Market Update
Stocks Rally After Fed Takes Aggressive Stance, 75 Basis Points Rate Hike
Barry Adams
15 Jun, 2022
New York City
Stocks rallied after the Federal Reserve lifted rates at a faster pace and reiterated its commitment to fight inflation.
The Federal Reserve set the new target range between 1.5% and 1.75% and said the rates are likely to be at 3.4% by the year's end.
The S&P 500 index increased 1.3% to 3,785.83 and the Nasdaq Composite index rose 2.4% to 11,086.37.
Futures of crude oil declined $3.01 to $115.91 a barrel but natural gas increased 27 cents to $7.46 a unit.
The yield on 10-year Treasury notes edged lower to 3.33%.
The widely anticipated interest rate increase of 75-basis-points met investors' expectations bolstering trading sentiment.
The Federal Reserve lifted its key benchmark rate most aggressively since 1994 and signaled it will continue its policy of tightening at a faster pace in taming 40-year high inflation.
At the end of the two-day meeting, the policy members voted in favor of lifting rates by 75-basis-points and set the new fed funds range between 1.5% and 1.75%.
The monetary policy committee reaffirmed its commitment to continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities as laid out at the end of the May meeting.
The Federal Reserve also lowered its 2022 growth projection to 1.7% from 2.8% and lifted the unemployment rate estimate to 3.7% from 3.5% estimated in March.
Retail Sales Turn Negative, Weaker Builders Sentiment
Retail sales turned negative as consumers curtail discretionary spending, the Commerce Department said today.
On a monthly basis, advance retail and food services sales fell 0.3% in May and excluding auto increased 0.5%.
Sales were lower from the downwardly revised 0.7% from 0.9% increase in April.
On a yearly basis, retail sales rose 8.1% as consumers dipped in savings to keep up with price increases.
Home builders sentiment index declined for the sixth month in a row as buyers stayed away after mortgage rates escalated in the last five months.
The National Association of Home Builders/Wells Fargo Housing Market Index decreased 2 points to 67 in June as home prices hovered near record levels and mortgage rates more than doubled.
European Markets Advance After ECB Emergency Meeting
The European market indexes advanced after an emergency of the policy committee of the European Central Bank.
The DAX index jumped 1.4% to 13,485.29, the CAC-40 index gained 1.4% to 6,030.13, and the FTSE index increased 1.2% to 7,273.41.
The European Central Bank said it plans to release a new tool to tackle widening sovereign bond yields and ease the debt crisis in the currency zone.
The yield on 10-year German Bund trade around 1.60% but the yields on similar maturities of Italian bonds surged above 4% and of Greek bonds hovered near 7%.
The central bank plans to reinvest redemptions from the proceeds of its emergency bond purchasing program in a flexible way.
The central bank set no limit for the purchase amount.
China Data Shows Optimism, Japan Awaits BOJ Decision
Markets in Asia reacted to local news and awaited rate decisions in the U.S. on Wednesday and Japan on Friday.
The Nikkei index declined 1.1% to 26,326.16, the Hang Seng Index gained 1.1% to 21,308.21, and the Sensex index eased 0.3% to 52,541.39.
Indexes in China closed higher after industrial production increased in May and retail sales fell less than expected.
Industrial production rose 0.7% in May after falling 2.9% in April and retail sales declined 6.7% after dropping 11.1% in April, the the National Bureau of Statistic reported today.
The data were supported by the gradual relaxing of pandemic restrictions.
Federal Reserve Lifts Interest Rates 75 Basis Points, Lowers Growth Estimate
Brian Turner
15 Jun, 2022
New York City
The Federal Reserve lifted its key benchmark rate most aggressively since 1994 and signaled it will continue its policy of tightening at a faster pace in taming 40-year high inflation.
At the end of the two-day meeting, the policy members voted in favor of lifting rates by 75-basis-points and set the new fed funds range between 1.5% and 1.75%.
The monetary policy committee reaffirmed its commitment to continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities as laid out at the end of the May meeting.
Only one of the eleven members of the policy committee voted against the larger rate increase.
Kansas City Fed President Esther L. George, against the measure and preferred to raise the target range for the federal funds rate by 0.5 percentage point to 1-1/4 percent to 1-1/2 percent.
The Fed reiterated its commitment to fight elevated inflation and said "the Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run."
"I do not see moves of this size to be common" speaking to reporters after the meeting in Washington, Fed Chairman Jerome Powell and referring to 75 basis points rate increase.
European Markets Advance After ECB Emergency Meeting to Fight Widening Bond Yields
Bridgette Randall
15 Jun, 2022
New York City
European markets advanced after the European Central Bank announced a plan to tame diverging bond yields.
The DAX index jumped 1.4% to 13,485.29, the CAC-40 index gained 1.4% to 6,030.13, and the FTSE index increased 1.2% to 7,273.41.
The European Central Bank said it plans to release a new tool to tackle rising sovereign bond yields and the risk of euro zone fragmentation.
The yield on 10-year German Bund trade around 1.60% but the yields on similar maturities of Italian bonds surged above 4% and of Greek bonds hovered near 7%.
The central bank plans to reinvest redemptions from the proceeds of its emergency bond purchasing program in a flexible way.
The central bank set no limit for the purchase amount.
Banks gained after the central bank announced its plan.
Italian banks Unicredit, Intesa Sanpaolo and BPER Banca gained between 3% and 5% after the ECB announcement.
Eurozone industrial production rebounded in April but the pace of growth remained weak, Eurostat reported on Wednesday.
On a monthly basis, industrial output increased 0.4% in April, reversing a revised 1.4% decline in March.
Industrial production was initially estimated to decline 1.8% in March.
The final inflation data in France matched the previous estimate as inflation continued to accelerate in the country on the continent.
The consumer price index rose 5.2% in May, faster than the 4.8% increase in April from a year ago.
The rate matched the flash data published on May 31.
On a yearly basis, energy prices soared 27.8% in May due to elevated petroleum product prices and food prices increased 4.3% in May and services cost rose 3.2% from a year ago.
Bulgaria's inflation rose the most in 24 years according to the latest data from the National Statistical Institute.
Consumer prices accelerated 15.6% in May following a 14.4% rise in April on an annual basis.
The latest inflation surpassed the previous record of 18.8% in May 1998.
Transport costs soared 32.6% yearly in May and prices food and non-alcoholic beverages advanced 22.7%.
H&M Hennes & Mauritz AB dropped 6.5% to 124.51 krona despite the apparel retailer reported sales increased 12% in local currencies in the latest quarter ending in May.
Sales increased 17% in Swedish krona.
Bloomsbury Plc increased 1.6% to 386 pence after the publishing company reported record sales and earnings and said "reading has become a reacquired habit and continues to thrive."
Sales surged 24% to
Movers: Baidu, H&M, MicroStrategy, Moderna, Olin, Robinhood, Snowflake, Stellantis
Barry Adams
15 Jun, 2022
New York City
Baidu Inc gained 1.2% to $142.47 after a news report suggested that the China=based search giant is looking to sell its controlling stake in video streaming company iQiYi Inc.
iQiYi Inc declined 2.4% to $4.58.
The news was first reported by Reuters.
H&M Hennes & Mauritz AB dropped 6.5% to $2.41 despite the apparel retailer reported sales increased 12% in local currencies in the latest quarter ending in May.
Sales increased 17% in Swedish krona.
MicroStrategy Inc jumped 7.7% to $167.97 after the price of bitcoin dropped to $20,178 on Wednesday before rebounding 8%.
MicroStrategy is the largest corporate investor in cryptocurrency and has spent $3.97 billion amassing close to 130,000 bitcoins.
The value of the holding has declined steadily and hovers near $2.7 billion.
Moderna Inc increased 5.4% to $128.06 after a FDA advisory panel recommended the company's coronavirus vaccine for children aged 6 to 17 years.
The company is anticipating a vote from a full FDA panel in the next few weeks or earlier.
Olin Corporation dropped 9.7% to $51.68 after Royal Bank of Canada lowered its price target on the specialty chemical maker to $76 from $83.
Recently, Bank of America lowered its price target to $72 from $81 and Barclays raised its target to $65 from $57.
Robinhood Markets Inc fell 2.4% to $7.06 after the online trading platform operator was downgraded by Atlantic Equities from "neutral" to "underweight" citing uneven revenue trends.
Sonos Inc increased 2.1% to $20.01 despite the high-end audio speakers maker was downgraded by Morgan Stanley to "equal-weight" from "overweight" citing restrained discretionary spending by consumers and changing consumer priorities driven by higher inflation.
Snowflake Inc increased 5.6% to $120.49 after Canaccord Genuity upgraded the stock from "hold" to "buy" citing new products and attractive stock price.
Snowflake has plunged 69% from its peak of $392.15 on November 19, 2021.
Stellantis NV increased 3.1% to $13.38 after the parent of Fiat and Chrysler said it will start laying off people from next week at its Sterling Heights, Michigan stamping plant.
The automaker did not announce how many employees will be impacted and said the lay off will be indefinite.
S&P 500 Rebound Led by Tech Stocks, Retail Sales Fall
Barry Adams
15 Jun, 2022
New York City
Stocks rebounded after five days of selling and investors awaited Fed's comments and rate decision this afternoon.
The S&P 500 index increased 1.3% to 3,785.83 and the Nasdaq Composite index rose 1.7% to 11,010.37.
Futures of crude oil declined 85 cents to $118.05 a barrel and natural gas increased 45 cents to $7.65 a unit.
Traders are rooting for 75-basis-point after the consumer prices accelerated in May and crude oil prices show no sign of weakening.
The consumer price index has stayed above the Fed's target rate of 2% since January 2021 and with each passing month inflation has been seeping deeper and broader in broader economic activities.
The yield on 10-year Treasury notes edged lower to 3.39% and mortgage rates crossed 6.2% this week according to the Mortgage Daily News.
Retail sales turned negative as consumers curtail discretionary spending, the Commerce Department said today.
On a monthly basis, advance retail and food services sales fell 0.3% in May and excluding auto increased 0.5%.
Sales were lower from the downwardly revised 0.7% from 0.9% increase in April.
On a yearly basis, retail sales rose 8.1% as consumers dipped in savings to keep up with price increases.
Home builders sentiment index declined for the sixth month in a row as buyers stayed away after mortgage rates escalated in the last five months.
The National Association of Home Builders/Wells Fargo Housing Market Index decreased 2 points to 67 in June as home prices hovered near record levels and mortgage rates more than doubled.
The European Central Bank said it plans to release a new tool to tackle rising sovereign bond yields and the risk of euro zone fragmentation.
The yield on 10-year German Bund trade around 1.60% but the yields on similar maturities of Italian bonds surged above 4% and of Greek bonds hovered near 7%.
The central bank plans to reinvest redemptions from the proceeds of its emergency bond purchasing program in a flexible way.
The central bank set no limit for the purchase amount.
S&P 500 Sinks Deeper in Bear Territory, Mortgage Rates Hit 6.3%
Barry Adams
14 Jun, 2022
New York City
Global markets declined ahead of the U.S. rate decision tomorrow and cautious traders stayed on the sidelines.
The S&P 500 closed down 0.4% to 3,735.64 and the Nasdaq Composite index rose 0.2% to 10,828.35.
The S&P 500 index declined for the fifth day in a row.
The yield on 10-year Treasury notes inched slightly higher to 3.493%, record high in 11 years.
Investors are factoring 75 basis points increase in interest rate after the Fed's policy committee meeting tomorrow after consumer prices accelerated in May driven by higher energy and food prices.
The inflation has been running above Fed's target range of 2% for 17 months in a row.
For nearly two years, the Fed Chairman Jerome Powell and other officials have been labeling roaring inflation as "transitory" but with every passing week the inflation has seeped deeper and broader across all activities of the economy.
The Fed's lagging response in containing inflation has got the market on edge with negative rates, the difference between current interest rate at 1% and latest inflation at 8.6%, running at record high of 7.6%.
Today market indexes sank deeper in bear territory on the worries that the Fed will be forced to take drastic actions risking a recession and lifting the unemployment rate higher.
Natural gas futures plunged on the rising supply in the domestic market after the closure of a LNG terminal exporting the commodity.
Freeport LNG said it had a fire at Quintana Island, Texas facility and the plant will not return to full-operation till late 2022.
EQT Corporation plunged 10.10% to $40.55 after natural gas futures plunged 16% to $7.25.
Southwestern Energy plunged 11.3% to $7.63, Range Resources dropped 8.2% to $29.53, and Comstock Resources declined 8.9% to $16.66.
Compass Inc plunged 11.4% to $4.22 and Redfin Corp dropped 5.5% to $8.07 after the real estate brokerage firms announced layoffs.
Compass plans to trim 10% of its workforce and Redfin plans to cut about 8%, according to regulatory filings with the SEC.
Compass and Redfin dropped to new 52-week lows after home sales are expected to continue to decline on rising mortgage rates.
Rates for 30-year fixed mortgages rose 10 basis points to 6.28% today from 5.55% a week ago, according to Mortgage News Daily.
European markets traded up but near the close the indexes started wavering and closed down.
The DAX index decreased 0.5% to 13,365.90, the CAC-40 index declined 0.6% to 5,985.52, and the FTSE 100 index fell 0.05% to 7,201.04.
Market indexes across Europe opened higher but began to waver after thirty minutes of trading and reached intra-day lows by mid-day local time.
Brent crude jumped $2.81 to $125.01 and West Texas crude advanced $2.51 to $123.43 a barrel.
Asian markets were on the defensive on the growing worries of global economic slowdown, rising energy prices, and extended lockdowns in China.
The Nikkei index fell 1.3% to 26,692.86, the Hang Seng Index closed nearly unchanged at 21,067.99, and the Sensex index edged lower 0.3% to 52,693.57.
Investors were on the edge after market indexes extended losses in New York for a third day in a row.
The Nikkei index dropped as much as 2.2% before recovering in the afternoon on the worries of inflation.
India's wholesale inflation accelerated to 15.88% in May from 13.11% in April, according to the latest data released by the Ministry of Commerce & Industry.
The latest bout of inflation was driven by rising prices in petroleum products, chemicals, and food and non-food items.
The index is at a record high since the current data series began in 2011.
The Australian market index ASX 200 fell 3.55% to 6,686.58 after a day of holiday and catching up with market losses around the world on Monday.
Movers: Coinbase, Compass, FedEx, EQT, Redfin, Oracle
Barry Adams
14 Jun, 2022
New York City
Oracle Corp jumped 9.9% to $70.35 after the database maker reported higher-than-expected earnings.
Revenues in fiscal fourth quarter ending on May 31st rose 5% to $11.8 billion and net income dropped 21% to $3.2 billion.
diluted earnings per share declined to $1.16 from $1.37 a year ago.
Coinbase Global declined 4.5% to $49.75 after the cryptocurrency exchange in an internal memo announced 18% staff reduction. The company has about 5,000 employees.
Coinbase stock has plunged 85% from its peak and dropped 80% this year and bitcoin declined to $22,000, extending this year's losses to 53%.
Natural gas futures plunged following the excess supply in the domestic market after the closure of a LNG terminal exporting the commodity.
Freeport LNG said it had a fire at Quintana Island, Texas facility and the plant will not return to full-operation till late 2022.
EQT Corporation plunged 10.10% to $40.55 after natural gas futures plunged 16% to $7.25.
Southwestern Energy plunged 11.3% to $7.63, Range Resources dropped 8.2% to $29.53, and Comstock Resources declined 8.9% to $16.66.
FedEx jumped 12.5% to $226.01 after the package delivery company lifted its quarterly dividend 50% to $1.15 a share.
The package delivery company added two directors and expanded the board as a part of agreement with hedge fund D.E Shaw.
Compass Inc plunged 11.4% to $4.22 and Redfin Corp dropped 5.5% to $8.07 after the real estate brokerage firms announced layoffs.
Compass plans to trim 10% of its workforce and Redfin plans to cut about 8%, according to regulatory filings with the SEC.
Compass and Redfin dropped to new 52-week lows after home sales are expected to continue to decline and mortgage rates for 30-year loans crossed 6% today.
European Markets Fall, Third Monthly Increase in German Inflation
Bridgette Randall
14 Jun, 2022
New York City
European markets traded up but near the close the indexes started wavering and closed down.
The DAX index decreased 0.5% to 13,365.90, the CAC-40 index declined 0.6% to 5,985.52, and the FTSE 100 index fell 0.05% to 7,201.04.
Market indexes across Europe opened higher but began to waver after thirty minutes of trading and reached intra-day low by mid-day local times.
Indexes attempted to recover in the next two hours of trading and managed to touch flat-line near 2 p.m. and reversed the course on weak trading activities.
German consumer prices increased 7.9% in May from 7.4% in April, the final data from Destatis showed.
The data were revised from the flash estimate released on May 30.
Early Bounce Evaporates On Wall Street
Barry Adams
14 Jun, 2022
New York City
On Wall Street early stock bounce evaporated after steep loses on Monday and market indexes extended losses.
The S&P 500 index increased 0.3% to 3,761.62 and the Nasdaq Composite index added 0.24% to 10,835.23.
Traders are revising interest rate expectations to 75-basis-points from 50-basis-points after the Fed meeting tomorrow after the wholesale price index rose 10.8% and hovered near record level.
The yield on 10-year Treasury notes inched slightly lower to 3.348%.
Futures of crude oil edged up $2.50 to $123.45 a barrel and natural gas edged down $1.46 or 17% to $7.14 a unit.
With elevated inflation measures, the Federal Reserve is lagging in its response in tackling inflation that is hovering above its target range above 2% for months.
Investors are worried that the Fed may be forced to take drastic actions to tame inflation forces and dip the economy into a recession and shrink corporate profits.
Market indexes are rebounding from steep losses on Monday when the S&P 500 index dropped 3.9% and the Nasdaq Composite index declined 4.7% ahead of the interest rate decision on Wednesday.
The dramatic declines came on top of similar losses in the last two days in the previous week after the U.S. inflation accelerated in May to the fastest pace of 8.6% since December 1981.
The S&P 500 index dipped to bear market with losses of 21.76% from the high in January and the Nasdaq index extended losses to 31.8% in the year so far.
Oracle jumped 9.9% to $70.35 after the database maker reported higher-than-expected earnings.
Revenues in fiscal fourth quarter ending on May 31st rose 5% to $11.8 billion and net income dropped 21% to $3.2 billion.
diluted earnings per share declined to $1.16 from $1.37 a year ago.
Coinbase Global declined 4.5% to $49.75 after the cryptocurrency exchange in an internal memo announced 18% staff reduction. The company has about 5,000 employees.
Coinbase stock has plunged 85% from its peak and dropped 80% this year and bitcoin declined to $22,000, extending this year's losses to 53%.
FedEx jumped 12.5% to $226.01 after the package delivery company lifted its quarterly dividend 50% to $1.15 a share.
The package delivery company added two directors and expanded the board as a part of agreement with hedge fund D.E Shaw.
European markets traded up but near the close the indexes started wavering and closed down.
The DAX index decreased 0.5% to 13,364.60, the CAC-40 index declined 0.7% to 5,981.72, and the FTSE 100 index fell 0.05% to 7,201.67.
German consumer prices increased 7.9% in May from 7.4% in April, the final data from Destatis showed.
The data were revised from the flash estimate released on May 30.
Cautious Trading in Asia On Elevated Energy Prices
Arjun Pandit
14 Jun, 2022
New York City
Asian markets were on the defensive on the growing worries of global economic slowdown, rising energy prices, and extended lockdowns in China.
The Nikkei index fell 1.3% to 26,692.86, the Hang Seng Index closed nearly unchanged at 21,067.99, and the Sensex index edged lower 0.3% to 52,693.57.
Investors were on the edge after market indexes extended losses in New York for a third day in a row.
The S&P 500 index dropped 3.9% and the Nasdaq Composite index declined 4.7% ahead of the interest rate decision on Wednesday.
The dramatic declines came on top of similar losses in the last two days in the previous week after the U.S. inflation accelerated in May to the fastest pace of 8.6% since December 1981.
The Nikkei index dropped as much as 2.2% before recovering in the afternoon on the worries of inflation.
The index declined for the third day in a row as crude oil prices stayed firm near $123 a barrel price level in international markets.
Japan, one of the largest importers of crude oil in the world, is battling energy price inflation that is slowly sipping in the broader economy after decades of deflations.
The broader Topix index declined 1.2% led by losses in tech, healthcare and real estate companies.
Softbank Group fell 2.6% to 5,033 yen.
Automakers fell on the persistent supply chain disruption worries. Toyota Motors declined 1.7% to 2,095 yen, Nissan Motor fell 1% to 539.20 yen, and Honda Motor dropped 0.2% to 3,287 yen.
The indexes in Shanghai and Hong Kong opened higher but trimmed gains on the worries that the lockdowns in Shanghai and Beijing may be expanded to more regions and extended again.
The Kospi average dropped 0.46% to 2,492.97 on the rate hike worries in Korea.
LG Energy Solution rose 2.8% after the company announced a new battery manufacturing plant in South Korea. The 4680 battery cells made by LG are used by Tesla in its electric vehicles.
Mumbai stocks struggled to rise above the weak sentiment in global markets and wholesale inflation surged to a record high in a decade.
The Sensex index declined 153.13 or 0.3% to 52,693.57 and the Nifty index dropped 42.30 or 0.27% to 15,732.10.
India's wholesale inflation accelerated to 15.88% in May from 13.11% in April, according to the latest data released by the Ministry of Commerce & Industry.
The latest bout of inflation was driven by rising prices in petroleum products, chemicals, and food and no-food items.
The index is at a record high since the current data series began in 2011.
Adani Enterprises jumped 5.6% to 2,197.60 rupees after the company agreed to sell a 25% minority stake in its subsidiary Adani New Industries to France-based TotalEnergies.
New Industries plans to build green hydrogen production and ecosystem with the aim of investing $50 billion over the next 10 years.
The Australian market index ASX 200 fell 3.55% to 6,686.58 after a day of holiday and catching up with market losses around the world on Monday.
The mining companies BHP Group fell 4.2% to $44.26, Rio Tinto declined 4.2% to $111.50, and Fortescue plunged 8.5% to $19.63 after iron ore prices eased.
Rate Fears On Wall Street Sank S&P 500 and Nasdaq 4%
Barry Adams
13 Jun, 2022
New York City
On Wall Street fear ruled and investors sold stocks deepening market selloff.
Market indexes plunged after investors increasingly focused on the yawning gap between the current interest rates at 1% and inflation nearing 9%.
The gap between the interest rate and inflation is so wide that investors fear only drastic Fed actions will tame inflation running above the Fed's target range of 2% and showing no signs of cooling.
The Fed's plan to lift rates is a blunt instrument with wider ramifications for the economy and may lead to unintended consequences.
Tougher Fed actions, higher rates faster, will not only slow down the economy but also lift jobless rates and reduce the value of future profits.
The stock markets around the world turned lower on the prospects of elevated inflation for many more months and larger rate hikes in the U.S. and Europe.
In addition, crude oil prices are showing no signs of softening despite trading near 8-year highs despite the prospects of slowing economies.
This week, central banks around the world are going to announce their rate decisions.
The rate decisions are expected from the U..S. Federal Reserve and the Banco Central Do Brasil on Wednesday, from the Bank of England on Thursday, and from the Bank of Japan and Swiss National Bank on Friday.
The S&P 500 closed down 3.9% to 3,749.62 and the Nasdaq Composite index plunged 4.7% to 10,809.23.
Only five stocks closed higher in the S&P 500 index.
In the year so far, the S&P 500 extended losses to 21.8% and the Nasdaq Composite fell deeper in the bear market with a loss of 31.7%.
Bitcoin dropped 15% and extended two-month losses above 50%.
Travel and leisure stocks led the losers.
American Express plunged 5.2%, American Airlines declined 9.5%, Delta Air dropped 8.3%, Hyatt Hotels plunged 7.01%, and Expedia Group decreased 7.7%.
Large losses in trading today did not spare large tech companies.
Microsoft Corp declined 4.2%, Apple Inc lost 3.8%, Alphabet plunged 4.1%, and Meta Platforms decreased 6.5%.
European markets closed at their lows of the day tracking losses on Wall Street.
The DAX index dropped 2.4% to 13,427.03, the CAC-40 index declined 2.7% to 6,022.32, and the FTSE100 index fell 1.5% to 7,205.81.
Futures of crude oil declined 41 cents to $120.22 and natural gas fell 18 cents to $8.67 a unit.
The yield on 10-year Treasury notes rose 24 basis points to 3.389%, highest since 2011.
Asian market plunged after the U.S. inflation accelerated and fueling worries of faster rate hikes.
The yen dropped to a 23-year low on widening rate gap between Japan and the U.S.
Indexes in China declined after Beijing reimposed stricter controls in several parts of the city.
The Nikkei index plunged 3.01% to 26,987.44, the Hang Seng index declined 3.4% to 21,067.58, and the Kospi index dropped 3.5% to 2,504.51, a 19-month low.
Market indexes in Frankfurt and Paris dropped 2% and in London declined 1.7%.
The Sensex index dropped 1,456.74 or 2.7% to 52,846.70 and the Nifty 50 index plunged 2.6% or 427.40 to 15,774.40.
The Australian markets were closed for a holiday and the New Zealand index dropped 1.9%, the largest one-day decline in four months and fell to its lowest level in two years.
The Japanese government 10-year bonds yield rose to 0.255%, a six-year high and above the cap set by the central bank, ahead of the interest rate decision by the Bank of Japan on Friday.
Movers: Astra Space, Caesars, Coinbase, DocuSign, McDonald's, Prologis, Zendesk
Barry Adams
13 Jun, 2022
New York City
Astra Space Inc dropped 24.01% to $1.54 after the company rocket this weekend failed to reach orbit carrying NASA's satellites.
Caesars Entertainment plunged 12.1% to $39.99 and traded at a new 52-week and one-year low.
Coinbase Global plunged 21.4% to $46.24 after the continued weakness in the largest cryptocurrency bitcoin.
Bitcoin declined for the 12 weeks in a row from its high near $49,000 in March to $23,000.
The large bitcoin holder MicroStrategy Inc plunged 19.8% to $163.23 following the bitcoin fall.
DocuSign Inc dropped 10.2% to $59.97 on top of 24% losses on Friday after the company missed earnings expectations. Wolfe Research also lowered its rating to "market perform" from "peer perform."
McDonald's Corp increased 0.7% to $239.14 after the company's Russian operations opened under a new Russian ownership on Russia Day this weekend.
Alexander Govor, the Siberian entrepreneur, said he paid a token purchase price for McDonald's Russia operations and the U.S. fast food giant has no plans to return to Russia.
Prologis Inc declined 8.1% to $107.79 after the industrial real estate developer and operator agreed to acquire Duke Realty for $26 billion in an all-cash transaction.
Under the agreement Duke shareholders will receive 0.475 shares of Prologis shares.
Duke Realty jumped 0.7% to $50.73.
Revlon Inc plunged 42% to $1.17 after a Wall Street Journal report without citing sources said that the cosmetic company is facing financial issues and supply chain disruptions and the management is preparing to file for bankruptcy protection as early as this week.
Today's market decline was led by losses in tech stocks.
Alphabet Inc dropped 3%, Amazon.com Inc dropped 5.2% and traded only 10% above its pre-pandemic level, Apple Inc fell 2.5%, Adobe declined 3.7%, Netflix plunged 6.2% and extended this year's loss to 71%, and Meta Platforms traced down 4.2%, and Tesla declined 6.2%.
Zendesk Inc declined 7.9% to $59.84 after Morgan Stanley downgraded the stock to "equal weight" from "overweight."
S&P 500 Sinks to Bear Territory, Nasdaq Extends Losses
Barry Adams
13 Jun, 2022
New York City
Market jitters continued for the third day in a row ahead of the rate decision on Wednesday.
Futures of the S&P 500 index declined 2.4% to 3,806.50 and the Nasdaq Composite index fell 2.9% to 11,523.50.
Stocks extended losses for the third day in a row and the S&P 500 index dropped to bear market mark after the latest inflation data showed no signs of abating and the Fed has a long road ahead in catching up with inflation.
Risky assets were hit hard and bitcoin plunged 14% to $23,582 according to the price data available on CoinDesk.
Bitcoin declined for the 12 weeks in a row from its high near $49,000 in March.
Coinbase Global plunged 21.4% to $46.24 after the continued weakness in the largest cryptocurrency bitcoin.
Markets are looking ahead to interest rate decisions from several central banks this week.
The rate decisions are expected from the U..S. Federal Reserve and the Banco Central Do Brasil on Wednesday, from the Bank of England on Thursday, and from the Bank of Japan and Swiss National Bank on Friday.
The faster than expected inflation dashed hopes of peaking inflation and raised expectations that the interest rates may be raised higher-than-expected 50 basis points after a two-day meeting on Wednesday.
The Federal Reserve has signaled a 50 basis points interest rate increase at its next meeting this week and in late July.
The yen extended its year-long decline and fell to 135.20 against one dollar before recovering to close at 134.60 as the rate gap widens between the yen and the U.S. dollar.
The rupee edged to record low 77.81 on the rising worries that higher U.S. interest rates may accelerate selling by international investors.
Asian market plunged after the U.S. inflation accelerated and fueling worries of faster rate hikes. The yen dropped to a 23-year low on widening rate gap between Japan and the U.S. Indexes in China declined after Beijing reimposed stricter controls in several parts of the city.
The Nikkei index plunged 3.01% to 26,987.44, the Hang Seng index declined 3.4% to 21,067.58, and the Kospi index dropped 3.5% to 2,504.51, a 19-month low.
Market indexes in Frankfurt and Paris dropped 2% and in London declined 1.7%.
The Sensex index dropped 1,456.74 or 2.7% to 52,846.70 and the Nifty 50 index plunged 2.6% or 427.40 to 15,774.40.
The Australian markets were closed for a holiday and the New Zealand index dropped 1.9%, the largest one-day decline in four months and fell to its lowest level in two years.
The Japanese government 10-year bonds yield rose to 0.255%, a six-year high and above the cap set by the central bank, ahead of the interest rate decision by the Bank of Japan on Friday.
The business survey index of large businesses declined to -9.9 in the quarter to June compared to -7.6 in the three-month period to March.
The joint survey by the Finance Ministry and the Cabinet Office showed negative sentiment deepened among businesses after the Ukraine war dragged on and China lockdowns continued.
The sentiment in the automobile industry fell to -25.4 on the persistent global supply chain worries.
Asian Markets Plunge On Faster Rate Hike and Covid Worries
Arjun Pandit
13 Jun, 2022
New York City
Accelerating U.S. inflation data sparked a wave of selloff in Asian markets in Monday's trading.
Market indexes opened lower and remained under pressure and continued to fall in the region as indexes in Tokyo, Hong Kong, Mumbai, and Seoul sank near their lows by early afternoon.
Asian markets were also on the decline after the U.S. inflation data and rate hike worries compounded by the reimposing of stricter restrictions in parts of Shanghai and Beijing.
Chinese authorities began reimposed mass testing in Beijing and also shut down several schools after coronavirus infections began to rise.
The Nikkei index plunged 3.01% to 26,987.44, the Hang Seng index declined 3.4% to 21,067.58, and the Kospi index dropped 3.5% to 2,504.51, a 19-month low.
Market indexes in Frankfurt and Paris dropped 2% and in London declined 1.7%.
The Sensex index dropped 1,456.74 or 2.7% to 52,846.70 and the Nifty 50 index plunged 2.6% or 427.40 to 15,774.40.
The Australian markets were closed for a holiday and the New Zealand index dropped 1.9%, the largest one-day decline in four months and fell to its lowest level in two years.
The U.S. consumer price index in May soared 8,6% after rising at 8.3% in April, according to the latest data released by the U.S. Bureau of Labor Statistics on Friday.
The May consumer price inflation rose at the fastest pace since December 1981.
The annual price increases have been accelerating since the lifting of pandemic restrictions as businesses struggle with supply chain issues and rising costs of commodities, food, and energy.
On a monthly basis, food prices rose 1.2%, energy prices surged 3.9%, and shelter prices rose 0.6%.
On a yearly basis, food prices surged 10.1%, energy prices soared 34.6%, and shelter cost rose 5.5%.
The faster than expected inflation dashed hopes of peaking inflation and raised expectations that the interest rates may be raised higher-than-expected 50 basis points after a two-day meeting on Wednesday.
The Federal Reserve has signaled a 50-basis-points interest rate increase at its next meeting this week and in late July.
Markets are looking ahead interest rate decisions from several central banks this week.
The rate decisions are expected from the U..S. Federal Reserve and the Banco Central Do Brasil on Wednesday, from the Bank of England on Thursday, and from the Bank of Japan and Swiss National Bank on Friday.
The yen extended its year-long decline and fell to 135.20 against one dollar before recovering to close at 134.60 as the rate gap widens between the yen and the U.S. dollar.
The rupee edged lower to 77.81 on the rising worries that higher U.S. interest rates may accelerate selling by international investors.
The Japanese government 10-year bonds yield rose to 0.255%, a six-year high and above the cap set by the central bank, ahead of the interest rate decision by the Bank of Japan on Friday.
The business survey index of large businesses declined to -9.9 in the quarter to June compared to -7.6 in the three-month period to March.
The business sentiment among smaller companies improved but remained negative at -2.1 from -9.6 in the previous quarter.
The joint survey by the Finance Ministry and the Cabinet Office showed negative sentiment deepened among businesses after the Ukraine war dragged on and China lockdowns continued.
The sentiment in the automobile industry fell to -25.4 on the persistent global supply chain worries.
U.S. and European Markets Extend Weekly Losses to 6%
Barry Adams
10 Jun, 2022
New York City
Market indexes took another knock after inflation accelerated in May and escalating fuel and food prices show no signs of receding.
Traders were already nervous before the release of the inflation report this morning and hit the sell button after inflation was ahead of expectations and dashed all hopes of peaking inflation.
The S&P 500 index plunged 2.9% to 3,900.86 and the Nasdaq Composite index plunged 3.5% to 11,340.02.
In the week, the S&P 500 declined 6.1% and the Nasdaq Composite fell 6.9%.
For the year, the S&P 500 declined 18.7% and the Nasdaq Composite fell 28.4%.
Consumer prices in May rose at a faster pace as energy price surge continued in the month.
The Consumer Price Index increased 1.0% in May on a seasonally adjusted basis after rising 0.3% in April, the U.S. Bureau of Labor Statistics reported today.
Over the last 12 months, the all items index increased 8.6% before seasonal adjustment, faster than 8.3% in the previous month.
The annual price increases have been accelerating since the lifting of pandemic restrictions as businesses struggle with supply chain issues and rising costs of commodities, food, and energy.
On a monthly basis, food prices rose 1.2%, energy prices surged 3.9%, and shelter prices rose 0.6%.
On a year basis, food prices surged 10.1%, energy prices 34.6%, and shelter cost rose 5.5%.
In stock trading technology, consumer goods makers, travel and entertainment stocks faced renewed selling.
Microsoft declined 3.4%, Google parent Alphabet fell 1.9%, Apple dropped 2.8%, Meta Platforms traded down 3.5%, and Amazon plunged 4.9%.
Las Vegas Sands declined 4.3%, Hyatt Hotels decreased 5.4%, Expedia Group dropped 5.4%, and Cheesecake Factory plunged 3.8%.
Uber dropped 6.3% and Lyft plunged 6.7%.
Traders also reacted to the latest earnings news and brokerage rating revisions.
Netflix Inc declined 4.4% to $184.55 after Goldman Sachs downgraded the streaming service provider's stock from "neutral" to "sell" and cut its price target to $186 from $265.
The brokerage firm cited a number of reasons including lower investor's appetite for businesses with longer-term investment, rising competition, and declining new subscriber growth prospects in the U.S.
Rent the Runway Inc jumped 7.7% but closed down 1% to $3.50 after the online style provider said fiscal 2022 first quarter surged 100% to $67.1 million and net loss shrank 63% to $42.5 million.
Active customers increased 70% to 177,200.
Stitch Fix Inc dropped 17.7% to $6.41 following a decline of 15% in previous session after the company reported fiscal 2022 third quarter revenues declined 8% to $492.9 million and net loss of $78 million or 72 cents a share.
The total number of active clients declined 5% to 3.9 million and net revenues per active clients increased 15% to $553.
Separately, the company said it has laid off about 4% of its workforce, including 15% of its salaried positions and took a one-time charge of $15 million to $20 million in the fourth quarter.
The DAX index dropped 3.08% to `13,761.08, the CAC-40 declined 2.7% to 6,187.23, and the FTSE 100 index fell 2.2% to 7,317.52.
For the week, the DAX and CAC-40 indexes declined 5.5% and the FTSE index dropped 2.8%.
In the year so far, the DAX and the CAC-40 indexes have lost 14.1% and the FTSE 100 index is down 2.8%.
Automakers and insurance companies led the losers.
Ryanair Holdings dropped 4%, International Consolidated Airlines Group declined 2%, and Wizz Air fell 3.6% on the rising prospects of labor strikes during the busy summer travel season.
Mercedes Benz declined 2.1%, BMW fell 2.6%, and Volkswagen dropped 3.2%. Renault SA fell 3.6% and Peugeot SA declined 4.2%.
Allianz SE dropped 3.6%, AXA declined 3.6%, and Prudential Plc fell 4.2%.
In Asia, markets were cautious ahead of the release of the U.S. inflation report and the reimposing of restrictions in areas of Beijing and Shanghai also raised the prospects of longer lockdowns.
The Nikkei index dropped 1.5% to 27,824.29, the Hang Seng Index declined 0.3% to 21,806.18, and the Sensex index dropped 1.8% to 54,303.44.
For the week, the Nikkei 225 index closed up 0.5%, the Hang Seng rose 2.5%, and the Sensex index fell 2.2%.
In the year so far, the Nikkei 225 declined 5.04%, the Hang Seng fell 6.3%, and the Sensex dropped 8.3%.