Market Update
Traders Look Ahead to Inflation Data Amid Monday Market Jitters
Barry Adams
11 Mar, 2024
New York City
Stocks struggled in Monday's trading, and benchmark indexes extended the previous week's losses as investors looked ahead to the release of inflation data later in the week.
The S&P500 index and the Nasdaq Composite declined 0.5% in early trading in New York, and investors debated the future rate path and labor market conditions.
Last week, stock market indexes declined, and investors focused on labor market updates and overlooked international trade data.
U.S. nonfarm payrolls expanded at a healthy pace in February, and the growing job market also enticed more people to apply for jobs, which in turn increased the jobless rate to a 2-year high, and annual wage gains decelerated to 4.3%.
Moreover, job openings edged slightly lower but remained at a high level, indicating that labor market conditions are healthy, despite multiple rate hikes over the last two years.
The yield on Treasury notes declined on the growing optimism that policymakers are more likely to cut rates as early as June, providing another boost to the stock market advance and driving gold to a record high.
Traders are anticipating that February's consumer price inflation will rise by 0.4% on a monthly basis and 3.0% from a year ago, according to a survey conducted by Ticker.com.
Core inflation, which excludes volatile food and energy prices, is expected to rise 0.3% from the previous month and advance at a faster pace of 3.7% from a year ago.
The U.S. Bureau of Labor Statistics is set to release inflation data on Tuesday and producer price index data on Thursday.
Despite multiple interest rate hikes over the last two years, inflation has still stayed well above the Federal Reserve's target rate of 2%, and bringing down inflation may require higher interest rates to stay longer, contrary to the market's expectations.
U.S. Indexes and Yields
The S&P 500 index decreased 0.2% to 5,113.50, and the Nasdaq Composite fell 0.2% to 16,052.06.
The yield on 2-year Treasury notes increased to 4.51%, 10-year Treasury notes inched up to 4.07%, and 30-year Treasury bonds edged down to 4.24%.
WTI crude oil decreased $0.87 to $77.21 a barrel, and natural gas prices decreased 3 cents to $1.78 a thermal unit.
Gold increased by $1.30 to $2,178.70 an ounce, and silver rose 13 cents to $24.43.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.83.
U.S. Stock Movers
Cryptocurrency stocks advanced after Bitcoin surged above $71,000 in the hopes that the U.K. securities regulator may approve retail investing in the digital currency through an exchange-traded note vehicle.
MicroStrategy soared 9%, Coinbase advanced 6%, and Marathon Digital jumped 5%.
Artificial intelligence applications and infrastructure-related stocks declined in Monday's trading.
Nvidia declined 1%, Super Micro dropped 3%, Broadcom fell 1%, and Advanced Micro Devices eased 2%.
Europe Movers: Currys, Enel, EssilorLuxottica, HelloFresh, Imperial Brands, Marston's
Inga Muller
11 Mar, 2024
Frankfurt
European stock market indexes declined from record highs, and bond yields drifted lower after the European Central Bank supported the market view of a possible rate cut as early as June.
The DAX index decreased by 0.7% to 17,686.07, the CAC-40 index fell by 0.4% to 7,999.17, and the FTSE 100 index inched lower by 0.3% to 7,637.33.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.71%; the UK gilts edged lower to 3.95%; and Italian bonds inched lower to 3.59%.
Metals and mining companies fell after cautious comments from the Chinese minister.
China's housing minister said on Monday that the government is prepared to let some property developers go bankrupt if they are deemed to be financially unviable.
Anglo American declined 2.1% to 1,811.60 pence, and Glencore fell 2.2% to 391.70 pence after copper and iron ore prices eased on China's growth worries.
Currys PLC dropped 8.7% to 59.15 pence after U.S.-based activist investment manager Elliott Investment Management said it no longer plans to make a bid for the electronics retailer.
Marston's PLC decreased 1.1% to 29.50 pence after the UK-based pub's chairman William Rucker confirmed his plans to step down from the company's board as of July 8.
Imperial Brands rose 2.1% to 1,728.0 pence after the company announced a stock repurchase plan of £11 billion.
HelloFresh advanced 3.7% to €7.11 after the German meal-kit company's stock plunged 40% last week following the company's weak outlook.
Enel SpA rose 0.6% to €6.16 after the Italian energy company's subsidiary E-distribuzione announced its plans to sell some of its distribution activities for €1.2 billion to Italian regional utility A2A.
LEG Immobilien gained 3.7% to €74.62 after the property company reported better-than-expected quarterly results.
EssilorLuxottica decreased 2.1% to €204.45, and the Financial Times said that the company was one of the top contenders to acquire Italian eyewear maker Marcolin.
European Indexes Decline from Record Highs, Spain's Retail Trade Expanded
Bridgette Randall
11 Mar, 2024
Frankfurt
European market indexes declined from record highs after investors booked profits and reviewed the latest rate announcements last week.
Benchmark indexes in Frankfurt, Paris, and London inched lower in Monday's trading, and bond yields also drifted lower.
Central banks in the U.S. and Eurozone led investors to believe that interest rates are near their peak in the current cycle and raised hopes for rate cuts to begin as early as June.
Last week, the European Central Bank also held its key lending rates steady for the fourth consecutive time in a row, and ECB President Lagarde confirmed that the market’s view of rate cuts in three months is converging with the view of policymakers.
Moreover, last week's latest batch of economic reports showed Germany's exports rose more than expected and the trade surplus widened in January, but France's trade balance remained in deficit because of high energy prices.
Spain's retail trade activity increased by 0.3% in January, following the downwardly revised 2.7% rise in the previous month, the National Statistics Institute reported Monday.
Retail sales rose for the fourteenth month in a row, but the rise was the smallest in the period.
Europe Indexes and Yields
The DAX index decreased by 0.7% to 17,686.07, the CAC-40 index fell by 0.4% to 7,999.17, and the FTSE 100 index inched lower by 0.3% to 7,637.33.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.71%; the UK gilts edged lower to 3.95%; and Italian bonds inched lower to 3.59%.
The euro edged higher to $1.09, the British pound inched higher to $1.28, and the U.S. dollar weakened to 87.67 Swiss cents.
Brent crude increased $0.29 to $82.39 a barrel, and the Dutch TTF natural gas decreased by €0.96 to €25.43 per MWh.
Europe Stock Movers
Metals and mining companies fell after cautious comments from the Chinese minister.
China's housing minister said on Monday that the government is prepared to let some property developers go bankrupt if they are deemed to be financially unviable.
Anglo American declined 2.1% to 1,811.60 pence, and Glencore fell 2.2% to 391.70 pence after copper and iron ore prices eased on China's growth worries.
Currys PLC dropped 8.7% to 59.15 pence after U.S.-based activist investment manager Elliott Investment Management said it no longer plans to make a bid for the electronics retailer.
Marston's PLC decreased 1.1% to 29.50 pence after the UK-based pub's chairman confirmed his plans to step down from the company's board later in the year.
Imperial Brands rose 2.1% to 1,728.0 pence after the company announced a stock repurchase plan of £11 billion.
HelloFresh advanced 3.7% to €7.11 after the German meal-kit company's stock plunged 40% last week following the company's weak outlook.
Enel SpA rose 0.6% to €6.16 after the Italian energy company's subsidiary E-distribuzione announced its plans to sell some of its distribution activities for €1.2 billion to Italian regional utility A2A.
LEG Immobilien gained 3.7% to €74.62 after the property company reported better-than-expected quarterly results.
EssilorLuxttica decreased 2.1% to €204.45, and the Financial Times said that the company was one of the top contenders to acquire Italian eyewear maker Marcolin.
Japan Narrowly Avoided Recession After GDP Growth Revised Higher, China's Inflation Rebounded
Arjun Pandit
11 Mar, 2024
Mumbai
Asian markets traded mixed in Monday's trading, and tech stocks led the indexes in Tokyo and Mumbai lower, but the benchmark indexes in China edged higher after the release of inflation data.
Nikkei In Tokyo Dropped 2%, Q4 GDP Revised Higher
Stocks in Tokyo dropped sharply following the weakness in tech stocks in Friday's trading in New York.
Profit-taking sentiment dictated market volatility, and the Japanese yen strengthened against the U.S. dollar after the fourth quarter. GDP was upwardly revised and stoked speculation that the Bank of Japan is likely to end its ultra-loose monetary policy at the end of its policy meeting on March 19.
Japan's fourth-quarter GDP growth was revised to an increase of 0.1% from the preliminary estimate of a decline of 0.1%, avoiding a technical recession after contracting 0.8% in the third quarter. Japan's Cabinet Office reported Monday.
On an annualized basis, GDP increased 0.4% after slumping 2.9% in the three months prior. GDP capital expenditure was up 2.0 percent on the quarter after declining 0.4% in the third quarter.
The Nikkei 225 Stock Average declined 2% to 38,868.10, and the Topix index dropped 2.2% to 2,666.72.
Tokyo Electron, Disco Corp., SoftBank, Advantest, and Screen Holdings declined between 3% and 5%.
Sumitomo Mitsui Financial, Mizuho Financial, and Mitsubishi UFJ Financial declined more than 3%.
Inflation Rebounded and Foreign Investments Lift China Stocks Higher
Stocks in Shanghai and Hong Kong advanced on the hopes that demand conditions are recovering after the rebound in inflation.
Market sentiment was also bolstered by a net inflow of $9.6 billion of funds in Chinese stocks in February, reversing a net outflow in the previous six months in a row, according to the Institute of International Finance.
China's consumer price inflation rebounded to an increase of 0.7% in February after a 14-year steep decline of 0.8% in January, the National Bureau of Statistics reported over the weekend.
The shifting lunar holiday calendar also played a role in the rebound in inflation following the early arrival of the annual holidays last year.
Property developers declined after the housing minister confirmed that the government is prepared to let some developers go bankrupt for a lack of financial viability.
The CSI 300 index increased 0.4% to 3,559.88, and the Hang Seng index added 1.1% to 16,548.22.
Longfor Group, China Vanke, China Resources Land, Henderson Land Development, and Sun Hung Kai traded down but managed to recover in the afternoon trading.
Longfor Group traded higher by 0.5% to HK$9.43, despite the property developer saying its annual profit declined by as much as 50% in the last year.
Alibaba Group, Tencent Holdings, JD.com, Meituan, and Baidu advanced between 2% and 4% following the bargain hunting for foreign investors.
India indexes track lower global markets.
The Sensex index decreased 0.2% to 73,952.93, and the Nifty index fell 0.2% to 22,458.20.
On the Mumbai stock exchange, 160 stocks traded at their 52-week highs and 57 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.05%, and the Indian rupee strengthened to ₹82.82 against the U.S. dollar.
Stocks in Mumbai headed lower in Monday's trading, and investors reacted to local corporate news amid global markets.
The Sensex and the Nifty indexes dropped more than 0.1% in early trading on global interest rate uncertainties compounded by high valuations in local markets.
Market indexes struggled after extending weekly gains for the seventh week in a row, and international crude oil prices hovered near two-week lows on the ongoing demand growth worries in China and rising supplies in the U.S.
India Movers: Interglobe Aviation, Exide Industries, HG Infra, JM Financial, Rail Vikas Nigam, Torrent Power
Arun Goswami
11 Mar, 2024
Mumbai
Stock market indexes declined in Monday's trading after extending weekly gains for the seventh week in a row in the previous week.
The Sensex index decreased 0.2% to 73,952.93, and the Nifty index fell 0.2% to 22,458.20.
On the Mumbai stock exchange, 160 stocks traded at their 52-week highs and 57 stocks traded at their 52-week lows.
Torrent Power increased 4.1% to ₹1,192.15 after the company was awarded a 306 MW solar power project by Maharashtra State Electricity Distribution.
Interglobe Aviation decreased 0.2% to ₹3,099.85 on a report that the company's promoter, Rakesh Gangwal, and other entities controlled by his family are expected to sell a 3.3% stake, or 13 crore shares, in the airline in a block deal today.
Rail Vikas Nigam gained 5% to ₹249.90 after the company won orders from Himachal Pradesh and Madhya Pradesh for expanding 11 KV powerlines.
JM Financial decreased 8.5% to ₹80.15 after the financial services provider was barred by the securities regulator from managing a new public offering of debt securities.
Sonata Software added 0.2% to ₹789.70, and the company announced the integration of its artificial intelligence application with Microsoft Azure.
HG Infra Engineering increased 2.3% to ₹929.50 after the company's 610 crore bid was selected as the lowest for the construction of a 4-lane highway in Jharkhand.
Coal India advanced 0.5% to ₹460.90 after the company signed a preliminary contract to investigate the possibility of setting up a 4,1000 MW power plant in Rajasthan.
Exide Industries decreased 0.5% to ₹326.50, and the company announced a plan to raise ₹40 crore through a rights offering in its advanced battery manufacturing subsidiary.
U.S. Movers: Broadcom, Costco Wholesale, Gap, Marvell Technology
Scott Peters
08 Mar, 2024
New York City
Broadcom declined 0.4% to $1,402.0 after the advanced chipmaker reported better-than-expected quarterly results and estimated revenue in the current quarter in line with market expectations.
Marvell Technology decreased 4.2% to $81.50 after the semiconductor company reported mixed quarterly results and issued a lighter-than-expected revenue and adjusted earnings outlook for the current quarter.
Costco Wholesale declined 3.8% to $761.41 after the membership retailer reported weaker than expected revenue in its latest quarter.
Gap Inc. increased 9.5% to $21.17 after the apparel retailer reported better-than-expected holiday quarter sales of $4.3 billion and earnings per share of 49 cents.
The U.S. Job Market Stays Hot, Wage Growth Decelerates
Brian Turner
08 Mar, 2024
New York City
Total nonfarm payroll employment increased by 275,000 in February, and the unemployment rate increased to 3.9%, the Bureau of Labor Statistics reported Friday.
The February month's increase was higher than the average 230,00 monthly gain in the last 12 months.
The unemployment rate rose by 0.2 percentage points to 3.9% in February, and the number of unemployed people increased by 334,000 to 6.5 million.
A year earlier, the jobless rate was 3.6%, and the number of unemployed people was 6.0 million.
The number of long-term unemployed, those seeking jobs for 27 weeks or more, held steady at 1.2 million in February.
Moreover, the employment participation rate and employment-to-population ratio held steady for the third month in a row at 62.5% and 60.1%, respectively.
In addition, there are 5.7 million people still seeking jobs, but not in the labor force, as in the previous month.
Average hourly earnings for all employees rose at a slower monthly pace of 0.1% and an annual rate of 4.3% to $34.57 in February.
The change in total nonfarm payroll employment for December was revised down by 43,000 to 290,000, and the change for January was revised down by 124,000 to 229,000.
With these revisions, employment in December and January combined is 167,000 lower than previously reported.
Expanding Job Market Sends Mixed Signals to Policymakers, Treasury Yields Edged Lower
Barry Adams
08 Mar, 2024
New York City
Benchmark indexes traded higher in early trading, and the popular indexes are set to extend gains after a week of turbulent trading.
The S&P 500 index and the Nasdaq Composite edged higher after investors reviewed the nonfarm payroll update for February.
The February jobs report offered a mixed picture of expanding payrolls, but the jobless rate also rose, sending conflicting signals to policymakers.
The economy is still adding jobs above its long-term average, and that sustained expansion is also attracting more people to the job market, driving unemployment higher.
Treasury yields edged lower after the release of the jobs report.
U.S. Job Growth Stays Hot
Total nonfarm payroll employment increased by 275,000 in February, and the unemployment rate increased to 3.9%, the Bureau of Labor Statistics reported Friday.
The February month's increase was higher than the average 230,00 monthly gain in the last 12 months.
The unemployment rate rose by 0.2 percentage points to 3.9% in February, and the number of unemployed people increased by 334,000 to 6.5 million.
A year earlier, the jobless rate was 3.6%, and the number of unemployed people was 6.0 million.
The number of long-term unemployed, those seeking jobs for 27 weeks or more, held steady at 1.2 million in February.
Moreover, the employment participation rate and employment-to-population ratio held steady for the third month in a row at 62.5% and 60.1%, respectively.
In addition, there are 5.7 million people still seeking jobs, but not in the labor force, as in the previous month.
Average hourly earnings for all employees rose at a slower monthly pace of 0.1% and an annual rate of 4.3% to $34.57 in February.
The change in total nonfarm payroll employment for December was revised down by 43,000 to 290,000, and the change for January was revised down by 124,000 to 229,000.
With these revisions, employment in December and January combined is 167,000 lower than previously reported.
U.S. Indexes and Yields
The S&P 500 index increased 0.2% to 5,165.60, and the Nasdaq Composite advanced 0.4% to 16,324.28.
The yield on 2-year Treasury notes decreased to 4.42%, 10-year Treasury notes inched down to 4.05%, and 30-year Treasury bonds edged down to 4.22%.
WTI crude oil decreased $0.21 to $78.70 a barrel, and natural gas prices decreased 3 cents to $1.78 a thermal unit.
Gold increased by $7.50 to $2,155.90 an ounce, and silver rose 23 cents to $24.39.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.23.
U.S. Stock Movers
Broadcom declined 0.4% to $1,402.0 after the advanced chipmaker reported better-than-expected quarterly results and estimated revenue in the current quarter in line with market expectations.
Marvell Technology decreased 4.2% to $81.50 after the semiconductor company reported mixed quarterly results and issued a lighter-than-expected revenue and adjusted earnings outlook for the current quarter.
Costco Wholesale declined 3.8% to $761.41 after the membership retailer reported weaker than expected revenue in its latest quarter.
Gap Inc. increased 9.5% to $21.17 after the apparel retailer reported better-than-expected holiday quarter sales of $4.3 billion and earnings per share of 49 cents.
Europe Movers: Curry, DS Smith, HelloFresh, Informa, Mondi
Inga Muller
08 Mar, 2024
Frankfurt
The DAX index decreased by 0.05% to 17,833.07, the CAC-40 index rose by 0.2% to 8,032.07, and the FTSE 100 index inched lower by 0.3% to 7,668.35.
For the week, the DAX index increased by 0.5%, the CAC-40 index advanced by 1.2%, but the FTSE 100 index fell 0.3%.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.71%; the UK gilts edged lower to 3.96%; and Italian bonds inched lower to 3.59%.
Mondi plc decreased 2.2% to 1,350.50 pence after the UK-based paper company agreed to acquire its smaller rival DS Smith for £5.14 billion.
DS Smith stock soared 5.6% to 344.30 pence.
Informa gained 0.4% to 808.60 pence after the UK-based information services provider and business-to-business trade show manager said organic revenue increased 30% in 2023.
HelloFresh SE plunged 42% to €6.80 after the German meal-kit provider cut its core earnings outlook for the second time in five months and withdrew its half-year targets.
Currys PLC fell 1.8% to 64.35 pence after the UK-based electronics retailer confirmed the sale of its operations in Greece and Cyprus for £156 million.
German Industrial Production Rebounded, French Trade Deficit Widened
Bridgette Randall
08 Mar, 2024
Frankfurt
European market indexes struggled to advance in Friday's trading, and investors awaited the release of the eurozone's GDP data and labor market update in the U.S.
Benchmark indexes in Frankfurt and Paris traded around the flatline, and they declined in London.
Market sentiment remained positive in the hopes that major central banks are ready to pivot to cut interest rates as early as June.
Broad Rebounds in German Industrial Production
Germany's monthly industrial production advanced for the first time in nine months in January, the Federal Statistics Office, or destatis, reported Friday.
Seasonal and calendar-adjusted industrial production rose 1.0% from the previous month after falling 2.0% in December.
Calendar-adjusted industrial production fell 5.5% from a year ago.
The production of capital goods fell by 2.1%. However, the production of intermediate goods rose by 4.4% and the production of consumer goods by 4.0%.
The broad-based increase in industrial production was driven by the rise in chemical production by 4.7%, in the food industry by 5.9%, and in machine maintenance and assembly by 11.1%.
However, automobile industry production declined by 7.6%.
Industrial production data excludes the output of the energy and construction sectors.
Energy production declined by 3.7% and construction output increased by 2.7% from the previous month, respectively.
France's Goods Trade Balance Deteriorated
France's goods trade balance deteriorated to €7.4 billion from €6.4 billion after the decline in exports overwhelmed the smaller fall in imports.
Over the month, exports decreased to €48.8 billion from €50.4 billion, while imports declined to €56.2 billion to €56.8 billion.
In January 2024, the energy balance weakened by €0.4 billion, driven largely by the increase in the price of imported energy products.
The balance of manufactured products fell by €0.2 billion and stood at a deficit of €4.0 billion, dragging the overall trade balance.
The energy trade balance deteriorated by €0.4 billion to a deficit of €4.6 billion after five consecutive months of increase, and agricultural product surpluses held steady at €0.2 billion.
Europe Indexes and Yields
The DAX index decreased by 0.05% to 17,833.07, the CAC-40 index rose by 0.2% to 8,032.07, and the FTSE 100 index inched lower by 0.3% to 7,668.35.
The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.71%; the UK gilts edged lower to 3.96%; and Italian bonds inched lower to 3.59%.
The euro edged higher to $1.09, the British pound inched higher to $1.28, and the U.S. dollar weakened to 88.09 Swiss cents.
Brent crude decreased $0.02 to $82.94 a barrel, and the Dutch TTF natural gas increased by €0.47 to €26.48 per MWh.
Europe Stock Movers
Mondi plc decreased 2.2% to 1,350.50 pence after the UK-based paper company agreed to acquire its smaller rival DS Smith for £5.14 billion.
DS Smith stock soared 5.6% to 344.30 pence.
Informa gained 0.4% to 808.60 pence after the UK-based information services provider and business-to-business trade show manager said organic revenue increased 30% in 2023.
HelloFresh SE plunged 42% to €6.80 after the German meal-kit provider cut its core earnings outlook for the second time in five months and withdrew its half-year targets.
Currys PLC fell 1.8% to 64.35 pence after the UK-based electronics retailer confirmed the sale of its operations in Greece and Cyprus for £156 million.
Rate Cut Optimism Boosts Asian Markets, Japan's Household Spending Declined 11th Consecutive Month
Arjun Pandit
07 Mar, 2024
Mumbai
Asian markets traded higher on the final day of the week on speculation that major central banks are laying the groundwork for a pivot rate cut as early as June.
Benchmark indexes in Japan rebounded and trimmed losses in the previous session in the hopes that major central banks will pivot to trimming interest rates later in the year.
The Japanese yen edged higher to 147.20 against the U.S. dollar on widespread speculation that the Bank of Japan is likely to end its ultra-loose policy at the end of two-day meeting on March 19.
Moreover, tech and semiconductor stocks rallied on the persistent enthusiasm linked to the boom in artificial intelligence-related demand for chips, servers, and application providers.
The Nikkei 225 Stock Average gained 0.7% to 39,877.01, and the Topix index added 0.6% to 2,734.10.
For the week, the Topix index advanced 1.0%, but the Nikkei index fell 0.6%.
Tech stocks rebounded, and Tokyo Electron, Advantest, Softbank, Disco Corp., and Screen Holdings increased between 1.5% and 2.5%.
Japan's Household Spending Decline Extends to the Tenth Month
Japan's household spending declined for the 11th month in a row in January, the Ministry of Internal Affairs & Communications reported Friday.
Household spending fell 6.3% from a year ago in January, the steepest decline since February 2021, driven by sharp declines in food, fuel, transportation, and housing costs.
Household spending in December fell 2.5%.
Japan's Current Account Swings to Surplus
Japan reported a current account surplus of 438.2 billion yen in January, the Ministry of Finance said on Friday, following the 744 billion yen surplus in December.
Imports declined 12.1% from a year ago to 8.783 trillion yen, and exports gained an annual 7.6% to 7.340 trillion yen, resulting in a trade deficit of 1.442 trillion yen.
The capital account reported a deficit of 100 million yen, while the financial account had a surplus of 1.808 trillion yen.
Global Rate Cut Hopes Lift China Stocks
Stocks in Shanghai struggled, but in Hong Kong they advanced as investors debated monetary policy stimulus measures by the central banks.
The People's Bank of China Governor Gongsheng commented that banks could lower reserves and offer more loans to individuals and businesses.
During a panel discussion of Chinese lawmakers's annual legislative, Governor Gongsheng said China's reserve requirement ratio is still higher than its peers, and there is room to lower the ration.
Investors also took note of positive comments from Fed Chair Jerome Powell that the central bank is well aware of cutting rates too late and that policymakers are willing and ready to lower rates once inflation is on a sustainable path towards 2%.
The European Central Bank's President Christine Lagarde also suggested that the market view of a rate cut after the June policy meeting is converging with the view of the central bank.
The CSI 300 index declined 0.05% to 3,527.82, and the Hang Seng index advanced 1.3% to 16,441.33.
For the week, the CSI 300 index fell 0.3% and the Hang Seng index dropped 1.2% after advancing in the previous week.
Tech stocks in Hong Kong advanced, and Alibaba Group, JD.com, Baidu, and Tencent added between 0.5% and 1.1%.
Wuxi Biologic and Wuxi Apptec rebounded 3%, recouping some of the losses from the previous session after the U.S. Senate committee advanced a bill preventing Chinese biotech companies from doing business with U.S. government agencies.
Property developers generally declined after lawmakers failed to provide specific and substantial stimulus to revive the moribund property market.
China Vanke, China Resource Land, Henderson Land, and Sun Hung Kai declined between 0.3% and 0.8%.
India Indexes Extend Weekly Gains
Financial markets were closed for a holiday in India, and benchmark Sensex and Nifty indexes advanced 1.5% in the week to close at a new record high after a volatile week.
Gujarat State allocated more land to accelerate the setting up of semiconductor production plants for Tata Group and CG Power.
NTT Data Group is in the process of expanding one of its 14 data centers in India, as demand for data storage and transfer is expected to double over the next five years.
The company is planning to invest as much as $2.4 billion this year in expanding its data centers in the U.S., where demand is driven by artificial intelligence applications, and India, where broader digital connectivity adoption is growing at a rapid clip.
U.S. Trade Gap Rebounds to 9-month High
Brian Turner
07 Mar, 2024
New York City
The U.S. goods and services trade deficit increased to $67.4 billion in January from the revised $64.2 billion in December, the Bureau of Economic Analysis reported Thursday.
The trade deficit in goods and services was the widest in nine months, after exports struggled to advance and imported energy rebounded.
Exports edged up 0.1% to $257.2 billion, and imports advanced 1.1% to $324.6 billion.
The goods and services deficit decreased $2.9 billion from a year ago, or 4.1%, after exports fell 0.4%, or $1.0 billion, and imports decreased 1.2%, or $3.9 billion.
The January increase in the goods and services deficit reflected an increase in the goods deficit of $3.0 billion to $91.6 billion and a decrease in the services surplus of $0.3 billion to $24.2 billion.
The U.S. recorded a goods deficit with China of $22.9 billion, the European Union $18.1 billion, Mexico $12.7 billion, Vietnam $8.5 billion, Japan $7.3 billion, Germany $6.3 billion, Ireland $6.0 billion, Canada $5.7 billion, South Korea $5.5 billion, Taiwan $4.8 billion, Italy $3.8 billion, and India $3.7 billion.
Inflation Views and AI Optimism Lifted S&P 500 and Nasdaq 1%, ECB Held Rates Steady
Barry Adams
07 Mar, 2024
New York City
Benchmark indexes on Wall Street extended 2-day gains after struggling to advance in the previous three sessions.
Semiconductor stocks led the gainers amid the continuing enthusiasm about the boom related to artificial intelligence applications.
The market rally also gained steam after the European Central Bank lowered its view on inflation in 2024.
Treasury yields held steady ahead of the release of nonfarm payroll data on Friday, and investors reviewed the slight decline in the number of job openings to 8.9 million at the end of January, released on Wednesday.
Initial jobless claims in the week ending on March 2 held steady at 217,000, up from the previous week's revised level, the Department of Labor reported Thursday.
Market indexes are trading near record highs, and sentiment remains positive despite the growing consensus that interest rates are likely to stay higher for at least three more months.
The four-week moving average eased from 750 to 212,250 from the previous week's revised level of 213,000.
U.S. Trade Gap Rebounds to 9-month High
The U.S. goods and services trade deficit increased to $67.4 billion in January from the revised $64.2 billion in December, the Bureau of Economic Analysis reported Thursday.
The trade deficit in goods and services was the widest in nine months, after exports struggled to advance and imported energy rebounded.
Exports edged up 0.1% to $257.2 billion, and imports advanced 1.1% to $324.6 billion.
The goods and services deficit decreased $2.9 billion from a year ago, or 4.1%, after exports fell 0.4%, or $1.0 billion, and imports decreased 1.2%, or $3.9 billion.
The January increase in the goods and services deficit reflected an increase in the goods deficit of $3.0 billion to $91.6 billion and a decrease in the services surplus of $0.3 billion to $24.2 billion.
The U.S. recorded a goods deficit with China of $22.9 billion, the European Union $18.1 billion, Mexico $12.7 billion, Vietnam $8.5 billion, Japan $7.3 billion, Germany $6.3 billion, Ireland $6.0 billion, Canada $5.7 billion, South Korea $5.5 billion, Taiwan $4.8 billion, Italy $3.8 billion, and India $3.7 billion.
U.S. Indexes and Yields
The S&P 500 index increased 0.9% to 5,147.90, and the Nasdaq Composite advanced 1.2% to 16,229.52.
The yield on 2-year Treasury notes decreased to 4.55%, 10-year Treasury notes inched down to 4.08%, and 30-year Treasury bonds edged down to 4.22%.
WTI crude oil decreased $0.16 to $78.96 a barrel, and natural gas prices decreased 6 cents to $1.86 a thermal unit.
Gold increased by $7.50 to $2,155.90 an ounce, and silver rose 23 cents to $24.39.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.23.
U.S. Stock Movers
American Eagle jumped 11.7% to $26.20 after the specialty apparel retailer reported better-than-expected quarterly results.
The company also took on an impairment and restructuring charge of $98.3 million related to its internal logistics business, Quiet Platform, which the company put together through various acquisitions during the COVID-19 pandemic years between 2020 and 2022.
Revenue in the holiday quarter increased 12% to $1.68 billion from $1.5 billion, net income plunged to $6.3 million from $54.6 million, and diluted earnings per share dropped to 3 cents from 28 cents a year ago.
Novo Nordisk increased 6.7% to $133.22 after the Danish pharmaceutical company announced positive Phase 1 trial data for its experimental obesity drug, amycretin.
New York Community Bancorp advanced 1.1% to $3.50 after the company announced a $1 billion capital raise on Wednesday.
Victoria's Secret dropped 27.4% to $18.60 after the specialty apparel retailer reported mixed quarterly results and announced an outlook that fell short of market expectations.
ECB Holds Rates and Lowers Inflation and Growth Outlook
European markets rebounded, and investors reacted positively to the monetary policy decisions from the European Central Bank and comments from President Christine Lagarde.
Benchmark indexes in Frankfurt, Paris, and London lacked direction in subdued trading as investors focused on rate decisions, the growth outlook, and inflation views from the European Central Bank.
The European Central Bank as widely expected held rates steady for the fourth time in a row, and policymakers lowered economic growth outlook and inflation expectations.
The central bank acknowledged that inflation is falling faster than anticipated, but policymakers signaled that rates are likely to stay higher as long needed.
“We are in the disinflationary process and we are making progress,” ECB President Lagarde said during a press conference on Thursday.
President Lagarde also signaled rate cut is likely after June meeting added that market view "seems to be converging better" with the policymakers at the ECB.
The main refinancing operation stayed at 22-year high of 4.5%, and deposit facility rate unchanged at 4%.
The central bank also lowered its 2024 estimate of inflation to 2.3% from 2.7%, and economic growth outlook was lowered to 0.6% from 0.8% estimated in December.
Market indexes are trading near record highs in Paris and Frankfurt as investors react positively to rising corporate earnings despite the weak economic backdrop.
German Factory Orders Dropped In January
On the economic front, German factory orders declined sharply in January following a high volume of large orders in the previous month.
New manufacturing orders adjusted for seasonal and calendar factors decreased 11.3% from the previous month, and December orders were revised to a jump of 12%, Destatis reported Thursday.
On an annual basis, factory orders declined 6.0%.
In all three main groups, orders declined, capital goods fell 13.1%, intermediate goods declined 9.3%, and consumer goods eased 5.7%.
Domestic and foreign orders fell during the month.
Foreign orders fell by 11.4%, and orders from the Eurozone decreased by 25.7%. Orders from outside the eurozone, however, rose by 1.6%.
Domestic orders fell by 11.2%, largely because of the higher base effect in the previous month.
UK Home Price Growth Slowed In February
Home prices rose at a slower pace in February, signaling relatively stable home prices at the start of 2024, according to the mortgage lender Halifax.
The Halifax House Price Index rose 1.7% in February, slower than the revised 2.3% growth in the previous month.
On a monthly basis, home prices rose 0.4%, an increase for the fifth month in a row, supported by a decline in mortgage rates and rising wages.
The home price in London led all regions with an average price of £536,996.
Europe Indexes and Yields
The DAX index increased by 0.8% to 17,856.26, the CAC-40 index rose by 0.8% to 8,018.42, and the FTSE 100 index inched higher by 0.2% to 7,692.46.
The yield on 10-year German bonds edged down to 2.31%; French bonds inched lower to 2.76%; the UK gilts edged lower to 4.01%; and Italian bonds inched lower to 3.64%.
The euro edged higher to $1.089, the British pound inched higher to $1.276, and the U.S. dollar weakened to 88.09 Swiss cents.
Brent crude decreased $0.08 to $82.87 a barrel, and the Dutch TTF natural gas decreased by €0.47 to €26.11 per MWh.
Europe Stock Movers
Stellantis NV increased 0.04%, and the Italian automaker said it plans to invest €5.6 billion in South America between 2025 and 2030.
Grafton Group decreased 0.8% to 957.50 pence after home improvement retailer reported 2023 pre-tax profit declined 27% from the previous year.
Aviva plc rose 2.3% to 465.40 pence after the UK-based insurance company reported a 9% increase in annual operating profit.
Hugo Boss dropped 17.4% to €52.24 after the German fashion house warned that 2024 operating profit is likely to lag market expectations.
Deutsche Lufthansa declined 0.3% to €7.02 after the German airline signaled a subdued outlook for the fiscal year 2024.
Continental AG decreased 3% to €70.56 after the German tire maker reported annual operating results that fell short of market expectations.
Virgin Money UK jumped 37% to 216.20 pence after the Nationwide Building Society agreed to acquire the lender for £2.9 billion.
Earning Worries In China and Rate Jitters in Japan Dominate Asian Trading
Asian markets traded mixed amid rate uncertainties, rising geopolitical tensions between China and the U.S., and growing worries of deflation in China.
U.S. Federal Reserve Chairman Jerome Powell reiterated the central bank's stance to hold interest rates but confirmed that rates are likely to go down later in the year.
Powell added that it is too early to discuss a rate cut until there are signs of a sustained decline in inflation to 2%.
In addition, later in the day, the European Central Bank is set to announce its rate decision and growth outlook.
Investors are looking for the central bank to hold rates steady, which may provide insights into the future direction of interest rates.
Nikkei In Tokyo Turned Lower Amid BoJ Rate Decision Speculations
Benchmark indexes in Tokyo traded at a new intra-day high before receding after the yen fell below 149 against the dollar in the hopes that the Bank of Japan is likely to end its ultra-loose monetary policy as early as this month.
Investors also reacted negatively to the real wage decline of 0.6% in February. Real wages fell for the 22nd month in a row, but the decrease was the smallest in eleven months amid weakening goods and service prices in the economy.
The Nikkei 225 Stock Average declined 1.3% to 39,593.69, and the Topix index fell 0.4% to 2,718.23.
Financial stocks trimmed gains in the afternoon trading, and Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial Group rose between 1% and 3%.
Tech stocks were among the leading decliners, and Advantest, Tokyo Electron, Screen Holdings, and Disco Corp. dropped between 3% and 6%.
SoftBank bucked the trend and gained 1.4% to ¥8,997.0.
China Stocks Extend Weekly Losses
Stocks in Shanghai and Hong Kong struggled to stay above the flatline amid rising geopolitical tensions.
Market sentiment was dented after lawmakers in the annual parliamentary session failed to announce specific stimulus to stabilize financial markets.
Investors overlooked stronger-than-expected exports in the January–February months, and the smaller-than-expected increase in imports suggested persistent broader economic weakness.
The U.S. Senate committee advanced a bill that will prevent federal agencies from doing business with certain Chinese biotech companies linked to "foreign adversaries."
The CSI 300 index decreased 0.4% to 3,536.13, and the Hang Seng index fell 0.6% to 16,339.12.
Wuxi Biologics plunged 21.2% to HK$17.12 and Wuxi AppTec plunged 17% to HK$46.85, extending this year's losses to 40% and 38%, respectively.
JD.com jumped 6% to HK$95.30 after the e-commerce company reported better-than-expected earnings.
BYD declined 1.9% to HK$190.0 after the electric vehicle maker announced its plan to buyback 400 million yuan, or $55.5 million, of its shares.
China's Goods Exports Surpass Estimates
China's exports and imports rose more than expected during the January–February period.
China's exports soared 7.1% to $528 billion in the two-month period, following a 2.3% increase in December, the General Administration of Customs reported Thursday.
China's trade surplus in the two-month period soared to $125.2 billion from $104.4 billion in December.
In 2023, China's exports eased 4.6% to $3.38 trillion and imports declined 5.5% to $2.56 trillion, resulting in a trade surplus of $823 billion.
India's Economic Growth Likely to Surpass Target Rate
Stocks in Mumbai opened higher tracking gains in overnight trading in New York.
The Sensex and the Nifty indexes danced around the flatline as investors debated interest rate outlooks at home and abroad.
Market sentiment was positive after Reserve Bank of India Governor Shaktikanta Das, in an interview with ETNow on Wednesday, said fiscal fourth quarter economic growth is likely to surpass the 5.9% estimate suggested by the statistical agency.
Governor Das added that there is a "good chance" that fiscal year 2024 economic growth will be "close to 8.0%," but he reiterated the fiscal 2025 outlook at 7.0%.
The Sensex index increased 0.02% to 74,108.98, and the Nifty index rose 0.03% to 22,482.90.
On the Mumbai stock exchange, 61 stocks traded at their 52-week highs and 21 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.05%, and the Indian rupee strengthened to ₹82.82 against the U.S. dollar.