Market Update
The S&P 500 index declined 3.4% and the Nasdaq Composite index plunged 4.0%, worst weekly losses since September.
09 Dec, 2022
U.S. Stocks Accelerate Losses On Inflation Worries, Global Markets On Edge
Barry Adams
09 Dec, 2022
New York City
Major averages accelerated market decline in late trading after higher-than-expected wholesale inflation rekindled hopes of rapid interest rate rises next week.
Investors turned cautious in the afternoon trading and morning gains turned to losses and extended weekly losses ahead of consumer price inflation data on Tuesday and the Fed's rate decision on Wednesday.
Hotter-than-expected wholesale inflation at 0.3% in November also raised fears that consumer price inflation may accelerate from a monthly increase of 0.4% in October.
The widely watched consumer price index is expected to moderate in November from the annual pace of 7.7% in October but the deepening of inflation in services may surprise markets.
U.S. Wholesale Inflation Stay Elevated
The producer price index increased 0.3% in November from October and eased to 7.4% from a year ago on higher cost of services, the U.S. Bureau of Labor Statistics said.
Core rate of inflation in November accelerated to 0.4% from 0.1% in October but eased to 6.2% annual pace from 6.6% rate in October.
Stock Market Indexes Trade Volatile
Benchmark indexes opened higher but quickly lost direction lacking momentum after wholesale inflation data raised the prospect of higher terminal rates.
The S&P 500 index fell 0.7% to 3,934.38 and the Nasdaq Composite index fell 0.7% to 11,004.62.
For the week, the S&P 500 dropped 3.4% and the Nasdaq Composite index dropped 4.0%.
Crude oil price decreased 5 cents to $71.40 a barrel and natural gas prices rose 33 cents to $6.29 a thermal unit.
The yield on 2-year Treasury notes rose to 4.34%, 10-year Treasury notes increased to 3.59% and 30-year Treasury bonds to 3.57%.
Brazil Inflation Drops to 20-month Low
Brazil's inflation eased to an annual pace of 5.9% in November from 6.4% in October, the lowest since February 2021, after transportation and housing prices cooled, the statistical office said Friday.
U.S. Stock Movers
Costco Wholesale Corporation eased 0.2% to $480.71 after the membership warehouse club operator said fiscal first quarter sales increased 8.1% to $53.4 billion.
Net income increased to $1.36 billion from $1.32 billion or $3.07 from $2.98 a diluted share a year ago.
lululemon athletica Inc declined 12.5% to $328.01 after the company issued lighter guidance for the current quarter.
The specialty apparel retailer said third quarter revenue increased 28% to $1.9 billion and net income soared to $255.5 million from $187.8 million or $2 from $1.44 a share a year ago.
For the fourth quarter of 2022, the company expects net revenue between $2.605 billion and $2.655 billion, representing a three-year compound annual growth rate of approximately 24%.
Diluted earnings per share are expected to be in the range of $4.20 to $4.30 for the quarter.
DocuSign soared 12.8% to $49.37 after the company reported better-than-expected quarterly results.
The only verification system provider said third quarter revenue increased 18% to $645.5 million and net loss widened to $29.8 million from $5.7 million or 15 cents from 3 cents a share from a year ago.
European Markets Look Ahead to Rate Decisions
European markets halted weeklong slide after industrial and financial stocks led gainers and energy prices eased.
Investors shifted focus to upcoming policy meetings next week and markets are awaiting slower rate hikes in the U.S. and eurozone.
The U.S. Federal Reserve is set to announce its interest rate decision on Wednesday and markets are factoring at least 50 basis points increase after four 75 basis points increase in a row.
The European Central Bank is also scheduled to lift its deposit rate on Thursday and markets are anticipating a 50 basis points increase to 2.0%, matching the rate in 2009.
The Bank of England is expected to revise its key lending rate higher by 50 basis points to 3.5% on Wednesday following a 75-basis-point increase in November, the largest in three decades.
Europe Stock Market Halts Five-day Slide
Stocks rebounded on the final day of the week and halted five-day long slide ahead of rate decision next week.
Market indexes closed higher following a week of selloff on the worries of global economic slowdown and elevated inflation and ongoing Covid-curbs in China.
The DAX index increased 0.7% to 14,370.72, the CAC-40 index advanced 0.5% to 6,677.64 and the FTSE 100 index gained 4.46 points to 7,476.63.
For the week, the DAX index, the CAC-40 index and the FTSE 100 index and the Swiss Market index closed down 1%
Oil Extends Weekly Loss to 10%.
Crude oil prices dropped about 10% in the week despite the supply worries.
OPEC+ confirmed its production cut of 2 millions barrels a day after last Sunday's meeting and the European Union placed its price cap of $60 a barrel on Russia oil transported using tankers registered in the region.
Despite the supply worries, oil prices dropped to this year's low on the global slowdown and slow rebound of activities in China.
Moreover, China's exports to the European Union dropped 10.6% in November, confirming demand slowdown in the region.
Brent crude oil increased 42 cents to $76.57 a barrel and Dutch TTF natural gas prices rose 0.1% to 139.11 euros per MWh.
Europe Bond Yields Rebound to 2-month Highs
Government bond yields rebounded in Friday's trading and closed at 2-month highs in anticipation of rate increases next week.
The yield on 10-year German Bunds increased to 1.94%, French bonds inched up to 2.39%, the UK Gilts to 3.18% and Italian bonds advanced to 3.81%.
France Fourth Quarter GDP Growth Slows
The French economy is expected to slow down further in the fourth quarter according to a monthly survey from the Bank of France.
The eurozone's second largest economy in the fourth quarter GDP is expected to expand 0.1% from the previous quarter following a 0.2% increase in the third quarter.
The estimate was prepared after surveying 8,500 French businesses between November 28 and December 5.
The European Commission estimated French GDP to slow down to 0.4% in 2023 from 2.6% increase in 2022.
Asian Markets
In overnight trading, Asian market indexes closed higher, driven in cautious trading ahead of the U.S. inflation data later in the day and rate decisions next week.
The Nikkei 225 average increased 1.1% to 27,901.01 after China relaxed stringent Covid-restrictions and permitted more mobility in cities around the nation.
Investors also showed optimism and bid up tech stocks on the hopes that the U.S. Federal Reserve will continue to moderate its future rate hike beginning next week.
The Shanghai Composite index inched up 0.3% to 3,206.95 and the Hang Seng index jumped 2.3% to 19,900.87 after China's inflation eased and the price increase was in-line with expectations.
Stocks in Hong Kong soared after Sunac China Holdings said significant progress in its debt restructuring with foreign investors.
The Sensex index declined 0.6% to 62,181.67 after leading tech services providers dropped following cautious comments from Credit Suisse.
Four leading tech service giants, Tata Consultancy Services, Infosys, Tech Mahindra and Wipro dropped between 2% and 4%.
China Inflation Eases
Consumer price index in China eased to 1.6% in November from 2.1% in October and declined by 0.2% from the previous month, the National Bureau of Statistics said Friday.
Resource Stocks Drive Australian Indexes Higher
BHP and Rio Tinto gained between 2% and 3% on the hopes of demand revival after China reopening gathers steam.
The benchmark S&P ASX 200 Index rose 0.5% to 7,213.20 and the broader All Ordinaries Index closed up 0.5% to 7,406.30.
Europe Movers: Anglo American Carl Zeiss, Credit Suisse, Pendragon, Vestas
Bridgette Randall
09 Dec, 2022
Frankfurt
Energy producers traded down between 1% and 3% on the worries that economic activities are likely to fall at a faster pace in the coming months.
Shell Plc fell 1.7%. TotalEnergies SE declined 1.5% and BP Plc eased 0.7%
Anglo American declined 3.4% to 3,199.32 pence after the copper and iron ore mining group said unit production costs are estimated to increase 16% and volume fall 3% in 2022 from a year ago.
Credit Suisse closed up 6.4% to 3.14 Swiss francs after the struggling Swiss bank said it raised 2.2 billion Swiss francs of the targeted 4 billion Swiss franc fundraising plan.
Carl Zeiss Meditec declined 3.5% to
European Stocks Halt 5-day Slide, France GDP Growth Slows
Bridgette Randall
09 Dec, 2022
Frankfurt
European markets halted weeklong slide after industrial and financial stocks led gainers and energy prices eased.
Investors shifted focus to upcoming policy meetings next week and markets are awaiting slower rate hikes in the U.S. and eurozone.
The U.S. Federal Reserve is set to announce its interest rate decision on Wednesday and markets are factoring at least 50 basis points increase after four 75 basis points increase in a row.
The European Central Bank is also scheduled to lift its deposit rate on Thursday and markets are anticipating a 50 basis points increase to 2.0%, matching the rate in 2009.
The Bank of England is expected to revise its key lending rate higher by 50 basis points to 3.5% on Wednesday following a 75-basis-point increase in November, the largest in three decades.
Stock Market Halts Five-day Slide
Stocks rebounded on the final day of the week and halted five-day long slide ahead of rate decision next week.
Market indexes closed higher following a week of selloff on the worries of global economic slowdown and elevated inflation and ongoing Covid-curbs in China.
The DAX index increased 0.7% to 14,370.72, the CAC-40 index advanced 0.5% to 6,677.64 and the FTSE 100 index gained 4.46 points to 7,476.63.
For the week, the DAX index, the CAC-40 index and the FTSE 100 index and the Swiss Market index closed down 1%
Oil Extends Weekly Loss to 10%.
Crude oil prices dropped about 10% in the week despite the supply worries.
OPEC+ confirmed its production cut of 2 millions barrels a day after last Sunday's meeting and the European Union placed its price cap of $60 a barrel on Russia oil transported using tankers registered in the region.
Despite the supply worries, oil prices dropped to this year's low on the global slowdown and slow rebound of activities in China.
Moreover, China's exports to the European Union dropped 10.6% in November, confirming demand slowdown in the region.
Brent crude oil increased 42 cents to $76.57 a barrel and Dutch TTF natural gas prices rose 0.1% to 139.11 euros per MWh.
Bond Yields Rebound to 2-month Highs
Government bond yields rebounded in Friday's trading and closed at 2-month highs in anticipation of rate increases next week.
The yield on 10-year German Bunds increased to 1.94%, French bonds inched up to 2.39%, the UK Gilts to 3.18% and Italian bonds advanced to 3.81%.
France Fourth Quarter GDP Growth Slows
The French economy is expected to slow down further in the fourth quarter according to a monthly survey from the Bank of France.
The eurozone's second largest economy in the fourth quarter GDP is expected to expand 0.1% from the previous quarter following a 0.2% increase in the third quarter.
The estimate was prepared after surveying 8,500 French businesses between November 28 and December 5.
The European Commission estimated French GDP to slow down to 0.4% in 2023 from 2.6% increase in 2022.
Spain's Industrial Production Growth Slows
Spain's industrial production growth slowed for the fourth month in a row in October, the statistical office INE reported Friday.
Industrial production after adjusting for seasonal factors increased at a slower pace of 2.5%, slower than 3.6% rise in October.
Industrial production started to advance in April but the growth has been decelerating for the last four months.
On a monthly basis, industrial production declined 0.4% in October after falling 0.1% in September.
Europe Stock Movers
Energy producers traded down between 1% and 3% on the worries that economic activities are likely to fall at a faster pace in the coming months.
Shell Plc fell 1.7%. TotalEnergies SE declined 1.5% and BP Plc eased 0.7%
Anglo American declined 3.4% to 3,199.32 pence after the copper and iron ore mining group said unit production costs are estimated to increase 16% and volume fall 3% in 2022 from a year ago.
Credit Suisse closed up 6.4% to 3.14 Swiss francs after the struggling Swiss bank said it raised 2.2 billion Swiss francs of the targeted 4 billion Swiss franc fundraising plan.
Carl Zeiss Meditec declined 3.5% to
Movers: Broadcom, Chewy, Costco, DocuSign, Hooker, lululemon, RH, Vail Resorts
Scott Peters
09 Dec, 2022
New York City
Broadcom Inc increased 3.5% to $549.46 after the advanced semiconductor chip maker boosted its dividend by 12% and said it plans to resume its stock repurchase program.
Revenue in the fiscal fourth quarter increased 21% to $8.9 billion from $7.4 billion a year ago.
Net income increased to $3.3 billion from $1.9 billion and diluted earnings per share rose to $7.8 from $4.43 a year ago.
The company guided revenue in the fiscal first quarter ending in January of $8.9 billion.
The company also declared a quarterly cash dividend of $4.60 a share.
Chewy Inc increased 5.6% to $44.34 after the online pet food retailer reported better-than-expected quarterly results.
Third quarter net sales increased 14.5% from a year ago to $2.53 billion after active customers increased to 0.6% to 20.5 million and net sales per active customers increased 13.8% to $477.
The online retailer swung to a profit of $2.3 million from a loss of $32.2 million or diluted earnings per share were 1 cent from 8 cents loss a year ago.
Costco Wholesale Corporation eased 0.2% to $480.71 after the membership warehouse club operator said fiscal first quarter sales increased 8.1% to $53.4 billion.
Net income increased to $1.36 billion from $1.32 billion or $3.07 from $2.98 a diluted share a year ago.
DocuSign soared 12.8% to $49.37 after the company reported better-than-expected quarterly results.
The only verification system provider said third quarter revenue increased 18% to $645.5 million and net loss widened to $29.8 million from $5.7 million or 15 cents from 3 cents a share from a year ago.
Hooker Furnishing Corp increased 0.2% after the furniture maker reported better-than-expected quarterly results.
Net sales in the fiscal third quarter increased 136% to $151.6 million, driven by higher sales across all segments.
In the quarter, the company swung to $4.8 million profit or 42 cents a diluted share from $1.2 million loss or 10 cents a share a year ago.
The company sounded optimistic for the next several quarters without giving sales or earnings estimates. The furniture maker said its first quarter results are likely to see positive impact from the sharp plunge in ocean freight costs and shifting trends in furniture sales favoring lower prices.
lululemon athletica Inc declined 12.5% to $328.01 after the company issued lighter guidance for the current quarter.
The specialty apparel retailer said third quarter revenue increased 28% to $1.9 billion and net income soared to $255.5 million from $187.8 million or $2.0 from $1.44 a share a year ago.
For the fourth quarter of 2022, the company expects net revenue between $2.605 billion and $2.655 billion, representing a three-year compound annual growth rate of approximately 24%.
Diluted earnings per share are expected to be in the range of $4.20 to $4.30 for the quarter.
RH, formerly known as Restoration Hardware, increased 3.4% to $275.0 after the furniture retailer reported quarterly results ahead of expectations.
Revenue in the fiscal third quarter ending in October declined to $869 million from $1.00 billion a year ago.
Net income the quarter plunged to $99 million from $184 million and earnings per share fell to $3.88 from $5.88 a year ago.
The company also highlighted weakening market conditions are likely to impact sales for several quarters.
"We expect our business trends will continue to deteriorate as a result of accelerating weakness in the housing market over the next several quarters and possibly longer," said chairman and chief executive officer Gary Friedman.
The company revised its fiscal 2022 revenue to decline between 3.5% and 4.5% from the previous range of decline between 3.5% and 5.5%.
Vail Resorts, Inc increased 2.9% to $258.93 after the ski resort operator and developer
Revenue in the first quarter increased to $279.4 million from $175.5 million a year ago.
Net loss in the quarter declined to $137.0 million from $139.3 million or loss per diluted share decreased to $3.40 from $3.44 a year ago.
Wholesale Prices Rise 0.3% In November
Brian Turner
09 Dec, 2022
New York City
The producer price index increased 0.3% in November from October and eased to 7.4% from a year ago on higher cost of services, the U.S. Bureau of Labor Statistics said.
Core rate of inflation in November accelerated to 0.4% from 0.1% in October but eased to 6.2% annual pace from 6.6% rate in October.
The higher-than-expected wholesale price data contrasted with other economic data in recent times indicating moderating of inflation.
The 3.3% decline in energy price in the month was offset by a similar rise in the food index after wholesale vegetable prices soared 38%.
The elevated inflation is likely to keep policymakers on Wednesday on track to deliver another rate hike of at least 0.5% and lift the federal funds rate target range between 4.25% and 4.50%.
Monthly inflation pace has moderated to 0.3% from 1.0% increase in November 2021 but price increases have spread to the service sector of the economy.
The index for final demand for services accelerated to 0.4% in November from 0.1% in October.
Stocks Turn Volatile, Wholesale Inflation Stays Elevated In November
Barry Adams
09 Dec, 2022
New York City
Stocks on Wall Street eased and investors digested the latest read on inflation.
Wholesale inflation was unchanged on a monthly basis and eased but remained elevated on an annual pace
Investors are also awaiting consumer price data on Tuesday and the Fed's rate decision on Wednesday.
Investors are hoping that widely watched consumer price inflation may show larger moderation in November as gasoline prices drop to a one-year low.
U.S. Wholesale Inflation Stay Elevated
The producer price index increased 0.3% in November from October and eased to 7.4% from a year ago on higher cost of services, the U.S. Bureau of Labor Statistics said.
Core rate of inflation in November accelerated to 0.4% from 0.1% in October but eased to 6.2% annual pace from 6.6% rate in October.
Stock Market Indexes Trade Volatile
Benchmark indexes opened higher but quickly lost direction lacking momentum after wholesale inflation data raised the prospect of higher terminal rates.
The S&P 500 index fell 0.2% to 3,955.93 and the Nasdaq Composite index fell 0.3% to 11,046.73.
Crude oil price increased 95 cents to $72.46 a barrel and natural gas prices rose 37 cents to $6.33 a thermal unit.
The yield on 2-year Treasury notes rose to 4.33%, 10-year Treasury notes increased to 3.57% and 30-year Treasury bonds to 3.50%.
China Inflation Eases
Consumer price index in China eased to 1.6% in November from 2.1% in October and declined by 0.2% from the previous month, the National Bureau of Statistics said Friday.
Brazil Inflation Drops to 20-month Low
Brazil's inflation eased to an annual pace of 5.9% in November from 6.4% in October, the lowest since February 2021, after transportation and housing prices cooled, the statistical office said Friday.
U.S. Stock Movers
Costco Wholesale Corporation eased 0.2% to $480.71 after the membership warehouse club operator said fiscal first quarter sales increased 8.1% to $53.4 billion.
Net income increased to $1.36 billion from $1.32 billion or $3.07 from $2.98 a diluted share a year ago.
lululemon athletica Inc declined 12.5% to $328.01 after the company issued lighter guidance for the current quarter.
The specialty apparel retailer said third quarter revenue increased 28% to $1.9 billion and net income soared to $255.5 million from $187.8 million or $2 from $1.44 a share a year ago.
For the fourth quarter of 2022, the company expects net revenue between $2.605 billion and $2.655 billion, representing a three-year compound annual growth rate of approximately 24%.
Diluted earnings per share are expected to be in the range of $4.20 to $4.30 for the quarter.
DocuSign soared 12.8% to $49.37 after the company reported better-than-expected quarterly results.
The only verification system provider said third quarter revenue increased 18% to $645.5 million and net loss widened to $29.8 million from $5.7 million or 15 cents from 3 cents a share from a year ago.