Market Update
Stocks Brave Higher as Markets Anticipate Larger Rate Hikes
Barry Adams
07 Sep, 2022
New York City
Stocks on Wall Street advanced in morning trading as investors await the next round of rate hikes across the globe.
The European Central Bank is set to lift its key lending rate by as much as 75 basis points and the U.S. Federal Reserve is expected to match the hike at its next two-day policy meeting ending on Sep 21.
Two days ago, the Reserve Bank of Australia hiked its key lending rate by 50 basis points to 2.35% as expected.
The latest hike follows three increases of similar size in the previous three months and 25 basis points increase in May, lifting the rates to the levels last seen in January 2015.
The Bank of Canada lifted its overnight lending rate by 75 basis points to 3.25% meeting the market expectations.
The latest rate hike is the fifth consecutive increase in a row, lifting the lending rates to a high not seen since 2008.
Crude oil prices declined in New York and in international markets on the falling demand worries and rising dollar.
The oil price fell to the lowest level since Russia's invasion of Ukraine on February 24.
Futures of West Texas Intermediate crude oil declined 3% to $84.21 a barrel and natural gas eased 20 cents to $7.92 a thermal unit.
The yields on 2-year notes fell to 3.47%, 10-year Treasury notes eased to 3.28% and 30-year bond fell to 3.44%.
Elevated U.S. Trade Deficit Eases In July
U.S. trade deficit declined $10.2 billion to $70.7 billion in July, the Bureau of Economic Analysis reported Wednesday.
Total exports rose 0.2% to record $259.3 billion driven by higher service exports offsetting a decline in merchandise shipments.
Total imports fell 2.9% to $329.9 billion after a decline in imports of industrial supplies and consumer goods offset an increase in shipments of automotive vehicles and parts.
The deficit with China fell to $33 billion, a decline of $3.9 billion after exports rose to $12.8 billion and imports eased to $45.8 billion.
European Markets Trade Higher Ahead of Rate Decision
European markets advanced and energy prices in the region fell for the third day in a row.
Investors are bracing another round of rate hike as central banks in the U.S., Europe and Asia target inflation in a coordinated fashion.
The National Bank of Poland lifted its key lending rate by 25 basis points to 6.75%, marching the market expectations.
The DAX index increased 0.6% to 12,942.11, the CAC-40 index rose 0.2% to 6,115.93, and the FTSE 100 index fell 0.9% to 7,237.83.
Brent crude oil prices fell 4% to $89.06 a barrel and TTF gas prices plunged 11.4% to 212.41 euros a megawatt a hour.
The U.S. dollar continued to rise and the euro dropped to $0.994 and the British pound eased to $1.147, the lowest in 37 years as investors anticipate inflation to accelerate and economic conditions to weaken.
Rising current account deficit and dropping investor confidence has hammered the pound 15% against the U.S. dollar this year.
The British pound is set to test its record low of $1.02 reached in February 1985.
Yields Rise, Stocks Fall After Service Report, Stronger Dollar Another Hurdle for Global Markets
Barry Adams
06 Sep, 2022
New York City
Stocks on Wall Street lacked direction as investors debated the health of the U.S. economy and the future rate hikes.
The service sector expanded at a faster pace in August following the jobs report that met investors expectations on Friday.
The back-to-back two reports highlighted the strength in the economy and also raised the prospects of a larger rate hike at the next meeting of the policymakers.
The PMI service index of services increased to 56.9 in August from 56.7 in July, the ISM reported Tuesday. The service index accelerated for the third month in a row after hitting the low 55.3 this year.
Crude oil prices eased on the expected decline in demand after China imposed tighter restrictions in several cities impacting as many as 30 million people.
Yesterday, OPEC+ announced 100,000 barrels a day supply cut as demand softens in China and rising supply from Iran and Venezuela.
The S&P 500 index decreased 0.4% to 3,908.13 and the Nasdaq Composite index declined 0.7% to 11,544,93.
Futures of crude oil declined 11 cents to $86.83 a barrel and natural gas edged down 74 cents to $8.02 a thermal unit.
The yield on 10-year Treasury notes rose 6 points to 3.34%, 30-year bonds increased to 3.492%, and 2-year notes advanced to 3.50%.
European Markets Rebound, Germany's Factory Orders Fall
European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures.
The DAX index gained 0.3% to 12,794.51, the CAC-40 index fell 0.5% to 6,064.11, and the FTSE 100 index fell 0.2% to 7,275.83.
Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.
Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday.
The June orders were revised to an increase of 0.3%.
The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14.
The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy.
With low approval among her party members and even lower vote of confidence from voters, Truss faces challenges on multiple fronts and most political analysts anticipate the country to head to general polls in late 2023 or early 2024.
The pound is expected to continue its slide and sink to a parity with the U.S. dollar.
Brent crude oil fell 3.3% to $92.59 a barrel and TTF natural gas prices fell 2.5% to 239.47 euros a megawatt hour.
BP Plc, Shell, BT, National Grid and Pershing Square Holdings fell between 1% and 2%.
Ashtead Group declined 2.4% to 4,207.o pence despite the industrial equipment rental company posting higher fiscal first quarter revenues and earnings.
Revenues in the fiscal first quarter 2022 ending in July rose 25% to $2.26 billion and pre-tax net income soared 28% to $527 million.
Berkeley Group Holdings Plc gained 3.3% to 3,573.0 pence after the company issued a positive outlook for the current financial year.
In Frankfurt trading, Volkswagen AG rose 6.2% to 194.83 euros after the company said it plans to spin off its sportscar division Porsche AG in a public offering in the next 30 to 60 days.
Asian Markets Struggle to Adjust to Dollar Strength
Asian markets gave up early losses and closed down after the energy crisis in Europe deepened and ahead of the rate decision in the currency union on Thursday.
The Nikkei 225 Index closed marginally higher at 27,626.51 and the yen fell 1.8% to a 24-year low of 142.82 against the U.S. dollar.
The Sensex index in India closed marginally lower after a volatile session.
The Sensex closed down 48.99 points to 59,196.99 and the Nifty index eased 10.20 points to 17,655.60.
The rupee edged down to 79.81 against the U.S. dollar.
The benchmark ASX 200 Index fell 0.4% to 6,826.50, while the broader All Ordinaries Index closed 0.3% lower at 7,055.90 after the Reserve Bank of Australia hiked key lending rate by 50 basis points to 2.35% as expected.
The latest hike follows three increases of similar size in the previous three months and 25 basis points increase in May, lifting the rates to the levels last seen in January 2015.
The Shanghai Composite Index gained 1.4% to 3,243.45 after China's central bank officials and ministers promised additional stimulus measures to follow the package released five months ago.
China Takes Steps to Support Yuan and Economic Growth
China announced a slew of stimulus measures to revive the flagging economic growth and arrest the falling yuan.
At a press conference on Monday, officials from ministries, People's Bank of China and National Development and Reform Commission highlighted details of the plan in the third quarter.
The one trillion yuan or $145 billion plan will focus on more infrastructure spending.
The People's Bank of China, after the press conference, lowered the foreign currency reserve ratio by 2 percentage points.
China's yuan closed down to a new two-year low of 6.955 against the U.S. dollar and the currency has fallen for the sixth month in a row.
Movers: Ashtead, Berkeley Group, Centrica, Safran, Siemens Energy
Bridgette Randall
06 Sep, 2022
Frankfurt
European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures.
The DAX index gained 0.8% to 12,871.41, the CAC-40 index fell 0.2% to 6,104.61, and the FTSE 100 index rose 0.2% to 7,300.43.
Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.
Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday.
The June orders were revised to an increase of 0.3%.
The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14.
The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy.
The pound is expected to continue its slide and sink to a parity with the U.S. dollar.
In London stock trading, Taylor Wimpey, Persimmon, Berkley Group, JD Sports Fashion and Hargreaves Lansdown gained between 3% and 5%.
Resource stocks led the decliners after copper, crude oil and natural gas prices eased after rallying for two days in a row.
Brent crude oil fell 3.3% to $92.59 a barrel and TTF natural gas prices fell 2.5% to 239.47 euros a megawatt hour.
BP Plc, Shell, BT, National Grid and Pershing Square Holdings fell between 1% and 2%.
Ashtead Group declined 2.4% to 4,207.o pence despite the industrial equipment rental company posting higher fiscal first quarter revenues and earnings.
Revenues in the fiscal first quarter 2022 ending in July rose 25% to $2.26 billion and pre-tax net income soared 28% to $527 million.
Berkeley Group Holdings Plc gained 3.3% to 3,573.0 pence after the company issued a positive outlook for the current financial year.
"Berkeley is on track to meet its profit guidance and deliver a pre-tax profit for the current financial year ending 30 April 2023 of
European Markets Rebounded from Losses, German Factory Orders Fell
Bridgette Randall
06 Sep, 2022
Frankfurt
European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures.
The DAX index gained 0.8% to 12,871.41, the CAC-40 index fell 0.2% to 6,104.61, and the FTSE 100 index rose 0.2% to 7,300.43.
Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.
Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday.
The June orders were revised to an increase of 0.3%.
The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14.
The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy.
With low approval among her party members and even lower vote of confidence from voters, Truss faces challenges on multiple fronts and most political analysts anticipate the country to head to general polls in late 2023 or early 2024.
The pound is expected to continue its slide and sink to a parity with the U.S. dollar.
India's GDP Rebounds 13.5% In Fiscal Q1 2023
Brian Turner
31 Aug, 2022
New York City
India's economy rebounded at 13.5% in the second quarter ending in June from a year ago, slower than the 16.2% estimate set by the Reserve Bank of India.
Household consumption accelerated to 25.9% from 14.4% but construction spending growth dropped to 16.8% from 71.3% a year ago, according to the data released by the National Statistics Office.
Agriculture sector expanded at 4.5% after rising 4.1% in the previous quarter and 2.2% a year ago.
Manufacturing rebounded to 4.8% from the decline of 0.2% and dropped from 49.0% a year ago.
Construction sector recovered to 16.8% from 2.0% in the previous quarter and plunged from 71.3% in the last year.
Services sector, the bulk of the economic activities, increased 17.6% from 5.5% in the previous quarter and 10.5% a year ago.
The relaxing of Covid-19 restrictions powered the economic rebound and lifted the growth at the fastest pace in a year.
But the growth fell short of the estimate set by the Reserve Bank, largely on the account of weaker-than-expected exports and higher-than-expected imports.
International trade activities have been a significant drag on economic growth as the elevated crude oil prices continue to accelerate the trade deficit.
Moreover, the central bank has also lifted the key lending rate by 140 basis points since May, dragging the demand cycle lower.
The RBI has estimated economic growth in the remaining three quarters of 6.2%, 4.1% and 4.0% respectively and the fiscal 2023 economic growth rate of 7.2%.
China Provides Stimulus Measures to Stabilize Yuan and Economic Growth
Arjun Pandit
06 Sep, 2022
Mumbai
China announced a slew of stimulus measures to revive the flagging economic growth and arrest the falling yuan.
At a press conference on Monday, officials from ministries, People's Bank of China and National Development and Reform Commission highlighted details of the plan in the third quarter.
The one trillion yuan or $145 billion plan will focus on more infrastructure spending but will not provide mortgage relief to buyers of real estate projects that have been on hold for more than two years.
The People's Bank of China, after the press conference, lowered the foreign currency reserve ratio by 2 percentage points.
China's yuan closed down to a new two-year low of 6.955 against the U.S. dollar and the currency has fallen for the sixth month in a row.
Several regional and local banks are struggling with cash crunch as widespread mortgage boycotts in smaller cities are hampering banking activities.
CVS to Acquire Home Healthcare Provider Signify for $8 Billion
Scott Peters
06 Sep, 2022
New York City
Signify Health increased 1% to $29.06 after the company agreed to be acquired by CVS for $30.50 a share or $8 billion.
The home healthcare company will operate as a separate company under CVS.
Signify provided home visits or virtual medical services to 2.5 million patients in 2021.
Signify priced its public offering of 23.5 million shares at $24 each on Feb 10, 2021.
New Mountain Capital, which holds a 60% stake in the company has agreed to support the deal.
Home healthcare space has attracted attention from large players after Amazon announced its plan in July to acquire One Medical for $3.9 billion.
Walgreen in partnership with Village MD is building primary care doctor's offices next to its drug stores across the nation.
Signify shares soared 45% in the last three weeks of trading after a news report on August 2 from The Wall Street Journal that the company may be looking for a buyer.
The stock surged further on August 19 on news reports that Amazon.com was among the bidders.
Movers: 1800Flowers, Apple, Bed Bath & Beyond, Datadog, Illumina, Lululemon, Okta, Signify
Barry Adams
06 Sep, 2022
New York City
Stocks on Wall Street extended losses to the fourth session in a row, bond yields rose and crude oil prices dropped.
Crude oil prices eased on the expected decline in demand after China imposed tighter restrictions in several cities impacting as many as 30 million people.
Yesterday, OPEC+ announced 100,000 barrels a day supply cut as demand softens in China and rising supply from Iran and Venezuela.
The S&P 500 index decreased 0.3% to 3,895.76 and the Nasdaq Composite index declined 1.1% to 11,512,37.
Futures of crude oil declined $1.40 to $87.32 a barrel and natural gas edged down 31 cents to $8.44 a thermal unit.
The yield on 10-year Treasury notes rose 6 points to 3.26%, 30-year bonds increased 5 basis points to 3.406%, and 2-year notes advanced 4 basis points to 3.46%.
1-800-flowers.com Inc declined dropped 7% to $6.92 after the online florist and gift store reported quarterly loss and cited ongoing macroeconomic challenges for the rest of the year at the time of the release of earnings last week.
Apple Inc declined 1.5% to $155.21 ahead of its product launch event scheduled Wednesday.
Apple is expected to release its new iPhone 14 and other hardware products at its in-person event for the first time since 2019.
Bed Bath & Beyond plunged 16.9% to $7.17 after the struggling home goods retailer said CFO Gustavo Arnal committed suicide on Friday.
The retailer appointed chief accounting officer Laura Crossen as interim chief finance officer.
Datadog declined 3.2% to $93.73 and extended this year's losses to 43% in active trading.
The monitoring and security application for cloud computing provider reported a month ago its second quarter revenues increased 74% to $406.1 million.
Net loss in the second quarter ending in June declined to $4.9 million or 2 cents a share from $9.3 million or 3 cents a share a year ago.
Illumina, Inc advanced 2.9% to $201.67 after the company said it plans to appeal the European Commission's decision in rejecting the purchase of Grail.
Last week, the U.S. Federal Trade Commission approved the acquisition of GRAIL, the early cancer detection company, which was announced on August 18, 2021.
Lululemon Athletica gained 3.7% to $325.66 and the fitness apparel retailer extended one-week gain to 6% after reporting better-than-expected earnings last week.
Okta Inc declined 4.3% to $61.84 and the cyber security company extended 5-day losses to 32% after several brokers downgraded the company citing ongoing difficulties integrating the recently acquired Auth0.
The company reported revenues for the fiscal year second quarter ending in July jumped 43% to $452 million and net loss declined to $210 million from $277 million a year ago.
Signify Health increased 1% to $29.06 after the company agreed to be acquired by CVS for $30.50 a share or $8 billion.
The home healthcare company will operate as a separate company under CVS.
Signify provided home visits or virtual medical services to 2.5 million patients in 2021.
Signify priced its public offering of 23.5 million shares at $24 each on Feb 10, 2021.
New Mountain Capital, which holds a 60% stake in the company has agreed to support the deal.
Stocks Wavers, Bond Yields Rise, Crude Eases
Barry Adams
06 Sep, 2022
New York City
Stocks on Wall Street opened higher and kicked off a 4-day week after falling for three days in a row.
Crude oil prices eased on the expected decline in demand after China imposed tighter restrictions in several cities impacting as many as 30 million people.
Yesterday, OPEC+ announced 100,000 barrels a day supply cut as demand softens in China and rising supply from Iran and Venezuela.
The S&P 500 index decreased 0.2% to 3,917.16 and the Nasdaq Composite index declined 0.4% to 11,588,43.
Futures of crude oil declined $1.40 to $87.32 a barrel and natural gas edged down 31 cents to $8.44 a thermal unit.
The yield on 10-year Treasury notes rose 6 points to 3.26%, 30-year bonds increased 5 basis points to 3.406%, and 2-year notes advanced 4 basis points to 3.46%.
European Markets Advance, Germany's Factory Orders Fall
European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures.
The DAX index gained 0.3% to 12,794.51, the CAC-40 index fell 0.5% to 6,064.11, and the FTSE 100 index fell 0.2% to 7,275.83.
Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.
Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday.
The June orders were revised to an increase of 0.3%.
The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14.
The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy.
With low approval among her party members and even lower vote of confidence from voters, Truss faces challenges on multiple fronts and most political analysts anticipate the country to head to general polls in late 2023 or early 2024.
The pound is expected to continue its slide and sink to a parity with the U.S. dollar.
China Takes Steps to Support Yuan and Economic Growth
China announced a slew of stimulus measures to revive the flagging economic growth and arrest the falling yuan.
At a press conference on Monday, officials from ministries, People's Bank of China and National Development and Reform Commission highlighted details of the plan in the third quarter.
The one trillion yuan or $145 billion plan will focus on more infrastructure spending.
The People's Bank of China, after the press conference, lowered the foreign currency reserve ratio by 2 percentage points.
China's yuan closed down to a new two-year low of 6.955 against the U.S. dollar and the currency has fallen for the sixth month in a row.
Europe Movers: Assa Abloy, Aston Martin, Countryside Partnership, Volkswagen, Zurich Insurance
Bridgette Randall
05 Sep, 2022
Frankfurt
Benchmark indexes in Europe fell sharply on the first day of a week on the rising fears of natural gas rationing and the growing possibilities of a recession.
Crude oil prices rose 3% after Russia halted natural gas shipments through Nord Stream 1 following the G7 finance ministers pledge to implement a price cap on Russia's energy exports.
Brent crude oil rose $2.49 to $95.11 a barrel and natural gas prices soared as much as 20% but closed up 12.7% to 241.75 euros a megawatt hour.
Moreover, market sentiment was dented after the eurozone retail sales rose less-than-expected and the private sector contracted for the second month in a row and Switzerland's second quarter economic growth slowed more than estimated.
Retail sales in the currency union increased 0.3% in July after falling 1.0% in June, the region's statistics agency Eurostat reported Monday.
Sales declined 0.9% from a year ago, slower than 3.2% decline in June.
The S&P Global said activities in the eurozone declined after the private service sector contracted, joining the manufacturing sector in August.
The final composite output index dropped to an 18-month low of 48.9 in August from 49.9 in July.
The preliminary estimate or flash reading was 49.2.
The DAX index declined 2.2% to 12,760.28, the CAC-40 index dropped 1.2% to 6,093.22, but the FTSE 100 index rose 0.1% to 7,287.43.
The euro weakened after energy prices surged and traded at a new low of $0.99.
The British pound also edged lower to $1.15, weakest since March 2020, after rising energy prices worsened the outlook for the embattled currency.
Zurich Insurance Group declined 1% to 430 Swiss francs after the company said it plans to exercise its option to redeem 450 million pounds of its subordinated debt.
Assa Abloy AB decreased 1.5% to 214.40 Swedish kroner and the company said it agreed to acquire Brazil-based Control iD.
Headquartered in Sao Paulo, Brazil, Control iD employs about 300 people and generated sales of 130 million Brazilian real or 250 million Swedish kroner in 2021.
Countryside Partnership PLC increased 5.2% to 240.12 pence after the company agreed to be acquired by Vistry Group PLC
Based upon Vistry's Friday's closing price of 741 pence the merger represents a total implied value of 249 pence of Countryside Share, valuing the entire issued and to be issued ordinary share capital of Countryside at approximately
European Stocks Drop On Rising Recession Risks, Natural Gas Soars
Bridgette Randall
05 Sep, 2022
Frankfurt
Benchmark indexes in Europe fell sharply on the first day of a week on the rising fears of natural gas rationing and the growing possibilities of a recession.
Crude oil prices rose 3% after Russia halted natural gas shipments through Nord Stream 1 following the G7 finance ministers pledge to implement a price cap on Russia's energy exports.
Brent crude oil rose $2.49 to $95.11 a barrel and natural gas prices soared as much as 20% but closed up 12.7% to 241.75 euros a megawatt hour.
Moreover, market sentiment was dented after the eurozone retail sales rose less-than-expected and the private sector contracted for the second month in a row and Switzerland's second quarter economic growth slowed more than estimated.
Retail sales in the currency union increased 0.3% in July after falling 1.0% in June, the region's statistics agency Eurostat reported Monday.
Sales declined 0.9% from a year ago, slower than 3.2% decline in June.
The S&P Global said activities in the eurozone declined after the private service sector contracted, joining the manufacturing sector in August.
The final composite output index dropped to an 18-month low of 48.9 in August from 49.9 in July.
The preliminary estimate or flash reading was 49.2.
The DAX index declined 2.2% to 12,760.28, the CAC-40 index dropped 1.2% to 6,093.22, but the FTSE 100 index rose 0.1% to 7,287.43.
The euro weakened after energy prices surged and traded at a new low of $0.99.
The British pound also edged lower to $1.15, weakest since March 2020, after rising energy prices worsened the outlook for the embattled currency.
Rising energy prices are expected to lift the U.K.'s inflation above 15% in 2023 and currency traders are fearing the pound to test its parity with the U.S. dollar.
The latest government agency data showed that consumer price inflation picked up in the U.K. to 10.1% in July.
Members of the Conservative Party elected Liz Truss as their next leader according to the voting results released by the party Monday.
Truss, the next prime minister of the U.K. replacing Boris Johnson, faces 4-decade high inflation, faltering economy and the pound and growing voters' discontent with the political leaders.
S&P 500 Down Third Week In a Row, Nasdaq Falls 6th Day Straight
Barry Adams
02 Sep, 2022
New York City
On Wall Street investors welcomed the latest jobs report but caution prevailed in the afternoon trading.
The morning surge slowly dissipated and benchmark indexes closed down, extending losses for the third week in a row as investors debated the health of the labor market.
For the week, the S&P 500 index declined 3.3% and the Nasdaq Composite fell 4.2%.
Non-farm payrolls increased 315,000 in August following the 526,000 additions in July, the Bureau of Labor Statistics said Friday.
In a broad-based hiring employers added positions across many industries.
Professional and business services including computer and system design led the job gains in the month with 86,000, followed by healthcare services with 48,000, retail trade with 44,000 , leisure and hospitality with 31,000 and manufacturing with 22,000.
Leisure and hospitality sector additions slowed down considerably after adding an average of 90,000 for the last seven months.
The unemployment rate increased to 3.7% and average hourly wages increased 0.3% from the previous month and 5.2% annually.
Historically August jobs data are volatile and in the past the statistics agency has revised the data substantially.
The BLS lowered the job additions in June to 293,000 from the previous estimate of 398,000 and July additions to 526,000 from 528,000.
Employers, corporations and governments at all levels, added 315,000 net new jobs in August, slower than the revised 526,000 increase in July.
The job growth was slowed but still solid and the gains were across many sectors in the economy, bolstering the case that the next U.S. rate hike may be moderate 50 basis points and not large 75 basis points as many had anticipated.
With more people returning to the job market, the labor participation rate increased to 62.4% from 62.1% in July.
The S&P 500 index decreased 1.1% to 3,924.26 and the Nasdaq Composite index fell 1.3% to 11,640.86.
The S&P 500 index dropped to a nearly 4-week low and the Nasdaq declined for the sixth session in a row.
Oil prices rose in the U.S. and European trading ahead of the OPEC+ meeting on Monday.
Prices rose on the expectations that the cartel will announce production cuts at the gathering of finance ministers.
Futures of crude oil increased 48 cents to $87.09 a barrel and natural gas fell 37 cents to $8.89 a thermal unit.
The yield on 10-year Treasury notes declined to 3.19% and on 2-year notes eased to 3.39%.
European Markets Jump On Smaller Rate Hike Hopes
European markets traded higher after the release of the U.S. payrolls report.
In choppy trading on Friday, benchmark indexes in the region accelerated gains after the U.S. reported a slowdown in payrolls additions.
The softer but solid jobs data lifted market indexes in New York and powered the rally in Europe.
The DAX index increased 3.3% to 13,050.27, the CAC-40 index advanced 2.2% to 6,167.51, and the FTSE 100 index added 1.9% to 7,281.19.
The euro held its parity with the U.S. dollar and the U.K. pound declined to $1.1506 ahead of the results of the Conservative party's leadership election on Monday.
Producer prices, a measure of wholesale prices, in the euro zone rose 4% in July from the previous month, the eurostat report showed on Friday.
The 4-month high increase was driven by the 9% surge in energy prices compared to 3% increase in June.
On Thursday, Swiss Federal Statistics Office reported consumer price inflation index increased 3.5% from a year ago in August.
The prices rose at a faster pace from 3.4% in July and accelerated to a 29-year high.
On a monthly basis, prices rose 0.3% in August after staying flat in July.
In stock trading, energy stocks led the gainers followed advances in technology stocks and banks.
Deutsche Lufthansa gained 3.3% to 5.96 euros despite a one-day strike by pilots on Friday.
GEA Group increased 1.9% to 32.95 euros and the food and beverage company said it is planning to invest 70 million euros in Germany to build a pharmaceutical technology center.
Air Liquide increased 1.1% to 123.92 euros after the company confirmed its plan to exit from Russia.
Ashmore Group fell as much as 4% but closed up 8.8% to 210.80 pence after the U.K.-based asset manager reported a decline in fiscal 2022 earnings.
Caution Prevails In Asia
Asian markets marginally lower ahead of the U.S. jobs report as more cities tighten restrictions to prevent coronavirus outbreak from spreading.
Shanghai index increased fractionally and indexes in Japan and India declined marginally after volatile trading.
U.S. Jobs Report Powers European Markets Rally
Bridgette Randall
02 Sep, 2022
Frankfurt
European markets traded higher after the release of the U.S. payrolls report.
In choppy trading on Friday, benchmark indexes in the region accelerated gains after the U.S. reported a slowdown in payrolls additions.
Employers, corporations and governments at all levels, added 315,000 net new jobs in August, slower than the revised 526,000 increase in July.
The job growth was slowed but still solid and the gains were across many sectors in the economy, bolstering the case that the next U.S. rate hike may be moderate 50 basis points and not large 75 basis points as many had anticipated.
Average hourly wages rose 0.3% on a monthly basis and jobless rate jumped to 3.7% after more people returned to the job market, lifting the labor participation rate to 62.4% from 62.1% in July.
The softer but solid jobs data lifted market indexes in New York and powered the rally in Europe.
The DAX index increased 2.5% to 12,955.28, the CAC-40 index advanced 1.7% to 6,135.97, and the FTSE 100 index added 1.7% to 7,271.26.
Producer prices, a measure of wholesale prices, in the euro zone rose 4% in July from the previous month, the eurostat report showed on Friday.
The 4-month high increase was driven by the 9% surge in energy prices compared to 3% increase in June.
On Thursday, Swiss Federal Statistics Office reported consumer price inflation index increased 3.5% from a year ago in August.
The prices rose at a faster pace from 3.4% in July and accelerated to a 29-year high.
On a monthly basis, prices rose 0.3% in August after staying flat in July.
In stock trading, energy stocks led the gainers followed advances in technology stocks and banks.
Deutsche Lufthansa gained 3.3% to 5.96 euros despite a one-day strike by pilots on Friday.
GEA Group increased 1.9% to 32.95 euros and the food and beverage company said it is planning to invest 70 million euros in Germany to build a pharmaceutical technology center.
Air Liquide increased 1.1% to 123.92 euros after the company confirmed its plan to exit from Russia.
Ashmore Group fell as much as 4% but closed up 8.8% to 210.80 pence after the U.K.-based asset manager reported a decline in fiscal 2022 earnings.
Asian markets marginally lower ahead of the U.S. jobs report as more cities tighten restrictions to prevent coronavirus outbreak from spreading.
Shanghai index increased fractionally and indexes in Japan and India declined marginally after volatile trading.
1-800-Flowes.com Drops to Eight-year Low After Quarterly Results
Scott Peters
02 Sep, 2022
New York City
1-800-Flowers.com Inc declined 4.5% to $7.39 after the company reported weak quarterly results.
The online flower and gift retailer's stock dropped to a eight-year low after the company swung to a loss and highlighted operating and marketing costs struggle.
The online flower and gift retailer said revenues in the fiscal year fourth quarter ending on July 3 declined 0.2% to $485.9 million from $487 million a year ago.
Excluding sales from Vital Choice, acquisition in October 2021, total revenue for the quarter fell 1.5% from a year ago.
Revenues for the quarter increased 87.3% from $259.4 million in the fourth quarter of fiscal 2019, prior to the pandemic.
However, higher product cots and rising shipping costs negatively impacted the gross margins.
Gross profit margin in the quarter plunged 700 points to 33.7% from 40.7% a year ago, reflecting higher costs of labor, shipping, and commodities and write downs of perishable inventory.
During the quarter, the company swung to a loss of $22.3 million or 34 cents a share from net income of $13.3 million or $0.20 a diluted share a year ago.
Segment Review
The company operates three business segments - gourmet food, flowers and gifts, and the floral network BloomNet.
Gourmet Foods and Gift Baskets revenue in the quarter fell 2.4% to $148.4 million from $152.2 million a year ago.
Excluding Vital Choice, which the Company acquired in October 2021, revenue in the quarter was $142.7 million.
Revenue in the quarter was up 104.9% from the fiscal 2019 fourth quarter.
Consumer Floral & Gifts revenue in the quarter increased 0.4% to $299 million from $297.7 million in the prior year's period.
Revenues for the quarter increased 87.2% from the fiscal 2019 fourth quarter.
BloomNet revenue in the quarter increased 3.2% to $38.5 million from $37.3 million in the prior year period.
Revenue for the quarter was up 41.2% from the fiscal 2019 fourth quarter.
Annual Revenues Rise
Total net revenues for the full fiscal year 2022 increased 4% to $2.21 billion from $2.12 billion in the prior year.
This increase reflected growth across all three business segments, and includes the contributions from Vital Choice and Personalization Mall.
On a pro forma basis, total net revenues grew 2.5% compared with the prior year and total net revenues grew 76.8% compared with total net revenues of $1.25 billion in fiscal 2019, prior to the pandemic.
The company acquired Personalization Mail in August 2020 for $252 million from Bed Bath & Beyond and purchased Vital Choice for $20 million in October 2021.
Prior to the acquisition, Personalization Mall revenues in 2019 were approximately $150 million and Vital Choice revenues in 2020 were $28 million.
Guidance and Outlook
Based on the performance of the first two months of the current fiscal quarter. the company guided fiscal first quarter revenues to fall between 3% and 6% citing cautious customer reflecting higher food and energy prices.
The online retailer anticipates on an annual basis costs for labor, shipping, commodities, and digital marketing will remain high through the fiscal first quarter and estimated adjusted operating or EBITDA loss between $28 million and $33 million.
In the fiscal year, the company estimates reduced capital expenditures as well as lower working capital needs from a year ago and generate "substantial positive year-over-year free cash flow."
In the fiscal year 2022 free cash outflow was $61 million compared to positive free cash flow of $118 million in the fiscal 2021.
August Payrolls Additions Slow to 315,000
Brian Turner
02 Sep, 2022
New York City
Non-farm payrolls increased 315,000 in August following the 526,000 additions in July, the Bureau of Labor Statistics said Friday.
In a broad-based hiring employers added positions across many industries.
Professional and business services including computer and system design led the job gains in the month with 86,000, followed by healthcare services with 48,000, retail trade with 44,000 , leisure and hospitality with 31,000 and manufacturing with 22,000.
Leisure and hospitality sector additions slowed down considerably after adding an average of 90,000 for the last seven months.
The unemployment rate increased to 3.7% and average hourly wages increased 0.3% from the previous month and 5.2% annually.
The jobless rate increased after labor force participation rate expanded to 62.4% from 62.1% in July.
Historically August jobs data are volatile and in the past the statistics agency has revised the data substantially.
The BLS lowered the job additions in June to 293,000 from the previous estimate of 398,000 and July additions to 526,000 from 528,000.