Market Update
Europe Movers: BAE Systems, Dr Martens, FLSmidth & Co, Lonza Group, Remy Cointreau, Safran
Bridgette Randall
01 Jun, 2023
Frankfurt
Lonza Group AG increased 1.2% to CHF 576.20 after the Swiss manufacturing company agreed to acquire Holland-based Synaffix, the developer of antibody drug conjugates.
FLSmidth & Co advanced 2.7% to DKK 296.80 after the Danish company agreed to acquire the U.S. based Morse Rubber, the maker of rubber products for marine, industrial and mining applications.
BAE Systems Plc increased 1.1% to 939.20 pence after the company said it has hired Morgan Stanley to launch the repurchase of £500 million of its own stock.
Safran SA advanced 1.5% to €137.46 after the company said it entered into exclusive negotiation with Air Liquide SA to purchase its aeronautical oxygen and nitrogen business, excluding cryogenic business related to marine applications.
Dr Martens PLC dropped 8.5% to 143.0 pence after the UK-based boot maker said its operating margin is likely to fall this year.
Revenue in the fiscal year 2023 ending in March increased 10% to £1.0 billion but profit after-tax declined 28% to £128.9 million from £181.2 million a year ago.
The company recommended a final dividend of 4.28 pence, matching the previous year and increasing the total dividend to 5.84 pence, an increase of 6% from a year ago.
The company estimated operating earning margin to fall between 1% and 2% because of the need to invest in the supply chain to support long term sales growth.
Remy Cointreau SA decreased 0.4% to €143.25 after the French liquor and spirit group warned of the continued slowdown in growth in the U.S.
Sales in the fiscal year 2023 ending in March increased 17.9% to Є1.55 billion from Є1.3 billion and net profit soared 38.3% to Є293.8 million from Є212.5 million and earnings per share rose to Є5.79 from Є4.21 a year ago.
The company proposed a regular dividend of 2 per share and a special dividend of 1 per share, reflecting its strong annual performance.
The company guided revenue in the first half to decline, largely driven by a significant sales fall in the U.S. and higher base effect but also estimated sales to rebound beginning the third quarter.
European Markets Rebounded After Eurozone Inflation Eased and New Record Low In Jobless Rate
Bridgette Randall
01 Jun, 2023
Frankfurt
European markets rebounded after the jobless rate fell to a new low and inflation eased to the level last seen thirteen months ago.
Inflation pressures eased after energy prices declined and food inflationary pressures weakened, supporting the case for the central bank to consider pausing aggressive rate hikes.
Stocks responded positively to tight labor market conditions after the jobless rate dropped to a new record low since record keeping began in 1995.
Market optimism was bolstered after the debt ceiling agreement was passed by an overwhelming majority in the U.S. House of Representatives, raising hopes of smoother passage in the Senate before the critical deadline on June 5.
Crude oil hovered around the recent lows after a private survey in China showed the manufacturing sector unexpectedly expanded in May.
The Caixin China Manufacturing General Manufacturing PMI increased to 50.9 in May from 49.5 in April. The survey focuses more on companies in the private sector.
The reading above 50 indicates expansion and below shows a contraction.
A day ago, an official manufacturing industry survey, which is heavily focused on large government controlled enterprises, showed a contraction.
Eurozone Inflation Eased In May
The consumer price inflation in the Euro Area slowed in May after energy prices fell and food inflation slowed, the Eurostat reported Thursday.
Core inflation, which excludes food, energy, alcohol and tobacco, eased to 5.3% from 5.6% in April.
Consumer price index eased to 6.1% in May from 7.0% in April and fell to the slowest pace since February 2022.
Energy prices declined 1.7% in the month after rising 2.4% in April and food, alcohol and tobacco inflation eased to 12.5% from 13.5%, non-energy industrial goods inflation weakened to 5.8% from 6.2% and service inflation ebbed to 5.0% from 5.2%.
New Record Low Jobless Rate In Eurozone
The euro area seasonally-adjusted unemployment rate declined to 6.5% in April from 6.6% in March and from 6.7% from a year ago, the statistical office of the European Union or Eurostat reported Thursday.
The jobless rate in the currency union dropped to the lowest level since record keeping began in 1995.
In the currency union, the number of unemployed fell 33,000 from the previous month to 11.088 million and declined 203.000 from a year ago.
Youth unemployment, those younger than 25, declined to 13.9% in April from 14.0% in March and about 2.2 million were unemployed.
Of the largest economies in the Euro Area, Germany recorded a jobless rate of 2.9%, in France 7.0%, in Italy 7.8% and Spain 12.7%.
Europe Indexes & Yields
The DAX index increased 1.1% to 15,838.66, the CAC-40 index rose 0.7% to 7,150.96, and the FTSE 100 index advanced 0.5% to 7,481.20.
The yield on 10-year German Bunds inched higher to 2.29%, French bonds traded higher to 2.87%, the UK gilts held at 4.19% and Italian bonds decreased to 4.08%.
The euro edged lower to $1.07, the British pound to $1.245 and the Swiss franc to 90.82 cents.
Brent crude decreased $0.38 to $72.20 a barrel and the Dutch TTF natural gas increased €2.80 to €24.05 per MWh.
Europe Stock Movers
Lonza Group AG increased 1.2% to CHF 576.20 after the Swiss manufacturing company agreed to acquire Holland-based Synaffix, the developer of antibody drug conjugates.
FLSmidth & Co advanced 2.7% to DKK 296.80 after the Danish company agreed to acquire the U.S. based Morse Rubber, the maker of rubber products for marine, industrial and mining applications.
BAE Systems Plc increased 1.1% to 939.20 pence after the company said it has hired Morgan Stanley to launch the repurchase of £500 million of its own stock.
Safran SA advanced 1.5% to €137.46 after the company said it entered into exclusive negotiation with Air Liquide SA to purchase its aeronautical oxygen and nitrogen business, excluding cryogenic business related to marine applications.
Dr Martens PLC dropped 8.5% to 143.0 pence after the UK-based boot maker said its operating margin is likely to fall this year.
Revenue in the fiscal year 2023 ending in March increased 10% to £1.0 billion but profit after-tax declined 28% to £128.9 million from £181.2 million a year ago.
The company recommended a final dividend of 4.28 pence, matching the previous year and increasing the total dividend to 5.84 pence, an increase of 6% from a year ago.
The company estimated operating earning margin to fall between 1% and 2% because of the need to invest in the supply chain to support long term sales growth.
U.S. House Vote Uncertainties Kept Indexes Lower, Nasdaq Jumped 6% In May
Barry Adams
31 May, 2023
New York City
Major averages on Wall Street traded lower ahead of the House vote on the debt ceiling deal.
Leaders of both parties are hoping that the debt deal will be ratified by the House, despite some far-right representatives voicing their disapproval.
The White House and Republican leaders agreed to suspend the debt ceiling for the next two years and freeze federal government spending for the next two fiscal years.
Republican leaders are signaling the passage of the bill in the House despite a small group of lawmakers showing their displeasure with the agreement, highlighting that the spending cuts are not deep enough.
“I think we have the votes to pass this today,” said Rep. Patrick McHenry, a key Republican negotiator for the debt deal, in an interview on CNBC TV channel on Wednesday.
The U.S. federal government's debt is expected to rise by at least $1 trillion a year, because the government spending exceeds revenues by that amount annually.
The U.S. government ramped up spending to support the faltering economy during the height of the coronavirus pandemic and between 2020 and 2021 the federal government provided $6.2 trillion of financial support, all funded with borrowed money.
About 22 million jobs were lost during the peak of the pandemic months and the economy took another 29 months to recover those lost jobs, reflecting one of the fastest recovery of the job market in the last four decades.
The government debt to GDP ratio soared to 129% in 2022, after the government enacted three stimulus measures to support family spending and protect jobs.
In the market of stocks, the tech-heavy Nasdaq index advanced 6% and the S&P 500 index gained 0.4% in May.
Tight Labor Market Conditions Prevailed In April
The number of job openings in May unexpectedly increased, the Bureau of Labor Statistics reported Wednesday.
Job openings increased 358,000 to 10.1 million at the end of April, rebounding from nearly a two-year low of 9.745 million in March.
Job market remains tight for the second year in a row and despite the multiple interest rate hikes, the labor market shows no sign of easing.
In April, job openings increased in retail trade by 209,000, health care and social assistance by 185,000, and transportation, warehousing, and utilities by 154,000.
Over the month, the number of hires changed little at 6.1 million and total separations decreased to 5.7 million.
Within separations, quits changed little at 3.8 million, while layoffs and discharges fell to 1.6 million.
The quit rate fell to 2.4% in April from 2.5% in March, and dropped closer to the pre-pandemic monthly average between 2.3% and 2.4% in 2019.
U.S. Indexes & Yields
The S&P 500 index decreased 0.6% to 4,179.83 and the Nasdaq Composite declined 0.6% to 12,935.29.
The yield on 2-year Treasury notes decreased to 4.42%, 10-year Treasury notes edged down to 3.67% and 30-year Treasury bonds held at 3.90%.
Crude oil declined for the second day in a row after China reported second month of contraction in manufacturing sector.
The official manufacturing purchasing manager's index declined for the second month to 48.8 in May from 49.2 in April, the National Bureau of Statistics reported Wednesday.
The non-manufacturing purchasing manager's index, which tracks the confidence in the service and construction industries, slowed to 54.5 from 56.4 in April.
In May, crude oil declined 9.5% and plunged 39% from a year ago.
Crude oil fell $0.52 to $68.87 a barrel and natural gas prices increased 6 cents to $2.39 a thermal unit.
U.S. Stock Movers
Advance Auto Parts, Inc plunged 30.50% to $78.30 after the auto parts retailer reported a sharp decline in earnings, cut its dividend and lowered its full-year estimate.
The specialty retailer announced a quarterly dividend of 25 cents per share compared to $1.50 in the previous quarter.
The company also slashed its annual earnings per share estimate between $6.0 and $6.50 from the previous outlook between $10.20 and $11.20.
American Airlines Group Inc increased 1.8% to $14.88 after the international airline lifted its earnings outlook and revised higher operating margin.
The airline revised higher second quarter earnings per share between $1.45 and $1.65 from the previously estimated range between $1.20 and $1.40.
The company revised higher its margin estimate from between 11% and 13% to between 12.5% and 14.5%.
Hewlett Packard Enterprise dropped 6.3% to $14.56 after the company announced mixed quarterly results.
Sales in the latest quarter were $6.97 billion and adjusted earnings per share was 52 cents, both missed the expectations set by analysts.
Growth Worries and Weak Resource Stocks Dragged European Markets Down
European markets turned lower after growth worries resurfaced and the U.S. debt ceiling revision faced critical voting from lawmakers later today.
Major averages declined in London, Paris and Frankfurt on the worries that China's economic recovery may take longer than previously estimated.
China's official manufacturing purchasing manager's index declined for the second month to 48.8 in May from 49.2 in April, the National Bureau of Statistics reported Wednesday.
The non-manufacturing purchasing manager's index, which tracks the confidence in the service and construction industries, slowed to 54.5 from 56.4 in April.
Investors turned cautious as the U.S. debt ceiling agreement faced its first resistance from lawmakers in the lower house of Congress.
The full House of Representatives is expected to vote on the agreement as early as today and the Senate is likely to vote for the bill before the estimated default deadline June 5.
The House Ruling Committee in a narrow 7-to-6 vote approved the rules for debate and vote on the debt ceiling agreement later today.
On the inflation front, France and Italy reported decline in consumer price inflation and Germany is expected to report its inflation reading later today.
Italy's Consumer Inflation Slowed In April
Italy's consumer price inflation slowed to 7.6% in May from 8.2% in April, the National Institute of Statistics ISTAT said Wednesday.
Prices on a monthly basis rose at a slower pace of 0.3% in May from 0.4% in April.
The preliminary estimate of inflation declined after prices of energy, transportation services and food products rose at a slower pace.
Energy price inflation slowed to 20.5% from 26.6% in April, processed food inflation eased to 13.4% from 14%, and transportation services inflation weakened to 5.5% from 6%.
However, elevated inflation was supported by the faster rise in costs of unprocessed food at 8.9% compared to 8.4% in April, and habitational services rose at 3.4% from 3.2%.
Core consumer prices, which exclude unprocessed food and energy, slowed to 6.1% in May from 6.2% in April.
French Consumer Price Inflation Slowed In May
Inflation forces ebbed in France in may after energy prices rose at a slower pace, the statistical office INSEE reported Wednesday.
The consumer price inflation slowed to 5.1% in May from 5.9% in April, according to the preliminary estimate released by the government agency.
On a monthly basis, inflation declined 0.1% in May from April, the first monthly decline since December 2022.
The inflation rate was the slowest since April 2022, but still stayed above the target rate of 2% set by the European Central Bank.
Price increase slowed for energy at 2.0% from 6.8% in April, for food at 14.1% from 15.0%, for manufactured goods at 4.1% from 4.6%, and services at 3.0% from 3.2%.
However, tobacco products prices accelerated for the third month in a row.
Europe Indexes & Yields
The DAX index decreased 1.4% to 15,664.02, the CAC-40 index fell 1.5% to 7,098.70, and the FTSE 100 index dropped 1.01% to 7,446.14.
The yield on 10-year German Bunds inched lower to 2.25%, French bonds traded lower to 2.82%, the UK gilts held at 4.17% and Italian bonds decreased to 4.07%.
The euro edged lower to $1.067, the British pound to $1.232 and the Swiss franc to 91.06 cents.
Brent crude decreased $1.05 to $72.65 a barrel and the Dutch TTF natural gas price for immediate month delivery increased €2.17 to €26.85 per MWh.
Europe Stock Movers
Resource and energy stocks traded lower after China's official data showed manufacturing sector growth contracted at a faster pace in May.
Glencore, Anglo American, Antofagasta, Shell Plc, TotalEnergies SE declined between 1% and 4%.
Bloomsbury Publishing Plc increased 1.4% to 416.0 pence after the fiscal year 2023 revenue and earnings were ahead of market expectations.
WH Smith Plc advanced 1.8% to 1,555.0 pence after the book retailer revised higher its full-year outlook.
B&M European Value Retail SA soared 8.20% to 510.58 pence after the discount retailer said adjusted core earnings in the fiscal year 2024 are expected to be higher.
Movers: Advance Auto Parts, American Airlines, HP Inc, Hewlett Packard Enterprise, Yatra Online
Scott Peters
31 May, 2023
New York City
Advance Auto Parts, Inc plunged 30.50% to $78.30 after the auto parts retailer reported a sharp decline in earnings, cut its dividend and lowered its full-year estimate.
Net sales in the first quarter increased 1.3% to $3.4 billion, driven by new store openings and partially offset by a 0.4% decline in comparable store sales.
Net income plunged to $42.6 million from $129.8 million and diluted earnings per share fell to 72 cents from $2.26 a year ago.
The specialty retailer announced a quarterly dividend of 25 cents per share compared to $1.50 in the previous quarter.
The retailer lowered its estimate of new store openings from between 60 and 80 to between 40 and 60 in the current fiscal year.
The company also slashed its annual earnings per share estimate between $6.0 and $6.50 from the previous outlook between $10.20 and $11.20.
American Airlines Group Inc increased 1.8% to $14.88 after the international airline lifted its earnings outlook and revised higher operating margin.
The airline revised higher second quarter earnings per share between $1.45 and $1.65 from the previously estimated range between $1.20 and $1.40.
The company revised higher its margin estimate from between 11% and 13% to between 12.5% and 14.5%.
Hewlett Packard Enterprise dropped 6.3% to $14.56 after the company announced mixed quarterly results.
Sales in the fiscal second quarter ending in April increased 4% to $6.97 billion and net income increased to $418 million from $250 million and diluted earnings per share rose to 32 cents from 19 cents a year ago.
The company declared a regular cash dividend of 12 cents a share to shareholders on record on June 15 payable on July 14.
The company guided fiscal third quarter revenue between $6.7 billion and $7.2 billion and diluted earnings per share between 34 cents and 38 cents.
The company estimated full-year revenue growth in constant currency between 4% and 6% and revised higher diluted earnings per share between $1.42 and $1.50.
Yatra Online Inc increased 3.8% to $2.06 after the company reported a rebound in travel sales in India.
Revenue in the March quarter increased 97.4% to ₹1.2 billion and the company swung to a profit of ₹7.5 million from a loss of ₹117.2 million a year ago.
For the fiscal year ending in March 2023, revenue increased 92.4% to ₹3.8 billion and loss shrank to ₹288.2 million from ₹482.5 million a year ago.
In the year, air passengers booked jumped 51% to 5.6 million from 3.7 million and hotel room nights books soared 72% to 1.7 million from 1.0 million a year ago.
HP Inc declined 4.6% to $29.50 after the computer and advanced systems maker reported weaker than expected results.
Revenue in the fiscal second quarter ending in April dropped 21.7% to $12.9 billion from $16.5 billion and net income increased 7% to $1.07 billion from $1.0 billion and diluted earnings per share rose to $1.07 from 94 cents a year ago.
For the fiscal third quarter, the company estimated diluted earnings per share between 61 cents and 71 cents and for the fiscal year 2023 between $2.91 and $3.11.
Increase In Job Openings Suggest Tight Labor Market Conditions In April
Brian Turner
31 May, 2023
New York City
The number of job openings in May unexpectedly increased, the Bureau of Labor Statistics reported Wednesday.
Job openings increased 358,000 to 10.1 million at the end of April, rebounding from nearly a two-year low of 9.745 million in March.
Job market remains tight for the second year in a row and despite the multiple interest rate hikes, the labor market shows no sign of easing.
In April, job openings increased in retail trade by 209,000, health care and social assistance by 185,000, and transportation, warehousing, and utilities by 154,000.
Over the month, the number of hires changed little at 6.1 million and total separations decreased to 5.7 million.
Within separations, quits changed little at 3.8 million, while layoffs and discharges fell to 1.6 million.
Market Indexes Turned Volatile Ahead of House Vote, Oil Extended May Loss to 10%
Barry Adams
31 May, 2023
New York City
Stocks lacked direction as investors focused on the upcoming vote in the full House of Representatives this evening.
The White House and Republican leaders agreed to suspend the debt ceiling for the next two years and freeze federal government spending for the next two fiscal years.
Republican leaders are signaling the passage of the bill in the House despite a small group of lawmakers showing their displeasure with the agreement, highlighting that the spending cuts are not deep enough.
Major averages lacked direction and investors hoped that the Republican dominated House would ratify the agreement.
On the final day of May, the tech-heavy Nasdaq index advanced 6% in the month and the S&P 500 index gained 0.6%.
“I think we have the votes to pass this today,” said Rep. Patrick McHenry, a key Republican negotiator for the debt deal, in an interview on CNBC TV channel on Wednesday.
U.S. Indexes & Yields
The S&P 500 index decreased 0.4% to 4,190.97 and the Nasdaq Composite fell 0.3% to 12,985.73.
The yield on 2-year Treasury notes decreased to 4.42%, 10-year Treasury notes edged down to 3.67% and 30-year Treasury bonds held at 3.90%.
Crude oil declined for the second day in a row after China reported second month of contraction in manufacturing sector.
The official manufacturing purchasing manager's index declined for the second month to 48.8 in May from 49.2 in April, the National Bureau of Statistics reported Wednesday.
The non-manufacturing purchasing manager's index, which tracks the confidence in the service and construction industries, slowed to 54.5 from 56.4 in April.
In May, crude oil declined 9.5% and plunged 39% from a year ago.
Crude oil fell $0.52 to $68.87 a barrel and natural gas prices increased 6 cents to $2.39 a thermal unit.
U.S. Stock Movers
Advance Auto Parts, Inc plunged 30.50% to $78.30 after the auto parts retailer reported a sharp decline in earnings, cut its dividend and lowered its full-year estimate.
The specialty retailer announced a quarterly dividend of 25 cents per share compared to $1.50 in the previous quarter.
The company also slashed its annual earnings per share estimate between $6.0 and $6.50 from the previous outlook between $10.20 and $11.20.
American Airlines Group Inc increased 1.8% to $14.88 after the international airline lifted its earnings outlook and revised higher operating margin.
The airline revised higher second quarter earnings per share between $1.45 and $1.65 from the previously estimated range between $1.20 and $1.40.
The company revised higher its margin estimate from between 11% and 13% to between 12.5% and 14.5%.
Hewlett Packard Enterprise dropped 6.3% to $14.56 after the company announced mixed quarterly results.
Sales in the latest quarter were $6.97 billion and adjusted earnings per share was 52 cents, both missed the expectations set by analysts.
Growth Worries and Weak Resource Stocks Dragged Down European Markets
Bridgette Randall
31 May, 2023
Frankfurt
European markets turned lower after growth worries resurfaced and the U.S. debt ceiling revision faced critical voting from lawmakers later today.
Major averages declined in London, Paris and Frankfurt on the worries that China's economic recovery may take longer than previously estimated.
China's official manufacturing purchasing manager's index declined for the second month to 48.8 in May from 49.2 in April, the National Bureau of Statistics reported Wednesday.
The non-manufacturing purchasing manager's index, which tracks the confidence in the service and construction industries, slowed to 54.5 from 56.4 in April.
Investors turned cautious as the U.S. debt ceiling agreement faced its first resistance from lawmakers in the lower house of Congress.
The full House of Representatives is expected to vote on the agreement as early as today and the Senate is likely to vote for the bill before the estimated default deadline June 5.
The House Ruling Committee in a narrow 7-to-6 vote approved the rules for debate and vote on the debt ceiling agreement later today.
On the inflation front, France and Italy reported decline in consumer price inflation and Germany is expected to report its inflation reading later today.
Italy's Consumer Inflation Slowed In April
Italy's consumer price inflation slowed to 7.6% in May from 8.2% in April, the National Institute of Statistics ISTAT said Wednesday.
Prices on a monthly basis rose at a slower pace of 0.3% in May from 0.4% in April.
The preliminary estimate of inflation declined after prices of energy, transportation services and food products rose at a slower pace.
Energy price inflation slowed to 20.5% from 26.6% in April, processed food inflation eased to 13.4% from 14%, and transportation services inflation weakened to 5.5% from 6%.
However, elevated inflation was supported by the faster rise in costs of unprocessed food at 8.9% compared to 8.4% in April, and habitational services rose at 3.4% from 3.2%.
Core consumer prices, which exclude unprocessed food and energy, slowed to 6.1% in May from 6.2% in April.
French Consumer Price Inflation Slowed In May
Inflation forces ebbed in France in may after energy prices rose at a slower pace, the statistical office INSEE reported Wednesday.
The consumer price inflation slowed to 5.1% in May from 5.9% in April, according to the preliminary estimate released by the government agency.
On a monthly basis, inflation declined 0.1% in May from April, the first monthly decline since December 2022.
The inflation rate was the slowest since April 2022, but still stayed above the target rate of 2% set by the European Central Bank.
Price increase slowed for energy at 2.0% from 6.8% in April, for food at 14.1% from 15.0%, for manufactured goods at 4.1% from 4.6%, and services at 3.0% from 3.2%.
However, tobacco products prices accelerated for the third month in a row.
Europe Indexes & Yields
The DAX index decreased 0.4% to 15,843.08 and the CAC-40 index fell 0.5% to 7,172.86, and the FTSE 100 index dropped 0.2% to 7,172.86.
The yield on 10-year German Bunds inched lower to 2.25%, French bonds traded lower to 2.82%, the UK gilts held at 4.17% and Italian bonds decreased to 4.07%.
The euro edged lower to $1.067, the British pound to $1.232 and the Swiss franc to 91.06 cents.
Brent crude decreased $1.04 to $72.66 a barrel and the Dutch TTF natural gas increased €1.05 to €25.75 per MWh.
Europe Stock Movers
Resource and energy stocks traded lower after China's official data showed manufacturing sector growth contracted at a faster pace in May.
Glencore, Anglo American, Antofagasta, Shell Plc, TotalEnergies SE declined between 1% and 4%.
Bloomsbury Publishing Plc increased 1.4% to 416.0 pence after the fiscal year 2023 revenue and earnings were ahead of market expectations.
WH Smith Plc advanced 1.8% to 1,555.0 pence after the book retailer revised higher its full-year outlook.
B&M European Value Retail SA soared 8.20% to 510.58 pence after the discount retailer said adjusted core earnings in the fiscal year 2024 are expected to be higher.
Debt Deal Faces Tough Road Ahead Amid Rising GOP Criticism, Crude Oil Dropped 4%
Barry Adams
30 May, 2023
New York City
Getting the debt ceiling deal was hard, but getting it approved in a house of rancorous lawmakers may prove to be even harder.
Over the weekend, the White House and Republican leaders came together and hammered out a deal that allowed both sides to claim victory.
But selling that victory to 535 U.S. congressional lawmakers may prove to be a Herculean task in the face of the looming default date June 5.
The debt ceiling deal raises the limit slightly higher and freezes federal government spending level for the next two years with a few exceptions, not the deal that far-right Republicans and far-left Democrats had in mind.
The agreement is facing its first test today when the House Rules Committee of 13 members decides debate rules for a meeting of all representatives on 8:30 p.m. ET Wednesday.
Investors turned cautious after two of the nine Republican members of the committee voiced their displeasure with the deal.
Opponents of the deal may run the clock and delay any voting on the bill, raising the prospect of the U.S. default on June 5, the event that will be disruptive to the bond and stock markets.
Sensing the impending chaos ahead of the House vote, crude oil plunged 4% and benchmark indexes drifted in the negative territory after morning enthusiasm dissipated.
Last week, Treasury Secretary Janet Yellen reiterated that the federal government is likely to run out of cash to pay for expenses as early as June 5.
The U.S. is expected to default on its debt obligation if lawmakers fail to approve the bipartisan deal and the government may have to prioritize its expenses including social security, federal employee salaries and military spending.
U.S. Indexes & Yields
The S&P 500 index increased 0.5% to 4,225.40 and the Nasdaq Composite rose 1.3% to 13,149.68.
The yield on 2-year Treasury notes decreased to 4.53%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds held at 3.93%.
Crude oil rose $1.72 to $71.28 a barrel and natural gas prices held at $2.35 a thermal unit.
U.S. Stock Movers
Semiconductor chip makers led the gainers on the hopes of revenue growth led by the expected surge in demand for AI-chips.
Nvidia Corp jumped 5.5% to $411.43, AMD gained 0.3% to $127.11 and Qualcomm Inc increased 4.4% to $115.11.
Nvidia crossed $1 trillion mark capitalization after the stock extended this year's gain to 190%.
Toyota Motor Corp decreased 1.3% to $138.55 after the Japan-based vehicle maker and Germany-based Daimler Truck Holding agreed to merge their Japanese operations.
Daimler Truck Holding AG increased 1.1% to €28.83 in Frankfurt trading.
Tesla Inc increased 5.1% to $202.50 after the electric vehicle maker's chief officer Elon Musk met with China's foreign minister and signaled his readiness to expand Shanghai operations.
China has been facing a steady exodus of manufacturing companies to Vietnam, India and Mexico as companies seek to diversify its manufacturing base.
European Markets Turned Cautious Amid Rising Debt Ceiling Uncertainties
European stock indexes traded mixed and bond yields retreated following the easing of U.S. debt default worries.
Benchmark indexes in Frankfurt and Paris hovered near record highs and in London traded lower following the decline in energy and commodities prices.
On the economic front, Spain's inflation eased in May and Italy's producer prices declined in April, reflecting a sharp downturn in energy prices.
The Swiss GDP expanded in the first quarter after manufacturing activities picked up following nine months of weakness.
In international news, U.S. lawmakers are scheduled to vote as early as Wednesday on the recent debt ceiling deal between the White House and Republican leaders.
The deal is expected to face its first big test in the House where far-right Republicans are likely to oppose the agreement.
Spain's Inflation Eased to 2-year Low
Spain's consumer price inflation slowed to 3.2% in May from 4.1% in April, the National Statistics Institute or INE said Tuesday.
On a monthly basis, overall inflation declined 0.1%.
The inflation rate was the lowest since July 2021 but still above the target level set by the European Central Bank.
Core inflation from a year ago, which excludes food and energy, slowed to 6.1% in May from 6.6% in April. On a monthly basis, core inflation rose 0.2%.
Italy's Producer Price Index Declined 1.5%
Italy's industrial producer price index declined 1.5% in April, the National Institute of Statistics or ISTAT reported Tuesday.
The measure of wholesale prices peaked at 41.7% in September 2022 and since then has steadily declined every month except in November and December 2022.
The decline in large part was driven by an 18.1% fall in energy prices but prices of consumer goods rose 7.8%, capital goods 5.2% and intermediate goods 0.5%.
Swiss Economic Activities Picked Up In First Quarter
The Swiss economy expanded 0.5% in the first quarter of 2023 from the final quarter of 2022, the Secretariat of Economic Affairs reported Tuesday.
The economic growth estimate was adjusted for the sporting event, the football world cup.
The Swiss GDP expanded 0.3% in the first quarter not adjusted for the one-time sporting event and on a yearly basis expanded at 0.6%.
The growth in economic activities has been muted for the last six quarters in a row while the central bank carried out its aggressive rate hike campaign to arrest rising inflation.
Manufacturing sector picked up activities following three negative quarters of growth in a row after exports rebounded.
The increase in aggregate domestic demand led to a slight rebound in overall economic activities. Wholesale trade increased 2.1% but value added in retail trade fell 0.4%.
Europe Indexes & Yields
The DAX index decreased 43.82 points to 15,908.91 points, the CAC-40 index decreased 94.06 points to 7,209.75, and FTSE 100 index declined 1.4% to 7,522.07.
The yield on 10-year German Bunds inched lower to 2.33%, French bonds traded lower to 2.90%, the UK gilts held at 4.23% and Italian bonds decreased to 4.15%.
The euro edged lower to $1.072, the British pound to $1.241 and the Swiss franc to 90.19 cents.
Brent crude decreased $3.30 to $73.70 a barrel and the Dutch TTF natural gas increased €0.12 to €24.68 per MWh.
Europe Stock Movers
Bunzl Plc declined 1.0% to 3,161.0 pence after the international agricultural products distributor agreed to acquire a safety business based in Brazil and Spain.
In May, the company agreed to acquire Brazil-based Leal Equipamentos de Proteção, a specialized safety distributor generating revenue of 216 million real or £34 million.
In April, Bunzl agreed to acquire Spain-based Irudek, a distributor of safety and personal protective equipment, specializing in fall protection equipment in Spain generating revenue of €17 million or £15 million.
Unilever Plc declined 2.4% to 4,071.0 pence after the company said its chief financial officer Graeme Pitkethly would leave the company by the end of May 2024.
Nestle SA dropped 2.5% to CHF 109.18 after the company said chief financial officer François-Xavier Roger will step down.
Anna Manz, current chief financial officer of the London Stock Exchange Group will assume the position and also join the Nestle board.
Hunting Plc soared 14.9% to 231.50 pence after the company won a $91 million contract from Cairn Oil and Gas and Vedanta Limited for its operations in Rajasthan, India.
The contract is for an estimated 100 wells and covers operations over three years.
The company said its order backlog increased to $575 million and revised higher its 2023 operating earnings outlook to a range between $92 million and $94 million.
Movers: Airlines, Nvidia, Chip Stocks, Hotels, Toyota Motor, Daimler Truck
Scott Peters
30 May, 2023
New York City
The S&P 500 index increased 0.2% to 4,212.60 and the Nasdaq Composite rose 0.7% to 13,065.55.
The yield on 2-year Treasury notes decreased to 4.53%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds held at 3.93%.
Semiconductor chip makers led the gainers on the hopes of revenue growth led by the expected surge in demand for AI-chips.
Nvidia Corp jumped 5.5% to $411.43, AMD gained 0.3% to $127.11 and Qualcomm Inc increased 4.4% to $115.11.
Nvidia crossed $1 trillion mark capitalization after the stock extended this year's gain to 190%.
Toyota Motor Corp decreased 1.3% to $138.55 after the Japan-based vehicle maker and Germany-based Daimler Truck Holding agreed to merge their Japanese operations.
Daimler Truck Holding AG increased 1.1% to €28.83 in Frankfurt trading.
Tesla Inc increased 5.1% to $202.50 after the electric vehicle maker's chief officer Elon Musk met with China's foreign minister and signaled his readiness to expand Shanghai operations.
China has been facing a steady exodus of manufacturing companies to Vietnam, India, Indonesia and Mexico as companies seek to diversify their manufacturing base.
Airline and hospitality stocks were in focus after Memorial Day weekend air travel crossed 2019 levels.
Despite sky-high inflation and elevated high airfares, a record number of passengers traveled during the Memorial Day weekend.
The Transportation Security Administration said it processed about 9.8 million passengers from Friday through Monday, slightly higher from the holiday weekend in 2019.
The government agency screened 2.7 million passengers at check points across the nation on Friday, a post-pandemic daily record.
United Airlines Holdings Inc increased 1% to $47.77, American Airlines Group increased 1.2% to $14.53, Southwest Airlines Co gained 0.8% to $29.90 and JetBlue Airways Corp decreased 0.4% to $6.81.
Uber Technologies Inc declined 1.7% to$37.77 and Lyft Inc increased 0.3% to $8.40.
Hilton Hotels Corp decreased 0.5% to $137.49, Marriott International Inc declined 1% to $170.01 and Airbnb Inc fell 0.5% to $106.33.
Stocks Advanced On Wall Street as Debt Deal Moves to Congress
Barry Adams
30 May, 2023
New York City
Stocks advanced after a three-day weekend and tech stocks led the gainers on Wall Street.
Market sentiment was positive after the White House and Republican lawmakers worked out a deal to avert government default, restrain government spending and expand permitting process for energy projects.
The deal still faces hurdles and lawmakers in the House are expected to vote on the agreement as early as Wednesday followed by a vote in the Senate.
Last week, Treasury Secretary Janet Yellen reiterated that the federal government is likely to run out of cash to pay for expenses as early as June 5.
The U.S. is expected to default on its debt obligation if lawmakers fail to approve the bipartisan deal and the government may have to prioritize its expenses including social security, federal employee salaries and military spending.
U.S. Indexes & Yields
The S&P 500 index increased 0.5% to 4,225.40 and the Nasdaq Composite rose 1.3% to 13,149.68.
The yield on 2-year Treasury notes decreased to 4.53%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds held at 3.93%.
Crude oil rose $1.72 to $71.28 a barrel and natural gas prices held at $2.35 a thermal unit.
U.S. Stock Movers
Semiconductor chip makers led the gainers on the hopes of revenue growth led by the expected surge in demand for AI-chips.
Nvidia Corp jumped 5.5% to $411.43, AMD gained 0.3% to $127.11 and Qualcomm Inc increased 4.4% to $115.11.
Nvidia crossed $1 trillion mark capitalization after the stock extended this year's gain to 190%.
Toyota Motor Corp decreased 1.3% to $138.55 after the Japan-based vehicle maker and Germany-based Daimler Truck Holding agreed to merge their Japanese operations.
Daimler Truck Holding AG increased 1.1% to €28.83 in Frankfurt trading.
Tesla Inc increased 5.1% to $202.50 after the electric vehicle maker's chief officer Elon Musk met with China's foreign minister and signaled his readiness to expand Shanghai operations.
China has been facing a steady exodus of manufacturing companies to Vietnam, India and Mexico as companies seek to diversify its manufacturing base.
Europe Movers: Bunzl, Unilever, Nestle, Hunting Plc
Bridgette Randall
30 May, 2023
Frankfurt
Bunzl Plc declined 1.0% to 3,161.0 pence after the international agricultural products distributor agreed to acquire a safety business based in Brazil and Spain.
In May, the company agreed to acquire Brazil-based Leal Equipamentos de Proteção, a specialized safety distributor generating revenue of 216 million real or £34 million.
In April, Bunzl agreed to acquire Spain-based Irudek, a distributor of safety and personal protective equipment, specializing in fall protection equipment in Spain generating revenue of €17 million or £15 million.
Unilever Plc declined 2.4% to 4,071.0 pence after the company said its chief financial officer Graeme Pitkethly would leave the company by the end of May 2024.
Nestle SA dropped 2.5% to CHF 109.18 after the company said chief financial officer François-Xavier Roger will step down.
Anna Manz, current chief financial officer of the London Stock Exchange Group will assume the position and also join the Nestle board.
Hunting Plc soared 14.9% to 231.50 pence after the company won a $91 million contract from Cairn Oil and Gas and Vedanta Limited for its operations in Rajasthan, India.
The contract is for an estimated 100 wells and covers operations over three years.
The company said its order backlog increased to $575 million and revised higher its 2023 operating earnings outlook to a range between $92 million and $94 million.
Swiss GDP Rebounded, Spain's Inflation Eased, Italy's Producer Price Inflation Turned Negative
Bridgette Randall
30 May, 2023
Frankfurt
European stock indexes traded mixed and bond yields retreated following the easing of U.S. debt default worries.
Benchmark indexes in Frankfurt and Paris hovered near record highs and in London traded lower following the decline in energy and commodities prices.
On the economic front, Spain's inflation eased in May and Italy's producer prices declined in April, reflecting a sharp downturn in energy prices.
The Swiss GDP expanded in the first quarter after manufacturing activities picked up following nine months of weakness.
In international news, U.S. lawmakers are scheduled to vote as early as Wednesday on the recent debt ceiling deal between the White House and Republican leaders.
The deal is expected to face its first big test in the House where far-right Republicans are likely to oppose the agreement.
Spain's Inflation Eased to 2-year Low
Spain's consumer price inflation slowed to 3.2% in May from 4.1% in April, the National Statistics Institute or INE said Tuesday.
On a monthly basis, overall inflation declined 0.1%.
The inflation rate was the lowest since July 2021 but still above the target level set by the European Central Bank.
Core inflation from a year ago, which excludes food and energy, slowed to 6.1% in May from 6.6% in April. On a monthly basis, core inflation rose 0.2%.
Italy's Producer Price Index Declined 1.5%
Italy's industrial producer price index declined 1.5% in April, the National Institute of Statistics or ISTAT reported Tuesday.
The measure of wholesale prices peaked at 41.7% in September 2022 and since then has steadily declined every month except in November and December 2022.
The decline in large part was driven by an 18.1% fall in energy prices but prices of consumer goods rose 7.8%, capital goods 5.2% and intermediate goods 0.5%.
Swiss Economic Activities Picked Up In First Quarter
The Swiss economy expanded 0.5% in the first quarter of 2023 from the final quarter of 2022, the Secretariat of Economic Affairs reported Tuesday.
The economic growth estimate was adjusted for the sporting event, the football world cup.
The Swiss GDP expanded 0.3% in the first quarter not adjusted for the one-time sporting event and on a yearly basis expanded at 0.6%.
The growth in economic activities has been muted for the last six quarters in a row while the central bank carried out its aggressive rate hike campaign to arrest rising inflation.
Manufacturing sector picked up activities following three negative quarters of growth in a row after exports rebounded.
The increase in aggregate domestic demand led to a slight rebound in overall economic activities. Wholesale trade increased 2.1% but value added in retail trade fell 0.4%.
Europe Indexes & Yields
The DAX index increased 93.45 points to 16,046.18 and the CAC-40 index decreased 12.58 points to 7,291.23, and FTSE 100 index declined 0.4% to 7,598.60.
The yield on 10-year German Bunds inched lower to 2.39%, French bonds traded lower to 2.92%, the UK gilts held at 4.33% and Italian bonds decreased to 4.22%.
The euro edged lower to $1.072, the British pound to $1.241 and the Swiss franc to 90.19 cents.
Brent crude decreased $1.61 to $75.42 a barrel and the Dutch TTF natural gas decreased €0.45 to €25.05 per MWh.
Europe Stock Movers
Bunzl Plc declined 1.0% to 3,161.0 pence after the international agricultural products distributor agreed to acquire a safety business based in Brazil and Spain.
In May, the company agreed to acquire Brazil-based Leal Equipamentos de Proteção, a specialized safety distributor generating revenue of 216 million real or £34 million.
In April, Bunzl agreed to acquire Spain-based Irudek, a distributor of safety and personal protective equipment, specializing in fall protection equipment in Spain generating revenue of €17 million or £15 million.
Unilever Plc declined 2.4% to 4,071.0 pence after the company said its chief financial officer Graeme Pitkethly would leave the company by the end of May 2024.
Nestle SA dropped 2.5% to CHF 109.18 after the company said chief financial officer François-Xavier Roger will step down.
Anna Manz, current chief financial officer of the London Stock Exchange Group will assume the position and also join the Nestle board.
Hunting Plc soared 14.9% to 231.50 pence after the company won a $91 million contract from Cairn Oil and Gas and Vedanta Limited for its operations in Rajasthan, India.
The contract is for an estimated 100 wells and covers operations over three years.
The company said its order backlog increased to $575 million and revised higher its 2023 operating earnings outlook to a range between $92 million and $94 million.
European Markets Drifted Lower In Thin Trading, Erdogan Secured Third Term In Turkey
Bridgette Randall
29 May, 2023
Frankfurt
European markets traded higher in thin trading after the tentative U.S. debt deal raised hopes for the federal government averting fast approaching default.
Benchmark indexes in Frankfurt and Paris lacked direction and struggled to advance.
Market sentiment was mildly positive after the U.S. President Joe Biden and congressional leaders reached a tentative debt ceiling deal.
The debt deal is still facing a tough road ahead and needs approvals from the House and Senate where hard-right Republican lawmakers are likely to vote against the bipartisan agreement.
Turkish stock market jumped 3.2% after president Recep Tayyip Erdogan secured a third term in a runoff election held over the weekend.
Erdogan won 52% of votes and his rival Kemal Kilicdaroglu of the Republican People's Party attracted 47.86% of votes, according to Turkey's Supreme Election Council.
Turkish lira dropped to a record low of 20.07 against the U.S. dollar as investors awaited future government's plans to combat sky-high inflation.
Europe Indexes & Yields
The DAX index decreased a fraction to 15,983.08 and the CAC-40 index declined a fraction to 7,317.30, and financial markets in London were closed for a holiday.
The yield on 10-year German Bunds inched lower to 2.44%, French bonds traded lower to 3.01%, the UK gilts inched lower to 4.33% and Italian bonds decreased to 4.29%.
The euro edged lower to $1.074, the British pound to $1.235 and the Swiss franc to 90.37 cents.
Brent crude decreased 42 cents to $76.52 a barrel and the Dutch TTF natural gas decreased €0.82 to €25.32 per MWh.
Europe Stock Movers
Banks led the gainers in trading in Frankfurt and Paris in light trading.
UBS, Deutsche Bank, BNP Paribas and Commerzbank advanced between 1% and 1.4% in light trading.
German automakers BMW and Volkswagen gained 1%.
Richemont SA gained 2.5% in Zurich and LVMH Moet Hennessy Louis Vuitton SE edged up a fraction in Paris trading.
Mixed Trading In Asian Markets
The Nikkei index in Tokyo jumped 1.0% to 31,233.54 and reached a new 33-year high and the yen drifted to 140.26 against the U.S. dollar.
In Shanghai, the benchmark index traded higher 0.3% to 3,221.45 but the Hang Seng index declined 1.0% 18,551.11 and traded at a new low in 2023.
China's domestic tourism reached pre-Covid level during the May Day holiday period as demand for travel picked up but the overall domestic spending struggled to rebound.
The arrival of Chinese tourists in Thailand and Japan also picked up sharply during the holiday period, raising hopes that the broader economic revival will pick up in the months ahead.
China has lost about 30 million service jobs in the last three years of Covid-related business closures and many small businesses are struggling to stay afloat in the absence of direct financial support from the government.