down to 3.79% and 30-year Treasury bonds eased 3.88%.
Crude oil increased $0.71 to $70.03 a barrel and natural gas prices increased 3 cents to $2.37 a thermal unit.
U.S. Stock Movers
Advanced Micro Devices, Inc jumped 2.2% to $127.09 and the company said on Tuesday it is ready to ship its latest chip for artificial intelligence.
Vodafone Group Plc increased 1.9% to $9.32 after the company and CK Hutchison owned Three UK agreed to merge their UK businesses.
After the merger, the UK will have only three mobile network operators - BT, Virgin Media O2 and Vodafone-Three UK.
Alphabet Inc Class A declined 0.9% to $122.78 after the European Union charged Google's parent for violating antitrust rules in adtech business.
UnitedHealth Group Inc dropped 7.2% to $455.97 after the company's chief financial officer John Rex said at a conference that non-emergency surgeries rates this quarter are running above the average level.
On the back of the news, Cigna declined 5.3% to $257.82 and Humana Inc dropped 13.5% to $443.0.
Toyota Motor Corp jumped 4.5% to $165.41 after chairman Akio Toyoda was reelected by shareholders, endorsing a new electric vehicle strategy.
Toyota traded at about a 9-month high in New York and closed at 16-month high ¥2,310.0 in Tokyo.
European Markets Closed Higher Ahead of Rate Decisions
Stocks advanced in the eurozone but gains were muted ahead of decisions.
Benchmark indexes edged higher in London after crude oil and commodities prices rebounded and luxury stocks led gainers in Paris.
Eurozone industrial production reversed previous month's decline in April after capital goods orders rebounded.
British GDP expanded 0.2% from the previous month in April, the Office for National Statistics reported Wednesday.
The retail and wholesale trade lifted service sector activities by 0.3% in April after falling 0.5% in March.
On the other hand, production output declined 0.3% after expanding 0.7% in March and construction output declined 0.6% after advancing 0.2%.
Investors are awaiting rate decision from the Federal Reserve at 2:00 p.m. ET and from the European Central Bank Thursday.
Euro Area Industrial Production Rebounded In April
Eurozone industrial production increased 1.0% in April, reversing 3.8% decline in March, the Eurostat reported Wednesday.
On an annual basis, industrial production increased 0.2%.
On a monthly basis in April production of capital goods advanced 14.7% and energy 1.0%, while production of intermediate goods fell 1.0%, durable consumer goods 2.6% and non-durable consumer goods 3.0%
On an annual basis in April, production of capital goods rose 8.3% and nondurable consumer goods 0.6%, while production of durable consumer goods fell 4.6%, intermediate goods 6.2% and energy 7.4%.
Among member states, industrial production soared 21.5% in Ireland, rose 0.8% in France and flat in Germany while declined 1.8% in Spain and fell 1.9% in Italy.
Europe Indexes & Yields
The DAX index increased 0.6% to 16,319.97, the CAC-40 index increased 0.9% to 7,355.93 and the FTSE 100 index increased 0.6% to 7,637.82.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded higher to 2.98%, the UK gilts edged up to 4.43% and Italian bonds increased to 4.08%.
The euro edged higher to $1.08, the British pound edged up to $1.26 and the Swiss franc traded at 90.26 cents.
Brent crude increased $1.19 to $73.12 a barrel and the Dutch TTF natural gas increased €2.26 to €38.36 per MWh.
Europe Stock Movers
Shell PLC increased 1.7% to 2,336.50 pence after the company said it plans to increase dividend and accelerate stock buybacks.
Puma SE increased 0.6% to €51.60 after the German footwear company announced a corporate reorganization.
Wacker Neuson SE soared 6% to €21.85 after the Germany-based construction equipment company set a target to increase its sales by 78% in 2030.
Entain Plc declined 8% to 1,212.0 pence after the company agreed to acquire Poland-based STS Holdings for £750 million.
Heidelberger Druckmaschinen AG declined 6.5% to €1.59 after the company forecasted cautious outlook for the current fiscal year.
Safestore Holdings plc decreased 1.5% to 917.0 pence after the company said its pre-tax profit in the first-half declined 64%.
Grifols SA Class A soared 8.3% to €11.99 after the Spanish pharmaceutical company announced its plan to sell its stake in Shanghai RAAS for $1.5 billion.
Logitech International SA plunged 10% to CHF 51.68 after the company said its chief executive officer Bracken Darrell plans to leave the company.
Federal Reserve Holds Rates
Brian Turner
14 Jun, 2023
New York City
The Federal Reserve in an unanimous decision agreed to leave the target range for the federal funds unchanged at 5% to 5.25%.
The Federal Open Market Committee paused rates for the first time after lifting rates for ten times in a row since March 2022, when rates were revised higher by 500 basis points over the last fifteen months.
The Fed left the door open for future rate hikes and added that the central bank will continue to reduce its holding of Treasury securities and agency debt and agency mortgage-backed securities.
The Federal Reserve is hoping that multiple rate hikes since March 15 will impact broader economic activities and slowdown inflation forces to the Fed's target rate of 2%.
"The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the accompanying statement noted.
Movers: Alphabet, AMD, Logitech, Shell Plc, Toyota Motor, UnitedHealth, Vodafone
Scott Peters
14 Jun, 2023
New York City
Shell PLC increased 2.5% to $59.85 after the UK-based energy company said it plans to increase dividend and accelerate stock buybacks.
The company announced its plan to buy back at least $5 billion of its in the second half, 15% increase in dividend from the second quarter and shareholder distribution increased to 30% to 40% of cash flow from operations.
Logitech International SA plunged 11.9% to $56.26 after the company said its chief executive officer Bracken Darrell plans to leave the company.
Advanced Micro Devices, Inc jumped 2.2% to $127.09 and the company said on Tuesday it is ready to ship its latest chip for artificial intelligence.
Vodafone Group Plc increased 1.9% to $9.32 after the company and CK Hutchison owned Three UK agreed to merge their UK businesses.
After the merger, the UK will have only three mobile network operators - BT, Virgin Media O2 and Vodafone-Three UK.
Alphabet Inc Class A declined 0.9% to $122.78 after the European Union charged Google's parent for violating antitrust rules in adtech business.
UnitedHealth Group Inc dropped 7.2% to $455.97 after the company's chief financial officer John Rex said at a conference that non-emergency surgeries rates this quarter are running above the average level.
On the back of the news, Cigna declined 5.3% to $257.82 and Humana Inc dropped 13.5% to $443.0.
Lumen Technologies Inc jumped 7.8% to $2.29 after the company announced partnership with Google and Microsoft for its new network interconnection ecosystem.
Toyota Motor Corp jumped 4.5% to $165.41 after chairman Akio Toyoda was reelected by shareholders, endorsing a new electric vehicle strategy.
Toyota traded at about a 9-month high in New York and closed at 16-month high ¥2,310.0 in Tokyo.
Wholesale Inflation Declined In May
Brian Turner
14 Jun, 2023
New York City
Producer prices for final demand declined 0.3% in May from the previous month, following a 0.2% rise in April, the U.S. Bureau of Labor Statistics reported Wednesday.
Goods prices declined 1.6%, the largest decline since July 2022 and services prices increased 0.2%.
Most of the May decline is attributable to the index for final demand energy, which dropped 6.8%.
Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8% drop in prices for gasoline.
Prices for final demand foods moved down 1.3%.
In contrast, the index for final demand goods less foods and energy increased 0.1%.
Service inflation increased 0.2% in May and over 40 percent of the increase in prices can be attributed to margins for automobiles and automobile parts retailing, which rose 4.2%.
On an annual basis, core inflation, which excludes food, energy and trade, eased to 2.8% in May from 3.3% in April and 6.8% a year ago.
Fed's Action in Focus as Rates Remain Far From Restrictive
Barry Adams
14 Jun, 2023
New York City
Stocks continued to advance ahead of the Federal Reserve's rate decision and comments about the state of the economy.
The S&P 500 index and the Nasdaq Composite index traded at new 13-month highs on the hopes that the central bank may leave rates unchanged after increasing ten times in a row since March 2012.
The latest read on producer price inflation followed the release of consumer inflation data on Tuesday which declined to a two-year low of 4.0% in May.
After multiple rate hikes consumer and wholesale inflation measures have cooled from as high as 9% and 11% respectively, inflation still remains significantly above the central bank's target rate of 2%.
Real rates are still not restrictive enough as suggested by elevated housing market, low treasury yields and broad price pressures.
Wholesale Inflation Declined In May
Producer prices for final demand declined 0.3% in May from the previous month, following a 0.2% rise in April, the U.S. Bureau of Labor Statistics reported Wednesday.
Goods prices declined 1.6%, the largest decline since July 2022 and services prices increased 0.2%.
Most of the May decline is attributable to the index for final demand energy, which dropped 6.8%. Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8% drop in prices for gasoline.
Prices for final demand foods moved down 1.3%.
In contrast, the index for final demand goods less foods and energy increased 0.1%.
Service inflation increased 0.2% in May and over 40 percent of the increase in prices can be attributed to margins for automobiles and automobile parts retailing, which rose 4.2%.
On an annual basis, core inflation, which excludes food, energy and trade, eased to 2.8% in May from 3.3% in April and 6.8% a year ago.
U.S. Indexes & Yields
The S&P 500 index increased 0.3% to 4,379.74 and the Nasdaq Composite added 0.3% to 13,605.72.
The yield on 2-year Treasury notes increased to 4.64%, 10-year Treasury notes edged down to 3.69% and 30-year Treasury bonds rose 3.91%.
Crude oil increased $0.71 to $70.03 a barrel and natural gas prices increased 3 cents to $2.37 a thermal unit.
U.S. Stock Movers
Shell PLC increased 2.5% to $59.85 after the UK-based energy company said it plans to increase dividend and accelerate stock buybacks.
The company announced its plan to buy back at least $5 billion of its in the second half, 15% increase in dividend from the second quarter and shareholder distribution increased to 30% to 40% of cash flow from operations.
Logitech International SA plunged 11.9% to $56.26 after the company said its chief executive officer Bracken Darrell plans to leave the company.
Advanced Micro Devices, Inc jumped 2.2% to $127.09 and the company said on Tuesday it is ready to ship its latest chip for artificial intelligence.
Vodafone Group Plc increased 1.9% to $9.32 after the company and CK Hutchison owned Three UK agreed to merge their UK businesses.
After the merger, the UK will have only three mobile network operators - BT, Virgin Media O2 and Vodafone-Three UK.
Alphabet Inc Class A declined 0.9% to $122.78 after the European Union charged Google's parent for violating antitrust rules in adtech business.
Europe Movers: Grifols, Entain, Heidelberger Druckmaschinen, Logitech, Puma, Shell PLC, Wacker Neuson
Bridgette Randall
14 Jun, 2023
Frankfurt
The DAX index increased 0.6% to 16,319.97, the CAC-40 index increased 0.9% to 7,355.93 and the FTSE 100 index increased 0.6% to 7,637.82.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded higher to 2.98%, the UK gilts edged up to 4.43% and Italian bonds increased to 4.08%.
Shell PLC increased 1.7% to 2,336.50 pence after the company said it plans to increase dividend and accelerate stock buybacks.
The company announced its plan to buyback at least $5 billion of its in the second half, 15% increase in dividend from the second quarter and shareholder distribution increased to 30% to 40% of cash flow from operations.
Puma SE increased 0.6% to €51.60 after the German footwear company announced a corporate reorganization.
Wacker Neuson SE soared 6% to €21.85 after the Germany-based construction equipment company set a target to increase its sales by 78% in 2030.
Entain Plc declined 8% to 1,212.0 pence after the company agreed to acquire Poland-based STS Holdings for £750 million.
Heidelberger Druckmaschinen AG declined 6.5% to €1.59 after the company forecasted cautious outlook for the current fiscal year.
Safestore Holdings plc decreased 1.5% to 917.0 pence after the company said its pre-tax profit in the first-half declined 64%.
Grifols SA Class A soared 8.3% to €11.99 after the Spanish pharmaceutical company announced its plan to sell its stake in Shanghai RAAS for $1.5 billion.
Logitech International SA plunged 10% to CHF 51.68 after the company said its chief executive officer Bracken Darrell plans to leave the company.
European Markets Looked Up and Euro Area Industrial Production Rebounded
Bridgette Randall
14 Jun, 2023
Frankfurt
Stocks advanced in the eurozone but gains were muted ahead of decisions.
Benchmark indexes edged higher in London after crude oil and commodities prices rebounded and luxury stocks led gainers in Paris.
Eurozone industrial production reversed previous month's decline in April after capital goods orders rebounded.
British GDP expanded 0.2% from the previous month in April, the Office for National Statistics reported Wednesday.
The retail and wholesale trade lifted service sector activities by 0.3% in April after falling 0.5% in March.
On the other hand, production output declined 0.3% after expanding 0.7% in March and construction output declined 0.6% after advancing 0.2%.
Investors are awaiting rate decision from the Federal Reserve at 2:00 p.m. ET and from the European Central Bank Thursday.
Euro Area Industrial Production Rebounded In April
Eurozone industrial production increased 1.0% in April, reversing 3.8% decline in March, the Eurostat reported Wednesday.
On an annual basis, industrial production increased 0.2%.
On a monthly basis in April production of capital goods advanced 14.7% and energy 1.0%, while production of intermediate goods fell 1.0%, durable consumer goods 2.6% and non-durable consumer goods 3.0%
On an annual basis in April, production of capital goods rose 8.3% and nondurable consumer goods 0.6%, while production of durable consumer goods fell 4.6%, intermediate goods 6.2% and energy 7.4%.
Among member states, industrial production soared 21.5% in Ireland, rose 0.8% in France and flat in Germany while declined 1.8% in Spain and fell 1.9% in Italy.
Europe Indexes & Yields
The DAX index increased 0.6% to 16,319.97, the CAC-40 index increased 0.9% to 7,355.93 and the FTSE 100 index increased 0.6% to 7,637.82.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded higher to 2.98%, the UK gilts edged up to 4.43% and Italian bonds increased to 4.08%.
The euro edged lower to $1.08, the British pound to $1.26 and the Swiss franc to 90.26 cents.
Brent crude increased $1.13 to $75.42 a barrel and the Dutch TTF natural gas increased €2.50 to €33.56 per MWh.
Europe Stock Movers
Shell PLC increased 1.7% to 2,336.50 pence after the company said it plans to increase dividend and accelerate stock buybacks.
Puma SE increased 0.6% to €51.60 after the German footwear company announced a corporate reorganization.
Wacker Neuson SE soared 6% to €21.85 after the Germany-based construction equipment company set a target to increase its sales by 78% in 2030.
Entain Plc declined 8% to 1,212.0 pence after the company agreed to acquire Poland-based STS Holdings for £750 million.
Heidelberger Druckmaschinen AG declined 6.5% to €1.59 after the company forecasted cautious outlook for the current fiscal year.
Safestore Holdings plc decreased 1.5% to 917.0 pence after the company said its pre-tax profit in the first-half declined 64%.
Grifols SA Class A soared 8.3% to €11.99 after the Spanish pharmaceutical company announced its plan to sell its stake in Shanghai RAAS for $1.5 billion.
Logitech International SA plunged 10% to CHF 51.68 after the company said its chief executive officer Bracken Darrell plans to leave the company.