Market Update
Stocks Powered Ahead On Wall Street and U.S. Treasury Yields Rebounded
Barry Adams
16 Oct, 2023
New York City
Stocks on Wall Street advanced as investors focused on earnings and bond yields gains amid rising geopolitical tensions.
Benchmark indexes advanced in Monday's trading and investors looked ahead to a fresh batch of earnings including quarterly updates from Bank of America, Tesla, Netflix and Johnson & Johnson.
The S&P 500 index and the Nasdaq Composite index jumped more than 1% and extended previous week's gains on earnings optimism, despite the rise in Treasury yields and elevated crude oil prices.
Crude oil prices remained elevated on the worries of widening war in the Middle East as Israel prepares for its ground offensive in Gaza and the United Nations warned of an impending humanitarian crisis in the region.
At least 500,000 Gaza residents have left northern Gaza as Israel prepares for its bombing campaign and ground invasion in addition to shutting off the supply of electricity and water to the occupied territory.
There are at least 2.5 million people living in Gaza and about half of the residents are women and children.
U.S. Indexes & Yields
The S&P 500 index increased 1.1% to 4,375.54 and the Nasdaq Composite added 1.3% to 13,575.16.
The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.70% and 30-year Treasury bonds edged up to 4.86%.
Crude oil decreased $1.20 to $86.48 a barrel and natural gas prices eased 12 cents to $3.11 a thermal unit.
The dollar index edged higher to 106.48, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Big banks were in focus on the second day after Wells Fargo, Citigroup and JPMorgan Chase reported stronger-than-expected earnings.
Rite Aid Corp declined 6% to 61 cents after the drug retailer filed for bankruptcy protection as the company struggled under the weight of hundreds of cases linked to opioid prescriptions.
Pfizer Inc gained 4.5% to $33.69 after the pharmaceutical company lowered its annual revenue guidance.
Pfizer revised lower its 2023 revenue in the range between $58 billion and $61 billion, from the previous estimate between $67 billion and $70 billion on the weakening demand for its Covid products.
The company also lowered its full-year adjusted earnings per share outlook to a new range of $1.45 to $1.65 from the previous estimate between $3.25 and $3.45.
Lululemon Athletica soared 10.7% to $418.25 ahead of the company's addition to the S&P 500 index later in the week.
Charles Schwab Corporation increased 4.2% to $53.49 after the online brokerage firm reported mixed quarterly results.
Net revenue in the third quarter ending in September declined 16% to $4.6 billion from $5.5 billion and net income plunged 44% to $1.1 billion from $2.0 billion and diluted earnings per share dropped to 56 cents from 99 cents a year ago.
Net interest revenue declined 24% to $2.2 billion but advised solution and asset management fees jumped 17% to a quarterly record of $1.2 billion.
European Markets Struggled After Bond Yields Advanced
Stocks across Europe struggled and market indexes traded near flatline in Monday's trading.
Benchmark indexes In London, Paris and Frankfurt struggled to gain traction and bond yields advanced in the region.
Investors turned cautious on the worries of higher interest rates, looming global economic slowdown and impending Israel's invasion in Gaza as early as this week.
Natural gas prices stayed elevated on the supply worries after Israel asked Chevron to halt natural gas production at fields located near its northern shores.
Closer to home, German wholesale prices dropped for the sixth month in a row and declined 4.1% in September, following a 2.7% decline in August, the Federal Statistics office or Destatis reported Monday.
The measure of wholesale price declined after petroleum products prices eased from a higher price base in the month a year ago.
Euro Area Goods Trade Balance Swung to Surplus
The Euro Area goods trade balance swung to a surplus of Є6.7 billion in August from a Є54.4 billion deficit in the month a year ago.
Exports declined 3.9% to Є221.6 billion and imports plunged 24.6% to Є214.9 billion.
In the first eight months of the year, international trade deficit declined to Є9.8 billion from Є311.4 billion and the surplus with the U.S. rose to Є100.2 billion from Є98.3 billion in the corresponding period a year ago.
Europe Indexes & Yields
The DAX index increased 0.4% to 15,237.99, the CAC-40 index rose 0.3% to 7,022.19 and the FTSE 100 index added 0.4% to 7,630.69.
In the previous week, the DAX index increased 1.1%, the CAC-40 index advanced 0.8% and the FTSE 100 index edged higher 1.4%.
The yield on 10-year German bonds decreased to 2.79%, French bonds traded higher to 3.42%, the UK gilts edged up to 4.47% and Italian bonds rose to 4.87%.
The euro edged lower to a three-month low to $1.053, the British pound to $1.215 and the U.S. dollar fetched 90.24 Swiss cents.
Brent crude decreased $1.04 to $89.84 a barrel and the Dutch TTF natural gas edged lower by €5.54 to €48.47 per MWh.
Europe Stock Movers
Resource stocks were in focus on the hopes that demand growth from China would recover after the People's Bank of China offered additional liquidity to the banking system.
Anglo America, Glencore and Antofagasta advanced between 1% and 2% after base metal prices advanced.
BioNTech SE dropped 7.7% to €93.14 after the German biotech company said it plans to take a one-time charge to write-down assets worth €900 million in the third quarter.
GSK Plc declined 1.2% to 1,491.60 pence despite the European Medicines Agency's drug approval committee offering a positive view on its intravenous cancer treatment therapy Jemperli.
U.S. Movers: Charles Schwab, Lululemon Athletica, Pfizer Corp, Rite Aid
Scott Peters
16 Oct, 2023
New York City
Big banks were in focus on the second day after Wells Fargo, Citigroup and JPMorgan Chase reported stronger-than-expected earnings.
Rite Aid Corp declined 6% to 61 cents after the drug retailer filed for bankruptcy protection as the company struggled under the weight of hundreds of cases linked to opioid prescriptions.
Pfizer Inc gained 4.5% to $33.69 after the pharmaceutical company lowered its annual revenue guidance.
Pfizer revised lower its 2023 revenue in the range between $58 billion and $61 billion, from the previous estimate between $67 billion and $70 billion on the weakening demand for its Covid products.
The company also lowered its full-year adjusted earnings per share outlook to a new range of $1.45 to $1.65 from the previous estimate between $3.25 and $3.45.
Lululemon Athletica soared 10.7% to $418.25 ahead of the company's addition to the S&P 500 index later in the week.
Charles Schwab Corporation increased 4.2% to $53.49 after the online brokerage firm reported mixed quarterly results.
Net revenue in the third quarter ending in September declined 16% to $4.6 billion from $5.5 billion and net income plunged 44% to $1.1 billion from $2.0 billion and diluted earnings per share dropped to 56 cents from 99 cents a year ago.
Net interest revenue declined 24% to $2.2 billion but advised solution and asset management fees jumped 17% to a quarterly record of $1.2 billion.
Treasury Yields Resumed Advance Crude and Oil Prices Stayed Elevated as Investors Focused On Upcoming Earnings
Barry Adams
16 Oct, 2023
New York City
Stocks on Wall Street advanced as investors focused on earnings and bond yields advanced amid rising geopolitical tensions.
Benchmark indexes struggled to advance in Monday's trading and investors looked ahead to a fresh batch of earnings including quarterly updates from Bank of America, Tesla, Netflix and Johnson & Johnson.
Benchmark S&P 500 index and the Nasdaq Composite index advanced in morning trading and extended gains of the previous week.
Crude oil prices remained elevated on the worries of widening war in the Middle East as Israel prepares for its ground offensive in Gaza and the United Nations warned of an impending humanitarian crisis in the region.
U.S. Indexes & Yields
The S&P 500 index increased 0.6% to 4,353.43 and the Nasdaq Composite added 0.4% to 13,466.07.
The yield on 2-year Treasury notes increased to 5.09%, 10-year Treasury notes inched higher to 4.71% and 30-year Treasury bonds edged up to 4.86%.
Crude oil decreased $0.20 to $87.64 a barrel and natural gas prices eased 15 cents to $3.08 a thermal unit.
The dollar index edged higher to 106.48, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Big banks were in focus on the second day after Wells Fargo, Citigroup and JPMorgan Chase reported stronger-than-expected earnings.
Rite Aid Corp declined 6% to 61 cents after the drug retailer filed for bankruptcy protection as the company struggled under the weight of hundreds of cases linked to opioid prescriptions.
Pfizer Inc gained 4.5% to $33.69 after the pharmaceutical company lowered its annual revenue guidance.
Pfizer revised lower its 2023 revenue in the range between $58 billion and $61 billion, from the previous estimate between $67 billion and $70 billion on the weakening demand for its Covid products.
The company also lowered its full-year adjusted earnings per share outlook to a new range of $1.45 to $1.65 from the previous estimate between $3.25 and $3.45.
European Markets Struggled, Euro Area Trade Deficit Shrank and German Wholesale Inflation Declined
Bridgette Randall
16 Oct, 2023
Frankfurt
Stocks across Europe struggled and market indexes traded near flatline in Monday's trading.
Benchmark indexes In London, Paris and Frankfurt struggled to gain traction and bond yields advanced in the region.
Investors turned cautious on the worries of higher interest rates, looming global economic slowdown and impending Israel's invasion in Gaza as early as this week.
Natural gas prices stayed elevated on the supply worries after Israel asked Chevron to halt natural gas production at fields located near its northern shores.
Closer to home, German wholesale prices dropped for the sixth month in a row and declined 4.1% in September, following a 2.7% decline in August, the Federal Statistics office or Destatis reported Monday.
The measure of wholesale price declined after petroleum products prices eased from a higher price base in the month a year ago.
Euro Area Goods Trade Balance Swung to Surplus
The Euro Area goods trade balance swung to a surplus of Є6.7 billion in August from a Є54.4 billion deficit in the month a year ago.
Exports declined 3.9% to Є221.6 billion and imports plunged 24.6% to Є214.9 billion.
In the first eight months of the year, international trade deficit declined to Є9.8 billion from Є311.4 billion and the surplus with the U.S. rose to Є100.2 billion from Є98.3 billion in the corresponding period a year ago.
Europe Indexes & Yields
The DAX index increased 0.08% to 15,198.75, the CAC-40 index rose 0.2% to 7,015.60 and the FTSE 100 index added 0.4% to 7,630.60.
In the week, the DAX index increased 1.1%, the CAC-40 index advanced 0.8% and the FTSE 100 index edged higher 1.4%.
The yield on 10-year German bonds decreased to 2.79%, French bonds traded higher to 3.42%, the UK gilts edged up to 4.47% and Italian bonds rose to 4.87%.
The euro edged lower to a three-month low to $1.053, the British pound to $1.215 and the U.S. dollar fetched 90.24 Swiss cents.
Brent crude increased $0.17 to $90.78 a barrel and the Dutch TTF natural gas edged higher by €2.74 to €51.24 per MWh.
Europe Stock Movers
Resource stocks were in focus on the hopes that demand growth from China would recover after the People's Bank of China offered additional liquidity to the banking system.
Anglo America, Glencore and Antofagasta advanced between 1% and 2% after base metal prices advanced.
BioNTech SE dropped 7.7% to €93.14 after the German biotech company said it plans to take a one-time charge to write-down assets worth €900 million in the third quarter.
GSK Plc declined 1.2% to 1,491.60 pence despite the European Medicines Agency's drug approval committee offering a positive view on its intravenous cancer treatment therapy Jemperli.
Overall Inflation Held Steady In September
Brian Turner
13 Oct, 2023
New York City
The Consumer Price Index, a measure of overall inflation, rose 0.4% in September and jumped 3.7% from a year ago, the U.S. Bureau of Labor Statistics reported Thursday.
Core inflation, which excludes volatile food and energy prices, rose 4.1% from a year ago, the slowest pace of increase since September 2021.
On a monthly basis, overall consumer price inflation declined to 0.4% from 0.6% increase in the previous month and core inflation held steady at 0.3%.
U.S. Movers: Activision Blizzard, Microsoft, Citigroup, JPMorgan Chase, Wells Fargo
Scott Peters
13 Oct, 2023
New York City
Market indexes traded sideways after big banks reported rising revenue and earnings.
The S&P 500 index increased 0.2% to 4,374.16 and the Nasdaq Composite eased 0.3% to 13,306.74.
The yield on 2-year Treasury notes increased to 5.02%, 10-year Treasury notes inched lower to 4.60% and 30-year Treasury bonds edged up to 4.76%.
JPMorgan Chase & Company increased 1.1% to $147.49 after the bank reported a surge in revenue and earnings in the third quarter.
The bank benefited from higher interest rates and lower provision for credit losses.
Revenue increased 22% to $39.8 billion $32.7 billion and net income soared 35% to $13.2 billion from $$9.7 billion and diluted earnings per share advanced to $4.33 from $3.12 from a year ago.
Net income attributable to First Republic was $1.1 billion in the quarter.
The bank set aside $1.3 billion for potential credit losses compared to the $2.39 billion estimate.
Wells Fargo & Company advanced 2.4% to $40.70 after the bank reported a surge in net interest income in the third quarter.
Total revenue increased to $20.8 billion from $19.6 billion and net income advanced to $5.7 billion from $3.6 billion and diluted earnings per share surged to $1.48 from 86 cents a year ago.
Provision for credit losses increased to $1.2 billion from $784 million a year ago.
The company repurchased 33.8 million shares of $1.5 billion of its common stock in the third quarter.
Citigroup Inc advanced 2.4% to $42.85 after the bank reported a surge in earnings on the back of higher interest rates in the third quarter.
Revenue in the third quarter increased 9% to $20.1 billion from $18.5 billion and net income increased 2% to $3.54 billion from $3.47 billion and diluted earnings per share was unchanged at $1.63 compared to a year ago.
Citigroup's total allowance for credit losses was approximately $17.6 billion compared to $16.3 billion at the end of the quarter a year ago , with a reserve-to-funded loans ratio of 2.68%, compared to 2.54% at the end of the prior-year period.
Activision Blizzard Inc jumped 0.1% to $94.64 after the UK regulator approved the purchase of the company by Microsoft Corp.
Microsoft edged lower a fraction to $330.98.
Stocks Lack Direction After Big Banks Earnings, Crude Oil Surged 4%
Barry Adams
13 Oct, 2023
New York City
Benchmark indexes traded down as investors reviewed the latest earnings from big banks.
JPMorgan Chase and Wells Fargo reported a rise in revenue on the back of rising interest rates and Citigroup reported flat earnings.
Big banks passed on higher interest rates to customers but depositors were not rewarded with higher interest rates.
The worries of recession and weakening commercial real estate market set the tone for credit provisions and banks generally faced higher losses in the real estate loan portfolios.
Crude oil surged more than 3% on the worries of widening conflict in the Middle East as Israel ordered evacuation of 1.1 million in the occupied northern Gaza.
Investors feared that the Israeli military offensive as early as this weekend may draw neighboring nations in the latest conflict with Hamas.
U.S. Indexes & Yields
The S&P 500 index increased 0.2% to 4,374.16 and the Nasdaq Composite eased 0.3% to 13,306.74.
The yield on 2-year Treasury notes increased to 5.02%, 10-year Treasury notes inched lower to 4.60% and 30-year Treasury bonds edged up to 4.76%.
Crude oil prices were in focus on the worries that the latest flare up between Israel and Hamas may spread to neighboring oil producing states and disrupt global oil supply.
Crude oil decreased $3.75 to $86.67 a barrel and natural gas prices eased 6 cents to $3.27 a thermal unit.
The dollar index edged higher to 106.46, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
JPMorgan Chase & Company increased 1.1% to $147.49 after the bank reported a surge in revenue and earnings in the third quarter.
The bank benefited from higher interest rates and lower provision for credit losses.
Revenue increased 22% to $39.8 billion $32.7 billion and net income soared 35% to $13.2 billion from $$9.7 billion and diluted earnings per share advanced to $4.33 from $3.12 from a year ago.
Net income attributable to First Republic was $1.1 billion in the quarter.
The bank set aside $1.3 billion for potential credit losses compared to the $2.39 billion estimate.
Wells Fargo & Company advanced 2.4% to $40.70 after the bank reported a surge in net interest income in the third quarter.
Total revenue increased to $20.8 billion from $19.6 billion and net income advanced to $5.7 billion from $3.6 billion and diluted earnings per share surged to $1.48 from 86 cents a year ago.
Provision for credit losses increased to $1.2 billion from $784 million a year ago.
The company repurchased 33.8 million shares of $1.5 billion of its common stock in the third quarter.
Citigroup Inc advanced 2.4% to $42.85 after the bank reported a surge in earnings on the back of higher interest rates in the third quarter.
Revenue in the third quarter increased 9% to $20.1 billion from $18.5 billion and net income increased 2% to $3.54 billion from $3.47 billion and diluted earnings per share was unchanged at $1.63 compared to a year ago.
Citigroup's total allowance for credit losses was approximately $17.6 billion compared to $16.3 billion at the end of the quarter a year ago , with a reserve-to-funded loans ratio of 2.68%, compared to 2.54% at the end of the prior-year period
Activision Blizzard Inc jumped 0.1% to $94.64 after the UK regulator approved the purchase of the company by Microsoft Corp.
Microsoft edged lower a fraction to $330.98.