Market Update
Europe Movers: GSK, Inditex, N Brown Group, UK Home Builder, Stratec
Bridgette Randall
07 Jun, 2023
Frankfurt
The DAX index increased 0.4% to 15,935.32, the CAC-40 index decreased 0.4% to 7,181.45, and the FTSE 100 index inched higher 0.03% to 7,630.53.
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%.
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.
Revenue in the first quarter ending in April increased 13% to €7.6 billion and net income soared 54% to €1.2 billion.
The company plans to recommend a dividend of €1.20, composed of two equal payments of €0.60 per share, the first interim payment was made on 2 May followed by the final dividend payment on 2 November.
Inditex said sales in the current quarter between May 1 and June 4 increased 16% in constant currency, reflecting a rebound in worldwide sales.
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 Group Plc 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.
Stratec agreed to pay $30 million and earn out based on certain parameters over the next two years for the Long Island, New York based company which generated $16.3 million revenue in 2022.
The acquisition "should have a neutral to slightly positive impact" on adjusted earnings per share at the STRATEC Group in the 2024 financial year, said the company in a statement.
European Markets Rest, German Industrial Production Rebounded, French Trade Deficit Widened
Bridgette Randall
07 Jun, 2023
Frankfurt
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.
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.
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 increased 0.4% to 15,935.32, the CAC-40 index decreased 0.4% to 7,181.45, and the FTSE 100 index inched higher 0.03% to 7,630.53.
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 $0.50 to $76.75 a barrel and the Dutch TTF natural gas increased €0.55 to €25.40 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.
World Bank Lifts Global Growth, Higher Rates and Tighter Credit to Drag U.S.
Brian Turner
07 Jun, 2023
New York City
The latest report from the World Bank highlighted key hurdles for the global economy, despite improving its forecast.
The global economy is expected to grow 2.1% in 2023, a faster pace from the 1.7% estimate in January.
The multilateral agency revised the U.S. economic growth higher to 1.1% from the previous estimate of 0.5%, the Euro Area growth to 0.5% from flat, China growth to 5.6% from 4.3% but India's growth estimate was lowered to 6.3% from 6.6%.
Among the top 20 economies in the world, only India's economy is expected to grow above 6% annually in 2023, 2024 and 2025.
The World Bank added in its report that the U.S. economy is likely to slow considerably from 2.1% in 2022 to 1.1% in 2023, largely because of the sharp rise in interest rates over the last sixteen months and recent bank failures are also likely to tighten credit conditions.
Household consumption is likely to slow substantially as families exhaust their savings accumulated during pandemic.
"Model-based estimates show that the peak impact on growth from this tightening is likely to take place in 2023" and "decelerating consumption and residential investment will likely contribute to very feeble activity in the second half of 2023," the report noted.
U.S. Market Averages Rest As Old Worries Resurface, World Bank Highlights Growth Hurdles
Barry Adams
06 Jun, 2023
New York City
Market indexes hugged flat-line as investors shifted focus to inner workings of the U.S. economy and debated the future rate path.
After a week of volatile trading and leading indexes trading near nine-month highs, investors worried about the looming economic slowdown in the second half.
Moreover, a long list of worries also kept investor sentiment in check.
Market indexes rested and after the passage of debt ceiling agreement rate path, stubborn inflation and slowing corporate earnings dominated sentiment.
In addition, trading in Apple and chip stocks influenced broader averages and investors worried that the recent two-week surge in chip stocks may be overdone.
World Bank Lifts Global Growth, Higher Rates and Tighter Credit to Drag U.S.
The latest report from the World Bank highlighted key hurdles for the global economy, despite improving its forecast.
The global economy is expected to grow 2.1% in 2023, a faster pace from the 1.7% estimate in January.
The multilateral agency revised the U.S. economic growth higher to 1.1% from the previous estimate of 0.5%, the Euro Area growth to 0.5% from flat, China growth to 5.6% from 4.3% and India growth was lowered to 6.3% from 6.6%.
Among the top 20 economies in the world, only India's economy is expected to grow above 6% annually in 2023, 2024 and 2025.
The World Bank added in its report that the U.S. economy is likely to slow considerably from 2.1% in 2022 to 1.1% in 2023, largely because of the sharp rise in interest rates over the last sixteen months and recent bank failures are also likely to tighten credit conditions.
Household consumption is likely to slow substantially as families exhaust their savings accumulated during pandemic.
"Model-based estimates show that the peak impact on growth from this tightening is likely to take place in 2023" and "decelerating consumption and residential investment will likely contribute to very feeble activity in the second half of 2023," the report noted.
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 decreased to 4.52%, 10-year Treasury notes edged down to 3.69% and 30-year Treasury bonds held at 3.86%.
Crude oil decreased $0.16 to $71.98 a barrel and natural gas prices increased 1 cent to $2.26 a thermal unit.
U.S. Stock Movers
GitLab Inc increased 23.6% to $43.77 after the database developer reported smaller-than-estimated loss and offered a positive outlook for the current quarter and full-year.
Coinbase Global Inc plunged 17.9% to $48.34 after the cryptocurrency exchange was sued by the Securities and Exchange Commission.
The regulatory agency alleged that the company is acting as an unregistered broker.
Yesterday, the SEC sued Binance alleging similar charges as the agency ramped up its oversight of the cryptocurrency market.
Mobileye Global Inc declined 2.5% to $41.44 after the company announced its plan to sell 35 million class A shares in a secondary offering according to a regulatory filing.
Thor Industries Inc soared 8.6% to $89.03 after the recreational vehicle maker reported better-than-expected quarterly earnings and lifted its full-year estimate.
Taiwan Semiconductor Manufacturing Company added 0.2% to $98.21 after Apple said it plans to use its own silicon for all of its computers using TSMC processes.
With the release of its own chip, Apple has moved away from Intel and all computing devices made since 2020 will not have chips made by Apple.
Final Hour Rally Lifted European Indexes
European markets rebounded from morning lows amid lingering worries of inflation and slow-growth.
Benchmark indexes in Paris, London and Frankfurt gained after the eurozone retail sales were flat in April and investors reviewed global monetary outlook.
In addition, British Retail Consortium noted retail sales growth slowed to a seven-month low in May because of surging food prices.
Moreover, Germany's factory orders declined in April and consumer inflation in the Netherlands accelerated to 6.1% in May from 5.2% in April.
Eurozone Retail Sales Flat In April
The Euro Area retail sales adjusted for seasonal factors were unchanged in April from the previous month, Eurostat, the statistical office of the European Union reported Tuesday.
Retail sales for March were revised to a decline of 0.4%.
From a year ago, retail sales declined 2.6% in the eurozone and fell 2.9% in the European Union, marking the seventh month of sales contraction in a row.
Non-food products retail sales increased 0.5% but food, drinks and tobacco sales decreased 0.5% and fuel sales fell 2.3%.
On a yearly basis, food, drinks and tobacco sales declined 4.4%, automotive fuel by 1..8% and non-food products by 1.1%.
Germany Factory Orders Declined In April
German factory orders declined 0.4% in April from the previous month, the Federal Statistics Office or Destatis reported Tuesday.
March orders were upwardly revised to a decline of 10.9% from the preliminary estimate of 10.7%.
Orders declined for the second month in a row following the decline in large-scale orders.
Machinery and equipment orders declined 6.2% and miscellaneous vehicle construction orders, which includes railed vehicles, spacecraft, aircrafts and army vehicles, plunged 34.0%
However, orders for electrical equipment increased 12.0% and motor vehicles, trailers and semi-trailers advanced 2.4%.
New orders in the consumer goods sector fell 2.5% and in the capital goods sector decreased 1.7% and intermediate goods sector increased 2.3%.
Domestic orders rose 1.6%, while foreign orders decreased 1.8% from the previous month. New orders from the rest of the world fell 1.1% and orders from the euro area declined 2.7%.
From a year ago, factory orders adjusted for seasonal and calendar factors decreased 1.2% in April.
March orders fell 2.2%, revised from the preliminary estimate of 2.9% decline.
Europe Indexes & Yields
The DAX index increased 0.2% to 15,992.44, the CAC-40 index increased 0.1% to 7,209.00, and the FTSE 100 index inched higher 0.4% to 7,628.10.
The yield on 10-year German Bunds inched lower to 2.33%, French bonds traded lower to 2.88%, the UK gilts edged down 4.19% and Italian bonds increased to 4.11%.
The euro edged lower to $1.069, the British pound to $1.240 and the Swiss franc to 90.75 cents.
Brent crude decreased $0.22 to $76.45 a barrel and the Dutch TTF natural gas decreased €3.06 to €25.45 per MWh.
Europe Stock Movers
British American Tobacco increased 0.8% to 2,593.0 pence after the company reiterated its annual outlook.
Associated British Foods Plc declined 0.9% to 1,828.64 pence after the company agreed to acquire National Milk Records for £48 million.
Paragon Banking Group Plc increased 9% to 549.0 pence after the company revised its fiscal 2023 outlook and launched its second £50 million stock buyback plan.
N Brown Group Plc plunged 12.3% to 24.10 pence after the online retailer swung to a pre-tax loss in the fiscal year 2023 and the company blamed it on "challenging market" environment.
Movers: Cracker Barrel, Coinbase, GitLab, Mobileye, Taiwan Semiconductor, Thor Industries
Scott Peters
06 Jun, 2023
New York City
The S&P 500 index increased 8.52 points to 4,282.58 and the Nasdaq Composite increased 0.3% to 13,263.27.
The yield on 2-year Treasury notes decreased to 4.50%, 10-year Treasury notes edged down to 3.70% and 30-year Treasury bonds held at 3.90%.
Cracker Barrel Old Country Store, Inc decreased 2.5% to $94.93 after the reported quarterly results that missed some investors' expectations.
Revenue in the fiscal third quarter ending in April increased 5.4% to $832.7 million, and comparable store restaurant sales increased 7.4% while comparable store retail sales fell 4.6%.
Net income declined to $14.0 million from $27.5 million and diluted earnings per share fell to 63 cents from $1.19 a year ago.
The company estimated fiscal fourth quarter revenue to increase between 1% and 3% and capital expenditure between $30 million and $35 million.
In the quarter, the restaurant company plans to open one new Cracker Barrel restaurant and five to seven new Maple Street Biscuit Company restaurants.
The company also estimated flat commodity inflation in the quarter and wage inflation of approximately 5% compared to a year ago.
GAAP operating income margin rate of 4.1% to 5.1% and adjusted operating income margin rate of 4.5% to 5.5%.
GitLab Inc increased 23.6% to $43.77 after the database developer reported smaller-than-estimated loss and offered a positive outlook for the current quarter and full-year.
Revenue in the fiscal first quarter ending in April increased 45% to $126.9 million from $87.4 million and net loss expanded to $52.5 million from $26.1 million and diluted loss per share widened to 35 cents from 18 cents a year ago.
The company guided fiscal second quarter revenue between $129.0 million and $130.0 million and for full-year between $541.0 million and $543.0 million.
The database developer forecasted non-GAAP fiscal second quarter net loss between 10 cents and 11 cents and for full-year 14 cents and 18 cents.
Coinbase Global Inc plunged 17.9% to $48.34 after the cryptocurrency exchange was sued by the Securities and Exchange Commission.
The regulatory agency alleged that the company is acting as an unregistered broker.
Yesterday, the SEC sued Binance alleging similar charges as the agency ramped up its oversight of the cryptocurrency market.
Mobileye Global Inc declined 2.5% to $41.44 after the company announced its plan to sell 35 million class A shares in a secondary offering according to a regulatory filing.
Taiwan Semiconductor Manufacturing Company added 0.2% to $98.21 after Apple said it plans to use its own silicon for all of its computers using TSMC processes.
With the release of its own chip, Apple has moved away from Intel and all computing devices made since 2020 will not have chips made by Apple.
Thor Industries Inc soared 8.6% to $89.03 after the recreational vehicle maker reported better-than-expected quarterly earnings and lifted its full-year estimate.
Net sales in the third quarter ending in April dropped 37.1% to $2.93 billion and net income plunged to $120.7 million from $348.1 million and diluted earnings per share fell to $2.24 from $6.32 a year ago.
The company tightened its full-year net sales and diluted earnings per share outlook.
The company lowered its fiscal year 2023 sales range between $10.5 billion and $11.0 billion from the previous range between $10.5 billion and $11.5 billion.
Fiscal year 2023 diluted earnings per share range was revised to between $5.80 and $6.50 from between $5.50 and $6.50.
Rate Path and Inflation Worries Dominate Trading Sentiment
Barry Adams
06 Jun, 2023
New York City
Stocks traded near flat-line on Wall Street and investors debated the latest economic development after a week of volatile trading.
Market indexes rested and after the passage of debt ceiling agreement rate path, stubborn inflation and slowing corporate earnings dominated sentiment.
Trading in Apple and chip stocks influenced broader averages and investors worried that the recent surge in chip stocks may be overdone.
The S&P 500 and the Nasdaq Composite indexes are hovering near the nine-months high as investors shift focus to the Fed's rate decision next week.
U.S. Indexes & Yields
The S&P 500 index decreased 1.12 points to 4,280.72 and the Nasdaq Composite increased 0.1% to 13,256.81.
The yield on 2-year Treasury notes decreased to 4.50%, 10-year Treasury notes edged down to 3.70% and 30-year Treasury bonds held at 3.90%.
Crude oil decreased $1.90 to $70.75 a barrel and natural gas prices decreased 1 cent to $2.22 a thermal unit.
U.S. Stock Movers
GitLab Inc increased 23.6% to $43.77 after the database developer reported smaller-than-estimated loss and offered a positive outlook for the current quarter and full-year.
Coinbase Global Inc plunged 17.9% to $48.34 after the cryptocurrency exchange was sued by the Securities and Exchange Commission.
The regulatory agency alleged that the company is acting as an unregistered broker.
Yesterday, the SEC sued Binance alleging similar charges as the agency ramped up its oversight of the cryptocurrency market.
Mobileye Global Inc declined 2.5% to $41.44 after the company announced its plan to sell 35 million class A shares in a secondary offering according to a regulatory filing.
Thor Industries Inc soared 8.6% to $89.03 after the recreational vehicle maker reported better-than-expected quarterly earnings and lifted its full-year estimate.
Taiwan Semiconductor Manufacturing Company added 0.2% to $98.21 after Apple said it plans to use its own silicon for all of its computers using TSMC processes.
With the release of its own chip, Apple has moved away from Intel and all computing devices made since 2020 will not have chips made by Apple.
Inflation Worries Resurfaced In European Markets, German Factory Orders Dropped, Eurozone Retail Sales Flat
Thomas Buckingham
06 Jun, 2023
New York City
European markets turned lower for the second day in a row after inflation and slow-growth worries resurfaced.
Benchmark indexes in Paris, London and Frankfurt declined after the eurozone retail sales were flat in April and investors reviewed global monetary outlook.
In addition, British Retail Consortium noted retail sales growth slowed to a seven-month low in May because of surging food prices.
Moreover, Germany's factory orders declined in April and consumer inflation in the Netherlands accelerated to 6.1% in May from 5.2% in April.
Eurozone Retail Sales Flat In April
The Euro Area retail sales adjusted for seasonal factors were unchanged in April from the previous month, Eurostat, the statistical office of the European Union reported Tuesday.
Retail sales for March were revised to a decline of 0.4%.
From a year ago, retail sales declined 2.6% in the eurozone and fell 2.9% in the European Union, marking the seventh month of sales contraction in a row.
Non-food products retail sales increased 0.5% but food, drinks and tobacco sales decreased 0.5% and fuel sales fell 2.3%.
On a yearly basis, food, drinks and tobacco sales declined 4.4%, automotive fuel by 1..8% and non-food products by 1.1%.
Germany Factory Orders Declined In April
German factory orders declined 0.4% in April from the previous month, the Federal Statistics Office or Destatis reported Tuesday.
March orders were upwardly revised to a decline of 10.9% from the preliminary estimate of 10.7%.
Orders declined for the second month in a row following the decline in large-scale orders.
Machinery and equipment orders declined 6.2% and miscellaneous vehicle construction orders, which includes railed vehicles, spacecraft, aircrafts and army vehicles, plunged 34.0%
However, orders for electrical equipment increased 12.0% and motor vehicles, trailers and semi-trailers advanced 2.4%.
New orders in the consumer goods sector fell 2.5% and in the capital goods sector decreased 1.7% and intermediate goods sector increased 2.3%.
Domestic orders rose 1.6%, while foreign orders decreased 1.8% from the previous month. New orders from the rest of the world fell 1.1% and orders from the euro area declined 2.7%.
From a year ago, factory orders adjusted for seasonal and calendar factors decreased 1.2% in April.
March orders fell 2.2%, revised from the preliminary estimate of 2.9% decline.
Europe Indexes & Yields
The DAX index decreased 0.2% to 15,926.66, the CAC-40 index declined 0.3% to 7,179.54, and the FTSE 100 index fell 0.3% to 7,576.10.
The yield on 10-year German Bunds inched lower to 2.33%, French bonds traded lower to 2.88%, the UK gilts edged down 4.19% and Italian bonds increased to 4.11%.
The euro edged lower to $1.069, the British pound to $1.240 and the Swiss franc to 90.75 cents.
Brent crude decreased $1.86 to $74.85 a barrel and the Dutch TTF natural gas increased €1.86 to €27.05 per MWh.
Europe Stock Movers
British American Tobacco increased 0.8% to 2,593.0 pence after the company reiterated its annual outlook.
Associated British Foods Plc declined 0.9% to 1,828.64 pence after the company agreed to acquire National Milk Records for £48 million.
Paragon Banking Group Plc increased 9% to 549.0 pence after the company revised its fiscal 2023 outlook and launched its second £50 million stock buyback plan.
N Brown Group Plc plunged 12.3% to 24.10 pence after the online retailer swung to a pre-tax loss in the fiscal year 2023 and the company blamed it on "challenging market" environment.
Narrow Stock Market Rally Paused On Monday
Barry Adams
05 Jun, 2023
New York City
Stocks turned lower after investors shifted focus to rate path and inflation worries after the passage of debt ceiling bill, removing critical debt default uncertainties.
The S&P 500 and the Nasdaq indexes turned lower after Apple Inc lost early gains in the afternoon.
Apple announced a slew of new products including virtual reality headset at its annual Worldwide Developers Conference and also said all newer Mac models are made with its chips.
Intel declined 3% after Apple's homemade chip announcement.
President Joe Biden signed the Fiscal Responsibility Act approved by the House and Senate, averting the June 5 debt default deadline set by the U.S. Treasury.
Despite the rally over the last ten weeks, largely driven by tech stocks and AI chip enthusiasm, the market has a long list of worries to overcome.
Weakening corporate earnings outlook, slower economic growth, stubborn inflation, and how high rates are likely to go and how long rates are likely to stay elevated, are just a few of the worries dominating the list.
As the Fed's next policy meeting approaches, a growing number of investors are forecasting rates to go higher by 25 basis points after the 2-day meeting ending on June 14.
In commodities news, the price of crude oil jumped as much as 4% but most of the session's gains evaporated.
After the weekend meeting of OPEC and allied nations, ministers agreed to hold recently agreed production cuts for the current year, but Saudi Arabia unilaterally decided to lower production amid weak global demand growth.
Crude Oil Rebounded
Crude oil rebounded as much as 4% before receding from the day's high in Asian markets after Saudi Arabia pledged to cut additional output from July.
After a tense meeting of OPEC+ nations over the weekend, Saudi Arabia announced voluntary oil production cuts by 1 million barrels a day to 9 million barrels a day.
OPEC+ nations produce 40% of the world's crude oil and any change in policy could impact oil prices worldwide.
Under the agreement, the United Arab Emirates was permitted to increase its output next year and Russia will hold its monthly production target.
Brent crude jumped 0.7% to $76.84 a barrel and WTI crude increased 1% to $72.87 a barrel.
U.S. Indexes & Yields
The S&P 500 index decreased 0.3% to 4,270.32 and the Nasdaq Composite increased 0.3% to 13,210.60.
The yield on 2-year Treasury notes decreased to 4.49%, 10-year Treasury notes edged down to 3.69% and 30-year Treasury bonds held at 3.88%.
Crude oil increased $1.74 to $73.64 a barrel and natural gas prices increased 9 cents to $2.26 a thermal unit.
U.S. Stock Movers
Apple Inc increased 1.5% to $183.30 as investors looked forward to new product announcements at its annual developers conference starting today.
Tesla Inc gained 2.3% to $218.96 and technical traders boosted the stock after the 15-day average crossed its 50-day average, supporting the case for higher stock price ahead.
Starbucks Inc advanced 0.9% to $100.37 after a private survey showed China's service sector expanded for the fifth month in a row in May.
For the coffee retailer, China is the second largest market with more than 6,000 locations.
UBS Group AG declined 0.1% to $19.96 after the company said the acquisition of Credit Suisse is likely to be completed by June 12.
Chewy Inc extended its Friday's gains by 2.2% to $36.31 after the pet food retailer reported better than expected results last week..
European Markets Closed Down
European markets lacked direction in Monday's trading and investors digested mixed economic data.
Averages in Frankfurt, Paris and London hugged the flat line and investors reacted positively to a surprise rise in Germany's trade surplus.
Business growth in the Euro Area slowed in May, according to the latest survey released by the S&P Global.
HCOB's final Composite Purchasing Managers' Index dropped to a three-month low 52.8 in May from 54.1 in April.
Any reading above 50 indicates expansion.
The HCOB Italy Services PMI fell to 54 in May from 57.6 in April, which was the highest level in 20 months.
The growth in the service level eased but was supported by a rise in demand and the company's expanded payrolls.
Service sector growth in Spain also eased from the 17-month high reading in April but remained elevated and the sector expanded for the fifth month in a row.
The HCOB Spain Services PMI eased to 56.7 in May 2023 from 57.9 the month before, slightly below market expectations of 56.9.
The Turkish inflation rate dropped for the seventh month in a row to 39.6% in May, the Turkish Statistical Institute reported Monday.
Inflation eased from 43.7% in April because of the pre-election promise of free natural gas for all households for one year by President Erdogan.
In overseas news, U.S. President Joe Biden signed the debt ceiling bill suspending the debt limit for the next two years, just in time to avoid debt default on June 5.
After weeks of political wrangling and tense negotiations, U.S. lawmakers approved bipartisan agreement, which kept global financial markets on edge.
Germany's Trade Surplus Widened In April
Germany's trade surplus widened to Є18.4 billion in April from Є14.9 billion in March, the Federal Statistics Office of DeStatis reported Monday.
The trade surplus was the largest since January 2021.
On a calendar and seasonally adjusted basis, exports increased 1.2% to Є130.4 billion from the previous month and imports fell 1.7% to Є112.0 billion, driving the trade surplus higher.
From a year ago, exports increased 1.5% while imports fell 10.3%.
Exports to the EU member states increased 4.5% from March but declined to countries outside the EU, falling 5.2% to the UK and 17.8% to Russia. Exports to the U.S. increased 4.7% and to China surged 10.1% respectively.
Imports from the EU nations declined 0.4% and from other countries declined 3.0%.
Imports from Russia declined 7.6%, the UK fell 6.4% but increased from the U.S. by 2.9% and China by 1.9%.
Most imports came from China valued at Є12.9 billion, followed by Є8.0 billion from the U.S. and Є2.8 billion from the U.K.
Crude Oil Rebounded
Crude oil rebounded as much as 4% before receding from the day's high in Asian markets after Saudi Arabia pledged to cut additional output from July.
After a tense meeting of OPEC+ nations over the weekend, Saudi Arabia announced voluntary oil production cuts by 1 million barrels a day to 9 million barrels a day.
OPEC+ nations produce 40% of the world's crude oil and any change in policy could impact oil prices worldwide.
Under the agreement, the United Arab Emirates was permitted to increase its output next year and Russia will hold its monthly production target.
Brent crude jumped 0.7% to $76.84 a barrel and WTI crude increased 1% to $72.87 a barrel.
Europe Indexes & Yields
The DAX index decreased 0.5% to 15,963.89, the CAC-40 index decreased 1.0% to 7,200.91, and the FTSE 100 index fell 0.1% to 7,599.99.
The yield on 10-year German Bunds inched higher to 2.38%, French bonds traded higher to 2.93%, the UK gilts edged up 4.22% and Italian bonds increased to 4.02%.
The euro edged lower to $1.068, the British pound to. $1.239 and the Swiss franc to 91.07 cents.
Brent crude increased $0.40 to $75.54 a barrel and the Dutch TTF natural gas increased €4.76 to €28.48 per MWh.
Europe Stock Movers
Resource companies traded higher in London trading following a rise in energy prices.
Anglo American and Antofagasta and Glencore increased between 0.5% and 1.5%. BP Plc and Shell Plc advanced 1.5%.
Polymetal International PLC declined 2% to 186.22 pence after the company said it plans to divest its Russian business.
In addition, the Russian subsidiary's chief executive and chief financial officer have resigned.
UBS AG increased 1.4% after the Swiss bank said that the Credit Suisse takeover is likely to be completed as early as June 12.
SBB jumped 6% after the troubled Swedish property group's chief executive said that the company is not going to sell off its properties at a discount.
Sirius Real Estate Ltd increased 4.2% to 88.43 pence after the company reported a decline in its annual profit and increased its dividend.
Hunting Plc advanced 1.6% to 225.60 pence after the company signed a 10-year strategic partnership with China-based Zhejiang Jiuli Hi-Tech Metals Co.
Amedisys Received Unsolicited Merger Proposal from Optum
Scott Peters
05 Jun, 2023
New York City
Amedisys Inc soared 14.4% to $90.90 after the home health and hospice company received an unsolicited cash buyout offer from Optum, a division of UnitedHealth for $100 a share.
On May 3, Amedisys and Option Care Health agreed to combine in an all-stock deal that valued Amedisys at $3.6 billion or $97.38 a share.
Upon closing, Option Care Health stockholders will own approximately 64.5% of the combined company, and Amedisys stockholders will own approximately 35.5%.
The merger proposal still needs regulatory and stockholders approvals.
The Baton Rouge, Louisiana based company's stock peaked around $313 in early 2021.
Under the Option Care Health proposal, the combined company will retain its operations in Baton Rouge and Nashville and its chief executive John Rademacher will lead the larger company.
Option Care jumped 7% to $30.57 after the buy out news.
Movers: Amedisys, Apple Inc, Coinbase, EPAM Systems, Starbucks, Tesla, UBS
Scott Peters
05 Jun, 2023
New York City
The S&P 500 index decreased 1.12 points to 4,280.72 and the Nasdaq Composite increased 0.1% to 13,256.81.
The yield on 2-year Treasury notes increased to 4.55%, 10-year Treasury notes edged up to 3.75% and 30-year Treasury bonds held at 3.94%.
Crude oil increased $1.74 to $73.64 a barrel and natural gas prices increased 9 cents to $2.26 a thermal unit.
Apple Inc increased 1.5% to $183.30 as investors looked forward to new product announcements at its annual developers conference starting today.
Tesla Inc gained 2.3% to $218.96 and technical traders boosted the stock after the 15-day average crossed its 50-day average, supporting the case for higher stock price ahead.
Starbucks Inc advanced 0.9% to $100.37 after a private survey showed China's service sector expanded for the fifth month in a row in May.
For the coffee retailer, China is the second largest market with more than 6,000 locations.
UBS Group AG declined 0.1% to $19.96 after the company said the acquisition of Credit Suisse is likely to be completed by June 12.
Chewy Inc extended its Friday's gains by 2.2% to $36.31 after the pet food retailer reported better than expected results last week.
Coinbase Global Inc declined 10.5% to $57.54 after the Securities and Exchange Commission sued rival Binance on Monday, alleging that Binance and its cofounder Changpeng Zhao violated U.S. securities laws.
The regulatory authority in a 13-count charge sheet alleged that the company and its founder Zhao commingled billions of dollars of investor funds with its owned.
Amedisys Inc soared 14.4% to $90.90 after the home health and hospice company received an unsolicited cash buyout offer from Optum, a division of UnitedHealth for $100 a share.
On May 3, Amedisys and Option Care Health agreed to combine in an all-stock deal that valued Amedisys at $3.6 billion or $97.38 a share.
Upon closing, Option Care Health stockholders will own approximately 64.5% of the combined company, and Amedisys stockholders will own approximately 35.5%.
The merger proposal still needs regulatory and stockholders approvals.
The Baton Rouge, Louisiana based company's stock peaked around $313 in early 2021.
Under the Option Care Health proposal, the combined company will retain its operations in Baton Rouge and Nashville and its chief executive John Rademacher will lead the larger company.
Option Care jumped 7% to $30.57 after the buy out news.
EPAM Systems Inc declined 19.9% to $208.30 after the software developer lowered its sales and earnings outlook for the second quarter and full year.
Revenue in the first quarter increased 3.4% to $1.21 billion from $1.17 billion but net income rose to $102.3 million from $89.7 million and diluted earnings per share advanced to $1.73 from $1.52 a year ago.
For the full year, EPAM lowered its revenue estimate in the range of $4.95 billion to $5.0 billion and diluted earnings per share in the range of $8.11 to $8.31.
For the second quarter the company lowered its revenue estimate in the range of $1.195 billion to $1.205 billion and diluted earnings per share in the range of $1.82 to $1.90.