Market Update
Europe Movers: LVMH, Moncler, Mercedes-Benz Group, Prada
Inga Muller
27 Sep, 2024
Frankfurt
Market indexes in Frankfurt and Paris extended their weekly gains to 4% and in London gained 1% amid Chinese leaders pledge of significant fiscal measures following the raft of monetary measures earlier in the week.
The DAX index increased by 1.1% to 19,129.17; the CAC-40 index rose by 1.5% to 7,677.44; and the FTSE 100 index rose by 0.2% to 8,285.97.
The yield on 10-year German bonds edged higher to 2.15%, French bonds inched lower to 2.94%, the UK gilts edged up to 4.0%, and Italian bonds decreased to 3.46%.
China-linked vehicle makers and luxury goods companies traded higher for the fourth day in a row amid rising hopes of additional fiscal stimulus.
Mercedes-Benz Group AG increased 2.9% to €59.42, Volkswagen Group advanced 2.2% to €97.44, and BMW gained 2.9% to €80.80.
LVMH increased 1.2% to €687.20, Hermes International added 1.1% to €2,230.40, Kering SA advanced 3.8% to €260.35, Prada SpA jumped 6.8%, and Richemont traded up 1.1% to CHF 132.65.
Moncler SpA jumped 8.9% to €56.72 after LVMH agreed to acquire a 1.6% stake in the company.
LVMH acquired a 10% stake in the holding company, Double R, owned by chief executive Remo Rufini, that controls a 15.8% stake in the publicly traded company.
LVMH can increase its stake in the investment vehicle that controls Moncler, Double R, to as much as 22%.
With the LVMH's investment, Double R plans to increase its holding in Moncler to 18.5% from 15.8%, and become the largest shareholder in the outerwear maker.
LVMH will have one board seat on Moncler and two on Double R.
European Markets Extend Weekly Gains to 4%, LVMH Acquired 1.6% Stake In Moncler
Bridgette Randall
27 Sep, 2024
London
Stock market indexes in Europe advanced in Friday's trading following the faster-than-expected cooling of inflation in France and Spain.
Benchmark indexes in Frankfurt, Paris, and London gained, and market sentiment was boosted after Chinese leaders pledged for additional large fiscal stimulus measures.
On Friday, China's leaders pledged to provide additional fiscal stimulus during an emergency meeting chaired by President Xi Jinping.
The meeting followed wide-ranging monetary stimulus measures announced by the People's Bank of China on Tuesday.
Sources in Beijing also confirmed that China is preparing to inject an additional one trillion yen into the state-controlled banks over the next three weeks, supporting lending to corporations.
The central bank today cut the 50 basis points reserve ratio for commercial banks, following the announcement on Tuesday.
The latest cut in reserves ratio is expected to release an additional one trillion yuan for loans by commercial banks.
Inflation in France and Spain Cooled in August
Closer to home, inflation in Spain and France fell more than expected in September, supporting the case for the European Central Bank to lower its policy lending rate at the next meeting.
Consumer price inflation in France slowed to 1.2% in September from 1.8% in August, the statistical agency, INSEE, reported today.
France's inflation fell sharply after energy price deflation was 3.3% compared to an inflation of 11.9% a year ago and 0.4% in the previous month.
Goods prices declined at a faster pace of 0.3% from 0.1% in the previous month and fell from an inflation rate of 2.8% from a year ago.
Consumer price inflation in Spain eased to 1.5% in September from 2.3% in August, the statistical agency, INE, reported Friday.
Core inflation, which excludes food and energy prices, slowed to 2.4% from 2.7% in the previous month.
On a monthly basis, overall consumer price inflation was -0.6% and core inflation was -0.4%.
In other economic news in the region, Germany's seasonally adjusted jobless rate held steady for the fourth month in a row at 6.0%.
The number of jobless people increased from 17,000 to 2.823 million, and job openings fell from 65,000 to 696,000.
Europe Indexes and Yields
The DAX index increased by 1.1% to 19,129.17; the CAC-40 index rose by 1.5% to 7,677.44; and the FTSE 100 index rose by 0.2% to 8,285.97.
The yield on 10-year German bonds edged higher to 2.15%, French bonds inched lower to 2.94%, the UK gilts edged up to 4.0%, and Italian bonds decreased to 3.46%.
The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.38 Swiss cents.
Brent crude decreased $0.12 to $71.70 a barrel, and the Dutch TTF natural gas fell by €0.33 to €38.03 per MWh.
Europe Stock Movers
China-linked vehicle makers and luxury goods companies traded higher for the fourth day in a row amid rising hopes of additional fiscal stimulus.
Mercedes-Benz Group AG increased 2.9% to €59.42, Volkswagen Group advanced 2.2% to €97.44, and BMW gained 2.9% to €80.80.
LVMH increased 1.2% to €687.20, Hermes International added 1.1% to €2,230.40, Kering SA advanced 3.8% to €260.35, Prada SpA jumped 6.8%, and Richemont traded up 1.1% to CHF 132.65.
Moncler SpA jumped 8.9% to €56.72 after LVMH agreed to acquire a 1.6% stake in the company.
LVMH acquired a 10% stake in the holding company, Double R, owned by chief executive Remo Rufini, that controls a 15.8% stake in the publicly traded company.
LVMH can increase its stake in the investment vehicle that controls Moncler, Double R, to as much as 22%.
With the LVMH's investment, Double R plans to increase its holding in Moncler to 18.5% from 15.8%.
LVMH will have one board seat on Moncler and two on Double R.
Nikkei 225 In Japan Extended Weekly Rise to 4%, Tokyo Inflation Slowed In September
Akira Ito
27 Sep, 2024
Tokyo
Japan's stock market indexes overcame morning doldrums to close at a two-week high on Friday and extended their weekly advance.
The Nikkei 225 stock average edged up 1%, and the broader Topix index gained 0.2%, following the gains in overnight trading in New York.
For the week, the Nikkei 225 advanced 4.5% and the Topix gained 3.4%.
Market sentiment was positive after the release of better-than-expected U.S. jobless claims, durable goods orders, and second quarter GDP growth data.
Moreover, investors boosted their holdings of semiconductors and related stocks after Micron Technology estimated higher revenue and profit in the current quarter.
Closer to home, investors also reviewed the latest update on Tokyo-area inflation data.
Overall consumer price inflation in September slowed to 2.2% from 2.6% in August, the Bank of Japan said in a release Friday.
Core inflation, which only excludes volatile food prices but not energy, slowed to 2.0% from 2.4%, halting a 4-month acceleration in price increases.
The latest inflation matched the target rate set by the Bank of Japan, driven by a fall in energy prices and slowing food price inflation.
Tokyo's inflation is widely considered a harbinger of the nationwide price trend, and Japan's inflation data generally follow about three weeks later.
Earlier in the week, policymakers at the central bank noted the need to sharpen focus on inflation and favored a gradual approach to increasing inflation, according to the minutes of the previous policy meeting.
The yen weakened to 146.27 against the yen and fell to a three-week low as investors reviewed the latest inflation update in the Tokyo area.
Elsewhere in Asia, China's leaders released a statement pledging more fiscal support after an emergency meeting chaired by President Xi Jinping.
The latest statement to approve more government spending boosted market sentiment and lifted market indexes in Hong Kong and mainland China to a gain of over 13% in the week and over 20% from the lows reached two months ago.
Japan Stock Movers
The Nikkei 225 Stock Average increased 1.4% to 39,472.0, and the broader Topix index added 0.2% to 2,726.53.
Tech stocks led the gainers in Tokyo trading and extended weekly gains over 10%.
Tokyo Electron gained 6.5% to ¥27,170.0, Lastertec Corporation jumped 7.7% to ¥26,130.0, and Advantest Corp. increased 3.8% to ¥7,143.0.
Mitsubishi UFJ Financial decreased 0.7% to¥1,447.50, Sumitomo Mitsui Financial declined 1.5% to ¥2,957.50, and Mizuho Financial fell 0.8% to ¥2,814.50.
Seven & I Holdings added 0.4% to ¥2,214.0, Isetan Mitsukoshi rose 6.5% to ¥2,460.0, and Fast Retailing added 1.4% to ¥48,590.0.
Itochu Corp. advanced 0.3% to ¥7,897.0, Marubeni Corp. increased 1.4% to ¥2,417.50, Mitsubishi Corp. jumped 2% to ¥3,070.0, and Mitsui & Company added 2.3% to ¥3,264.0.
Kawasaki Kisen Kaisha Ltd. added 2.2% to ¥2,246.50, Nippon Yusen traded higher 1.7% to ¥5,307.0, and Mitsui O.S.K. Lines advanced 2.2% to ¥5,047.0.
Toyota Motor Corp. jumped 1.7% to ¥2,744.0, Honda Motor advanced 2.2% to ¥1,616.0, and Nissan Motor rebounded 4.7% to ¥427.70.
China's Stimulus Rally Extended Weekly Gains to Over 10% Ahead of Expected Fiscal Measures
Li Chen
27 Sep, 2024
Hong Kong
Stock market indexes soared for the fourth consecutive day after Chinese leaders pledged to announce more measures to revive faltering economic growth.
The People's Bank of China lowered the reserve requirement ratio for all banks by 50 basis points on Friday, following the announcement on Tuesday.
The Hang Seng index and the CSI 300 index jumped more than 3% and extended their weekly surge to over a whopping 13% amid a stock-buying spree by investors.
Today's market surge was driven by the expectations of more fiscal measures, according to an official statement released after an unexpected Politburo meeting chaired by President Xi Jinping.
“The vast number of party members and cadres must have the courage to take responsibility and dare to innovate,” noted the statement released after the meeting.
The meeting underscored the urgency for sharpening the focus on economic priorities as the top leadership shifts their attention away from military expansion and modernization.
The emergency policy meeting focused on boosting government spending, effectively implementing current policies, and increasing efforts to achieve an economic growth target rate of around 5%.
Moreover, the meeting called for additional necessary spending to stabilize the slumping property market and increase funding for local government.
Chinese leaders stepped up calls to revive economic growth after initial measures released four months ago to support the property market failed to make a dent.
In a much-delayed move, China's State Council announced 24-point guidelines to strengthen protection for gig workers and encourage job creation by state-controlled entities.
The yuan traded around 7.0 against the U.S. dollar, but bank stocks traded down.
Despite economic revival talks by top leaders, there were no clear and quantitative measures announced after the meeting.
Investors are hoping that Beijing will roll out large and meaningful measures after the National Holiday and avoid ramping up of wasteful spending carried out after the 2008 global financial crisis.
China Stock Movers
The Hang Seng index jumped 3.5% to 20,621.90, and the mainland-focused CSI 300 index soared 3.8% to 3,678.98.
Alibaba Group jumped 5.4% to $103.60, JD.com advanced 8.5% to $153.60, Tencent Holdings added 2.7% to HK $441.80, and Baidu Inc. advanced 5.6% to HK $101.20.
Bank of China decreased 2.5% to HK $3.75, ICBC fell 3.1% to HK $4.68, and China Merchants Bank fell 1% to HK $37.25.
China Vanke Company jumped 11% to HK $6.38, China Resources Land gained 3% to HK $27.35, and Longfor Group advanced 12% to HK $13.22.
U.S. and World Markets Extend September Gains Thanks to Shifting Interest Rate Outlook
Alexander Garcia
26 Sep, 2024
Miami
Benchmark indexes extended their two-week run amid positive market sentiment following better-than-expected economic data.
The S&P 500 index traded at a new intraday high, and the Nasdaq Composite approached its record high reached in July.
Market sentiment improved after the latest weekly jobless claims, durable goods orders, and GDP growth revisions met investor expectations.
Initial weekly jobless claims decreased 4,000 to 218,000 at the end of the last week, the U.S. Department of Labor reported Thursday.
Jobless claims dropped to a 4-month low, and continuing claims, which lag by a week, rose 13,000 to 1.834 million.
Despite the recent decline in jobless claims, labor market conditions have softened from a year ago and earlier months in the year as employers avoid adding new staff.
Investors are now awaiting the release of monthly nonfarm payroll data, which could provide additional insights into the current conditions of the labor market.
U.S. Q2 GDP Growth Confirmed In Third Estimate
The second quarter GDP growth estimate was unrevised at 3.0% in the third estimate and higher than the 1.6% increase in the first quarter, the Bureau of Economic Analysis reported Thursday.
The GDP update primarily reflected upward revisions to private inventory investment (8.3% from 7.5%) and federal government spending (4.3% from 3.3%) that were offset by downward revisions to nonresidential fixed investment (3.9% from 4.6%) and exports (1% from 1.6%).
Imports, which are a subtraction in the calculation of GDP, were revised.
The government agency also revised its GDP growth estimate in the first quarter to 1.6% from the previous estimate of 1.4%, primarily reflecting an upward revision to consumer spending that was partly offset by downward revisions to private inventory investment and residential fixed investment.
U.S. Durable Goods Orders Unchanged In August
In other economic news, new orders for manufactured durable goods were nearly unchanged from the previous month in August, the U.S. Census Bureau reported Thursday.
New order growth slowed sharply from the 9.8% surge in July, which was the highest rate of growth in four years.
The better-than-expected orders contrasted with the growing pessimism about manufacturing sector activities, suggesting that the current slowdown may be temporary.
New orders excluding transportation increased 0.5%, and excluding volatile defense goods eased 0.2%.
On an annual basis, new orders for durable goods declined 1.3%.
Non-defense capital goods orders declined 1.3% from the previous month in August, and excluding volatile aircraft orders rose 0.2%.
From the previous year, non-defense capital goods orders dropped 6.5%, and excluding aircraft rose 0.3%.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,713.52, the Nasdaq Composite rose 0.2% to 18,114.49, and the Russell 2000 index rose 0.7% to 2,213.77.
The yield on 2-year Treasury notes edged higher to 3.59%, 10-year Treasury notes inched up to 3.77%, and 30-year Treasury bonds inched higher to 4.12%.
WTI crude oil increased $2.25 to $67.42 a barrel, and natural gas prices edged down 1 cent to $2.80 a thermal unit.
Gold rose by $14.80 to $2,671.10 an ounce, and silver increased by $0.25 to $32.08.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 100.77.
U.S. Stock Movers
Micron Technology soared 17% to $111.87 after the advanced semiconductor company reported better-than-expected quarterly results.
The company also estimated higher revenue and earnings in the current quarter.
Southwest Airlines Company increased 9.8% to $31.26 after the regional airline announced its stock buyback plan of $2.5 billion.
The company also said its third quarter revenue is expected to rise as much as 3% compared to its previous estimate of a decline of 2%.
The company also announced a host of other changes to its business model and named Bob Fornaro, who previously led Spirit Airlines, to its board of directors.
China-linked stocks soared for the third day in a row after China's politburo announced their commitment to revive economic growth to 5%.
JD.com, Alibaba Group, Tencent Holdings, and Baidu jumped between 5% and 9%.
European Indexes Jump 1% Tracking Higher Global Markets
European markets advanced following the rise in global markets after China announced strong monetary stimulus.
Benchmark indexes in Paris, London, and Frankfurt jumped as much as 1.5% after China's Politburo pledged to provide additional stimulus to meet an economic growth target of 5% in the current year.
Chinese authorities are considering injecting as much as one trillion yuan in the state-controlled banks, the largest injection since 2008.
In addition, Chinese authorities are considering providing direct cash assistance to as many as 25% of the population, which could increase consumption of basic items.
Global tech stocks advanced after Micron Technology estimated higher sales and earnings, providing another upward push to semiconductor-related stocks in Europe, Japan, and South Korea.
Closer to home, the Swiss National Bank lowered its policy rate by 25 basis points to 1.0%, a third consecutive decrease in rates, and the cost of borrowing dropped to the lowest since early 2023.
The central bank noted that policymakers are prepared to lower rates in the coming quarters, if necessary, citing a weakening inflation outlook.
The Swiss National Bank lowered its inflation outlook to 1.2% from 1.3% in 2024, 0.6% from 1.1% in 2025, and 0.7% from 1.0% in 2026.
The central bank left its gross domestic product growth estimate at around 1% in 2024 and 1.5% in 2025.
Bank lending to households increased 0.6% to Є6.891 trillion in August, accelerating from 0.5% in the previous month, the European Central Bank reported Tuesday.
The increase in lending to households was the fastest since October 2023, amid a slight pick up in consumer demand.
Meanwhile, lending to corporations increased by 0.8% to Є5.133 trillion, a faster increase than in July.
Overall lending to the private sector, including households and non-financial corporations, increased by 1.6% from 1.3% in the previous month.
Europe Indexes and Yields
The DAX index increased by 1.7% to 19,238.36; the CAC-40 index rose by 2.3% to 7,742.09; and the FTSE 100 index rose by 0.2% to 8,284.91.
The yield on 10-year German bonds edged lower to 2.14%, French bonds inched lower to 2.94%, the UK gilts edged up to 3.99%, and Italian bonds decreased to 3.45%.
The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.72 Swiss cents.
Brent crude decreased $1.80 to $71.66 a barrel, and the Dutch TTF natural gas fell by €0.04 to €37.52 per MWh.
Europe Stock Movers
H&M Mennes & Mauritz AB dropped 4.5% to SEK 174.10 after the Swedish apparel retailer reported weaker-than-expected fiscal this quarter results.
China-linked companies in Europe advanced after Chinese leaders pledged additional support to meet the annual economic growth target rate of 5%.
Vehicle makers, luxury goods purveyors, and mining companies advanced for the third session in a row.
Antofagasta gained 5.7% to 2,030.0 pence, Anglo American jumped 5.9% to 2,434.0 pence, and Glencore increased 4.8% to 422.75 pence.
LVMH soared 7.4% to €663.50, Hermes International SCA added 7.2% to €2,178.0, Kering SA advanced 8.2% to €247.80, Richemont SA jumped 5.6% to CHF 129.40, Moncler SpA increased 6.6% to €52.08, and Prada gained 2.4% to €6.18.
Puma SE increased 4.3% to €38.45 after the athletic footwear maker appointed Markus Neubrand as the company's chief financial officer and a board member.
Commerzbank AG increased 5.3% to €16.17 after the German lender estimated higher profit and return on equity by 2027.
BASF SE decreased 2.2% to €44.33 after the German chemical company announced its plans to lower its fiscal year 2024 dividend to at least €2.25 per share, payable in 2025.
The revised dividend is a decrease from the €3.40 per share dividend paid in 2023.
The German chemical company plans to distribute €12 billion between 2025 and 2028, including €8 billion of stock buybacks and €2 billion of dividend payments, the company said in a statement.
The company also estimated cumulative dividends to exceed €12 billion in the period between 2025 and 2028 and return on capital to reach 10% by 2028.
SMA Solar Technology AG increased 2.2% to €17.48 after the German company announced a companywide restructuring to increase efficiency, sharpen strategic focus, and lower operating costs.
Rally In Semiconductor Stocks Powered 2.5% Surge In Japan Indexes
Stock market indexes in Tokyo traded at three-week highs following a rebound in semiconductor and related stocks.
The Nikkei 225 stock average and the Topix index jumped more than 2.5% after Micron Technology reported better-than-expected quarterly results after the close of the regular trading session in New York.
Investors also reviewed the latest policy meeting minutes, and several policymakers cautioned against creating excessive expectations about future rate hikes and called for sharper focus on upward inflation risks.
The yen traded in a tight range and edged up 0.04% to 144.77 after the Bank of Japan's policy meeting minutes showed the committee prefers a gradual approach to increasing interest rates in the future.
The surge in semiconductor stocks also boosted market indexes in South Korea, and the KOSPI index advanced 2.6%.
In other Asian markets, benchmark indexes in India crossed another record high and extended a string of highs to close to 60 in 2024, amid positive market sentiment and earnings optimism.
Benchmark indexes in mainland China and Hong Kong extended their three-day tally to over 7% as investors stepped up to buy riskier stocks in the hopes of additional market-supportive measures following the announcement of wide-ranging monetary stimulus measures.
Japan Stock Movers
The Nikkei 225 Stock Average jumped 2.8% to 38,925.63, and the broader Topix index advanced 2.6% to 2,721.12.
Tech stocks led the surge in Tokyo trading in the hopes of improving business after Micron Technology reported better-than-expected quarterly results.
Tokyo Electron jumped 8% to ¥25,760.0, Advantest soared 5.4% to ¥6,900.0, Screen Holdings gained 5.9% to ¥10,410.0, and Lasertec added 0.1% to ¥24,250.0.
Banks also participated in the market surge after the latest policy meeting minutes suggested that the central bank is looking to raise rates in gradual steps and not in sharp increments.
Mitsubishi UFJ Financial advanced 2.5% to ¥1,481.50, Sumitomo Mitsui added 3.2% to ¥9,174.0, and Mizuho Financial Group gained 2.7% to ¥2,894.50.
Retail stocks traded higher amid market rally and stable yen.
Seven & I Holdings increased 2.1% to ¥2,206.50, Aeon Co. Ltd. gained 1.6% to ¥2,206.50, Fast Retailing advanced 1.7% to ¥47,900.0, and Isetan Mitsukoshi jumped 7.6% to ¥2,326.0.
China's Indexes Extended Stimulus Rally to Third Day Amid Hopes of Additional Measures
Benchmark indexes in mainland China and Hong Kong extended gains for the third consecutive day after Beijing rolled out stimulus measures.
The Hang Seng index jumped 2.7% and the CSI 300 index advanced 2.3%, and the benchmark indexes extended three-day gains to over 7%.
The wide-ranging stimulus measures revived market confidence in Beijing's leadership in the hopes that the regulators and policymakers are finally serious about reviving economic growth and tackling multi-year property market malaise.
Investors stepped up to buy tech- and consumer-focused stocks amid expectations that the Politburo is likely to approve injecting as much as one trillion yuan into state-controlled banks.
Despite the wide-ranging monetary policy measures released by the People's Bank of China, caution prevailed in stock trading amid worries of weak consumer sentiment and persistent weakness in the residential property market.
China Stock Movers
The Hang Seng index soared 2.7% to 19,641.05, and the mainland-focused CSI 300 index jumped 2.3% to 3,478.54.
Tech stocks led gainers in Hong Kong after investors stepped up to increase exposure to high-growth and riskier stocks.
Tencent Holdings jumped 4% to $421.60, Alibaba Group advanced 6.5% to HK $97.25, and JD.com soared 8.2% to HK $136.10.
China Vanke added 13.4% to HK $5.34, China Resources Land added 11.9% to HK $24.45, and Longfor Group jumped 10.2% to HK $10.34.
New World Development was halted at HK$8.19, and the company's chief executive, Adrian Cheng, is set to step down ahead of the company's releasing its annual financial results later in the day.
The residential property developer is expected to announce losses totaling as much as HK $20 billion or $2.5 billion, reflecting a sharp decline in property valuations.
Hong Kong-based property developers were in focus after New World Development news.
CK Asset Holdings dropped as much as 1.5% to HK $32.35 before recovering to trade higher by 0.2% to HK $32.80.
Sun Hung Kai Properties edged up 0.2% to HK $82.95 and rebounded from earlier losses of as much as 1.3%.
U.S. Movers: China-linked ADRs, Micron Technology, Southwest Airlines
Scott Peters
26 Sep, 2024
New York City
Micron Technology soared 17% to $111.87 after the advanced semiconductor company reported better-than-expected quarterly results.
The company also estimated higher revenue and earnings in the current quarter.
Southwest Airlines Company increased 9.8% to $31.26 after the regional airline announced its stock buyback plan of $2.5 billion.
The company also said its third quarter revenue is expected to rise as much as 3% compared to its previous estimate of a decline of 2%.
The company also announced a host of other changes to its business model and named Bob Fornaro, who previously led Spirit Airlines, to its board of directors.
China-linked stocks soared for the third day in a row after China's politburo announced their commitment to revive economic growth to 5%.
JD.com, Alibaba Group, Tencent Holdings, and Baidu jumped between 5% and 9%.
S&P 500 Climbs to New Record High After Latest Economic Updates
Barry Adams
26 Sep, 2024
New York City
Stocks rebounded on Wall Street following better-than-expected economic data, and investors increased risk exposure.
The S&P 500 index traded at a new intraday high, and the Nasdaq Composite approached its record high reached in July.
Market sentiment improved after the latest weekly jobless claims, durable goods orders, and GDP growth revisions met investor expectations.
Initial weekly jobless claims decreased 4,000 to 218,000 at the end of the last week, the U.S. Department of Labor reported Thursday.
Jobless claims dropped to a 4-month low, and continuing claims rose 13,000 to 1.834 million in the previous week.
Despite the recent decline in jobless claims, labor market conditions have softened from a year ago and earlier months in the year as employers avoid adding new staff.
Investors are now awaiting the release of monthly nonfarm payroll data, which could provide additional insights into the current conditions of the labor market.
U.S. Q2 GDP Growth Confirmed at 3.0%
The second quarter GDP growth estimate was unrevised at 3.0% in the third estimate and higher than the 1.6% increase in the first quarter, the Bureau of Economic Analysis reported Thursday.
The GDP update primarily reflected upward revisions to private inventory investment (8.3% from 7.5%) and federal government spending (4.3% from 3.3%) that were offset by downward revisions to nonresidential fixed investment (3.9% from 4.6%) and exports (1% from 1.6%).
Imports, which are a subtraction in the calculation of GDP, were revised.
The government agency also revised its GDP growth estimate in the first quarter to 1.6% from the previous estimate of 1.4%, primarily reflecting an upward revision to consumer spending that was partly offset by downward revisions to private inventory investment and residential fixed investment.
Durable Goods Orders Unchanged In August
In other economic news, new orders for manufactured durable goods were nearly unchanged from the previous month in August, the U.S. Census Bureau reported Thursday.
New order growth slowed sharply from the 9.8% surge in July, which was the highest rate of growth in four years.
The better-than-expected orders contrasted with the growing pessimism about manufacturing sector activities, suggesting that the current slowdown may be temporary.
New orders excluding transportation increased 0.5%, and excluding volatile defense goods eased 0.2%.
On an annual basis, new orders for durable goods declined 1.3%.
Non-defense capital goods orders declined 1.3% from the previous month in August, and excluding volatile aircraft orders rose 0.2%.
From the previous year, non-defense capital goods orders dropped 6.5%, and excluding aircraft rose 0.3%.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.5% to 5,748.64, the Nasdaq Composite rose 0.8% to 18,209.77, and the Russell 2000 index rose 1.1% to 2,219.61.
The yield on 2-year Treasury notes edged higher to 3.59%, 10-year Treasury notes inched up to 3.77%, and 30-year Treasury bonds inched higher to 4.12%.
WTI crude oil increased $2.55 to $67.13 a barrel, and natural gas prices edged down 1 cent to $2.80 a thermal unit.
Gold rose by $8.15 to $2,664.11 an ounce, and silver increased by $0.20 to $32.02.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 100.77.
U.S. Stock Movers
Micron Technology soared 17% to $111.87 after the advanced semiconductor company reported better-than-expected quarterly results.
The company also estimated higher revenue and earnings in the current quarter.
Southwest Airlines Company increased 9.8% to $31.26 after the regional airline announced its stock buyback plan of $2.5 billion.
The company also said its third quarter revenue is expected to rise as much as 3% compared to its previous estimate of a decline of 2%.
The company also announced a host of other changes to its business model and named Bob Fornaro, who previously led Spirit Airlines, to its board of directors.
China-linked stocks soared for the third day in a row after China's politburo announced their commitment to revive economic growth to 5%.
JD.com, Alibaba Group, Tencent Holdings, and Baidu jumped between 5% and 9%.
Europe Movers: BASF, Commerzbank, H&M, PUMA, SMA Solar
Inga Muller
26 Sep, 2024
Frankfurt
The rise in global tech stocks and the expectations of additional stimulus measures in China supported the market advance.
The Swiss National Bank lowered its lending rate for the third time in a row and said additional cuts are likely.
The overall lending growth to households and non-financial corporations in the eurozone accelerated in August.
The DAX index increased by 1.1% to 19,129.17; the CAC-40 index rose by 1.5% to 7,677.44; and the FTSE 100 index rose by 0.2% to 8,285.97.
The yield on 10-year German bonds edged lower to 2.14%, French bonds inched lower to 2.94%, the UK gilts edged up to 3.99%, and Italian bonds decreased to 3.45%.
H&M Mennes & Mauritz AB dropped 4.5% to SEK 174.10 after the Swedish apparel retailer reported weaker-than-expected fiscal third quarter results.
China-linked companies in Europe advanced after Chinese leaders pledged additional support to meet the annual economic growth target rate of 5%.
Vehicle makers, luxury goods purveyors, and mining companies advanced for the third session in a row.
Antofagasta gained 5.7% to 2,030.0 pence, Anglo American jumped 5.9% to 2,434.0 pence, and Glencore increased 4.8% to 422.75 pence.
LVMH soared 7.4% to €663.50, Hermes International SCA added 7.2% to €2,178.0, Kering SA advanced 8.2% to €247.80, Richemont SA jumped 5.6% to CHF 129.40, Moncler SpA increased 6.6% to €52.08, and Prada gained 2.4% to €6.18.
Puma SE increased 4.3% to €38.45 after the athletic footwear maker appointed Markus Neubrand as the company's chief financial officer and a board member.
Commerzbank AG increased 5.3% to €16.17 after the German lender estimated higher profit and return on equity by 2027.
BASF SE decreased 2.2% to €44.33 after the German chemical company announced its plans to lower its fiscal year 2024 dividend to at least €2.25 per share, payable in 2025.
The revised dividend is a decrease from the €3.40 per share dividend paid in 2023.
The German chemical company plans to distribute €12 billion between 2025 and 2028, including 8 billion of stock buybacks and €2 billion of dividend payments, the company said in a statement.
The company also estimated cumulative dividends to exceed €12 billion in the period between 2025 and 2028 and return on capital to reach 10% by 2028.
SMA Solar Technology AG increased 2.2% to €17.48 after the German company announced a companywide restructuring to increase efficiency, sharpen strategic focus, and lower operating costs.
European Indexes Jump 1% Tracking Higher Global Markets
Bridgette Randall
26 Sep, 2024
London
European markets advanced following the rise in global markets after China announced strong monetary stimulus.
Benchmark indexes in Paris, London, and Frankfurt jumped as much as 1.5% after China's Politburo pledged to provide additional stimulus to meet an economic growth target of 5% in the current year.
Chinese authorities are considering injecting as much as one trillion yuan in the state-controlled banks, the largest injection since 2008.
In addition, Chinese authorities are considering providing direct cash assistance to as many as 25% of the population, which could increase consumption of basic items.
Global tech stocks advanced after Micron Technology estimated higher sales and earnings, providing another upward push to semiconductor-related stocks in Europe, Japan, and South Korea.
Closer to home, the Swiss National Bank lowered its policy rate by 25 basis points to 1.0%, a third consecutive decrease in rates, and the cost of borrowing dropped to the lowest since early 2023.
The central bank noted that policymakers are prepared to lower rates in the coming quarters, if necessary, citing a weakening inflation outlook.
The Swiss National Bank lowered its inflation outlook to 1.2% from 1.3% in 2024, 0.6% from 1.1% in 2025, and 0.7% from 1.0% in 2026.
The central bank left its gross domestic product growth estimate at around 1% in 2024 and 1.5% in 2025.
Bank lending to households increased 0.6% to Є6.891 trillion in August, accelerating from 0.5% in the previous month, the European Central Bank reported Tuesday.
The increase in lending to households was the fastest since October 2023, amid a slight pick up in consumer demand.
Meanwhile, lending to corporations increased by 0.8% to Є5.133 trillion, a faster increase than in July.
Overall lending to the private sector, including households and non-financial corporations, increased by 1.6% from 1.3% in the previous month.
Europe Indexes and Yields
The DAX index increased by 1.1% to 19,129.17; the CAC-40 index rose by 1.5% to 7,677.44; and the FTSE 100 index rose by 0.2% to 8,285.97.
The yield on 10-year German bonds edged lower to 2.14%, French bonds inched lower to 2.94%, the UK gilts edged up to 3.99%, and Italian bonds decreased to 3.45%.
The euro edged lower to $1.11; the British pound inched higher to $1.33; and the U.S. dollar weakened to 84.72 Swiss cents.
Brent crude decreased $1.82 to $71.63 a barrel, and the Dutch TTF natural gas fell by €0.65 to €36.91 per MWh.
Europe Stock Movers
H&M Mennes & Mauritz AB dropped 4.5% to SEK 174.10 after the Swedish apparel retailer reported weaker-than-expected fiscal third quarter results.
China-linked companies in Europe advanced after Chinese leaders pledged additional support to meet the annual economic growth target rate of 5%.
Vehicle makers, luxury goods purveyors, and mining companies advanced for the third session in a row.
Antofagasta gained 5.7% to 2,030.0 pence, Anglo American jumped 5.9% to 2,434.0 pence, and Glencore increased 4.8% to 422.75 pence.
LVMH soared 7.4% to €663.50, Hermes International SCA added 7.2% to €2,178.0, Kering SA advanced 8.2% to €247.80, Richemont SA jumped 5.6% to CHF 129.40, Moncler SpA increased 6.6% to €52.08, and Prada gained 2.4% to €6.18.
Puma SE increased 4.3% to €38.45 after the athletic footwear maker appointed Markus Neubrand as the company's chief financial officer and a board member.
Commerzbank AG increased 5.3% to €16.17 after the German lender estimated higher profit and return on equity by 2027.
BASF SE decreased 2.2% to €44.33 after the German chemical company announced its plans to lower its fiscal year 2024 dividend to at least €2.25 per share, payable in 2025.
The revised dividend is a decrease from the €3.40 per share dividend paid in 2023.
The German chemical company plans to distribute €12 billion between 2025 and 2028, including €8 billion of stock buybacks and €2 billion of dividend payments, the company said in a statement.
The company also estimated cumulative dividends to exceed €12 billion in the period between 2025 and 2028 and return on capital to reach 10% by 2028.
SMA Solar Technology AG increased 2.2% to €17.48 after the German company announced a companywide restructuring to increase efficiency, sharpen strategic focus, and lower operating costs.
Rally In Semiconductor Stocks Powered 2.5% Surge In Japan Indexes
Akira Ito
26 Sep, 2024
Tokyo
Stock market indexes in Tokyo traded at three-week highs following a rebound in semiconductor and related stocks.
The Nikkei 225 stock average and the Topix index jumped more than 2.5% after Micron Technology reported better-than-expected quarterly results after the close of the regular trading session in New York.
Investors also reviewed the latest policy meeting minutes, and several policymakers cautioned against creating excessive expectations about future rate hikes and called for sharper focus on upward inflation risks.
The yen traded in a tight range and edged up 0.04% to 144.77 after the Bank of Japan's policy meeting minutes showed the committee prefers a gradual approach to increasing interest rates in the future.
The surge in semiconductor stocks also boosted market indexes in South Korea, and the KOSPI index advanced 2.6%.
In other Asian markets, benchmark indexes in India crossed another record high and extended a string of highs to close to 60 in 2024, amid positive market sentiment and earnings optimism.
Benchmark indexes in mainland China and Hong Kong extended their three-day tally to over 7% as investors stepped up to buy riskier stocks in the hopes of additional market-supportive measures following the announcement of wide-ranging monetary stimulus measures.
Japan Stock Movers
The Nikkei 225 Stock Average jumped 2.8% to 38,925.63, and the broader Topix index advanced 2.6% to 2,721.12.
Tech stocks led the surge in Tokyo trading in the hopes of improving business after Micron Technology reported better-than-expected quarterly results.
Tokyo Electron jumped 8% to ¥25,760.0, Advantest soared 5.4% to ¥6,900.0, Screen Holdings gained 5.9% to ¥10,410.0, and Lasertec added 0.1% to ¥24,250.0.
Banks also participated in the market surge after the latest policy meeting minutes suggested that the central bank is looking to raise rates in gradual steps and not in sharp increments.
Mitsubishi UFJ Financial advanced 2.5% to ¥1,481.50, Sumitomo Mitsui added 3.2% to ¥9,174.0, and Mizuho Financial Group gained 2.7% to ¥2,894.50.
Retail stocks traded higher amid market rally and stable yen.
Seven & I Holdings increased 2.1% to ¥2,206.50, Aeon Co. Ltd. gained 1.6% to ¥2,206.50, Fast Retailing advanced 1.7% to ¥47,900.0, and Isetan Mitsukoshi jumped 7.6% to ¥2,326.0.
China's Indexes Extended Stimulus Rally to Third Day Amid Hopes of Additional Measures
Li Chen
26 Sep, 2024
Hong Kong
Benchmark indexes in mainland China and Hong Kong extended gains for the third consecutive day after Beijing rolled out stimulus measures.
The Hang Seng index jumped 2.7% and the CSI 300 index advanced 2.3%, and the benchmark indexes extended three-day gains to over 7%.
The wide-ranging stimulus measures revived market confidence in Beijing's leadership in the hopes that the regulators and policymakers are finally serious about reviving economic growth and tackling multi-year property market malaise.
Investors stepped up to buy tech- and consumer-focused stocks amid expectations that the Politburo is likely to approve injecting as much as one trillion yuan into state-controlled banks.
Despite the wide-ranging monetary policy measures released by the People's Bank of China, caution prevailed in stock trading amid worries of weak consumer sentiment and persistent weakness in the residential property market.
China Stock Movers
The Hang Seng index soared 2.7% to 19,641.05, and the mainland-focused CSI 300 index jumped 2.3% to 3,478.54.
Tech stocks led gainers in Hong Kong after investors stepped up to increase exposure to high-growth and riskier stocks.
Tencent Holdings jumped 4% to $421.60, Alibaba Group advanced 6.5% to HK $97.25, and JD.com soared 8.2% to HK $136.10.
China Vanke added 13.4% to HK $5.34, China Resources Land added 11.9% to HK $24.45, and Longfor Group jumped 10.2% to HK $10.34.
New World Development was halted at HK$8.19, and the company's chief executive, Adrian Cheng, is set to step down ahead of the company's releasing its annual financial results later in the day.
The residential property developer is expected to announce losses totaling as much as HK $20 billion or $2.5 billion, reflecting a sharp decline in property valuations.
Hong Kong-based property developers were in focus after New World Development news.
CK Asset Holdings dropped as much as 1.5% to HK $32.35 before recovering to trade higher by 0.2% to HK $32.80.
Sun Hung Kai Properties edged up 0.2% to HK $82.95 and rebounded from earlier losses of as much as 1.3%.
India Movers: Bank of India, Coromandel Intnl, HDFC Bank, KRP Mill, Piramal Pharma, Reliance Power, Spiecejet, Shriram Finance, Vedanta
Arun Goswami
26 Sep, 2024
Mumbai
Benchmark indexes in Mumbai crossed another record high amid positive market sentiment driven by improving macroeconomic outlook and earnings optimism.
The Sensex index increased by 0.3% to 85,390.20, and the Nifty index rose by 0.2% to 26,060.40.
On the Mumbai stock exchange, 137 stocks traded at their 52-week highs, and 22 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.74%, and the Indian rupee strengthened to 83.68 against the U.S. dollar.
Vedanta Limited declined 1% to ₹479.35, and the company's board is scheduled to meet on October 8 to discuss a potential fourth interim dividend.
The mineral resource company has declared a total dividend of ₹13,474 crore in the current fiscal year, despite the company's lackluster quarterly results.
The mining company is also looking to repay its international debt by $3 billion over the next three years.
Piramal Pharma increased 1.5% to ₹229.90, and the company's chairman, Nadini Piramal, said that the company is targeting an annual sale of $2 billion by the end of 2030 amid rising demand for its contract development and manufacturing services.
HDFC Bank decreased 0.3% to ₹1,773.80, and UBS Group acquired 30.72 lakh shares at an average price per share of ₹1,768.08, totaling ₹543 crore.
Spicejet advanced 1.2% to ₹63.14, and the company's chairman, Ajay Singh, said the company is planning to increase its aircraft fleet to 100 by 2026 following the ₹3,000 crore secondary offering.
Coromandel International declined 1.3% to ₹1,622.70, and the company increased its stake in the Senegal-based rock phosphate company.
The company increased its stake to 53.8% by acquiring an additional stake of 8.82% for $3.84 million in Baobab Mining and Chemicals Corporation.
Shriram Finance increased 0.4% to ₹3,538.95, and the company completed its $500 million bond offering with a fixed rate of 6.15%.
Reliance Power surged 4% to ₹44.15, and the company's subsidiary, Rosa Power, repaid ₹850 crore of debt to Varde Partners.
The company said it plans to be debt-free by the end of the current financial year.
KPR Mill Ltd. decreased 1.8% to ₹988.65, and the Coimbatore-based textile mill operator's promoter KP Ramaswamy sold 3.1% stake in the company for ₹971.4 crore at an average price of ₹925.12 per share.
After the transaction, SBI Mutual Fund increased its stake in the company to 7.74%.
Bank of India decreased 0.3% to ₹110.14, and the company said it raised ₹2,500 crore through the sale of tier II bonds paying an interest rate of 7.49%.