Market Update
Durable Goods Orders Accelerated In May
Brian Turner
27 Jun, 2023
New York City
Durable goods orders rose more than expected and new home sales also advanced.
Durable goods orders expanded in May 1.7%, faster than upwardly revised 1.2% in April, the Commerce Department reported Tuesday.
Excluding transportation equipment orders, durable goods orders rose 0.6% in May after dropping by a revised 0.6% in April.
Excluding defense orders, which declined 14.7%, durable goods orders rose 3%.
Durable goods shipments increased 1.7% to $282.7 billion, following a 0.6% decrease in April.
Shipment of transportation equipment increased 4.6% to $91.8 billion.
Closely watched non-defense capital goods orders increased 6.7% to $91.0 billion and shipments increased 3.4% to $82.9 billion and unfilled orders advanced 1.1% to $758.7 billion.
Non-defense capital goods orders, excluding aircraft orders, rose 0.7% in May from April.
New Home Sales Jumped In May
Brian Turner
27 Jun, 2023
New York City
New home sales jumped 12.2% to 763,000 on a seasonally adjusted basis, U.S. Census Bureau reported Tuesday.
The annual rate jumped to a high not seen since February of last year and increased 20% from a year ago when the annual rate estimate was 636,000.
The median sales price of new houses sold in May was $416,300 and the average sales price was $487,300 compared to $450,700 and $521,500 respectively a year ago.
Home sales in the Northeast increased 17.6% to 40,000, in the West rose 17.4% to 175,000, in the Midwest increased 4.1% to 77,000 and in the South jumped 11.3% to 471,000.
Movers: Energy Stocks, Home Builders, Lordstown Motor, Meta Platforms, Walgreen Boots
Scott Peters
27 Jun, 2023
New York City
The S&P 500 index increased 0.4% to 4,343.69 and the Nasdaq Composite rose 0.5% to 13,403.09.
The yield on 2-year Treasury notes increased to 4.69%, 10-year Treasury notes inched lower to 3.71% and 30-year Treasury bonds edged down to 3.82%.
Home builders continued it extend gains after new home sales rose more than expected in May.
PulteGroup, Inc advanced 2.7% to $78.06, Toll Brothers added 2.5% to $77.80 and NVR Inc gained 2% to $6,270.11.
Energy stocks were in focus after crude extended this year's loss.
Exxon Mobil decreased 0.4% to $103.05, Chevron Corp declined 0.1% to $153.99 and Hess Corp fell 0.8% to $133.99.
Tech stocks were under pressure on the persistent worries of rate hike at the next meeting.
Meta Platforms increased 2% to $284.07, Alphabet Inc declined 0.6% to $116.95 and Microsoft Inc increased 0.3% to $330.85.
Meta Platforms increased 2% to $284.07, Alphabet Inc declined 0.6% to $116.95 and Microsoft Inc increased 0.3% to $330.85.
Facebook and WhatsApp parent Meta extended this year's gain to 129% on the optimism of video advertising revenue growth on Instagram and a surge in WhatsApp's monthly active userbase to 200 million.
Google's parent Alphabet was under pressure after UBS and Bernstein downgraded the stock on the worries of rising competition from AI-powered chat bots.
Lordstown Motors Corp plunged 33.8% to $1.79 after the U.S. electric truck maker filed for bankruptcy protection.
Separately, the company also sued Taiwan-based Foxconn for a financing deal that fell apart.
Walgreens Boots Alliance Inc dropped 8.9% to $28.97 after the pharmacy retail chain reported lower-than-expected fiscal third quarter earnings.
The company also lowered its full-year earnings outlook.
Revenue in the fiscal third quarter ending in May increased to $35.2 billion from $32.6 billion and net earnings attributable to shareholders plunged to $118 million from $289 million and diluted earnings per share dropped to 14 cents from 33 cents a year ago.
For the full fiscal year 2023, Walgreens Boots Alliance now expects adjusted earnings per share between $4.00 and $4.05 from the previous estimate of $4.45 to $4.65, reflecting challenging consumer and macroeconomic conditions, and lower COVID-19 vaccine and testing volumes.
For the fiscal year 2024, the company is forecasting "low- to mid-single digit adjusted operating income growth, with the U.S. Healthcare and U.S. Retail Pharmacy performance more than offsetting headwinds from lower sale and leaseback program benefits, lower COVID-19 contribution, and the sale of holdings in AmerisourceBergen."
Stocks Turn Higher After New Home Sales and Durable Goods Orders Rise
Barry Adams
27 Jun, 2023
New York City
Stocks turned higher after falling sharply on Monday and investors digested latest economic data.
Durable goods orders rose more than expected and new home sales also advanced.
Durable goods orders expanded in May 1.7%, faster than 1.2% in April, the Commerce Department reported Tuesday.
Excluding transportation equipment orders, durable goods orders rose 0.6% in May after dropping by a revised 0.6% in April.
Excluding defense orders, which declined 14.7%, durable goods orders rose 3%.
New home sales jumped 12.2% to 763,000 on a seasonally adjusted basis, U.S. Census Bureau reported Tuesday.
The annual rate jumped to a high not seen since February of last year and increased 20% from a year ago when the annual rate estimate was 636,000.
The median sales price of new houses sold in May was $416,300 and the average sales price was $487,300 compared to $450,700 and $521,500 respectively a year ago.
Home sales in the Northeast increased 17.6% to 40,000, in the West rose 17.4% to 175,000, in the Midwest increased 4.1% to 77,000 and in the South jumped 11.3% to 471,000.
U.S. Indexes & Yields
The S&P 500 index increased 0.4% to 4,343.69 and the Nasdaq Composite rose 0.5% to 13,403.09.
The yield on 2-year Treasury notes increased to 4.69%, 10-year Treasury notes inched lower to 3.71% and 30-year Treasury bonds edged down to 3.82%.
Crude oil increased $0.15 to $69.20 a barrel and natural gas prices decreased 3 cents to $2.75 a thermal unit.
U.S. Stock Movers
Lordstown Motors Corp plunged 33.8% to $1.79 after the U.S. electric truck maker filed for bankruptcy protection.
Separately, the company also sued Taiwan-based Foxconn for a financing deal that fell apart.
Walgreens Boots Alliance Inc dropped 8.9% to $28.97 after the pharmacy retail chain reported lower-than-expected fiscal third quarter earnings.
The company also lowered its full-year earnings outlook.
Home builders continued it extend gains after new home sales rose more than expected in May.
PulteGroup, Inc advanced 2.7% to $78.06, Toll Brothers added 2.5% to $77.80 and NVR Inc gained 2% to $6,270.11.
Energy stocks were in focus after crude extended this year's loss.
Exxon Mobil decreased 0.4% to $103.05, Chevron Corp declined 0.1% to $153.99 and Hess Corp fell 0.8% to $133.99.
Tech stocks were under pressure on the persistent worries of rate hike at the next meeting.
Meta Platforms increased 2% to $284.07, Alphabet Inc declined 0.6% to $116.95 and Microsoft Inc increased 0.3% to $330.85.
Google's parent Alphabet was under pressure after UBS and Bernstein downgraded the stock on the worries of rising competition from AI-powered chat bots.
Europe Movers: JD Sports, Porsche Automobil, Prosus, Naspers, Wise
Bridgette Randall
27 Jun, 2023
New York City
European markets erased morning gains after rate hike worries resurfaced.
Major averages in Paris and Frankfurt turned lower after European Central Bank President Christine Lagarde reiterated the central bank's commitment in lowering inflation to 2%.
Resource stocks were in focus on hopes that China will offer more targeted stimulus measures to revive faltering economic recovery soon.
However, fears of higher rates also negatively impacted the metals and mining sector stocks.
The DAX index increased 0.03% to 15,818.32, the CAC-40 index declined 0.05% to 7,180.93 and the FTSE 100 index dropped 0.3% to 7,433.84.
The yield on 10-year German Bunds inched lower to 2.29%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.31% and Italian bonds decreased to 3.94%.
Antofagasta Plc declined 0.4% to 1,464.50 pence and Glencore plc dropped 0.2% to 436.55 pence.
Wise Plc soared 633.20 pence after the company reported a surge in profit in the financial year 2023 ending in March.
Revenue in the year jumped 51% to £846.1 million from £559.9 million and profit before-tax soared 234% to £146.5 million from £43.9 million a year ago.
Active customer base increased 34% to 10 million and transaction volume increased 37% to £104.5 billion.
Prosus NV increased 5.5% to €66.49 and Naspers Limited jumped 8.3% to €31.60 after the company received an approval from South African regulators to eliminate cross holding structure.
Sanofi SA declined 0.4% to €53.50 despite the drugmaker reporting positive results from its phase 2B study of Amlitelimab in adults with moderate-to-severe Atopic Dermatitis, a condition that causes dry, itchy and inflamed skin.
JD Sports Fashion Plc declined 5.6% t0 138.40 pence after the specialty retailer reported a slowdown in sales in May.
Porsche Automobil Holding SE declined 1.4% to €53.50 and the company signed a 5-year revolving credit for €2.5 billion to improve its liquidity position.
European Markets Nosedived After Hawkish Comments from ECB President
Bridgette Randall
27 Jun, 2023
Frankfurt
European markets erased morning gains after rate hike worries resurfaced.
Major averages in Paris and Frankfurt turned lower after European Central Bank President Christine Lagarde reiterated the central bank's commitment in lowering inflation to 2%.
The European Central Bank will continue to increase rates at the next meeting in July, barring any material geopolitical event, Lagarde reiterated her stance.
President Lagarde said at the ECB Forum that inflation is too high and rates are likely to go higher and it is too early to predict peak rates.
Market sentiment sapped after hawkish comments from Lagarde but earlier in trading indexes advanced on the hopes of more targeted stimulus announcement from Chinese leaders.
Resource stocks advanced before erasing most of the session's gains and auto sector stocks turned lower but financial services and banks traded higher.
Europe Indexes & Yields
The DAX index increased 0.03% to 15,818.32, the CAC-40 index declined 0.05% to 7,180.93 and the FTSE 100 index dropped 0.3% to 7,433.84.
The yield on 10-year German Bunds inched lower to 2.29%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.31% and Italian bonds decreased to 3.94%.
The euro edged higher to $1.09, the British pound to $1.273 and the U.S. dollar fetched 89.42 Swiss cents.
Brent crude decreased $1.78 to $72.38 a barrel and the Dutch TTF natural gas increased €0.65 to €32.63 per MWh.
Europe Stock Movers
Resource stocks were in focus on hopes that China will offer more targeted stimulus measures to revive faltering economic recovery soon.
However, fears of higher rates also negatively impacted the metals and mining sector stocks.
Antofagasta Plc declined 0.4% to 1,464.50 pence and Glencore plc dropped 0.2% to 436.55 pence.
Wise Plc soared 633.20 pence after the company reported a surge in profit in the financial year ending in March.
Prosus NV increased 5.5% to €66.49 and Naspers Limited jumped 8.3% to €31.60 after the company received an approval from South African regulators to eliminate cross holding structure.
Sanofi SA declined 0.4% to €53.50 despite the drugmaker reporting positive results from its phase 2B study of Amlitelimab in adults with moderate-to-severe Atopic Dermatitis, a condition that causes dry, itchy and inflamed skin.
JD Sports Fashion Plc declined 5.6% t0 138.40 pence after the specialty retailer reported a slowdown in sales in May.
Porsche Automobil Holding SE declined 1.4% to €53.50 and the company signed a 5-year revolving credit for €2.5 billion to improve its liquidity position.
U.S. Market Averages Struggle, Home Builders Extend Yearly Gains, Global Indexes Slide
Barry Adams
26 Jun, 2023
New York City
Stocks on Wall Street looked down after major indexes declined 1% in the previous week.
The S&P 500 index and the Nasdaq Composite index turned lower as investors assessed the implications of higher rates staying longer and looming economic slowdown.
The tech stocks driven eight-week rally halted last week after Fed Chairman Powell reminded investors that the central bank is not done with raising rates.
The Federal Reserve is expected to raise rates at least by 25 basis points two times before the end of 2023, according to the latest projections provided by the central bank while announcing its rate decision on June 14.
Crude Oil and Natgas Volatile After Russian Mutiny Aborted
Over the weekend, crude oil traded volatile and natural gas prices shot up more than 10% in European trading after Russia's mercenary forces ended its rebellion.
Yevgeny Prigozhin led Wagner Group gave up on its plan to march to Moscow, but not before challenging Russian president Vladimir Putin's 23-year hold on power.
Prigozhin agreed to exile in Belarus, according to Kremlin controlled news services Pravda.
Crude oil jumped 2% before its retreat and the Russian ruble plunged to a 13-month low of 87 against the U.S. dollar before recovering to 84.40..
U.S. Indexes & Yields
The S&P 500 index decreased 0.3% to 43,36.92 and the Nasdaq Composite declined 0.9% to 13,378.61.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.79%.
Crude oil increased $0.64 to $69.80 a barrel and natural gas prices increased 3 cents to $2.76 a thermal unit.
U.S. Stock Movers
Lucid Group jumped 9.4% to $5.47 after the company signed an agreement with the UK-based Aston Martin to supply power train and battery systems.
Aston also agreed to sell 3.7% stake in the company to Lucid for $232 million.
Carnival Corp plunged 9.7% to $14.20 after release of the company's quarterly results.
Revenue in the quarter ending in May increased to $4.9 billion from $2.4 billion and net loss shrank to $407 million from $1.8 billion and diluted loss per share dropped to 32 cents from $1.61 a year ago.
For the full year 2023, the company forecasted adjusted EBITDA of $4.10 billion to $4.25 billion, above March guidance's range and with a midpoint increase of $175 million.
Cruise stocks have been on upswing since April on the expectations of a rebound in reservations after travel demand recovered following the Covid-19 pandemic.
PacWest Bancorp jumped 7% to $7.71 after the company sold a $3.5 billion specialty finance portfolio of senior and secured maturities to Ares Management.
Home builder continued to climb for the second week in a row and extend 2023 gains.
NVR Inc gained 0.6% to $6,196.51 and extended this year's gain to 35% and PulteGroup, Inc advanced 0.3% to $76.47 and extended this year's gains to 65.5%.
Palo Alto Networks Inc increased 0.6% to $245.50 and extended this year's gains to 77%.
European Markets Trade In tight Range, Natural Gas Turns Volatile
European markets struggled on Monday after investors reviewed energy markets and bond yields held steady following the events over the weekend.
The Russian paramilitary Wagner group gave up their threat to advance to Mosco and avoided a potentially bloody confrontation with the Russian military.
Despite the ending of mutiny by the Russian rebel group, worries persisted about the security of the nuclear arsenal.
The Wagner group's threat to march to Mosco unnerved energy markets and natural gas prices shot up as much as 10% in Amsterdam trading.
Crude oil prices soared as much as 2% before retreating to the level last seen on Friday.
The Russian ruble dropped to as low as 87 against the U.S. dollar and extended this year's loss to 17%.
German Business Confidence Drops to 6-month Low
The German IFO Business Climate Index declined to 88.5 in June from the downwardly revised 91.5 in May, the IFO Institute reported Monday.
The business confidence index dropped to the lowest level since December on persistent worries about economic uncertainties and manufacturing reported falling new orders after rates around the world continued to advance.
Spain's Wholesale Inflation Declined for 3rd Month In a Row
Spain's producer price index declined 6.9% in May following the fall of 4.5% in April, the National Statistics Institute reported Monday.
The measure of wholesale prices declined for the third month in a row after energy prices plunged 24.9% and intermediate goods decreased 4% but prices for consumer goods rose 10.5%.
On a monthly basis, the producer price index declined 1.6% following 1.9% fall in April.
Europe Indexes & Yields
The DAX index decreased 0.2% to 15,813.06, the CAC-40 index gained 0.3% to 7,1814.35 and the FTSE 100 index dropped 0.1% to 7,453.38.
The yield on 10-year German Bunds inched lower to 2.31%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.30% and Italian bonds decreased to 3.94%.
The euro edged higher to $1.09, the British pound to $1.273 and the U.S. dollar fetched 89.32 Swiss cents.
The ruble recovered to 84.40 after falling sharply over the weekend after the paramilitary Wagner group threatened to march to Moscow, challenging President Putin's 23-year rule.
Brent crude increased $0.49 to $74.34 a barrel and the Dutch TTF natural gas increased €0.53 to €33.98 per MWh.
Europe Stock Movers
Bank stocks were hit the hardest in today's session after political turmoil heightened energy supply worries and stoked fears of renewed inflation.
Commerzbank, Deutsche Bank, Lloyds Banking Credit Agricole and BNP Paribas declined between 2% and 3%.
Aston Martin Lagonda Global Holdings Plc soared 9.4% to 358 pence after the luxury automaker struck a deal with the U.S.-based Lucid Group to manufacture "high performance" electric vehicles.
Associated British Foods plc decreased 0.9% to 1,934.50 pence despite the company lifting its outlook for the fiscal year.
Euronext NV declined 0.6% to €63.05 after the stock exchange group agreed to sell its 11.1% stake in LCH SA to LCH Group Holdings Limited for €111 million.
SCOR SE increased 0.8% to €24.95 after the company appointed Fabrice Bregier as chairman of the company's board.
SBB Group soared 11.6% to SKK 3.67 after the embattled Swedish property group said it is actively looking to sell its remaining 51% stake in its education unit.
China Stocks Extend Losses
Chinese stocks extended losses for the seventh day in a row after trading resumed following an extended weekend to celebrate Dragon Boat Festival.
The CSI 300 index closed down 1.4% and extended decline to 9.3% from a high in January on the ongoing economic worries, demographic challenges and high level of debt across all levels of government.
Amedisys Accepts $3.3 Billion Cash Offer from Optum
Scott Peters
26 Jun, 2023
New York City
Amedisys agreed to merge with a subsidiary of UnitedHealth Group, upending its plan to just six weeks ago.
The home-healthcare, hospice and high-acuity care provider accepted an all-cash $101 a share or $3.29 billion offer from Optum.
The merger agreement is conditional based on regulatory approval and shareholder approval and customary closing conditions.
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.
On June 5, Optum made an unsolicited offer to acquire Amedisys for $100 a share.
Amedisys board of directors accepted a slightly lower but all-cash deal.
Compensation committee approved one-time equity award grants of time-based restricted stock units that vest ratably over three years.
Amedisys CEO Richard Ashworth will receive $2.5 million grant date value, and CFO Scott Ginn will receive $1.5 million grant date value, effective from the date of merger in exchange for not agreeing to leave the company for six months after the completion of the merger.