Market Update
Asian Markets Trend Lower On Global Slowdown Worries
Arjun Pandit
30 Jun, 2022
New York City
Markets in Asia traded down in cautious trading as global recession worries dominated market sentiment.
The Nikkei 225 index declined 1.5% to 26,393.04, the Hang Seng Index fell 0.6% to 21,859.79.
Tech stocks led the decliners in Tokyo and in Hong Kong.
Toyota Motor dropped 1.3% after the largest automaker missed its latest production target.
Tokyo Electron fell 4.1% to 44,300 yen and Screen Holdings fell 5.4% to 9,170 yen.
The official measure of factory and service activities showed an expansion in June after contracting for three months in a row.
The Kospi average dropped 1.91% to close at 2,332.64.
In Seoul trading, Hyundai Motor gained 2.9% but SK Hynix fell 3.2% and Samsung Electronics dropped 1.7%.
India stocks in volatile trading closed down as global slowdown and elevated inflation worries dominated trading sentiment.
Benchmark indexes in directionless trading charted a volatile pattern.
The Sensex index fell 8.03 to 53,018.94 and the Nifty index eased 18.18 to 15,780.25.
Weak iron ore prices and worries of higher and faster interest rates also dragged down Australian indexes.
The ASX 200 dropped 1.97% to 6,568.10.
Banks led the decliners and Commonwealth Bank of Australia declined 2.8% to $90.38, Westpac Banking Corp dropped 2.2% to $19.50, National Australia Bank fell 2.4% to $27.39, and ANZ declined 2.7% to $22.03.
BHP Group, Rio Tinto and Fortescue Metals gained between 3% and 5%.
Listless Trading in Stocks, Bonds, and Oil Markets
Barry Adams
29 Jun, 2022
New York City
Market averages in listless trading searched for lower levels as rate hike and recession worries dominated trading sentiment today.
The major averages are set to register the worst first-half since 1970.
Stocks in volatile trading searched for a direction and struggled to stay in the positive territory after seven attempts.
The popular averages opened higher but quickly dropped below the flat line after bond yields rose and crude oil prices extended gains for the fourth day in a row.
However, traders in bond markets were also on the defensive after consumer spending was weaker than previously expected in the first quarter GDP.
Crude oil and natural gas prices closed on the worries that the elevated energy prices are denting demand for fuel.
The first quarter GDP shrink was revised higher to 1.6% annual rate from the previous estimate of 1.5%, the Bureau of Economic Analysis said today.
The decrease was revised down 0.1 percentage point from the second estimate released in May.
The latest comments from the Fed Chairman Powell at a panel of central bankers suggested faster and higher rate hikes at the next month's rate setting meeting.
Separately, Federal Reserve Bank of Cleveland President Loretta Mester said she plans to propose a 75 basis point rate increase at the meeting of policy makers on July 17 if economic conditions remain the same.
Central bankers struck a hawkish tone on inflation and future path of rate hikes, but most of the latest bout of inflation is driven by persistent supply shocks.
Central bankers have still not reckoned the loose monetary policy and reckless money printing since the Great Recession of 2008-09 are two major drivers of current inflation.
The U.S. consumer price index is hovering near 9% and the fed fund rates are still below 2%.
The Fed fund rates have been lagging inflation rate for more than 17 months in a row.
The S&P 500 index fell 0.08% to 3,818.83 and the Nasdaq Composite index eased 0.03% to 11,177.89.
Futures of crude oil fell $2.29 to $109.40 a barrel and natural gas declined 13 cents to $6.42 a unit.
The yield on 10-year Treasury notes inched lower to 3.102%.
Bed Bath & Beyond plunged 23.6% to $4.99 after the retailer reported sharply lower than expected revenues and earnings and the company also said its chief executive has departed.
Carnival dropped 14.2% to $8.87 after the cruise line operator's price target was cut in half by Morgan Stanley.
The broker also said that the stock could drop to zero in the event of another demand shock.
Walt Disney declined 0.3% to $95.65 after the company extended the contract of chief executive Bob Chapek.
European Indexes Decline On Powerless Central Bankers
Major averages in Europe were on the decline in cautious trading after comments from the central bank leaders and Spain's inflation surged to a record high.
investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
Investors also digested latest comments from the ECB President Christine Lagarde, the Fed Chairman Jerome Powell, and the Bank of England Governor Andrew Baile at a gathering in Sintra, Portugal.
However, central banks are powerless in impacting inflation fueled by supply disruptions linked to coronavirus and Ukraine war.
The Economic Sentiment Indicator dropped in both the EU and the euro zone.
The ESI declined in the EU by 1.7 points to 102.5 and in the euro area fell -1.0 point to 104.
The Employment Expectations Indicator also decreased -1.6 points to 110.6 in the EU and -1.7 points to 110.9 in the euro area.
Spain's consumer inflation in June soared to 10.2% from 8.7% in May and 2.7% a year ago, the statistical office reported today.
Spain's inflation was record high in 37 years since 1985.
Germany also reported elevated inflation in June, according to the Federal Statistical Office destatis in Wiesbaden, Germany.
Consumer prices rose 7.6% in June from a year ago and rose 0.1% from May. The CPI in May rose at 7.6% from a year ago.
The DAX index declined 1.7% to 13,003.35, the CAC-40 index fell 0.9% to 6,031.49, and the FTSE 100 index fell 0.15% to 7,312.32.
The U.K. retail prices rose at the fastest pace since 2008 according to the data released by the British Retail Consortium.
The BRC-NielsenIQ shop price index increased 3.1% after rising at 2.8% in May on an annual basis.
Resource stocks rose after crude oil, natural gas, and base metal prices rose for the third day in a row.
Antofagasta, Glencore, and Anglo American declined more than 2% despite the rise in commodities prices but worries on the global economic slowdown loomed trading sentiment.
Essilor Luxottica declined 2.3% to 140.94 euros after Leonardo Del Vecchio, the chairman of the eyeglass retailer and one of the richest business groups in Italy, passed away at the age of 87.
Hornbach Baumarkt, the do-it-yourself store chain, declined 2.2% to 79.65 euros after the company reported first quarter profit declined.
Revenues in the fiscal year 2022/23 first quarter ending in May rose 8.1% to 1.81 billion euros but net income declined 9.4% to 106.9 million euros.
Rising Oil Prices Dampen Sentiment in Asian Stocks and Currencies
Markets in Asia closed down after the crude energy prices resumed the advance and currencies in the region extended losses after the U.S. dollar gained.
The yen dropped to a new 22-year low and the rupee fell to a record low. Currencies in Thailand, Indonesia, and Philippines remained depressed.
Across Asia, indexes closed lower following weak markets in the U.S. and weaker sentiment in the region.
Investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
The Nikkei 225 index fell 0.9% to 26,804.60, the Hang Seng index declined 1.9% to 21,996.89, and the Shanghai index dropped 1.4% to 3,361.52.
Tech stocks led the decliners in Tokyo trading following 3% decline in tech heavy Nasdaq index in overnight trading in New York.
Softbank, Advantest, and Tokyo Electron dropped between 1% and 3%.
Tokyo Electric Power soared 5.3% to 579.0 yen after Prime Minister Fumio Kishida urged to increase the use of nuclear power to meet the rising demand from the latest heat wave engulfing the capital city.
The sentiment in the region was weak on the widening perception that a global economic slowdown may not be averted.
The resurgent dollar also knocked the yen to its 22-year low of 136.52 and the Korean won to 1,296.97.
The Kospi average dropped 1.82% to 2,377.99 after the latest consumer sentiment survey showed a sharp decline in consumer confidence elevated food and energy price inflation.
Rupee traded down 0.2% to 78,95 against one U.S. dollar extending this year's loss to 5.8%.
The Sensex index declined 150.48 or 0.3% to 53,026.97 and the Nifty index fell 51.10 or 0.3% to 15,799.10.
Bed Bath & Beyond Struggles with Shifting Consumer Spending Patterns
Scott Peters
29 Jun, 2022
New York City
Bed Bath & Beyond reported sharply lower than expected revenues and earnings and the company also said its chief executive has departed.
Retailers across all sectors are facing unpredictable shifts in consumer demand.
Furniture, apparel, and home goods, and appliances retailers scrambled to meet a surge in demand with the arrival of a pandemic two years ago.
Many of those fast moving items arrived too late because of supply chain disruptions just when the demand shifted again with the return to work and social gathering.
The demand surge and the subsequent plunge left many retailers with unusually high inventories of unsold items and supply chain disruptions added more costs at ports and warehouses.
Net sales in the first quarter ending in May declined 25.0% to $1.46 billion following the 22% decline in the previous quarter ending in February to $2.05 billion.
Comparable sales in the quarter dropped 23% and fleet optimization also lowered sales by 2%.
Comparable sales were lower across all channels as consumers focused on returning to work and preferred goods for new experiences.
Same store sales declined 24% and digital sales fell 21% from a year ago.
Comparable same store sales at Bed Bath & Beyond stores declined 27% driven by rapidly shifting consumer spending patterns and declining demand in home goods.
Gross margin for comparable sales in the quarter declined 850 basis points to 23.9% from 32.4% a year ago.
Supply chain disruptions played a key role in dragging down the gross margin as higher port charges lowered the margin by 220 basis points and inventory markdowns costs were 620 basis points in the quarter.
Adjusted gross margin excluding these charges were 32.2%.
Selling and general expenses margin dropped 990 basis points to 43.6% from 33.7% a year ago.
buybuy BABY store chain held its market share and comparable sales declined in mid-single digits reflecting the current market decline.
Loss in the quarter increased to $358 million or $4.49 a share from $51 million or 48 cents a share a year ago.
Comparable sales across all channels and banners plunged 27% from a year ago.
With a swift decline in sales and higher inventories, cash flow from operations turned negative to $400 million and investing activities consumed $100 million linked to store remodeling, supply chain and information systems.
Inventories at the end of the quarter rose 15% to $1.76 billion from $1.56 billion a year ago.
Falling sales and higher inventories in the last quarter sucked about $500 million of cash, said CFO Gustavo Arnal during the earnings call.
Leadership Changes
Sue Gove has been named Interim Chief Executive Officer, replacing Mark Tritton, who will leave his role as President and Chief Executive Officer and as a member of the Board.
The retailer had been battling on many fronts and Tritton initiated a turnaround plan in the fall of 2019 upon his arrival from Target.
Large scale turnaround and pandemic induced chaos and operation missteps only compounded the company's challenges as the retailer lost market share in the last five quarters.
Guidance and Outlook
The company guided fiscal 2022 capital expenditure to decline to $300 million from the previous estimate of $400 million reflecting a minimum reduction of $100 million.
The retailer also plans to align its cost structure to sales and reduce its adjusted selling and general expenses in fiscal 2022 to be lower than in fiscal 2011.
The company plans to optimize inventory levels and increase clearance activity to sequentially improve comparable sales in the second half compared to the first half 2022.
In the quarter, the company closed 3 Bed Bath & Beyond and 1 Harmon store.
Company and Stock
The retail chain Bed Bath & Beyond was founded in 1971 and sells a wide assortment of products in the home, baby, beauty, and wellness market.
The company has 32,000 employees and operates a total of 955 stores including 769 Bed Bath & Beyond stores in all 50 states, D.C., Puerto Rico, Canada and 135 buybuy BABY stores and 51 stores under the names Harmon, Harmon Face Values or Face Values.
The company operates 12 stores in Mexico through a joint venture under the banner Bed Bath & Beyond.
In July 2020, Bed Bath had announced the closure of 200 namesake stores over the next two years.
Bed Bath & Beyond plunged 24.8% to $4.91 after the release of earnings and extended this year's loss to 67.8%.
The stock traded at this level 26 years ago in Jan 1996.
The outstanding shares at the end of the quarter on May 28, 2022 declined to 79.6 million from 106.8 million a year ago.
Movers: Bed Bath & Beyond, Carnival Cruise, General Mills, McCormick, Pinterest, Disney
Barry Adams
29 Jun, 2022
New York City
The S&P 500 index fell 0.3% to 3,811.27 and the Nasdaq Composite index eased 0.4% to 11,136.27.
Futures of crude oil gained 80 cents to $112.60 a barrel and natural gas rose 0.5 cent to $6.62 a unit.
The yield on 10-year Treasury notes inched lower to 3.106%.
Bed Bath & Beyond plunged 21% to $5.16 after the retailer reported sharply lower than expected revenues and earnings and the company also said its chief executive has departed.
Net sales in the first quarter ending in May declined 25.0% to $1.46 billion and net loss surged to $358 million from $51 million a year ago.
Loss per share rose to $4.49 from 48 cents a year ago.
Comparable sales across all channels and banners plunged 27% from a year ago.
Carnival dropped 13.9% to $8.90 after the cruise line operator's price target was cut in half by Morgan Stanley.
The broker also said that the stock could drop to zero in the event of another demand shock.
General Mills, Inc increased 5.7% to $74.28 after the food products maker reported net sales in the fourth quarter rose 8% to $4.9 billion and net income surged 97% to $822.8 million.
For the full-year sales increased 5.0% to $19.0 billion and net income surged 17% to $2.7 billion or $4.46 a share from $2.4 billion or $3.81 a share.
The company guided full-year 2023 organic sales to rise between 4% and 5% and adjusted operating profit in constant currency between down 2% to plus 1% from the base of $3.2 billion reported in fiscal 2022.
McCormick & Company declined 1.5% to $85.56 after the spice maker reported weaker than expected quarterly results and lowered its full-year outlook.
Sales in the second quarter ending in May declined 1% to $1.54 billion and net income fell to $118.5 million from $183.7 million.
Earnings per share declined to 44 cents from 68 cents a year ago.
The company left its full-year 2022 sales estimate to increase between 3% and 5% and but lowered its constant currency estimate to rise between 4% to 6% compared to the previous estimate to rise between 5% and 7%.
Pinterest Inc declined 1.3% to $19.45 and co-founder Ben Silbermann stepped down as chief executive and will assume the newly created position of executive chairman.
Walt Disney declined 0.5% to $95.48 after the company extended the contract of chief executive Bob Chapek.
First Quarter GDP Declined at 1.6% After Third Revision
Brian Turner
29 Jun, 2022
New York City
The first quarter GDP shrink was revised higher to 1.6% annual rate from the previous estimate of 1.5%, the Bureau of Economic Analysis said today.
The decrease was revised down 0.1 percentage point from the second estimate released in May.
In the first quarter, there was a resurgence of COVID-19 cases from the Omicron variant and decreases in government pandemic assistance payments.
U.S. Stocks Lack Direction, Central Bankers Talk Tough
Barry Adams
29 Jun, 2022
New York City
Market averages in listless trading searched for lower levels as rate hike and recession worries dominated trading sentiment today.
The first quarter GDP shrink was revised higher to 1.6% annual rate from the previous estimate of 1.5%, the Bureau of Economic Analysis said today.
The decrease was revised down 0.1 percentage point from the second estimate released in May.
In the first quarter, there was a resurgence of COVID-19 cases from the Omicron variant and decreases in government pandemic assistance payments.
The latest comments from the Fed Chairman Powell at a panel of central bankers suggested faster and higher rate hikes at the next month's rate setting meeting.
Separately, Federal Reserve Bank of Cleveland President Loretta Mester said she plans to propose a 75 basis point rate increase at the meeting of policy makers on July 17 if economic conditions remain the same.
Central bankers struck a hawkish tone on inflation and future path of rate hikes, but most of the latest bout of inflation is driven by persistent supply shocks.
Central bankers have still not reckoned the loose monetary policy and reckless money printing since the Great Recession of 2008-09 are two major drivers of current inflation.
The U.S. consumer price index is hovering near 9% and the fed fund rates are still below 2%.
The Fed fund rates have been lagging inflation rate for more than 17 months in a row.
The S&P 500 index fell 0.3% to 3,811.27 and the Nasdaq Composite index eased 0.4% to 11,136.27.
Futures of crude oil gained 80 cents to $112.60 a barrel and natural gas rose 0.5 cent to $6.62 a unit.
The yield on 10-year Treasury notes inched lower to 3.106%.
Bed Bath & Beyond plunged 21% to $5.16 after the retailer reported sharply lower than expected revenues and earnings and the company also said its chief executive has departed.
Carnival dropped 13.9% to $8.90 after the cruise line operator's price target was cut in half by Morgan Stanley.
The broker also said that the stock could drop to zero in the event of another demand shock.
Walt Disney declined 0.5% to $95.48 after the company extended the contract of chief executive Bob Chapek.
European Indexes Decline On Powerless Central Bankers
Major averages in Europe were on the decline in cautious trading after comments from the central bank leaders and Spain's inflation surged to a record high.
investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
Investors also digested latest comments from the ECB President Christine Lagarde, the Fed Chairman Jerome Powell, and the Bank of England Governor Andrew Baile at a gathering in Sintra, Portugal.
However, central banks are powerless in impacting inflation fueled by supply disruptions linked to coronavirus and Ukraine war.
The Economic Sentiment Indicator dropped in both the EU and the euro zone.
The ESI declined in the EU by 1.7 points to 102.5 and in the euro area fell -1.0 point to 104.
The Employment Expectations Indicator also decreased -1.6 points to 110.6 in the EU and -1.7 points to 110.9 in the euro area.
Spain's consumer inflation in June soared to 10.2% from 8.7% in May and 2.7% a year ago, the statistical office reported today.
Spain's inflation was record high in 37 years since 1985.
Germany also reported elevated inflation in June, according to the Federal Statistical Office destatis in Wiesbaden, Germany.
Consumer prices rose 7.6% in June from a year ago and rose 0.1% from May. The CPI in May rose at 7.6% from a year ago.
The DAX index declined 1.4% to 13,050.33, the CAC-40 index fell 0.81% to 6,037.09, and the FTSE 100 index added 0.04% to 7,327.01.
The U.K. retail prices rose at the fastest pace since 2008 according to the data released by the British Retail Consortium.
The BRC-NielsenIQ shop price index increased 3.1% after rising at 2.8% in May on an annual basis.
Resource stocks rose after crude oil, natural gas, and base metal prices rose for the third day in a row.
Antofagasta, Glencore, and Anglo American declined more than 2% despite the rise in commodities prices but worries on the global economic slowdown loomed trading sentiment.
Essilor Luxottica declined 2.3% to 140.94 euros after Leonardo Del Vecchio, the chairman of the eyeglass retailer and one of the richest business groups in Italy, passed away at the age of 87.
Hornbach Baumarkt, the do-it-yourself store chain, declined 2.2% to 79.65 euros after the company reported first quarter profit declined.
Revenues in the fiscal year 2022/23 first quarter ending in May rose 8.1% to 1.81 billion euros but net income declined 9.4% to 106.9 million euros.
Rising Oil Prices Dampen Sentiment in Asian Stocks and Currencies
Markets in Asia closed down after the crude energy prices resumed the advance and currencies in the region extended losses after the U.S. dollar gained.
The yen dropped to a new 22-year low and the rupee fell to a record low. Currencies in Thailand, Indonesia, and Philippines remained depressed.
Across Asia, indexes closed lower following weak markets in the U.S. and weaker sentiment in the region.
Investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
The Nikkei 225 index fell 0.9% to 26,804.60, the Hang Seng index declined 1.9% to 21,996.89, and the Shanghai index dropped 1.4% to 3,361.52.
Tech stocks led the decliners in Tokyo trading following 3% decline in tech heavy Nasdaq index in overnight trading in New York.
Softbank, Advantest, and Tokyo Electron dropped between 1% and 3%.
Tokyo Electric Power soared 5.3% to 579.0 yen after Prime Minister Fumio Kishida urged to increase the use of nuclear power to meet the rising demand from the latest heat wave engulfing the capital city.
The sentiment in the region was weak on the widening perception that a global economic slowdown may not be averted.
The resurgent dollar also knocked the yen to its 22-year low of 136.52 and the Korean won to 1,296.97.
The Kospi average dropped 1.82% to 2,377.99 after the latest consumer sentiment survey showed a sharp decline in consumer confidence elevated food and energy price inflation.
Rupee traded down 0.2% to 78,95 against one U.S. dollar extending this year's loss to 5.8%.
The Sensex index declined 150.48 or 0.3% to 53,026.97 and the Nifty index fell 51.10 or 0.3% to 15,799.10.
Movers: Capita, Essilor Luxottica, Hornbach Baumarkt, Shoe Zone
Bridgette Randall
29 Jun, 2022
New York City
Major averages in Europe were on the decline in cautious trading ahead of comments from the central bank leaders and Spain's inflation surged to a record high.
investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
Investors also awaited latest comments from the ECB President Christine Lagarde, the Fed Chairman Jerome Powell, and the Bank of England Governor Andrew Baile at a gathering in Sintra, Portugal.
However, central banks are powerless in impacting inflation fueled by supply disruptions linked to coronavirus and Ukraine war.
Spain's consumer inflation in June soared to 10.2% from 8.7% in May and 2.7% a year ago, the statistical office reported today.
Spain's inflation was record high in 37 years since 1985.
Germany also reported elevated inflation in June, according to the Federal Statistical Office destatis in Wiesbaden, Germany.
Consumer prices rose 7.6% in June from a year ago and rose 0.1% from May. The CPI in May rose at 7.6% from a year ago.
The DAX index declined 1.4% to 13,050.33, the CAC-40 index fell 0.81% to 6,037.09, and the FTSE 100 index added 0.04% to 7,327.01.
The U.K. retail prices rose at the fastest pace since 2008 according to the data released by the British Retail Consortium.
The BRC-NielsenIQ shop price index increased 3.1% after rising at 2.8% in May on an annual basis.
Resource stocks rose after crude oil, natural gas, and base metal prices rose for the third day in a row.
Antofagasta, Glencore, and Anglo American declined more than 2% despite the rise in commodities prices but worries on the global economic slowdown loomed trading sentiment.
Essilor Luxottica declined 2.3% to 140.94 euros after Leonardo Del Vecchio, the chairman of the eyeglass retailer and one of the richest business groups in Italy, passed away at the age of 87.
Shoe Zone, the U.K. based discount retailer, in a trading update said adjusted full-year pre-tax profit is expected to be
European Indexes Turn Lower After Inflation In Spain Reaches a 37-Year High
Bridgette Randall
29 Jun, 2022
New York City
Major averages in Europe were on the decline in cautious trading ahead of comments from the central bank leaders and Spain's inflation surged to a record high.
investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
Investors also awaited latest comments from the ECB President Christine Lagarde, the Fed Chairman Jerome Powell, and the Bank of England Governor Andrew Baile at a gathering in Sintra, Portugal.
However, central banks are powerless in impacting inflation fueled by supply disruptions linked to coronavirus and Ukraine war.
The Economic Sentiment Indicator dropped in both the EU and the euro zone.
The ESI declined in the EU by 1.7 points to 102.5 and in the euro area fell -1.0 point to 104.
The Employment Expectations Indicator also decreased -1.6 points to 110.6 in the EU and -1.7 points to 110.9 in the euro area.
Spain's consumer inflation in June soared to 10.2% from 8.7% in May and 2.7% a year ago, the statistical office reported today.
Spain's inflation was record high in 37 years since 1985.
Germany also reported elevated inflation in June, according to the Federal Statistical Office destatis in Wiesbaden, Germany.
Consumer prices rose 7.6% in June from a year ago and rose 0.1% from May. The CPI in May rose at 7.6% from a year ago.
The DAX index declined 1.4% to 13,050.33, the CAC-40 index fell 0.81% to 6,037.09, and the FTSE 100 index added 0.04% to 7,327.01.
The U.K. retail prices rose at the fastest pace since 2008 according to the data released by the British Retail Consortium.
The BRC-NielsenIQ shop price index increased 3.1% after rising at 2.8% in May on an annual basis.
Resource stocks rose after crude oil, natural gas, and base metal prices rose for the third day in a row.
Antofagasta, Glencore, and Anglo American declined more than 2% despite the rise in commodities prices but worries on the global economic slowdown loomed trading sentiment.
Essilor Luxottica declined 2.3% to 140.94 euros after Leonardo Del Vecchio, the chairman of the eyeglass retailer and one of the richest business groups in Italy, passed away at the age of 87.
Shoe Zone, the U.K. based discount retailer, in a trading update said adjusted full-year pre-tax profit is expected to be
Asian Markets Sentiment Deteriorates On Oil Price Rise Resumption, Currencies Fall
Arjun Pandit
29 Jun, 2022
New York City
Across Asia, indexes closed lower following weak markets in the U.S. and weaker sentiment in the region.
Investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine.
Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said.
The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation.
The Nikkei 225 index fell 0.9% to 26,804.60, the Hang Seng index declined 1.9% to 21,996.89, and the Shanghai index dropped 1.4% to 3,361.52.
Tech stocks led the decliners in Tokyo trading following 3% decline in tech heavy Nasdaq index in overnight trading in New York.
Softbank, Advantest, and Tokyo Electron dropped between 1% and 3%.
Tokyo Electric Power soared 5.3% to 579.0 yen after Prime Minister Fumio Kishida urged to increase the use of nuclear power to meet the rising demand from the latest heat wave engulfing the capital city.
The sentiment in the region was weak on the widening perception that a global economic slowdown may not be averted.
The resurgent dollar also knocked the yen to its 22-year low of 136.52 and the Korean won to 1,296.97.
The Kospi average dropped 1.82% to 2,377.99 after the latest consumer sentiment survey showed a sharp decline in consumer confidence elevated food and energy price inflation.
Rupee traded down 0.2% to 78,95 against one U.S. dollar extending this year's loss to 5.8%.
The Sensex index declined 150.48 or 0.3% to 53,026.97 and the Nifty index fell 51.10 or 0.3% to 15,799.10.
S&P 500 Down 2%, Nasdaq Drops 3% as Bear Market Rally Fizzles
Barry Adams
28 Jun, 2022
New York City
Popular stock averages lost morning momentum after twin worries of recession and inflation resurfaced after the release of consumer confidence data.
The consumer confidence index declined to 98.7 in June from 103.2 in May, the Conference Board reported today.
The confidence index declined for the second month in a row and the expectation index, based on short term outlook for income, business and labor market conditions, declined to 66.4 from 73.7, the lowest since March 2013.
"Consumers
Movers: Nike, Occidental Petroleum, Spirit Air, Snowflake, Walt Disney
Barry Adams
28 Jun, 2022
New York City
Major market averages attempted to advance but the market sentiment was dented after the release of weak consumer confidence index was weaker than expected.
The consumer confidence index declined to 98.7 in June from 103.2 in May, the Conference Board reported today.
The S&P 500 index added 1.01% to 3,939.45 and the Nasdaq Composite index increased 0.8% to 11,618.86.
The 10-year U.S. Treasury notes yield increased to 3.23%.
Futures of crude oil increased $1.12 to $110.69 a barrel and natural gas added 9 cents to $6.59 a thermal unit.
Occidental Petroleum increased 4.7% to $61.65 after Warren Buffett controlled Berkshire Hathaway increased its stake to 16.4% according to a regulatory filing.
Spirit Airlines increased 3.04% to $23.24 after JetBlue Airways revised its offer for carrier higher responding to Frontier's bid revision.
JetBlue increased its breakup fee by $50 million to $400 million and a $2.50 a share cash payment upon the closing of the deal and monthly 10 cents a share pre-payment from January 2023 till the date of deal closure.
Las Vegas Sands soared 7.8% to $35.81 and Wynn Resorts increased 7.8% to $62.21.
Walt Disney & Company increased 3.2% to $99.71 after the company announced its Disneyland will reopen in Shanghai this week.
Snowflake Inc declined 0.3% to $147.74 after Jeffries upgraded the cloud data warehousing and delivery company to "buy" from "hold."
Snowflake has increased more than 22% in the last five days of trading.
Several banks lifted dividends after passing their annual stress tests.
Wells Fargo, Bank of America, Goldman Sachs, and Morgan Stanley lifted their dividends but Citigroup and JP Morgan Chase left their dividends unchanged.
Nike Inc declined 4.5% to $105.77 after the athletic shoemaker reported sales in the fourth quarter ending in May declined 1% to $12.2 billion from a year ago.
Gross margin in the fourth quarter declined 80 basis points to 45% and net income declined 5% to $1.44 billion from $1.51 billion a year ago.
Inventories in the fourth quarter surged 23% to $8.4 billion from a year ago on higher in-transit inventories driven by extended lead times from ongoing supply chain disruptions.
U.S. Stocks Mixed as China Relaxes Covid Restrictions
Barry Adams
28 Jun, 2022
New York City
Major market averages attempted to advance but the market sentiment was dented after the release of weak consumer confidence index was weaker than expected.
The consumer confidence index declined to 98.7 in June from 103.2 in May, the Conference Board reported today.
Stocks wavered in yesterday's trading as investors weighed future rate hike path and the prospects of the nature of economic slowdown.
The S&P 500 index added 1.01% to 3,939.45 and the Nasdaq Composite index increased 0.8% to 11,618.86.
The 10-year U.S. Treasury notes yield increased to 3.23%.
Futures of crude oil increased $1.12 to $110.69 a barrel and natural gas added 9 cents to $6.59 a thermal unit.
Energy stocks advanced following the rise in energy prices.
Exxon Mobil, Chevron, Marathon Oil, and Schlumberger gained between 3% and 4%.
Occidental Petroleum increased 4.7% to $61.65 after Warren Buffett controlled Berkshire Hathaway increased its stake to 16.4% according to a regulatory filing.
Spirit Airlines increased 3.04% to $23.24 after JetBlue Airways revised its offer for carrier higher responding to Frontier's bid revision.
JetBlue increased its breakup fee by $50 million to $400 million and a $2.50 a share cash payment upon the closing of the deal and monthly 10 cents a share pre-payment from January 2023 till the date of deal closure.
Transportation and entertainment stocks gained after China eased inbound travel restrictions.
Las Vegas Sands soared 7.8% to $35.81 and Wynn Resorts increased 7.8% to $62.21.
Walt Disney & Company increased 3.2% to $99.71 after the company announced its Disneyland will reopen in Shanghai this week.
European Markets Advanced on China Optimism and Lagarde Comments
European market indexes advanced after China loosened travel restrictions for international travelers.
The DAX index increased 0.97% to 13,314.60, the CAC-40 index gained 1.3% to 6,128.01, and the FTSE 100 index advanced 1.4% to 7,355.09.
Crude oil advanced 1.8% and traded $117.10 a barrel as economic activities picked up in China after Shanghai and other regions in the country eased coronavirus mobility and social gathering restrictions.
BP Plc and Shell Plc gained more than 3% after crude oil prices rebounded.
Consumer confidence in Germany dropped to a new low and in France declined for the sixth month in a row.
Consumer confidence forecast for July declined to 27.4 from the revised 26.2 in June and dropped to a record low since record keeping began in 1991, private market research group GfK said on Tuesday.
Consumer sentiment in France declined for the sixth month in a row and dropped to a nine-month low.
The index declined to 82 in June from 85 in May, the statistical office Insee reported on Tuesday in Paris.
Volkswagen increased 1.7% to 141.06 euros after the company is nearing an agreement to sell its electric vehicle charging business to a unit of Siemens. The news was first reported by the Wall Street Journal.
Petrofac Limited gained 3.0% to 122.70 pence after the energy services provider said revenues at its Asset Solutions division are running ahead of expectations on higher levels of new orders.
Valeo SE gained 2.7% to 19.83 euros after the auto parts maker won a contract from BMW to provide an advanced driving assistance system for its electric vehicle scheduled to be released in 2025.
Akzo Nobel declined 3.4% to 63.30 euros and the Dutch chemical company named Gregoire Poux-Guillaume as its new chief executive.
Asian Markets Close Higher After Volatile Trading
Asian markets closed higher after searching for direction but managed to close higher.
Market sentiment was positive following the advance in stocks in New York in overnight trading.
Sentiment was also bolstered after China eased its mandatory quarantine period for international travelers from 3 weeks to 10 days.
Moreover Beijing and Shanghai reported zero coronavirus cases for the first time since February.
The Nikkei index closed up 0.7% to 27,049.47, the Hang Seng index advanced 0.85% to 22,418.97, and the Sensex index gained 0.03% to 53,177.45.
Tokyo Electric Power jumped 7.2% to 552 yen after the government warned of tight power supply amid a heatwave
Australian indexes closed at a two-week high after energy and mining companies led the gainers following a 1% rise in crude oil prices.
The benchmark ASX 200 rose 0.86% to 6,763.60 while the broader All Ordinaries index added 0.87% to close at 6,953.40.
BHP Group, Rio Tinto, and Fortescue Metals advanced between 2% and 3%.
UAE energy minister said that the country is producing at maximum capacity of 3.17 million barrels a day agreed with OPEC+ nations till the end of the year.
Movers: Akzo, Petrofac, Stellantis, Valeo, Volkswagen
Bridgette Randall
28 Jun, 2022
New York City
European market indexes advanced after China loosened travel restrictions for international travelers.
The DAX index increased 0.97% to 13,314.60, the CAC-40 index gained 1.3% to 6,128.01, and the FTSE 100 index advanced 1.4% to 7,355.09.
Akzo Nobel declined 3.4% to 63.30 euros and the Dutch chemical company named Gregoire Poux-Guillaume as its new chief executive.
Petrofac Limited gained 3.0% to 122.70 pence after the energy services provider said revenues at its Asset Solutions division are running ahead of expectations on higher levels of new orders.
Stellantis NV gained 1.8% to 12.65 euros and the automaker's Italian unions said the company plans to transform its engine and gearbox manufacturing plant in Termoli, Southern Italy into a battery production facility by 2024.
The company plans to build three battery facilities in Europe, one each in Germany, France, and Italy through its joint ventures with TotalEnergies and Mercedes Benz with a total capacity of 120 Gwh by 2030.
Valeo SE gained 2.7% to 19.83 euros after the auto parts maker won a contract from BMW to provide an advanced driving assistance system for its electric vehicle scheduled to be released in 2025.
Volkswagen AG increased 1.7% to 141.06 euros after the company is nearing an agreement to sell its electric vehicle charging business to a unit of Siemens. The news was first reported by the Wall Street Journal.
Crude oil advanced 1.8% and traded $117.10 a barrel as economic activities picked up in China after Shanghai and other regions in the country eased coronavirus mobility and social gathering restrictions.
BP Plc and Shell Plc gained more than 3% after crude oil prices rebounded.
China optimism also lifted stocks of luxury products makers.
Richemont gained 0.5% to 10.6 euros, LVMH added 1.8% to 590.40 euros, and Kering SA advanced 1.5% to 504.30 euros.
European Markets Retain Positive Bias, ECB's Lagarde Highlighted Gradual Approach
Bridgette Randall
28 Jun, 2022
New York City
European market indexes advanced after China loosened travel restrictions for international travelers.
The ECB President Christine Lagarde played down recession risk in the euro zone and said that the central bank is ready to lift rates higher if inflation continues to accelerate but stressed gradual approach in tackling the price increases.
"We are also seeing signs that the supply shocks hitting the economy could linger for longer.
While it is reasonable to assume that global supply chain disruptions will gradually be resolved, the outlook for energy and commodities remains clouded," Lagarde added at the ECB Forum in Sintra, Portugal.
"The appropriate monetary policy stance has to incorporate our principles of gradualism and optionality." Lagarde highlighted the central bank's approach.
The DAX index increased 0.97% to 13,314.60, the CAC-40 index gained 1.3% to 6,128.01, and the FTSE 100 index advanced 1.4% to 7,355.09.
Crude oil advanced 1.8% and traded $117.10 a barrel as economic activities resume in China after Shanghai and other regions in the country eased coronavirus mobility and social gathering restrictions.
BP Plc and Shell Plc gained more than 3% after crude oil prices rebounded.
Consumer confidence in Germany dropped to a new low and in France declined for the sixth month in a row.
Consumer confidence forecast for July declined to 27.4 from the revised 26.2 in June and dropped to a record low since record keeping began in 1991, private market research group GfK said on Tuesday.
Consumer sentiment in France declined for the sixth month in a row and dropped to a nine-month low.
The index declined to 82 in June from 85 in May, the statistical office Insee reported on Tuesday in Paris.
Volkswagen increased 1.7% to 141.06 euros after the company is nearing an agreement to sell its electric vehicle charging business to a unit of Siemens. The news was first reported by the Wall Street Journal.
Petrofac Limited gained 3.0% to 122.70 pence after the energy services provider said revenues at its Asset Solutions division are running ahead of expectations on higher levels of new orders.
Valeo SE gained 2.7% to 19.83 euros after the auto parts maker won a contract from BMW to provide an advanced driving assistance system for its electric vehicle scheduled to be released in 2025.
Akzo Nobel declined 3.4% to 63.30 euros and the Dutch chemical company named Gregoire Poux-Guillaume as its new chief executive.
Movers: Altria, AutoZone, Coinbase, Chewy, Digital World, Etsy, Spirit Air, Walgreens
Barry Adams
27 Jun, 2022
New York City
Altria Group jumped as much as 0.5% to $43.80 after the cigarette maker won a temporary stay on the FDA ban on its e-cigarettes products.
AutoZone, Inc rose 1.0% to $2,179.35 after Goldman Sachs lifted its rating on the stock to "buy" from "neutral" and said auto parts sales are driven by market needs and demand is relatively inelastic even during the economic slowdown or a recession.
Chewy Inc gained 0.4% to $38.38 after Needham lifted its stock rating to "buy" from "hold" citing improving supply chain challenges and the recent price increases are not deterring customers.
Coinbase Global declined 9.9% to $56.45 after Goldman Sachs lowered its rating on the stock to "sell" from "sell" and cited persistent decline in cryptocurrencies prices and falling trading activities in the asset class.
Digital World Acquisition Corp plunged 9.2% to $25.28 after the SPAC in a regulatory filing said that ongoing investigation regarding its business combination faced more legal hurdles.
The company linked with the former president Donald Trump said that the investigation may impede or delay the business combination with Trump Media and Technology Group.
The company and its board of directors have received several subpoenas from a federal grand jury sitting in the Southern District of New York.
Oil patch stocks staged a rebound after crude oil prices rose 1.5%.
Futures of crude oil gained $1.83 to $109.45 a barrel and natural gas edged up a fraction to $6.23 a unit.
The Ukraine war is likely to persist well into 2023 as neither Russia nor Ukraine are discussing peaceful settlement.
Energy prices are likely to remain higher on the expectations of a long war combined with the slow rebound in manufacturing activities in China.
Ukraine's elevation to the European Union candidacy status is seen more as a signaling step rather than accession to the union in the near future.
Albania and Turkey have the EU candidacy status for nearly two decades with no clear deadline.
Devon Energy rose 6.8% to $57.42, Valero gained 6.3% to $110.30, Occidental Petroleum advanced 3.9% to $59.77, EOG Resources advanced 3.9% to $114.78, and Exxon Mobil increased 3.1% to $89.56.
Spirit Airlines declined 7.8% to $22.65 after the company recommended shareholders to accept the revised offer from Frontier.
Frontier after the market close on Friday increased its cash component of the offer by $2 to $4.13 a share and included its reverse termination fee to $450 million from $250 million and matched the fees proposed in JetBlue's offer.
Over the weekend, the proxy advisory firm Institutional Shareholder Services joined Glass, Lewis, & Company and recommended merger with Frontier over Jetblue.
Frontier Group Holdings declined 11.4% to $9.35.
Etsy declined 4.8% to $79.57 and the online platform operator extended this year's loss to 62.2% after Needham analyst Anna Andreeva lowered her views on the stock citing near term challenges because elevated inventories in the retail sector may impact Etsy's value proposition less compelling.
Walgreens Boots Alliance rose as much as 1% to $41.98 after the India-based Reliance Industries is actively arranging $8 billion financing to fund the purchase of its U.K.-based Boots drug store chain.