Market Update
Merger Monday Lifts Indexes, U.S Budget Deficit Soared 30%
Barry Adams
12 Dec, 2022
New York City
Major averages closed higher and investors awaited the consumer price inflation data tomorrow and the Fed's rate decision on Wednesday.
Investors were cautiously optimistic and are estimating consumer prices to ease in November to between 7.3% and 7.5%, following the increase of 7.7% in October.
Weaker energy prices and a sharp drop in shipping costs are likely to help in moderating inflation but service sector and shelter expenses are expected to rise faster than in October.
The Federal Reserve is also set to moderate its rate hike on Wednesday and investors are looking for more clues on the health of the economy after the two-day meeting.
The European Central Bank is also expected to announce its rate decision on Thursday and investors are hoping that the next rate hike will be 50 basis points.
U.S. Budget Deficit Soared 30% In November
The U.S. government budget deficit widened by 30% to a record $249 billion from $191 billion in October, the U.S. Treasury said Monday.
Total receipts from a year ago declined 10% to $252 billion and total outlays increased 6% to $501 billion.
For the fiscal year 2023, total receipts are expected to be to $4.4732 trillion and total outlays are estimated at $6.032 trillion resulting in a budget deficit of $1.299 trillion.
Revenue from individual income taxes are expected to be about $2.444 trillion and corporate taxes about $509.27 billion.
The Department of Defense and military programs are estimated to cost $781.09 billion and interest on treasury debt securities is estimated at $767.248 billion.
The Social Security Administration is expected to pay out $1.407 trillion in benefits against the total retirement receipts of $1.5 trillion.
Consumer Inflation Expectations Ease
The latest survey from the New York Federal Reserve showed inflation expectation for the year ahead declined to 5.2% in November from 5.9% in October.
The survey also indicated 3-year ahead inflation expectation declined to 3% and 5-year expectation fell to 2.3%.
Market Indexes Advance
Market indexes traded in a tight trading range ahead of rate decisions from the U.S. Federal Reserve, the Bank of England and the European Central Bank later in the week.
Investors are also confronting global economic slowdown in the face of a rising rate environment.
The S&P 500 index increased 1.4% to 3,990.56 and the Nasdaq Composite index added 1.3% to 11,143.74.
Crude Oil Rebounded On China optimism
Crude oil prices in New York and London rebounded after mobility restrictions were eased further in several cities in China.
Crude oil market remained on the edge after the European Union placed a price cap of $60 a barrel transported using oil tankers registered in the region.
Crude oil edged up $2.51 to $73.51 a barrel and natural gas futures increased 50 cents to $6.50 a thermal unit.
The yield on 2-year Treasury notes inched up to 4.39%, 10-year Treasury notes edged up to 3.61% and 30-year U.S. bonds advanced to 3.58%.
U.S. Stock Movers
Horizon Therapeutics Plc increased 15.1% to $112.0 after the company agreed to be acquired by Amgen for $116.50 a share or $27.8 billion.
Coupa Software Inc increased 26.7% to $78.69 after the software developer agreed to a $81 a share or $8 billion offer from the private equity manager Thoma Bravo.
Weber Inc jumped 23.3% to $8.03 after the maker of grills and cooking ranges agreed to be acquired by BDT Capital Partners for $8.05 a share of $2.32 billion.
Rivian Automotive Inc declined 3.8% to $26.26 after the company halted its plan to make electric vans in partnership with Mercedes Benz in Europe and the company plans to save its capital resource ahead of market uncertainties.
Microsoft Corp increased 1.8% to $248.19 after the company struck a 10-year "partnership deal" with the London Stock Exchange Group and took nearly a 4% stake in the U.K.-based exchange.
The joint statement from the two companies said the LSE will spend about $2.8 billion over the 10-year period for cloud computing services and operate under Microsoft's Azure environment.
The exchange operator acquired Refinitiv in a $27 billion deal with a private equity group led by Blackstone.
Boeing Company jumped 3.8% to $186.27 after the company is expected to ink a deal with the recently privatized Air India for 150 737 Max jets and purchase 350 jets from Airbus and acquire in all 500 planes.
European Markets Down Ahead of Rate Decisions
European markets traded lower ahead of rate decisions from several central banks amid rising economic slowdown and rate path worries.
Benchmark indexes in the region traded lower and energy prices edged lower as markets awaited rate decisions from the U.S. Federal Reserve and the Bank of England on Wednesday and from the European Central Bank on Thursday.
All three central banks are expected to moderate rate hikes and markets are widely anticipating rate increases of 50 basis points.
In the final bout of deal making ahead the year's end merger news also dominated news flow.
The DAX index decreased 0.4% to 14,306.63, the CAC-40 index fell 0.4% to 6,650.55 and the FTSE 100 index declined 0.4% to 7,445.97.
Brent crude oil rose $1.98 to $77.98 a barrel and the Dutch TTF natural gas futures for immediate month delivery eased 1.8% to
U.S. Budget Deficit Soars 30% In November
Brian Turner
12 Dec, 2022
New York City
The U.S. government budget deficit widened by 30% to a record $249 billion from $191 billion in October, the U.S. Treasury said Monday.
Total receipts from a year ago declined 10% to $252 billion and total outlays increased 6% to $501 billion.
For the fiscal year 2023, total receipts are expected to be to $4.4732 trillion and total outlays are estimated at $6.032 trillion resulting in budget deficit of $1.299 trillion.
Revenue from individual income taxes are expected to be about $2.444 trillion and corporate taxes about $509.27 billion.
The Department of Defense and military programs are estimated to cost $781.09 billion and interest on treasury debt securities is estimated at $767.248 billion.
Social Security Administration is expected to pay out $1.407 trillion in benefits against the total retirement receipts of $1.5 trillion.
UK GDP Rebounded, German Residential Sector Outlook Weakened
Bridgette Randall
12 Dec, 2022
Frankfurt
European markets traded lower ahead of rate decisions from several central banks amid rising economic slowdown and rate path worries.
Benchmark indexes in the region traded lower and energy prices edged lower as markets awaited rate decisions from the U.S. Federal Reserve and the Bank of England on Wednesday and from the European Central Bank on Thursday.
All three central banks are expected to moderate rate hikes and markets are widely anticipating rate increases of 50 basis points.
In the final bout of deal making ahead the year's end merger news also dominated news flow.
The DAX index decreased 0.4% to 14,306.63, the CAC-40 index fell 0.4% to 6,650.55 and the FTSE 100 index declined 0.4% to 7,445.97.
Brent crude oil rose $1.98 to $77.98 a barrel and the Dutch TTF natural gas futures for immediate month delivery eased 1.8% to
Movers: Coupa Software, Horizon Therapeutics, Microsoft, Rivian Automotive, Weber
Scott Peters
12 Dec, 2022
New York City
Horizon Therapeutics Plc increased 15.1% to $112.0 after the company agreed to be acquired by Amgen for $116.50 a share or $27.8 billion.
Coupa Software Inc increased 26.7% to $78.69 after the software developer agreed to a $81 a share or $8 billion offer from the private equity manager Thoma Bravo.
Weber Inc jumped 23.3% to $8.03 after the maker of grills and cooking ranges agreed to be acquired by BDT Capital Partners for $8.05 a share of $2.32 billion.
Rivian Automotive Inc declined 3.8% to $26.26 after the company halted its plan to make electric vans in partnership with Mercedes Benz in Europe and the company plans to save its capital resource ahead of market uncertainties.
Microsoft Corp increased 1.8% to $248.19 after the company struck a 10-year "partnership deal" with the London Stock Exchange Group and took nearly a 4% stake in the U.K.-based exchange.
The joint statement from the two companies said the LSE will spend about $2.8 billion over the 10-year period for cloud computing services and operate under Microsoft's Azure environment.
The exchange operator acquired Refinitiv in a $27 billion deal with a private equity group led by Blackstone.
Horizon Therapeutics agreed to be acquired by Amgen for $27.8 billion or $116.50 a share.
12 Dec, 2022
Stocks Advance Ahead of Rate Decisions and Inflation Data This Week
Barry Adams
12 Dec, 2022
New York City
Stocks turned higher on Wall Street ahead of the release of the consumer inflation data on Tuesday and the Fed's rate decision on Wednesday.
Investors were cautiously optimistic and are estimating consumer prices to ease in November to between 7.3% and 7.5%, following the increase of 7.7% in October.
The Federal Reserve is also set to moderate its rate hike on Wednesday and investors are looking for more clues on the health of the economy after the two-day meeting.
The European Central Bank is also expected to announce its rate decision on Thursday and investors are hoping that the next rate hike will be 50 basis points.
The latest survey from the New York Federal Reserve showed inflation expectation for the year ahead declined to 5.2% in November from 5.9% in October.
The survey also indicated 3-year ahead inflation expectation declined to 3% and 5-year expectation fell to 2.3%.
Market Indexes Retain Positive Bias
Market indexes traded in a tight trading range ahead of rate decisions from the U.S. Federal Reserve, the Bank of England and the European Central Bank later in the week.
Investors are also confronting global economic slowdown in the face of a rising rate environment.
The S&P 500 index increased 0.5% to 3,955.76 and the Nasdaq Composite index added 0.3% to 11,042.48.
Crude Oil Rebounded On China optimism
Crude oil prices in New York and London rebounded after mobility restrictions were eased further in several cities in China.
Crude oil market remained on the edge after the European Union placed a price cap of $60 a barrel transported using oil tankers registered in the region.
Crude oil edged up $2.65 to $73.68 a barrel and natural gas futures increased 52 cents to $6.77 a thermal unit.
The yield on 2-year Treasury notes inched up to 4.38%, 10-year Treasury notes edged up to 3.58% and 30-year U.S. bonds advanced to 3.56%.
U.S. Stock Movers
Horizon Therapeutics Plc increased 15.1% to $112.0 after the company agreed to be acquired by Amgen for $116.50 a share or $27.8 billion.
Coupa Software Inc increased 26.7% to $78.69 after the software developer agreed to a $81 a share or $8 billion offer from the private equity manager Thoma Bravo.
Weber Inc jumped 23.3% to $8.03 after the maker of grills and cooking ranges agreed to be acquired by BDT Capital Partners for $8.05 a share of $2.32 billion.
Rivian Automotive Inc declined 3.8% to $26.26 after the company halted its plan to make electric vans in partnership with Mercedes Benz in Europe and the company plans to save its capital resource ahead of market uncertainties.
Microsoft Corp increased 1.8% to $248.19 after the company struck a 10-year "partnership deal" with the London Stock Exchange Group and took nearly a 4% stake in the U.K.-based exchange.
The joint statement from the two companies said the LSE will spend about $2.8 billion over the 10-year period for cloud computing services and operate under Microsoft's Azure environment.
The exchange operator acquired Refinitiv in a $27 billion deal with a private equity group led by Blackstone.