Market Update
Major U.S. Averages Advanced, Global Markets May Face Rate Hikes Next Week
Barry Adams
08 Jun, 2023
New York City
Benchmark indexes climbed a tall wall of worries and investors debated rate path and health of the U.S. economy.
Treasury yields diverged and the yield spread between 2-year and 10-year notes widened but the yield on 30-year Treasury bonds hovered below 4.0%.
The Federal Reserve is scheduled to announce its rate decision after the 2-day meeting on June 14 and investors are divided with some forecasting rates to increase by 25 basis points.
Despite nine rate hikes over the last fourteen months, inflation has stayed above the Fed's target level of 2% and inflationary forces are weakening but price increases have spread to broader activities in the economy.
Lagged effects of rate hikes have still not worked its way to the broader economy, but elevated rates are likely to stay higher for longer.
The U.S. Federal Reserve, the Bank of Japan and the European Central Bank are scheduled to announce their rate decisions next week.
As earnings season for the first quarter is winding down, investors are revising expectations downward for the current quarter.
Stretched household budgets, because of elevated inflation, are likely to keep consumer spending in check for the rest of the year.
In addition, higher rates and tighter credit conditions after the recent collapse of several regional banks is also negatively impacting lending to small and medium-sized businesses.
Jobless Claims Advanced Third Week In a Row
The initial claims of jobless benefits increased to 261,000 in the week ending on June 3, the U.S. Department of Labor reported Thursday.
Weekly claims rose to the highest level since October 2021 and rose for the third week in a row.
Initial claims in the previous week were slightly revised higher to 233,000 from the previous estimate of 232,000.
Continuing claims declined 37,000 1.757 million from 1.794 million in the previous week.
U.S. Indexes & Yields
The S&P 500 index increased 0.5% to 4,288.97 and the Nasdaq Composite increased 0.9% to 13,224.58.
The yield on 2-year Treasury notes decreased to 4.45%, 10-year Treasury notes edged up to 3.79% and 30-year Treasury bonds rose 3.95%.
Crude oil traded lower after reports suggested that the U.S. and Iran are nearing a deal to ease sanctions in exchange for Iran reducing its uranium enrichment.
Crude oil increased $2.46 to $70.03 a barrel and natural gas prices increased 1 cent to $2.30 a thermal unit.
U.S. Stock Movers
GameStop Corp declined 21.6% to $20.46 after the company ousted chief executive Matthew Furlong and said Ryan Cohen will take over as executive chairman.
Signet Jewelers Limited dropped 9% to $63.01 after the specialty retailer lowered its revenue and earnings estimate for the full-year and forecasted weaker-than-expected second quarter revenue and operating income.
Lucid Group increased 3.1% to $6.60 after the electric vehicle maker's head of China operations Zhu Jiang said the company is preparing to launch its operations and enter the Chinese market.
HashiCorp Inc plunged 21.4% to $27.40 after the cloud computing company reported weaker than expected earnings.
In addition, the company announced its plan to reduce its workforce by 8% citing macroeconomic headwinds.
In Cautious Trading European Markets Lacked Direction
European markets traded in a narrow range and investors remained cautious ahead of rate decisions next week.
Bond yield in the region rose ahead of the European Central Bank's rate decision next week. The yields were also on the rise after the Bank of Canada and the Reserve Bank of Australia lifted rates by 25 basis points.
The U.S. Federal Reserve is also likely to lift its key lending rate by 25 basis points.
Tech stocks led decliners in the region and energy stocks led gainers in volatile trading in Paris, London and Frankfurt.
Market sentiment was cautious after the eurozone economy unexpectedly shrank in the first quarter of 2023 following a downwardly revised final quarter of 2022, dragging the region into technical recession.
Technical Recession in Euro Area
The Euro Area economy unexpectedly shrank 0.1% in the first quarter, the statistical office of the European Union Eurostat reported Thursday.
The GDP growth estimate for the final quarter of 2022 was revised to a decline of 0.1% from flat, indicating that the economy of the currency union entered a technical recession.
On an annual basis, seasonally adjusted GDP increased 1.0% in the first quarter of 2023, slower than the 1.8% rise in the final quarter of 2022.
Poland recorded the highest increase of 3.8% in GDP compared to the previous quarter, followed by 2.0% in Luxembourg and 1.6% in Portugal.
Ireland's GDP shrank the most in the currency union with a fall of 4.6%, followed by 2.1% decline in Lithuania and 0.7% decrease in the Netherlands.
GDP contracted 0.3% in Germany but expanded 0.5% in Spain, 0.2% in France and 0.6% in Italy.
Europe Indexes & Yields
The DAX index increased 0.2% to 15,991.76, the CAC-40 index increased 0.2% to 7,221.56, and the FTSE 100 index fell 0.3% to 7,599.74.
The yield on 10-year German Bunds inched higher to 2.46%, French bonds traded higher to 3.01%, the UK gilts edged up to 4.29% and Italian bonds increased to 4.26%.
The euro edged lower to $1.072, the British pound to $1.246 and the Swiss franc to 90.95 cents.
Brent crude increased $0.95 to $75.98 a barrel and the Dutch TTF natural gas increased €0.74 to €27.07 per MWh.
Europe Stock Movers
FirstGroup Plc soared 15.5% to 137.50 pence after the transportation company announced a stock buyback plan of £115 million.
The company also swung to a pre-tax profit in fiscal 2023 after revenue picked up.
RWS Holdings Plc increased 14.3% to or 259.80 pence after the company launched a stock repurchase plan of up to £50 million.
In the first-half, revenue increased and profit declined but the company confirmed that the full-year outlook is in line with market expectations.
Wizz Air Holdings Plc increased 0.2% to 2,784.0 pence after the deep discount airline said loss shrank in the fiscal 2023 on higher revenue.
The airline forecasted profitability in the fiscal year 2024.
Crest Nicholson Holdings Plc dropped 8.2% to 229.04 pence after the company reported weaker-than-expected revenues in the first-half but swung to a profit from a loss in the corresponding period a year ago.
Saint Gobain SA increased 1.2% to €56.73 after the French building materials company estimated fiscal 2023 operating margin between 9% and 11%.
Mitie Group Plc added 0.5% to 96.90 pence after the outsourcing company reported higher revenue but flat after-tax earnings.
Australia and Canada Lift Rates, India Holds
The Reserve Bank of India held its repo rate at 6.5% and the Bank of Canada and the Reserve Bank of Australia lifted their reference rates by 25 basis points.
Japan Q1 GDP Revised Higher
Japan's economic growth in the first quarter was revised to 0.7% from the previous estimate of 0.4%, the Cabinet Office reported Thursday.
On an annual basis, GDP growth was revised to 2.7% from 1.6% in the preliminary estimate.
Capital spending was revised higher to 1.4% from 0.9% in the preliminary estimate, private demand rose 1.2% from 0.8% and domestic demand was revised higher to 1.0% from 0.7%.
Upward revision in the Japan's GDP surprised economists and benchmark indexes in Tokyo trade at 33-year highs.
The Japanese yen strengthened 0.1% to 139.97 against the U.S. dollar after the release of data.
Movers: GameStop, HashiCorp, Lucid Group, Signet Jewelers
Scott Peters
08 Jun, 2023
New York City
The S&P 500 index increased 2.58 points to 4,269.62 and the Nasdaq Composite increased 0.2% to 13,135.62.
The yield on 2-year Treasury notes decreased to 4.45%, 10-year Treasury notes edged up to 3.79% and 30-year Treasury bonds rose 3.95%.
GameStop Corp declined 21.6% to $20.46 after the company ousted chief executive Matthew Furlong and said Ryan Cohen will take over as executive chairman.
Net sales in the first quarter ending in April declined to $1.237 billion from $1.378 billion and net loss shrank to $50.5 million from $157.9 million and diluted loss per share fell to 17 cents from 52 cents a year ago.
Signet Jewelers Limited dropped 9% to $63.01 after the specialty retailer lowered its revenue and earnings estimate for the full-year and forecasted weaker-than-expected second quarter revenue and operating income.
Sales in the fiscal first quarter ending in April declined 9.3% to $1.7 billion and same store sales declined 13.9% from a year ago.
Sales in North America declined 8.4% to $1.6 billion and same store sales fell 14.2% from a year ago.
The company swung net income attributable to shareholders to $88.8 million from a loss of $92.1 million and diluted earnings per share was $1.79 compared to ($1.89).
The company declared quarterly dividend per share of 23 cents to shareholders on record July 28 and payable on August 25.
The company repurchased $39.1 million of its shares in the first quarter.
Lucid Group increased 3.1% to $6.60 after the electric vehicle maker's head of China operations Zhu Jiang said the company is preparing to launch its operations and enter the Chinese market.
HashiCorp Inc plunged 21.4% to $27.40 after the cloud computing company reported weaker than expected earnings.
Revenue in the first quarter ending in April increased 37% to $138.0 million and net loss shrank to $53.2 million from $82.2 million and diluted loss per share fell to 28 cents from 43 cents a year ago.
The company estimated fiscal second quarter revenue between $137 million and $139 million and non-GAAP loss per share between 14 cents and 16 cents.
The company estimated full-year revenue between $564 million and $570 million and non-GAPP loss per share between 24 cents and 27 cents.
In addition, the company announced its plan to reduce its workforce by 8% citing macroeconomic headwinds.
With Stocks On Hold, U.S. Treasury Yields Show Divided Bond Market
Barry Adams
08 Jun, 2023
New York City
Benchmark indexes traded sideways and investors debated rate path and health of the U.S. economy.
Treasury yields diverged and the yield spread between 2-year and 10-year Treasury notes widened, indicating rising stress in the bond market ahead of the rate decision next week.
The Federal Reserve is scheduled to announce its rate decision after the 2-day meeting on June 14. Investors are divided with some forecasting rate to increase by 25 basis points.
Despite nine rate hikes over the last fourteen months, inflation has stayed above the Fed's target level of 2%.
Lagged effects of rate hikes have still not worked its way to the broader economy, but elevated rates are likely to stay higher for longer.
As earnings season for the first quarter is winding down, investors are revising expectations downward for the current quarter.
Stretched household budgets because of elevated inflation are likely to keep consumer spending in check for the rest of the year.
In addition, higher rates and tighter credit conditions after the recent collapse of several regional banks is also negatively impacting lending to middle America.
Jobless Claims Advanced Third Week In a Row
The initial claims of jobless benefits increased to 261,000 in the week ending on June 3, the U.S. Department of Labor reported Thursday.
Weekly claims rose to the highest level since October 2021 and rose for the third week in a row.
Initial claims in the previous week were slightly revised higher to 233,000 from the previous estimate of 232,000.
Continuing claims declined 37,000 1.757 million from 1.794 million in the previous week.
U.S. Indexes & Yields
The S&P 500 index increased 2.58 points to 4,269.62 and the Nasdaq Composite increased 0.2% to 13,135.62.
The yield on 2-year Treasury notes decreased to 4.45%, 10-year Treasury notes edged up to 3.79% and 30-year Treasury bonds rose 3.95%.
Crude oil increased $0.36 to $72.93 a barrel and natural gas prices increased 1 cent to $2.34 a thermal unit.
U.S. Stock Movers
GameStop Corp declined 21.6% to $20.46 after the company ousted chief executive Matthew Furlong and said Ryan Cohen will take over as executive chairman.
Signet Jewelers Limited dropped 9% to $63.01 after the specialty retailer lowered its revenue and earnings estimate for the full-year and forecasted weaker-than-expected second quarter revenue and operating income.
Lucid Group increased 3.1% to $6.60 after the electric vehicle maker's head of China operations Zhu Jiang said the company is preparing to launch its operations and enter the Chinese market.
HashiCorp Inc plunged 21.4% to $27.40 after the cloud computing company reported weaker than expected earnings.
In addition, the company announced its plan to reduce its workforce by 8% citing macroeconomic headwinds.
Europe Movers: Crest Nicholson, FirstGroup, Mitie Group, RWS Holdings, Saint Gobain, Wizz Air
Bridgette Randall
08 Jun, 2023
Frankfurt
The DAX index increased 0.2% to 15,998.35, the CAC-40 index increased 0.2% to 7,220.64, and the FTSE 100 index inched lower a fraction to 7,623.46.
The yield on 10-year German Bunds inched higher to 2.46%, French bonds traded higher to 3.01%, the UK gilts edged up to 4.29% and Italian bonds increased to 4.26%.
FirstGroup Plc soared 15.5% to 137.50 pence after the transportation company announced a stock buyback plan of £115 million.
The company also swung to a pre-tax profit in fiscal 2023 after revenue from continued operations increased to £4.7 billion from £4.6 billion a year ago.
Total revenue declined to £4.8 billion from £5.6 billion and adjusted attributable profit surged to £82.1 million from £45.9 million a year ago.
RWS Holdings Plc increased 14.3% to or 259.80 pence after the company launched a stock repurchase plan of up to £50 million.
In the first-half, revenue increased and profit declined but the company confirmed that the full-year outlook is in line with market expectations.
Revenue in the first-half ending in March increased to £366.3 million from £357.3 million and reported profit before-tax declined to £28.7 million from £32.9 million and basic earnings per share decreased to 5.4 pence from 6.1 pence a year ago.
The company increased its interim dividend to 2.40 pence from 2.25 pence a year ago.
Wizz Air Holdings Plc increased 0.2% to 2,784.0 pence after the deep discount airline said loss shrank in the fiscal 2023 on higher revenue.
Revenue in the fiscal year 2023 ending in March increased to 3.9 billion from 1.7 billion and reported loss shrank to 535.1 million from 642.5 million and load factor improved to 87.4% from 78.1%.
The airline forecasted profitability in the fiscal year 2024.
Crest Nicholson Holdings Plc dropped 8.2% to 229.04 pence after the home builder reported weaker-than-expected revenues in the first-half but swung to a profit from a loss in the corresponding period a year ago.
Revenue in the first-half ending in April declined to £282.7 million from £364,7 million and swung to a pre-tax profit of £28.4 million from a loss of £52.5 million.
The company confirmed pre-tax profit in the fiscal year 2023 in-line with market expectation of £73.7 million.
Saint Gobain SA increased 1.2% to €56.73 after the French building materials company estimated fiscal 2023 operating margin between 9% and 11%.
Mitie Group Plc added 0.5% to 96.90 pence after the outsourcing company reported higher revenue but flat after-tax earnings.
Revenue in the fiscal year 2023 increased to £4.05 billion from £3.99 billion a year ago and the company won a total contract value of £4.3 billion with renewal rate of over 90% and book-to-bill ratio of 105%.
Net income in the year jumped to 91 million from 31 million and basic earnings per share rose to 6.8 pence from 2.2 pence a year ago.
The company announced a new £50 million stock repurchase plan in April and the purchase of £25 million in progress.
European Markets Turn Cautious, Technical Recession In Eurozone
Bridgette Randall
08 Jun, 2023
Frankfurt
European markets traded in a narrow range and investors remained cautious ahead of rate decisions next week.
Bond yield in the region rose ahead of the European Central Bank's rate decision next week. The yields were also on the rise after the Bank of Canada and the Reserve Bank of Australia lifted rates by 25 basis points.
The U.S. Federal Reserve is also likely to lift its key lending rate by 25 basis points.
Tech stocks led decliners in the region and energy stocks led gainers in volatile trading in Paris, London and Frankfurt.
Market sentiment was cautious after the eurozone economy unexpectedly shrank in the first quarter of 2023 following a downwardly revised final quarter of 2022, dragging the region into technical recession.
Technical Recession in Euro Area
The Euro Area economy unexpectedly shrank 0.1% in the first quarter, the statistical office of the European Union Eurostat reported Thursday.
The GDP growth estimate for the final quarter of 2022 was revised to a decline of 0.1% from flat, indicating that the economy of the currency union entered a technical recession.
On an annual basis, seasonally adjusted GDP increased 1.0% in the first quarter of 2023, slower than the 1.8% rise in the final quarter of 2022.
Poland recorded the highest increase of 3.8% in GDP compared to the previous quarter, followed by 2.0% in Luxembourg and 1.6% in Portugal.
Ireland's GDP shrank the most in the currency union with a fall of 4.6%, followed by 2.1% decline in Lithuania and 0.7% decrease in the Netherlands.
GDP contracted 0.3% in Germany but expanded 0.5% in Spain, 0.2% in France and 0.6% in Italy.
Europe Indexes & Yields
The DAX index increased 0.2% to 15,998.35, the CAC-40 index increased 0.2% to 7,220.64, and the FTSE 100 index inched lower a fraction to 7,623.46.
The yield on 10-year German Bunds inched higher to 2.46%, French bonds traded higher to 3.01%, the UK gilts edged up to 4.29% and Italian bonds increased to 4.26%.
The euro edged lower to $1.072, the British pound to $1.246 and the Swiss franc to 90.95 cents.
Brent crude increased $0.72 to $77.68 a barrel and the Dutch TTF natural gas increased €2.15 to €28.48 per MWh.
Europe Stock Movers
FirstGroup Plc soared 15.5% to 137.50 pence after the transportation company announced a stock buyback plan of £115 million.
The company also swung to a pre-tax profit in fiscal 2023 after revenue picked up.
RWS Holdings Plc increased 14.3% to or 259.80 pence after the company launched a stock repurchase plan of up to £50 million.
In the first-half, revenue increased and profit declined but the company confirmed that the full-year outlook is in line with market expectations.
Wizz Air Holdings Plc increased 0.2% to 2,784.0 pence after the deep discount airline said loss shrank in the fiscal 2023 on higher revenue.
The airline forecasted profitability in the fiscal year 2024.
Crest Nicholson Holdings Plc dropped 8.2% to 229.04 pence after the company reported weaker-than-expected revenues in the first-half but swung to a profit from a loss in the corresponding period a year ago.
Saint Gobain SA increased 1.2% to €56.73 after the French building materials company estimated fiscal 2023 operating margin between 9% and 11%.
Mitie Group Plc added 0.5% to 96.90 pence after the outsourcing company reported higher revenue but flat after-tax earnings.
OECD Lifted Global Economic Growth Outlook
Brian Turner
08 Jun, 2023
New York City
Global economic growth is likely to pick up in the remainder of 2023, but the recovery is expected to be anemic, the OECD said in its quarterly update released Wednesday.
GDP growth in 2023 was revised higher to 2.7% from 2.6% but the outlook for 2024 was left unrevised at 2.9%.
Despite the slight pick up in the global growth, downside risks persists because of the uncertainties related to the Ukraine war, higher inflation and milder weather in Europe may not be repeated next year.
GDP growth in the Euro Area is likely to pick up from 0.9% in 2023 to 1.5% in 2024 because the sharp decline in energy prices is expected to increase real income and contribute to acceleration in economic growth.
U.S. Market Indexes Stay Elevated Amid Rates and Earnings Worries
Barry Adams
07 Jun, 2023
New York City
Stocks struggled to advance and investors took a cautious view of markets ahead of central bank decisions next week.
In cautious trading, investors debated global economic outlook, rate path and durability of corporate earnings.
The U.S. economy is expected to slow down sharply in the third quarter because of lagged effects of multiple interest rate hikes.
Moreover, retailers are facing a higher than normal promotional environment after ordering excess inventories to avoid future supply chain problems.
Despite the looming earnings slow down, tighter credit conditions and stretched consumer budgets, market indexes are trading at nine-month highs.
The latest annual outlook from the World Bank and OECD noted that the multiple rate hikes in the U.S. are expected to keep economic growth in check in the second half of this year.
The Federal Reserve is expected to continue its rate hike campaign and lift rates by 25 basis points as the central bank tackles high inflation.
Inflation has weakened in the last nine months but prices are still rising at a faster than 2% level preferred by the central bank.
The S&P 500 index retreated from the high not seen since August 2022 and the Nasdaq Composite index trended lower from a high not seen since April 2022.
Financial markets are looking ahead to rate decisions next week and the U.S. Federal Reserve and the European Central Bank are expected to lift rates.
In international news, China's exports in May plunged 7.5% from a year ago to $283.5 billion, reversing an 8.5% increase in April, China's custom agency reported Wednesday.
Exports in the period between January and May rose 0.3% from the corresponding period a year ago.
Trade surplus in May declined to $65.81 billion from $78.40 billion a year ago, the smallest trade surplus in February after exports fell 7.5% faster than the 4.5% decline in imports.
U.S. Trade Deficit Widened to 6-month High In April
U.S. trade deficit widened in April to $74.6 billion from $60.6 billion in March, the Bureau of Economic Analysis reported Wednesday.
Exports declined 3.6% to $246.9 billion and imports fell 1.5% to $323.6 billion.
The increase in the goods and services deficit reflected an increase in the goods deficit of $14.5 billion to $96.1 billion and an increase in the services surplus of $0.6 billion to $21.6 billion.
In April, exports of goods decreased $9.4 billion to $167.1 billion and exports of services increased $0.2 billion to $81.9 billion.
Imports of goods increased $5.2 billion to $263.2 billion in April and imports of services decreased $0.4 billion to $60.4 billion.
The U.S. recorded a surplus with the Netherlands of $4.2 billion, South and Central America of $4.1 billion, Belgium $1.9 billion, Hong Kong $1.6 billion, Australia $1.0 billion, United Kingdom $0.9 billion, and Brazil $0.7 billion.
The U.S. registered the largest deficits with China of $24.2 billion, European Union $17.3 billion, Mexico $13.0 billion.
Deficits with other countries included Vietnam of $8.5 billion, Germany $7.6 billion, Japan $6.8 billion, Canada $6.1 billion, Ireland $5.0 billion, Switzerland $4.5 billion, South Korea $4.3 billion, Italy $3.8 billion, India $3.5 billion, Taiwan $3.5 billion, Malaysia $2.3 billion, France $1.2 billion, Singapore $0.7 billion, Israel $0.6 billion, and Saudi Arabia $0.4 billion.
U.S. Indexes & Yields
The S&P 500 index decreased 4.48 points to 4,269.18 and the Nasdaq Composite increased 12.83 points to 13,242.21.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes edged up to 3.70% and 30-year Treasury bonds held at 3.87%.
Crude oil increased $0.94 to $72.71 a barrel and natural gas prices increased 7 cents to $2.33 a thermal unit.
U.S. Stock Movers
Dave & Buster's Entertainment Inc jumped 18% to $40.14 after the restaurant chain operator reported quarterly results ahead of market expectations.
Stitch Fix Inc soared 31.5% to $4.81 after the online fashion platform posted a loss of 19 cents a share on revenue of $395 million.
GameStop Corp increased 3.8% to $25.65 ahead of the specialty retailer's quarterly results today.
Warner Bros Discovery Inc jumped 4.7% to $12.67 after the company announced the departure of CNN CEO Chris Licht amid historic low rating and tumultuous reign of just over a year.
European Markets Trade Around Flatline
European stocks lacked direction as investors reviewed global economic outlook ahead of central bank actions next week.
Major indexes in Frankfurt, Paris and London rested as investors awaited the ECB's and the U.S. Fed's rate decisions.
Despite the recent slowdown in the inflationary pressures, inflation still remains significantly above the 2% level preferred by the European Central Bank.
Investors are also concerned about the uneven economic recovery in China and tightening credit conditions are expected to negatively impact U.S. economic growth.
German Industrial Production Rebounded
Germany's industrial production increased 0.3% from the previous month in April, the Federal Statistics Office or Destatis reported Wednesday.
March production data was downwardly revised to a decline of 2.1%.
On a yearly basis, industrial production increased 1.6% in April from 2.3% in March.
Production picked up on the rebound in construction activities to 2.0% from the fall of 2.9% in March, 6.4% jump in pharmaceutical manufacturing and 1.5% rise in consumer goods.
However the overall production activities were restrained by the decline in motor vehicles and parts production by 0.8%, engineering by 0.5%, capital goods 0.3%, intermediate goods by 0.2% and energy equipment by 1.5%.
Industrial production, excluding construction and energy, increased 0.1%.
France's Trade Deficit Expanded In April
France's trade deficit increased in April after exports fell faster than imports, customs office data showed Wednesday.
From the previous month, Imports and exports declined Є0.2 billion to Є59.3 billion and Є50.1 billion.
Exports advanced 8.2% in April and imports increased 0.2% from a year ago.
Excluding energy, international trade balance held at Є5.0 billion in April, matching the previous month.
Trade deficit increased to Є9.71 billion in April from Є8.39 billion in March.
OECD Revised Higher Global Growth Outlook
Global economic growth is likely to pick up in the remainder of 2023, but the recovery is expected to be anemic, the OECD said in its quarterly update released Wednesday.
GDP growth in 2023 was revised higher to 2.7% from 2.6% but the outlook for 2024 was left unrevised at 2.9%.
Despite the slight pick up in the global growth, downside risks persists because of the uncertainties related to the Ukraine war, higher inflation and milder weather in Europe may not be repeated next year.
GDP growth in the Euro Area is likely to pick up from 0.9% in 2023 to 1.5% in 2024 because the sharp decline in energy prices is expected to increase real income and contribute to acceleration in economic growth.
Europe Indexes & Yields
The DAX index decreased 0.2% to 15,960.25, the CAC-40 index decreased 0.01% to 7,202.79, and the FTSE 100 index inched lower 0.04% to 7,624.34.
The yield on 10-year German Bunds inched higher to 2.36%, French bonds traded higher to 2.91%, the UK gilts edged up to 4.19% and Italian bonds increased to 4.17%.
The euro edged lower to $1.070, the British pound to $1.244 and the Swiss franc to 90.65 cents.
Brent crude increased $0.63 to $76.92 a barrel and the Dutch TTF natural gas increased €1.45 to €26.33 per MWh.
Europe Stock Movers
Industria de Diseno Textil SA or Inditex increased 6.2% to €33.79 after the retailer reported better-than-expected profit in the first quarter.
GSK plc increased 0.02% to 1,391.80 pence after the company's respiratory syncytial virus vaccine Arexvy won an authorization from the European Commission.
UK home builders declined after home prices fell on a yearly basis In April according to data published by Halifax.
Home prices were stable in May from April but declined from a year ago by 1.0% after rising 0.1% in the previous month.
Average property price in May decreased to £286,532 compared to £286,662 in April.
"As expected the brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets, and in particular those with fixed rate mortgage deals coming to an end," noted Halifax Mortgages Director Kim Kinnaird in the statement.
Persimmon Plc declined 1.5% to 1,232.50 pence, Berkeley Group fell 1.2% to 3,990.0 pence and Taylor Wimpey dropped 1.2% to 116.30 pence.
N Brown declined 3.6% to 23.91 pence after the online fashion retailer reported a decline in revenue and net income.
Stratec SE increased 2.7% to €63.80 after the Germany-based in vitro diagnostic company agreed to acquire the U.S. based Natech Plastics.
Movers: Dave & Buster's, GameStop, Golf stocks, Stitch Fix, Tesla, Yext
Scott Peters
07 Jun, 2023
New York City
The S&P 500 index decreased 4.48 points to 4,269.18 and the Nasdaq Composite increased 12.83 points to 13,242.21.
Dave & Buster's Entertainment Inc jumped 4.7% to $35.34 after the restaurant chain operator reported quarterly results ahead of market expectations.
Revenue in the first quarter increased 32.4% to $597.3 million and comparable sales including Main Event stores decreased 4.1% from a year ago.
Net income increased to $70.1 million from $67.0 million and diluted earnings per share advanced to $1.45 from $1.35 a year ago.
The company repurchased 3.6 million shares in the first quarter at a total cost of $125.5 million and subsequent to the end of the quarter, the company purchased an additional 2.1 million shares at a total cost of $74.5 million, bringing the total repurchases in fiscal 2023 to 5.7 million shares totaling $200.0 million, representing 11.8% of the outstanding shares as of the end of fiscal 2022.
The company signed two international franchise agreements for up to 15 stores in India and up to 5 stores in Australia.
Stitch Fix Inc soared 9% to $4.01 after the online fashion platform posted a loss of 19 cents a share on revenue of $395 million.
Net revenue in the fiscal third quarter ending in April declined 20% to $394.9 million and active clients fell 11% to 3.476 million.
Net loss in the quarter shrank to $12.8 million from $78 million and diluted loss per share fell to 19 cents from 78 cents a year ago.
The company estimated fiscal fourth quarter revenue between $345 million and $365 million, a decline between 20% and 22% from a year ago.
The company also said it plans to exit from the UK in the next fiscal year.
GameStop Corp increased 8.3% to $26.75 ahead of the specialty retailer's quarterly results today.
Tesla Inc increased 2.4% to $226.70 after the company said on its website that new Tesla Model 3 and Tesla Model Y vehicles are eligible for a $7,500 tax credit from the Inflation Reduction Act.
Yext Inc soared 45% to $13.94 after the online marketplace operator reported better-than-expected quarterly results.
Revenue in the fiscal first quarter ending in April increased 1% to $99.4 million from $98.8 million and net loss shrank to $0.4 million from $25.8 million and diluted loss per share eased to breakeven from 20 cents a year ago.
Golf stocks extend gains for the second day in a row after PGA Tours agreed to merge with Saudi Arabia controlled Liv.
After two years of fighting with LIV, PGA tours in a stunning turnabout agreed to be taken over by the Saudi Arabia controlled company.
“So weird. PGA officials were in my office just months ago talking about how the Saudis’ human rights record should disqualify them from having a stake in a major American sport.
I guess maybe their concerns weren’t really about human rights?,” said Connecticut Senator Chris Murphy on his Twitter post.
Top Golf Callaway Brands increased 0.6% to $19.43 and Acushnet Holdings Corp jumped 1.7% to $49.88.
U.S. Trade Deficit Widened to 6-month High In April
Brian Turner
07 Jun, 2023
New York City
U.S. trade deficit widened in April to $74.6 billion from $60.6 billion in March, the Bureau of Economic Analysis reported Wednesday.
Exports declined 3.6% to $246.9 billion and imports fell 1.5% to $323.6 billion.
The increase in the goods and services deficit reflected an increase in the goods deficit of $14.5 billion to $96.1 billion and an increase in the services surplus of $0.6 billion to $21.6 billion.
In April, exports of goods decreased $9.4 billion to $167.1 billion and exports of services increased $0.2 billion to $81.9 billion.
Imports of goods increased $5.2 billion to $263.2 billion in April and imports of services decreased $0.4 billion to $60.4 billion.
The U.S. recorded a surplus with the Netherlands of $4.2 billion, South and Central America of $4.1 billion, Belgium $1.9 billion, Hong Kong $1.6 billion, Australia $1.0 billion, United Kingdom $0.9 billion, and Brazil $0.7 billion.
The U.S. registered the largest deficits with China of $24.2 billion, European Union $17.3 billion, Mexico $13.0 billion.
Deficits with other countries included Vietnam of $8.5 billion, Germany $7.6 billion, Japan $6.8 billion, Canada $6.1 billion, Ireland $5.0 billion, Switzerland $4.5 billion, South Korea $4.3 billion, Italy $3.8 billion, India $3.5 billion, Taiwan $3.5 billion, Malaysia $2.3 billion, France $1.2 billion, Singapore $0.7 billion, Israel $0.6 billion, and Saudi Arabia $0.4 billion.
Major U.S. Averages Traded at Nine-month Highs, Trade Deficit Widened
Barry Adams
07 Jun, 2023
New York City
Stocks on Wall Street advanced and major indexes traded at new highs of the year.
The S&P 500 index and the Nasdaq Composite index jumped to new highs in 2023 despite the worries of looming economic slowdown, stubborn inflation and multiple rate hikes over the last fourteen months.
The S&P 500 index advanced to a high not seen since August 2022 and the Nasdaq Composite index increased to a high not seen since April 2022.
Financial markets are looking ahead to rate decisions next week and many investors are forecasting another rate hike of 25 basis points on June 14 in the U.S.
Next week, the European Central Bank is also expected to revise higher its reference rate by 25 basis points.
In international news, China's exports in May plunged 7.5% from a year ago to $283.5 billion, reversing an 8.5% increase in April, China's custom agency reported Wednesday.
Exports in the period between January and May rose 0.3% from the corresponding period a year ago.
Trade surplus in May declined to $65.81 billion from $78.40 billion a year ago, the smallest trade surplus in February after exports fell 7.5% faster than the 4.5% decline in imports.
U.S. Trade Deficit Widened to 6-month High In April
U.S. trade deficit widened in April to $74.6 billion from $60.6 billion in March, the Bureau of Economic Analysis reported Wednesday.
Exports declined 3.6% to $246.9 billion and imports fell 1.5% to $323.6 billion.
The increase in the goods and services deficit reflected an increase in the goods deficit of $14.5 billion to $96.1 billion and an increase in the services surplus of $0.6 billion to $21.6 billion.
In April, exports of goods decreased $9.4 billion to $167.1 billion and exports of services increased $0.2 billion to $81.9 billion.
Imports of goods increased $5.2 billion to $263.2 billion in April and imports of services decreased $0.4 billion to $60.4 billion.
The U.S. recorded a surplus with the Netherlands of $4.2 billion, South and Central America of $4.1 billion, Belgium $1.9 billion, Hong Kong $1.6 billion, Australia $1.0 billion, United Kingdom $0.9 billion, and Brazil $0.7 billion.
The U.S. registered the largest deficits with China of $24.2 billion, European Union $17.3 billion, Mexico $13.0 billion.
Deficits with other countries included Vietnam of $8.5 billion, Germany $7.6 billion, Japan $6.8 billion, Canada $6.1 billion, Ireland $5.0 billion, Switzerland $4.5 billion, South Korea $4.3 billion, Italy $3.8 billion, India $3.5 billion, Taiwan $3.5 billion, Malaysia $2.3 billion, France $1.2 billion, Singapore $0.7 billion, Israel $0.6 billion, and Saudi Arabia $0.4 billion.
U.S. Indexes & Yields
The S&P 500 index decreased 4.48 points to 4,269.18 and the Nasdaq Composite increased 12.83 points to 13,242.21.
The yield on 2-year Treasury notes increased to 4.53%, 10-year Treasury notes edged up to 3.70% and 30-year Treasury bonds held at 3.87%.
Crude oil increased $0.54 to $72.51 a barrel and natural gas prices increased 7 cents to $2.33 a thermal unit.
U.S. Stock Movers
Dave & Buster's Entertainment Inc jumped 4.7% to $35.34 after the restaurant chain operator reported quarterly results ahead of market expectations.
Stitch Fix Inc soared 9% to $4.01 after the online fashion platform posted a loss of 19 cents a share on revenue of $395 million.
GameStop Corp increased 8.3% to $26.75 ahead of the specialty retailer's quarterly results today.