Market Update
Indexes Registered Losses in February On Rate-Path and Recession Worries
Barry Adams
28 Feb, 2023
New York City
Market indexes closed down after bond yields advanced and 10-year Treasury notes closed at a 3-month high.
Investors reacted to the latest batch of earnings from retailers, restaurants and tech companies and reviewed the rising bond yields.
Retailer Target Corp struggled to control costs but higher discounts lured customers back in search of bargains as prices of essential goods continue to rise but at a slower pace.
Zoom Video reported a sharp plunge in earnings and sales growth after the pandemic-era boom began to fade but the number of companies paying more than $100,000 a year continued to rise.
Movement in Treasury yields also impacted stock market sentiment after the yields on six-month and one-year Treasury notes traded above 5% and 10-year Treasury touched a 3-month high.
Investors are also looking ahead to earnings from Kohl's and Lowe's before the opening bell on Wednesday.
Indexes and Yields
The S&P 500 index decreased 0.3% to 3,970.51 and the Nasdaq Composite index fell 0.7% to 11,455.54.
In February, the S&P 500 declined 2.6% and the Nasdaq Composite decreased 1.1%.
U.S. Treasury yields increased and extended gains in February as traders come to terms with the prospects of higher rates staying longer and recalibrate expectations.
The yields on 10-year Treasury notes traded at a 3-month high and shorter term debts of six months or one-year duration stayed firmly above 5%.
The yield on 2-year Treasury notes increased to 4.83%, 10-year Treasury notes edged higher to 3.94% and 30-year Treasury bonds hovered near 3.93%.
Energy Prices Extend Annual Losses
Crude oil traded higher and the commodity rose 0.5% in February and dropped 28% over the last twelve months.
Traders are looking for a demand surge from China as refiners accelerate reopening to meet the rising demand for transportation fuel.
Natural gas futures edged higher but the fuel is set to fall more than 2.5% in February and extend loss to 41% over the last twelve months.
Demand for natural gas has been weak amid warm weather conditions and the LNG export terminal in Freeport, Louisiana is not expected to reopen before mid-March.
Crude oil increased 86 cents to $76.56 a barrel and natural gas rose 1 cent to $2.64 a thermal unit.
U.S. Movers
Target Corporation increased 1.1% to $168.46 after the retailer reported a weak sales increase and earnings fell on higher costs and the company issued a cautious outlook.
Target Corporation said revenue in the fourth quarter increased 1.2% to $30.9 billion but net income plunged 43% to $876 million and diluted earnings per share dropped to $1.89 from $3.21 a year ago.
In full-year 2022, revenue increased 2.8% to $107.6 billion and net income plunged 60% to $2.8 billion from $6.9 billion and diluted earnings per share dropped to $5.98 from $14.10 a year ago.
Comparable sales in the quarter increased 0.7% on top of 8.9% and advanced 2.2% on top of 12.7% in 2021. Comparable traffic in 2022 increased 2.1% on top of 12.3% in the previous year.
Zoom Video Communications increased 1.1% to $74.59 after the company reported better-than-expected earnings and sharp decline in sales growth.
Zoom Video Communications said revenue in the fourth quarter increased 4% to $1.1 billion and the company swung to a net loss of $104.4 million from a profit of $490.5 million.
The earnings per share was a loss of 36 cents compared to a profit of $1.60 a year ago.
Revenue in the fiscal year ending in January increased 7.0% to $4.4 billion and net income dropped to $103.7 million from $1.4 billion and diluted earnings per share dropped to 34 cents from $4.50 a year ago.
European Markets Erased Previous Day's Gains
European markets opened lower but managed to cross flat line by midday and turned lower in the afternoon trading.
Market sentiment was negative at the opening after inflation accelerated in France and Spain.
But by midday investors were able to shake off lingering worries of higher rates and indexes stayed firmly in the positive zone for two hours.
In the late afternoon stocks turned lower after bond yields advanced in the Euro Area, denting the market sentiment on the worries of higher interest rates.
Crude oil rebounded on the hopes that Chinese refineries will soon drive the demand higher as social mobility picks up in the second-largest economy after three-years of Covid-linked lockdowns.
However, natural gas fell towards the Є45 price level amid warm weather conditions and elevated supply.
France's Consumer Inflation Accelerated
France's consumer price inflation accelerated to 6.2% in February from 6.0% in January, the statistical office INSEE reported Tuesday.
Sustained increase in food and energy prices drove the bulk of inflation in the month.
Food prices increased 14.5% but energy price inflation slowed to 14.0% from 16.3% in January.
Consumer prices increased 0.9% in February after rising at 0.4% in January.
A separate report from the statistical office showed that household consumption on a monthly basis increased 1.5% in January after falling 1.6% in December.
Household consumption rose after the government withdrew support for household energy bills.
Spain's Inflation Accelerated in January
Spain's consumer price inflation increased to 6.1% in February from 5.9% in January, the statistical office INE said in a preliminary report Tuesday.
The recent bout of inflation was driven by the price increases in electric utility bills and rising cost of food.
Core inflation, excluding unprocessed food and energy, accelerated to 7.7% in February from 7.5% in January.
Overall consumer inflation rose 0.1% in February from the previous month when the prices dropped 0.2%
Indexes Looked Down and Yields Advanced
The DAX index decreased 0.1% to 15,365.14, the CAC-40 index dropped 0.4% to 7,267.93 and the FTSE 100 index fell 0.7% to 7,876.28.
The yield on 10-year German Bunds rose to 2.63%, French bonds increased to 3.1%, UK gilts to 3.84% and Italian bonds to 4.47%.
The euro edged lower to 1.056%, the British pound inched lower to $1.203 and the Swiss franc to 94.14 cents.
Oil Advanced On China Optimism, Gas Weakened
Brent crude fell 1.3% in February and plunged 28% and TTF natural gas price dropped 5% in February and plunged 61% from a year ago.
Brent crude oil increased to $1.23 to $83.27 a barrel and the Dutch TTF natural gas fell 63 cents to Є46.67 per MWh.
Europe Stock Movers
Credit Suisse Group AG increased 0.6% to sfr 2.85 and recovered from the loss of 2% and the Swiss financial regulator FINMA said the bank "seriously breached its supervisory obligations" in its transactions with Australian businessman Lex Greensill.
Greensill filed for financial bankruptcy protection after the supply chain financial products provider's subsidiary in Germany was shuttered for financial irregularities.
Adecco Group declined 2.9% to sfr 33.46 after the Swiss-French recruitment services provider reported fourth quarter net income plunged 65% to Є65 million from Є185 million a year ago.
Bayer AG declined 3.9% to €56.29 after the German pharmaceutical firm reported a sharp decline in earnings.
Fourth quarter earnings fell 47% to €611 million from €1.16 billion a year ago and revenue increased 4% to €12 billion from €11.1 billion in the period.
Diluted earnings per share declined to 62 cents from €1.18 a year ago.
Full-year revenue increased 8.7% to €50.7 billion and net income increased to 4.1 billion from 1.0 billion and diluted earnings per share rose to €4.22 from €1.02 a year ago.
Aitron SE increased 12.1% to €29.13 after the maker of advanced semiconductor chip equipment reported an improvement in sales and earnings.
Revenue in the fourth quarter slightly improved to €183.2 million from €180.9 million and in the full-year 2022 increased 8% to €463.2 million.
Consolidated net profit for the year 2022 grew by 6% to €100.5 million from €94.8 million and earnings per share improved to €0.89 from €0.85 in 2021.
Europe Movers: Adecco, Aixtron, Bayer, Credit Suisse
Bridgette Randall
28 Feb, 2023
Frankfurt
Credit Suisse Group AG increased 0.6% to sfr 2.85 and recovered from the loss of 2% and the Swiss financial regulator FINMA said the bank "seriously breached its supervisory obligations" in its transactions with Australian businessman Lex Greensill.
Greensill filed for financial bankruptcy protection after the supply chain financial products provider's subsidiary in Germany was shuttered for financial irregularities.
Adecco Group declined 2.9% to sfr 33.46 after the Swiss-French recruitment services provider reported fourth quarter net income plunged 65% to Є65 million from Є185 million a year ago.
Bayer AG declined 3.9% to €56.29 after the German pharmaceutical firm reported a sharp decline in earnings.
Fourth quarter earnings fell 47% to €611 million from €1.16 billion a year ago and revenue increased 4% to €12 billion from €11.1 billion in the period.
Diluted earnings per share declined to 62 cents from €1.18 a year ago.
Full-year revenue increased 8.7% to €50.7 billion and net income increased to 4.1 billion from 1.0 billion and diluted earnings per share rose to €4.22 from €1.02 a year ago.
Aitron SE increased 12.1% to €29.13 after the maker of advanced semiconductor chip equipment reported an improvement in sales and earnings.
Revenue in the fourth quarter slightly improved to €183.2 million from €180.9 million and in the full-year 2022 increased 8% to €463.2 million.
Consolidated net profit for the year 2022 grew by 6% to €100.5 million from €94.8 million and earnings per share improved to €0.89 from €0.85 in 2021.
European Markets Traded Lower After Inflation Worries Resurfaced
Bridgette Randall
28 Feb, 2023
Frankfurt
European markets opened lower but managed to cross flat line by midday and turned lower in the afternoon trading.
Market sentiment was negative at the opening after inflation accelerated in France and Spain.
But by midday investors were able to shake off lingering worries of higher rates and indexes stayed firmly in the positive zone for two hours.
In the late afternoon stocks turned lower after bond yields advanced in the Euro Area, denting the market sentiment on the worries of higher interest rates.
Crude oil rebounded on the hopes that Chinese refineries will soon drive the demand higher as social mobility picks up in the second-largest economy after three-years of Covid-linked lockdowns.
However, natural gas fell towards the Є45 price level amid warm weather conditions and elevated supply.
France's Consumer Inflation Accelerated
France's consumer price inflation accelerated to 6.2% in February from 6.0% in January, the statistical office INSEE reported Tuesday.
Sustained increase in food and energy prices drove the bulk of inflation in the month.
Food prices increased 14.5% but energy price inflation slowed to 14.0% from 16.3% in January.
Consumer prices increased 0.9% in February after rising at 0.4% in January.
A separate report from the statistical office showed that household consumption on a monthly basis increased 1.5% in January after falling 1.6% in December.
Household consumption rose after the government withdrew support for household energy bills.
Spain's Inflation Accelerated in January
Spain's consumer price inflation increased to 6.1% in February from 5.9% in January, the statistical office INE said in a preliminary report Tuesday.
The recent bout of inflation was driven by the price increases in electric utility bills and rising cost of food.
Core inflation, excluding unprocessed food and energy, accelerated to 7.7% in February from 7.5% in January.
Overall consumer inflation rose 0.1% in February from the previous month when the prices dropped 0.2%
Indexes Looked Down and Yields Advanced
The DAX index decreased 0.1% to 15,365.14, the CAC-40 index dropped 0.4% to 7,267.93 and the FTSE 100 index fell 0.7% to 7,876.28.
The yield on 10-year German Bunds rose to 2.63%, French bonds increased to 3.1%, UK gilts to 3.84% and Italian bonds to 4.47%.
The euro edged lower to 1.056%, the British pound inched lower to $1.203 and the Swiss franc to 94.14 cents.
Oil Advanced On China Optimism, Gas Weakened
Brent crude oil increased to $1.23 to $83.27 a barrel and the Dutch TTF natural gas fell 63 cents to Є46.67 per MWh.
Europe Stock Movers
Credit Suisse Group AG increased 0.6% to sfr 2.85 and recovered from the loss of 2% and the Swiss financial regulator FINMA said the bank "seriously breached its supervisory obligations" in its transactions with Australian businessman Lex Greensill.
Greensill filed for financial bankruptcy protection after the supply chain financial products provider's subsidiary in Germany was shuttered for financial irregularities.
Adecco Group declined 2.9% to sfr 33.46 after the Swiss-French recruitment services provider reported fourth quarter net income plunged 65% to Є65 million from Є185 million a year ago.
Bayer AG declined 3.9% to €56.29 after the German pharmaceutical firm reported a sharp decline in earnings.
Fourth quarter earnings fell 47% to €611 million from €1.16 billion a year ago and revenue increased 4% to €12 billion from €11.1 billion in the period.
Diluted earnings per share declined to 62 cents from €1.18 a year ago.
Full-year revenue increased 8.7% to €50.7 billion and net income increased to 4.1 billion from 1.0 billion and diluted earnings per share rose to €4.22 from €1.02 a year ago.
Aitron SE increased 12.1% to €29.13 after the maker of advanced semiconductor chip equipment reported an improvement in sales and earnings.
Revenue in the fourth quarter slightly improved to €183.2 million from €180.9 million and in the full-year 2022 increased 8% to €463.2 million.
Consolidated net profit for the year 2022 grew by 6% to €100.5 million from €94.8 million and earnings per share improved to €0.89 from €0.85 in 2021.
Stock Indexes Traded Higher, Bond Yields Jumped to 3-month Highs
Barry Adams
28 Feb, 2023
New York City
Market indexes extended day's gains as Treasury yields inched higher and crude oil was in focus.
Investors reacted to the latest batch of earnings from retailers, restaurants and tech companies and reviewed the rising bond yields.
Retailer Target Corp struggled to control costs but higher discounts lured customers back in search of bargains as prices of essential goods continue to rise but at a slower pace.
Zoom Video reported a sharp plunge in earnings and sales growth after the pandemic-era boom began to fade but the number of companies paying more than $100,000 a year continued to rise.
Movement in Treasury yields also impacted stock market sentiment after shorter term debt traded above 5% and 10-year Treasury yield also touched a 3-month high.
Indexes and Yields
The S&P 500 index increased 0.4% to 3,996.91 and the Nasdaq Composite index added 0.7% to 11,541.80.
U.S. Treasury yields increased and extended gains in February as traders come to terms with the prospects of higher rates staying longer and recalibrate expectations.
The yields on 10-year Treasury notes traded at a 3-month high and shorter term debts of six months or one-year duration stayed firmly above 5%.
The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury notes edged higher to 3.93% and 30-year Treasury bonds hovered near 3.94%.
Energy Prices Extend Annual Losses
Crude oil traded higher and the commodity is set to decline less than 1.5% in February and fall 23% over the last twelve months.
Traders are looking for a demand surge from China as refiners accelerate reopening to meet the rising demand for transportation fuel.
Natural gas futures edged higher but the fuel is set to fall more than 2.5% in February and extend loss to 41% over the last twelve months.
Demand for natural gas has been weak amid warm weather conditions and the LNG export terminal in Freeport, Louisiana is not expected to reopen before mid-March.
Crude oil increased $1.60 to $77.29 a barrel and natural gas fell 9 cents to $2.63 a thermal unit.
U.S. Movers
Target Corporation increased 2.8% to $171.46 after the retailer reported a weak sales increase and earnings fell on higher costs and the company issued a cautious outlook.
Target Corporation said revenue in the fourth quarter increased 1.2% to $30.9 billion but net income plunged 43% to $876 million and diluted earnings per share dropped to $1.89 from $3.21 a year ago.
In full-year 2022, revenue increased 2.8% to $107.6 billion and net income plunged 60% to $2.8 billion from $6.9 billion and diluted earnings per share dropped to $5.98 from $14.10 a year ago.
Comparable sales in the quarter increased 0.7% on top of 8.9% and advanced 2.2% on top of 12.7% in 2021. Comparable traffic in 2022 increased 2.1% on top of 12.3% in the previous year.
Zoom Video Communications increased 1.8% to $75.03 after the company reported better-than-expected earnings and sharp decline in sales growth.
Zoom Video Communications said revenue in the fourth quarter increased 4% to $1.1 billion and the company swung to a net loss of $104.4 million from a profit of $490.5 million.
The earnings per share was a loss of 36 cents compared to a profit of $1.60 a year ago.
Revenue in the fiscal year ending in January increased 7.0% to $4.4 billion and net income dropped to $103.7 million from $1.4 billion and diluted earnings per share dropped to 34 cents from $4.50 a year ago.
Movers: Advance Auto Parts, AutoZone, Cracker Barrel, Itron, Occidental Petroleum, Target, Zoom Video
Scott Peters
28 Feb, 2023
New York City
Advance Auto Parts, Inc increased 3.5% to $145.12 after the retailing company exceeded earnings expectations and announced leadership change.
Advance Auto Parts said revenue in the fourth quarter increased 3.2% to $2.5 billion and comparable store sales rose 2.1%.
Net income in the quarter decreased to $106.7 million from $81.7 million and diluted earnings per share rose to $1.79 from $1.30 a year ago.
Full- year 2022 revenue increased 1.4% to $11.2 billion and comparable sales rose 0.3% from a year ago.
Net income decreased to $501.8 million from $616.1 million and diluted earnings per share declined to $8.27 from $9.55 a year ago.
President and chief executive Tom Greco announced his retirement at the end of the year.
AutoZone, Inc decreased 3% to $2,494.08 after the auto parts retailer reported better-than-expected same store sales but earnings were below expectations.
AutoZone, Inc said revenue in the fiscal second quarter ending on February 11 increased 9.5% to $3.7 billion from $3.4 billion and net income rose to $476.5 million from $471.7 million and diluted earnings per share increased to $24.64 from $22.30 a year ago.
Domestic same store comparable sales rose 5.3% from the previous year.
The aftermarket automotive parts retailer repurchased 372,000 shares of its common stock for $906.0 million during the second quarter, at an average price of $2,434 per share and $1.8 billion were still remaining under its current share repurchase authorization at the end of the fiscal second quarter.
Cracker Barrel Old Country Store, Inc increased 1.8% to $109.71 after the restaurant chain reported a rise in sales and maintained its quarterly dividend.
Cracker Barrel said revenue in the fiscal second quarter ending on January 27 increased 8.3% to $933.9 million from a year ago.
Comparable store restaurant sales increased 8.4% and retail store sales rose 4.1%.
Net income decreased 19% to $30.5 million from $37.6 million and diluted earnings per share fell to $1.37 from $1.60 in the previous year. The restaurant chain announced a quarterly dividend of $1.30 per share payable on May 9 to shareholders of record as of April 14.
Itron Inc increased 6.2% to $54.94 after the metering equipment maker for utilities companies swung to a quarterly profit.
Itron Inc said revenue in the fourth quarter declined to $467.5 million from $485.6 million and measuring equipment maker for utilities swung to a net profit of $22.2 million from a loss of $58.9 million in the previous year.
Diluted earnings per share was 49 cents from a loss of $1.30 in the previous year.
Revenue in the full-year 2022 increased to $1.80 billion from $1.98 billion and net loss declined to $9.7 million from $81.7 million and diluted loss per share fell to 22 cents from $1.83 a year ago.
Norwegian Cruise Line Holdings declined 11.3% to $14.64 after the travel company forecasted weak annual profit on rising cost of fuel and wages.
Norwegian Cruise said revenue in the fourth quarter increased to $1.5 billion from $487.4 million and net loss shrank to $484 million from $1.5 billion and diluted loss per share fell to $1.14 from $4.01 in the previous year.
Total revenue per passenger day increased 23% on a reported basis and rose 24% in constant currency from the comparable period in 2019.
In full-year 2022, revenue increased to $4.8 billion from $647 million and net loss fell to $2.2 billion from $4.5 billion and diluted loss per share decreased to $5.41 from $12.33 a year ago.
"Full year 2023 cumulative booked position is ahead of 2019 levels inclusive of the Company’s approximately 19% increase in capacity, at continued higher pricing," said the company in its earnings statement.
Occidental Petroleum Corporation increased 0.6% to $59.30 after the energy company reported weaker-than-expected earnings and increased its quarterly dividend.
Occidental Petroleum said revenue in the fourth quarter increased to $8.2 billion from $4.2 billion and net income rose to $1.7 billion from $1.3 billion and diluted earnings per share rose to $1.74 from $1.37 a year ago.
In full-year 2022, revenue increased to $37 billion from $16.2 billion and net income surged to $12.5 billion from $1.5 billion and diluted earnings per share soared to $12.40 from $1.58 a year ago.
Average worldwide realized crude oil prices decreased 12% from the previous quarter to $83.64 a barrel and realized natural gas liquids prices fell 25% to $26.35 per barrel and average domestic realized gas prices plunged 37% to $4.45 per Mcf.
The company announced a new $3.0 billion stock repurchase program and increased its dividend by 38%.
Target Corporation increased 2.8% to $171.46 after the retailer reported a weak sales increase and earnings fell on higher costs and the company issued a cautious outlook.
Target Corporation said revenue in the fourth quarter increased 1.2% to $30.9 billion but net income plunged 43% to $876 million and diluted earnings per share dropped to $1.89 from $3.21 a year ago.
In full-year 2022, revenue increased 2.8% to $107.6 billion and net income plunged 60% to $2.8 billion from $6.9 billion and diluted earnings per share dropped to $5.98 from $14.10 a year ago.
Comparable sales in the quarter increased 0.7% on top of 8.9% and advanced 2.2% on top of 12.7% in 2021. Comparable traffic in 2022 increased 2.1% on top of 12.3% in the previous year.
Zoom Video Communications increased 1.8% to $75.03 after the company reported better-than-expected earnings and sharp decline in sales growth.
Zoom Video Communications said revenue in the fourth quarter increased 4% to $1.1 billion and the company swung to a net loss of $104.4 million from a profit of $490.5 million.
The earnings per share was a loss of 36 cents compared to a profit of $1.60 a year ago.
Revenue in the fiscal year ending in January increased 7.0% to $4.4 billion and net income dropped to $103.7 million from $1.4 billion and diluted earnings per share dropped to 34 cents from $4.50 a year ago.
Earnings Recession Signals Turbulent Drivers of Economic Engine
Barry Adams
27 Feb, 2023
New York City
Market indexes pared back early gains and investors renewed focus on economic growth on the first day of trading this week after the worst week in 2023.
Treasury yields were in focus and yields on 2-year and 10-year notes edged lower but the yields on 6-month and one-year Treasury bills traded above 5% for the second week in a row.
Market sentiment vacillated between rate-path worries and strength of the economy in the face of rates above 5% and mortgage rates above 6.5%.
But corporate results are signaling that earnings recession may have already begun for more companies in the face higher input and operating costs.
So far, companies have been reporting a sharp decline in quarterly and annual earnings following a surge in 2021 because companies are struggling to pass higher costs to customers and are facing rising costs and wage pressures.
Earnings are expected to remain depressed for the rest of the year as companies adjust to higher operating costs and lower revenue growth in the face of higher interest rates and stable consumer spending.
Retailers are still struggling with high levels of inventories and tough comparisons with previous years and consumers shift focus to experiences from goods.
This week more than 600 companies are scheduled to report earnings, including results from Zoom Video, Advance Auto Parts, AutoZone, HP Inc, Abercrombie & Fitch, American Eagle Outfitters, Dollar Tree, Kohl's, Lowe's. Best Buy and Big Lots.
Moreover, investors reacted positively to the fall in durable goods orders supporting the case that the economy is not overheating and pending home sales expanded for the second month in a row.
Durable goods orders declined in January and pending home sales improved for the second month in a row.
Investors bid up stocks and look ahead to earnings from retailers as the earnings season slows down.
Pending Home Sales Index Improved In January
Pending home sales, an index of forward looking home sales, increased for the second month in a row, the National Association of Realtors.
Pending home sales increased 8.1% In January from the previous month, following a downwardly revised 1.5% gain in December.
Despite the back-to-back monthly improvement, the home sale index showed home sales activities dropped 24.1% from a year ago.
“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.
The Northeast home sales index rose 6.0% from last month to 68.7, a fall of 19.8% from January 2022.
The Midwest index increased 7.9% to 83.3 in January, a sharp drop of 21.1% from one year ago.
The South index increased 8.3% to 99.2 in January, dipping 24.7% from the prior year. The West index jumped 10.1% in January to 66.2 but fell 29.3% from a year ago.
“An extra bump occurred in the West region because of lower home prices, while gains in the South were due to stronger job growth in that region,” Yun added.
“Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” Yun said.
Durable Goods Orders Dropped In January
Durable goods orders declined in January 4.5% from the previous month, according to the latest data released by the U.S. Census Bureau.
December durable goods orders were downwardly revised to an increase of 5.1% on the 13.3% plunge in transportation orders.
Shipments of manufactured durable goods in January decreased 0.1%, down following sixteen consecutive monthly increases. This followed a 0.4% increase in December.
Transportation equipment fell 1.7%, down following ten consecutive monthly increases.
Market Indexes and Yields
The S&P 500 index increased 0.3% to 3,982.24 and the Nasdaq Composite index advanced 0.6% to 11,466.98.
The yield on 2-year Treasury notes inched lower to 4.78%, 10-year Treasury notes eased to 3.92% and 30-year Treasury bonds hovered near 3.93%.
Crude oil prices declined 56 cents to $75.75 a barrel and natural gas prices inched up 16 cents to $2.71 a thermal unit.
U.S. Movers
Berkshire Hathaway declined 0.6% to $458,543.40 after the conglomerate of businesses reported a decline in operating earnings but the company stepped up its stock repurchases.
Berkshire Hathaway said operating earnings in the fourth quarter declined 8% to $6.7 billion from $7.3 billion and net income attributable to shareholders fell to $18.2 billion from $39.6 billion a year ago. Diluted earnings per Class A Share fell to $12,412 from $26,690 and Class B Share dropped to $8.27 from $17.79 in the previous year.
In 2022, operating earnings rose to $30.8 billion from $27.4 billion a year ago and net earnings attributable to shareholders swung to ($22.8 billion) from $89.8 billion and diluted earnings per Class A Shares to ($15,539) from $59,460 in the previous year.
Berkshire repurchased $2.6 billion of its own shares during the fourth quarter bringing the total for the year to approximately $7.9 billion.
Zoom Video Communications Inc soared 7.7% to $79.40 in the afterhours trading after the company reported better-than-expected earnings.
Zoom said revenue in the fourth quarter increased 4% to $1.1 billion and the company swung to a net loss of $104.4 million from a profit of $490.5 million.
The earnings per share was ($0.36) compared to $1.60 a year ago.
Revenue in the fiscal year ending in January increased 7.0% to $4.4 billion and net income dropped to $103.7 million from $1.4 billion and diluted earnings per share dropped to 34 cents from $4.50 a year ago.
The company guided fiscal first quarter revenue between $1.080 and $1.085 billion and adjusted-diluted earnings per share between 96 cents and 98 cents per share.
European Markets Advanced Following Earnings Optimism
European markets traded higher after a week of losses and looked ahead to a busy week of earnings.
Market sentiment was positive after indexes dropped the most in the previous week in 2023 on the hopes that the Euro Area economy will avoid a recession.
Investors also noticed that large corporations are reporting better earnings than their competitors in Asia and the United States, despite higher energy costs.
In economic news, lending growth in the euro zone declined in January and confidence index fell marginally in the currency block but lending growth continued to decelerate following tighter monetary policy.
Euro Area Economic Confidence Index Fell Marginally
The economic confidence index in the Euro Area unexpectedly declined in January, a survey from the Economic Commission showed Monday.
The confidence index decreased to 99.7 in January from 99.8 in December, a decline for the first time in three months.
The confidence index monitoring expectations among manufacturers declined 0.5 in February from 1.2 in January and among service providers eased to 9.5 from 10.4 in the corresponding period.
Despite the looming worries of consumer spending, the confidence index among retailers improved to -0.1 in February from -0.7 in January and among construction managers improved to 1.8 from 1.4 in the corresponding period.
Euro Area Credit Growth Slowed In January
The annual rate of growth in credit to the private sector declined in January, reflecting the ongoing monetary policy tightening.
The credit growth slowed to 3.8% in December from 4.3% in January, the European Central Bank reported Monday.
Annual growth rate of broad monetary aggregate M3 decreased to 3.5% in January 2023 from 4.1% in December and narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, decreased to -0.7% in January from 0.6% in December, the central bank noted.
The European Central Bank has lifted its key lending rate by 300 basis points since July to tame inflation by gradually lifting rates to restrictive rates and curtailing economic activities.
Annual growth rate of adjusted loans to households decreased to 3.6% in January from 3.8% in December and adjusted loans to non-financial corporations decreased to 6.1% in January from 6.3% in December.
M3 money supply growth has been slowing from the recent peak in September last year and lending growth to businesses or corporations slowed for the third month in a row.
Market Indexes and Yields
The DAX index increased 1.1% to 15,381.43, the CAC-40 index advanced 1.5% to 7,295.55 and the FTSE 100 index added 0.7% to 7,935.11.
The yield on 10-year German Bunds inched higher to 2.58%, on French bonds edged up to 3.05%, UK gilts to 3.80% and Italian bonds to 4.42%.
The euro edged up to $1.060, the British pound increased to $1.205 and the Swiss franc edged higher to 93.61 cents.
Brent crude oil fell 86 cents to $82.69 a barrel and the Dutch TTF natural gas spot price fell Є3.71 to Є47.30 per MWh.
Europe Stock Movers
Airbus SE increased 1.4% to €123.64 after the aviation group lifted its estimate of future demand for aircrafts in the next two decades on higher expectations of air travel and freight demand in the Pacific region.
Thales SA increased 0.5% to €133.75 after the French defense company said it plans to hire 12,000 new employees in 2023 to support its expected business growth.
The aerospace and cyber security company said it plans to add 5,500 new employees in France, 1,050 in the United Kingdom, 600 in Australia, 550 in India and 540 in the United States
Associated British Foods Plc increased 2.2% to 1,989.80 pence after the UK-based diversified conglomerate reported first-half revenue to increase 20% at actual exchange rates and 16% in constant currency.
Primark sales are expected to rise 19% to £4.2 billion and adjusted operating profit margin is expected to be above 8%.
The company also lifted its annual outlook and said adjusted operating profit and adjusted earnings per share are "expected to be inline with previous financial year."
Bunzl Plc increased 2.4% to 3,085.0 pence after the company reported an increase in pre-tax profit.
In 2022, revenue increased 17.1% to £12.03 billion and adjusted pre-tax increased 17.2% to £818.0 million from £698.2 million a year ago.
The maker of cigarette filters and tissue paper and outsourcing company increased its divided 10% to 141.7 pence from 132.7 pence in 2021.
Euro Area Credit Growth Decelerated In January, Stocks Advanced
Bridgette Randall
27 Feb, 2023
New York City
European markets traded higher after a week of losses and looked ahead to a busy week of earnings.
Market sentiment was positive after indexes dropped the most in the previous week in 2023 on the hopes that the Euro Area economy will avoid a recession.
Investors also noticed that large corporations are reporting better earnings than their competitors in Asia and the United States, despite higher energy costs.
In economic news, lending growth in the euro zone declined in January and confidence index fell marginally in the currency block but lending growth continued to decelerate following tighter monetary policy.
Euro Area Economic Confidence Index Fell Marginally
The economic confidence index in the Euro Area unexpectedly declined in January, a survey from the Economic Commission showed Monday.
The confidence index decreased to 99.7 in January from 99.8 in December, a decline for the first time in three months.
The confidence index monitoring expectations among manufacturers declined 0.5 in February from 1.2 in January and among service providers eased to 9.5 from 10.4 in the corresponding period.
Despite the looming worries of consumer spending, the confidence index among retailers improved to -0.1 in February from -0.7 in January and among construction managers improved to 1.8 from 1.4 in the corresponding period.
Euro Area Credit Growth Slowed In January
The annual rate of growth in credit to the private sector declined in January, reflecting the ongoing monetary policy tightening.
The credit growth slowed to 3.8% in December from 4.3% in January, the European Central Bank reported Monday.
Annual growth rate of broad monetary aggregate M3 decreased to 3.5% in January 2023 from 4.1% in December and narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, decreased to -0.7% in January from 0.6% in December, the central bank noted.
The European Central Bank has lifted its key lending rate by 300 basis points since July to tame inflation by gradually lifting rates to restrictive rates and curtailing economic activities.
Annual growth rate of adjusted loans to households decreased to 3.6% in January from 3.8% in December and adjusted loans to non-financial corporations decreased to 6.1% in January from 6.3% in December.
M3 money supply growth has been slowing from the recent peak in September last year and lending growth to businesses or corporations slowed for the third month in a row.
Market Indexes and Yields
The DAX index increased 1.1% to 15,381.43, the CAC-40 index advanced 1.5% to 7,295.55 and the FTSE 100 index added 0.7% to 7,935.11.
The yield on 10-year German Bunds inched higher to 2.58%, on French bonds edged up to 3.05%, UK gilts to 3.80% and Italian bonds to 4.42%.
The euro edged up to $1.060, the British pound increased to $1.205 and the Swiss franc edged higher to 93.61 cents.
Brent crude oil fell 86 cents to $82.69 a barrel and the Dutch TTF natural gas spot price fell Є3.71 to Є47.30 per MWh.
Europe Stock Movers
Airbus SE increased 1.4% to €123.64 after the aviation group lifted its estimate of future demand for aircrafts in the next two decades on higher expectations of air travel and freight demand in the Pacific region.
Thales SA increased 0.5% to €133.75 after the French defense company said it plans to hire 12,000 new employees in 2023 to support its expected business growth.
The aerospace and cyber security company said it plans to add 5,500 new employees in France, 1,050 in the United Kingdom, 600 in Australia, 550 in India and 540 in the United States
Associated British Foods Plc increased 2.2% to 1,989.80 pence after the UK-based diversified conglomerate reported first-half revenue to increase 20% at actual exchange rates and 16% in constant currency.
Primark sales are expected to rise 19% to £4.2 billion and adjusted operating profit margin is expected to be above 8%.
The company also lifted its annual outlook and said adjusted operating profit and adjusted earnings per share are "expected to be inline with previous financial year."
Bunzl Plc increased 2.4% to 3,085.0 pence after the company reported an increase in pre-tax profit.
In 2022, revenue increased 17.1% to £12.03 billion and adjusted pre-tax increased 17.2% to £818.0 million from £698.2 million a year ago.
The maker of cigarette filters and tissue paper and outsourcing company increased its divided 10% to 141.7 pence from 132.7 pence in 2021.