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Market Update

European Markets Lacked Direction Ahead of Key Inflation Data

Bridgette Randall
26 Aug, 2024
London

European markets traded mixed in Monday's trading after advancing in the previous three consecutive sessions amid a lack of domestic catalysts.

Benchmark indexes in Paris, London, and Frankfurt lost early morning momentum amid rising tensions in the Middle East.

Israel conducted a massive "preemptive" strike with 100 jets on Hezbollah-controlled military installations in southern Lebanon.

Israel's military said it conducted the strike on early Sunday morning at 5:00 a.m. after it detected Hezbollah rocket launchers were preparing to attack central Israel.

While the Lebanese group said it launched hundreds of rockets and drones targeting locations in northern Israel,.

Following the exchange of fire, British Airways suspended all flights from Israel, and Air France said it would halt all flights to Tel Aviv and Beirut until Monday.

Last week, Delta extended its flight suspension until the end of October, following a similar announcement by American Airlines.

Gold continued to trade higher and traded above $2,500 an ounce amid expectations of a dovish interest rate outlook in the U.S. and Europe.

During this week, investors are looking forward to the release of Germany’s second quarter GDP, inflation rates in the Euro Area, Germany, and Spain, the jobless rate in Italy, and retail sales in Spain.

The release of inflation and second-quarter GDP data would provide additional insights into the inner workings of the economy ahead of the monetary policy announcement on September 12.

Investors are concerned about the European Central Bank's rate decisions, and most are looking for a rate cut of 25 basis points, but many are also expecting the central bank to hold rates steady.

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,595.71; the CAC-40 index rose by 0.5% to 7,560.72; and the FTSE 100 index advanced by 0.3% to 8,312.02.

The yield on 10-year German bonds edged lower to 2.23%, French bonds inched higher to 2.94%, the UK gilts edged lower to 3.91%, and Italian bonds inched down to 3.58%.

The euro edged down to $1.11; the British pound inched higher to $1.31; and the U.S. dollar weakened to 84.65 Swiss cents.

Brent crude increased $1.78 to $80.78 a barrel, and the Dutch TTF natural gas fell by €0.08 to €36.51 per MWh.

Europe Stock Movers

Bakkafor PLC declined 0.5% to 155.0 pence after the Faroese salmon farming company's second quarter revenue was below market expectations.

Oil exploration companies advanced following higher crude oil prices and rising tensions in the Middle East.

TotalEnergies SE jumped 0.6% to €62.56, Eni SpA gained 1.1% to €14.76, Repsol SA added 2.2% to €12.91, BP plc increased 0.7% to 429.31 pence, and Shell PLC advanced 0.9% to €32.59.

Banks and insurance companies were among the leading decliners amid mixed trading in Europe.

UniCredit SpA decreased 0.3% to €36.42, Banco Santander fell 0.4% to €4.34, Deutsche Bank declined 0.7% to €14.59, and Societe Generale eased 0.2% to €21.44.

Luxury stocks in Paris advanced despite the market weakness in mainland China, and the yield on the Chinese 10-year bond hovered at a record low of 2.14%.

Hermes International SCA added 1.1% to €2,202, LVMH gained 0.3% to €682.90, and Kering SA increased 0.1% to €260.30.

BMW added 0.6% to €84.94, Mercedes-Benz Group gained 0.6% to €62.48, and Volkswagen Group added 0.3% to €97.24.

Japan's Rate Uncertainty Weighed On Tokyo Stocks In Monday's Trading

Akira Ito
26 Aug, 2024
Tokyo

Stocks in Tokyo reversed the previous session's gains despite Friday's advance in New York as investors reacted to the strengthening yen.

The Nikkei 2225 stock average and the Topix index fell 1% after the yen advanced and investors reassessed their rate outlook following comments from Bank of Japan Governor Kazuo Ueda.

The yen advanced to 144.13 against the U.S. dollar after BoJ Governor Ueda said in a testimony to lawmakers on Friday that the central bank is ready to raise rates if ongoing economic data support the move.

The prospect of a higher interest rate in Japan, coupled with a negative rate outlook in the U.S., supported the yen's advance for the second week in a row.

A stronger yen dampens the earnings outlook of Japanese exporting companies and also forces speculators to unwind the yen carry trade.

Investors remained on the sidelines amid the growing possibility of a rate hike at the end of the next policy meeting in Tokyo.

U.S. Federal Reserve Chair Jerome Powell sent his clearest signal so far: that the central bank is ready to adjust its monetary policy and may lower rates if there is ongoing economic data.

Powell did not say the amount and timing of the rate cut, but traders are anticipating at least a 25 basis point rate cut after the policy meeting on September 19, followed by additional rate cuts of at least another 50 basis points over the next policy meetings in 2024.

The dovish comments from Fed Chair lifted market indexes by as much as 1.4% in New York in Friday's trading, but that also raised the prospect of more yen carry trade unwinding in Tokyo, putting additional pressure on stocks.

Japan Stock Movers

The Nikkei 225 stock average decreased 0.9% to 38,024.32, and the Topix index declined 1% to 2,657.0.

Tech stocks were among the leading decliners in Monday's trading in Tokyo, and SoftBank, Disco Corp., Screen Holdings, Tokyo Electron, Advantest, and Lasertec declined between 0.5% and 2.5%.

Retailers were under pressure following the yen's rise, as a higher yen dampens tourist spending at Japanese stores.

Isetan Mitsukoshi dropped 6.3% to ¥2,180.0, Seven & I declined 0.7% to ¥2,041.0, and Mercari dropped 3% to ¥2,269.0.

Mitsubishi UFJ Financial dropped 1.9% to ¥1,495.50, Sumitomo Mitsui fell 3.2% to ¥9,578.0, and Mizuho Financial declined 2.6% to ¥2,995.0.

Toyota Motor declined 3.5% to ¥2,589.50, Honda Motor decreased 2.9% to ¥1,533.50, and Nissan Motor fell 4% to ¥422.80.

Weak Economic and Earnings Outlook Kept Gains In Check In Hong Kong, Shanghai Indexes Traded Down

Li Chen
26 Aug, 2024
Hong Kong

Stocks in Hong Kong advanced but fell in Shanghai amid lingering worries about economic growth and corporate earnings.

The Hang Seng index advanced 0.8% in the hopes that the Hong Kong Monetary Authority would lower rates in about three weeks following a possible rate cut in the U.S.

Federal Reserve Chair Jerome Powell sent his clearest signal so far: that the central bank is ready to adjust its monetary policy and may lower rates if there is ongoing economic data.

The Hong Kong Monetary Authority would follow similar rate cuts to keep the Hong Kong dollar parity with the U.S. dollar.

The prospect of an imminent rate cut in Hong Kong lifted the benchmark Hang Seng index, but market sentiment remained weak in mainland China markets.

Investors have been shunning stocks amid a weak economic outlook and a lack of earnings visibility, and investors are pouring new assets into exchange-traded funds, or ETFs, that track investments in Japan and the U.S. and snapping up luxury properties in Shanghai and Beijing.

Stock turnover in China's stock markets dropped to a four-year low, according to the data released by the China Securities Regulatory Agency, amid the waning effect of market-supportive measures released by policymakers in May.

The 10-year China government bond yield hovered near a record low of 2.14%, as investors prefer steady income from bonds over persistent losses from stocks.

Meanwhile, the PBoC held its one-year medium-term loan facility rate at 2.13% on Monday, after lowering rates in the previous month.

China Stock Movers

The Hang Seng index advanced 0.8% to 17,756.09, and the CSI 300 index fell 0.1% to 3,324.89.

Tech stocks advanced in Monday's trading in Hong Kong, tracking gains in Friday's trading in New York.

Baidu increased 1.9% to HK $83.75, Meituan added 0.6% to HK $108.20, and Tencent Holdings gained 1% to HK $379.40.

Alibaba Group Holding decreased 0.6% to HK $82.15, and the e-commerce marketplace is set to change its Hong Kong listing to a dual-primary listing on August 28.

Property stocks in Hong Kong advanced following the prospect of rate cuts in the U.S. starting as early as mid-September.

Longfor Group Holdings gained 2.6% to HK $8.71; China Resource Land added 0.9% to HK $21.85; Sun Hung Kai Properties gained 3.5% to HK $74.40; and Henderson Land Development advanced 3.8% to HK $23.0.

India Movers: Eco Hotels, Coal India, IREDA, KEC International, ONGC, TCI, Uno Minda

Arun Goswami
26 Aug, 2024
Mumbai

Stocks in Mumbai advanced tracking gains in U.S. financial markets after Fed Chair Powell raised expectations of future rate cuts.

Gold traded near record highs amid the dovish U.S. monetary policy outlook. Crude oil advanced amid rising tensions in the Middle East.

The Sensex index increased by 0.3% to 81,336.39, and the Nifty index rose 0.3% to 24,886.20.

On the Mumbai stock exchange, 209 stocks traded at their 52-week highs, and 10 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds inched lower to 6.85%, and the Indian rupee weakened to 83.85 against the U.S. dollar.

Indian Renewable Energy Development Agency increased 1% to ₹259.50, and the company is looking to raise as much as ₹4,500 crore.

Eco Hotels and Resorts gained 5% to ₹48.57, and the company said it acquired three properties in Sindhudurg, Maharashtra, to increase its available rooms by 500 by the end of 2024.

Uno Minda decreased 1.8% to ₹1,117.40, and the automotive component maker, in collaboration with Japan-based Tokai Rika Corp., inaugurated a new production facility in Rajasthan.

ONGC decreased 1.7% to ₹318.60, and the energy exploration company opened its fifth oil exploration well in the Krishna Godavari basin.

Coal India advanced 1.7% to ₹537.85, and the company said its failure to collect ₹35,000 crore of mining taxes from its customers would negatively impact its financials.

Transport Corporation of India dropped 7.1% to ₹1,080.0, and the company's board approved the buyback plan of 13.3 lakh shares at ₹1,200 per share from shareholders on record on September 4.

KEC International gained 5.7% to ₹888.0, and the company said it won new orders worth ₹1,079 crore for power transmission projects in India, the Middle East, and the Americas.

The company confirmed that its new orders in the current financial year have surpassed ₹8,700 crore.

Fed Chair Comments Power Market Advance On Wall Street, Housing Market Data Signal Mixed Outlook

Barry Adams
23 Aug, 2024
New York City

Stocks escalated their advances in Friday's trading after comments from Fed Chair Powell suggested a possible rate cut in the future.

The S&P 500 index jumped 1.2%, the Nasdaq Composite advanced 1.7%, and Treasury yields edged lower.

Fed Chair Jerome Powell suggested that a policy adjustment is needed and a possible rate cut is likely.

However, Powell fell short of indicating the amount and timing of future rate cuts.

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell said at an annual gathering of central bankers from around the world in Jackson Hole, Wyoming.

Investors were quick to bid up stocks following Powell's comments and interpreted that the central bank is likely to begin interest rate cuts as early as after the policy meeting on September 19.

Despite the market's enthusiasm for possible imminent rate cuts, inflation is still well anchored in the economy and showing little progress from the 3% level to the Fed's target of 2%.

If the Federal Reserve starts the process of cutting rates in September, it is almost certain that consumer price inflation will hover around 3% for several more months and may even resume its upward journey.

On the economic front, sales of new single-family houses in July increased from the previous month and from a year earlier, the Commerce Department reported Friday.

Seasonally adjusted single-family house sales in July increased 10.6% from the previous month and rose 5.6% from a year ago to 739,000.

A separate report from the government agency showed that building permits, housing starts, and housing completions declined from a year ago in July.

U.S. Indexes and Treasury Yields

The S&P 500 index increased 1.2% to 5,637.50, the Nasdaq Composite advanced 1.7% to 17,916.86, and the Russell 2000 index rose 1.2% to 2,175.27.

The yield on 2-year Treasury notes edged lower to 3.96%, 10-year Treasury notes decreased to 3.81%, and 30-year Treasury bonds inched higher to 4.10%.

WTI crude oil increased $1.27 to $74.28 a barrel, and natural gas prices edged down 2 cents to $2.02 a thermal unit.

Gold fell by $13.53 to $2,501.75 an ounce, and silver increased by $0.35 to $29.39.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.44.

U.S. Stock Movers

Cava Group jumped 16.7% to $118.98, and the fast-casual restaurant company reported better-than-expected quarterly results.

Ross Stores gained 1.8% to $155.26, and the discount household goods and apparel store chain reported better-than-expected quarterly results.

Uber Technologies decreased 0.3% to $73.28, and General Motors advanced 2.5% to $47.63 after the two companies struck a partnership for the driverless car fleet.

European Markets Extended Weekly Gains Amid Weak Macroeconomic Backdrop

Bridgette Randall
23 Aug, 2024
London

European market indexes advanced for the third session in a row, and indexes are set to close higher for the second consecutive week.

Benchmark indexes in London, Paris, and Frankfurt jumped between 0.3% and 0.5% in Friday's trading as traders awaited comments from major central bank leaders at an annual gathering held in Jackson Hole, Wyoming.

Investors have built up expectations that the U.S. Federal Reserve is likely to start its rate-cutting cycle at the end of the policy meeting in September, followed by additional cuts later in the year.

Closer to home, France's statistical agency, INSEE, said that confidence among manufacturers increased more than expected in August.

The manufacturing confidence index increased to 98.8 from 95.4, a 43-month low, in June.

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,595.71; the CAC-40 index rose by 0.5% to 7,560.72; and the FTSE 100 index advanced by 0.3% to 8,312.02.

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched higher to 2.95%, the UK gilts edged higher to 3.95%, and Italian bonds inched up to 3.60%.

The euro edged down to $1.11; the British pound inched higher to $1.31; and the U.S. dollar weakened to 85.22 Swiss cents.

Brent crude increased $1.12 to $78.36 a barrel, and the Dutch TTF natural gas fell by €0.38 to €36.35 per MWh.

Europe Stock Movers

Nestle SA declined 1.8% to CHF 87.80 after the Swiss food company announced that it plans to replace its current chief executive, Mark Schneider, with a long-time executive, Laurent Freixe.

Oil companies were in focus after crude oil prices rebounded for the second day in a row but declined for the week amid demand growth worries in the U.S. and China.

BP plc increased 0.6% to 428.80 pence, Shell PLC gained 0.3% to 2,715.50 pence, and TotalEnergies advanced 0.7% to €62.03.

Unilever gained 0.3% to 4,807.0 pence, and the food company recalled 137,000 cases of popsicle products out of concern that they may contain undeclared milk.

According to the U.S. Food and Drug Administration, Unilever recalled Jolly Rancher Frozen Confection Pops, citing potential harm to people with severe sensitivity to milk.

Japan Indexes Extended Weekly Gains, Core Inflation Accelerated Third Consecutive Month In July

Akira Ito
23 Aug, 2024
Tokyo

Stocks in Tokyo traded higher amid heightened anxieties about the future rate path, and investors reviewed the latest inflation update.

The Nikkei 225 stock average increased 0.4%, and the Topix index gained 0.5% after core inflation accelerated for the third month in a row in July.

July's overall inflation held steady at 2.8% for the third month in a row, and core inflation increased to 2.7% after electricity prices soared 22% and the cost of gas increased 7.4% after the government ended subsidies.

Core inflation, which excludes fresh food and includes energy costs, advanced to the highest reading since February and stayed above the BoJ's target rate of 2%.

The latest inflation data confirmed the hawkish shift of the Bank of Japan this year.

The yen weakened to 145.65 against the U.S. dollar after the release of inflation data and ahead of comments from Bank of Japan Governor Kazuo Ueda to parliament members.

Japan Stock Movers

The Nikkei 225 stock average added 0.4%, and the Topix index advanced 0.5% to 38,364.27.

Tech stocks led the decliners following the losses in overnight trading in New York.

Advantest, Lasertec, Tokyo Electron, Disco Corp., and SoftBank lost between 1% and 3%.

Export-focused companies were among the leading gainers after the yen weakened in Friday's trading.

IHI Corp. added 3.5% to ¥6,099.0, Mitsubishi Heavy Industries gained 2.2% to ¥1,870.50, and Kawasaki Heavy Industries increased 2.7% to ¥5,011.0.

Shimizu Corp. advanced 4.7% to ¥972.30, and Taisei Corp. gained 3.9% to ¥6,602.0.

China Stocks Closed Mixed After Volatile Trading, Alibaba Seeks More Investors In Mainland China

Li Chen
23 Aug, 2024
Hong Kong

Stocks in Shanghai and Hong Kong diverged as investors reacted to domestic earnings and overlooked international market jitters.

The Hang Seng index decreased by 0.3%, and the CSI 300 index advanced by 0.3%.

Investors reviewed the latest earnings from Ping An, NetEase, Orient Overseas, WH Group, and Longfor Group.

Investors also welcomed Alibaba Group's decision to change its stock listing to dual-listing in Hong Kong and Shanghai, allowing the e-commerce company to access more than 220 million investors in mainland China.

The Hang Seng index is set to close nearly unchanged after rising in the previous two weeks, and the CSI 300 index is set to close down 0.4% following the gain in the previous week.

For the year so far, the CSI 300 index is down 1.9% and the Han Seng index is up 4.5%.

China stocks are struggling for the fourth year in a row amid a faltering economic recovery, an uneven policy response, a protracted residential market downturn, and weakening consumer confidence.

Foreign investors are trimming their China holdings amid a lack of macroeconomic improvement catalysts and a weakening earnings outlook over the next two years.

Indexes in Shanghai and Hong Kong are now down between 40% and 50% since their peaks in early 2018.

China Stock Movers

The Hang Seng index declined 0.3% to 17,586.81, and the CSI 300 index gained 0.3% to 3,323.71.

NetEase declined 12.8% to HK $124.60, and the online game developer reported weaker-than-expected second-quarter results.

Orient Overseas International declined 7.5% to HK $106.10, and the international ocean shipping company reported a 26% decline in earnings in the first half of 2024.

Alibaba Group Holding increased 6% to HK $82.20 after the e-commerce giant announced its Hong Kong listing to a dual-primary listing status, allowing the company to access mainland China investors.

WH Group added 1.8% to HK $5.60 in active trading.

Longfor Group Holdings declined 0.8% to HK $8.51, and the residential property developer reported revenue in the first half increased 10.1% to 13.10 billion yuan, and profit attributable to shareholders was 5.87 billion yuan.

The company also declared an interim cash dividend of 0.22 yuan per share.

Ping An Insurance increased 3.5% to HK$35.15 after the insurance giant reported its best half-year results in four years.

India Movers: Adani Power, Ambuja Cement, Jain Irrigation, Power Mech, Railtel Corp., Nykaa, Zomato

Arun Goswami
23 Aug, 2024
Mumbai

Stocks lacked direction on Dalal Street, the rupee bounced around record lows, and the yield of Indian government bonds held firm.

Crude oil extended weekly losses, and gold edged lower after trading at record highs this week.

For the week, the Sensex and the Nifty indexes are set to advance.

The Sensex index decreased by 0.1% to 80,980.82, and the Nifty index fell 0.01% to 24,812.10.

On the Mumbai stock exchange, 165 stocks traded at their 52-week highs, and 7 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds inched lower to 6.85%, and the Indian rupee weakened to 83.88 against the U.S. dollar.

Power Mech Projects jumped 4% to ₹6,645.0, and the infrastructure-construction company announced a 1-to-1 bonus issue.

The company also set a ₹2 per share dividend payment to shareholders on record on September 28.

Jain irrigation jumped 4.6% to ₹69.77, and the company struck a deal with the Coffee Board of India to promote its disease-resistant coffee plants.

Zomato Ltd. gained 3% to ₹265.84, and the company shut down its intercity food delivery service.

Railtel Corporation of India increased 5.7% to ₹498.65 after the company won a ₹52.6 crore order from the police department of Uttar Pradesh.

Adani Power jumped 1.3% to ₹682.25, and the company's plan to acquire Lanco Amarkantak Power Ltd. for ₹4,101 crore was approved by the National Company Law Tribunal.

FSN E Commerce Venture added 4.5% to ₹220.05, and the pre-IPO investor Harindarpal Singh Banga plans to lower his stake in the parent company of beauty and cosmetic retailers by 1.4 percentage points from 6.4% with a floor price of 198 per share.

Ambuja Cements added 1.7% to ₹642.35, and the promoter group company Holderind Investments is planning to sell a 2.84% stake in the company with a floor price of ₹600 per share.

U.S. Major Averages Turned Cautious Ahead of Fed Chair Powell Speech

Alexander Garcia
22 Aug, 2024
Miami

Stocks turned lower, and benchmark indexes trimmed weekly gains but advanced for the third week in a row as market sentiment recovers.

Earlier in the day, the S&P500 index and the Nasdaq Composite edged higher, and investors confirmed the rate-cut expectations after the latest policy meeting minutes showed policymakers are ready to cut rates if ongoing economic data and inflation trends are supportive.

However, market sentiment turned cautious ahead of Fed Chair Jerome Powell's speech on Friday at the annual economic symposium in Jackson Hole, Wyoming.

Inflation has fallen from a peak of nearly 9% to closer to 3% over the last eighteen months, but prices are still rising faster than the 2% target rate set by the Federal Reserve policymakers.

Kansas City Federal Reserve President Jeffrey Schmid said that the time to lower the interest rate may be closer than expected, but inflation is still ahead of the Fed's 2% target rate.

Schmid stressed that current interest rates are "restrictive, but they are not overly restrictive."

“I still believe quite strongly that we really need to turn this inflation number towards 2%. It has to be sustainable.

Having the labor market cool some is helping that, but there’s still more work to do,” Schmid told CNBC in a live interview from the Fed’s annual retreat in Jackson Hole, Wyoming.

Weekly Jobless Claims Advanced to a 3-week High

Initial jobless claims for the week ending on August 17 increased to 232,000, an increase of 4,000 from the previous week, the Labor Department reported Thursday.

Continuing claims advanced by 4,000 to 1.863 million in the previous week, as long-term claims data lags by one week and is at its highest level since November 27, 2021.

Existing Home Sales Advanced for the First Time In Five Months

Seasonally adjusted existing home sales increased 1.3% from the previous month in July to an annual rate of 3.95 million units, the National Association of Realtors said Thursday.

Home sales increased for the first time in five months but declined 2.5% from a year ago.

The supply of available homes edged higher in July with more sellers emerging.

Homes available for sale at the end of July increased by 0.8% from June to 1.33 million and increased 19.8% from a year ago, or the equivalent of 4.0 months' supply at the current monthly sales pace.

"Despite the modest gain, home sales are still sluggish," said NAR Chief Economist Lawrence Yun. "But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates."

Home prices continued to move higher; even when more homes were listed for sale, the median sale price increased 4.2% to $422,600, an annual increase in price for the 13th consecutive month.

Sales in the Northeast increased the most by 4.3% and were flat in the Midwest; they rose 1.4% in the West and 1.1% in the South.

Median price increased the most in the Northeast, rising 8.3% to $505,100, in the West by 3.4% to $629,500, in the South by 2.3% to $372,500, and in the Midwest by 4.5% to $321,500.

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.5% to 5,590.23, the Nasdaq Composite fell 0.1% to 17,909.30, and the Russell 2000 index fell 0.4% to 2,161.25.

The yield on 2-year Treasury notes edged higher to 4.02%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched higher to 4.14%.

WTI crude oil increased $1.52 to $73.44 a barrel, and natural gas prices edged down 13 cents to $2.03 a thermal unit.

Gold fell by $28.19 to $2,484.76 an ounce, and silver decreased by $0.41 to $28.48.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 101.31.

U.S. Stock Movers

Agilent Technologies jumped 1.8% to $142.28, and the laboratory supply company reported higher-than-expected fiscal third quarter results.

Revenue in the quarter increased to $1.58 billion, and adjusted earnings per share rose to $1.32, ahead of expectations of at least $1.25.

Nordson Corp. gained 0.4% to $248.67, and the adhesive company reported better-than-expected fiscal third quarter results.

Advance Auto Parts dropped 16.7% to $51.53, and the auto parts retailer reported weaker-than-expected second-quarter earnings.

The company also lowered its annual earnings per share outlook to between $2.0 and $2.50 from the previous estimate of between $3.75 and $4.25.

Zoom Video Communications soared 11.7%, and the company reported better-than-expected second-quarter earnings and lifted its annual outlook.

Revenue increased to $1.16 billion, and earnings per share rose to $1.39.

Looking ahead, for the third quarter, the company anticipates adjusted earnings per share between $1.29 and $1.31, ahead of the consensus of $1.24.

The company estimated full-year adjusted earnings per share between $5.29 and $5.32, ahead of market expectations of $5.05.

Euro Area Business Activities Unexpectedly Expanded Despite Weaknesses In Germany

European markets inched higher on Thursday as private sector activities expanded for the sixth month in a row in August.

Benchmark indexes in London, Paris, and Frankfurt edged higher after the strength in the service sector overshadowed the continued weakness in manufacturing.

Private sector business activities showed surprising strength after a four-month high increase in the service sector to offset the two-year decline in manufacturing.

The HCOB Eurozone Composite PMI increased to 51.2 in August from 50.2 in July, and private sector activities expanded for the sixth month in a row, S&P Global reported Thursday.

The index for service activities rose to 53.3 from 51.9, and the index for manufacturing activities decreased to 45.6 from 45.8 in the previous month.

Any reading above 50 indicates expansion, and any reading below 50 shows contraction.

However, Germany's private sector economy remained in contraction, according to a separate report released by S&P Global.

HCOB Flash Composite PMI decreased to 48.5 in August from 49.1 in July after manufacturing activities continued to shrink and service sector activity growth slowed.

Negotiated wage growth slowed to 3.55% in the second quarter following the 4.74% increase in the first quarter, primarily because of the weakness in Germany, according to the data released by the European Central Bank.

The slowdown of wage growth in the largest economy in the eurozone could prompt policymakers to lower rates in September, alleviating concerns that rising labor costs would fuel inflation.

Europe Indexes and Yields

The DAX index increased by 0.2% to 18,493.39; the CAC-40 index rose by 0.002% to 7,524.11; and the FTSE 100 index advanced by 0.1% to 8,288.0.

The yield on 10-year German bonds edged higher to 2.23%, French bonds inched down to 2.93%, the UK gilts edged higher to 3.94%, and Italian bonds inched up to 3.59%.

The euro edged down to $1.12; the British pound inched higher to $1.31; and the U.S. dollar weakened to 85.15 Swiss cents.

Brent crude increased $1.57 to $77.62 a barrel, and the Dutch TTF natural gas rose by €0.46 to €36.73 per MWh.

Europe Stock Movers

Swiss Re rose 3.5% to CHF 114.75, and the reinsurance company reported an increase in earnings in the first half and confirmed its annual outlook.

Aegon decreased 5.8% to €5.47, and the Dutch insurance company reported a drop in its key operating profits and cash flow metrics.

CTS Eventim AG added 7.5% to €88.70 after the German ticketing company lifted its annual outlook.

Deutsche Bank gained 3.2% to €14.45 after the German bank settled with over 80% of plaintiffs in Postbank AG litigation.

JD Sports Fashion PLC jumped 7.6% to 139.20 pence after the UK-based athleticwear retailer reported organic second quarter sales improved because of the strength in the U.S. and Europe.

Oil exploration companies fell after crude oil prices fell for the fifth session in a row amid China's demand growth worries.

BP plc decreased 1% to 425.88 pence, Shell PLC dropped 0.9% to 2,693.50, and TotalEnergies fell 0.7% to €61.71.

Japan Stocks Rebounded After Service Sector Expanded Seventh Consecutive Month

Stocks in Tokyo advanced as investors latest update on private sector activities, and the yen retained its upward bias.

The Nikkei 225 stock average gained 0.5%, the Topix inched higher by 0.1%, and the yen traded at 145.35 against the U.S. dollar.

Stocks opened higher in Tokyo after the latest minutes of the meeting from the U.S. Federal Reserve showed policymakers are open to a rate cut at the next meeting if economic data support such a move.

The dovish minutes supported the broader market sentiment in New York, and positive earnings from leading retailers Target Corp., TJX, and Macy's also contributed to the market's strength.

Closer to home, Japan's service sector expanded for the seventh month in a row in August, indicating a strong demand for private sector business services, and the manufacturing sector contracted for the sixth month in a row.

The au Jibun Service Purchasing Managers' Index increased to 54.0 in August from the revised 53.7 in July, and the au Jibun Manufacturing PMI edged higher to 49.5 from a four-month low of 49.1 in July.

The monthly surveys were released by S&P Global on Thursday.

Japan Stock Movers

The Nikkei 225 stock average added 0.5% to 38,145.86, and the Topix index rose 0.1% to 2,668.61.

Technology stocks, financial stocks, retailers, and diversified conglomerates were among the most actively traded stocks on Thursday.

Advantest, Tokyo Electron, Shin-Etsu Chemical, Lasertec, and SoftBank advanced between 1% and 4%.

Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho Financial fell between 1% and 2%, but China Bank declined more than 3%.

Mitsubishi Corp. increased 0.3% to ¥3,027.0, Marubeni decreased 0.3% to ¥2,456.0, and Itochu Corp. jumped 0.5% to ¥7,127.0.

Mercari jumped 7.5% to ¥2,377.0, IHI Corp. added 5.9% to ¥5,891.0, Chugai Pharmaceutical gained 3.9% to ¥7,114.0, and Sumitomo Pharma jumped 6.7% to ¥652.0.

Hong Kong Stocks Rebound After Positive Earnings from AIA and Xiaomi

Stocks in Shanghai and Hong Kong advanced in subdued trading as investors reacted to positive earnings from leading companies.

The Hang Seng index added 0.5%, and the CSI 300 index edged up a fraction.

Market sentiment was positive after AIA and Xiaomi reported earnings ahead of market expectations. but residential property developers turned lower after Kaisa Group Holding reported weak results.

Investors also took note of the Federal Reserve policymakers supporting a rate cut at the next meeting in September if economic data support such a move, as the latest minutes of the meeting showed on Wednesday.

Despite the rebound in the Hang Seng index after a two-day sell-off, investor enthusiasm was muted amid a weakening macroeconomic backdrop.

China Stock Movers

The Hang Seng index increased 0.5% to 17,488.74, and the CSI 300 index inched up 0.05% to 3,323.36.

Xiaomi jumped 8.1% to HK $18.94, and the smartphone and electric vehicle maker reported that second-quarter revenue soared 32% to 88.9 billion yuan, or $12.4 billion, and net income jumped 38.3% to 5.1 billion yuan.

Smart handset unit sales soared 28% to 42.2 million units, and the business division's revenue increased 27.1% to 46.5 billion yuan.

The company' delivered 27,307 SU7 electric vehicles, with the EV unit generating revenue of 6.4 billion yuan and a net loss of 1.8 billion yuan.

The company lost an average of 65,900 yuan per car sold in the June quarter, and the company said it plans to sell 100,000 vehicles by November and expand its retail store network to 100 from the current 87 in 30 cities.

AIA Group gained 4.9% to HK$53.95, and the insurance company sold more insurance policies in mainland China.

The value of new business, a measure of revenue, increased 25% to $2.46 billion, and net income soared 52% to $3.31 billion, or 29.53 U.S. cents.

The value of new business in mainland China rose 36% to $782 million, and in Hong Kong, it advanced 26% to $858 million.

Mainland residents continued to buy insurance policies issued in Hong Kong to take advantage of stable currency and diversify investment returns amid a weak outlook for the yuan.

The Chinese yuan has lost about 12% of its value against the U.S. dollar over the last two years.

The company also increased its interim dividend by 5.2% to 44.50 HK cents.

Existing Home Sales Advanced for the First Time In Five Months

Brian Turner
22 Aug, 2024
Washington, D.C.

Seasonally adjusted existing home sales increased 1.3% from the previous month in July to an annual rate of 3.95 million units, the National Association of Realtors said Thursday.

Home sales increased for the first time in five months but declined 2.5% from a year ago.

The supply of available homes edged higher in July with more sellers emerging.

Homes available for sale at the end of July increased by 0.8% from June to 1.33 million and increased 19.8% from a year ago, or the equivalent of 4.0 months' supply at the current monthly sales pace.

Home prices continued to move higher; even when more homes were listed for sale, the median sale price increased 4.2% to $422,600, an annual increase in price for the 13th consecutive month.

Sales in the Northeast increased the most by 4.3% and were flat in the Midwest; they rose 1.4% in the West and 1.1% in the South.

Median price increased the most in the Northeast, rising 8.3% to $505,100, in the West by 3.4% to $629,500, in the South by 2.3% to $372,500, and in the Midwest by 4.5% to $321,500.

U.S. Movers: Advance Auto Parts, Agilent Technologies, Nordson, Synopsys, Zoom Video

Scott Peters
22 Aug, 2024
New York City

Agilent Technologies jumped 1.8% to $142.28, and the laboratory supply company reported higher-than-expected fiscal third quarter results.

Revenue in the quarter increased to $1.58 billion, and adjusted earnings per share rose to $1.32, ahead of expectations of at least $1.25.

Nordson Corp. gained 0.4% to $248.67, and the adhesive company reported better-than-expected fiscal third quarter results.

Advance Auto Parts dropped 16.7% to $51.53, and the auto parts retailer reported weaker-than-expected second-quarter earnings.

The company also lowered its annual earnings per share outlook to between $2.0 and $2.50 from the previous estimate of between $3.75 and $4.25.

Zoom Video Communications soared 11.7%, and the company reported better-than-expected second-quarter earnings and lifted its annual outlook.

Revenue increased to $1.16 billion, and earnings per share rose to $1.39.

Looking ahead, for the third quarter, the company anticipates adjusted earnings per share between $1.29 and $1.31, ahead of the consensus of $1.24.

The company estimated full-year adjusted earnings per share between $5.29 and $5.32, ahead of market expectations of $5.05.

Rate-cut Hopes Reinforced After Fed Minutes Signaled Optimism

Barry Adams
22 Aug, 2024
New York City

Stocks traded higher, and benchmark indexes are set to extend weekly gains for the third week in a row as market sentiment recovers.

The S&P500 index and the Nasdaq Composite edged higher, and investors confirmed the rate-cut expectations after the latest policy meeting minutes showed policymakers are ready to cut rates if ongoing economic data and inflation trends are supportive.

Inflation has fallen from a peak of nearly 9% to closer to 3% over the last eighteen months, but prices are still rising faster than the 2% target rate set by the Federal Reserve policymakers.

Kansas City Federal Reserve President Jeffrey Schmid said that the time to lower the interest rate may be closer than expected, but inflation is still ahead of the Fed's 2% target rate.

Schmid stressed that current interest rates are "restrictive, but they are not overly restrictive."

“I still believe quite strongly that we really need to turn this inflation number towards 2%. It has to be sustainable.

Having the labor market cool some is helping that, but there’s still more work to do,” Schmid told CNBC in a live interview from the Fed’s annual retreat in Jackson Hole, Wyoming.

Initial jobless claims for the week ending on August 17 increased to 232,000, an increase of 4,000 from the previous week, the Labor Department reported Thursday.

Continuing claims advanced by 4,000 to 1.863 million in the previous week, as long-term claims data lags by one week and is at its highest level since November 27, 2021.

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.01% to 5,620.68, the Nasdaq Composite fell 0.1% to 17,909.30, and the Russell 2000 index fell 0.4% to 2,161.25.

The yield on 2-year Treasury notes edged lower to 3.99%, 10-year Treasury notes increased to 3.84%, and 30-year Treasury bonds inched higher to 4.11%.

WTI crude oil increased $0.32 to $72.32 a barrel, and natural gas prices edged down 3 cents to $2.13 a thermal unit.

Gold fell by $11.33 to $2,501.31 an ounce, and silver increased by $0.01 to $29.32.