Market Update
U.S. Movers: Airlines, Cruise Lines, Defense Stocks, Energy Stocks
Scott Peters
09 Oct, 2023
New York City
Stocks in New York declined after geo-political tensions rose and crude oil prices surged on the fears of a potential supply disruptions amid worries of a widening conflict in the Middle East.
The S&P 500 index decreased 0.4% to 4,290.76 and the Nasdaq Composite fell 0.9% to 13,306.32.
The bond market was closed to observe Columbus Day but in Friday's trading U.S. Treasury yields advanced.
The surge in crude oil prices lifted energy stocks higher but airlines fell on the worries of higher fuel costs.
Exxon Mobil, Chevron, Marathon Oil, Hess Corp and Occidental Petroleum jumped around 3%.
United Airlines, Delta Air Lines and American Airlines dropped 3% after crude oil prices surged.
Allied Pilots Association, the union of American Airlines' pilots issued a directive asking all its members to refuse to fly to Israel after the country declared war.
Cruise lines operators declined after crude oil pries surged.
Royal Caribbean Cruises Limited fell 4.2% to $87.05, Carnival Corp dropped 5.5% to $12.52 and Norwegian Cruise Line Holdings decreased 4.5% to $15.88.
Defense stocks advanced after the Israel and Hamas conflict escalated and at least 1,000 people have died in the recent attacks and counterattacks.
Lockheed Martin, Northrop Grumman Corp and RTX Corporation advanced about 4%.
U.S. Markets Headed Lower After Deadly Israel-Hamas Conflict Killed 1,100
Barry Adams
09 Oct, 2023
New York City
Crude oil prices and rising geopolitical tensions overshadowed sentiment in stock markets in Monday's trading.
Crude oil surged as much as 4% and Israel declared war following rocket attacks from Hamas based in the West Bank and Gaza Strip.
Hamas launched air attacks on 22 locations in Israel, surprising military establishment and intelligence agency Mossad for their collective failures in monitoring the militant group that is seeking independence of Palestine.
Israeli Prime Minister Benjamin Netanyahu declared a siege of Gaza Strip controlled by Hamas and the Israeli military stepped us its bombing attacks that have killed at least 550 Palestinians.
For decades, Palestinians have been demanding an independent state and Israeli forces have been annexing land once owned by Palestinians and building homes for settlers.
Neither Palestine nor Israel are significant players in the energy market, but the latest conflict may spill over to neighboring states and oil producing states in the region and disrupt crude oil distribution.
Israeli shekel dropped to a seven-year low to 3.90 against the U.S. dollar and the Bank of Israel announced its plan to sell $30 billion and provided additional liquidity of $15 billion to support the falling shekel.
U.S. Indexes & Yields
The S&P 500 index decreased 0.4% to 4,290.76 and the Nasdaq Composite fell 0.9% to 13,306.32.
The bond market was closed to observe Columbus Day but in Friday's trading U.S. Treasury yields advanced.
The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.84% and 30-year Treasury bonds edged down to 5.0%.
Crude oil increased $3.65 to $86.45 a barrel and natural gas prices increased 4 cents to $3.38 a thermal unit.
The dollar index edged higher to 106.24, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
The surge in crude oil prices lifted energy stocks higher but airlines fell on the worries of higher fuel costs.
Exxon Mobil, Chevron, Marathon Oil, Hess Corp and Occidental Petroleum jumped around 3%.
United Airlines, Delta Air Lines and American Airlines dropped 3% after crude oil prices surged.
Allied Pilots Association, the union of American Airlines' pilots issued a directive asking all its members to refuse to fly to Israel after the country declared war.
Defense stocks advanced after the Israel and Hamas conflict escalated and at least 1,000 people have died in the recent attacks and counterattacks.
Lockheed Martin, Northrop Grumman Corp and RTX Corporation advanced about 4%.
Europe Movers: Airlines Stocks, Defense Stocks, Energy Stocks, Metro Bank
Inga Muller
09 Oct, 2023
Frankfurt
The DAX index decreased 0.7% to 15,121.42, the CAC-40 index fell 0.5% to 7,025.05 and the FTSE 100 index rose 0.1% to 7,502.59.
The yield on 10-year German bonds decreased to 2.87%, French bonds traded lower to 3.46%, the UK gilts edged down to 4.56% and Italian bonds rose to 4.95%.
Energy stocks advanced after crude oil prices surged 4% and air transportation stocks declined.
TotalEnergies, Repsol, BP Plc and Shell jumped between 1% and 3% after the Middle East conflict flared up.
Lufthansa, Air France KLM and the parent of British Air IAG declined between 3% and 4%.
Defense companies were in focus and traded higher.
Rhienmetall AG jumped 4.5% to €245.0, Leonardo SpA added 4.3% to €13.48 and Saab AB advanced 7.2% to skr 562.00.
Metro Bank Holdings Plc jumped 15% to 51.82 pence on reports that Bank of England held preliminary discussion with large banks amid search for a buyer for the troubled bank.
European Markets Headed Lower, Natural Gas Prices Soared 10%
Bridgette Randall
09 Oct, 2023
Frankfurt
European markets turned lower and extended previous week's losses but the resource heave index in London advanced.
Investors were cautious in Monday's trading after violence erupted in the world's most dangerous region and Israel stepped up its bombing activities in Palestine after a Hamas controlled group carried out targeted missile attacks.
The conflict escalated to the third day and at least 1,100 people have died so far after Israel carried out its most severe bombing campaign that included several civilian targets.
German Industrial Production Declined In August
German industrial production decreased 0.2% from the previous month in August, deStatis reported Monday.
Energy production declined 6.6% from the previous month, construction output fell 2.4% and machinery and capital equipment production declined 2.4%.
But vehicle production soared 7.6% after falling 9.4% in July.
Industrial production estimate was downwardly revised to a decline of 0.6% in July.
From a year ago, production shrank 2% after contracting 1.7% in July, the statistical bureau reported.
Natural Gas Prices Surged 10%
Crude oil prices jumped more than 4% after investors got first chance to react to the news of Israel-Palestine war
Natural gas futures soared 10% after a leak was reported in the pipe network between Estonia and Finland.
The sudden drop in pressure in the natural gas flow, forced authorities to shutdown flow and repair works could take several months.
Ample natural gas supplies and above average temperatures this month along with weakening industrial activities have kept natural gas prices relatively stable.
Prices are still significantly lower than a year ago when prices were above €60 per MWh.
Europe Indexes & Yields
The DAX index decreased 0.7% to 15,121.42, the CAC-40 index fell 0.5% to 7,025.05 and the FTSE 100 index rose 0.1% to 7,502.59.
The yield on 10-year German bonds decreased to 2.87%, French bonds traded lower to 3.46%, the UK gilts edged down to 4.56% and Italian bonds rose to 4.95%.
The euro edged lower to a three-month low to $1.051, the British pound to $1.218 and the U.S. dollar fetched 90.81 Swiss cents.
Brent crude increased $2.49 to $87.50 a barrel and the Dutch TTF natural gas edged lower by €4.67 to €42.90 per MWh.
Europe Stock Movers
Energy stocks advanced after crude oil prices surged 4% and air transportation stocks declined.
TotalEnergies, Repsol, BP Plc and Shell jumped between 1% and 3% after the Middle East conflict flared up.
Lufthansa, Air France KLM and the parent of British Air IAG declined between 3% and 4%.
Defense companies were in focus and traded higher.
Rhienmetall AG jumped 4.5% to €245.0, Leonardo SpA added 4.3% to €13.48 and Saab AB advanced 7.2% to skr 562.00.
Metro Bank Holdings Plc jumped 15% to 51.82 pence on reports that Bank of England held preliminary discussion with large banks amid search for a buyer for the troubled bank.
U.S. Economy Added Jobs At Brisk Pace In September
Brian Turner
06 Oct, 2023
New York City
Nonfarm payroll additions in all levels of government and private sector soared 336,000 in September, the U.S. Bureau of Labor Statistics reported Friday.
Moreover, employment in July and August were revised higher by a combined 119,000.
The July employment change was revised higher by 79,000, from 157,000 to 236,000, and for August was revised up by 40,000, from 187,000 to 227,000.
The surge in employment reflected the widening demand for employees in the service sector.
Jobless rate in the month increased to 3.8% and average hourly wages rose 0.2% from the previous month and jumped 4.2% from a year ago.
Despite the surge in hiring over the last two years, the labor force participation rate has remained nearly unchanged, indicating a steady and elevated level of employees retiring or choosing to leave the labor force.
Both the labor force participation rate, at 62.8%, and the employment-population ratio, at 60.4%, were unchanged over the month.
U.S. Movers: Aehr Test Systems, Levi Strauss, Philips, Tesla
Scott Peters
06 Oct, 2023
New York City
Stocks struggled after employers added staff at a brisk pace in September.
The S&P 500 index decreased 0.7% to 4,228.04 and the Nasdaq Composite fell 0.7% to 13,126.42.
The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.84% and 30-year Treasury bonds edged down to 5.0%.
Koninklijke Philips NV declined 9.4% to $17.86 after the U.S. FDA said the Dutch medical devices company's sleep apnea product recall fell short of the agency's expectations.
Levi Strauss & Company decreased 1% to $13.08 after the apparel maker reported third-quarter revenue below market's expectations and the company also lowered its full-year revenue outlook.
Tesla Inc fell 2.5% to $255.14 after the electric vehicle maker lowered prices on its Model 3 and Model Y vehicles in the U.S.
The move follows the recent weakness in U.S. sales after the company reported weaker-than-expected sales in the third quarter.
Aehr Test Systems plunged 16.1% to $37.06 despite the company reporting quarterly earnings and revenue ahead of expectations set by analysts.
The semiconductor testing equipment maker said net revenue in the fiscal first quarter ending in August jumped 93% to $20.6 million and net income advanced to $4.7 million from $.0.59 million and diluted earnings per share rose to 16 cents from 2 cents a year ago.
The company reiterated its revenue in the fiscal year 2024 ending in May 2024 of $100 million and net income of $28 million.
Treasury Yields Jumped Back to 16-year Highs After Hiring Surged In September
Barry Adams
06 Oct, 2023
New York City
Stocks headed lower and extended weekly losses after nonfarm payrolls surged in September.
The S&P 500 index and the Nasdaq Composite are set to extend weekly losses for the fifth week in a row and Treasury yields jumped more than 12 basis points after the release of a hotter-than-expected employment report.
Nonfarm Payroll Surged In September
Nonfarm payroll additions at all levels of government and by private sector soared 336,000 in September, the U.S. Bureau of Labor Statistics reported Friday.
Moreover, employment in July and August were revised higher by a combined 119,000.
The July employment change was revised higher by 79,000, from 157,000 to 236,000, and for August was revised up by 40,000, from 187,000 to 227,000.
The surge in employment reflected the widening demand for employees in the service sector.
Jobless rate in the month increased to 3.8% and average hourly wages rose 0.2% from the previous month and jumped 4.2% from a year ago.
Despite the surge in hiring over the last two years, the labor force participation rate has remained nearly unchanged, indicating a steady and elevated level of employees retiring or choosing to leave the labor force.
Both the labor force participation rate, at 62.8%, and the employment-population ratio, at 60.4%, were unchanged over the month.
U.S. Indexes & Yields
The S&P 500 index decreased 0.7% to 4,228.04 and the Nasdaq Composite fell 0.7% to 13,126.42.
The yield on 2-year Treasury notes increased to 5.10%, 10-year Treasury notes inched higher to 4.84% and 30-year Treasury bonds edged down to 5.0%.
Crude oil decreased $0.01 to $82.31 a barrel and natural gas prices increased 6 cents to $3.23 a thermal unit.
The dollar index edged lower to 106.80, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Koninklijke Philips NV declined 9.4% to $17.86 after the U.S. FDA said the Dutch medical devices company's recall of sleep apnea product recall fell short of the agency's expectations.
Levi Strauss & Company decreased 1% to $13.08 after the apparel maker reported third-quarter revenue below market's expectations and the company also lowered its full-year revenue outlook.
Tesla Inc fell 2.5% to $255.14 after the electric vehicle maker lowered prices on its Model 3 and Model Y vehicles in the U.S.
The move follows the recent weakness in U.S. sales after the company reported weaker-than-expected sales in the third quarter.
Aehr Test Systems plunged 16.1% to $37.06 despite the company reporting quarterly earnings and revenue ahead of expectations set by analysts.
The semiconductor testing equipment maker said net revenue in the fiscal first quarter ending in August jumped 93% to $20.6 million and net income advanced to $4.7 million from $.0.59 million and diluted earnings per share rose to 16 cents from 2 cents a year ago.
The company reiterated its revenue in the fiscal year 2024 ending in May 2024 of $100 million and net income of $28 million.
Movers: De La Rue, JD Wetherspoon, Metro Bank, Philips, Renault, Shell, Volvo
Inga Muller
06 Oct, 2023
New York City
European stocks edged higher on the final day of the week and investors reacted to corporate news and factory orders rebound in Germany and the home prices decline in the U.K.
The DAX index increased 0.8% to 15,193.87, the CAC-40 index rose 0.7% to 7,050.02 and the FTSE 100 index rose 0.5% to 7,488.54.
The yield on 10-year German bonds increased to 2.90%, French bonds traded higher to 3.49%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
Koninklijke Philips NV dropped 8.7% to €16.93 after the U.S. Food and Drug Administration said it is not happy with how the Dutch healthcare company handled its recent product recall.
Volvo AB Class B increased 0.5% to kr 224.15 and Renault SA advanced 0.1% to €35.10 after the two vehicle makers announced a plan to form a new company to make electric vans.
Metro Bank Holdings Plc soared 20% to 45.0 pence after the UK-based bank initiated talks to sell £3 billion of mortgage loans it held in its portfolio.
De La Rue Plc increased 1.7% to 61.50 pence after the security solutions provider said its adjusted first-half profit is likely to be slightly higher than its previous estimate of breakeven.
J D Wetherspoon Plc decreased 6.9% to 648.50 pence despite the UK-based pub chain operator returning to annual profit for the first time after three years since the coronavirus pandemic.
Shell Plc advanced 1.7% to 2,575.50 after the integrated oil and natural gas company revised its third-quarter natural gas production forecast.
German Factory Orders Rebounded, UK Home Prices Extended Decline to 5th Consecutive Month
Bridgette Randall
06 Oct, 2023
Frankfurt
European markets advanced on the final day of the week and bond yields edged higher.
Benchmark indexes in Paris, London and Frankfurt edged higher after crude oil prices extended weekly losses above 11%.
Market sentiment also improved after Germany's factory orders rebounded at a stronger-than-expected rate in August.
German Factory Orders Rebounded In August
Orders adjusted for seasonal and calendar factors jumped 3.9% in August from the previous month and rebounded from a sharp fall of revised 11.3% in July, Destatis reported Friday.
However, orders declined 4.2% from a year ago and July orders were revised to a decline of 11.3% from the fall of 11.7% in the previous estimate.
Excluding large scale orders, generally from the transportation and defense industry, orders rose 3.9% from the previous month.
Despite the talks of economic slowdown, orders from domestic customers, the Eurozone and international destinations rose.
Foreign orders increased by 3.9% and orders from the Eurozone and orders from outside the Eurozone rose 3.9% and domestic orders rose 4.0%.
When measured on a three-month average basis which smoothes out month-to-month volatility, orders surged 4.9% from the previous three-month period.
The rebound in orders in August was driven by the 37.9% increase in demand for electronic, optical and data processing equipment, 8.7% in electrical equipment and 4% rise in pharmaceutical industry.
UK Home Prices Declined In September
Home prices continued to decline in the U.K. for the fifth month in a row, according to the data released by Halifax, a division of Bank of Scotland.
The Halifax House Price Index decreased 4.7% from a year in September, following a slightly revised 4.5% decline in August.
The home price decline was the largest fall since August 2009 and on a monthly basis home prices decreased 0.4% in September compared to 1.8% decline in August.
“Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales.
Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability. Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market," said Kim Kinnard, director of Halifax Mortgages.
The average home now costs £278,601, a drop of around £1,200 since last month and remains £39,400 higher than in March 2020, reflecting a sharp jump in home prices since the pandemic.
Europe Indexes & Yields
The DAX index increased 0.8% to 15,193.87, the CAC-40 index rose 0.7% to 7,050.02 and the FTSE 100 index rose 0.5% to 7,488.54.
The yield on 10-year German bonds increased to 2.90%, French bonds traded higher to 3.49%, the UK gilts edged up to 4.59% and Italian bonds rose to 4.93%.
The euro edged lower to a three-month low to $1.055, the British pound to $1.222 and the U.S. dollar fetched 91.23 Swiss cents.
Brent crude increased $0.22 to $84.31 a barrel and the Dutch TTF natural gas edged lower by €0.69 to €36.91 per MWh.
Europe Stock Movers
Koninklijke Philips NV dropped 8.7% to €16.93 after the U.S. Food and Drug Administration said it is not happy with how the Dutch healthcare company handled its recent product recall.
Volvo AB Class B increased 0.5% to kr 224.15 and Renault SA advanced 0.1% to €35.10 after the two vehicle makers announced a plan to form a new company to make electric vans.
Metro Bank Holdings Plc soared 20% to 45.0 pence after the UK-based bank initiated talks to sell £3 billion of mortgage loans it held in its portfolio.
De La Rue Plc increased 1.7% to 61.50 pence after the security solutions provider said its adjusted first-half profit is likely to be slightly higher than its previous estimate of breakeven.
J D Wetherspoon Plc decreased 6.9% to 648.50 pence despite the UK-based pub chain operator returning to annual profit for the first time after three years since the coronavirus pandemic.
Shell Plc advanced 1.7% to 2,575.50 after the integrated oil and natural gas company revised its third-quarter natural gas production forecast.