Market Update
Asian Markets Advanced, Nikkei Traded Down Despite Record Service Sector Growth
Arjun Pandit
08 May, 2023
New York City
The Nikkei index in Tokyo declined 0.7% despite a private survey showed the service sector expanded at a record pace in April.
The PMI Service Index expanded for the fifth month in a row to 55.4 from 54.9 in March, The au Jibun Bank reported Monday.
Composite index, which combines the manufacturing and service sectors, was unchanged at 52.9%.
Energy and tech stocks led market gainers in Hong Kong and the Hang Seng index increased 0.8% to 20,211.16 after technology, health care and energy stocks led gainers.
The weak rebound in economic activities in China is reflected in weaker corporate earnings improvement in the first quarter.
In Monday's trading Alibaba gained 0.4%, BYD increased 2.2% and Geely Auto jumped 1.6%.
PetroChina, CNOOC and Sinopec increased between 3% and 4%, following a 1.2% rebound in oil prices.
Investors are also awaiting international trade and money supply data on Tuesday and inflation update on Thursday.
Stocks in Mumbai jumped 1% after a string of positive earnings contributed to positive market sentiment.
Coal India, Union Bank, Bank of India, Adani Power and Alembic Pharma reported higher-than-expected earnings.
The Sensex index increased 0.9% to 61,633.09 and the Nifty index advanced 0.9% to 18,227.20.
On the Mumbai stock exchange, 143 traded at their new 52-week highs and 17 traded at their new 52-week lows.
The yield on the 10-year Indian government bonds edged up 7.03% and the Indian rupee held firm at ₹81.71 against the U.S. dollar.
ASX 200 increased 0.7% to 20,211.16 after higher energy and commodities lifted resource stocks.
S&P 500 and Nasdaq Soared 2%, Apple and Regional Banks Zoom Higher
Barry Adams
05 May, 2023
New York City
Stocks rebounded and accelerated gains after regional banks soared and non-farm payrolls expanded in April.
Benchmark indexes soared as much as 2% and regional banks reversed weeklong losses on the optimism that the Fed is ready to pause at the next meeting.
Despite the market rebounded today, mark-to-market losses for Treasury securities are likely to resurface as the interest rates remain elevated.
Regional banks suffered heavy losses this week on the worries that more banks may suffer the fate of failed Signature Bank. First Republic Bank and Silicon Valley Bank.
Western Alliance Bancorp zoomed 50% to $27.31, Zions Bancorp increased 18.2% to $23.61 and PacWest Bancorp catapulted 79% to $5.70.
Investors welcomed the hotter-than-expected non-farm payrolls additions in April and interpreted that the resilient labor market may help the Fed in navigating the economy to soft landing as policymakers tackle elevated inflation.
Non-farm payrolls expanded in April and jobless rate dropped to five-decade low after professional and business services, health care and leisure and hospitality led the additions.
Payrolls Additions Expanded in April
The U.S. economy accelerated net new jobs in April, the U.S. Bureau of Labor Statistics reported Friday.
Non-farm payrolls increased 253,000 in April after the economy added downwardly revised 165,000 in March.
Job additions in March were sharply lowered from the initial estimate of 236,000.
Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in April.
The unemployment rate has ranged from 3.4% to 3.7% since March 2022 and dropped to a five-decade low in April and matched the level in February.
Both the labor force participation rate, at 62.6%, and the employment-population ratio, at 60.4%, were unchanged in April and remained below their pre-pandemic February 2020 levels of 63.3% and 61.1%, respectively.
In April, employment in professional and business services increased 43,000, in health care increased 40,000 and leisure and hospitality by 31,000.
In April, average hourly earnings for all employees on private nonfarm payrolls rose by 16 cents, or 0.5%, to $33.36 and extended annual wage gains to 4.4%.
U.S. Indexes & Yields
The S&P 500 index jumped 1.5% to 4,140.39 and the Nasdaq Composite 2.3% to 12,245.86.
The yield on 2-year Treasury notes hovered at 3.86%, 10-year Treasury notes edged down to 3.44% and 30-year Treasury bonds held at 3.79%.
Crude oil rose $3.12 to $71.78 a barrel and natural gas prices fell 1 cent to $2.08 a thermal unit.
U.S. Stock Movers
Apple Inc increased 4.8% to $173.75 after the maker of popular electronics gadgets reported higher-than-expected sales and earnings.
Expedia Group Inc soared 4.1% to $92.82 after the online travel booking platform reported record first quarter revenue and gross bookings soared 20%.
Carvana Company soared 26% to $9.10 after the online used car dealer reported a smaller-than-expected quarterly loss.
DoorDash Inc decreased 0.7% to $62.35 after the online delivery platform lifted its annual outlook and the company said demand for its services remained strong.
Lyft Inc plunged 22.8% to $8.34 after the ride-hailing company reported a larger-than-expected loss despite healthy demand for its services.
Bumble Inc jumped 1.7% to $17.95 after the online dating app operator reported strong activities on its platform.
DraftKings Inc jumped 15.9% to $24.71 after the sports betting company lifted its annual outlook on the back of a strong increase in its quarterly revenue.
European Markets Rebounded
European stock markets rebounded on the final day of the week and major indexes are set to close down after a week of volatile trading.
Investors shifted focus to corporate earnings after a busy week of economic data and central banks actions.
In the region's economic news, retail sales dropped in March after higher food prices and elevated energy costs sapped consumer spending.
German factory orders dropped to a three-year low after volatile transportation and defense orders fell sharply in March after surging in February.
Eurozone Retail Sales Dropped
The Euro Area retail sales decreased 1.2% in March from the previous month and eased 1.1% in the European Union, Eurostat reported Friday.
Seasonally adjusted retail sales dropped at a faster pace than 0.2% in February after higher food prices and interest rates weighed on the overall spending.
Across the Eurozone, retail sales dropped 2.4% in Germany, 1.4% in France, 0.3% in Italy but rose 0.7% in Spain.
On an annual basis, the calendar adjusted retail sales index decreased 3.8% in the euro area and 4.1% in the European Union.
Germany Factory Orders Drop to 3-year Low On Volatile Large Orders
German new factory orders, adjusted for prices and season factors, plunged 10.7% from the previous month in March, the Federal Statistics Office or destatis reported Friday.
February orders were downwardly revised to an increase of 4.5%.
The March orders declined the most since the peak of the coronavirus pandemic in April 2020, driven by a sharp decline of 47.4% in miscellaneous vehicle construction which includes orders for ships, rail locomotives, spacecrafts and army vehicles.
Large-scale orders had risen 55% in February from the previous month.
Excluding large-scale transportation and defense orders, new orders declined 7.7% in March from the previous month.
While new orders in the capital goods sector decreased 14.1% and in the intermediate goods area 7.5% in March 2023 compared to the previous month, new orders in the consumer goods sector increased 1.2%.
Preliminary real turnover in the manufacturing sector declined 2.9% in February after rising 1.5% in February, but rose 3.7% from a year ago.
Europe Indexes & Yields
The DAX index increased 1.4% to 15,961.02, the CAC-40 index added 1.3% to 7,432.93 and the FTSE 100 index advanced 1.0% to 7,778.38.
The yield on 10-year German Bunds inched up to 2.26%, French bonds traded slightly higher to 2.87%, the UK gilts inched higher to 3.76% and Italian bonds advanced to 4.19%.
The euro edged higher to $1.102, the British pound to $1.267 and the Swiss franc to 89.13 cents.
Brent crude rose $2.32 to $75.34 a barrel and the Dutch TTF natural gas increased €0.92 to €36.57 per MWh.
Europe Stock Movers
Adidas AG increased 7.3% to €167.86 after the German sportswear maker reported quarterly results ahead of expectations.
IAG or International Consolidated Airlines Group increased 1.7% to 149.55 pence after the parent of British Air and Iberian Air narrowed its first quarter pre-tax loss.
The airline group also lifted its full-year 2023 adjusted operating earnings outlook.
Air France KLM SA decreased 1.7% to €1.43 after the airline group reported a first quarter loss of €306 million.
SGL Carbon SE declined 0.6% to €8.75 after the company forecasted flat sales in 2023 compared to the previous year.
Intercontinental Hotels Group decreased 1.5% to 5,432.0 pence after the company said group chief executive Keith Barr plans to step down from the office and resign from the company board.
In addition, the company said its annual 2023 revenues are likely to exceed its previous estimate.
Halma plc declined 0.1% to 2,385.0 pence and the company agreed to acquire Poland-based Sewertronics for as much as €59 million or £52 million.
Movers: Apple, Bumble, Carvana, DraftKings, DoorDash, Expedia Group, Lyft
Scott Peters
05 May, 2023
New York City
Apple Inc increased 2.7% to $170.26 after the maker of popular electronics gadgets reported higher-than-expected sales and earnings.
Revenue in the fiscal second quarter ending on April 1 declined 3% to $94.8 billion and net income decreased to $24.2 billion from $25.0 billion and diluted earnings per share was unchanged at $1.52.
Revenue in the Americas declined to $37.8 billion from $40.8 billion, in Europe edged up to $23.9 billion from $23.2 billion, in Greater China eased to $17.8 billion from $18.3 billion and in Japan eased to #7.2 billion from $7.7 billion.
In the quarter, iPhone sales increased to $51.3 billion from $50.6 billion, Mac sales dropped to $7.2 billion from $10.4 billion, iPad sales to $6.6 billion from $7.6 billion and wearable and home and accessories were flat at $8.8 billion.
Services revenue jumped to $20.9 billion from $19.8 billion a year ago.
Bumble Inc jumped 8.1% to $19.06 after the online dating app operator reported strong activities on its platform.
Total revenue in the first quarter increased 15.7% to $242.9 million from $210.0 million and the company swung to a net loss of $2.3 million from a profit of $23.7 million and diluted earnings per share fell to ($0.01) from 12 cents a year ago.
Bumble App revenue rose 25.9% from a year ago to $194.3 million and Badoo App and other revenue declined 12.6% to $48.7 million.
The company forecasted second quarter total revenue in the range of $254 million to $258 million and Bumble App revenue of $205 million to $208 million.
For the full-year 2023, the company estimated total revenue to grow between 16% to 19% and Bumble App revenue growth in the range of 22% to 25%.
Carvana Company soared 45% to $10.50 after the online used car dealer reported a smaller-than-expected quarterly loss.
Total revenue in the first quarter declined 25% to $2.6 billion from 43.5 billion and net loss shrank to $286 million from $506 million and net loss per share dropped to $1.51 from $2.89 a year ago.
Quarterly vehicle sales declined for the third quarter in a row to 79,240 units, a decrease of 25% from a year ago and total gross profit per unit improved by $1,470 to $4,303.
DraftKings Inc jumped 14.6% to $24.43 after the sports betting company lifted its annual outlook on the back of a strong increase in its quarterly revenue.
DoorDash Inc increased 4.1% to $65.40 after the online delivery platform lifted its annual outlook and the company said demand for its services remained strong.
Revenue in the first quarter increased 40% to $2.04 billion from $1.45 billion and net loss shrank to $161 million from $167 million and diluted loss per share declined to 41 cents from 48 cents a year ago.
Total orders increased 27% from a year ago to 512 million and Marketplace gross order volume increased 29% to $15.9 billion.
The delivery service provider forecasted second quarter marketplace gross order volume to be between $15.9 billion and $16.2 billion for the full-year 2023 between $63.0 billion and $64.5 billion.
Expedia Group Inc soared 7.5% to $95.87 after the online travel booking platform reported record first quarter revenue and gross bookings soared 20%.
Revenue in the first quarter increased 18% to a record $2.7 billion from $2.3 billion and net loss increased 18% to $145 million from $122 million and diluted loss per share expanded to 95 cents from 78 cents a year ago.
Total gross bookings increased 20% to $29.4 billion and lodging bookings at $21.1 billion were at record levels. Booked room nights jumped 23% to 94.5 million from 77.0 million a year ago.
Lyft Inc plunged 13.9% to $9.20 after the ride-hailing company reported a larger-than-expected loss despite healthy demand for its services.
Revenue in the first quarter increased 14% to $1.0 billion and net loss in the quarter shrank to $187.6 million from $196.9 million and diluted loss per share fell to 50 cents from 57 cents a year ago.
Active riders in the first quarter increased 9.8% to 19.55 million from 17.8 million and revenue per active rider increased 4% to $51.17.
U.S. Payrolls Additions Expanded in April, Jobless Rate Dropped to 5-Decade Low
Brian Turner
05 May, 2023
New York City
The U.S. economy accelerated net new jobs in April, the U.S. Bureau of Labor Statistics reported Friday.
Non-farm payrolls increased 253,000 in April after the economy added downwardly revised 165,000 in March.
Job additions in March were sharply lowered from the initial estimate of 236,000.
Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in April.
The unemployment rate has ranged from 3.4% to 3.7% since March 2022 and dropped to a five-decade low in April and matched the level in February.
Both the labor force participation rate, at 62.6%, and the employment-population ratio, at 60.4%, were unchanged in April and remained below their pre-pandemic February 2020 levels of 63.3% and 61.1%, respectively.
In April, employment in professional and business services increased 43,000, in health care increased 40,000 and leisure and hospitality by 31,000.
In April, average hourly earnings for all employees on private nonfarm payrolls rose by 16 cents, or 0.5%, to $33.36 and extended annual wage gains to 4.4%.
February and March Payroll Downward Revisions
The increase in total nonfarm payroll employment for February was revised down 78,000, from 326,000 to 248,000, and for March was revised down 71,000, from 236,000 to 165,000.
With these revisions, employment in February and March combined is 149,000 lower than previously reported.
Wall Street Stocks Rebounded, Payrolls Expanded In April
Barry Adams
05 May, 2023
New York City
Stocks on Wall Street opened higher after payrolls expanded in April reflecting labor market strength.
Non-farm payrolls expanded in April and jobless rate dropped to five-decade low after professional and business services, health care and leisure and hospitality led the additions.
Payrolls Additions Expanded in April
The U.S. economy accelerated net new jobs in April, the U.S. Bureau of Labor Statistics reported Friday.
Non-farm payrolls increased 253,000 in April after the economy added downwardly revised 165,000 in March.
Job additions in March were sharply lowered from the initial estimate of 236,000.
Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in April.
The unemployment rate has ranged from 3.4% to 3.7% since March 2022 and dropped to a five-decade low in April and matched the level in February.
Both the labor force participation rate, at 62.6%, and the employment-population ratio, at 60.4%, were unchanged in April and remained below their pre-pandemic February 2020 levels of 63.3% and 61.1%, respectively.
In April, employment in professional and business services increased 43,000, in health care increased 40,000 and leisure and hospitality by 31,000.
In April, average hourly earnings for all employees on private nonfarm payrolls rose by 16 cents, or 0.5%, to $33.36 and extended annual wage gains to 4.4%.
U.S. Indexes & Yields
The S&P 500 index jumped 0.9% to 4,098.82 and the Nasdaq Composite 0.4% to 12,069.62.
The yield on 2-year Treasury notes hovered at 3.86%, 10-year Treasury notes edged down to 3.44% and 30-year Treasury bonds held at 3.79%.
Crude oil rose $1.72 to $70.28 a barrel and natural gas prices fell 1 cent to $2.08 a thermal unit.
U.S. Stock Movers
Apple Inc increased 2.7% to $170.26 after the maker of popular electronics gadgets reported higher-than-expected sales and earnings.
Expedia Group Inc soared 7.5% to $95.87 after the online travel booking platform reported record first quarter revenue and gross bookings soared 20%.
Carvana Company soared 45% to $10.50 after the online used car dealer reported a smaller-than-expected quarterly loss.
DoorDash Inc increased 4.1% to $65.40 after the online delivery platform lifted its annual outlook and the company said demand for its services remained strong.
Lyft Inc plunged 13.9% to $9.20 after the ride-hailing company reported a larger-than-expected loss despite healthy demand for its services.
Bumble Inc jumped 8.1% to $19.06 after the online dating app operator reported strong activities on its platform.
DraftKings Inc jumped 14.6% to $24.43 after the sports betting company lifted its annual outlook on the back of a strong increase in its quarterly revenue.
Europe Movers: Adidas, Air France, Halma, IAG, Intercontinental Hotels, SGL Carbon,
Bridgette Randall
05 May, 2023
Frankfurt
Adidas AG increased 7.3% to €167.86 after the German sportswear maker reported quarterly results ahead of expectations.
IAG or International Consolidated Airlines Group increased 1.7% to 149.55 pence after the parent of British Air and Iberian Air narrowed its first quarter pre-tax loss.
The airline group also lifted its full-year 2023 adjusted operating earnings outlook.
Air France KLM SA decreased 1.7% to €1.43 after the airline group reported a smaller first quarter loss and the company repaid €0.9 billion of its debt.
Revenue in the first quarter increased 42% to €6.3 billion and the airline group transported 19.7 million passengers, 35% higher than in the previous year.
Net loss shrank to €337 million from €552 million a year ago and the passenger load factor improved 11.8 percentage points to 86.1%.
SGL Carbon SE declined 0.6% to €8.75 after the company forecasted flat sales in 2023 compared to the previous year and adjusted operating earnings between €160 million and €180 million.
Revenue in the first quarter increased 4.7% to €283.7 million and adjusted EBITDA improved 9% to €40.1 million.
Intercontinental Hotels Group decreased 1.5% to 5,432.0 pence after the company said group chief executive Keith Barr plans to step down from the office and resign from the company board.
In addition, the company said its annual 2023 revenues are likely to exceed its previous estimate.
Halma plc declined 0.1% to 2,385.0 pence and the company agreed to acquire Poland-based Sewertronics for as much as €59 million or £52 million.
European Markets Rebounded, Eurozone Retail Orders Declined
Bridgette Randall
05 May, 2023
Frankfurt
European stock markets rebounded on the final day of the week and major indexes are set to close down after a week of volatile trading.
Investors shifted focus to corporate earnings after a busy week of economic data and central banks actions.
In the region's economic news, retail sales dropped in March after higher food prices and elevated energy costs sapped consumer spending.
German factory orders dropped to a three-year low after volatile transportation and defense orders fell sharply in March after surging in February.
Eurozone Retail Sales Dropped
The Euro Area retail sales decreased 1.2% in March from the previous month and eased 1.1% in the European Union, Eurostat reported Friday.
Seasonally adjusted retail sales dropped at a faster pace than 0.2% in February after higher food prices and interest rates weighed on the overall spending.
Across the Eurozone, retail sales dropped 2.4% in Germany, 1.4% in France, 0.3% in Italy but rose 0.7% in Spain.
On an annual basis, the calendar adjusted retail sales index decreased 3.8% in the euro area and 4.1% in the European Union.
Germany Factory Orders Drop to 3-year Low On Volatile Large Orders
German new factory orders, adjusted for prices and season factors, plunged 10.7% from the previous month in March, the Federal Statistics Office or destatis reported Friday.
February orders were downwardly revised to an increase of 4.5%.
The March orders declined the most since the peak of the coronavirus pandemic in April 2020, driven by a sharp decline of 47.4% in miscellaneous vehicle construction which includes orders for ships, rail locomotives, spacecrafts and army vehicles.
Large-scale orders had risen 55% in February from the previous month.
Excluding large-scale transportation and defense orders, new orders declined 7.7% in March from the previous month.
While new orders in the capital goods sector decreased 14.1% and in the intermediate goods area 7.5% in March 2023 compared to the previous month, new orders in the consumer goods sector increased 1.2%.
Preliminary real turnover in the manufacturing sector declined 2.9% in February after rising 1.5% in February, but rose 3.7% from a year ago.
Europe Indexes & Yields
The DAX index increased 0.7% to 15,839.18, the CAC-40 index added 0.4% to 7,370.86 and the FTSE 100 index advanced 0.4% to 7,734.90.
The yield on 10-year German Bunds inched up to 2.26%, French bonds traded slightly higher to 2.87%, the UK gilts inched higher to 3.76% and Italian bonds advanced to 4.19%.
The euro edged higher to $1.102, the British pound to $1.267 and the Swiss franc to 89.13 cents.
Brent crude rose $1.72 to $74.21 a barrel and the Dutch TTF natural gas increased €0.35 to €36.00 per MWh.
Europe Stock Movers
Adidas AG increased 7.3% to €167.86 after the German sportswear maker reported quarterly results ahead of expectations.
IAG or International Consolidated Airlines Group increased 1.7% to 149.55 pence after the parent of British Air and Iberian Air narrowed its first quarter pre-tax loss.
The airline group also lifted its full-year 2023 adjusted operating earnings outlook.
Air France KLM SA decreased 1.7% to €1.43 after the airline group reported a first quarter loss of €306 million.
SGL Carbon SE declined 0.6% to €8.75 after the company forecasted flat sales in 2023 compared to the previous year.
Intercontinental Hotels Group decreased 1.5% to 5,432.0 pence after the company said group chief executive Keith Barr plans to step down from the office and resign from the company board.
In addition, the company said its annual 2023 revenues are likely to exceed its previous estimate.
Halma plc declined 0.1% to 2,385.0 pence and the company agreed to acquire Poland-based Sewertronics for as much as €59 million or £52 million.
Investors Turn Cautious Amid Growing Bank Fears and Looming Debt Ceiling Turmoil
Barry Adams
04 May, 2023
New York City
Stocks struggled a day after the Federal Reserve raised interest rates causing more stress on the battered regional banks' balance sheets.
Benchmark indexes traded down and regional banks declined sharply on the growing realization that the regional banking crisis is not likely to go away anytime soon.
The ETF tracking regional banks, KRE, declined 5% reflecting investor's uneasiness with the sector.
PacWest plunged more than 40% on the news that the California bank is evaluating its strategic options including company sale.
First Horizon Corp tanked 38% after TD Bank terminated its plan to acquire the Tennessee-based bank citing possible regulatory delays for its merger plan.
Zions Bancorp declined 15.6% and Western Alliance Bancorp dropped 45.6%.
Banks of all sizes are carrying significant unrealized losses in their Treasury securities assets and banks with large percentage of deposits above the FDIC insured levels are especially vulnerable to sudden deposit outflows.
At the end of 2022, the FDIC estimated $622 billion in losses in Treasury debts held by banks of all sizes.
Stress in the regional banks is likely to worsen in the coming weeks and the crisis may persist well into 2024 as long as the Federal Reserve continues to hike rates or hold rates at elevated levels.
On Wednesday, the Federal Reserve lifted the fed funds rate by 25 basis points to a new range between 5.0% and 5.25% and left its door open for a potential rate pause at the next meeting.
The rate uncertainty was compounded by growing anxieties about the U.S. lawmakers' failure in lifting the debt ceiling.
The U.S. Treasury is expected to run out of cash as early as June and without the increase in debt ceiling the government operations may have to be closed for an unknown period.
U.S. Indexes & Yields
The S&P 500 index fell 0.6% to 4,065.10 and the Nasdaq Composite decreased 0.4% to 11,971.97.
The yield on 2-year Treasury notes declined to 3.86%, 10-year Treasury notes edged down to 3.37% and 30-year Treasury bonds held at 3.72%.
Crude oil fell 21 cents to $68.39 a barrel and natural gas prices fell 6 cents to $2.10 a thermal unit.
U.S. Stock Movers
PacWest Bancorp tanked 56.8% to $2.77 on the report that the company is looking for capital infusion, merger partner or the sale of the bank.
Zions Bancorp dropped 13.9% to $19.51 and Western Alliance declined 38.5% to $18.05.
First Horizon Crop plunged 37.6% to $9.42 after Canada-based TB Bank terminated its merger plan on the regulatory delay worries.
Johnson & Johnson decreased 0.4% to $162.34 after the company completed its spinoff of its consumer health unit Kenvue.
The company priced public offering of 172.8 million shares at $22.0 a share. Kenvue jumped 18.2% to $26.15.
Peloton Interactive Inc declined 13.7% to $7.62 after the company reported wider-than-expected loss.
Shopify Inc soared 27.9% to $59.16 after the e-commerce platform operator reported better-than-expected earnings.
The Canada-based company also announced its plan to lay off 20% of its staff.
Paramount Global Class A plunged 23.4% to $19.81 after the parent of Paramount Pictures and CBS network reported weaker-than-expected earnings.
The company also slashed its dividend to 5 cents from 24 cents per common stock as the company "moves toward streaming profitability."
Revenue in its film studio division declined 6% and television and cable properties including MTV and Comedy Central fell 8% to $5.2 billion.
Paramount said revenue in its streaming service unit, which includes Paramount+ and Pluto TV, rose 39% to $1.5 billion but losses expanded to $511 million from $456 million in the previous year.
European Stocks Turn Lower, 7th Rate Increase In Europe
European markets turned lower and the European Central Bank hiked its reference rate by 25 basis points.
Benchmark indexes in Paris and Frankfurt declined after investors digested the latest rate hike decision by the European Central Bank and the U.S. Federal Reserve.
Indexes in London edged down following weak commodities prices and crude oil drifted to a new 5-week low.
ECB Hikes Rates by 0.25%, Halts APP Reinvestments
The European Central Bank increased its reference rate by 25 basis points after lifting rates by 50 basis points for three times in a row.
After the hike, the main refinancing facility rate increased to 3.75%, marginal lending facility to 4.0% and deposit facility to 3.0% effective May 10.
In addition, the Governing Council decided to discontinue its reinvestment of cash maturing bonds purchased under the Є3.2 trillion Asset Purchase Program from July.
The balance in the program is declining by Є15 billion a month.
Policymakers noted that the headline inflation has been declining but underlying price pressures remain strong.
"At the same time, the past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain," the ECB statement released after the meeting noted.
Europe Indexes & Yields
The DAX index decreased 0.5% to 15,734.24, the CAC-40 index fell 0.9% to 7,304.77 and the FTSE 100 index fell 1.1% to 7,702.64.
The yield on 10-year German Bunds inched up to 2.26%, French bonds traded slightly higher to 2.86%, the UK gilts inched higher to 3.71% and Italian bonds advanced to 4.17%.
The euro edged higher to $1.106, the British pound to $1.257 and the Swiss franc to 88.50 cents.
Brent crude fell 5 cents to $72.28 a barrel and the Dutch TTF natural gas decreased €0.83 to €35.96 per MWh.
Europe Stock Movers
ArcelorMittal SA declined 2.2% to €25.06 after the French steel maker reported a decline in sales and earnings in its latest quarter.
Volkswagen Group increased 0.3% to €124.62 after the German automaker reported higher sales and the company confirmed its 2023 outlook.
Casino Guichard Perrachon SA dropped 10.9% to €7.46 after the French retailer said sales declined in its latest quarter.
Adecco Group AG decreased 2.5% to CH 28.65 after the Swiss staffing company reported mixed quarterly results.
Novo Nordisk AS dropped 4.6% to kr1,069.0 after the Danish pharmaceutical company said it may curtail sale of its starter weight loss drug Wegovy to new customers.
Revenue in the quarter increased to $7.69 billion and net income was $2.86 or $1.27 per share.
Shell Plc increased 1% to 2,348.0 pence after the UK-based energy company reported higher-than-expected quarterly earnings despite the fall in energy prices.
Movers: Ferrari, First Horizon, PacWest Bancorp, Paramount Global, Peloton Interactive, Shopify
Scott Peters
04 May, 2023
New York City
PacWest Bancorp tanked 56.8% to $2.77 on the report that the company is looking for capital infusion, merger partner or the sale of the bank.
Zions Bancorp dropped 13.9% to $19.51 and Western Alliance declined 38.5% to $18.05.
First Horizon Crop plunged 37.6% to $9.42 after Canada-based TB Bank terminated its merger plan on the regulatory delay worries.
Peloton Interactive Inc declined 13.7% to $7.62 after the company reported wider-than-expected loss.
Total revenues declined 22% to 748.9 million from $964.3 million and net loss shrank 64% to $275.9 million from $757.1 million and diluted loss per share fell to 79 cents from $2.27 a year ago.
Shopify Inc soared 27.9% to $59.16 after the e-commerce platform operator reported better-than-expected earnings.
The Canada-based company also announced its plan to lay off 20% of its staff.
Revenue in the first quarter increased 25% to $1.5 billion from $1.2 billion and the company swung to net income of $68 million from a loss of $1.5 billion and diluted earnings per share was 5 cents compared to ($1.17) a year ago.
Gross merchandise volume increased 15% or $6.4 billion from a year ago to $49.6 billion, up 18% on a constant currency basis.
Gross payments volume expanded to $27.5 billion, representing 56% of GMV processed in the quarter, compared to $22.0 billion or 51% in the first quarter of 2022.
Paramount Global Class A plunged 23.4% to $19.81 after the parent of Paramount Pictures and CBS network reported weaker-than-expected earnings.
The company also slashed its dividend to 5 cents from 24 cents per common stock as the company "moves toward streaming profitability."
Revenue in its film studio division declined 6% and television and cable properties including MTV and Comedy Central fell 8% to $5.2 billion.
Paramount said revenue in its streaming service unit, which includes Paramount+ and Pluto TV, rose 39% to $1.5 billion but losses expanded to $511 million from $456 million in the previous year.
Ferrari NV increased 5.3% to $292.28 $292.28 after the luxury automaker reported solid quarterly results.
Revenue in the first quarter increased 20% to Є1.4 billion from Є1.2 billion and net income jumped Є297 million from Є239 million and diluted earnings per share increased to Є1.62 from Є1.29 a year ago.
Total vehicle shipments increased 9.7% to 3,567 from 3,251 a year ago driven by 46% surge in the Americas to 962, 12% decline to 1,534 in the EMEA region, and 39% in the China region to 396 and 19% rise to 675 in the rest of the APAC region.