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Market Update

Euro Inches Two-Decade Low On Recession Fears, European Markets Drop 2%

Bridgette Randall
05 Jul, 2022
New York City

Market indexes in Europe dropped more than 2% as fears of a recession escalated in the union on soaring inflation and no end in sight of a war in Ukraine.

The DAX index fell 2.4% to 12,464.54, the CAC-40 index declined 2.4% to 5,810.58, and the FTSE 100 index dropped 2.6% to 7,047.26.

The euro accelerated its decline in the year so far and plunged to a two decade low.

The euro declined 1.3% to $1.029 and extended this year's loss to 9% after skyrocketing energy prices has driven inflation in the currency zone to a four-decade high.

Market worries were compounded after coronavirus infections flared up in easter region of China and local authorities imposed mass testing in at least three cities.

Industrial production in France was unchanged in May from the revised 0.3% decline in April, the France's statistical office or Insee said on Tuesday.

Manufacturing rebounded 0.8% in May, construction output increased 0.4%, bit utility production declined 5.6% from a year ago.

The euro zone private sector activity expanded at a slower pace in June after service sector growth slowed and the manufacturing sector contracted for the first time in two years, the final survey results from S&P Global reported on Tuesday.

The final composite output index fell to 52.0 in June from 54.8 in May and any reading above indicates expansion and below shows contraction.

Scandinavian Airlines SAS AB dropped 10.5% to 55 krona cents after the company sought bankruptcy protection in a U.S. court to accelerate its restructuring plan.

Delivery Hero SE gained 1.5% to 35.69 euros after the delivery services provider said it has completed the acquisition GlovoApp23 S.A.

J Sainsbury Plc increased 1.1% to 210.68 pence after the retailer confirmed its full-year outlook.

The retailer said total sales excluding fuel sales declined 4.5% and grocery sales were down 2.4% in the sixteen week period ending on June 25.

The company confirmed fiscal year 2022-23 underlying profit before tax of between

European Markets React to Fall in German Exports and Elevated Producer Prices

Bridgette Randall
04 Jul, 2022
New York City

European markets advanced and Germany's trade balance swung to a loss in May on a surprise decline in exports.

The DAX index fell 0.3% to 12,773.38, the CAC-40 rose 0.4% to 5,954.65, and the FTSE 100 index increased 0.9% to 7,232.65.

Financial markets in the U.S. are closed to celebrate the Independence Day holiday.

German exports declined 0.5% in May on a monthly basis from April and imports rose 2.7% after adjusting for calendar and seasonal factors, the Federal Statistics Office or Destatis said on Monday.

From a year ago, exports rose 11.7% in May and imports advanced 27.8%.

Highlighting how hard it is to wean away from trading with Russia, exports to the Russian Federation rose 29.4% to 1.0 billion euros in May from April but fell 54.6% from a year ago.

Imports from Russia declined 9.8% to 3.3 billion euros in May from April.

Eurozone producer prices eased to 36.3% in May from a record high 37.2 in April, eurostat, the statistical office of the European Union, reported on Monday.

Producer prices rose 36.4% in the European Union.

Price increase also slowed on a monthly basis. industrial producer prices rose 0.7% in the euro area and 0.8% in the EU, compared with April.

Inflation in Turkey accelerated to a record high in June primarily driven by transportation prices and surged to levels last seen in 1998.

The consumer prices index soared 78.62% in June on an annual basis from a 73.5% increase in May, the Turkish Statistical Institute reported on Monday.

Consumer prices on a monthly basis rose 4.95% in June from May.

Domestic producer price inflation increased to 138.31% in June from 132.16% in May, a separate report from the statistical office showed.

Resource stocks closed higher after futures of crude oil increased 2.3% to $113.83 a barrel on tight global oil supply.

Shell Plc, TotalEnergies, and BP Plc gained between 4% and 5%.

The discount airlines Ryanair and Wizz Air were on the defensive and dropped as much as 2% after releasing June passenger traffic data.

Airbus SE declined 1.9% to 93.40 euros and the company signed orders to deliver 292 A320 airplanes to several China-based airlines including Air China, China Eastern, China Southern, and Shenzhen Airlines.

Tesco plc gained 1.1% to 257.68 after the retailer commenced its share repurchase program.

Spirax-Sarco rose 0.8% to 10,130.0 pence after the valve maker entered in exclusive negotiations with Qualium to acquire Vulcanic Group for 262 million euros on a cash and debt free basis.

Asian Markets Closed Mixed After China Reimposed Mass Testing

Arjun Pandit
04 Jul, 2022
New York City

Stock markets across Asia closed mixed after China reported rising coronavirus cases and energy prices closed higher in the region.

The Nikkei 225 index gained 0.8% to 26,153.81, the Hang Seng index fell 0.1% to 21,830.35, and the Sensex index closed up 0.6% to 53,234.77.

Tokyo Electric Power Company jumped 13.0% to 654.0 yen after Japan suffered its worst heatwave in decades and the country is facing an energy crunch.

Unseasonably high temperatures of 104 degrees Fahrenheit or 40 degrees Celsius were reported in some parts of the country.

Japan has increased its reliance on imported oil after the Fukushima nuclear disaster and tsunami in 2011. But with the yen at a two-decade low, most consumers are facing sharp increases in utility bills.

SoftBank Group increased 2.9% to 5,283.0 after the tech giant's investment subsidiary Fortress Investment is the leading contender to buy Seven & I's struggling department store chain Sogo & Seibu.

Department stores closed down after J. Front Retailing reported slowing sales growth for its Daimaru and Matsuzakaya stores.

J. Front Retailing declined 5.6% to 1,107.07 yen after the retailer said total sales at Daimaru and Matsuzakaya increased 18.8% and jumped 27.2% in the quarter to June.

Isetan Mitsukoshi declined 4.3% to 1,061 yen and Takashimaya Company fell 2.2% to 1,414.0 yen.

Indexes in Shanghai closed higher despite the local authorities in several cities reimposed mass testing.

Chinese authorities demanded more testing for coronavirus after Anhui province in eastern China reported 380 new infection cases over the weekend.

The new infections were less than 200 in the entire month of June, and local officials have forced the closure of local businesses and locked down more than one million people.

Si town with 760,000 residents and Lingbi town with more than one million residents were placed in a lockdown.

Of the 380 infections reported, 41 were symptomatic and 339 were asymptomatic, the National Health Commission said on Monday.

However, no new deaths related to the virus infections were reported over the weekend.

Stocks in Mumbai rebounded from the morning losses on sustained buying in banks and consumer stocks.

The Sensex index 326.84 or 0.6% to 53,234.77 and the Nifty index advanced 0.5% or 83.30 to 15,835.35.

The Kospi average in Seoul declined 0.2% to 2,300.4 and Nomura Research cited the country along with several developed economies are likely to face recession in the next one year.

The Kospi average extended losses for the fourth day and fell to a new 20-month low.

Shipbuilders, chemical makers, and real estate developers led the losers.

Australian markets closed higher led by a rally in bank and energy stocks.

The Reserve Bank of Australia is set to increase its benchmark rate by 50 basis points tomorrow.

The ASX 200 index jumped 1.11% to 6,612.60 and the broader All Ordinaries index closed up 1.14% to 6,796.90.

The total number of building permits issued on a seasonally adjusted basis rose 9.9% to 16,390 in May, the Australian Bureau of Statistics said on Monday.

General Motors Lowers Earnings Outlook On Parts Shortages

Scott Peters
01 Jul, 2022
New York City

General Motors sold 582,401 vehicles in the second quarter, 15% fewer than a year ago, the company said in a press release today.

The automaker said supply chain disruptions have held up 95,000 vehicles lacking computer chips and certain components but vehicles are expected to be sold to dealers by the end of 2022.

General Motors also lowered its quarter earnings outlook on the supply chain disruptions and parts shortages.

The automaker guided net income in the June quarter to be in the range of between $1.6 billion and $1.9 billion and adjusted earnings to be in the range of between $2.3 billion and $2.6 billion.

The automaker said its market share increased one percentage point to an estimated 16.3% citing a J D Power survey.

Micron Technology's Quarterly Sales Rise 16%, Guidance Disappoints

Scott Peters
01 Jul, 2022
New York City

Micron Technology said revenues in the fiscal 2022 third quarter ending June 2 rose 16% to $8.6 billion from $7.6 billion a year ago.

Net income in the quarter rose to $2.6 billion or $2.34 a share from $2.3 billion or $2.0 a share.

The chipmaker's fourth quarter guidance was substantially weaker than anticipated by analysts.

The company expects fourth quarter revenues of $7.2 billion with a band of $400 million and diluted earnings per share of $1.52 with a 20 cents band and adjusted non-GAAP earnings between $1.43 and $1.83 a share.

Analysts were looking for fourth quarter revenues of at least $9 billion and adjusted earnings of $2.62 a share.

Micro Technology declined 2.7% to $53.78 after investors focused on the fourth quarter guidance and ignored the company's third quarter results.

Late Rally In S&P 500 Trims Weekly Loss, Bond Yields Fall

Barry Adams
01 Jul, 2022
New York City

U.S. stocks kicked off the second-half on a positive note with global slowdown worries looming in the backdrop after positing the worst first-half decline in more than five decades.

The worries of global recession compounded by accelerating inflation in Europe and Asia and falling growth in new orders kept investors' appetite for riskier assets in check.

The S&P 500 declined 16% in the second quarter ending on Thursday and fell 20.6% in the first-half. The second quarter decline was the worst since the first quarter 2020.

The Nasdaq dropped 22.4% in the second quarter and its worst record since 2008 and plunged 29.4% in the first-half.

The stock market's decline in the quarter and the first-half touched every sector except commodities and energy.

In Friday's trading, the S&P 500 index increased 1.1% to 3,825.31 and the Nasdaq Composite index gained 0.9% to 11,127.83.

Despite the market gains today, the two benchmark indexes closed down for the fourth week in five.

For the week, the S&P 500 fell 6.7% and the Nasdaq Composite declined 4.1%.

The popular averages traded near the flat line but picked up momentum in the late afternoon to close higher ahead of a 3-day weekend.

Futures of crude oil increased 2.8% to $108.49 and natural gas rose 4.8% to $5.68 a unit.

The yield on 10-year Treasury notes fell to 2.9% and mortgage rates declined for the third day in a row to 5.5%.

The latest economic news from the U.S., Europe, Japan, and China pointed to a global slowdown.

The Institute of Supply Management said the U.S. manufacturing activity index declined to 53, the lowest since June 2020.

The new order index dropped to 49.2 from 55.1 in May, showing a contraction for the first time since May 2020.

The 50-mark separates expansion from contraction.

General Motors gained 0.9% to $32.04 after the automaker said the company sold 582,401 vehicles in the second quarter, 15% fewer than a year ago.

The company said supply chain disruptions have held up 95,000 vehicles lacking computer chips and certain components but vehicles are expected to be sold to dealers by the end of the year.

The automaker guided net income in the June quarter to be in the range of between $1.6 billion and $1.9 billion and adjusted earnings to be in the range of between $2.3 billion and $2.6 billion.

Micro Technology declined 2.7% to $53.78 after the chipmaker said revenues in the fiscal 2022 third quarter ending on June 2 rose to $8.6 billion from $7.6 billion a year ago.

Net income in the quarter rose to $2.6 billion or $2.34 a share from $2.3 billion or $2.0 a share a year ago.

The chipmaker's fourth quarter guidance was substantially weaker than anticipated by analysts.

The company expects fourth quarter revenues of $7.2 billion with a band of $400 million and diluted earnings per share of $1.52 with a 20 cents band.

Kohl's Corporation plunged 17.3% to $29.57 after the department store retailer terminated talks to sell its business and cited deteriorating retail environment in the last six months.

The retailer also said second quarter sales are likely to fall in high-single digits compared to the previous estimate of a decline in low-single digits and said "the company is seeing a softening in consumer spending."

The home builders advanced after 30-year fixed mortgage rates declined for the third day in a row to 5.50% after peaking at 5.9% on Jun 28, according to data available on Mortgage Daily News.

Pulte Group gained 6.8% to $42.34, Lennar Corp advanced 5.1% to $74.14, and D R Horton added 5.3% to $69.71.

Inflation In Europe Accelerates

The inflation in the euro zone accelerated to 8.6% in June from 8.1% in May according to the preliminary estimate released by the eurostat Friday.

Italian consumer prices rose at 8.0% in June after rising at 6.8% in May, a separate report from the Italian statistics office Istat showed Friday.

The U.K.'s Purchasing Managers' Index fell to a 22-month low of 52.1 in June from 54.6 in May, final data from S&P Global showed Friday.

The preliminary estimate was 52.0, any data above 50 indicates expansion.

The U.K. manufacturing activities rose at the weakest pace in nearly two years on weaker new orders and production and the overall index declined for the fifth month in a row.

The Chartered Institute of Procurement & Supply 's final Purchasing Managers' Index dropped to a two-year low of 52.8 in June from 54.6 in May.

Asian Markets Fall on Slowdown Worries

Stocks in Asia closed down after manufacturing activities stalled in the region and India imposed windfall tax on oil companies.

The Nikkei 225 index declined 1.7% to 25,935.92, Shanghai Composite index fell 0.32% to 3,387.64,and the Kospi average decreased 1.17% to 2,305.42.

The Sensex index eased 0.2% to 52,907.93 and markets in Hong Kong were closed for a holiday.

Mitsubishi Corp and Mitusi Corp fell more than 5% after Russia set up a corporation to take over the stake held by trading companies and Shell Plc in Sakhalin Energy Investment Company.

The two trading companies and Shell own just below 50% stake in the natural gas development firm.

The seizure of the stake follows the recent Western sanctions on Russian businesses, trade, and persons.

The Nikkei fell near a two-week low after the Bank of Japan's tankan survey of large companies showed business sentiment worsened in the June quarter.

Japan's jobless rate increased unexpectedly to 2.6% in May from 2.5% in April, the Ministry of Internal Affairs said Friday.

The unemployment rate increased for the first time in four months.

A private survey in China showed manufacturing activities expanded for the first time in four months in June.

The Caixin/Markit manufacturing Purchasing Managers' Index for June rose to 51.7 from 48.1 in May, according to an independent survey released Friday.

India imposed windfall tax on oil companies to sustain domestic fuel supply and raise about 67,000 crore rupees or about $9 billion.

Stocks on Dalal Street traded lower after the central government imposed windfall tax on oil companies.

Central government imposed a one-time export tax of 6 rupees a liter on petrol and jet fuel and 13 rupees a liter on diesel, announced the finance ministry Friday.

The Sensex declined 111.01 or 0.2% to 52,907.93 and the Nifty 50 index decreased 28.20 or 0.2% to 15,752.05.

South Korea's exports in June rose 5.4% to a record high $57.73 billion on solid demand for chips and petroleum products.

The export increased for the 20th month in a row but slowed to a single-digit after expanding double-digits for 15 months in a row.

June imports rose 19.4% to $60.2 billion resulting in a trade deficit of $2.47 billion.

Exports in the first half increased 15.6% to a record half-year high of $350.3 billion and imports advanced 26.2% to $360.6 billion on high energy and raw materials prices.

Movers: General Motors, Kohl's, Micron Technology, PulteGroup

Barry Adams
01 Jul, 2022
New York City

U.S. stocks struggled to move higher on the first day of the month and reacted to corporate news.

U.S. manufacturing activities declined in June but activities stalled in Europe and Asia as supply chain constraints and elevated input costs dominated.

Benchmark indexes traded sideways on the first day of the third quarter after logging the worst decline in the first-half in decades.

The S&P 500 declined 16% in the second quarter ending on Thursday and fell 20.6% in the first-half. The second quarter decline was the worst since the first quarter 2020.

The Nasdaq dropped 22.4% in the second quarter and its worst record since 2008 and plunged 29.4% in the first-half.

The stock market declined in the quarter and the first-half touched every sector except commodities and energy.

In Friday's trading, the S&P 500 index increased 0.2% to 3,794.11 and the Nasdaq Composite index traded flat at 11,019.93.

The popular averages traded near the flat line and digested the latest corporate news and economic data from the U.S., Asia and Europe.

General Motors gained 0.9% to $32.04 after the automaker said the company sold 582,401 vehicles in the second quarter, 15% fewer than a year ago.

The company said supply chain disruptions have held up 95,000 vehicles lacking computer chips and certain components but vehicles are expected to be sold to dealers by the end of 2022.

The automaker guided net income in the June quarter to be in the range of between $1.6 billion and $1.9 billion and adjusted earnings to be in the range of between $2.3 billion and $2.6 billion.

Micro Technology declined 2.7% to $53.78 after the chipmaker said revenues in the fiscal 2022 third quarter ending on June 2 rose to $8.6 billion from $7.6 billion a year ago.

Net income in the quarter rose to $2.6 billion or $2.34 a share from $2.3 billion or $2.0 a share.

The chipmaker's fourth quarter guidance was substantially weaker than anticipated by analysts.

The company expects fourth quarter revenues of $7.2 billion with a band of $400 million and diluted earnings per share of $1.52 with a 20 cents band.

Kohl's Corporation plunged 17.3% to $29.57 after the department store retailer ended its talks to sell its business and cited deteriorating retail environment in the last six months.

The home builders advanced after 30-year fixed mortgage rates declined for the third day in a row to 5.50% after peaking at 5.9% on Jun 28, according to data available on Mortgage Daily News.

Pulte Group gained 6.8% to $42.34, Lennar Corp advanced 5.1% to $74.14, and DR Horton added 5.3% to $69.71.

U.S. Stocks Trade Sideways On Slowdown Worries