Market Update
Europe Movers: C&C Group, Concentric AB, Smiths Group, Titon Holdings
Bridgette Randall
19 May, 2023
Frankfurt
Concentric AB increased 3.3% to SEK215.0 after the Swedish pump maker won a SEK201 million order for a high voltage cooling solution from a North American zero-emission truck maker.
The hydrogen fuel cell are useful in achieving zero emission targets, reflecting heat and water as the sole emissions after combustion.
C&C Group Plc decreased 14.5% to 130.96 pence after the beverage maker announced a one-time charge of €25 million.
The maker of beer, cider and wines said it faced severe business disruptions while implementing enterprise resource planning system in the Matthew Clark and Bibendum business and the charge reflects the cost associated with restoring service level and lost revenue.
The company reiterated its annual operating profit outlook of €84 million and said it plans to reinstate its dividend for the fiscal year 2023.
Smiths Group Plc increased 0.9% to 1,720.0 pence after the company lifted its annual organic revenue growth outlook.
Titon Holdings plc dropped 8.1% to 80.0 pence after the UK-based windows and ventilations systems supplier said fiscal second-half 2023 results are likely to be below market expectations but reiterated its full-year outlook.
Revenue in the first-half ending in March increased 5.2% to £12.08 million from £11.48 million and pre-tax loss increased to £0.45 million from £0.25 million and basic loss per share increased to 2.86 pence from 1.46 pence a year ago.
The company declared an interim dividend per share of 0.5 pence compared to 1.5 pence a year ago.
European Markets Inched Higher, German Wholesale Inflation Slowed to 2-Year low, Bond Yields Advanced
Bridgette Randall
19 May, 2023
Frankfurt
Optimism ruled in European trading after positive corporate earnings and weakening wholesale inflation in Germany supported market sentiment.
Corporate earnings have met or exceeded investor expectations, supporting the advance of benchmark indexes to record highs.
The DAX index and the CAC-40 index traded at new record highs after banks, insurance companies and industrial equipment makers reported higher-than-expected earnings in the first quarter.
The progress in the U.S. debt ceiling talks also contributed to the market momentum.
Market expectations rose after the U.S. President Biden and congressional leader Kevin McCarthy vowed to avoid the government default.
Germany's Wholesale Inflation Slowed to 25-month Low
Germany's producer price inflation slowed for the seventh month in a row after energy prices declined, the Federal Statistics Office reported Friday.
The measure of wholesale inflation rose at a slower pace of 4.1% from 6.7% increase in March. On a monthly basis, prices advanced 0.3%.
Producer price inflation in April was driven by a jump of 6.8% in prices for capital goods, 11.4% in non-durable goods, 2.8% in energy and 0.2% in intermediate goods.
Wholesale prices, excluding energy, rose 4.8% in April, slower than 7.9% in March.
Europe Indexes & Yields
The DAX index increased 0.6% to 16,259.54, the CAC-40 index rose 0.7% to 7,498.21, and the FTSE 100 index advanced 0.4% to 7,770.91.
For the week, the DAX index advanced 2.1%, the CAC-40 index rose 0.8% and the FTSE 100 index edged up 0.2%.
The yield on 10-year German Bunds inched up to 2.47%, French bonds traded higher to 3.06%, the UK gilts inched higher to 4.01% and Italian bonds increased to 4.33%.
The euro edged lower to $1.079, the British pound to $1.241 and the Swiss franc to 90.22 cents.
Brent crude increased 78 cents to $76.64 a barrel and the Dutch TTF natural gas increased €0.46 to €30.25 per MWh.
Europe Stock Movers
Concentric AB increased 3.3% to SEK215.0 after the Swedish pump maker won a SEK201 million order for a high voltage cooling solution from a North American zero-emission truck maker.
The hydrogen fuel cell are useful in achieving zero emission targets, reflecting heat and water as the sole emissions after combustion.
C&C Group Plc decreased 14.5% to 130.96 pence after the beverage maker announced a one-time charge of €25 million.
The maker of beer, cider and wines said it faced severe business disruptions while implementing enterprise resource planning system in the Matthew Clark and Bibendum business and the charge reflects the cost associated with restoring service level and lost revenue.
The company reiterated its annual operating profit outlook of €84 million and said it plans to reinstate its dividend for the fiscal year 2023.
Smiths Group Plc increased 0.9% to 1,720.0 pence after the company lifted its annual organic revenue growth outlook.
Titon Holdings plc dropped 8.1% to 80.0 pence after the UK-based windows and ventilations systems supplier said fiscal year 2023 results are likely to be below market expectations.
Wall Street Pins Hopes On U.S. Debt Deal This Weekend, S&P 500 and Nasdaq Extend 2-day Rally
Barry Adams
18 May, 2023
New York City
Stocks on Wall Street traded higher for the second day in a row on the hopes that lawmakers are on track to conclude debt ceiling talks and avert the U.S. government default.
The S&P 500 index and the Nasdaq Composite index gained as much as 1% after the market rally broadened to regional banks, technology and resource sectors.
Energy and commodities gained on the hopes of higher demand from China and Asia as economies in the region continue to expand at a faster clip.
Investors have been increasing exposure to stocks in cautious trading on the hopes that President Biden and House Speaker Kevin McCarthy are likely to strike an agreement as early as this weekend, just in time to avert catastrophic debt default.
Despite the prevailing optimism, any agreement between the two leaders will need approvals from the U.S. House and the Senate in the next two weeks.
A faction of the Republican Party in the U.S. House is not fully on board to lift the debt ceiling, and a last minute disagreement could derail a compromise struck between the two leaders.
The yield on 10-year Treasury notes rose to a 2-month high and jumped above 3.60% after the rate hike at the next Fed's policy meeting was back on table.
Dallas Fed President Lorie Logan said policy makers are looking ahead to the inflation and employment data for the month of May and the economic data released so far do not support the case to pause rate hikes yet.
The Federal Reserve's rate setting committee is scheduled to announce its rate decision after a two-day meeting on June 14.
In overseas trading, European markets soared 1.5% and traded near record highs on the hopes that the U.S. lawmakers will set aside differences and come to an agreement.
Markets in Tokyo extended recent gains to a new 32-year high and indexes in India inched closer to record highs but indexes in Hong Kong and Shanghai traded lower on the worries of uneven economic rebound.
Initial Weekly Jobless Claims Unexpectedly Declined
Initial jobless claims for the week ending on May 13 declined 22,000 to 242,000, the U.S. Labor Department reported Thursday.
The 4-week moving average was 244,250, a decline of 1,000 from the previous week's unrevised average of 245,250.
The jobless claims unexpectedly declined in the previous week, indicating labor market conditions remained tight and upward wage pressures are likely to persist.
The advance number for seasonally adjusted insured unemployment during the week ending May 6 was 1,799,000, a decrease of 8,000 from the previous week's revised level.
The previous week's level was revised down 6,000 from 1,813,000 to 1,807,000.
Existing Home Sales Dropped In April
U.S. existing home sales declined for the second month in a row and extended the previous twelve monthly decline in a row interrupted by the sales increase in January.
Existing home sales in April declined 3.4% from the previous month to an annual rate of 4.3 million, the National Association of Realtors said Thursday.
Seasonally adjusted sales dropped 23.2% from 5.57 million in April 2022 after interest rate rose and home prices remained elevated.
The median existing home prices declined 1.7% from a year ago for all housing types across all four regions to $388,800.
"Home sales are bouncing back and forth but remain above recent cyclical lows. The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand," said NAR Chief Economist Lawrence Yun.
Available homes for sale at the end of April increased 7.2% from March and increased 1.0% from a year ago to 1.04 million units, about 2.9 month supply at the current sales rate.
U.S. Indexes & Yields
The S&P 500 index increased 0.4% to 4,176.76 and the Nasdaq Composite added 1.0% to 12,620.83.
The yield on 2-year Treasury notes increased to 4.18%, 10-year Treasury notes edged up to 3.60% and 30-year Treasury bonds held at 3.89%.
Crude oil fell $0.25 to $72.56 a barrel and natural gas prices rose 3 cents to $2.39 a thermal unit.
U.S. Stock Movers
Walmart Inc increased 1.9% to $151.45 after the retailer said revenue in the first quarter increased 7.6% to $152.3 billion.
U.S. comparable same store sales increased 7.4%, driven by 2.9% increase in number of transactions and 4.4% rise in average ticket size.
Net income in the quarter decreased 18.5% to $1.7 billion from $2.1 billion and diluted earnings per share declined to 62 cents from 74 cents a year ago.
The company forecasted consolidated store sales to increase 4.0% in the second quarter and 3.5% in the fiscal year 2024.
Take Two Interactive Software, Inc soared 12.8% to $141.0 after the videogame developer reported higher-than-expected revenue in the fiscal fourth quarter.
Revenue in the fourth quarter ending in March increased 56% to $1.45 billion from $930 million and the company swung to a net loss of $610.3 million from a profit of $110.9 million and diluted earnings per share was ($3.62) from 96 cents a year ago.
The company forecasted net revenue in the fiscal year 2024 between $5.37 billion and $5.47 billion net loss range from $518 million to $477 million and net loss per share between $3.05 and $2.80.
Bath & Body Works Inc soared 12.5% to $38.32 after the specialty retailer reported higher-than-expected revenue and earnings in its latest quarter.
Synopsys Inc increased 2.7% to $387.48 after the electronic design automation software developer reported quarterly results that were ahead of expectations.
Revenue in the fiscal second quarter ending in April increased to $1.40 billion from $1.28 billion a year ago.
Net income in the quarter decreased to $269.9 million from $293.8 million and diluted earnings per share fell to $1.76 from $1.89 a year ago.
The company forecasted revenue in the fiscal third quarter ending in July between $1.465 billion and $1.495 billion and earnings per share between $1.88 and $1.99.
Cisco Systems Inc declined 4.2% after the networking gear maker reported better-than-expected revenue and earnings in the fiscal third quarter.
Revenue increased 14% to $14.6 billion and net income increased to $3.2 billion from $2.6 billion and diluted earnings per share rose to 78 cents from 65 cents a year ago.
European Indexes Trade at New Record Highs
European stock markets rebounded in light trading after U.S. debt ceiling talk picked up pace.
Trading was light after financial markets were closed in Nordic countries and Switzerland.
Benchmark indexes in Germany and France traded at new highs and surpassed the previous peaks in January 2022.
Markets advanced after the U.S. President Joe Biden and House Speaker Kevin McCarthy vowed to avoid the government default.
Congressional leaders and Biden are expected to announce an agreement that will permit the lifting of the debt ceiling from $31.4 trillion.
However, any agreement still needs to be approved by the U.S. House and the Senate in the next two to three weeks before the federal government runs out of funds.
Spain's Trade Deficit Narrowed In March
Spain's trade deficit narrowed in March to €0.16 billion after exports increased 17.7% from a year ago to €38.9 billion and imports jumped 3.6% to €39.09 billion.
Exports to the European Union surged 15.4%, the United Kingdom increased 21.3%, the United States advanced 27.9%, and Latin America soared 62.7%. Exports to China increased 42.6% and Japan decreased 5.6%.
In the first three months of 2023, exports soared 14.6% to €102.6 billion and imports decreased 6.8% to €109.2 billion resulting in a trade deficit of €6.6 billion.
Italy's Trade Surplus Expanded In March
Italy's international trade swung to a surplus of €7.5 billion in March from a deficit of €0.76 billion a year ago, the statistical office Istat reported Wednesday.
The trade surplus accelerated from €2.1 billion in February after non-energy products exports expanded in the month.
Trade surplus was the largest since July 2021, when the surplus reached a record high of €8.2 billion.
Exports rose at a slower pace of 4.7% from a 10.4% rise in March and imports declined 9.8% reversing an increase of 3.2% in the previous month.
On a seasonally adjusted basis, exports declined 2.3% and imports fell 6.5%, lifting the surplus in March to €5.54 billion from €3.5 billion in February.
Europe Indexes & Yields
The DAX index increased 1.3% to 16,163.36, the CAC-40 index rose 0.6% to 7,446.89., and the FTSE 100 index advanced 0.3% to 7,742.30.
The yield on 10-year German Bunds inched up to 2.39%, French bonds traded higher to 2.98%, the UK gilts inched higher to 3.89% and Italian bonds increased to 4.25%.
The euro edged lower to $1.081, the British pound to $1.245 and the Swiss franc to 90.36 cents.
Brent crude decreased $1.30 to $75.65 barrel and the Dutch TTF natural gas decreased €2.17 to €29.79 per MWh.
Europe Stock Movers
Deutsche Bank AG increased 3.5% to €9.72 after Germany's largest bank settled a lawsuit for $75 million brought by women who alleged that the bank facilitated sex trafficking activities of the late Jeffrey Epstein.
Burberry Group Plc decreased 5.7% to 2,377.0 pence after the UK-based luxury apparel and accessories company reported same store sales increased 16% from a year ago.
EasyJet Plc increased 0.8% to 524.60 pence after the deep discount airline operator narrowed its first-half loss on rising international traffic.
BT Group Class A stock plunged 7.3% to 137.25 pence despite the UK-based telecom group reporting 5% increase in adjusted annual core earnings.
The telecom company also announced a plan to eliminate 55,000 jobs.
International Distribution Services Plc declined 0.7% to 220.60 pence after the parent of Royal Mail reported an annual adjusted operating loss of £419 million.
Premier Foods Plc advanced 3.9% to 134.64 pence after the company posted strong annual profit and increased its dividend.
Existing Home Sales In April Dropped to 6-month Low
Brian Turner
18 May, 2023
New York City
Existing home sales declined for the second month in a row and extended the previous twelve monthly decline in a row interrupted by the sales increase in January.
Home sales of all types including single-family, townhomes, condominiums and co-ops have been on the slide since peaking around 6.4 million annual pace in January 2022.
Existing home sales in April declined 3.4% from the previous month to an annual rate of 4.3 million, the National Association of Realtors said Thursday.
Seasonally adjusted sales dropped 23.2% from 5.57 million in April 2022 after interest rate rose and home prices remained elevated.
The median existing home prices declined 1.7% from a year ago for all housing types across all four regions to $388,800.
"Home sales are bouncing back and forth but remain above recent cyclical lows. The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand," said NAR Chief Economist Lawrence Yun.
Available homes for sale at the end of April increased 7.2% from March and increased 1.0% from a year ago to 1.04 million units, about 2.9 month supply at the current sales rate.
Movers: Bath & Body Works, Cisco, Synopsys, Take Two Interactive, Walmart
Scott Peters
18 May, 2023
New York City
Bath & Body Works Inc soared 12.5% to $38.32 after the specialty retailer reported higher-than-expected revenue and earnings in its latest quarter.
Revenue in the first quarter declined 4% to $1.39 billion from $1.45 billion and net income declined to $81 million from $155 million and diluted earnings per share fell to 35 cents from 64 cents a year ago.
The company forecasted fiscal 2023 sales between flat and decrease in mid-single digit decline from $7.5 billion in 2022 and diluted earnings per share between $2.70 and $3.10 compared to $3.40 a year ago.
Cisco Systems Inc declined 4.2% after the networking gear maker reported better-than-expected revenue and earnings in the fiscal third quarter.
Revenue increased 14% to $14.6 billion and net income increased to $3.2 billion from $2.6 billion and diluted earnings per share rose to 78 cents from 65 cents a year ago.
Synopsys Inc increased 2.7% to $387.48 after the electronic design automation software developer reported quarterly results that were ahead of expectations.
Revenue in the fiscal second quarter ending in April increased to $1.40 billion from $1.28 billion a year ago.
Net income in the quarter decreased to $269.9 million from $293.8 million and diluted earnings per share fell to $1.76 from $1.89 a year ago.
The company forecasted revenue in the fiscal third quarter ending in July between $1.465 billion and $1.495 billion and earnings per share between $1.88 and $1.99.
Take Two Interactive Software, Inc soared 12.8% to $141.0 after the videogame developer reported higher-than-expected revenue in the fiscal fourth quarter.
Revenue in the fourth quarter ending in March increased 56% to $1.45 billion from $930 million and the company swung to a net loss of $610.3 million from a profit of $110.9 million and diluted earnings per share was ($3.62) from 96 cents a year ago.
The company forecasted net revenue in the fiscal year 2024 between $5.37 billion and $5.47 billion and net loss range from $518 million to $477 million and net loss per share between $3.05 and $2.80.
Walmart Inc increased 1.9% to $151.45 after the retailer said revenue in the first quarter increased 7.6% to $152.3 billion.
U.S. comparable same store sales increased 7.4%, driven by 2.9% increase in number of transactions and 4.4% rise in average ticket size.
Net income in the quarter decreased 18.5% to $1.7 billion from $2.1 billion and diluted earnings per share declined to 62 cents from 74 cents a year ago.
The company forecasted consolidated store sales to increase 4.0% in the second quarter and 3.5% in the fiscal year 2024.
Debt Ceiling Talks In Focus Amid Cautious Optimism On Wall Street
Barry Adams
18 May, 2023
New York City
Stocks on Wall Street retained upward bias on the hopes that lawmakers are closer to an agreement on the U.S. debt ceiling.
The S&P 500 index and the Nasdaq Composite index traded higher led by regional banks, technology and resource stocks.
Energy and commodities gained in the early trading on the hopes of higher demand from China and Asia as economies in the region continue to expand at a faster clip.
Investors have been increasing exposure to stocks in cautious trading on the hopes that President Biden and House Speaker Kevin McCarthy are likely to strike an agreement as early as this weekend, just in time to avert catastrophic debt default.
Despite the prevailing optimism, any agreement between the two leaders needs approvals from the U.S. House and the Senate in the next two weeks.
A faction of the Republican Party in the U.S. House is not fully on board to lift the debt ceiling, and a last minute disagreement could derail a compromise struck between the two leaders.
In overseas trading, European markets soared 1.5% and traded near record highs on the hopes that the U.S. lawmakers will set aside differences and come to an agreement.
Markets in Tokyo extended recent gains to a new 32-year high and indexes in India inched closer to record highs but indexes in Hong Kong and Shanghai traded lower on the worries of uneven economic rebound.
Initial Weekly Jobless Claims Unexpectedly Declined
Initial jobless claims for the week ending on May 13 declined 22,000 to 242,000, the U.S. Labor Department reported Thursday.
The 4-week moving average was 244,250, a decline of 1,000 from the previous week's unrevised average of 245,250.
The jobless claims unexpectedly declined in the previous week, indicating labor market conditions remained tight and upward wage pressures are likely to persist.
The advance number for seasonally adjusted insured unemployment during the week ending May 6 was 1,799,000, a decrease of 8,000 from the previous week's revised level.
The previous week's level was revised down 6,000 from 1,813,000 to 1,807,000.
U.S. Indexes & Yields
The S&P 500 index decreased 0.2% to 4,162.10 and the Nasdaq Composite fell 0.04% to 12,468.03.
The yield on 2-year Treasury notes increased to 4.18%, 10-year Treasury notes edged up to 3.60% and 30-year Treasury bonds held at 3.89%.
Crude oil fell $0.25 to $72.56 a barrel and natural gas prices rose 3 cents to $2.39 a thermal unit.
U.S. Stock Movers
Walmart Inc increased 1.9% to $151.45 after the retailer said revenue in the first quarter increased 7.6% to $152.3 billion.
U.S. comparable same store sales increased 7.4%, driven by 2.9% increase in number of transactions and 4.4% rise in average ticket size.
Net income in the quarter decreased 18.5% to $1.7 billion from $2.1 billion and diluted earnings per share declined to 62 cents from 74 cents a year ago.
The company forecasted consolidated store sales to increase 4.0% in the second quarter and 3.5% in the fiscal year 2024.
Take Two Interactive Software, Inc soared 12.8% to $141.0 after the videogame developer reported higher-than-expected revenue in the fiscal fourth quarter.
Revenue in the fourth quarter ending in March increased 56% to $1.45 billion from $930 million and the company swung to a net loss of $610.3 million from a profit of $110.9 million and diluted earnings per share was ($3.62) from 96 cents a year ago.
The company forecasted net revenue in the fiscal year 2024 between $5.37 billion and $5.47 billion net loss range from $518 million to $477 million and net loss per share between $3.05 and $2.80.
Bath & Body Works Inc soared 12.5% to $38.32 after the specialty retailer reported higher-than-expected revenue and earnings in its latest quarter.
Synopsys Inc increased 2.7% to $387.48 after the electronic design automation software developer reported quarterly results that were ahead of expectations.
Revenue in the fiscal second quarter ending in April increased to $1.40 billion from $1.28 billion a year ago.
Net income in the quarter decreased to $269.9 million from $293.8 million and diluted earnings per share fell to $1.76 from $1.89 a year ago.
The company forecasted revenue in the fiscal third quarter ending in July between $1.465 billion and $1.495 billion and earnings per share between $1.88 and $1.99.
Cisco Systems Inc declined 4.2% after the networking gear maker reported better-than-expected revenue and earnings in the fiscal third quarter.
Revenue increased 14% to $14.6 billion and net income increased to $3.2 billion from $2.6 billion and diluted earnings per share rose to 78 cents from 65 cents a year ago.
Europe Movers: Burberry Group, BT Group, Deutsche Bank, EasyJet, Premier Foods, Royal Mail
Bridgette Randall
18 May, 2023
Frankfurt
Burberry Group Plc decreased 5.7% to 2,377.0 pence after the UK-based luxury apparel and accessories company reported same store sales increased 16% from a year ago.
Revenue in the fiscal year ending on April 1, 2023 increased 10% to £3.0 billion from £2.8 billion a a year ago.
Profit after-tax increased 24% to £634 million from £511 million and diluted earnings per share expanded 29% to 126.3 pence from 97.7 pence a year ago.
For the year comparable store sales rose 7% and the 13% jump in Mainland China lifted comparable store sales to 16% in the fourth quartet.
The company reiterated its high single digit annual growth rate target for the fiscal year 2024 and adjusted operating margin of 20% in constant currencies.
BT Group Class A plunged 7.3% to 137.25 pence despite the UK-based telecom group reporting 5% increase in adjusted annual core earnings.
The telecom company also announced a plan to eliminate 55,000 jobs.
Revenue in the financial year ending in March 2023 declined 1% to £20.6 billion and after-tax profit soared 50% to £1.9 billion from £1.2 billion a year ago.
The company held its dividend payout at 7 pence a share and capital expenditure declined 4% to £5.0 billion.
Deutsche Bank AG increased 3.5% to €9.72 after Germany's largest bank settled a lawsuit for $75 million brought by women who alleged that the bank facilitated sex trafficking activities of the late Jeffrey Epstein.
EasyJet Plc increased 0.8% to 524.60 pence after the deep discount airline operator narrowed its first-half loss on rising international traffic.
The company said passengers transported increased 41% to 33.1 million in the first-half from 23.1 million in the corresponding period a year ago.
Revenue in the first-half increased to £2.7 billion from £1.5 billion and pre-tax loss shrank to £411 million from £545 million a year ago.
International Distribution Services Plc declined 0.7% to 220.60 pence after the parent of Royal Mail reported an annual adjusted operating loss of £419 million.
Premier Foods Plc advanced 3.9% to 134.64 pence after the company posted strong annual profit and increased its dividend.
Revenue in the first quarter increased 6% to £197 million from £185.9 million a year ago.
The company reiterated its full-year outlook.
New Highs In DAX and CAC-40 Indexes, Spain and Italy Trade Balances Improved
Bridgette Randall
18 May, 2023
Frankfurt
European stock markets rebounded in light trading after U.S. debt ceiling talk picked up pace.
Trading was light after financial markets were closed in Nordic countries and Switzerland.
Benchmark indexes in Germany and France traded at new highs and surpassed the previous peaks in January 2022.
Markets advanced after the U.S. President Joe Biden and House Speaker Kevin McCarthy vowed to avoid the government default.
Congressional leaders and Biden are expected to announce an agreement that will permit the lifting of the debt ceiling from $31.4 trillion.
However, any agreement still needs to be approved by the U.S. House and the Senate in the next two to three weeks before the federal government runs out of funds.
Spain's Trade Deficit Narrowed In March
Spain's trade deficit narrowed in March to €0.16 billion after exports increased 17.7% from a year ago to €38.9 billion and imports jumped 3.6% to €39.09 billion.
Exports to the European Union surged 15.4%, the United Kingdom increased 21.3%, the United States advanced 27.9%, and Latin America soared 62.7%. Exports to China increased 42.6% and Japan decreased 5.6%.
In the first three months of 2023, exports soared 14.6% to €102.6 billion and imports decreased 6.8% to €109.2 billion resulting in a trade deficit of €6.6 billion.
Italy's Trade Surplus Expanded In March
Italy's international trade swung to a surplus of €7.5 billion in March from a deficit of €0.76 billion a year ago, the statistical office Istat reported Wednesday.
The trade surplus accelerated from €2.1 billion in February after non-energy products exports expanded in the month.
Trade surplus was the largest since July 2021, when the surplus reached a record high of €8.2 billion.
Exports rose at a slower pace of 4.7% from a 10.4% rise in March and imports declined 9.8% reversing an increase of 3.2% in the previous month.
On a seasonally adjusted basis, exports declined 2.3% and imports fell 6.5%, lifting the surplus in March to €5.54 billion from €3.5 billion in February.
Europe Indexes & Yields
The DAX index increased 1.5% to 16,196.05, the CAC-40 index rose 0.9% to 7,462.45., and the FTSE 100 index advanced 0.6% to 7,771.16.
The yield on 10-year German Bunds inched up to 2.39%, French bonds traded higher to 2.98%, the UK gilts inched higher to 3.89% and Italian bonds increased to 4.25%.
The euro edged lower to $1.081, the British pound to $1.245 and the Swiss franc to 90.36 cents.
Brent crude decreased 41 cents to $76.54 a barrel and the Dutch TTF natural gas decreased €1.06 to €30.96 per MWh.
Europe Stock Movers
Deutsche Bank AG increased 3.5% to €9.72 after Germany's largest bank settled a lawsuit for $75 million brought by women who alleged that the bank facilitated sex trafficking activities of the late Jeffrey Epstein.
Burberry Group Plc decreased 5.7% to 2,377.0 pence after the UK-based luxury apparel and accessories company reported same store sales increased 16% from a year ago.
EasyJet Plc increased 0.8% to 524.60 pence after the deep discount airline operator narrowed its first-half loss on rising international traffic.
BT Group Class A stock plunged 7.3% to 137.25 pence despite the UK-based telecom group reporting 5% increase in adjusted annual core earnings.
The telecom company also announced a plan to eliminate 55,000 jobs.
International Distribution Services Plc declined 0.7% to 220.60 pence after the parent of Royal Mail reported an annual adjusted operating loss of £419 million.
Premier Foods Plc advanced 3.9% to 134.64 pence after the company posted strong annual profit and increased its dividend.
Weekly Mortgage Applications Declined 5.7%
Brian Turner
17 May, 2023
New York City
Applications for new mortgages declined 5.7% in the week ending on May 12, reversing an increase of 6.3% in the previous week, reported Mortgage Bankers Association Wednesday.
Seasonally adjusted composite index declined from the previous week and unadjusted index decreased 6.0%.
The Refinance Index decreased 8% from the previous week and was 43% lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less increased to 6.57% from 6.48%, with points including origination fee held at 0.61% for 80% loan-to-value ratio loans.
Higher Rates and Prices Weigh On Housing Market
Brian Turner
17 May, 2023
New York City
Housing starts advanced 2.2%, building permits declined 1.5% and completions dropped 10.4% in April, the U.S. Census Bureau reported Wednesday.
Seasonally adjusted building permits increased to an annual rate of 1.416 million, housing starts to 1.401 million and completions to 1.375 million.
Building permits declined 21.1%, starts fell 22.3% and completions rose 1% from a year ago.
Higher home price and elevated mortgage rates continue to weigh on the housing market.
Single-family housing permits increased 3.1% to 855,000 units, housing starts rose 1.6% to 846,000 and housing completions fell 6.5% to 971,000.
S&P 500 and Nasdaq Rebound 1% After Biden and McCarthy Vow to Avoid Default
Barry Adams
17 May, 2023
New York City
Stocks scaled higher after negotiating parities showed willingness to compromise and vowed to avoid catastrophic debt default.
Benchmark indexes inched higher after President Joe Biden and House Speaker Kevin McCarthy offered optimism after the meeting on Tuesday.
President Biden echoed positive sentiment just before he departed to Japan to attend a meeting of G7 leaders.
Moreover, the White House said President Biden canceled the second leg of an international trip after completing the meeting with G7 leaders in Japan.
President Biden was scheduled to visit Papua New Guinea and Australia and meet leaders of Australia, Japan and India.
President Biden and congressional leaders are hoping to finalize an agreement by this weekend and lift the current debt ceiling of $31.4 trillion.
The lifting of the debt ceiling does not allow the government to increase its spending but finances the spending plan that is already approved by the U.S. Congress and the president.
Despite the looming debt default crisis, three leading rating agencies are silent.
S&P Global, Moody's and Fitch are quick to express their opinion or threaten a debt rating revision in a similar situation of any other nation other than the U.S.
The silence of three rating agencies and lack of their stance on the U.S. government debt in the throes of debt negotiations also highlight their double standards when it comes to rating a debt issued by other nations.
Investors are hoping that a clarity on debt ceiling may calm market sentiment and keep focus on economic growth and rate path.
The latest data on the housing market showed higher prices and rising interest rates dented housing starts and building permits in April.
Higher Rates and Prices Weigh On Housing Market
Housing starts advanced 2.2%, building permits declined 1.5% and completions dropped 10.4% in April, the U.S. Census Bureau reported Wednesday.
Seasonally adjusted building permits increased to an annual rate of 1.416 million, housing starts to 1.401 million and completions to 1.375 million.
Building permits declined 21.1%, starts fell 22.3% and completions rose 1% from a year ago.
Higher home price and elevated mortgage rates continue to weigh on the housing market.
Single-family housing permits increased 3.1% to 855,000 units, housing starts rose 1.6% to 846,000 and housing completions fell 6.5% to 971,000.
Mortgage Applications Declined 5.7%
Applications for new mortgages declined 5.7% in the week ending on May 12, reversing an increase of 6.3% in the previous week, reported Mortgage Bankers Association Wednesday.
Seasonally adjusted composite index declined from the previous week and unadjusted index decreased 6.0%.
The Refinance Index decreased 8% from the previous week and was 43% lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less increased to 6.57% from 6.48%, with points including origination fee held at 0.61% for 80% loan-to-value ratio loans.
U.S. Indexes & Yields
The S&P 500 index increased 1.15% to 4,159.80 and the Nasdaq Composite rose 1.24% to 12,498.23.
The yield on 2-year Treasury notes increased to 4.11%, 10-year Treasury notes edged up to 3.54% and 30-year Treasury bonds held at 3.86%.
Crude oil rose $1.90 to $72.75 a barrel and natural gas prices rose 3 cents to $2.40 a thermal unit.
U.S. Stock Movers
Target Corp increased 1.7% to $159.62 after the retailer reported only 0.6% increase in revenue to $25.32 billion. Store traffic increased 0.9% on top of 3.9% in the quarter a year ago.
Net income declined 5.8% to $950 million from $1.0 billion and diluted earnings per share fell to $2.05 from $2.16 a year ago.
EVgo Inc dropped 13.4% to $4.96 after the electric vehicle charging stations network operator reported a $125 million secondary offering.
Keysights Technologies Inc jumped 7.7% to $157.74 after the company reported higher-than-expected fiscal second quarter adjusted earnings and offered a positive outlook for the current quarter.
European Markets Hold After Inflation Stayed Near Record High
European markets hugged the flatline after consumer inflation accelerated in April and automobile sales in April slowed from the previous month.
Stocks were in a holding pattern after inflation accelerated in April despite the cooling of energy prices in the European Union as inflation but service prices rose at a faster pace.
Automobile stocks advanced after unit sales rose in April and electric vehicles increased market share.
Investors remained cautious and awaited the outcome of the debt ceiling talks in the U.S. as president Joe Biden and congressional leaders struggled to find a common ground.
Despite the debt ceiling talks uncertainties, global markets are hoping that the U.S. lawmakers will lift the debt ceiling higher and avoid the U.S. government default.
The U.S. Treasury is estimated to run out of funds in about three weeks, yet three leading rating agencies S&P Global, Moody's and Fitch have been silent.
Consumer Inflation Accelerated In April
Consumer price inflation in the Euro Are increased to 7.0% in April, Eurostat reported Wednesday.
Inflation accelerated from a 13-month low of 6.9% in March after energy prices rebounded to 2.4% increase in April from 0.9% decline in March and cost of services accelerated to 5.2% from 5.1%.
Core inflation, which excludes food, energy, alcohol and tobacco, slowed to 5.6% in April from the record high 5.7% in March.
Hungary led the region with consumer price inflation of 24.5%, followed by 15% in Latvia, 14.3% in Czechia, and 14.% in Slovakia.
Annual inflation in Italy was 8.7%, Germany 7.6%, France 6.9% and Spain 3.8%.
EU Car Registration Growth In April Slowed from March
Car registration in the European Union soared 17.2% to 803,188 in April, the European Automobile Manufacturers Association reported Wednesday.
Passenger car sales increased for the ninth month in a row and sales in the first four months to April rose 17.8% from a year ago to 3.5 million, still down 22.8% from the same period in 2019.
Among the four largest markets in the European Union, unit sales surged 33.7% in Spain, 26.9% in Italy, 16.7% in France and 7.9% in Germany.
Battery electric car share of the market increased to 11.8% from 9.1%, hybrid car share rose to 24.8% and petrol cars led by 38.2%.
Europe Indexes & Yields
The DAX index increased 0.5% to 15,951.14, the CAC-40 index fell 0.09% to 7,399.44 and the FTSE 100 index advanced 0.40% to 7,723.39.
The yield on 10-year German Bunds inched up to 2.31%, French bonds traded slightly higher to 2.89%, the UK gilts inched lower to 3.79% and Italian bonds increased to 4.18%.
The euro edged lower to $1.082, the British pound to $1.244 and the Swiss franc to 89.91 cents.
Brent crude increased $1.90 to $76.84 a barrel and the Dutch TTF natural gas increased €0.05 to €31.78 per MWh.
Europe Stock Movers
AstraZeneca increased 0.6% to 12,146.0 pence after the drug maker reported positive results in the discovery of a lung cancer trial.
SAP SE advanced 1.6% to €123.28 after the German software company announced a stock repurchase program of up to €5 billion.
Commerzbank AG declined 6.6% to €9.23 despite the German lender saying net income in the first quarter nearly doubled.
London Stock Exchange Group Plc dropped 3.5% to 8,172.0 pence after a consortium of investors sold stocks in the exchange operator worth about £2.7 billion.
British Land Company PLC decreased 5.2% to 358.30 pence after the company reported a pre-tax loss in the fiscal year 2023 ending in March.
JD Sports Fashion Plc declined 5.8% to 160.45 pence after the specialty retailer said pre-tax income declined the fiscal year 2023.
Siemens AG increased 2.5% to €153.42 after the Germany based industrial engineering company lifted its annual sales outlook on stronger order inflow and higher-than-expected profit in the fiscal second quarter.
Japan's GDP Expanded In the First Quarter
Japan's economy expanded at an annual pace of 1.6% in the first quarter, the Cabinet Office reported Wednesday.
The faster than expected economic growth bodes well for the third largest economy of the world, which has struggled with five quarters of contraction in the last nine quarters.
Rising consumer and business spending were the key drivers of growth in the first quarter, but the international trade provided a headwind as exports of automobiles and semiconductor machinery lagged.
The Nikkei 225 index closed up 0.8% to 30,093.59 and inched closer to a 32-year high reached seven months ago on September 17, 2021.
In other Asian markets, the Sensex index in Mumbai dropped 0.6%, the Hang Seng index in Hong Kong dropped 2.1% and the Shanghai Composite index declined 0.2%.
Movers: Container Store, Doximity, EVgo, Keysights, Target Corp
Scott Peters
17 May, 2023
New York City
Target Corp increased 1.7% to $159.62 after the retailer reported only 0.6% increase in revenue to $25.32 billion. Store traffic increased 0.9% on top of 3.9% in the quarter a year ago.
Net income declined 5.8% to $950 million from $1.0 billion and diluted earnings per share fell to $2.05 from $2.16 a year ago.
EVgo Inc dropped 13.4% to $4.96 after the electric vehicle charging stations network operator reported a $125 million secondary offering with an option to raise additional $18 million.
The company hopes to sell between 94 million and 97 million shares in the secondary offering.
Revenue in the first quarter increased 229% to $25.3 million and net loss shrank to $49 million from $55.2 million and diluted losses pre share fell to 18 cents from 21 cents a year ago.
Keysights Technologies Inc jumped 7.7% to $157.74 after the company reported higher-than-expected fiscal second quarter adjusted earnings and offered a positive outlook for the current quarter.
Doximity Inc declined 5.5% to $32.02 after the company reported mixed quarterly results in the fiscal fourth quarter ending in March.
Revenue in the quartet increased 18% to $111.0 million from $97.0 million and net income dropped to $30.7 million from $36.7 million and diluted earnings per share declined to 14 cents from 20 cents a year ago.
The company forecasted revenue in the fiscal first quarter ending in June between $106.5 million and $107.5 million and for the full-year between $500 million and $506 million.
The company forecasted adjusted EBITDA in the June quarter between $39 million and $40.0 million and for the fiscal year 2024 between $216 million and $222 million.
The Container Store Group Inc fell 5.9% to $2.55 after the specialty retailer reported a decline in revenue.
Revenue in the first quarter declined to $259.7 million from $356.7 million and the company swung to a net loss of $189.3 million from a profit of $23.2 million and diluted earnings per share was ($3.85) compared to 46 cents a year ago.
The retailer forecasted revenue in the fiscal first quarter ending in June between $200 million and $210 million and comparable sales to fall between 19% and 23%.
The company also estimated net loss between 16 cents and 10 cents per share.
For the fiscal year 2024, the retailer forecasted revenue between $885 million and $900 million and net income between 7 cents and 17 cents per share and comparable sales to decline in "mid to high teens."
Optimism Returned to Debt ceiling Talks, Housing Activities Fall
Barry Adams
17 May, 2023
New York City
Stocks traded higher after both sides signaled easier path to an agreement and vowed to avoid catastrophic debt default.
Benchmark indexes inched higher after President Joe Biden and House Speaker Kevin McCarthy offered optimism after a meeting on Tuesday.
The White House said President Biden canceled the second leg of an international trip after completing the meeting with G7 leaders in Japan.
President Biden was scheduled to visit Papua New Guinea and Australia and meet leaders of Australia, Japan and India.
President Biden and congressional leaders are hoping to have an agreement by this weekend and lift the current debt ceiling of $31.4 trillion.
Investors are hoping that a clarity on debt ceiling may calm market sentiment and keep focus on economic growth and rate path.
The latest data on the housing market showed higher prices and rising interest rates are denting housing starts and building permits.
Higher Rates and Prices Weigh On Housing Market
Housing starts advanced 2.2%, building permits declined 1.5% and completions dropped 10.4% in April, the U.S. Census Bureau reported Wednesday.
Seasonally adjusted building permits increased to an annual rate of 1.416 million, housing starts to 1.401 million and completions to 1.375 million.
Building permits declined 21.1%, starts fell 22.3% and completions rose 1% from a year ago.
Higher home price and elevated mortgage rates continue to weigh on the housing market.
Single-family housing permits increased 3.1% to 855,000 units, housing starts rose 1.6% to 846,000 and housing completions fell 6.5% to 971,000.
Mortgage Applications Declined 5.7%
Applications for new mortgages declined 5.7% in the week ending on May 12, reversing an increase of 6.3% in the previous week, reported Mortgage Bankers Association Wednesday.
Seasonally adjusted composite index declined from the previous week and unadjusted index decreased 6.0%.
The Refinance Index decreased 8% from the previous week and was 43% lower than the same week one year ago.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less increased to 6.57% from 6.48%, with points including origination fee held at 0.61% for 80% loan-to-value ratio loans.
U.S. Indexes & Yields
The S&P 500 index increased 0.25% to 4,125.06 and the Nasdaq Composite rose 0.07% to 12,355.94.
The yield on 2-year Treasury notes increased to 4.11%, 10-year Treasury notes edged up to 3.54% and 30-year Treasury bonds held at 3.86%.
Crude oil rose $0.80 to $71.65 a barrel and natural gas prices fell 3 cents to $2.33 a thermal unit.
U.S. Stock Movers
Target Corp increased 1.7% to $159.62 after the retailer reported only 0.6% increase in revenue to $25.32 billion. Store traffic increased 0.9% on top of 3.9% in the quarter a year ago.
Net income declined 5.8% to $950 million from $1.0 billion and diluted earnings per share fell to $2.05 from $2.16 a year ago.
EVgo Inc dropped 13.4% to $4.96 after the electric vehicle charging stations network operator reported a $125 million secondary offering.
Keysights Technologies Inc jumped 7.7% to $157.74 after the company reported higher-than-expected fiscal second quarter adjusted earnings and offered a positive outlook for the current quarter.
Europe Movers: AstraZeneca, British Land, Commerzbank, Euronext, JD Sports, London Stock Exchange, SAP AG, Siemens, UBS
Bridgette Randall
17 May, 2023
Frankfurt
AstraZeneca increased 0.6% to 12,146.0 pence after the drug maker reported positive results in the discovery of a lung cancer trial.
SAP SE advanced 1.6% to €123.28 after the German software company announced a stock repurchase program of up to €5 billion.
The company estimated cloud revenue in 2025 of more than €21.5 billion and total revenue of more than €37.5 billion and free cash flow of €7.5 billion.
The company announced mid-term financial estimates at its SAP Sapphire conference for analysts in Orlando, Florida.
Commerzbank AG declined 6.6% to €9.23 despite the German lender saying net income in the first quarter nearly doubled.
London Stock Exchange Group Plc dropped 3.5% to 8,172.0 pence after a consortium of investors sold stocks in the exchange operator worth about £2.7 billion.
British Land Company PLC decreased 5.2% to 358.30 pence after the company reported a pre-tax loss in the fiscal year 2023 ending in March.
Net rental income increased to £446 million from £425 million and the real estate company swung to a net loss of £1.03 billion from £965 million and basic earnings per share was (112.0) pence compared to 103.8 pence a year ago.
JD Sports Fashion Plc declined 5.8% to 160.45 pence after the specialty retailer said pre-tax income declined the fiscal year 2023 ending in January.
Revenue increased to 10.1 billion from 8.5 billion and profit after-tax decreased to 440.9 million from 654.7 million and basic earnings per share dropped to 2.76 pence from 7.17 pence a year ago.
Siemens AG increased 2.5% to €153.42 after the Germany based industrial engineering company lifted its annual sales outlook on stronger order inflow and higher-than-expected profit in the fiscal second quarter.
Revenue in the second quarter increased 14% from a year ago to €19.4 billion and new orders rose 13% to €23.6 billion, driven by substantially higher volume from large orders in Mobility which included a €2.9 billion order for locomotives and associated maintenance in India.
The book-to-bill ratio was 1.22.
Net income soared to €3.6 billion from €1.2 billion a year ago and earnings per share rose to €4.39 from €1.29 a year ago.
Net income in the quarter was helped by one-time gain of €1.6 billion from reversal of an impairment of Siemens’ stake in Siemens Energy AG.
Euronext SE declined 3.2% to €67.20 after the financial exchange operator reported 11.7% decline in foreign exchange revenue in the first quarter.
UBS Group AG increased 1.7% to CHF17.22 after the Swiss bank said it expects to take a loss of $17.1 billion linked to the takeover of Credit Suisse AG.
Eurozone Core Inflation Stayed Near Record High, EU Car Registration Growth Slowed
Bridgette Randall
17 May, 2023
Frankfurt
European markets hugged the flatline after consumer inflation accelerated in April and automobile sales in April slowed from the previous month.
Stocks were in a holding pattern after inflation accelerated in April despite the cooling of energy prices in the European Union as inflation but service prices rose at a faster pace.
Automobile stocks advanced after unit sales rose in April and electric vehicles increased market share.
Investors remained cautious and awaited the outcome of the debt ceiling talks in the U.S. as president Joe Biden and congressional leaders struggled to find a common ground.
Despite the debt ceiling talks uncertainties, global markets are hoping that the U.S. lawmakers will lift the debt ceiling higher and avoid the U.S. government default.
The U.S. Treasury is estimated to run out of funds in about three weeks, yet three leading rating agencies S&P Global, Moody's and Fitch have been silent.
Core Inflation Stays Near Record High
Consumer price inflation in the Euro Are increased to 7.0% in April, Eurostat reported Wednesday.
Inflation accelerated from a 13-month low of 6.9% in March after energy prices rebounded to 2.4% increase in April from 0.9% decline in March and cost of services accelerated to 5.2% from 5.1%.
Core inflation, which excludes food, energy, alcohol and tobacco, slowed to 5.6% in April from the record high 5.7% in March.
Hungary led the region with consumer price inflation of 24.5%, followed by 15% in Latvia, 14.3% in Czechia, and 14.% in Slovakia.
Annual inflation in Italy was 8.7%, Germany 7.6%, France 6.9% and Spain 3.8%.
EU Car Registration Growth In April Slowed from March
Car registration in the European Union soared 17.2% to 803,188 in April, the European Automobile Manufacturers Association reported Wednesday.
Passenger car sales increased for the ninth month in a row and sales in the first four months to April rose 17.8% from a year ago to 3.5 million, still down 22.8% from the same period in 2019.
Among the four largest markets in the European Union, unit sales surged 33.7% in Spain, 26.9% in Italy, 16.7% in France and 7.9% in Germany.
Battery electric car share of the market increased to 11.8% from 9.1%, hybrid car share rose to 24.8% and petrol cars led by 38.2%.
Europe Indexes & Yields
The DAX index increased 0.3% to 15,943.40, the CAC-40 index fell 0.2% to 7,395.27 and the FTSE 100 index advanced 0.05% to 7,747.49.
The yield on 10-year German Bunds inched up to 2.31%, French bonds traded slightly higher to 2.89%, the UK gilts inched lower to 3.79% and Italian bonds increased to 4.18%.
The euro edged lower to $1.082, the British pound to $1.244 and the Swiss franc to 89.91 cents.
Brent crude increased 20 cents to $75.12 a barrel and the Dutch TTF natural gas increased €0.73 to €32.55 per MWh.
Europe Stock Movers
AstraZeneca increased 0.6% to 12,146.0 pence after the drug maker reported positive results in the discovery of a lung cancer trial.
SAP SE advanced 1.6% to €123.28 after the German software company announced a stock repurchase program of up to €5 billion.
Commerzbank AG declined 6.6% to €9.23 despite the German lender saying net income in the first quarter nearly doubled.
London Stock Exchange Group Plc dropped 3.5% to 8,172.0 pence after a consortium of investors sold stocks in the exchange operator worth about £2.7 billion.
British Land Company PLC decreased 5.2% to 358.30 pence after the company reported a pre-tax loss in the fiscal year 2023 ending in March.
JD Sports Fashion Plc declined 5.8% to 160.45 pence after the specialty retailer said pre-tax income declined the fiscal year 2023.
Siemens AG increased 2.5% to €153.42 after the Germany based industrial engineering company lifted its annual sales outlook on stronger order inflow and higher-than-expected profit in the fiscal second quarter.