Market Update
Movers: Amazon, Chord Energy, Microsoft, Norwegian Cruise, Paramount Resources, Rivian, RingCentral
Barry Adams
06 Jul, 2022
New York City
U.S. indexes traded near flat line and energy prices continued to slide reacting to the rising expectations of economic slowdown.
The S&P 500 index increased 0.05% to 3,833.92 and the Nasdaq Composite Index rose 0.2% to 11,347.91.
Futures of crude oil declined 3.5% to $96.01 a barrel and natural gas eased 5.8 cents to $5.48 a unit.
Amazon.com, Inc declined 0.7% to $112.84 after the company added one year free delivery from Grubhub.com for its prime members.
Just Eat Takeaway.com, the parent of Grubhub, offered warrants totaling up to a 15% stake in the U.S. based Grubhub when fully exercised by Amazon.
Separately, the U.K. antitrust regulator is investigating the retailer if the company is offering an unfair advantage to its own sellers over third-party sellers.
Chord Energy Corporation dropped 5.6% to $96.58 after the newly named company completed the merger between Whiting Petroleum and Oasis Petroleum.
The newly merged company under the new symbol CHRD began trading on July 5.
The merged company also lifted its second quarter energy production to increase 18% from 9% using the three stream production assumption.
Whiting and Oasis announced a $6 billion merger on March 7.
Microsoft increased 0.2% to $263.32 and the company's $68 billion acquisition of Activision Blizzard is facing an antitrust investigation from the U.K. regulator.
Norwegian Cruise Line dropped 9.5% to $11.28 on the worries that the cruise industry may face more headwinds if the U.S. heads into a recession or an economic slowdown.
Carnival Corp declined 6.8% to $8.80 and Royal Caribbean dropped 6.6% to $33.99.
Paramount Resources dropped 8.04% to $26.09 and Raymond James lifted its price target for the Canadian energy company to C$45.
Rivian Automotive Inc surged 10.5% to $29.68 after the electric vehicle maker reiterated its production plan.
The electric truck maker said it produced 4,401 vehicles in the second quarter ending in June and the company is on track to produce 25,000 vehicles in the current year.
RingCentral Inc declined 10.01% to $55.09 after Needham analyst Ryan Koontz downgraded the cloud services provider to "hold" from "buy" and removed his price target of $110 citing stronger competition from Microsoft Teams.
Jobs Market Remain Tight, New Job Postings Decline 6.9% In May
Brian Turner
06 Jul, 2022
New York City
The number of job openings decreased 6.9% to 11.3 million on the last business day of May, the U.S. Bureau of Labor Statistics reported today.
Total hires in May were nearly unchanged at 6.5 million and separations were also unchanged at 6.0 million in May.
Hires totaled 78.4 million and separations totaled 72.0 million, yielding a net employment gain of 6.4 million, over 12 months to May.
These totals include workers who may have been hired and separated more than once during the year.
U.S. Indexes Fall In Volatile Trading Tracking Lower Oil
Bridgette Randall
06 Jul, 2022
New York City
U.S. stocks edged lower and energy prices continued to slide reacting to the rising expectations of economic slowdown.
The S&P 500 index decreased 0.5% to 3,809.92 and the Nasdaq Composite Index fell 0.6% to 11,256.71.
Futures of crude oil declined 3.5% to $96.01 a barrel and natural gas eased 5.8 cents to $5.48 a unit.
The labor market conditions remained tight at the end of spring according to the latest employment situation report from the U.S. Department of Labor.
The yield on 10-year Treasury notes increased to 2.88% and mortgage rates dropped for the second week in a row.
Mortgage rates for 30-year fixed-rate mortgage loans declined to 5.74% from 5.84% in the previous week, according to data from the Mortgage Bankers Association.
The origination and other fees rose to 0.65 percentage points from 0.64 for the loans with 20% down payment in the previous week, the press release noted.
The number of job openings decreased 6.9% to 11.3 million on the last business day of May, the U.S. Bureau of Labor Statistics reported today.
Total hires in May were nearly unchanged at 6.5 million and separations were also unchanged at 6.0 million in May.
Hires totaled 78.4 million and separations totaled 72.0 million, yielding a net employment gain of 6.4 million, over 12 months to May.
These totals include workers who may have been hired and separated more than once during the year.
Investors are looking ahead to the release of the Fed's latest minutes of meeting at 2:00 p.m. this afternoon.
Amazon.com, Inc declined 0.7% to $112.84 after the company added one year free delivery from Grubhub.com for its prime members.
Separately, the U.K. antitrust regulator is investigating the retailer if the company is offering an unfair advantage to its own sellers over third-party sellers.
Microsoft increased 0.2% to $263.32 and the company's $68 billion acquisition of Activision Blizzard is facing an antitrust investigation from the U.K. regulator.
European Movers: Abrdn, EDF, Evotec, Just Eat, Trainline
Bridgette Randall
06 Jul, 2022
Frankfurt
European markets rebounded after natural gas prices dropped after Norwegian workers called off strike for now.
The DAX index increased 1.3% to 12,565.63, the CAC-40 index advanced 1.6% to 5,886.09, and the FTSE 100 index added 1.6% to 7,137.84.
Oil and gas workers at Equinor called off strike after Norway intervened and proposed a mandatory arbitration.
However, the union has not called off the proposed strike at other fields scheduled from July 9.
The Gudrun, Oseberg South and Oseberg East fields have started run-up of production and are expected to reach full production of 89,000 equivalent barrels of oil in two days.
Natural gas prices eased to 169.05 euros per megawatt after rising as much as 177 euros in the previous session.
Just Eat Takeaway.com increased 16.8% to 1,383.0 pence after Amazon offered a one-year free delivery from restaurants listed on its U.S. unit Grubhub for one year.
The deal is expected to be earnings neutral in 2022 but is expected to be positive for earnings and cash flow in 2023, the company's press release noted on Wednesday.
Trainline Plc increased 23.9% to 349.18 pence after the online booking site lifted its sales outlook on the European travel rebound driven by a surge in demand from the U.S.
The company said rail ticket sales are up 16% in the first four months to June in the fiscal 2023.
The ticket platform operator said full-year ticker sales are expected to increase between 18% and 27% and sales to increase between 22% and 31% from fiscal 2020.
Abrdn Plc gained 7.2% to 157.80 pence after the U.K. based investment management firm announced a share repurchase plan of 300 million pounds.
The asset management firm will complete the repurchase of 1
European Markets Rebound After Norway Energy Workers Return to Work for Now
Bridgette Randall
06 Jul, 2022
New York City
European markets rebounded after natural gas prices dropped after Norwegian workers called off strike for now.
The DAX index increased 1.3% to 12,565.63, the CAC-40 index advanced 1.6% to 5,886.09, and the FTSE 100 index added 1.6% to 7,137.84.
Oil and gas workers at Equinor called off strike after Norway intervened and proposed a mandatory arbitration.
However, the union has not called off the proposed strike at other fields scheduled from July 9.
The Gudrun, Oseberg South and Oseberg East fields have started run-up of production and are expected to reach full production of 89,000 equivalent barrels of oil in two days.
Natural gas prices eased to 169.05 euros per megawatt after rising as much as 177 euros in the previous session.
Eurozone retail sales rose at a slower than anticipated pace in May, the eurostat data showed on Wednesday.
On a monthly basis, retail sales increased 0.2% in May from the revised 1.4% in April.
Food, drinks and tobacco sales contracted 0.3% in May compared to a 2.3% fall in April.
On a yearly basis, retail sales growth eased to 0.2% in May from 4.0% in April.
Germany's factory orders increased 0.1% in May after falling 1.8% in April, the destatis data showed on Wednesday.
On a yearly basis, new orders declined 3.1% in May, slower than 5.3% fall in April,
On a monthly basis, domestic orders declined 1.3% but foreign orders rose 1.6% after non-euro area orders increased 3.7%.
Construction activities in Germany declined for the third month in a row in June, the latest survey from S&P Global showed on Wednesday.
Rising building costs and higher interest rates dragged the activities in the sector.
The construction Purchasing Managers' Index increased from a nine-month low of 45.4 in May to 45.9 in June.
Any reading below 50 indicates contraction.
UK construction activities dropped to a nine-month low in June on rising materials cost and higher interest rates, the survey from S&P Global reported on Wednesday.
The S&P Global/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell to 52.6 in June from 56.4 in May.
Home building was the weakest among all construction activities for the fourth month in a row and contracted for the first time since May 2020.
Just Eat Takeaway.com increased 16.8% to 1,383.0 pence after Amazon offered a one-year free delivery from restaurants listed on its U.S. unit Grubhub for one year.
The deal is expected to be earnings neutral in 2022 but is expected to be positive for earnings and cash flow in 2023, the company's press release noted on Wednesday.
Trainline Plc increased 23.9% to 349.18 pence after the online booking site lifted its sales outlook on the European travel rebound driven by a surge in demand from the U.S.
The company said rail ticket sales are up 16% in the first four months to June in the fiscal 2023.
The ticket platform operator said full-year ticker sales are expected to increase between 18% and 27% and sales to increase between 22% and 31% from fiscal 2020.
Abrdn Plc gained 5.4% after the U.K. based investment management firm announced a share repurchase plan of 300 million pounds.
Evotec SE increased 2.6% to 24.51 euros after the company set up a joint venture with Boehringer Ingelheim and bioM
Tech Stocks Rally Lifts Nasdaq and Erases 2% Loss In S&P 500
Barry Adams
05 Jul, 2022
New York City
U.S. stocks staged a afternoon rally led by tech stocks after interest rates eased.
The S&P 500 index increased 0.16% to 3,831.39 and the Nasdaq Composite index gained 1.75% to 11,322.25.
After a three-day weekend, investors returned with recession anxieties and global economic slowdown worries and stocks opened lower and stayed in the negative territory in the first two hours of trading.
However, the weakness in the bond yields energized traders in tech stocks and the tech-heavy Nasdaq Composite gained momentum.
The yield on 10-year U.S. Treasury notes declined 10 basis points to 2.812%.
The steady advances in tech stocks supported a turnaround in the S&P 500 index but the rally failed to broaden.
Investors are awaiting the jobs report on Friday and the release of Fed's latest minutes of meeting on Wednesday.
President Biden's administration is negotiating with Chinese cabinet members in rolling back Trump era tariffs on imported goods from China and ease inflation burden on consumers.
The decision on tariff rollback is expected as early as this week.
Futures of crude oil plunged 8% to $99.51 a barrel and natural gas plunged 4.2% to $5.49 a unit.
The crude oil futures plunged below $100 a barrel for the first time since May 11 after spiking as high as $130.50 a barrel in March following Russia's Ukraine invasion and the international price of oil spiked to $140 a barrel.
Natural gas markets are bracing for another delivery shock starting as early next week.
Russia announced to completely halt all gas deliveries through Nordstream 1 beginning next Monday for 10 days for planned maintenance.
Moreover, Norwegian gas workers went on a strike over a pay dispute forcing the state controlled Equinor to shut down three oil fields in the North Sea.
Three gas fields produce the equivalent of 89,000 barrels of oil a day with about 30% of output in natural gas, Equinor said in a press release.
September Futures of natural gas prices soared as much as 5% or to 172 euros before settling at a lower level of 165 euros per megawatt hour, price feed from the Intercontinental Exchange showed.
Energy stocks led the decliners after crude oil prices plunged in the early trading.
Exxon Mobil Corp declined 4.5% to $83.71, Chevron dropped 4.2% to $140.35, and Occidental Petroleum fell 4.8% to $57.52.
Halliburton, Marathon Oil, Schlumberger, EOG Resources, and ConocoPhillips declined more than 7.0%.
Yum Brands declined 1.1% to $114.45 and the owner of fast food chains said the company is close to selling its operations in Russia.
The U.S. dollar advanced against world currencies on rising fears of global slowdown and higher rate expectations in the U.S.
Global recession worries were front and center in today's trading and the euro accelerated its decline in the year so far and plunged to a two decade low.
The euro declined 1.3% to $1.029 and extended this year's loss to 9% after skyrocketing energy prices has driven inflation in the currency zone to a four-decade high.
In the year so far, the euro has fallen 13.8% and the British pound has declined 13.6% against the U.S. dollar.
The U.S. dollar has been gaining ground against currencies around the world after the Federal Reserve lifted rates two times this year and set the expectations for more hikes during the year.
Europe's proximity to the Ukraine war, four-decade high inflation, and interest rates lagging the U.S. has driven the euro to a two-decade low.
The British pound fell 1.5% to $1.193 after two cabinet ministers resigned in protest of Prime Minister Boris Johnson's leadership.
U.K. Prime Minister Boris Johnson suffered a serious blow after two top senior ministers offered their resignations.
Finance Minister Rishi Sunak resigned after the latest scandal rocked Downing Street involving Tory deputy chief Chris Pincher.
Four days ago Pincher resigned from the government over allegations that he groped two men at a private member's club.
"The public rightly expect government to be conducted properly, competently and seriously.
I recognise this may be my last ministerial job, but I believe these standards are worth fighting for and that is why I am resigning.," said Sunak in a letter published on his twitter account.
"It has been an enormous privilege to serve in this role, but I regret that I can no longer continue in good conscience," Health Secretary of State & Social Care Sajid Javid tendered his resignation and said in a letter submitted to prime minister Johnson and published on twitter.
European Markets Drop 2%
Market indexes in Europe dropped more than 2% as fears of a recession escalated in the union on soaring inflation and no end in sight of a war in Ukraine.
The DAX index fell 2.4% to 12,464.54, the CAC-40 index declined 2.4% to 5,810.58, and the FTSE 100 index dropped 2.6% to 7,047.26.
Market worries were compounded after coronavirus infections flared up in easter region of China and local authorities imposed mass testing in at least three cities.
Scandinavian Airlines SAS AB dropped 10.5% to 55 krona cents after the company sought bankruptcy protection in a U.S. court to accelerate its restructuring plan.
Delivery Hero SE gained 1.5% to 35.69 euros after the delivery services provider said it has completed the acquisition GlovoApp23 S.A.
J Sainsbury Plc increased 1.1% to 210.68 pence after the retailer confirmed its full-year outlook.
The retailer said total sales excluding fuel sales declined 4.5% in the sixteen week period ending on June 25. Grocery sales were down 2.4% in the period.
The company confirmed fiscal year 2022-23 underlying profit before tax of between
Strong Dollar Extends Lead Over World Currencies
Brian Turner
05 Jul, 2022
New York City
The U.S. dollar advanced against world currencies on rising fears of global slowdown and higher rate expectations in the U.S.
The Federal Reserve Chairman Jerome Powell has reiterated the central bank's commitment in fighting sky high inflation and set expectations for more rate hikes in the year.
Global recession worries were front and center in today's trading and the euro accelerated its decline in the year so far and plunged to a two decade low.
The euro declined 1.3% to $1.029 and extended this year's loss to 9% after skyrocketing energy prices has driven inflation in the currency zone to a four-decade high.
In the year so far, the euro has fallen 13.8% and the British pound has declined 13.6% against the U.S. dollar.
The U.S. dollar has been gaining ground against currencies around the world after the Federal Reserve lifted rates two times this year and set the expectations for more hikes during the year.
Europe's proximity to the Ukraine war, four-decade high inflation, and interest rates lagging the U.S. has driven the euro to a two-decade low.
The British pound fell 1.5% to $1.193 after two cabinet ministers resigned in protest of Prime Minister Boris Johnson's leadership.
U.K. Prime Minister Boris Johnson suffered a serious blow after two top senior ministers offered their resignations.
Finance Minister Rishi Sunak resigned after the latest scandal rocked Downing Street involving Tory deputy chief Chris Pincher.
Four days ago Pincher resigned from the government over allegations that he groped two men at a private member's club.
"The public rightly expect government to be conducted properly, competently and seriously.
I recognise this may be my last ministerial job, but I believe these standards are worth fighting for and that is why I am resigning.," said Sunak in a letter published on his twitter account.
"It has been an enormous privilege to serve in this role, but I regret that I can no longer continue in good conscience," Health Secretary of State & Social Care Sajid Javid tendered his resignation and said in a letter submitted to prime minister Johnson and published on twitter.
The Japanese yen has been hovering near a two-decade low as the interest rate gap between Japan and the U.S. is expected to widen.
In the year so far, the yen has declined 22.3%.
The yen closed at 135.77 against the U.S. dollar and traders are looking for the currency to cross 140 yen in the early fall.
The Australian dollar has fallen 9.5% and the Canadian dollar has declined 4.5% against one U.S. dollar in the year so far.
Currencies of the emerging markets have also been on the slide with the Indian rupee trading at a record low of 79.36 after June trade deficit widened to a record high above $25 billion.
The Indian rupee has declined 6.3% against the U.S. dollar.
The Korean won has also depreciated as the country's foreign exchange reserve dipped below $440 billion and the currency fell 9.2% in the year so far.
In the past, falling Korean won was a boon to exports but with the rising exports of higher value added manufactured goods, the weakness in the won has been more inflationary as the country imports more raw materials.
Mexican peso has eased 0.4% and the Brazilian Real has dropped 4.5% in the year so far against the U.S. dollar.
European Movers: Delivery Hero, Deutsche Post, Equinor, J Sainsbury, SAS
Bridgette Randall
05 Jul, 2022
New York City
Market indexes in Europe dropped more than 2% as fears of a recession escalated in the union on soaring inflation and no end in sight of a war in Ukraine.
The DAX index fell 2.9% to 12,401.24, the CAC-40 index declined 2.4% to 5,794.18, and the FTSE 100 index dropped 2.86% to 7,025.46.
Market worries were compounded after coronavirus infections flared up in easter region of China and local authorities imposed mass testing in at least three cities.
Scandinavian Airlines SAS AB dropped 10.5% to 55 krona cents after the company sought bankruptcy protection in a U.S. court to accelerate its restructuring plan.
Delivery Hero SE gained 1.5% to 35.69 euros after the delivery services provider said it has completed the purchase of additional stake in Spain-based delivery app GlovoApp23 S.A.
Delivery Hero acquired an additional stake of 39.4% in addition to the 43.8% stake held in the delivery app company.
J Sainsbury Plc increased 1.1% to 210.68 pence after the retailer confirmed its full-year outlook.
The retailer said total sales excluding fuel sales declined 4.5% in the sixteen week period ending on June 25. Grocery sales were down 2.4% in the period.
The company confirmed fiscal year 2022-23 underlying profit before tax of between
Energy Stocks Fall After Crude Oil Drops 10%
Barry Adams
05 Jul, 2022
New York City
Crude oil plunged 10% below $100 a barrel for the first time in six weeks as recession worries dragged market indexes across the Atlantic by 2%.
U.S. stocks fell on recession worries and elevated energy prices with the war in Ukraine showing no signs of ending.
The S&P 500 index declined 1.9% to 3,751.63 and the Nasdaq Composite index dropped 0.9% to 11,029.55.
After a three-day weekend, investors returned with recession anxieties and global economic slowdown worries.
The yield on 10-year U.S. Treasury notes declined 10 basis points to 2.802%.
Energy stocks led the decliners after crude oil prices plunged in the early trading in New York but prices rose in European trading after Norwegian workers went on a strike.
Futures of crude oil plunged 10% to $98.31 a barrel and natural gas plunged 3.7% to $5.51 a unit.
The crude oil futures plunged below $100 a barrel for the first time since May 11 after spiking as high as $130.50 a barrel in March following Russia's Ukraine invasion and the international price of oil spiked to $140 a barrel.
Natural gas markets are bracing for another delivery shock starting as early next week.
Russia announced to completely halt all gas deliveries through Nordstream 1 beginning next Monday for 10 days for planned maintenance.
Moreover, Norwegian gas workers went on a strike over a pay dispute forcing the state controlled Equinor to shut down three oil fields in the North Sea.
Three gas fields produce the equivalent of 89,000 barrels of oil a day with about 30% of output in natural gas, Equinor said in a press release.
September Futures of natural gas prices soared as much as 5% or to 172 euros before settling at a lower level of 165 euros per megawatt hour, price feed from the Intercontinental Exchange showed.
Exxon Mobil Corp declined 4.5% to $83.71, Chevron dropped 4.2% to $140.35, and Occidental Petroleum fell 4.8% to $57.52.
Halliburton, Marathon Oil, Schlumberger, EOG Resources, and ConocoPhillips declined more than 7.0%.
Yum Brands declined 1.1% to $114.45 and the owner of fast food chains said the company is close to selling its operations in Russia.
Floor & Decor Holdings Inc gained 5.5% to $68.49 after two institutional investors took additional stake in the retailer.
Restaurant Brand International declined 2.0% to $50.59 on no company specific news and the stock dropped below its 5-day moving average.
Royal Gold, Inc declined 3.3% to $106.56 and Retirement Systems of Alabama increased its stake in the company to 86,123 shares.
Etsy Inc increased 7.5% to $85.80 and Fifth Third Bancorp said investment funds managed by the bank increased their stake 37.1% to 12,562 shares or $1.56 million at the end of the March quarter.
Liquidity Services, Inc increased 4.4% to $14.71 after Walmart Inc and Target Inc ramped up liquidation of kitchen appliances and outdoor furniture items.
U.S. Stocks Drop On Profit Growth Worries
Barry Adams
05 Jul, 2022
New York City
U.S. stocks fell on recession worries and elevated energy prices with the war in Ukraine showing no signs of ending.
The S&P 500 index declined 1.9% to 3,751.63 and the Nasdaq Composite index dropped 0.9% to 11,029.55.
After a three-day weekend, investors returned with recession anxieties and global economic slowdown worries.
Investors are awaiting the jobs report on Friday and the release of Fed's latest minutes of meeting on Wednesday.
President Biden's administration is negotiating with Chinese cabinet members in rolling back Trump era tariffs on imported goods from China and ease inflation burden on consumers.
The decision on tariff rollback is expected as early as this week.
Futures of crude oil plunged 8% to $99.51 a barrel and natural gas plunged 3.7% to $5.51 a unit.
The crude oil futures plunged below $100 a barrel for the first time since May 11 after spiking as high as $130.50 a barrel in March following Russia's Ukraine invasion and the international price of oil spiked to $140 a barrel.
The yield on 10-year U.S. Treasury notes declined 10 basis points to 2.802%.
Energy stocks led the decliners after crude oil prices plunged in the early trading.
Exxon Mobil Corp declined 4.5% to $83.71, Chevron dropped 4.2% to $140.35, and Occidental Petroleum fell 4.8% to $57.52.
Halliburton, Marathon Oil, Schlumberger, EOG Resources, and ConocoPhillips declined more than 7.0%.
Yum Brands declined 1.1% to $114.45 and the owner of fast food chains said the company is close to selling its operations in Russia.
Floor & Decor Holdings Inc gained 5.5% to $68.49 after two institutional investors took additional stake in the retailer.
Restaurant Brand International declined 2.0% to $50.59 on no company specific news and the stock dropped below its 5-day moving average.
Royal Gold, Inc declined 3.3% to $106.56 and Retirement Systems of Alabama increased its stake in the company to 86,123 shares.
Euro Plunges to Twenty Year Low
The euro accelerated its decline in the year so far and plunged to a two decade low.
The euro declined 1.3% to $1.029 and extended this year's loss to 9% after skyrocketing energy prices has driven inflation in the currency zone to a four-decade high.
Eurozone Private Sector Activities Growth Slows
Industrial production in France was unchanged in May from the revised 0.3% decline in April, the France's statistical office or Insee said on Tuesday.
Manufacturing rebounded 0.8% in May, construction output increased 0.4%, bit utility production declined 5.6% from a year ago.
The eurozone private sector activity expanded at a slower pace in June after service sector growth slowed and the manufacturing sector contracted for the first time in two years, the final survey results from S&P Global reported on Tuesday.
The final composite output index fell to 52.0 in June from 54.8 in May and any reading above indicates expansion and below shows contraction.
European Markets Drop 2%
Market indexes in Europe dropped more than 2% as fears of a recession escalated in the union on soaring inflation and no end in sight of a war in Ukraine.
The DAX index fell 2.4% to 12,464.54, the CAC-40 index declined 2.4% to 5,810.58, and the FTSE 100 index dropped 2.6% to 7,047.26.
Market worries were compounded after coronavirus infections flared up in easter region of China and local authorities imposed mass testing in at least three cities.
Scandinavian Airlines SAS AB dropped 10.5% to 55 krona cents after the company sought bankruptcy protection in a U.S. court to accelerate its restructuring plan.
Delivery Hero SE gained 1.5% to 35.69 euros after the delivery services provider said it has completed the acquisition GlovoApp23 S.A.
J Sainsbury Plc increased 1.1% to 210.68 pence after the retailer confirmed its full-year outlook.
The retailer said total sales excluding fuel sales declined 4.5% in the sixteen week period ending on June 25. Grocery sales were down 2.4% in the period.
The company confirmed fiscal year 2022-23 underlying profit before tax of between
Euro Inches Two-Decade Low On Recession Fears, European Markets Drop 2%
Bridgette Randall
05 Jul, 2022
New York City
Market indexes in Europe dropped more than 2% as fears of a recession escalated in the union on soaring inflation and no end in sight of a war in Ukraine.
The DAX index fell 2.4% to 12,464.54, the CAC-40 index declined 2.4% to 5,810.58, and the FTSE 100 index dropped 2.6% to 7,047.26.
The euro accelerated its decline in the year so far and plunged to a two decade low.
The euro declined 1.3% to $1.029 and extended this year's loss to 9% after skyrocketing energy prices has driven inflation in the currency zone to a four-decade high.
Market worries were compounded after coronavirus infections flared up in easter region of China and local authorities imposed mass testing in at least three cities.
Industrial production in France was unchanged in May from the revised 0.3% decline in April, the France's statistical office or Insee said on Tuesday.
Manufacturing rebounded 0.8% in May, construction output increased 0.4%, bit utility production declined 5.6% from a year ago.
The euro zone private sector activity expanded at a slower pace in June after service sector growth slowed and the manufacturing sector contracted for the first time in two years, the final survey results from S&P Global reported on Tuesday.
The final composite output index fell to 52.0 in June from 54.8 in May and any reading above indicates expansion and below shows contraction.
Scandinavian Airlines SAS AB dropped 10.5% to 55 krona cents after the company sought bankruptcy protection in a U.S. court to accelerate its restructuring plan.
Delivery Hero SE gained 1.5% to 35.69 euros after the delivery services provider said it has completed the acquisition GlovoApp23 S.A.
J Sainsbury Plc increased 1.1% to 210.68 pence after the retailer confirmed its full-year outlook.
The retailer said total sales excluding fuel sales declined 4.5% and grocery sales were down 2.4% in the sixteen week period ending on June 25.
The company confirmed fiscal year 2022-23 underlying profit before tax of between
European Markets React to Fall in German Exports and Elevated Producer Prices
Bridgette Randall
04 Jul, 2022
New York City
European markets advanced and Germany's trade balance swung to a loss in May on a surprise decline in exports.
The DAX index fell 0.3% to 12,773.38, the CAC-40 rose 0.4% to 5,954.65, and the FTSE 100 index increased 0.9% to 7,232.65.
Financial markets in the U.S. are closed to celebrate the Independence Day holiday.
German exports declined 0.5% in May on a monthly basis from April and imports rose 2.7% after adjusting for calendar and seasonal factors, the Federal Statistics Office or Destatis said on Monday.
From a year ago, exports rose 11.7% in May and imports advanced 27.8%.
Highlighting how hard it is to wean away from trading with Russia, exports to the Russian Federation rose 29.4% to 1.0 billion euros in May from April but fell 54.6% from a year ago.
Imports from Russia declined 9.8% to 3.3 billion euros in May from April.
Eurozone producer prices eased to 36.3% in May from a record high 37.2 in April, eurostat, the statistical office of the European Union, reported on Monday.
Producer prices rose 36.4% in the European Union.
Price increase also slowed on a monthly basis. industrial producer prices rose 0.7% in the euro area and 0.8% in the EU, compared with April.
Inflation in Turkey accelerated to a record high in June primarily driven by transportation prices and surged to levels last seen in 1998.
The consumer prices index soared 78.62% in June on an annual basis from a 73.5% increase in May, the Turkish Statistical Institute reported on Monday.
Consumer prices on a monthly basis rose 4.95% in June from May.
Domestic producer price inflation increased to 138.31% in June from 132.16% in May, a separate report from the statistical office showed.
Resource stocks closed higher after futures of crude oil increased 2.3% to $113.83 a barrel on tight global oil supply.
Shell Plc, TotalEnergies, and BP Plc gained between 4% and 5%.
The discount airlines Ryanair and Wizz Air were on the defensive and dropped as much as 2% after releasing June passenger traffic data.
Airbus SE declined 1.9% to 93.40 euros and the company signed orders to deliver 292 A320 airplanes to several China-based airlines including Air China, China Eastern, China Southern, and Shenzhen Airlines.
Tesco plc gained 1.1% to 257.68 after the retailer commenced its share repurchase program.
Spirax-Sarco rose 0.8% to 10,130.0 pence after the valve maker entered in exclusive negotiations with Qualium to acquire Vulcanic Group for 262 million euros on a cash and debt free basis.
Asian Markets Closed Mixed After China Reimposed Mass Testing
Arjun Pandit
04 Jul, 2022
New York City
Stock markets across Asia closed mixed after China reported rising coronavirus cases and energy prices closed higher in the region.
The Nikkei 225 index gained 0.8% to 26,153.81, the Hang Seng index fell 0.1% to 21,830.35, and the Sensex index closed up 0.6% to 53,234.77.
Tokyo Electric Power Company jumped 13.0% to 654.0 yen after Japan suffered its worst heatwave in decades and the country is facing an energy crunch.
Unseasonably high temperatures of 104 degrees Fahrenheit or 40 degrees Celsius were reported in some parts of the country.
Japan has increased its reliance on imported oil after the Fukushima nuclear disaster and tsunami in 2011. But with the yen at a two-decade low, most consumers are facing sharp increases in utility bills.
SoftBank Group increased 2.9% to 5,283.0 after the tech giant's investment subsidiary Fortress Investment is the leading contender to buy Seven & I's struggling department store chain Sogo & Seibu.
Department stores closed down after J. Front Retailing reported slowing sales growth for its Daimaru and Matsuzakaya stores.
J. Front Retailing declined 5.6% to 1,107.07 yen after the retailer said total sales at Daimaru and Matsuzakaya increased 18.8% and jumped 27.2% in the quarter to June.
Isetan Mitsukoshi declined 4.3% to 1,061 yen and Takashimaya Company fell 2.2% to 1,414.0 yen.
Indexes in Shanghai closed higher despite the local authorities in several cities reimposed mass testing.
Chinese authorities demanded more testing for coronavirus after Anhui province in eastern China reported 380 new infection cases over the weekend.
The new infections were less than 200 in the entire month of June, and local officials have forced the closure of local businesses and locked down more than one million people.
Si town with 760,000 residents and Lingbi town with more than one million residents were placed in a lockdown.
Of the 380 infections reported, 41 were symptomatic and 339 were asymptomatic, the National Health Commission said on Monday.
However, no new deaths related to the virus infections were reported over the weekend.
Stocks in Mumbai rebounded from the morning losses on sustained buying in banks and consumer stocks.
The Sensex index 326.84 or 0.6% to 53,234.77 and the Nifty index advanced 0.5% or 83.30 to 15,835.35.
The Kospi average in Seoul declined 0.2% to 2,300.4 and Nomura Research cited the country along with several developed economies are likely to face recession in the next one year.
The Kospi average extended losses for the fourth day and fell to a new 20-month low.
Shipbuilders, chemical makers, and real estate developers led the losers.
Australian markets closed higher led by a rally in bank and energy stocks.
The Reserve Bank of Australia is set to increase its benchmark rate by 50 basis points tomorrow.
The ASX 200 index jumped 1.11% to 6,612.60 and the broader All Ordinaries index closed up 1.14% to 6,796.90.
The total number of building permits issued on a seasonally adjusted basis rose 9.9% to 16,390 in May, the Australian Bureau of Statistics said on Monday.
General Motors Lowers Earnings Outlook On Parts Shortages
Scott Peters
01 Jul, 2022
New York City
General Motors sold 582,401 vehicles in the second quarter, 15% fewer than a year ago, the company said in a press release today.
The automaker said supply chain disruptions have held up 95,000 vehicles lacking computer chips and certain components but vehicles are expected to be sold to dealers by the end of 2022.
General Motors also lowered its quarter earnings outlook on the supply chain disruptions and parts shortages.
The automaker guided net income in the June quarter to be in the range of between $1.6 billion and $1.9 billion and adjusted earnings to be in the range of between $2.3 billion and $2.6 billion.
The automaker said its market share increased one percentage point to an estimated 16.3% citing a J D Power survey.
Micron Technology's Quarterly Sales Rise 16%, Guidance Disappoints
Scott Peters
01 Jul, 2022
New York City
Micron Technology said revenues in the fiscal 2022 third quarter ending June 2 rose 16% to $8.6 billion from $7.6 billion a year ago.
Net income in the quarter rose to $2.6 billion or $2.34 a share from $2.3 billion or $2.0 a share.
The chipmaker's fourth quarter guidance was substantially weaker than anticipated by analysts.
The company expects fourth quarter revenues of $7.2 billion with a band of $400 million and diluted earnings per share of $1.52 with a 20 cents band and adjusted non-GAAP earnings between $1.43 and $1.83 a share.
Analysts were looking for fourth quarter revenues of at least $9 billion and adjusted earnings of $2.62 a share.
Micro Technology declined 2.7% to $53.78 after investors focused on the fourth quarter guidance and ignored the company's third quarter results.