Market Update
Eurozone Private Sector Activities Contracts for the First Time In Seven Months, Swiss Inflation Drops to 3-Year Low
Bridgette Randall
03 Oct, 2024
London
Stock market indexes in Europe turned lower as tensions in the Middle East rose and the stimulus rally in China faded.
Benchmark indexes in Paris, Frankfurt, Milan, and London headed lower as investors reviewed the latest economic updates in the region.
Investors turned cautious after Israel stepped up its military offensive in Beirut and vowed to mount a solid retaliatory response to recent missile attacks from Iran.
The escalating tensions between Iran and Israel raised the prospect of crude oil supply disruptions in the Middle East.
Eurozone Producer Price Inflation Eases in August
Eurozone producer price inflation continued to ease in August, driven by weaker energy prices.
Producer price inflation in the currency union slowed to 0.6% in August, following a downwardly revised 0.7% increase in July, according to a report released by Eurostat.
On an annual basis, producer price inflation fell 2.3% from a downwardly revised 2.2% decline in the previous month.
Excluding energy, producer price inflation held steady at 0.3% in August.
Among the four largest economies in the currency union, producer prices on a monthly basis rose 0.2% in Germany and France, 1.2% in Italy, and 1.5% in Spain.
Swiss Inflation Drops to a 3-Year Low
Consumer price inflation in Switzerland decelerated to 0.8% in September from 1.1% in August, the Swiss Federal Statistical Office reported Thursday.
The inflation fell to the lowest level since September 2021, and dropped below 1% for the first time in three years.
Eurozone Private Sector Activities Contracted in September
The private sector activities contracted in the Euro Area for the first time in 2024, according to data compiled by S&P Global.
The final HCOB Eurozone Composite PMI Output Index fell to 49.6 in September from a three-month high of 51.0 in the previous month. The output index was estimated at 48.9 in the preliminary estimate.
Private sector activities contracted month-to-month simultaneously in Germany, France, and Italy for the first time in 2024 so far.
The German private sector output contracted for the third month in a row and fell at the fastest pace since February, and contraction resumed in France after the Olympic Games boost in August.
Italy's private sector activities index decreased for the first time in September, but the decline was marginal, and the index of activities eased to 49.7 from 50.7 in August.
Spain's private sector growth accelerated to a four-month high in September, driven by an increase in manufacturing and service sector activities.
The composite output index increased to 56.3 in September, up from 53.5 in August.
Europe Indexes and Yields
The DAX index decreased by 0.5% to 19,066.73; the CAC-40 index fell by 0.7% to 7,521.42; and the FTSE 100 index rose by 0.3% to 8,317.92.
The yield on 10-year German bonds edged higher to 2.14%, French bonds inched higher to 2.92%, the UK gilts edged up to 4.03%, and Italian bonds increased to 3.50%.
The euro edged lower to $1.10; the British pound inched lower to $1.31; and the U.S. dollar weakened to 85.05 Swiss cents.
Brent crude increased $1.31 to $75.21 a barrel, and the Dutch TTF natural gas fell by €0.24 to €38.65 per MWh.
Europe Stock Movers
Deutsche Lufthansa increased 0.2%, and the German state-controlled carrier said it is resuming flights to certain destinations in the Middle East.
The international flight operator also said the carrier plans to avoid airspace used by Iran and Iraq due to ongoing conflicts in the region.
Alstom SA increased 2.4% to €18.79 after the French mobility company received orders from supply chain procurement company Proxima for 12 high-speed trains.
SAP SE decreased 1.3% to €201.45, and the Germany company is under investigation by the U.S. Department of Justice for the alleged price-fixing practices.
Vonovia SE declined 1.5% to €33.11, and the German residential landlord confirmed total cash inflow of about €4 billion in 2024, matching the level in the previous year.
LANXESS AG declined 1.8% to €28.76, and the German chemical company agreed to sell its Urethane Systems business to Japan-based UBE Corporation.
Tesco PLC increased 2.3% to 363.10 pence after the British grocery company reported an increase in revenue and profit in the first half and lifted its annual outlook.
British Land Company declined 1.1% to 433.0 pence, and the property firm said it acquired seven retail properties for £441 million.
Japan Indexes Rebounded After Rate-Hike Worries Eased
Akira Ito
03 Oct, 2024
Tokyo
Stock market sentiment rebounded in Tokyo after falling sharply in the previous session amid rising tensions in the Middle East.
The Nikkei 225 stock average jumped 2% and the Topix index increased more than 1% as the yen fell to a one-month low of 146.55 against the U.S. dollar.
The recently appointed prime minister, Shigeru Ishiba, said it is too soon to raise the interest rate after a meeting with Bank of Japan Governor Kazuo Ueda.
Prime Minister Ishiba's comments weakened the yen and pushed export heavy stocks higher in Tokyo.
On the economic front, the au Jibun Bank Japan Services PMI for September was revised lower to 53.1 from the preliminary estimate of 53.9.
Despite the slight easing of activities in the service sector, the index expanded for the third month in a row. but new orders rose modestly amid weak growth in export orders.
On the price front, input costs increased, driven by higher import costs because of the yen's weakness and rising wages; however, the increase was the lowest in six months.
Japan Stock Movers
The Nikkei 225 stock average rose 2% to 38,581.96, and the broader Topix index advanced 1.2% to 2,685.42.
Tech stocks led the gainers in Tokyo as investors overlooked the growing prospects of a wider war in the Middle East.
Tokyo Electron increased 2.7% to ¥25,760.0, Advantest Corp. gained 4.7% to ¥6,865.0, and Lasertec Corp. added 4% to ¥23,705.0.
Banks and financial services companies advanced after the yen weakened to a one-month low.
Mitsubishi UFJ Financial increased 0.1% to ¥1,448.50, Sumitomo Mitsui Financial added 0.2% to ¥3,032.0, but Mizuho Financial edged down 1.3% to ¥2,919.0.
Shipping companies were in focus for the second week in a row, as the U.S. port workers strike showed no sign of ending in the near future.
Nippon Yusen jumped 3.5% to ¥5,485.0, Kawasaki Kisen Kaisha added 3.6% to ¥2,290.0, and Mitsui O.S.K. Lines increased 2.5% to ¥5,149.0.
Hong Kong Indexes Plunged 4% as Market Rally Ran Out of Steam
Li Chen
03 Oct, 2024
Hong Kong
Hong Kong market indexes declined for the first time in seven days after investors turned cautious.
Benchmark indexes in Hong Kong declined as much as 4% and halted a 6-day rally that saw indexes soar more than 23%.
Financial markets in mainland China are closed for the Golden Week holidays, and trading is set to resume next Tuesday.
The $3 trillion rally over the last six trading sessions in China indexes was powered by a raft of monetary policy measures to revive investor confidence and facilitate residential property market transactions.
Initial market enthusiasm turned into a market frenzy after local governments in Shanghai, Shenzhen, and Guangzhou eased home buying restrictions and lowered down payment requirements.
Property stocks soared as much as 60% over the last six sessions as retail investors rushed to increase exposure to residential property developers and companies linked to the construction industry.
China's president Xi Jinping signaled big fiscal stimulus at a hastily arranged Politburo meeting last week, stoking the market rally further.
The People's Bank of China's $141 billion package to revive investor confidence and the property market is likely to fall far short of what is needed to revive consumer confidence.
Moreover, the announced monetary stimulus measures are not deep and broad enough to change the nature of the business cycle, consumer mood, and revive the flailing job market.
Investors are still holding out for more gains after the release of fiscal measures over the next two weeks, but previous measures by the government have failed to change China's growth trajectory.
China Stock Movers
The Hang Seng index decreased 2.8% to 21,818.41, and financial markets in mainland China are set to resume trading next week.
Property stocks trimmed gains of the previous session after investors questioned the strength of the market rally.
China Vanke increased 0.7% to HK $12.08, China Resources Land plunged 5.9% to HK $29.80, Longfor Group dropped 8.5% to HK $17.14, and Sun Hung Kai Properties declined 1.6% to HK $89.70.
Electric vehicle makers erased gains of the previous session, despite five leading makers reporting a sharp gain in September unit sales.
Li Auto declined 3.7% to HK $117.0, BYD fell 1% to HK $296.40, NIO jumped 6% to HK $55.60, and Xpeng dropped 6.3% to HK $51.55.
Alibaba Group dropped 4% to HK $110.40, Tencent Holding declined 1.1% to HK $464.80, and Baidu Inc. dropped 4.7% to HK $109.80.
India Movers: Adani Power, Blue Star, Eicher Motors, Godrej Properties, HCL Technologies, NTPC, Reliance Power
Arun Goswami
03 Oct, 2024
Mumbai
The rising tensions in the Middle East and uncertainties about the supply chain disruptions in the Eastern United States negatively impacted market enthusiasm on Dalal Street as trading resumed after the Gandhi Jayanti holiday.
The Sensex index decreased by 0.7% to 83,707.86, and the Nifty index fell by 0.7% to 25,618.90.
On the Mumbai stock exchange, 183 stocks traded at their 52-week highs, and 54 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 6.73%, and the Indian rupee eased to 83.91 against the U.S. dollar.
Godrej Properties decreased 0.2% to ₹3,243.10, and the company's board approved the company's plans to raise as much as ₹6,000 crore to finance its real estate projects.
HCL Technologies decreased 0.6% to ₹1,798.25, and Taiwan-based Foxconn is planning to invest as much as 424 crore in a semiconductor joint venture with the company.
Adani Power decreased 1% to ₹646.20, and the company agreed to acquire the Dahanu Power Station for ₹815 crore.
Marico Ltd. increased 2.6% to ₹705.10 after the company reported a high single-digit revenue growth in the fiscal second quarter ending in September.
The company said revenue growth is expected to accelerate in the second half of the fiscal year as currency headwinds ease.
Blue Star Ltd. declined 0.7% to ₹2,080.45, and the company said it is likely to prevail in arbitration with Oman-based W J Towell & Company, which is demanding ₹461.74 crore.
The company said the claims asserted by the Oman-based company are unfounded and materially not significant.
NTPC increased 0.3% to ₹440.65, and the company owned THDC India Limited signed a preliminary agreement with the Rajasthan government for 1,600 MW pump storage projects for a total investment of ₹8,000 crore.
Reliance Power increased 5% to ₹53.64 and Reliance Infrastructure jumped 2.7% to ₹340.95, and both companies struck a partnership with Bhutan-based Druk Holding and Investment for renewable energy projects.
The joint venture plans to develop a 770 MW hydroelectric power plant and a 500 MW solar power plant.
Eicher Motors declined 2.7% to ₹4,837.55, and the vehicle maker said unit sales jumped 11% from a year ago to 86,978 in September.
Rising Middle East Tensions and Port Strike Weigh On Wall Street, China Stocks Scale Higher
Alexander Garcia
02 Oct, 2024
Miami
Stock market indexes wavered in early trading on Wednesday amid rising tensions in the Middle East compounded by the uncertainty about the port workers strike.
The S&P 500 index increased 0.1% and the Nasdaq Composite edged higher 0.4% in Wednesday's trading as fears rose about the prospect of a wider war in the Middle East.
Iran said it completed its ballistic missile attack on Israel in retaliation for the killing of its political advisors to Hezbollah and a military commander in Iran.
Israel's president Benjamin Netanyahu vowed to provide a "painful" response to Iran's missile attacks, which were shot down with the help of the U.S. military installations in Jordan and Saudi Arabia.
Israel also launched its ground offensive in southern Lebanon, targeting military hardware and fighters controlled by the Iran-backed Hezbollah.
Investors are on edge as tensions escalate between Iran and Israel, which could possibly pull the U.S. into yet another war, while the U.S.-led NATO is enmeshed in challenging Russia's invasion of Ukraine.
In addition, supply chain worries also dominated market sentiment after International Longshoremen's Association members launched a historic strike at key 14 ports on the East and Gulf Coasts from Maine to Texas.
The last time dock workers on the East Coast and along the Gulf Coast took to strike was in 1977.
If the strike drags on longer than three weeks, retailers and businesses could face shortages, and customers could experience higher prices on items ranging from apparel, fruits, and vegetables, coffee, chemicals, wood products, and Christmas decoration.
Cruise ships and oil tankers are not going to be affected by the port strike, because the union's pledge not to hold up travelers and non-union workers handling the flow.
The United States Maritime Alliance, or USMX, which represents shippers, port associations, and terminal operators, said the now-expired contract of six years covered about 25,000 workers.
On the economic front, private payrolls rose 143,000 in September, higher than the revised increase of 103,000 in August, according to the monthly report by ADP.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.1% to 5,717.41, the Nasdaq Composite rose 0.4% to 17,974.91, and the Russell 2000 index increased 0.1% to 2,199.91.
The yield on 2-year Treasury notes edged higher to 3.65%, 10-year Treasury notes inched up to 3.79%, and 30-year Treasury bonds inched higher to 4.14%.
WTI crude oil increased $0.25 to $70.07 a barrel, and natural gas prices edged up 4 cents to $2.94 a thermal unit.
Gold fell by $9.54 to $2,650.80 an ounce, and silver increased by $0.42 to $31.76.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.43.
U.S. Stock Movers
Nike Inc. declined 7.4% to $82.57, and the athletic footwear company reported better-than-expected revenue in its latest quarter.
Revenue in the fiscal first quarter ending in August declined 10% to $11.6 billion from $12.9 billion, net income plunged 28% to $1.05 billion from $1.45 billion, and diluted earnings per share fell to 70 cents from 94 cents a year ago.
The athletic footwear and apparel maker said inventories at the end of the quarter fell 5% to $8.3 billion, reflecting product mix shifts and lower input costs.
In the fiscal first quarter, the company returned to shareholders about $1.8 billion, including $558 million of dividends and $1.2 billion of stock repurchases.
The company also withdrew its annual outlook and postponed its investor day as the new chief executive prepares to take charge.
China-linked stocks advanced for the sixth session in a row following the stimulus rally turned into a frenzy in Hong Kong.
The Hang Seng index soared 6% and extended its six-day rally to a whopping 25%, ahead of the widely anticipated fiscal measures following monetary stimulus and the relaxing of curbs on residential property transactions.
Property stocks in Hong Kong trading soared between 10% and 60%, and tech stocks jumped between 6% and 20%.
In New York trading, Alibaba Group advanced 2.6% to $115.63, JD.com gained 8.6% to $46.65, Baidu increased 5.8% to $116.45, and PDD Holdings jumped 5.3% to $153.06.
Tesla declined 4.4% to $246.85 after the electric vehicle maker reported slightly less-than-expected deliveries in the third quarter.
The electric vehicle maker delivered 462,890 vehicles, higher than 435,059 in the quarter a year ago and 443,956 in the previous quarter.
Tesla is facing growing competition from Chinese automakers, and electric vehicle industry sales in China surged more than 43% from a year ago to 1.03 million in September.
Li Auto, BYD, and NIO reported record monthly sales in China in September.
Eli Lilly increased 0.8% to $885.78, and the pharmaceutical company is planning to invest as much as $4.5 billion in research and manufacturing facilities in Indiana.
The new facility will hire about 400 staff, when fully operational, of scientists, researchers, engineers, and clinical personnel.
The company's latest investment plan is in addition to its previously announced $5.3 billion plan in May to manufacture active ingredients for its diabetes and weight loss drugs.
European Indexes Wavered as Crude Oil Jumped 3%, Eurozone Jobless Rate Held Steady at Record Low
European markets struggled to stay above the flatline amid growing fears of a wider war in the Middle East, which potentially could disrupt crude oil supplies and international goods trade.
Crude oil surged more than 3% in New York and London trading after Iran launched ballistic missiles targeting Israel while the Israeli military entered southern Lebanon.
Benchmark indexes in Paris, London, and Frankfurt traded in a tight range, and investors reviewed the latest update on the labor market in the Euro Area.
Eurozone Jobless Rate Held Steady In August
The jobless rate in the Euro Area held steady at 6.4% in August, according to a Eurostat report released on Wednesday.
The unemployment rate stayed at record lows and stayed resilient despite an elevated interest rate and weakening manufacturing sector activities.
The jobless count increased by 94,000 from the previous month to 10.925 million, and the unemployment rate among those younger than 25 years of age and seeking jobs eased to 14.1%.
Geographically, Spain led with a jobless rate of 11.3%, followed by Greece with 9.5% and Sweden with 8.4%.
On the other hand, the jobless rate was the lowest in Poland with 2.9%, Malta with 3%, Slovenia with 3.3%, and Germany with 3.5%.
Spain's August Jobless Count Dropped to the Lowest Since 2007
The number of people registered as jobless increased by 3,146 to 2.575 million in September, the ministry of employment and social security reported Tuesday.
Unemployment among those younger than 25 increased by 15,027 to 192,139 in the month.
The overall number of unemployed and those younger than 25 were lowest in the month since 2007.
Europe Indexes and Yields
The DAX index decreased by 0.3% to 19,149.33; the CAC-40 index rose by 0.1% to 7,577.59; and the FTSE 100 index rose by 0.2% to 8,290.86.
The yield on 10-year German bonds edged higher to 2.08%, French bonds inched higher to 2.86%, the UK gilts edged up to 4.02%, and Italian bonds increased to 3.42%.
The euro edged lower to $1.10; the British pound inched higher to $1.32; and the U.S. dollar weakened to 84.80 Swiss cents.
Brent crude decreased $2.20 to $75.76 a barrel, and the Dutch TTF natural gas fell by €0.11 to €39.13 per MWh.
Europe Stock Movers
Energy stocks advanced in London following the rise in crude oil prices for the second week in a row amid rising tensions in the Middle East.
Separately, American Petroleum Institute data showed that the U.S. crude oil inventories declined by 1.5 million barrels last week, the second weekly decline in a row.
BP plc increased 2.4% to 410.60 pence, Shell PLC jumped 2.3% to 2,536.50 pence, and TotalEnergies SE advanced 2.7% to €60.91.
TotalEnergies announced an investment of $10.5 billion in the GranMorgu offshore oil exploration block in the Republic of Suriname.
GEA Group AG increased 2.4% to €45.08, and the German technology and system provider for the food processing industry said it achieved its mid-term financial goals two years ahead of schedule.
Wizz Air Holdings dropped 6% to 1,285.0 pence in London trading after discount airline operator said load factor in September dropped.
JD Sports Fashion PLC dropped 5.3% to 141.70 pence despite the retailer reporting record sales in 26 weeks to August and reiterating its annual outlook.
Japan Indexes Erase Gains of Previous Session, Diet Elects Ishiba as Next Prime Minister
Stock market indexes in Tokyo erased most of the gains of the previous session, and investors turned cautious amid rising tensions in the Middle East.
The Nikkei 225 stock average dropped nearly 2%, and the broader Topix index declined more than 1% amid worries of a wider war in the Middle East.
Iran launched a ballistic missile attack targeting Israel, escalating war in the Middle East, and Israeli forces carried out a ground invasion in Lebanon to dismantle installations controlled by Hezbollah.
Despite Israel's recent military advances against Hezbollah in Lebanon and Hamas in Gaza, security conditions are not likely to improve in the Middle East in the near future.
Investors in Tokyo and Asia are worried about the possibilities of crude oil supply disruptions if the war draws Iran and its supporters to a wider war, prolonging instability in the region.
The yen decreased 0.1% to 143.64 against the U.S. dollar as currency traders monitored developments in the Middle East.
Japan's parliament elected Shigeru Ishiba, the president of the Liberal Democratic Party, as the 102nd prime minister, and investors looked for clues about the future course of the monetary and fiscal policies.
Prime Minister Ishiba is expected to support a gradual increase in the interest rate and is likely to be more conservative in increasing government spending.
The newly elected prime minister announced dissolution of the parliament on October 9 and called for a general election on October 27, as the ruling party sought to regain public trust following the political funds scandal.
On Tuesday, the Bank of Japan's Tankan survey found optimism among large manufacturing companies, but the mid-sized and smaller companies in the construction and service sectors expect conditions to worsen in the months ahead.
Japan Stock Movers
The Nikkei 225 stock average declined 1.9% to 37,930.58, and the Topix index dropped 1.1% to 2,660.87.
Tech stocks were among the leading decliners in Tokyo as investors turned cautions amid rising tensions in the Middle East.
Tokyo Electron decreased 3.6% to ¥25,105.0, Advantest fell 4% to ¥6,616.0, and Lasertec Corporation dropped 4% to ¥22,970.0.
Seven & I decreased 0.1% to ¥2,161.0, Isetan Mitsukoshi dropped 4.4% to ¥2,242.0, Fast Retailing declined 3.7% to ¥46,950.0, and Takashimaya fell 0.7% to ¥1,154.50.
Marubeni Corp. gained 1.5% to ¥2,417.50, Itochu advanced 1% to ¥7,868.0, Mitsubishi Corp added 0.6% to ¥3,046.0, and Mitsui & Company gained 1.2% to ¥3,332.0.
Shipping companies were in focus for the second day in a row after workers at 14 key ports in the U.S. went on a strike following the breakdown of wage negotiations.
Nippon Yusen KK decreased 0.4% to ¥5,312.0, Kawasaki Kisen Kaisha fell 0.6% to ¥2,216.0, and Mitsui O.S.K. Lines gained 1.2% to ¥5,046.0.
Automobile companies were in focus ahead of monthly sales data, and the vehicle makers scrambled to stock additional inventories after the U.S. port workers strike disrupted supply chains.
Toyota Motor decreased 0.9% to ¥2,573.50, Honda Motor increased 0.2% to ¥1,544.50, and Nissan Motor jumped 0.2% to ¥410.70.
China Stock Frenzy Powers Hong Kong Rally for the Sixth Consecutive Session, EV Sales Soar In September
The stimulus rally in China has turned into a frenzy as investors piled in after the People's Bank of China announced measures to support financial markets.
The Hang Seng index soared nearly 4%, extending the rally to the sixth session in a row and gains to over a whopping 23%.
Financial markets in mainland China are closed for the Golden Week holidays, and trading is set to resume next Wednesday.
Last week, the People's Bank of China announced a raft of measures to revive investor confidence, facilitate lending to corporations and consumers, and provide support to the residential property market.
Moreover, Beijing's policymakers pivoted their attention to reviving economic growth and supporting the property market after sitting on the sidelines for four years.
Local authorities in Shanghai, Guangzhou, and Shenzhen eased restrictions on buying homes by lowering down payment requirements and approving purchases by nonresidents.
Luxury property sales soared in Shanghai over the weekend, following the easing of restrictions, powering the sale of more than 11 billion yuan in just two days.
Retail investors jumped on the bandwagon in Monday's trading, lifting the trading volume to record highs in Shenzhen and Shanghai stock exchanges.
About HK$506 billion, or $65 billion worth of stocks, changed hands on Monday in Hong Kong, breaking the previous record on Friday.
Trading turnover on exchanges in Shanghai and Shenzhen soared to a record high of 2.6 trillion yuan, or $371 billion, as individual and institutional investors bid up stocks.
The improving investor confidence is expected to draw more investments from global fund managers and foreign investors as foreign investors recalibrate their China exposure.
Despite the current euphoric market sentiment, it will take time before consumers feel the positive effect of the monetary policy easing.
Investors are now expecting the release of significant fiscal measures from policymakers over the next two weeks, but previous measures released earlier in the year have failed to revive consumer confidence and arrest the decline in the property market.
China Stock Movers
The Hang Seng index soared 3.6% to 22,380.41, and financial markets in China were closed for National Holidays.
Mainland China-focused property developers soared in Hong Kong trading.
China Resources Land jumped 10.5% to HK $31.55, China Vanke soared 41% to HK $10.52, Longfor Group Holding surged 30.1% to HK $19.62, and Sun Hung Kai Properties added 6.3% to HK $90.90.
Tech stocks also participated in the market rally, as investors warmed up to high-growth stocks and riskier assets.
Alibaba Group added 7.1% to HK $118.20, JD.com jumped 12.1% to HK $189.0, and Tencent Holdings gained 7.7% to HK $477.80.
Electric vehicle makers advanced in Hong Kong trading following the strong September sales driven by heavy discounting, and new models attracted new buyers.
Li Auto advanced 13.1% to HK $122.30 and BYD increased 7.2% to HK $305.0 after five leading electric vehicle makers reported record sales in September.
BYD sold a record 419,426 electric vehicles in September, an increase of 12.4% from the previous month and a surge of 45.9% from a year ago.
Li Auto shipped 53,709 electric vehicles last month, a rise of 11.6% from August and a jump of 48.9% from a year ago.
NIO Inc. increased 5.9% to HK $59.50 after the electric vehicle maker reported September vehicle sales increased 5% from the previous month and 35.4% from a year ago to 21,181.
Xpeng advanced 3.8% to HK $54.95 after the electric vehicle maker sold a record 21,352 units, an increase of 52.1% from August and a surge of 39.5% from a year ago.
U.S. Movers: China ADRs, Eli Lilly, Nike, Tesla
Scott Peters
02 Oct, 2024
New York City
Nike Inc. declined 7.4% to $82.57, and the athletic footwear company reported better-than-expected revenue in its latest quarter.
Revenue in the fiscal first quarter ending in August declined 10% to $11.6 billion from $12.9 billion, net income plunged 28% to $1.05 billion from $1.45 billion, and diluted earnings per share fell to 70 cents from 94 cents a year ago.
The athletic footwear and apparel maker said inventories at the end of the quarter fell 5% to $8.3 billion, reflecting product mix shifts and lower input costs.
In the fiscal first quarter, the company returned to shareholders about $1.8 billion, including $558 million of dividends and $1.2 billion of stock repurchases.
The company also withdrew its annual outlook and postponed its investor day as the new chief executive prepares to take charge.
China-linked stocks advanced for the sixth session in a row following the stimulus rally turned into a frenzy in Hong Kong.
The Hang Seng index soared 6% and extended its six-day rally to a whopping 25%, ahead of the widely anticipated fiscal measures following monetary stimulus and the relaxing of curbs on residential property transactions.
Property stocks in Hong Kong trading soared between 10% and 60%, and tech stocks jumped between 6% and 20%.
In New York trading, Alibaba Group advanced 2.6% to $115.63, JD.com gained 8.6% to $46.65, Baidu increased 5.8% to $116.45, and PDD Holdings jumped 5.3% to $153.06.
Tesla declined 4.4% to $246.85 after the electric vehicle maker reported slightly less-than-expected deliveries in the third quarter.
The electric vehicle maker delivered 462,890 vehicles, higher than 435,059 in the quarter a year ago and 443,956 in the previous quarter.
Tesla is facing growing competition from Chinese automakers, and electric vehicle industry sales in China surged more than 43% from a year ago to 1.03 million in September.
Li Auto, BYD, and NIO reported record monthly sales in China in September.
Eli Lilly increased 0.8% to $885.78, and the pharmaceutical company is planning to invest as much as $4.5 billion in research and manufacturing facilities in Indiana.
The new facility will hire about 400 staff, when fully operational, of scientists, researchers, engineers, and clinical personnel.
The company's latest investment plan is in addition to its previously announced $5.3 billion plan in May to manufacture active ingredients for its diabetes and weight loss drugs.
Wall Street Indexes Face Headwinds Amid Rising Prospects of a Wider War In Middle East
Barry Adams
02 Oct, 2024
New York City
Stock market indexes were under pressure amid rising tensions in the Middle East compounded by the uncertainty about the port workers strike.
The S&P 500 index decreased 0.3% and the Nasdaq Composite declined 0.4% in Wednesday's trading, as fears rose about the prospect of a wider war in the Middle East.
Iran said it completed its ballistic missile attack on Israel in retaliation of death of its political advisors to Hezbollah.
Israel president Benjamin Netanyahu vowed to provide a "painful response" to Iran's missile attacks, which were thwarted with the help of the U.S. military installations in Jordan and Saudi Arabia.
Israel also launched its ground offensive in southern Lebanon, targeting military hardware controlled by the Iran-backed Hezbollah.
Investors are on edge as tensions escalate between Iran and Israel, which could possibly pull the U.S. in yet another war, while the U.S.-led NATO is enmeshed in challenging Russia's invasion of Ukraine.
In addition, supply chain worries also dominated market sentiment after International Longshoremen's members launched a historic strike at key 14 ports on the East and Gulf Coasts.
If the strike drags on longer than a week, retailers and businesses could face shortages and customers could experience higher prices.
On the economic front, private payrolls rose 143,000 in September, higher than the revised increase of 103,000 in August, according to the monthly report by ADP.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.3% to 5,687.86, the Nasdaq Composite fell 0.2% to 17,867.55, and the Russell 2000 index fell 1.5% to 2,197.03.
The yield on 2-year Treasury notes edged higher to 3.65%, 10-year Treasury notes inched up to 3.79%, and 30-year Treasury bonds inched higher to 4.14%.
WTI crude oil increased $2.07 to $71.87 a barrel, and natural gas prices edged up 8 cents to $2.98 a thermal unit.
Gold fell by $9.77 to $2,650.97 an ounce, and silver increased by $0.31 to $31.66.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.43.
U.S. Stock Movers
Nike Inc. declined 7.4% to $82.57, and the athletic footwear company reported better-than-expected revenue in its latest quarter.
Revenue in the fiscal first quarter ending in August declined 10% to $11.6 billion from $12.9 billion, net income plunged 28% to $1.05 billion from $1.45 billion, and diluted earnings per share fell to 70 cents from 94 cents a year ago.
The athletic footwear and apparel maker said inventories at the end of the quarter fell 5% to $8.3 billion, reflecting product mix shifts and lower input costs.
In the fiscal first quarter, the company returned to shareholders about $1.8 billion, including $558 million of dividends and $1.2 billion of stock repurchases.
The company also withdrew its annual outlook and postponed its investor day as the new chief executive prepares to take charge.
China-linked stocks advanced for the sixth session in a row following the stimulus rally turned into a frenzy in Hong Kong.
The Hang Seng index soared 6% and extended its six-day rally to a whopping 25%, ahead of the widely anticipated fiscal measures following monetary stimulus and the relaxing of curbs on residential property transactions.
Property stocks in Hong Kong trading soared between 10% and 60%, and tech stocks jumped between 6% and 20%.
In New York trading, Alibaba Group advanced 2.6% to $115.63, JD.com gained 8.6% to $46.65, Baidu increased 5.8% to $116.45, and PDD Holdings jumped 5.3% to $153.06.
Tesla declined 4.4% to $246.85 after the electric vehicle maker reported slightly less-than-expected deliveries in the third quarter.
The electric vehicle maker delivered 462,890 vehicles, higher than 435,059 in the quarter a year ago and 443,956 in the previous quarter.
Tesla is facing growing competition from Chinese automakers, and electric vehicle industry sales in China surged more than 43% from a year ago to 1.03 million in September.
Li Auto, BYD, and NIO reported record monthly sales in China in September.
Eli Lilly increased 0.8% to $885.78, and the pharmaceutical company is planning to invest as much as $4.5 billion in research and manufacturing facilities in Indiana.
The new facility will hire about 400 staff, when fully operational, of scientists, researchers, engineers, and clinical personnel.
The company's latest investment plan is in addition to its previously announced $5.3 billion plan in May to manufacture active ingredients for its diabetes and weight loss drugs.
Europe Movers: Energy Stocks, GEA Group, JD Sports, TotalEnergies, Wizz Air
Inga Muller
02 Oct, 2024
Frankfurt
European market indexes wavered amid rising fears of a wider war in the Middle East, which could potentially disrupt international trade in crude oil and manufactured goods.
The jobless rate in the Euro Area held steady at a record low in August.
The DAX index decreased by 0.4% to 19,140.96; the CAC-40 index rose by 0.1% to 7,580.34; and the FTSE 100 index rose by 0.2% to 8,292.31.
The yield on 10-year German bonds edged higher to 2.08%, French bonds inched higher to 2.86%, the UK gilts edged up to 4.02%, and Italian bonds increased to 3.42%.
Energy stocks advanced in London following the rise in crude oil prices for the second week in a row amid rising tensions in the Middle East.
Separately, American Petroleum Institute data showed that the U.S. crude oil inventories declined by 1.5 million barrels last week, the second weekly decline in a row.
BP plc increased 2.4% to 410.60 pence, Shell PLC jumped 2.3% to 2,536.50 pence, and TotalEnergies SE advanced 2.7% to €60.91.
TotalEnergies announced an investment of $10.5 billion in the GranMorgu offshore oil exploration block in the Republic of Suriname.
GEA Group AG increased 2.4% to €45.08, and the German technology and system provider for the food processing industry said it achieved its mid-term financial goals two years ahead of schedule.
Wizz Air Holdings dropped 6% to 1,285.0 pence in London trading after discount airline operator said load factor in September dropped.
JD Sports Fashion PLC dropped 5.3% to 141.70 pence despite the retailer reporting record sales in 26 weeks to August and reiterating its annual outlook.
European Indexes Wavered as Crude Oil Jumped 3%, Eurozone Jobless Rate Held Steady at Record Low
Bridgette Randall
02 Oct, 2024
London
European markets struggled to stay above the flatline amid growing fears of a wider war in the Middle East, which potentially could disrupt crude oil supplies and international goods trade.
Crude oil surged more than 3% in New York and London trading after Iran launched ballistic missiles targeting Israel while the Israeli military entered southern Lebanon.
Benchmark indexes in Paris, London, and Frankfurt traded in a tight range, and investors reviewed the latest update on the labor market in the Euro Area.
Eurozone Jobless Rate Held Steady In August
The jobless rate in the Euro Area held steady at 6.4% in August, according to a Eurostat report released on Wednesday.
The unemployment rate stayed at record lows and stayed resilient despite an elevated interest rate and weakening manufacturing sector activities.
The jobless count increased by 94,000 from the previous month to 10.925 million, and the unemployment rate among those younger than 25 years of age and seeking jobs eased to 14.1%.
Geographically, Spain led with a jobless rate of 11.3%, followed by Greece with 9.5% and Sweden with 8.4%.
On the other hand, the jobless rate was the lowest in Poland with 2.9%, Malta with 3%, Slovenia with 3.3%, and Germany with 3.5%.
Spain's August Jobless Count Dropped to the Lowest Since 2007
The number of people registered as jobless increased by 3,146 to 2.575 million in September, the ministry of employment and social security reported Tuesday.
Unemployment among those younger than 25 increased by 15,027 to 192,139 in the month.
The overall number of unemployed and those younger than 25 were lowest in the month since 2007.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 19,140.96; the CAC-40 index rose by 0.1% to 7,580.34; and the FTSE 100 index rose by 0.2% to 8,292.31.
The yield on 10-year German bonds edged higher to 2.08%, French bonds inched higher to 2.86%, the UK gilts edged up to 4.02%, and Italian bonds increased to 3.42%.
The euro edged lower to $1.10; the British pound inched higher to $1.32; and the U.S. dollar weakened to 84.80 Swiss cents.
Brent crude decreased $2.20 to $75.76 a barrel, and the Dutch TTF natural gas fell by €0.11 to €39.13 per MWh.
Europe Stock Movers
Energy stocks advanced in London following the rise in crude oil prices for the second week in a row amid rising tensions in the Middle East.
Separately, American Petroleum Institute data showed that the U.S. crude oil inventories declined by 1.5 million barrels last week, the second weekly decline in a row.
BP plc increased 2.4% to 410.60 pence, Shell PLC jumped 2.3% to 2,536.50 pence, and TotalEnergies SE advanced 2.7% to €60.91.
TotalEnergies announced an investment of $10.5 billion in the GranMorgu offshore oil exploration block in the Republic of Suriname.
GEA Group AG increased 2.4% to €45.08, and the German technology and system provider for the food processing industry said it achieved its mid-term financial goals two years ahead of schedule.
Wizz Air Holdings dropped 6% to 1,285.0 pence in London trading after discount airline operator said load factor in September dropped.
JD Sports Fashion PLC dropped 5.3% to 141.70 pence despite the retailer reporting record sales in 26 weeks to August and reiterating its annual outlook.
Japan Indexes Erase Gains of Previous Session, Diet Elects Ishiba as Next Prime Minister
Akira Ito
02 Oct, 2024
Tokyo
Stock market indexes in Tokyo erased most of the gains of the previous session, and investors turned cautious amid rising tensions in the Middle East.
The Nikkei 225 stock average dropped nearly 2%, and the broader Topix index declined more than 1% amid worries of a wider war in the Middle East.
Iran launched a ballistic missile attack targeting Israel, escalating war in the Middle East, and Israeli forces carried out a ground invasion in Lebanon to dismantle installations controlled by Hezbollah.
Despite Israel's recent military advances against Hezbollah in Lebanon and Hamas in Gaza, security conditions are not likely to improve in the Middle East in the near future.
Investors in Tokyo and Asia are worried about the possibilities of crude oil supply disruptions if the war draws Iran and its supporters to a wider war, prolonging instability in the region.
The yen decreased 0.1% to 143.64 against the U.S. dollar as currency traders monitored developments in the Middle East.
Japan's parliament elected Shigeru Ishiba, the president of the Liberal Democratic Party, as the 102nd prime minister, and investors looked for clues about the future course of the monetary and fiscal policies.
Prime Minister Ishiba is expected to support a gradual increase in the interest rate and is likely to be more conservative in increasing government spending.
The newly elected prime minister announced dissolution of the parliament on October 9 and called for a general election on October 27, as the ruling party sought to regain public trust following the political funds scandal.
On Tuesday, the Bank of Japan's Tankan survey found optimism among large manufacturing companies, but the mid-sized and smaller companies in the construction and service sectors expect conditions to worsen in the months ahead.
Japan Stock Movers
The Nikkei 225 stock average declined 1.9% to 37,930.58, and the Topix index dropped 1.1% to 2,660.87.
Tech stocks were among the leading decliners in Tokyo as investors turned cautions amid rising tensions in the Middle East.
Tokyo Electron decreased 3.6% to ¥25,105.0, Advantest fell 4% to ¥6,616.0, and Lasertec Corporation dropped 4% to ¥22,970.0.
Seven & I decreased 0.1% to ¥2,161.0, Isetan Mitsukoshi dropped 4.4% to ¥2,242.0, Fast Retailing declined 3.7% to ¥46,950.0, and Takashimaya fell 0.7% to ¥1,154.50.
Marubeni Corp. gained 1.5% to ¥2,417.50, Itochu advanced 1% to ¥7,868.0, Mitsubishi Corp added 0.6% to ¥3,046.0, and Mitsui & Company gained 1.2% to ¥3,332.0.
Shipping companies were in focus for the second day in a row after workers at 14 key ports in the U.S. went on a strike following the breakdown of wage negotiations.
Nippon Yusen KK decreased 0.4% to ¥5,312.0, Kawasaki Kisen Kaisha fell 0.6% to ¥2,216.0, and Mitsui O.S.K. Lines gained 1.2% to ¥5,046.0.
Automobile companies were in focus ahead of monthly sales data, and the vehicle makers scrambled to stock additional inventories after the U.S. port workers strike disrupted supply chains.
Toyota Motor decreased 0.9% to ¥2,573.50, Honda Motor increased 0.2% to ¥1,544.50, and Nissan Motor jumped 0.2% to ¥410.70.
China Stock Frenzy Powers Hong Kong Rally for the Sixth Consecutive Session, EV Sales Soar In September
Li Chen
02 Oct, 2024
Hong Kong
The stimulus rally in China has turned into a frenzy as investors piled in after the People's Bank of China announced measures to support financial markets.
The Hang Seng index soared nearly 4%, extending the rally to the sixth session in a row and gains to over a whopping 23%.
Financial markets in mainland China are closed for the Golden Week holidays, and trading is set to resume next Wednesday.
Last week, the People's Bank of China announced a raft of measures to revive investor confidence, facilitate lending to corporations and consumers, and provide support to the residential property market.
Moreover, Beijing's policymakers pivoted their attention to reviving economic growth and supporting the property market after sitting on the sidelines for four years.
Local authorities in Shanghai, Guangzhou, and Shenzhen eased restrictions on buying homes by lowering down payment requirements and approving purchases by nonresidents.
Luxury property sales soared in Shanghai over the weekend, following the easing of restrictions, powering the sale of more than 11 billion yuan in just two days.
Retail investors jumped on the bandwagon in Monday's trading, lifting the trading volume to record highs in Shenzhen and Shanghai stock exchanges.
About HK$506 billion, or $65 billion worth of stocks, changed hands on Monday in Hong Kong, breaking the previous record on Friday.
Trading turnover on exchanges in Shanghai and Shenzhen soared to a record high of 2.6 trillion yuan, or $371 billion, as individual and institutional investors bid up stocks.
The improving investor confidence is expected to draw more investments from global fund managers and foreign investors as foreign investors recalibrate their China exposure.
Despite the current euphoric market sentiment, it will take time before consumers feel the positive effect of the monetary policy easing.
Investors are now expecting the release of significant fiscal measures from policymakers over the next two weeks, but previous measures released earlier in the year have failed to revive consumer confidence and arrest the decline in the property market.
China Stock Movers
The Hang Seng index soared 3.6% to 22,380.41, and financial markets in China were closed for National Holidays.
Mainland China-focused property developers soared in Hong Kong trading.
China Resources Land jumped 10.5% to HK $31.55, China Vanke soared 41% to HK $10.52, Longfor Group Holding surged 30.1% to HK $19.62, and Sun Hung Kai Properties added 6.3% to HK $90.90.
Tech stocks also participated in the market rally, as investors warmed up to high-growth stocks and riskier assets.
Alibaba Group added 7.1% to HK $118.20, JD.com jumped 12.1% to HK $189.0, and Tencent Holdings gained 7.7% to HK $477.80.
Electric vehicle makers advanced in Hong Kong trading following the strong September sales driven by heavy discounting, and new models attracted new buyers.
Li Auto advanced 13.1% to HK $122.30 and BYD increased 7.2% to HK $305.0 after five leading electric vehicle makers reported record sales in September.
BYD sold a record 419,426 electric vehicles in September, an increase of 12.4% from the previous month and a surge of 45.9% from a year ago.
Li Auto shipped 53,709 electric vehicles last month, a rise of 11.6% from August and a jump of 48.9% from a year ago.
NIO Inc. increased 5.9% to HK $59.50 after the electric vehicle maker reported September vehicle sales increased 5% from the previous month and 35.4% from a year ago to 21,181.
Xpeng advanced 3.8% to HK $54.95 after the electric vehicle maker sold a record 21,352 units, an increase of 52.1% from August and a surge of 39.5% from a year ago.
AT&T Agreed to Sell Direct TV Stake, Paving the Way to Merge with Dish Tv
Scott Peters
30 Sep, 2024
New York City
AT&T edged up 0.3% to $21.95 after the company said it has agreed to sell its 70% stake in satellite TV company DirectTV Entertainment Holding LLC to a private equity firm TPG for about $7.6 billion in cash payments stretching to 2029.
AT&T will receive $1.7 billion in cash at the time of completion of the deal, $5.4 billion in payment in 2025, and $500 million in 2029.
DirectTV also said in a separate statement it has agreed to buy Sling TV and Dish TV from EchoStar through debt exchange, culminating in a combination of two satellite TV companies.
In addition, Direct TV will acquire Dish TV's video distribution business for $1 and assume a net debt of $9.75 billion.
U.S. Job Openings Increased, Quits Dropped In August
Brian Turner
01 Oct, 2024
Washington, D.C.
The number of job openings increased 329,000 to 8.04 million in August from an upwardly revised 7.71 million in July, the U.S. Bureau of Labor Statistics reported Tuesday.
The number of job openings increased in construction by 138,000, in state and local government excluding education by 78,000, and in accommodation and food services by 88,000.
However, job openings declined in finance insurance by 41,000 and in other services by 93,000.
In August, the total number of hires and total separations changed little, at 5.3 million and 5.0 million, respectively.
Within separations, the number of quits trended down to 3.1 million, the lowest since August 2020, indicating workers are holding on to jobs as it gets harder to find a new job.
U.S. Major Averages Drop Nearly 2% as Iran and Israel Launch Attacks
Alexander Garcia
01 Oct, 2024
Miami
Stocks on Wall Street faced selling pressure amid growing prospects of a wider war in the Middle East.
Wall Street indexes traded down on the rising geopolitical risks and mixed economic data after finishing higher in the previous month and third quarter.
The S&P 500 index decreased 0.9% and the Nasdaq Composite declined 1.8% after the Israeli military reported that Iran launched ballistic missiles targeting Israel.
Market sentiment was further dented after workers at key ports decided to strike, which is likely to disrupt supply chains for weeks ahead.
Stock traders were also monitoring the first strike in fifty years by members of the International Longshoremen's Association on 14 ports on the East and Gulf Coasts.
About 45,000 members decided to strike after wage negotiations broke down with the U.S. Maritime Alliance employers group.
Consumers are likely to feel the impact of the strike if it drags on longer than a week, which could invite an intervention by President Joe Biden, asking workers to return to work and look for a settlement over the next eighty days.
Major averages on Monday edged higher after Fed Chair Jerome Powell signaled two possible rate cuts in the year if the economy performs as expected.
Market mood further soured after manufacturing contraction extended for the sixth month in a row in September.
The ISM Manufacturing Purchasing Managers' Index held steady at 47.2, matching the level in the previous month.
“Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy and election uncertainty," said Timothy R. Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee.
U.S. Job Openings Increased, Quits Dropped In August
The number of job openings increased 329,000 to 8.04 million in August from an upwardly revised 7.71 million in July, the U.S. Bureau of Labor Statistics reported Tuesday.
The number of job openings increased in construction by 138,000, in state and local government excluding education by 78,000, and in accommodation and food services by 88,000.
However, job openings declined in finance insurance by 41,000 and in other services by 93,000.
In August, the total number of hires and total separations changed little, at 5.3 million and 5.0 million, respectively.
Within separations, the number of quits trended down to 3.1 million, the lowest since August 2020, indicating workers are holding on to jobs as it gets harder to find a new job.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.9% to 5,708.76, the Nasdaq Composite fell 1.8% to 17,836.26, and the Russell 2000 index fell 1.4% to 2,197.90.
The yield on 2-year Treasury notes edged higher to 3.64%, 10-year Treasury notes inched down to 3.74%, and 30-year Treasury bonds inched lower to 4.12%.
WTI crude oil increased $3.0 to $71.76 a barrel, and natural gas prices edged down 3 cents to $2.89 a thermal unit.
Gold fell by $31.61 to $2,666.91 an ounce, and silver increased by $0.32 to $31.56.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.13.
U.S. Stock Movers
Charles Schwab Corporation declined 1.6% to $63.75, and the company announced the retirement of chief executive Walt Bettinger at the end of the year.
Charles Schwab President Rick Wurster is slated to assume the leadership role at the start of the new year.
Stellantis NV declined 1.9% to $13.78 and extended its loss for the second day in a row after the automaker plans to halt production of the electric Fiat 500 until the end of November.
McCormick & Company increased 0.7% to $82.84 after the spice maker reported better-than-expected revenue and earnings.
The spice and flavoring company reported net sales in the edge to $1.67 billion from $1.68 billion, net income increased to $223.1 million from $170.1 million, and diluted earnings per share to 83 cents from 63 cents.
The company reaffirmed its sales and operating profit outlook, and estimated adjusted earnings per share between $2.85 and $2.90.
European Markets Dropped Amid Prospects of a Wider War In Middle East
European market indexes swung between gains and losses as investors reviewed the latest update on consumer price inflation.
Benchmark indexes in Paris, London, and Frankfurt traded around the flatline after inflation in the Euro Area fell more than expected in September.
However, market sentiment deteriorated rapidly in the late afternoon trading on reports that Iran is preparing to strike targets in Israel ahead of its invasion in Lebanon.
Crude oil jumped as much as 4% as Israel prepared to carry out a military invasion in Lebanon, targeting territories controlled by Hezbollah, raising the prospects of supply disruptions.
Eurozone Manufacturing Woes Deepened In September
Eurozone manufacturing woes deepened amid broad weakness and the fall in new orders, output, employment, and procurement activity, S&P Global reported Tuesday.
The Hamburg Commercial Bank factory purchasing managers' index eased to 45.0 in September from 45.8 in August, according to the revised estimate.
The index stood at 44.8 in the preliminary estimate, and the final estimate was the lowest in the current series in 2024 and weakest in the current 27-month downturn.
Across the four largest economies in the currency union, the manufacturing index in Spain rose at the fastest pace to 53.0 from 50.5 in August and extended growth in activities for the eighth month in a row.
The headline manufacturing index plunged to a 12-month low of 40.6 from 42.4 in August as the sector's slump worsened.
"The worsening industrial slump in Germany, for example, is too big for Spain's momentum in September to make much of a difference," the Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.
Weakening Energy Prices Drag Eurozone Inflation Lower In September
Consumer price inflation in the eurozone slowed to 1.8% in September from 2.2% in August, Eurostat reported Tuesday.
Overall inflation dropped to the lowest level since April 2021.
The overall inflation slowed largely because of the weakening of the price of energy and related products, tracking lower crude oil prices.
Energy price deflation accelerated to 6% from 3% in the previous month, and food, alcohol, and tobacco inflation edged up to 2.4% from 2.3%.
Core inflation, which excludes food and energy, slowed to 2.7% from 2.8% in the previous month, and service inflation slowed to 4% from 4.1%.
Geographically, inflation eased in Germany to 1.8% from 2.0% in the previous month; in France it eased to 1.5% from 2.2%; in Italy it declined to 0.8% from 1.2%; and in Spain it slowed to 1.7% from 2.4%, respectively.
Overall inflation is expected to rebound in the later part of 2024, as the previous high base in energy prices ends.
Europe Indexes and Yields
The DAX index decreased by 0.6% to 19,200.18; the CAC-40 index fell by 0.8% to 7,574.07; and the FTSE 100 index rose by 0.5% to 8,276.65.
The yield on 10-year German bonds edged lower to 2.05%, French bonds inched lower to 2.80%, the UK gilts edged down to 3.95%, and Italian bonds decreased to 3.35%.
The euro edged lower to $1.10; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.66 Swiss cents.
Brent crude increased $2.58 to $74.28 a barrel, and the Dutch TTF natural gas rose by €0.76 to €39.42 per MWh.
Europe Stock Movers
Covestro AG jumped 4.2% to €58.10 after the Abu Dhabi-controlled oil company, ADNOC, said it plans to buy the German chemical firm for €14.7 billion.
The acquisition deal requires ADNOC to purchase all outstanding shares at €62 per share.
Crude oil prices traded volatile as investors weighed rising tensions in the Middle East against demand growth worries in the U.S.
BP plc, Shell PLC, TotalEnergies SE, and Repsol SA declined between 0.2% and 0.5%.
Mulberry Group PLC declined 3.2% to 120.0 pence, and the British luxury handbag maker rejected a conditional offer from Mike Ashley-controlled Frasers Group.
Greggs plc declined 4.2% to 2,992.0 pence after the bakery chain reported a slowdown in its core business in the latest quarter.
Tokyo Indexes Recover 2%, Japan Business Sentiment Held Steady In Third Quarter
Stock market indexes in Tokyo advanced, and the yen eased as investors reviewed the latest economic updates.
The Nikkei 225 stock average jumped 1.9%, and the Topix index advanced 1.7% after market sentiment reversed from the previous sentiment.
The yen weakened 0.5% to 144.36 against the U.S. dollar after calm returned to markets following the knee-jerk reaction in the previous session.
Markets sold off after former defense minister Shigeru Ishiba won the race to lead the Liberal Democratic Party, following the abrupt resignation of Prime Minister Fumio Kishida.
The hawkish monetary policy advocate Ishiba is expected to name former Chief Cabinet Secretary and health minister Katsunobu Kato as the next finance minister.
Ishiba's selection of cabinet members suggested that the next prime minister is laying the groundwork for a stable administration that is likely to favor moderate policies and a gradual increase in interest rates.
On the economic front, the au Jibun Bank Japan Manufacturing PMI was revised higher to 49.7 in September from the preliminary estimate of 49.6 and 49.8 in the previous month, S&P Global reported Tuesday.
The manufacturing sector contracted for the third month in a row, and activities declined for the seventh consecutive month as new orders fell driven by weakness in export orders.
In addition, the business sentiment weakened to the lowest level since December 2022.
The Bank of Japan's sentiment index among large manufacturers was stable for the second quarter in a row, according to the survey released by the central bank on Tuesday.
The sentiment index among the 1,730 large companies surveyed in the quarter was steady at 13, among 2,576 mid-sized companies was steady at 8, and among 4,732 small companies improved from -1 to zero.
The overall index among all 9,038 participants improved to 14 from 12, according to the data available from the so-called Tankan survey.
Meanwhile, large companies are looking to increase capital spending by 10.6% in the current fiscal year ending in March 2025.
Japan Stock Movers
The Nikkei 225 Stock Average gained 1.9% to 38,643.77, and the Topix index advanced 1.7% to 2,690.32.
Exporting companies and industrial heavyweights traded higher after U.S. Fed Chair Powell poured cold water over another 50 basis points rate hike during the next policy meeting.
Mitsubishi Heavy Industries increased 7.5% to ¥2,278.0, Kawasaki Heavy Industries gained 8.2% to ¥6,286.0, and IHI Corp. jumped 7.9% to ¥7,966.0.
Mitsubishi UFJ advanced 2% to ¥1,482.50, Sumitomo Mitsui Financial Group gained 2.1% to ¥3,110.0, and Mizuho Financial increased 2.1% to ¥2,998.0.
Seven & I Holdings advanced 0.6% to ¥2,160.50, Isetan Mitsukoshi jumped 5% to ¥2,340.50, and Fast Retailing gained 2.4% to ¥48,570.0.
Marubeni Corp. gained 1.9% to ¥2,385.50, Itochu Corp. added 3.7% to ¥7,960.0, Mitsui & Company jumped 3.7% to ¥3,293.0, and Mitsubishi Corp. added 2.5% to ¥3,027.0.
Shipping companies were in focus amid elevated tensions in the Middle East, and shipping workers at 14 ports on the U.S. East Coast and along the Gulf of Mexico were demanding higher wages over the next five years.
The container shipping companies have earned more than $400 billion over the four years since the onset of the pandemic in 2020, surpassing the combined profits in the previous four decades.
Nippon Yusen KK increased 1.9% to ¥5,298.0, Mitsui O.S.K. Lines gained 1% to ¥4,976.0, and Kawasaki Kishen Kaisa added 0.5% to ¥2,224.50.