Market Update

Global Markets Extend Losses After FedEx and World Bank Warnings

Barry Adams
16 Sep, 2022
New York City

Stocks on Wall Street traded sharply lower on the worries of global economic slowdown and rate increases yet to come. 

The World Bank in its latest report said that the global economic slowdown is accelerating at the fastest pace since the early seventies and several recession indicators are flashing warning signals. 

The multilateral bank also said that the global economy is expected to plunge into a recession in 2023 as central banks around the world lift interest rates. 

In addition, the U.S. dominated institution also cited that despite the higher interest rates inflation is likely to stay elevated on the persistent supply chain problems. 

The mood also soured in financial markets after FedEx said its global shipments declined in the last two months at a pace higher-than-expected and the global parcel delivery company also withdrew its fiscal 2023 earnings outlook. 

 

Can We Tame Inflation and Avert a Recession?

Investors are increasingly accepting the scenario that high inflation can not be tackled without the high interest rates and the longer the Fed takes in lifting rates to or above 5% the longer the economic slowdown or even a recession will last.  

 

Why Wall Street Opened Lower 

The two separate reports put investors on alert and stock market indexes closed down in Asia and extended weekly losses in Europe. 

Stocks on Wall Street extended weekly losses and two popular indexes are set to close down between 4% and 6% for the week.  

The S&P 500 index declined 1.1% to 3,854.06 and the Nasdaq Composite index dropped to 1.5% 11,381.79. 

Crude Oil futures increased $1.10 to $86.04 and natural gas fell to 35 cents to $7.96 a thermal unit.

 

Bond Yields Advance Ahead of Fed Meeting Next Week 

The bond yields continue to trade higher with 2-year Treasury notes trading near 15-year high and ahead of 30-year Treasury bonds indicating that the bond market is forecasting a recession or an economic slowdown in the coming quarters. 

The yield on 2-year Treasury notes hovered near 3.89%, 10-year notes traded at 3.42% and 30-year bonds  at 3.48%. 

 

European Markets Head Lower

In Europe, benchmark indexes also extended losses and bond yields rose on the persistent worries of economic slowdown and deepening energy crisis. 

The DAX index fell 1.3% to 12,788.31, the CAC-40 index dropped 0.9% to 6,104.77 and the FTSE 100 index fell 0.3% to 7,259.25. 

 

Pound at 37-year Low 

The U.K. pound declined to a 37-year low of $1.14 as latest economic data point to economic slowdown and weakening activities. 

Retail sales in the U.K. dropped 1.6% on a monthly basis in August, the largest monthly decline so far in the year after a 0.4% rise in July, the Office for National Statistics reported Friday. 

 

Eurozone August Inflation Reaffirmed 

The Eurozone inflation was unrevised in the final estimate at 9.1% in August according to the Eurostat report released on Friday.

The inflation[s previous estimate was released on August 31 and the rate accelerated from 8.9% in July.  

 

Russia Cuts Rate Again 

The Central Bank of Russia lowered its key lending rate by 50 basis points to 7.5%, matching the expectations. 

The central bank lowered the rate for the sixth time in a row but guided 2022 inflation to range between 11.0% and 13.0% before cooling down to between 5.0% and 7.0% in 2023. 

 

Final Hour Sparks Another Wave of Selling on Wall Street, Bond Yields Rise

Barry Adams
15 Sep, 2022
New York City

Stocks on Wall Street lacked direction and struggled to stay above the flat-line and accelerated declines in the final hour of trading.

Benchmark indexes fell more than 1% as investors digest conflicting trends in the economy. 

Economy is slowing down as the housing market faces surging mortgage rates but labor market conditions remain tight and consumer spending is holding up despite high inflation. 

However, global markets remain defensive as nervous investors digest the implications of higher rates and economic slowdown. 

Economic slowdown worries spilled over energy markets and crude oil prices eased in New York and in European trading. 

Weakening economic backdrop and stubborn inflation has also lifted bond yields around the world. 

The S&P 500 index fell 1.1% to 3,901.35 and the Nasdaq Composite index declined 1.4% to 11,552.37. 

Oil complex traded lower after energy prices eased from one-week highs. 

 

Bond Market Route Continues 

The yield on 10-year U.S. Treasury bonds are above 3.45% and approaching the peak of 3.5% reached in June, 2-year notes are now at 3.86%, a 15-year high and  30-year bond at 3.47%. 

In addition, the bond yields in Germany are at 1.7%, a 8-year high, as the deepening energy crisis shows no sign of easing. Yields in Greece and Italy are above 4%, prompting worries of another sovereign debt crisis in the eurozone. 

 

Crude Oil Searches Bottom

Global market sentiment has been weakening on the extended coronavirus lockdowns and housing market problems in China, natural gas crisis in Europe, and escalating interest rates in the U.S. 

Moreover, shifting of Russia's oil supply to Asia and a conflict between Armenia and Azerbaijan has kept the supply worries in front and center. 

WTI crude oil price declined $3.30 to $86.12 a barrel and Brent crude price declined $3.30 to $90.31. 

Natural gas price dropped 81 cents to $8.29 a thermal unit and the TTF gas price in Europe fell 1.6% to

Movers: Adobe, Bed Bath & Beyond, Danaher, FedEx

Barry Adams
15 Sep, 2022
New York City

Adobe plunged 17% to $309.13 after the company announced a deal to acquire cloud-based software design company Figma Inc for $20 billion  in cash and stock. 

Bed Bath & Beyond increased 0.4% to $8.79 after the company said it plans to close 150 of its namesake stores of which over 50 are scheduled to be closed by the end of 2020. 

The struggling retailer said it has secured more than $500 million in new secured financing and it plans to cut 20% of its supply chain and corporate staff. 

Danaher Corp jumped 3% but closed up nearly unchanged at $281.91 after the medical technology and industrial products maker said it plans to separate its environment and science applications division as a separate company in the last quarter of 2023. 

FedEx withdrew its fiscal 2023 earnings guidance released on June 23 after disappointing fiscal first quarter revenues and shipments. 

The company also lowered its fiscal 2023 capital spending plan to to $6.3 billion from the previous estimate of $6.8 billion.  

The company reaffirmed its previously announced plan to repurchase $1.5 billion of its common stock in fiscal 2023 of which $1.0 billion is expected in the fiscal second quarter. 

The parcel delivery company said it plans to cut costs, delay hiring and close 90 offices and five corporate sites. 

FedEx fell 15% to close at $204.87. 

European Markets Deepen Losses, Eurozone Deficit with China, Russia, Norway Soar

Bridgette Randall
15 Sep, 2022
Frankfurt

European markets struggled to advance after two days of losses as the energy crisis remains in the spotlight and investors digest mixed U.S. economic data. 

Benchmark indexes in Germany and France declined after governments raised the spectre of energy rationing in the coming weeks as natural prices remain sky-high and supplies are tight.  

Germany's wholesale price inflation eased to 18.9% after rising 19.5% in July, Destatis reported Thursday. 

The wholesale price inflation has declined for the fourth month in a row. 

On a monthly basis, wholesale prices inched up 0.1% after falling 0.4% in July.

Consumer price inflation in France slowed to 5.9% in August from 6.1% in July, France's statistics office Insee reported Thursday.

Consumer price inflation in August was estimated at 5.8% in the preliminary estimate released on August 31.  

U.K.'s consumer confidence slipped in the negative territory for the first time since June 2020. 

Greece's jobless rate declined to 12.4% in the second quarter from 13.8% in the first quarter, a survey from the Hellenic Statistical Authority showed Thursday. 

The unemployment rate declined from 15.8% a year ago.   

The DAX index declined 50.55 or 0.4% to 12,974.77, the CAC-40 index fell 1.2% or 75.66 to 6,146.75 and the FTSE 100 index added 0.1% or 4.77 to 7,282.07. 

Banks in Germany led the gainers on the back of rising interest rates. 

Commerzbank added 3.5% and Deutsche Bank advanced 2.5%.  

 In Madrid trading, Bankinter, Sabadell and Caixabank gained more than 5% on the hopes that Spain may revise a tax that is deemed to violate the European Central Bank's directive. 

 

Eurozone Swings to Trade Deficit  

The euro area trade balance swung to a merchandise trade deficit of

Weekly Jobless Claims Lowest Since May

Brian Turner
15 Sep, 2022
New York City

Initial weekly jobless claims declined 5,000 to 213,000 in the week ending on September 10, the U.S. Department of Labor said Thursday. 

The initial claims were the lowest since the last week in May highlighting the tight labor market conditions. 

Initial claims plunged 40% from 363,000 a year ago in the similar period. 

Seasonally unadjusted claims declined 16,934 from the previous week to 155,961. 

 

Retail Sales In August Rise 0.3%

Brian Turner
15 Sep, 2022
New York City

Retail sales in August rose 0.3% from July, when sales fell 0.4% after a revision, the U.S. Census Bureau and Commerce Department said Thursday.  

Advance estimates of U.S. retail and food services sales for August adjusted for seasonal factors and calendar were $683.3 billion, an increase of 0.3% from the previous month, and 9.1% higher from a year ago. 

July retail sales were revised lower from flat to a decline of 0.4%. 

Retail sales data are not adjusted for inflation and falling gasoline prices helped consumers to make other purchases. 

Gasoline stations sales declined 4.2%, furniture store sales fell 1.3%, and sales at non-store retailers decreased 0.7%. 

Sales of motor vehicles and parts rose 2.8% from the previous month and 6.7% from a year ago and food and beverages increased 0.5% and 7.2% respectively.

Excluding gasoline stations, sales increased 0.8%. 

Core retail sales which exclude automobiles, gasoline, building materials and food services, were flat.

The September 2022 Advance Monthly Retail report is scheduled for release on October 14, 2022 at 8:30 a.m. EDT.

Industrial Production Falls

Brian Turner
15 Sep, 2022
New York City

Industrial production in August declined 0.2% from July but rose 3.7% from a year ago, the Federal Reserve Board reported Thursday. 

Manufacturing output edged up 0.1% after rising 0.6% in July. 

The index for mining was unchanged, and the index for utilities decreased 2.3%. 

Capacity utilization declined 0.2 percentage point in August to 80.0%. 

 

U.S. Stocks Lack Direction Amid Conflicting Economic Data

Barry Adams
15 Sep, 2022
New York City

Stocks on Wall Street lacked direction and struggled to stay above the flat-line as investors digest conflicting trends in the economy. 

Economy is slowing down as the housing market faces surging mortgage rates but labor market conditions remain tight and consumer spending is holding up despite high inflation. 

However, global markets remain defensive as nervous investors digest the implications of higher rates and economic slowdown. 

Economic slowdown worries spilled over energy markets and crude oil prices eased in New York and in European trading. 

Weakening economic backdrop and stubborn inflation has also lifted bond yields around the world. 

The S&P 500 index rose 0.2% to 3,954.50 and the Nasdaq Composite index gained 0.24% to 11,743.87. 

Financials led the early gains in the session with banks and brokerage companies leading the gainers. 

Oil complex traded lower after energy prices eased from one-week highs. 

Adobe Inc plunged 10% after the software company said it agreed to acquire design software platform developer Figma for $20 billion. 

 

Weekly Jobless Claims Lowest Since May 

Initial weekly jobless claims declined 5,000 to 213,000 in the week ending on September 10, the U.S. Department of Labor said Thursday. 

The initial claims were the lowest since the last week in May highlighting the tight labor market conditions. 

Initial claims plunged 40% from 363,000 a year ago in the similar period. 

Seasonally unadjusted claims declined 16,934 from the previous week to 155,961. 

 

Retail Sales In August Rise 0.3% 

Retail sales in August rose 0.3% from July, when sales fell 0.4% after a revision, the U.S. Census Bureau and Commerce Department said Thursday.  

July retail sales were revised lower from flat to a decline of 0.4%. 

Retail sales data are not adjusted for inflation and falling gasoline prices helped consumers to make other purchases. 

Gasoline stations sales declined 4.2%, furniture store sales fell 1.3%, and sales at non-store retailers decreased 0.7%. 

Excluding gasoline stations, sales increased 0.8%. 

Core retail sales which exclude automobiles, gasoline, building materials and food services, were flat.

 

Industrial Production Falls 

Industrial production in August declined 0.2% from July but rose 3.7% from a year ago, the Federal Reserve Board reported Thursday. 

Manufacturing output edged up 0.1% after rising 0.6% in July. 

The index for mining was unchanged, and the index for utilities decreased 2.3%. 

Capacity utilization declined 0.2 percentage point in August to 80.0%. 

 

Bond Market Route Continues 

The yield on 10-year U.S. Treasury bonds are above 3.45% and approaching the peak of 3.5% reached in June and 2-year notes are now at 3.8%, a 15-year high. 

In addition, the bond yields in Germany are at 1.7%, a 8-year high, as the deepening energy crisis shows no sign of easing. Yields in Greece and Italy are above 4%, prompting worries of another sovereign debt crisis in the eurozone. 

 

Crude Oil Searches Bottom

Global market sentiment has been weakening on the extended coronavirus lockdowns and housing market problems in China, natural gas crisis in Europe, and escalating interest rates in the U.S. 

Moreover, shifting of Russia's oil supply to Asia and a conflict between Armenia and Azerbaijan has kept the supply worries in front and center. 

WTI crude oil price eased $1.20 to $87.22 a barrel and Brent crude price declined $1.40 to $92.71. 

Surging energy costs also negatively impacted trade balance for the eurozone.

 

Railroad Strike Averted for Now 

Railroad stocks traded higher after President Joe Biden announced a preliminary agreement for a better pay and working conditions for railroad workers. 

The agreement is likely to avert the strike for now and disruptions in services. 

In corporate news, Adobe dropped nearly 10% after the company announced a deal to acquire cloud-based software design company Figma Inc for $20 billion  in cash and stock. 

Danaher Corp jumped 3% after the medical technology and industrial products maker said it plans to separate its environment and science applications division as a separate company in the last quarter of 2023. 

 

Eurozone Trade Balance Swings to Deficit

Brian Turner
15 Sep, 2022
New York City

The euro area trade balance swung to a merchandise trade deficit of

Stocks, Bonds, Oil Look Down

Barry Adams
15 Sep, 2022
New York City

Global markets remain defensive as nervous investors digest implications of higher rates and economic slowdown. 

Economic slowdown worries spilled over energy markets and crude oil prices eased in New York and in European trading. 

Weakening economic backdrop and stubborn inflation has also lifted bond yields around the world. 

 

Bond Market Rout Deepens 

The yield on 10-year U.S. Treasury bonds are above 3.45% and approaching the peak of 3.5% reached in June and 2-year notes are now at 3.8%, a 15-year high. 

In addition, the bond yields in Germany are at 1.7%, a 8-year high, as the deepening energy crisis shows no sign of easing. Yields in Greece and Italy are above 4%, prompting worries of another sovereign debt crisis in the eurozone. 

 

Crude Oil Searches Bottom

Global market sentiment has been weakening on the extended coronavirus lockdowns and housing market problems in China, natural gas crisis in Europe, and escalating interest rates in the U.S. 

Moreover, shifting of Russia's oil supply to Asia and a conflict between Armenia and Azerbaijan has kept the supply worries in front and center. 

WTI crude oil price eased $1.20 to $87.22 a barrel and Brent crude price declined $1.40 to $92.71. 

Surging energy costs also negatively impacted trade balance for the eurozone. 

 

U.S. Stocks Trade with Downward Bias 

In New York, benchmark indexes traded down between 0.3% and 0.5% and tech stocks led the decliners in early trading. 

Railroad stocks traded higher after President Joe Biden announced a preliminary agreement for a better pay and working conditions for railroad workers. 

The agreement is likely to avert the strike for now and disruptions in services. 

In corporate news, Adobe dropped nearly 10% after the company announced a deal to acquire cloud-based software design company Figma Inc for $20 billion  in cash and stock. 

Danaher Corp jumped 3% after the medical technology and industrial products maker said it plans to separate its environment and science applications division as a separate company in the last quarter of 2023. 

 

Eurozone Swings to Trade Deficit  

The euro area trade balance swung to a merchandise trade deficit of

Slight Rebound in Stocks A Day After Sell-off, 2-year Yield at 15-year High

Barry Adams
14 Sep, 2022
New York City

Benchmark indexes on Wall Street struggled around the flat-line a day after major averages recorded this year's worst losses and fell the most in two years.  

Major averages struggled to stay in the positive zone after four attempts in choppy trading and accelerated the decline in the final hour of trading. 

Popular indexes managed to rebound in the final 20 minutes of trading and closed marginally higher in the session. 

The S&P 500 index increased 0.3% to 3,946.01 and the Nasdaq Composite index added 0.7% to 11,719.84. 

Tech stocks rebounded on the hopes that Tuesday's sell-off was overdone but nervous investors worried a sustained rally in less likely until there is a clarity on the inflation front. 

Apple, Tesla, IBM, Microsoft, Google and Amazon added between 0.5% and 1.5%.  

Oil complex stocks gained after crude oil and natural gas prices continued to advance. 

APA, Marathon Oil, Hess, Exxon Mobil, Chevron and Schlumberger gained between 2% and 4.5%. 

Crude oil price rebounded 2% and reached a one-week high nearing $89 a barrel. 

Crude oil prices advanced $1.55 to $88.67 a barrel and natural gas increased 82 cents to $9.10 a thermal unit. 

Producer prices, a measure of wholesale prices, declined 0.1% in August after falling 0.4% in July, the second monthly decline in a row. 

Gasoline prices fell 12.7% but services prices rose 0.4%, the fourth monthly increase in a row. 

On a yearly basis, producer prices slowed to 8.7% in August from 9.8% in July. the U.S. Bureau of Labor Statistics reported Wednesday.   

The yield on 2-year Treasury notes increased to 3.80%, 10-year notes edged up to 3.40% and 30-year bonds eased to 3.46%. 

 

European Leaders Plan to Intervene In Energy Markets 

Market indexes in Europe swung between losses and gains as investors focused on faster and larger rate increase outlook in the U.S. 

Energy policy was also in focus in the region after President Ursula von der Leyen said that the European Commission is considering intervening in the energy markets including price caps and revenue caps on low-cost electricity producers. 

The market interventions are expected to generate

Movers: Home Builders, Railroads, Nucor, Starbucks, Twilio, United Airlines

Barry Adams
14 Sep, 2022
New York City

Benchmark indexes on Wall Street struggled around the flat-line a day after major averages recorded this year's worst loss and fell the most in two years.  

Producer prices, a measure of wholesale prices, declined 0.1% in August after falling 0.4% in July, the second monthly decline in a row. 

The S&P 500 index increased 0.3% to 3,943.58 and the Nasdaq Composite index added 0.7% to 11,712.18. 

Crude oil price rebounded 2% and reached a one-week high nearing $89 a barrel. 

Crude oil prices advanced $1.20 to $88.54 a barrel and natural gas increased 47 cents to $8.73 a thermal unit. 

The yield on 2-year Treasury notes increased to 3.80%, 10-year notes edged up to 3.42% and 30-year bonds eased to 3.50%

Home builders extended two-day losses to more than 10% after mortgage loan application volume decreased 1.2% for the week ending September 9 from the previous week on a seasonally adjusted basis. 

From a year ago, the application volumes declined nearly one third. 

European Markets Lack Direction, EU Mulls to Intervene Energy Markets

Bridgette Randall
14 Sep, 2022
Frankfurt

Market indexes in Europe swung between losses and gains as investors focused on faster and larger rate increase outlook in the U.S. 

Energy policy was also in focus in the region after President Ursula von der Leyen said that the European Commission is considering intervening in the energy markets including price caps and revenue caps on low-cost electricity producers. 

The market interventions are expected to generate

Producer Prices Eases In August to 8.7%

Brian Turner
14 Sep, 2022
New York City

Producer prices, a measure of wholesale prices, declined 0.1% in August after falling 0.4% in July, the second monthly decline in a row. 

Gasoline prices fell 12.7% but services prices rose 0.4%, the fourth monthly increase in a row. 

On a yearly basis, producer prices slowed to 8.7% in August from 9.8% in July. the U.S. Bureau of Labor Statistics reported Wednesday.   

Stocks Wavered, Investors Rattled, Yields Spiked

Barry Adams
14 Sep, 2022
New York City

Benchmark indexes on Wall Street struggled around the flat-line a day after major averages recorded this year's worst loss and fell the most in two years.  

Producer prices, a measure of wholesale prices, declined 0.1% in August after falling 0.4% in July, the second monthly decline in a row. 

Gasoline prices fell 12.7% but services prices rose 0.4%, the fourth monthly increase in a row. 

On a yearly basis, producer prices slowed to 8.7% in August from 9.8% in July. the U.S. Bureau of Labor Statistics reported Wednesday.   

The S&P 500 index increased 0.3% to 3,942.60 and the Nasdaq Composite index added 0.3% to 11,664.78. 

Crude oil price rebounded 2% and reached a one-week high nearing $89 a barrel. 

Crude oil prices advanced $1.20 to $88.54 a barrel and natural gas increased 47 cents to $8.73 a thermal unit. 

The yield on 2-year Treasury notes increased to 3.80%, 10-year notes edged up to 3.42% and 30-year bonds eased to 3.50%. 

 

Europe Looks to Intervene Energy Markets  

In Europe, market indexes swung between losses and gains as investors focused on faster and larger rate increase outlook in the U.S. 

Energy policy was also in focus in the region after President Ursula von der Leyen said that the European Commission is considering intervening in the energy markets including price caps and revenue caps on low-cost electricity producers. 

The market interventions are expected to generate