Market Update
Europe Movers: Danone, Fresenius Medical, Lloyds Banking, Rio Tinto, Stellantis
Bridgette Randall
22 Feb, 2023
Frankfurt
Danone SA increased 4.5% to €54.66 after the French yogurt maker reported the fastest sales increase in more than a decade in 2022.
Revenue in the fourth quarter increased 12.3% to Є7.0 billion and comparable sales rose 7% and volume mix growth declined 4.4%.
In the full-year 2022, revenue increased 13.9% to 27.7 billion and comparable sales increased 7.8% and volume mix growth declined 0.8%.
Sales in North America increased 20.6% to €6.7 billion, in Europe increased 5.2% to €8.7 billion and rest of the world excluding China and North Asia increased 18.7% to €8.7 billion.
Net income in the full-year 2022 declined to €1.0 billion from €1.9 billion in 2021 or 1.48 from 2.94 a share respectively.
Lloyds Banking Group PLC decreased 2.6% to 49.62 pence after the British banking and insurance company reported flat annual income in 2022.
Total income in 2022 increased 14% to £18 billion from £15.7 billion and after-tax income declined 6% to £5.6 billion from £5.9 billion a year ago and diluted earnings per share fell to 7.3 pence from 7.50 pence a share respectively.
The financial services company announced its plan of a final dividend of 1.60 pence a share resulting in a total dividend of 2.40 pence and announced a new stock buyback plan in 2023 of £2 billion matching the repurchase in 2022 and 2021.
Rio Tinto plc declined 1.7% to 6,096.19 pence after the mining company cut its annual dividend and it reported a 38% decline in annual profit in 2022.
The Anglo-Australian mining company reiterated its unit production cost estimate for iron ore in 2023 between $21.0 and $22.50, slightly higher than $21.0 in 2022.
Pilbara iron ore production in 2023 is estimated to increase between 322 million tons and 335 million tons, higher than 320 million tons in 2022.
Consolidated revenue in 2022 declined to $55.6 billion from $63.5 billion and net income dropped to $13 billion from $22.6 billion and diluted earnings per share fell to $7.62 from $12.95 in the previous year.
Mining companies traded lower after metals prices weakened on the worries that the rebound in China's manufacturing activities may be slower than anticipated.
Glencore, Anglo American and Antofagasta declined between 2% and 3%.
Fresenius Medical SE & Co increased 7.4% to €39.8 after the dialysis services provider reported better-than-expected fourth quarter results.
Revenue in the fourth quarter increased 7% to €10.6 billion and net income fell 15% to €445 million.
In 2022, revenue increased 9% to €40.8 billion and net income fell 7% to €1.7 billion.
The company said it plans to separate its medical care company and continue to hold 32% stake in the newly separated company after the shareholder approval.
The medical care company will focus on medical care, biopharmaceuticals and medical technology units.
The company guided 2023 operating earnings in constant currency is expected to "remain broadly flat or decline up to a mid-single-digit percentage rate."
Stellantis NV rose 2.2% to €16.22 after the parent of Chrysler and Fiat posted better-than-expected annual results and announced a new stock repurchase plan.
Revenue in 2022 increased 18% to €179.6 billion and net profit rose 26% to €16.8 billion.
The company announced a stock repurchase program of €1.5 billion to be completed before the end of 2023 and €4.2 billion of ordinary dividend corresponding to €1.34 per share.
Industrial free cash flow in 2022 increased 78% to €10.8 billion from €6 billion in the previous year.
The automotive company estimated sales in North America, Europe and India and Middle East to increase by 5% in 2023.
Sales in South America are estimated to rise 3% and in China by 2% in 2023.
Vehicle sales in Europe to 2.6 million from 2.86 million and in North America slightly edged up to 1.86 million from 1.82 million in 2021.
Business Climate In Germany and France Improved Despite Elevated Inflation
Bridgette Randall
22 Feb, 2023
Frankfurt
European markets closed mixed after a day of lackluster trading.
Market sentiment was dominated by the latest corporate earnings releases with the lingering worries of rate hikes and state of consumer spending.
Investors were cautious ahead of the release of the U.S. Fed's latest minutes of meeting.
The minutes released after the close of market hours showed all policymakers supported the rate increase of 25 basis points and anticipated rates to continue to rise in future until the inflation is on the path towards a target rate of 2%.
Inflation reports from Germany and Italy showed that prices are expected to rise at elevated levels for some time but indicators of manufacturing and businesses showed improvements.
Germany's Business Climate Index Notched Up
Germany's IFO Business Climate Index increased to an eight-month 91.1 in February from a revised 90.1 in January, the data from the Munich-based Ifo showed Wednesday.
France's Manufacturing Confidence Improved
France's manufacturing confidence index increased for the third month in a row in February on the back of rising new orders, the statistical office Insee said Wednesday.
Italy's Inflation Eased In January
Italy's consumer price inflation in January eased to 10.0% from 11.6% in December, ISTAT report released on Wednesday showed.
Core inflation, which excludes energy and unprocessed food prices, accelerated to 6.0% in January from 5.8% in December.
The sharp decline in energy price inflation dragged the overall inflation rate in January.
Prices of regulated energy declined 12.0% in January from a whopping 70.2% surge in December, while those of non-regulated energy increased at a slower pace of 59.3%.
Service inflation increased to 4.2% in January from 4.1% in the previous month.
Germany's January Consumer Inflation Accelerated
Germany's consumer price inflation accelerated in January as previously estimated, the Federal Statistics Office Destatis confirmed today.
Consumer price inflation increased to 8.7% in January from the downwardly revised 8.1% in December.
Europe Indexes and Yields
The DAX index increased 2.27 points to 15,399.89, the CAC-40 index declined 9.39 points to 7,299.26 and the FTSE 100 index fell 0.6% or 47.12 points to 7,930.63.
The euro inched lower to $1.0603, the British pound held at $1.204 and the Swiss franc inched higher to 93.15 U.S. cents.
The yield on 10-year German Bunds increased to 2.53%, French bonds edged higher to 3.01%, the UK Gilts to 3.61% and Italian bonds edged up to 4.47%.
Brent crude oil decreased to $2.59 to $80.45 a barrel and the Dutch TTF natural gas spot price rose 4% to Є50.57 per MWh.
Europe Movers
Danone SA increased 4.5% to €54.66 after the French yogurt maker reported the fastest sales increase in more than a decade in 2022.
Revenue in the fourth quarter increased 12.3% to Є7.0 billion and comparable sales rose 7% and volume mix growth declined 4.4%.
In the full-year 2022, revenue increased 13.9% to 27.7 billion and comparable sales increased 7.8% and volume mix growth declined 0.8%.
Sales in North America increased 20.6% to €6.7 billion, in Europe increased 5.2% to €8.7 billion and rest of the world excluding China and North Asia increased 18.7% to €8.7 billion.
Net income in the full-year 2022 declined to €1.0 billion from €1.9 billion in 2021 or 1.48 from 2.94 a share respectively.
Lloyds Banking Group PLC decreased 2.6% to 49.62 pence after the British banking and insurance company reported flat annual income in 2022.
Total income in 2022 increased 14% to £18 billion from £15.7 billion and after-tax income declined 6% to £5.6 billion from £5.9 billion a year ago and diluted earnings per share fell to 7.3 pence from 7.50 pence a share respectively.
The financial services company announced its plan of a final dividend of 1.60 pence a share resulting in a total dividend of 2.40 pence and announced a new stock buyback plan in 2023 of £2 billion matching the repurchase in 2022 and 2021.
Rio Tinto plc declined 1.7% to 6,096.19 pence after the mining company cut its annual dividend and it reported a 38% decline in annual profit in 2022.
The Anglo-Australian mining company reiterated its unit production cost estimate for iron ore in 2023 between $21.0 and $22.50, slightly higher than $21.0 in 2022.
Pilbara iron ore production in 2023 is estimated to increase between 322 million tons and 335 million tons, higher than 320 million tons in 2022.
Consolidated revenue in 2022 declined to $55.6 billion from $63.5 billion and net income dropped to $13 billion from $22.6 billion and diluted earnings per share fell to $7.62 from $12.95 in the previous year.
Mining companies traded lower after metals prices weakened on the worries that the rebound in China's manufacturing activities may be slower than anticipated.
Glencore, Anglo American and Antofagasta declined between 2% and 3%.
Fresenius Medical SE & Co increased 7.4% to €39.8 after the dialysis services provider reported better-than-expected fourth quarter results.
Revenue in the fourth quarter increased 7% to €10.6 billion and net income fell 15% to €445 million.
In 2022, revenue increased 9% to €40.8 billion and net income fell 7% to €1.7 billion.
The company said it plans to separate its medical care company and continue to hold 32% stake in the newly separated company after the shareholder approval.
The medical care company will focus on medical care, biopharmaceuticals and medical technology units.
The company guided 2023 operating earnings in constant currency is expected to "remain broadly flat or decline up to a mid-single-digit percentage rate."
Stellantis NV rose 2.2% to €16.22 after the parent of Chrysler and Fiat posted better-than-expected annual results and announced a new stock repurchase plan.
Revenue in 2022 increased 18% to €179.6 billion and net profit rose 26% to €16.8 billion.
The company announced a stock repurchase program of €1.5 billion to be completed before the end of 2023 and €4.2 billion of ordinary dividend corresponding to €1.34 per share.
Industrial free cash flow in 2022 increased 78% to €10.8 billion from €6 billion in the previous year.
The automotive company estimated sales in North America, Europe and India and Middle East to increase by 5% in 2023.
Sales in South America are estimated to rise 3% and in China by 2% in 2023.
Vehicle sales in Europe to 2.6 million from 2.86 million and in North America slightly edged up to 1.86 million from 1.82 million in 2021.
Movers: Coinbase, CoStar Group, Dillard's, Haverty Furniture, Intel, Palo Alto Networks, Toll Brothers
Scott Peters
22 Feb, 2023
New York City
Coinbase Global Inc declined 6.4% to $58.12 despite the cryptocurrency exchange exceeding revenue expectations.
Revenue in the fourth quarter declined to $605 million from $2.5 billion a year ago and the company swung to a loss of $557 million from $840 million a year ago.
Diluted loss per share was $2.46 compared to a profit of $3.32 in the previous year.
In 2022, revenue declined to $3.2 billion from $7.8 billion and the company reported a loss of $2.6 billion compared to a profit of $3.2 billion a year ago.
Diluted loss per share was $11.83 compared to a profit of $14.50 in the previous year.
The company said 2022 total trading volumes and transaction revenues declined 50% and 66% from the previous year, respectively.
CoStar Group Inc dropped 5.2% to $72.30 after the online real estate marketplace operator and information provider's current year outlook disappointed some investors.
Revenue in the fourth quarter increased 13% to $573 million and net income increased 34% to $124 million from $94 million a year ago.
Diluted earnings per share increased to 31 cents from 24 cents a year ago.
The real estate company expects revenue in the range of $2.46 billion to $2.48 billion for the full-year of 2023, representing an increase of 13% from the previous year at the midpoint of the range.
Revenue in the first quarter in the range of $575 million to $580 million, representing an increase of 12% from the previous year at the midpoint of the range.
The company also confirmed that it is no longer in discussion with News Corp regarding the purchase of Realtor.com.
Dillard's Inc increased 1.5% to $342.16 after the retailer said comparable store sales were unchanged and inventories rose 4% from the previous year.
Revenue in the fourth quarter was flat at $2.1 billion and net income declined to $289.2 million from $321.2 million a year ago.
The latest quarterly earnings included pre-tax gain of $13.8 million, after-tax gain of $10.8 million or 63 cents a share, and tax benefits of $16.3 million linked to dividend payments linked to employee stock plan and $13.6 million related to state net carry loss forward.
Diluted earnings per share increased to $16.89 from $16.61 in the previous year.
In 2022, sales increased 5% to $6.7 billion from $6.6 billion and net income rose to $891.6 million from $862.5 million and diluted earnings per share increased to $50.81 from $41.88 a year ago.
Haverty Furniture Companies, Inc increased 6.4% to $37.27 after the retailer reported comparable store sales increased 5.8% in the fourth quarter.
Revenue in the fourth quarter increased 5.5% to $280.6 million and net income declined to $23.7 million from $24.2 million a year ago.
Diluted earnings per share increased to $1.45 from $1.35 in the previous year.
In 2022, revenue slightly edged up to $1.4 billion from $1.01 billion and net income edged lower to $89.4 million from $90.8 million or diluted earnings per share increased to $5.24 from $4.90 in the previous year.
Average sales ticket in 2022 increased to $3,171 from $2,865 in 2021 and sales per square foot rose to $256 from $232 in respective years.
Intel Corporation declined 1% to $25.81 after the chipmaker announced a cut of 65.7% for its quarterly dividend to 12.5 cents from 36.5 cents, a first cut in dividend since 2000.
The dividend is payable on June 1 to stockholders of record on May 17.
The company also reaffirmed its 2023 first quarter adjusted earnings outlook of 15 cents and did not provide full-year guidance citing economic uncertainties.
Palo Alto Networks Inc jumped 11.8% to $186.66 after the company revised higher its full-year outlook.
Revenue in the fiscal second quarter ending in January increased 26% to $1.7 billion and the company swung to a net income of $84.2 million from a loss of $93.5 million a year ago.
Diluted earnings per share was 25 cents compared to a loss of 32 cents in the previous year.
The cyber security company lifted its full-year revenue to increase between 25% and 26% in the range of $6.85 billion and $6.91 billion and total billings in the range of $9.1 billion and $9.2 billion.
Toll Brothers Inc increased 3.7% to $57.77 after the luxury home builder reported better-than-expected earnings.
Home sales in the fiscal first quarter ending in January increased 4% to $1.7 billion.
In the quarter, the company delivered 1,826 homes, 5% fewer homes than in the previous year.
Net income increased to $191.5 million from $151.9 million and diluted earnings per share rose to $1.70 from $1.24 a year ago.
Backlog value of homes fell 21% to $8.6 billion and the number of homes in the backlog dropped 32% to 7,733.
The company reaffirmed its full-year fiscal 2023 guidance of an adjusted gross margin of 27.0% and $8.00 to $9.00 of earnings per share.
The homebuilder repurchased approximately 187,300 shares at an average price of $49.95 per share for a total purchase price of approximately $9.4 million.
With Fed Minutes In Focus, Investors React to Latest Earnings
Barry Adams
22 Feb, 2023
New York City
Stocks lacked direction as investors mulled the amount of future interest rate hikes ahead of the release of minutes of meeting later in the day.
The Fed minutes are scheduled to be released at 2:00 p.m. ET and investors are looking for clues about how long elevated rates are likely to stay.
Rising bond yields have kept markets on the edge as investors are still uncertain about how high rates have to go to cool elevated inflation.
Despite eight interest rate hikes over the last twelve months, inflation is far above the Fed's preferred rate of 2%.
Stocks were under pressure a day after the worst single-day decline in 2023 and investors shifted focus to the latest batch of earnings.
Toll Brothers surpassed expectations and expressed confidence in the strength of the housing demand highlighting demographic and migration trends to the South and the company's land portfolio.
Palo Alto Networks jumped 11% after the company revised higher its full-year outlook and Coinbase fell despite the cryptocurrency exchange exceeding revenue expectations.
CoStar Group plunged as much as 15% in early trading after the real estate marketplace operator forecasted revenue growth in fiscal 2023 of 13%, slightly higher than the previous fiscal year's growth rate of 12%.
Intel Corporation declined 1% to $25.81 after the chipmaker announced a cut of 65.7% for its quarterly dividend to 12.5 cents from 36.5 cents, a first cut in dividend since 2000.
The dividend is payable on June 1 to stockholders of record on May 17.
The company also reaffirmed its 2023 first quarter adjusted earnings outlook of 15 cents and did not provide full-year guidance citing economic uncertainties.
U.S. Indexes and Yields
The S&P 500 index increased 1.81 points to 3,999.15 and the Nasdaq Composite index advanced 19.95 points to 11,512.26.
The yield on 2-year Treasury notes edged lower to 4.66%, 10-year Treasury notes edged higher to 3.91% and 30-year Treasury bonds hovered near 3.92%.
Crude oil decreased $1.64 to $74.71 a barrel and natural gas futures increased 11 cents to $2.19 a thermal unit.
U.S. Movers
Toll Brothers Inc increased 3.7% to $57.77 after the luxury home builder reported better-than-expected earnings.
Home sales in the fiscal first quarter ending in January increased 4% to $1.7 billion.
In the quarter, the company delivered 1,826 homes, 5% fewer homes than in the previous year.
Net income increased to $191.5 million from $151.9 million and diluted earnings per share rose to $1.70 from $1.24 a year ago.
Backlog value of homes fell 21% to $8.6 billion and the number of homes in the backlog dropped 32% to 7,733.
The company reaffirmed its full-year fiscal 2023 guidance of an adjusted gross margin of 27.0% and $8.00 to $9.00 of earnings per share.
The homebuilder repurchased approximately 187,300 shares at an average price of $49.95 per share for a total purchase price of approximately $9.4 million.
CoStar Group Inc dropped 5.2% to $72.30 after the online real estate marketplace operator and information provider's current year outlook disappointed some investors.
Revenue in the fourth quarter increased 13% to $573 million and net income increased 34% to $124 million from $94 million a year ago.
Diluted earnings per share increased to 31 cents from 24 cents a year ago.
The real estate company expects revenue in the range of $2.46 billion to $2.48 billion for the full-year of 2023, representing an increase of 13% from the previous year at the midpoint of the range.
Revenue in the first quarter in the range of $575 million to $580 million, representing an increase of 12% from the previous year at the midpoint of the range.
The company also confirmed that it is no longer in discussion with News Corp regarding the purchase of Realtor.com.
After Retailer Earnings, Investors Fear Not So Resilient Consumer Spending
Barry Adams
21 Feb, 2023
New York City
Market indexes registered the worst day in 2023 after interest rate worries lifted bond yields to a four-month high.
After 3-day weekend, benchmark indexes opened lower and steadily drifted to new lows every hour following the rebound in bond yields and energy prices drifted to new one-year lows.
The yield on 10-year Treasury notes inched closer to 4.0%, the level seen in last November, after retailers Walmart and Home Depot posted strong results but guided weaker growth.
The growth outlook from two retail giants put investors on the defensive on the worries that higher interest rates and inflation may have started affecting consumer spending.
Home Depot fell 6% after the home improvement retailer missed the quarterly revenue estimate and the retailer estimated flat sales in the current fiscal year.
Investors were also on the backfoot after tensions continued to rise between the two superpowers of the world, U.S. and China.
U.S. Secretary of State Antony Blinken in an interview on Sunday raised the prospects of "Chinese companies providing non-lethal support to Russia for use in Ukraine."
Last Saturday, on the sidelines of the Munich Security Conference, the meeting between Secretary Blinken and Chinese Director of the Office of the Central Foreign Affairs Commission Wang Yi failed to calm down the rising tensions.
Relations between the U.S. and China are at low not seen in decades after China ramps up its military influence in North Asia and tightened its dominance in rare metals markets.
China has not criticized Russia's invasion of Ukraine and the second largest economic power has a long term ambition to regain control of renegade province Taiwan.
U.S. Existing Home Sales Declined 12th Straight Month
Existing home sales declined for the twelfth month in a row in January after home affordability kept buyers away.
Sales of single-family homes, condominiums and co-ops declined 0.7% from the previous month in January to a seasonally adjusted annual rate of 4 million.
Sales plunged 36.9% from the previous year and median price of a home increased 1.3% from a year ago to $359,000.
“Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun.
“Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Homes available for sale at the end of January increased 2.1% from December and 15.3% from a year ago to 980,000.
U.S. Markets In Review
The S&P 500 index decreased 2.0% to 3,997.34 and the Nasdaq Composite index dropped 2.50% to 11,492.30.
The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury yields jumped to 3.95% and 30-year Treasury bonds jumped to 3.97%.
Crude oil and natural gas prices declined on the first day of trading this week and natural gas prices dropped below $2 a thermal unit, the first time since September 2020.
Crude oil declined $1.20 to $75.99 a barrel and natural gas futures declined 16 cents to $2.07 a thermal unit.
Walmart and Home Depot Results Dent Sentiment
Home Depot fell 6% to $298.77 after the home improvement retailer reported weaker-than-expected quarterly results.
The retailer said revenue in the fiscal fourth quarter ending in January increased 0.3% to $35.8 billion from the previous year.
Comparable sales for the fourth quarter fell 0.3% and comparable sales in the U.S. decreased 0.3%.
Net earnings for the fourth quarter were $3.4 billion or $3.30 per diluted share compared with net earnings of $3.4 billion or $3.21 per diluted share a year ago.
The home improvement retailer said sales and comparable sales growth to be approximately flat compared to fiscal 2022 as consumers shift aways from goods to services.
Walmart Inc increased 0.7% to $147.56 after the discount retailer reported strong quarterly results as high income consumers search for bargains in the face of high inflation.
Total revenues in the fourth quarter rose 7.9% to $164 billion and comparable sales in the U.S. rose 8.3% from the previous year and 13.9% from two-years ago.
Sam’s Club comparable sales increased 12.2% from a year ago and 22.6% in two years and membership income increased 7.1% to and membership count rose to a record high.
Total transactions at Walmart U.S. locations increased 1.8% and average ticket size rose 6.3% from a year ago.
Consolidated net income soared 76% to $6.3 billion from $3.6 billion and diluted earnings per share rose to $2.32 from $1.28 in the previous year.
The company estimated fiscal 2024 comparable sales at Walmart U.S. locations to grow between 2% and 2.5%, slower than the 6.6% increase in the previous year.
Consolidated sales in the fiscal 2024 are estimated to rise between 2.5% and 3.0%, compared to 6.7% in the prior year.
Rate Worries Drag European Markets Lower
Benchmark indexes in Europe closed down after choppy sessions on the worries that high inflation and rising interest rates are beginning to negatively impact consumer spending.
Despite the two economic reports showing improving business sentiment in Germany and economic activities in the Euro Area, market indexes sold off.
German Economic Confidence Index Rose 5th Month
Germany's economic sentiment improved for the fifth month in a row in February to 281. from 16.9 in January, the Manheim-based think tank ZEW said in a report today.
The Inflation expectations in the Euro Area remained almost constant at a level of minus 83.4 points.
Euro Area Business Activities Expanded at Fastest Pace In Nine Months
The Euro Area business activities rose at the fastest pace in nine months in February after service sector activities improved and the manufacturing sector returned to expansion, S&P Global noted in its purchasing managers' survey Tuesday.
The preliminary composite output index increased more-than-expected to 52.3 in February from 50.3 in the previous month.
The services Purchasing Managers' Index increased to 53.0, up from 50.8 in January.
The manufacturing PMI unexpectedly fell to a two-month low of 48.5 from 48.8 in the previous month but the manufacturing output index increased to 50.4 from 48.9 in the previous month.
Any reading higher than 50 indicates expansion and lower shows contraction in growth rates.
Swiss international goods trade surplus expanded to Sfr 3.12 billion in January from Sfr 2.82 billion in December, the Federal Customs Administration reported Tuesday.
In nominal terms, exports increased 2.2% led by a 6.1% rise in chemicals and pharmaceuticals exports followed by a 4.0% increase in shipment of precision instruments. however, jewellery exports dropped 13.1%
Watch exports rose 8.6% to Sfr 1.9 billion, according to the Federation of the Swiss Watch Industry.
U.S. China Tensions Stay Elevated
Investors were also on the backfoot after tensions continued to rise between the two superpowers of the world, U.S. and China.
U.S. Secretary of State Antony Blinken in an interview on Sunday raised the prospects of "Chinese companies providing non-lethal support to Russia for use in Ukraine."
On the sidelines of the Munich Security Conference, the meeting between Secretary Blinken and Chinese Director of the Office of the Central Foreign Affairs Commission Wang Yi failed to calm down the rising tensions.
European Indexes and Yields
The DAX index declined 0.5% to 15,397.62, the CAC-40 index fell 0.4% to 7,308.65 and the FTSE 100 index dropped 0.5% to 7,977.75.
The euro edged lower to $1.06, the British pound inched up to $1.2107 and the Swiss franc edged higher to 92.74 U.S. cents.
The yield on 10-year German Bunds increased to 2.55%, French bonds rose to 3.02%, the UK Gilts to 3.63% and Italian bonds to 4.47%.
Brent crude oil eased $1.41 to $82.65 a barrel and the Dutch TTF natural gas spot price fell 2.6% to Є48.67 per MWh.
Europe Stock Movers
HSBC Holdings Plc declined 1.8% to 609.50 pence despite the global bank reported a rise in earnings.
Fourth quarter revenue increased 24% to $14.9 billion and profit before-tax increased by $2.5 billion to $5.2 billion.
Estimated credit losses in the quarter jumped to $1.4 billion from $0.5 billion largely because of the exposure to commercial real estate in mainland China and UK corporate loans.
The company estimated net interest income in 2023 of at least $36 billion and the global bank revised higher credit impairment charges to 40 basis points from 30 basis points.
In 2022, revenue increased 4% to $51.7 billion and pre-tax income fell by $1.4 billion to $17.5 billion.
Profit after-tax increased $2.0 billion to $16.7 billion, including a $2.2 billion credit linked to the recognition of a deferred tax asset.
Intercontinental Hotels Group declined 1.2% to 5,526.88 pence despite the UK-based hotel chain reporting a surge in revenue and earnings and announced a stock repurchase program.
The company plans to repurchase $750 million of its stock in 2023 and increased its final dividend by 10% to 94.5 U.S. cents, resulting in a total dividend of 138.4 cents.
Total revenues increased 34% to $3.8 billion and operating income rose 27% to $628 million from the previous year.
Diluted earnings per share increased to 207.2 cents from 145.4 cents in the previous year.
Credit Suisse AG declined 4.2% to Sfr 2.66 after the Swiss Financial Market Supervisory Authority, Finma, said it plans to review the recent statement from the company's chairman Axel Lehman.
Chairman Lehman had indicated in the statement that the net asset outflows stabilized in December.
Smith Nephew Plc increased 4.2% to 1,210.50 pence after the company reported a less-than-expected drop in annual profit.
Fourth quarter revenue increased 1.4% to $1.37 billion from the previous year.
Revenue in 2022 increased 0.1% to $5.2 billion and operating profit declined to $450 million from $593 million and diluted earnings per share fell to 25.5 cents from 59.8 cents a year ago.
Europe Movers: Credit Suisse, HSBC, IHG, Smith & Nephew
Bridgette Randall
21 Feb, 2023
Frankfurt
HSBC Holdings Plc declined 1.8% to 609.50 pence despite the global bank reported a rise in earnings.
Fourth quarter revenue increased 24% to $14.9 billion and profit before-tax increased by $2.5 billion to $5.2 billion.
Estimated credit losses in the quarter jumped to $1.4 billion from $0.5 billion largely because of the exposure to commercial real estate in mainland China and UK corporate loans.
The company estimated net interest income in 2023 of at least $36 billion and the global bank revised higher credit impairment charges to 40 basis points from 30 basis points.
In 2022, revenue increased 4% to $51.7 billion and pre-tax income fell by $1.4 billion to $17.5 billion.
Profit after-tax increased $2.0 billion to $16.7 billion, including a $2.2 billion credit linked to the recognition of a deferred tax asset.
Intercontinental Hotels Group declined 1.2% to 5,526.88 pence despite the UK-based hotel chain reporting a surge in revenue and earnings and announced a stock repurchase program.
The company plans to repurchase $750 million of its stock in 2023 and increased its final dividend by 10% to 94.5 U.S. cents, resulting in a total dividend of 138.4 cents.
Total revenues increased 34% to $3.8 billion and operating income rose 27% to $628 million from the previous year.
Diluted earnings per share increased to 207.2 cents from 145.4 cents in the previous year.
Credit Suisse AG declined 4.2% to Sfr 2.66 after the Swiss Financial Market Supervisory Authority, Finma, said it plans to review the recent statement from the company's chairman Axel Lehman.
Chairman Lehman had indicated in the statement that the net asset outflows stabilized in December.
Smith Nephew Plc increased 4.2% to 1,210.50 pence after the company reported a less-than-expected drop in annual profit.
Fourth quarter revenue increased 1.4% to $1.37 billion from the previous year.
Revenue in 2022 increased 0.1% to $5.2 billion and operating profit declined to $450 million from $593 million and diluted earnings per share fell to 25.5 cents from 59.8 cents a year ago.
Euro Area Business Activities Expanded But Interest Rate Worries Overshadowed Stocks
Bridgette Randall
21 Feb, 2023
Frankfurt
Benchmark indexes in Europe closed down after choppy sessions on the worries that high inflation and rising interest rates are beginning to negatively impact consumer spending.
Despite the two economic reports showing improving business sentiment in Germany and economic activities in the Euro Area, market indexes sold off.
German Economic Confidence Index Rose 5th Month
Germany's economic sentiment improved for the fifth month in a row in February to 281. from 16.9 in January, the Manheim-based think tank ZEW said in a report today.
The Inflation expectations in the Euro Area remained almost constant at a level of minus 83.4 points.
Euro Area Business Activities Grows at Fastest Pace In Nine Months
The Euro Area business activities rose at the fastest pace in nine months in February after service sector activities improved and the manufacturing sector returned to expansion, S&P Global noted in its purchasing managers' survey Tuesday.
The preliminary composite output index increased more-than-expected to 52.3 in February from 50.3 in the previous month.
The services Purchasing Managers' Index increased to 53.0, up from 50.8 in January.
The manufacturing PMI unexpectedly fell to a two-month low of 48.5 from 48.8 in the previous month but the manufacturing output index increased to 50.4 from 48.9 in the previous month.
Any reading higher than 50 indicates expansion and lower shows contraction in growth rates.
Swiss international goods trade surplus expanded to Sfr 3.12 billion in January from Sfr 2.82 billion in December, the Federal Customs Administration reported Tuesday.
In nominal terms, exports increased 2.2% led by a 6.1% rise in chemicals and pharmaceuticals exports followed by a 4.0% increase in shipment of precision instruments. however, jewellery exports dropped 13.1%
Watch exports rose 8.6% to Sfr 1.9 billion, according to the Federation of the Swiss Watch Industry.
U.S. China Tensions Stay Elevated
Investors were also on the backfoot after tensions continued to rise between the two superpowers of the world, U.S. and China.
U.S. Secretary of State Antony Blinken in an interview on Sunday raised the prospects of "Chinese companies providing non-lethal support to Russia for use in Ukraine."
On the sidelines of the Munich Security Conference, the meeting between Secretary Blinken and Chinese Director of the Office of the Central Foreign Affairs Commission Wang Yi failed to calm down the rising tensions.
European Indexes and Yields
The DAX index declined 0.5% to 15,397.62, the CAC-40 index fell 0.4% to 7,308.65 and the FTSE 100 index dropped 0.5% to 7,977.75.
The euro edged lower to $1.06, the British pound inched up to $1.2107 and the Swiss franc edged higher to 92.74 U.S. cents.
The yield on 10-year German Bunds increased to 2.55%, French bonds rose to 3.02%, the UK Gilts to 3.63% and Italian bonds to 4.47%.
Brent crude oil eased $1.41 to $82.65 a barrel and the Dutch TTF natural gas spot price fell 2.6% to Є48.67 per MWh.
Europe Stock Movers
HSBC Holdings Plc declined 1.8% to 609.50 pence despite the global bank reported a rise in earnings.
Fourth quarter revenue increased 24% to $14.9 billion and profit before-tax increased by $2.5 billion to $5.2 billion.
Estimated credit losses in the quarter jumped to $1.4 billion from $0.5 billion largely because of the exposure to commercial real estate in mainland China and UK corporate loans.
The company estimated net interest income in 2023 of at least $36 billion and the global bank revised higher credit impairment charges to 40 basis points from 30 basis points.
In 2022, revenue increased 4% to $51.7 billion and pre-tax income fell by $1.4 billion to $17.5 billion.
Profit after-tax increased $2.0 billion to $16.7 billion, including a $2.2 billion credit linked to the recognition of a deferred tax asset.
Intercontinental Hotels Group declined 1.2% to 5,526.88 pence despite the UK-based hotel chain reporting a surge in revenue and earnings and announced a stock repurchase program.
The company plans to repurchase $750 million of its stock in 2023 and increased its final dividend by 10% to 94.5 U.S. cents, resulting in a total dividend of 138.4 cents.
Total revenues increased 34% to $3.8 billion and operating income rose 27% to $628 million from the previous year.
Diluted earnings per share increased to 207.2 cents from 145.4 cents in the previous year.
Credit Suisse AG declined 4.2% to Sfr 2.66 after the Swiss Financial Market Supervisory Authority, Finma, said it plans to review the recent statement from the company's chairman Axel Lehman.
Chairman Lehman had indicated in the statement that the net asset outflows stabilized in December.
Smith Nephew Plc increased 4.2% to 1,210.50 pence after the company reported a less-than-expected drop in annual profit.
Fourth quarter revenue increased 1.4% to $1.37 billion from the previous year.
Revenue in 2022 increased 0.1% to $5.2 billion and operating profit declined to $450 million from $593 million and diluted earnings per share fell to 25.5 cents from 59.8 cents a year ago.
Movers: Copart, Expeditors Intnl, Home Depot, Nordson, Walmart
Scott Peters
21 Feb, 2023
New York City
Copart, Inc increased 0.7% to $68.85 after the online auctions services provider met investors' expectations.
Revenue in the fiscal second quarter ending in January increased 10.9% to $956.7 million and net income rose to 2.2% to $23.2 million compared to $287.4 million a year ago.
Diluted earnings per share increased to 62 cents from 61 cents a year ago.
The company said used car prices on its auction platform have jumped 55% over the last three years to 2022.
Expeditors International of Washington Inc declined 5.5% to $105.25 after the logistics services provider reported a sharp decline in earnings and revenue in its latest quarter.
Revenue in the fourth quarter fell 36% to $3.6 billion and net income dropped 52% to $219 million from $452.8 million and diluted earnings per share declined 48% to $1.38 compared to $2.69 in the previous year.
The demand for goods from North Asia plunged sharply after the U.S. customers retrenched in the face of elevated inflation and looming economic slowdown worries.
“As pandemic-related bottlenecks eased and air and ocean supply/demand imbalances began to dissipate in the first half of the year, average buy and sell rates progressively declined to varying degrees, as they typically do – until they suddenly began to plummet simultaneously and faster than we would have expected in the fourth quarter,” said Jeffrey S. Musser, President and Chief Executive Officer.
Home Depot Inc fell 6% to $298.77 after the home improvement retailer reported weaker-than-expected quarterly results.
The retailer said revenue in the fiscal fourth quarter ending in January increased 0.3% to $35.8 billion from the previous year.
Comparable sales for the fourth quarter fell 0.3% and comparable sales in the U.S. decreased 0.3%.
Net earnings for the fourth quarter were $3.4 billion or $3.30 per diluted share compared with net earnings of $3.4 billion or $3.21 per diluted share a year ago.
The home improvement retailer said sales and comparable sales growth to be approximately flat compared to fiscal 2022 as consumers shift aways from goods to services.
Nordson Corp dropped 13.8% to $212.25 after the maker of adhesive dispensing equipment reported quarterly results below expectations.
Revenue in the fiscal first quarter ending in January rose 1% to $610 million and net income fell to $104 million from $120 million in the previous year.
Diluted earnings per share dropped to $1.81 from $2.05 a year ago.
The company lowered its fiscal year sales outlook to between zero and 3.0% and adjusted earnings outlook to between $8.75 and $9.50 a share.
"While the backlog remains robust at approximately $1 billion, the backlog is not consistent across the different businesses and is heavily weighted toward systems and medical interventional solutions.
Order entry in recent weeks has decreased from the previous run rate and several customers have been pushing delivery dates out into the second half of fiscal 2023," the company noted in the earnings statement.
Walmart Inc increased 0.7% to $147.56 after the discount retailer reported strong quarterly results as high income consumers search for bargains in the face of high inflation.
Total revenues in the fourth quarter rose 7.9% to $164 billion and comparable sales in the U.S. rose 8.3% from the previous year and 13.9% from two-years ago.
Sam’s Club comparable sales increased 12.2% from a year ago and 22.6% in two years and membership income increased 7.1% to and membership count rose to a record high.
Total transactions at Walmart U.S. locations increased 1.8% and average ticket size rose 6.3% from a year ago.
Consolidated net income soared 76% to $6.3 billion from $3.6 billion and diluted earnings per share rose to $2.32 from $1.28 in the previous year.
The company estimated fiscal 2024 comparable sales at Walmart U.S. locations to grow between 2% and 2.5%, slower than the 6.6% increase in the previous year.
Consolidated sales in the fiscal 2024 are estimated to rise between 2.5% and 3.0%, compared to 6.7% in the prior year.
Stocks Drop 2% After Treasury Yields Spiked On Higher Rate Worries
Barry Adams
21 Feb, 2023
New York City
Stocks on Wall Street headed lower after worries of consumer spending, rising bond yields and elevated geopolitical tensions dented market sentiment.
The yield on 10-year Treasury notes inched closer to 4.0% after retailers Walmart and Home Depot posted strong results but guided weaker growth.
The growth outlook from two retail giants put investors on defensive as higher interest rates and inflation have started affecting consumer spending.
Home Depot fell 6% after the home improvement retailer missed revenue estimate in the last quarter and the retailer estimated flat sales in the current fiscal year.
Investors were also on the backfoot after tensions continued to rise between the two superpowers of the world, U.S. and China.
U.S. Secretary of State Antony Blinken in an interview on Sunday raised the prospects of "Chinese companies providing non-lethal support to Russia for use in Ukraine."
On the sidelines of the Munich Security Conference, the meeting between Secretary Blinken and Chinese Director of the Office of the Central Foreign Affairs Commission Wang Yi failed to calm down the rising tensions.
U.S. Existing Home Sales Declined 12th Straight Month
Existing home sales declined for the twelfth month in a row in January after home affordability kept buyers away.
Sales of single-family homes, condominiums and co-ops declined 0.7% from the previous month in January to a seasonally adjusted annual rate of 4 million.
Sales plunged 36.9% from the previous year and median price of a home increased 1.3% from a year ago to $359,000.
“Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun.
“Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Homes available for sale at the end of January increased 2.1% from December and 15.3% from a year ago to 980,000.
U.S. Markets In Review
The S&P 500 index decreased 1.6% to 4,015.44 and the Nasdaq Composite index dropped 1.9% to 11,559.44.
The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury yields jumped to 3.92% and 30-year Treasury bonds jumped to 3.97%.
Crude oil and natural gas prices declined on the first day of trading this week and natural gas prices dropped below $2 a thermal unit, the first time since September 2020.
Crude oil declined 83 cents to $76.40 a barrel and natural gas futures declined 13 cents to $2.09 a thermal unit.
U.S. Movers
Home Depot fell 6% to $298.77 after the home improvement retailer reported weaker-than-expected quarterly results.
The retailer said revenue in the fiscal fourth quarter ending in January increased 0.3% to $35.8 billion from the previous year.
Comparable sales for the fourth quarter fell 0.3% and comparable sales in the U.S. decreased 0.3%.
Net earnings for the fourth quarter were $3.4 billion or $3.30 per diluted share compared with net earnings of $3.4 billion or $3.21 per diluted share a year ago.
The home improvement retailer said sales and comparable sales growth to be approximately flat compared to fiscal 2022 as consumers shift aways from goods to services.
Walmart Inc increased 0.7% to $147.56 after the discount retailer reported strong quarterly results as high income consumers search for bargains in the face of high inflation.
Total revenues in the fourth quarter rose 7.9% to $164 billion and comparable sales in the U.S. rose 8.3% from the previous year and 13.9% from two-years ago.
Sam’s Club comparable sales increased 12.2% from a year ago and 22.6% in two years and membership income increased 7.1% to and membership count rose to a record high.
Total transactions at Walmart U.S. locations increased 1.8% and average ticket size rose 6.3% from a year ago.
Consolidated net income soared 76% to $6.3 billion from $3.6 billion and diluted earnings per share rose to $2.32 from $1.28 in the previous year.
The company estimated fiscal 2024 comparable sales at Walmart U.S. locations to grow between 2% and 2.5%, slower than the 6.6% increase in the previous year.
Consolidated sales in the fiscal 2024 are estimated to rise between 2.5% and 3.0%, compared to 6.7% in the prior year.
Russia's Economy Avoided Dire Predictions, Euro Area Confidence Improved
Bridgette Randall
20 Feb, 2023
Frankfurt
European markets gyrated and benchmark indexes struggled to find direction after geopolitical tensions rose in North Asia.
Tensions between the U.S. and China rose after diplomats sparred at the Munich Security Conference on Friday ahead of the one-year anniversary of Russia's invasion of Ukraine.
U.S. President Joe Biden made an unannounced visit to Kyiv, Ukraine ahead of the one-year anniversary in a show of support to the struggling nation under military invasion.
Tensions are also on the rise in the European Union after energy prices soared five-fold and the cost of living crisis has spread from Germany, France, to the UK.
The war in Ukraine is showing no signs of ending as the first anniversary of the war approaches and consumers in the European Union are struggling with sky high energy prices and the European Union governments are weighed down by a surge in national debts.
In addition, the Russian economy shrank under widening sanctions from the United States and European Union but the resource export dependent economy is showing no signs of cracking as predicted by most western economists and analysts.
Russia's Economy Avoided Dire Predictions
Russia's economy contracted 2.1% in 2022, the Federal State Statistics Service reported Monday.
The GDP declined far less-than-expected in the year after energy prices soared as much as five-fold before cooling off in the last quarter.
Immediately after the Russia's invasion to Ukraine, most economists in the U.S. and western Europe estimated Russia's GDP to collapse at least 12% and and estimates ran as high as 25%.
The statistics office also upwardly revised 2021 economic expansion to 5.6% after the share of exports in the economy was revised higher.
Geopolitical Tensions Rise In Asia
North Korea fired two short-range missiles on Monday, the defense ministry confirmed Monday.
Two missiles traveled between 350 kilometers and 400 kilometers and plunged to the Sea of Japan near the economic zone.
Monday's launch followed the firing of the long-range missile on Saturday that reached waters near Hokkaido.
Tensions were high after balloon spat between China and the U.S. escalated and showed no sign of easing.
Moreover, Japanese diplomats also stepped up activities and notified Chinese counterparts that Japan will knock down aerial objects that violate its airspace.
Prime Minister Fumio Kishida requested an emergency meeting of the United Nations Security Council and the meeting is expected to be held in New York on Tuesday at 8 p.m. Eastern Time.
Consumer Confidence Improved In Euro Area
Consumer confidence index increased 1.7 points to -19.0 in the Euro Are and recovered 1.5 points to -20.6 in the European Union, according to a report released by the European Commission Monday.
Despite the confidence improving for the four months in a row, the index remained well below its long term average.
European Markets
The DAX index declined 4.45 points to 15,477.55, the CAC-40 index dropped 12.11 points to 7,335.61 and the FTSE 100 index increased 9.95 points to 8,014.31.
The yield on 10-year German Bunds inched up to 2.469%, French bonds edged higher to 2.93%, the UK Gilts to 3.47% and Italian bonds to 4.33%.
The euro inched lower to $1.0683, the British pound traded near $1.203 and the Swiss franc held firm at 92.30 U.S. cents.
Brent crude oil increased $1.21 to $84.21 a barrel and the Dutch TTF natural gas spot price inched up 1.5% to Є49.87 per MWh.
Europe Movers
Resource and metals companies traded higher on the hopes of a rebound in China demand.
Glencore plc increased 1.9% to 519.40 pence, Anglo American increased 0.3% to 3,219.0 pence and Antofagasta Plc added 0.2% to 1,733.36 pence.
Valneva SE increased 0.7% to €5.82 after the French biotech company said that the U.S. Food and Drug Administration granted priority status for its Chikungunya vaccine VLA1553 application.
Raiffeisen Bank International AG fell 7.3% to €15.25 after the Austrian bank said that the U.S. Office of Foreign Assets Control has launched an inquiry into the bank's business related to Russia.
China Holds Key Rates, Ocean Freight Rates Plunged to New One-year Low
Arjun Pandit
20 Feb, 2023
Mumbai
Asian stocks closed mixed and investors in Japan were on alert after North Korea tested another ballistic missile.
North Korea fired two short-range missiles on Monday, the defense ministry confirmed Monday.
Two missiles traveled between 350 kilometers and 400 kilometers and plunged to the Sea of Japan near the economic zone.
Monday's launch followed the firing of the long-range missile on Saturday that reached waters near Hokkaido.
Tensions were high after balloon spat between China and the U.S. escalated and showed no sign of easing.
Moreover, Japanese diplomats also stepped up activities and notified Chinese counterparts that Japan will knock down aerial objects that violate its airspace.
Prime Minister Fumio Kishida requested an emergency meeting of the United Nations Security Council and the meeting is expected to be held in New York on Tuesday at 8 p.m. Eastern Time.
The yen traded in a tight range and stocks were on hold after geopolitical tensions were on the rise in the region.
The Nikkei 225 Stock Average increased 18.18 points and the yen edged down to 134.04 against the U.S. dollar.
China Left Key Lending Rates Unchanged
The central bank left its lending rate unchanged for the sixth month in a row.
One-year loan prime lending rate, used for consumer and corporate lending, was left at 3.65% and five-year lending rate, reference rate for mortgages, was held at 4.3%.
China lowered two key lending rates last August 2020 to revive the flagging economy before the ending of "zero-Covid" lockdowns.
Container Shipping Rates Accelerate Decline
Shifting trade picture and falling global demand was visible as port activities at main exporting hubs in South China remained subdued.
Yantian International Container Terminal has only 15% of the 15,000 truck drivers working and empty containers are stacked seven-level high, the highest since the launching of the port in 1993.
The Freightos Baltic Index showed that the freight cost to ship a 40-foot container from Asia to the west coast of the United States weakened last week and dropped to $1,295, 92% lower than the level last year.
The freight cost for shipping a 40-foot container from Asia to the east coast of the United States declined 86% last week from the level a year ago.
China Stocks Soar After Rate Decision
Stocks in China surged after the People's Bank of China left its key lending rate unchanged.
The Shanghai Composite Index soared 2.1% to 3,290.34 and the Hang Seng index added 0.8% to 20,886.96.
India Stocks On Hold On Rising Geopolitical Tensions
Stocks in Mumbai advanced in the early trading but gave up gains in the afternoon after investors turned cautious on the rising tensions between China, Japan, North Korea and the U.S.
Investors are also worried that the return of aggressive U.S. interest rate hikes may negatively impact the battered rupee and also weaken the goods exports from India.
Cipla Ltd plunged 6.1% after the U.S. health regulator issued 8 observations following inspections between February 6 and 17.
The company said it will work closely with the U.S. Food and Drug Administration and the drug maker said it is committed to addressing the recommendations in the stipulated time.
The Sensex index declined 0.5% or 311.03 points to 60,691.54 and the Nifty index dropped 0.6% or 99.60 points to 17,844.60.
The Indian rupee edged lower to 82.62 against the U.S. dollar.
Housing Starts and Permits Declined, Completions Rose In January
Brian Turner
16 Feb, 2023
New York City
Seasonally adjusted housing starts fell 4.5% from a month earlier to an annualized rate of 1.309 million, the lowest since June 2020.
Housing starts fell 21.4% from a year ago level of 1.66 million, the monthly report from the U.S. Census Bureau said Thursday in the residential construction monthly report.
Single-family housing starts declined 4.3% to an annual rate of 841,000 from the revised December rate of 879,000.
Building permits in January were at a seasonally adjusted annual rate of 1,339,000, 0.1% above the revised December rate of 1.33 million, but 27.3% below the January 2022 rate of 1.8 million.
Housing completions in January were at a seasonally adjusted annual rate of 1.4 million. 1.0% above the revised December estimate of 1.39 million and 12.8% up from a year ago.
Single-family home completions increased 4.4% from December at a rate of 1.04 million.
Wholesale Price Inflation Jumped to 7-month High
Brian Turner
16 Feb, 2023
New York City
The producer price index, a measure of wholesale prices, in the U.S. rose more than expected in January, the U.S. Bureau of Labor Statistics said Thursday.
The Producer Price Index for final demand increased 0.7% in January from the previous month and advanced 6.0% in a year, the most in seven months.
Prices for final demand goods advanced 1.2%, and index for final demand services rose 0.4%.
Nearly one-third of the January advance in the index for final demand goods can be traced to prices for gasoline, which increased 6.2%.
U.S. and European Markets Diverge On Different Outlooks for Rates and Earnings
Barry Adams
17 Feb, 2023
New York City
Falling energy prices and worries of rising rates drove market sentiment on the final day this week.
On the light day but busy week of corporate earnings releases, market sentiment swung between resilient consumer spending and weakening corporate earnings outlook.
Tight labor market conditions are supporting consumer spending despite the eight interest rate increases over the last twelve months.
But, higher rates have a lagging impact on the broader economy and so far the rate hikes of more than 400 basis points have failed to dampen consumer demand.
Moreover, the supply chain issues that drove consumer price inflation to a 4-decade high in 2020 and 2021 are not the drivers of inflation as price increases have seeped into the services sector which dominates the economy.
Energy sector stocks led the decliners in Friday's trading after crude oil prices neared the pre-Ukraine war levels and natural gas prices dropped near a 30-month low.
U.S. Markets
Benchmark indexes opened lower and dropped to the low by midday but indexes managed to trim losses as the market weakness failed to broaden beyond tech and energy sectors.
The S&P 500 index decreased 0.3% to 4,079.22 and the Nasdaq Composite index declined 0.6% to 11,787.27.
For the week, the S&P 500 index declined 0.8% and the Nasdaq Composite index eased 0.2%.
Year-to-date, the S&P 500 index has gained 6.6% and the Nasdaq Composite index has advanced 13.5%.
The yield on 2-year Treasury notes increased to 4.62%, 10-year Treasury notes edged lower to 3.81% and 30-year Treasury bonds closed down at 3.87%.
Natural gas prices closed down below $2.30 a unit and fell to the low last seen in September 2020 amid weak demand on warmer-than-usual weather and elevated supplies.
Natural gas prices in Europe also traded near 18-month low on falling demand after warmer weather conditions eased energy crisis in the region.
Crude oil declined $2.11 to $76.37 a barrel and natural gas futures for immediate month delivery fell 11 cents or 4.7% to 11,787.272.27 a thermal unit.
U.S. Movers
AutoNation Inc increased 9.5% to $154.90 after the automobile dealer reported better-than-expected sales of new vehicles.
AutoNation said fourth quarter revenue decreased 2% to $6.7 billion and net income declined 26% to $286.4 million from $ 387.1 million and diluted earnings per share declined to $5.72 from $5.87 a year ago.
In the quarter, new vehicle unit sales increased 4% to 60,074 and used vehicle sales declined 9% to 67,608.
Deere & Company increased 5.9% to $426.89 after quarterly income more than doubled.
Deere & Company said revenue in the fiscal first quarter ending in January increased 32% to $12.6 billion and net income jumped 117% to $1.95 billion from $903 million and diluted earnings per share rose to $6.55 from $2.92 a year ago.
DoorDash Inc declined 5.9% to $62.94 after the delivery service provider said quarterly loss expanded.
DoorDash said revenue in the fourth quarter increased 38% to $1.8 billion and net loss expanded to $659 million from $157 million and diluted loss per share increased to $1.65 from 45 cents a year ago.
In 2022, revenue increased 34.6% $6.6 billion from $4.9 billion and net loss increased to $1.4 billion from $468 million or $3.68 from $1.39 a share.
Hyatt Hotels Corporation declined 2.4% to $114.10 after the hotel and resorts operator reported weaker-than-expected quarterly earnings.
Hyatt Hotels said revenue in the fourth quarter increased 49% to $1.59 billion and the hotel operator swung to a profit of $294 million from a loss of $29 million and diluted EPS was $2.74 from ($0.26) a year ago.
In 2022, revenue increased 97% to $5.9 billion from $3.0 billion and swung to a profit of $455 million from a loss of $222 million or $4.09 from ($2.13) a share a year ago.
By the end of 2022, the company had a pipeline of approximately 580 hotels with 117,000 rooms.
European Markets Extend Weekly Advances
European markets faced headwinds but managed to trim losses after stronger corporate results provided support for riskier assets.
Benchmark indexes were under pressure after two Federal Reserve officials called for strong rate hikes at the next policy meetings in March after wholesale inflation and retail sales were ahead of expectations.
Loretta Mester and James Bullard supported the case for a larger rate increase of 50 basis points.
Investors stepped up stock exposure after banks, insurance and industrial companies and logistics and transportation companies generally reported better-than-expected results.
Investors also reviewed the latest earnings from Allianz SE, Daimler Benz AG, NatWest, SEGRO and Air France KLM.
For the week the DAX index gained 1%, the CAC-40 index advanced 2.6% and the FTSE 100 index rose 1.5%.
Weaker Energy Prices Drag German PPI Down to 17-month Low
Germany's producer price index decreased for the fourth month in a row and declined to the level last seen 17 months after natural gas prices steadily declined.
The producer price index eased to 17.8% in January from 21.2% in December, data from Destatis or Federal Statistics Office showed Friday.
The latest inflation rate was the weakest since August 2021, when prices had rose 14.2% from a year ago.
French Consumer Inflation In January Reaffirmed
Consumer price inflation in January rose slightly as previously estimated, the final data from the statistics office INSEE showed Friday.
Consumer price index increased 6.0% from a year ago in January after rising 5.9% in December, matching the previous estimate released on January 31.
Energy price inflation accelerated to 16.3% in January from 15.1% in December and food prices rose 13.3% from 12.1%.
Promotions Drove UK Retail Sales Rebound In January
UK retail sales unexpectedly increased 0.5% in January from the previous month driven by sales promotion, the Office for National Statistics reported Friday.
January sales rose following a 1.2% decline in December and 0.6% fall in November after promotions brought back consumers to stores.
Excluding auto fuel, retail sales rose 0.4%, reversing 1.4% decline in December.
Swiss Industrial Production Expands In Q4
Swiss industrial production expanded in the fourth quarter at a slightly faster pace than in the third quarter, Federal Statistics Office data showed Friday.
Industrial production increased 6.0% in the final quarter of 2022 from 5.9% in the third quarter.
Manufacturing sector expanded 7.9%, while the mining and quarrying segment shrank 3.0% and electricity supply declined 10.3%.
Europe Markets Review
The DAX index fell 0.3% to 15,482.00, the CAC-index declined 0.3% to 7,347.72 and the FTSE 100 index eased 0.1% 8,004.36.
The euro inched higher to $1.068, the British pound edged up to $1.202 and the Swiss franc traded near 92.56 U.S. cents.
The yield on 10-year German Bunds increased to 2.43%, French bonds closed down at 2.89%, the UK Gilts at 3.50% and Italian bonds at 4.27%.
Brent crude oil declined $2.90 to $82.21 a barrel and the Dutch TTF natural gas futures dropped to Є49.40 per MWh.
Europe Movers
Allianz SE declined 1.9% to €216.95 after the insurance and asset management group reported a decline in its assets under management and in non-life operations.
Daimler Benz Group AG increased 2.4% to €74.64 after the vehicle maker reported better-than-expected financial results and said it plans to repurchase Є4 billion of its stocks over the next two years.
Sika AG increased 4.9% to Sfr276.90 after the Swiss chemical company reported fiscal year 2022 net income increased 11%.
Swiss Re AG was nearly unchanged at 96.14 after the Swiss reinsurance group reported a decline in fiscal 2022 earnings.
Air France KLM SA increased 5.3% to €1.76 after the French-Dutch airline forecasted higher margin and strong bookings in 2023.
NatWest Group Plc declined 6.5% to 285.62 pence despite the British bank reporting stronger operating results in 2022.
SEGRO PLC increased 0.9% to 843.57 pence after the UK-based warehouse company reported a rebound in operating results in 2022.
Smith & Nephew Plc declined 0.2% to 1,154.93 pence after the UK-based prosthetic devices maker nominated a new chairman.
Asian markets fell across the region on the worries of higher U.S. interest rates inflicting another round of currency devaluation in the region.
Benchmark indexes fell after two U.S. Federal Reserve officials called for strong rate hikes at the next policy meetings in March after wholesale inflation and retail sales were ahead of expectations.
Loretta Mester and James Bullard supported the case for a larger rate increase of 50 basis points.
Stocks in Japan closed lower on the uncertainties about the future direction of the Bank of Japan's yield curve control policy.
Softbank led the decliners after tech stocks faced renewed selling following the prospect of larger increases in interest rates in the U.S.
Mainland China and Hong Kong stocks declined on the weakness in tech stocks and home builders.
For the week, the Nikkei edged down 0.6%, the Shanghai Composite declined 1.1%, the Hang Seng index dropped 2.2% and the Nifty and the Sensex indexes rose 0.6%.
China's New Home Prices Extend Losses to 9th Month
New home prices in China declined for the ninth month in a row after buyers stayed away from new purchases, the National Bureau of Statistics reported Friday.
The average price of a new home in 70 large and medium sized cities declined 1.5% from a year ago in January, matching the rate in December.
Home prices in January increased 0.1% from the previous month, the first rise in a year.
Singapore's International Trade Shrank On Weak Global Demands
Singapore's non-oil exports declined for the fourth month in a row in January, Enterprise Singapore said in a report Friday.
Non-oil exports declined 25% in January, larger than the 20.6% fall in November, the government data showed.
Exports declined 9.3% and imports fell 11.7% in January, resulting in a 10.4% decline in total international trade. volume.
Asian Markets Review
The Nikkei 225 index fell 0.7% to 27,513.13 and the yen declined to 134.18 against the U.S. dollar.
The Shanghai Composite index fell 0.7% to 3,224.02 and the Hang Seng index declined 1.3% to 20,719.81.
The Sensex index decreased 0.5% or 316.94 points to 20,719.81 and the Nifty index declined 0.5% or 91.65 to 17,944.20.
The Indian rupee weakened to 82.72 against the U.S. dollar and the yield on 10-year Indian government bonds traded near 7.34%.
Asia Movers
Tech stocks led the decliners in Tokyo trading.
Advantest Corp fell 1.7% to ¥10,050.0, Tokyo Electron Ltd declined 1.7% to ¥46,190.0 and Screen Holdings dropped 1.7% to ¥10,290.0.
China Renaissance Holdings Ltd plunged 28% after the company said it is not able to contact its chief executive office and the controlling shareholder Bao Fan.
Samsung Electronics, LG Energy Solution and Samsung SDI fell between 2% and 4%. after the Kospi index in Seoul decreased 1% to 2,451.21.
Adani Enterprises Ltd declined 4.5% to ₹1,719.0 and extended year-to-date losses by 55% following a negative report from the U.S.-based short seller Hindenburg Research.
Aggressive Rate Hike Worries Dragged Asian Markets Lower
Arjun Pandit
17 Feb, 2023
Mumbai
Asian markets fell across the region on the worries of higher U.S. interest rates inflicting another round of currency devaluation in the region.
Benchmark indexes fell after two U.S. Federal Reserve officials called for strong rate hikes at the next policy meetings in March after wholesale inflation and retail sales were ahead of expectations.
Loretta Mester and James Bullard supported the case for a larger rate increase of 50 basis points.
Stocks in Japan closed lower on the uncertainties about the future direction of the Bank of Japan's yield curve control policy.
Softbank led the decliners after tech stocks faced renewed selling following the prospect of larger increases in interest rates in the U.S.
Mainland China and Hong Kong stocks declined on the weakness in tech stocks and home builders.
For the week, the Nikkei edged down 0.6%, the Shanghai Composite declined 1.1%, the Hang Seng index dropped 2.2% and the Nifty and the Sensex indexes rose 0.6%.
China's New Home Prices Extend Losses to 9th Month
New home prices in China declined for the ninth month in a row after buyers stayed away from new purchases, the National Bureau of Statistics reported Friday.
The average price of a new home in 70 large and medium sized cities declined 1.5% from a year ago in January, matching the rate in December.
Home prices in January increased 0.1% from the previous month, the first rise in a year.
Singapore's International Trade Shrank On Weak Global Demands
Singapore's non-oil exports declined for the fourth month in a row in January, Enterprise Singapore said in a report Friday.
Non-oil exports declined 25% in January, larger than the 20.6% fall in November, the government data showed.
Exports declined 9.3% and imports fell 11.7% in January, resulting in a 10.4% decline in total international trade. volume.
Asian Markets Review
The Nikkei 225 index fell 0.7% to 27,513.13 and the yen declined to 134.18 against the U.S. dollar.
The Shanghai Composite index fell 0.7% to 3,224.02 and the Hang Seng index declined 1.3% to 20,719.81.
The Sensex index decreased 0.5% or 316.94 points to 20,719.81 and the Nifty index declined 0.5% or 91.65 to 17,944.20.
The Indian rupee weakened to 82.72 against the U.S. dollar and the yield on 10-year Indian government bonds traded near 7.34%.
Asia Movers
Tech stocks led the decliners in Tokyo trading.
Advantest Corp fell 1.7% to ¥10,050.0, Tokyo Electron Ltd declined 1.7% to ¥46,190.0 and Screen Holdings dropped 1.7% to ¥10,290.0.
China Renaissance Holdings Ltd plunged 28% after the company said it is not able to contact its chief executive office and the controlling shareholder Bao Fan.
Samsung Electronics, LG Energy Solution and Samsung SDI fell between 2% and 4%. after the Kospi index in Seoul decreased 1% to 2,451.21.
Adani Enterprises Ltd declined 4.5% to ₹1,719.0 and extended year-to-date losses by 55% following a negative report from the U.S.-based short seller Hindenburg Research.