Market Update
Hong Kong Stocks Jump Second Consecutive Week After Positive Earnings
Li Chen
16 Aug, 2024
Hong Kong
Stocks in Hong Kong and Shanghai diverged as investors reacted to earnings reports and reviewed the latest comments from the People's Republic of China governor.
The Hang Seng index jumped more than 1.5% after JD.com and Alibaba Group reported their quarterly results.
Stock market sentiment has wavered in recent months following the weak macroeconomic and earnings outlook, but market sentiment rebounded after global market sentiment improved and leading tech companies reported a sharp jump in earnings.
Positive results from residential developers, banks, and tech leaders also bolstered market sentiment in Hong Kong over the last two weeks.
People's Bank of China Governor Pan Gongsheng said in an interview with CCTV on Thursday that the central bank will take measures to effectively implement policy measures announced earlier in the year to achieve the growth target set by the politburo.
The Hang Seng index advanced for the second week in a row amid positive earnings from tech companies, but market sentiment has been more cautious in mainland China trading.
For the week, the Hang Seng index advanced 2% and the CSI 300 index gained 0.4%.
Global market sentiment improved after U.S. retail sales were ahead of expectations, following softer increases in consumer and producer price inflation, easing worries of a U.S. economic slowdown.
The S&P 500 index and Nasdaq Composite inched closer to record highs in mid-July and recovered sharp losses from the previous two weeks, which sparked a global rout.
China Stock Movers
The Hang Seng index advanced 1.7% to 17,397.61, and the CSI 300 index gained 0.1% to 3,343.21.
JD.com jumped 8.2% to $107.50, and the online retailer reported a sharp jump in income in the second quarter, despite the intense price competition.
Revenue increased 1.2% to 291.4 billion yuan, and net income soared to 12.6 billion yuan.
Alibaba Group advanced 4.7% to HK $80.0, and the e-commerce platform and cloud service provider reported a 4% increase in revenue in its latest quarter.
Revenue in the second quarter increased 4% to 243.2 billion yuan, and net income declined 29% to 24.3 billion yuan.
Cloud division revenue rose less-than-expected by 6% to 26.5 billion yuan.
India Movers: Hinduja Global, Hindustan Aeronautics, Hindustan Zinc, Spicejet
Arun Goswami
16 Aug, 2024
Mumbai
Market rally in New York powered strong advances in Mumbai and Asian markets amid improving global market sentiment.
The Sensex index increased by 1.0% to 79,885.57, and the Nifty index rose 0.9% to 24,363.20.
On the Mumbai stock exchange, 51 stocks traded at their 52-week highs, and 12 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 83.93 against the U.S. dollar.
Reliance Power increased 2.3% to ₹30.44, and the electric power producer reported net loss narrowed in the June quarter.
Net revenue increased 6% to ₹2,069.1 crore and net loss narrowed to ₹97.9 crore from ₹296.3 crore a year ago.
Hindustan Aeronautics advanced 1.3% to ₹4,723.85, and the military aircraft manufacturer reported a rise in net profit and revenue in the June quarter.
Total revenue increased 18% to ₹5,083 crore from ₹4,325 crore, and net income soared 77% to ₹1,437 crore from ₹814 crore a year earlier.
Last month, the company's board declared a final dividend of ₹13 per share following the interim cash dividend of ₹22 per share.
Hindustan Zinc declined 6.4% to ₹535.0, and the company's promoter group Vedanta is set to sell a 3.17% stake in the company between August 16 and August 19 at a floor price of ₹486 per share.
Hinduja Global Solutions decreased 0.3% to ₹727.15, and the tech-enabled business services provider reported weak revenue growth in the June quarter.
Revenue increased 3.7% to ₹1,091.9 crore, and net income jumped to ₹165.6 crore from ₹14.9 crore a year ago.
Spicejet decreased 0.6% to ₹54.87, and the discount airline reported a decline in revenue and profit in the June quarter.
Revenue dropped 14.7% to 1,708 crore from 2,003.6 crore and net income declined 19.9% to 158.2 crore from 197.6 crore a year ago.
Wall Street Rebound Gathers Momentum, Stoking Global Recovery
Alexander Garcia
15 Aug, 2024
Miami
Stock market indexes on Wall Street rose sharply after retail sales and weekly jobless data showed resilient consumer spending and a healthy labor market condition.
The S&P 500 index and the Nasdaq Composite advanced more than 1% after retail sales jumped more than expected and weekly jobless claims eased for the second week in a row from a one-year high.
Market indexes are now trading higher than the August 2 closing level, before the global markets plunged in Monday's trading on August 5.
Retail Sales Growth In July Surpassed Expectations
Retail and food services sales, adjusted for calendar and seasonal factors but not for inflation, increased from the previous month to 1.1% in July, the Bureau of Economic Analysis reported Thursday.
Retail sales are closely watched to gauge the level and direction of consumer spending, which dictates about two-thirds of the gross domestic product.
Retail and food services sales rose 2.7% from last year.
Retail trade sales were up 1.1% from June and 2.6% from last year.
Nonstore retailers were up 6.7% from last year, while food services and drinking places were up 3.4% from July 2023.
Retail and food services sales rose the most since January 2023, with sales at motor vehicles and parts dealers rising the most by 3.6%.
Initial jobless claims decreased from 7,000 to 227,000 in the week ending August 10, the U.S. Department of Labor reported Thursday.
The weekly jobless claims declined for the second consecutive week after reaching a near one-year high of 250,000 in the week ending on July 27.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 1.5% to 5,534.14, the Nasdaq Composite advanced 2.2% to 17,560.29, and the Russell 2000 index surged 2.7% to 2,140.77.
The yield on 2-year Treasury notes edged higher to 3.97%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched higher to 4.14%.
WTI crude oil increased $1.29 to $78.27 a barrel, and natural gas prices edged up 2 cents to $2.24 a thermal unit.
Gold advanced by $5.54 to $2,454.24 an ounce, and silver increased by $0.74 to $28.32.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 102.99.
U.S. Stock Movers
Cisco Systems jumped 7.9% to $49.03, and the networking equipment maker reported better-than-expected fiscal fourth quarter results.
Revenue declined 10% to $13.6 billion from $15.2 billion, net income plunged 45% to $2.2 billion from $4.0 billion, and diluted earnings per share dropped to 54 cents from 97 cents a year ago.
For the full-year fiscal 2024, revenue dropped 6% to $53.8 billion from $57.0 billion, net income plunged 18% to $10.3 billion from $12.6 billion, and diluted earnings per share decreased to $2.54 from $3.07 a year ago.
Cisco declared a quarterly dividend of 40 cents per share payable on October 23 to shareholders on record on October 2.
The company guided fiscal 2025 first quarter revenue to fall between $13.65 billion and $13.85 billion and earnings per share between 35 cents and 42 cents.
The company also announced its plans to cut 7% of its global workforce.
Walmart Inc. soared 8.8% to $74.70, and the discount retailer reported better-than-expected revenue and earnings in its latest quarter. The company lifted its annual estimate.
Consolidated revenue in the second quarter increased 4.8% to $169.3 billion from $161.6 billion, net income plunged to $4.7 billion from $8.1 billion, and diluted earnings per share dropped to 56 cents from 97 cents a year ago.
Walmart U.S. sales increased by 4.1% to $115.3 billion from $110.9 billion, driven by comparable sales excluding fuel sales at stores rising by 4.2%, the number of transactions increasing by 3.6%, and the average ticket size advancing by 0.6%.
The retailer guided fiscal third-quarter sales of $159.4 billion, operating income of $6.2 billion, and adjusted earnings per share of 51 cents.
Ulta Beauty soared 12.7% to $370.11 after Berkshire Hathaway acquired a stake in the cosmetic retailer worth $266 million.
Snowflake Inc. declined 3.2% to $123.17 after Berkshire Hathaway sold its entire stake in the cloud service provider, according to its latest regulatory filing.
European Markets Extended 3-day Rally, UK GDP Growth Slowed In Second Quarter
European markets were little changed in Thursday's trading, and investors reviewed the latest GDP update in the UK and key economic data released by China.
Benchmark indexes in Frankfurt, Paris, and London traded around the flatline amid weak investor sentiment and rate path uncertainties.
The U.K.'s gross domestic product in the second quarter slowed to an increase of 0.6% after rising 0.7% in the first quarter, the Office for National Statistics reported Thursday.
The broad-based increase in the service sector contributed to the increase in the second quarter.
The service sector expanded by 0.8%, with scientific and research activities soaring by 11%; manufacturing sector activities decreased by 0.1%, driven by a fall in transportation equipment by 1.8%; and textile, apparel, and leather products declined by 6.6%.
Construction activities shrank by 0.1% in the second quarter.
Government spending increased by 1.4%, and household spending rose by 0.2%.
Investors also reviewed China's retail sales, industrial output, and new home price updates.
Retail sales rebounded to an increase of 2.7% from a year ago, after falling to a 2% increase in June from 3.7% in May, the National Bureau of Statistics reported.
Retail sales rose for the 18th month in a row, driven by a rising demand for beverages, sports and recreational goods, and communication equipment.
Industrial output edged slightly lower to 5.1% in July from 5.3% in June, the statistical agency reported in a separate report on Thursday.
New home prices in 70 of the largest cities declined 4.9% from a year ago in July, extending the decline to the 13th month in a row, the statistical agency said in a note on Thursday.
Europe Indexes and Yields
The DAX index increased by 1.6% to 18,183.24; the CAC-40 index rose by 1.2% to 7,423.37; and the FTSE 100 index advanced by 0.8% to 8,347.35.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched down to 2.92%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.57%.
The euro edged down to $1.10; the British pound inched lower to $1.281; and the U.S. dollar weakened to 86.62 Swiss cents.
Brent crude increased $1.25 to $81.24 a barrel, and the Dutch TTF natural gas rose by €0.73 to €39.60 per MWh.
Europe Stock Movers
Admiral Group soared 7% to 3,009.0 pence after the home and vehicle insurer reported better-than-expected first-half results.
Rank Group jumped 7.2% to 75.05 pence, and the parent company of Bingo Mecca swung to profit in the year ending in June, driven by higher revenue.
Adyen NV advanced 8.7% to €1,236.80, and the Dutch payment solution provider reported strong first-half results and announced its plans to expand its business in India.
Orsted AS decreased 6.8% to DKK 393.60, and the largest offshore wind farm operator reported weaker-than-expected results because of significant impairment charges.
Net loss in the second quarter expanded to DKK 1.7 billion from DKK 538 million, driven by impairment losses of DKK 3.2 billion linked to the FlagshipONE project in Northern Sweden and delays related to the onshore substation Revolution Wind project near the shores of Rhode Island, U.S.A.
Geberit AG dropped 3.5% to CHF 509.80 after the Swiss sanitary products maker reported quarterly results.
Revenue in the second quarter increased by 4.4% to CHF 800.7 million from CHF 769.1 million, net income advanced by 4.1% to CHF 159.8 million from CHF 153.5 million, and earnings per share rose to CHF 4.82 from CHF 4.55 a year ago.
The sanitary products company estimated 2024 sales in local currencies to match the previous year and the EBITDA margin to ease to 29%.
The company also announced a stock buyback plan of CHF 300 million over the next two years.
Japan's Second Quarter GDP Rebounds as Private Consumption Rises
Japan market indexes extended gains for the fourth session in a row after economic growth rebounded in the second quarter.
The Nikkei 225 Stock Average and the Topix index advanced 0.8% after the faster-than-expected increase in GDP growth in the second quarter bolstered market sentiment.
GDP in the second quarter expanded by 0.8% on a quarterly basis, reversing the 0.6% decline in the first quarter, the Cabinet Office reported Thursday.
The second quarter data is preliminary, and the estimate is likely to be revised in the coming months.
On an annualized basis, economic growth rebounded to an increase of 3.1% in the second quarter from the decline in the first quarter of 2.3%.
The first quarter annualized growth rate was revised from a decrease of 2.9%.
Private consumption, which includes consumer spending, increased 1.0% from the previous quarter and expanded for the first time in five quarters.
Durable goods purchases, including appliances and automobiles, soared 8.1%, and the purchase of non-durable goods, which includes food and beverage items, edged up 0.8%.
However, service spending was unchanged in the quarter.
The faster rise in imports was a drag on the economy, after exports rose 1.4% and imports advanced 1.7%.
Government spending inched slightly higher by 0.1%, and public investment expanded by 4.5%.
Japan has struggled to regain its economic growth momentum since the collapse of the asset bubble nearly three decades ago, and the economy continues to bounce between periods of decline and short spurts of growth.
The yen held firm at 147.23 against the U.S. dollar after the release of the GDP data.
Japan Movers
The Nikkei 225 stock average increased 0.8% to 36,721.55, and the Topix index advanced 0.8% to 2,602.50.
Tech companies advanced following the softer increase in consumer price inflation data in the U.S.
Advantest, Tokyo Electron, Socionext, Lasertec, and Screen Holdings increased between 1% and 5%.
Financial stocks also participated in the market advance in the hopes that the faster GDP increase may provide additional support to policymakers looking to increase interest rates.
Sumitomo Mitsui Financial, Mitsubishi UFJ, and Mizuho Financial gained between 0.5% and 1.4%.
Kawasaki Heavy Industries soared 7.3% to ¥4,845.0 after the company reported a record June quarter profit amid rising demand and reiterated its annual outlook.
Dentsu Group soared 10.3% to ¥4,266.0 despite the advertising agency lowering its annual outlook.
The company lowered its annual earnings outlook and now expects net income of 36.7 billion yen compared to the previous estimate of 61.7 billion yen.
However, the company retained its annual sales outlook at 1.36 trillion yen.
Net sales for the second quarter increased 17% to 348.03 billion yen, and net income plunged to 10 million yen from 3.44 billion in the quarter a year ago.
China Indexes Advance After Key Earnings and Economic Reports
Stocks in Shanghai and Hong Kong advanced following a mixed batch of key economic data.
The Hang Seng index gained 0.4% and the CSI 300 index advanced more than 1% after China's statistical agency released retail sales, industrial output, and home price data for July on Thursday.
Retail sales rebounded to an increase of 2.7% from a year ago, after falling to a 2% increase in June from 3.7% in May, the National Bureau of Statistics reported.
China Retail Sales Growth Expanded 18th Consecutive Month
Retail sales rose for the 18th month in a row, driven by a rising demand for beverages, sports and recreational goods, and communication equipment.
On a monthly basis, retail sales rebounded to 0.4% in July from a downwardly revised 0.1% decline in June.
Retail sales have been under pressure after rising between 7% and 20% a year between 2001 and 20219, as consumer confidence continues to decline following the protracted property market collapse.
Industrial output edged slightly lower to 5.1% in July from 5.3% in June, the statistical agency reported in a separate report on Thursday.
China New Home Price Decline Accelerated to Nine-Year High
New home prices in 70 of the largest cities declined 4.9% from a year ago in July, extending the decline to the 13th month in a row, the statistical agency said in a note on Thursday.
The prices declined at the fastest pace since June 2015, and the property market rout spread from the second-tier cities to the top-tier cities.
The decline in home prices accelerated in Beijing to 3.3% from 2.4% in the previous month, in Shenzhen to 8.0% from 7.3%, in Guangzhou to 9.9% from 9.3%, and in Chongqing to 4.9% from 3.4%.
Shanghai recorded a price increase of 4.4%, matching the rate of increase in the previous month.
Monthly home prices eased for the third month in a row (0.7% in July), and the decrease was the largest since October 2014.
The residential property market is likely to remain depressed for the rest of the decade, amid falling demand, a lack of policy support for new construction, weak financial positions of property developers, and shifting demographic patterns.
China Stock Movers
The Hang Seng index increased 0.4% to 17,171.01, and the CSI 300 index advanced 1.1% to 3,347.40.
Samsonite SA dropped 12.8% to HK $18.52, and the travel goods maker plans a second listing in the U.S., expands its investor base, and improves stock liquidity.
Samsonite stock has fallen about 25% in the year so far and plunged nearly 40% from its peak in March.
CK Infrastructure Holdings declined 0.8% to HK $55.90 after the largest infrastructure company based in Hong Kong received approval for a secondary stock listing in London.
Last week, a consortium led by the company's energy unit agreed to acquire a portfolio of 32 wind farms located in England, Scotland, and Wales from insurer Aviva for £350 million.
The company also reported a 2% increase in its earnings in the first half, driven by higher sales in its UK-based portfolio of properties.
UK-based infrastructure assets accounted for the largest earnings driver for the company and generated 36% of the company's earnings.
Tencent Holdings Net Income Jumped 79% In Second Quarter
Tencent Holdings declined 0.8% to HK $370.80, despite the diversified Internet platform company reporting a 79% increase in profit in its latest quarter.
Revenue in the second quarter increased 8% to 161.1 billion yuan, or $22.6 billion; profit jumped 79% to 48.4 billion yuan, or $6.8 billion; and free cash flow soared to 40.4 billion yuan, or $5.7 billion.
In the second quarter, diluted earnings per share increased to 4.99 yuan from 2.69 yuan in the period a year ago.
During the second quarter, the company repurchased approximately 103.7 million shares on the Hong Kong Stock Exchange for approximately HK$ 37.5 billion and paid HK$ 31.7 billion for the final dividend in respect of the year ended December 2023.
U.S. Movers: Cisco Systems, Ulta Beauty, Snowflake, Walmart
Scott Peters
15 Aug, 2024
New York City
Cisco Systems jumped 7.9% to $49.03, and the networking equipment maker reported better-than-expected fiscal fourth quarter results.
Revenue declined 10% to $13.6 billion from $15.2 billion, net income plunged 45% to $2.2 billion from $4.0 billion, and diluted earnings per share dropped to 54 cents from 97 cents a year ago.
For the full-year fiscal 2024, revenue dropped 6% to $53.8 billion from $57.0 billion, net income plunged 18% to $10.3 billion from $12.6 billion, and diluted earnings per share decreased to $2.54 from $3.07 a year ago.
Cisco declared a quarterly dividend of 40 cents per share payable on October 23 to shareholders on record on October 2.
The company guided fiscal 2025 first quarter revenue to fall between $13.65 billion and $13.85 billion and earnings per share between 35 cents and 42 cents.
The company also announced its plans to cut 7% of its global workforce.
Walmart Inc. soared 8.8% to $74.70, and the discount retailer reported better-than-expected revenue and earnings in its latest quarter. The company lifted its annual estimate on the back of the strength in its first-half results.
Consolidated revenue in the second quarter increased 4.8% to $169.3 billion from $161.6 billion, net income plunged to $4.7 billion from $8.1 billion, and diluted earnings per share dropped to 56 cents from 97 cents a year ago.
Walmart U.S. sales increased by 4.1% to $115.3 billion from $110.9 billion, driven by comparable sales excluding fuel sales at stores rising by 4.2%, the number of transactions increasing by 3.6%, and the average ticket size advancing by 0.6%.
The retailer guided fiscal third-quarter sales of $159.4 billion, operating income of $6.2 billion, and adjusted earnings per share of 51 cents.
The retailer issued a cautious outlook for the second half, citing geopolitical tensions and upcoming U.S. elections, that could impact consumer sentiment.
Ulta Beauty soared 12.7% to $370.11 after Berkshire Hathaway acquired a stake in the cosmetic retailer worth $266 million.
Snowflake Inc. declined 3.2% to $123.17 after Berkshire Hathaway sold its entire stake in the cloud service provider, according to its latest regulatory filing.
U.S. Major Averages Jump 1% Following Retail Sales and Jobless Claims Data
Barry Adams
15 Aug, 2024
New York City
Stock market indexes on Wall Street advanced after retail sales were ahead of expectations.
The S&P 500 index and the Nasdaq Composite advanced more than 1% in early trading after retail sales jumped in July.
Market indexes are now trading higher than the August 2 closing level, before the global markets plunged in Monday's trading on August 5.
Retail and food services sales, adjusted for calendar and seasonal factors but not for inflation, increased from the previous month to 1.1% in July, the Bureau of Economic Analysis reported Thursday.
Retail sales are closely watched to gauge the level and direction of consumer spending, which dictates about two-thirds of the gross domestic product.
Retail and food services sales rose 2.7% from last year.
Retail trade sales were up 1.1% from June and 2.6% from last year.
Nonstore retailers were up 6.7% from last year, while food services and drinking places were up 3.4% from July 2023.
Retail and food services sales rose the most since January 2023, with sales at motor vehicles and parts dealers rising the most by 3.6%.
Initial jobless claims decreased by 7,000 to 227,000 in the week ending August 10, the U.S. Department of Labor reported Thursday.
The weekly jobless claims declined for the second consecutive week after reaching a near one-year high of 250,000 in the week ending on July 27.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 1% to 5,514.72, the Nasdaq Composite advanced 1.3% to 17,413.39, and the Russell 2000 index decreased 0.5% to 2,082.36.
The yield on 2-year Treasury notes edged higher to 3.97%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched higher to 4.14%.
WTI crude oil increased $0.70 to $77.67 a barrel, and natural gas prices edged up 0.1 cents to $2.21 a thermal unit.
Gold advanced by $11.94 to $2,461.05 an ounce, and silver increased by $0.68 to $28.31.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 102.38.
U.S. Stock Movers
Cisco Systems jumped 7.9% to $49.03, and the networking equipment maker reported better-than-expected fiscal fourth quarter results.
Revenue declined 10% to $13.6 billion from $15.2 billion, net income plunged 45% to $2.2 billion from $4.0 billion, and diluted earnings per share dropped to 54 cents from 97 cents a year ago.
For the full-year fiscal 2024, revenue dropped 6% to $53.8 billion from $57.0 billion, net income plunged 18% to $10.3 billion from $12.6 billion, and diluted earnings per share decreased to $2.54 from $3.07 a year ago.
Cisco declared a quarterly dividend of 40 cents per share payable on October 23 to shareholders on record on October 2.
The company guided fiscal 2025 first quarter revenue to fall between $13.65 billion and $13.85 billion and earnings per share between 35 cents and 42 cents.
The company also announced its plans to cut 7% of its global workforce.
Walmart Inc. soared 8.8% to $74.70, and the discount retailer reported better-than-expected revenue and earnings in its latest quarter. The company lifted its annual estimate.
Consolidated revenue in the second quarter increased 4.8% to $169.3 billion from $161.6 billion, net income plunged to $4.7 billion from $8.1 billion, and diluted earnings per share dropped to 56 cents from 97 cents a year ago.
Walmart U.S. sales increased by 4.1% to $115.3 billion from $110.9 billion, driven by comparable sales excluding fuel sales at stores rising by 4.2%, the number of transactions increasing by 3.6%, and the average ticket size advancing by 0.6%.
The retailer guided fiscal third-quarter sales of $159.4 billion, operating income of $6.2 billion, and adjusted earnings per share of 51 cents.
Ulta Beauty soared 12.7% to $370.11 after Berkshire Hathaway acquired a stake in the cosmetic retailer worth $266 million.
Snowflake Inc. declined 3.2% to $123.17 after Berkshire Hathaway sold its entire stake in the cloud service provider, according to its latest regulatory filing.
Europe Movers: Admiral Group, Adyen, Geberit, Orsted, Rank Group
Inga Muller
15 Aug, 2024
Frankfurt
European markets retained an upward bias for the third day in a row.
The U.K.'s GDP growth in the second quarter slowed, and the increase in activities in the service sector overcame the decline in the manufacturing and construction sectors.
The DAX index increased by 0.2% to 17,921.19; the CAC-40 index fell by 0.2% to 7,322.07; and the FTSE 100 index advanced by 0.04% to 8,284.45.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched down to 2.92%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.57%.
Admiral Group soared 7% to 3,009.0 pence after the home and vehicle insurer reported better-than-expected first-half results.
Rank Group jumped 7.2% to 75.05 pence, and the parent company of Bingo Mecca swung to profit in the year ending in June, driven by higher revenue.
Adyen NV advanced 8.7% to €1,236.80, and the Dutch payment solution provider reported strong first-half results and announced its plans to expand its business in India.
Orsted AS decreased 6.8% to DKK 393.60, and the largest offshore wind farm operator reported weaker-than-expected results because of significant impairment charges.
Net loss in the second quarter expanded to DKK 1.7 billion from DKK 538 million, driven by impairment losses of DKK 3.2 billion linked to the FlagshipONE project in Northern Sweden and delays related to the onshore substation Revolution Wind project near the shores of Rhode Island, U.S.A.
Geberit AG dropped 3.5% to CHF 509.80 after the Swiss sanitary products maker reported quarterly results.
Revenue in the second quarter increased by 4.4% to CHF 800.7 million from CHF 769.1 million, net income advanced by 4.1% to CHF 159.8 million from CHF 153.5 million, and earnings per share rose to CHF 4.82 from CHF 4.55 a year ago.
The sanitary products company estimated 2024 sales in local currencies to match the previous year and the EBITDA margin to ease to 29%.
The company also announced a stock buyback plan of CHF 300 million over the next two years.
European Markets Extended 3-day Rally, UK GDP Growth Slowed In Second Quarter
Bridgette Randall
15 Aug, 2024
London
European markets were little changed in Thursday's trading, and investors reviewed the latest GDP update in the UK and key economic data released by China.
Benchmark indexes in Frankfurt, Paris, and London traded around the flatline amid weak investor sentiment and rate path uncertainties.
The U.K.'s gross domestic product in the second quarter slowed to an increase of 0.6% after rising 0.7% in the first quarter, the Office for National Statistics reported Thursday.
The broad-based increase in the service sector contributed to the increase in the second quarter.
The service sector expanded by 0.8%, with scientific and research activities soaring by 11%; manufacturing sector activities decreased by 0.1%, driven by a fall in transportation equipment by 1.8%; and textile, apparel, and leather products declined by 6.6%.
Construction activities shrank by 0.1% in the second quarter.
Government spending increased by 1.4%, and household spending rose by 0.2%.
Investors also reviewed China's retail sales, industrial output, and new home price updates.
Retail sales rebounded to an increase of 2.7% from a year ago, after falling to a 2% increase in June from 3.7% in May, the National Bureau of Statistics reported.
Retail sales rose for the 18th month in a row, driven by a rising demand for beverages, sports and recreational goods, and communication equipment.
Industrial output edged slightly lower to 5.1% in July from 5.3% in June, the statistical agency reported in a separate report on Thursday.
New home prices in 70 of the largest cities declined 4.9% from a year ago in July, extending the decline to the 13th month in a row, the statistical agency said in a note on Thursday.
Europe Indexes and Yields
The DAX index increased by 0.2% to 17,921.19; the CAC-40 index fell by 0.2% to 7,322.07; and the FTSE 100 index advanced by 0.04% to 8,284.45.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched down to 2.92%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.57%.
The euro edged down to $1.10; the British pound inched lower to $1.281; and the U.S. dollar weakened to 86.62 Swiss cents.
Brent crude increased $0.59 to $80.34 a barrel, and the Dutch TTF natural gas rose by €0.45 to €39.33 per MWh.
Europe Stock Movers
Admiral Group soared 7% to 3,009.0 pence after the home and vehicle insurer reported better-than-expected first-half results.
Rank Group jumped 7.2% to 75.05 pence, and the parent company of Bingo Mecca swung to profit in the year ending in June, driven by higher revenue.
Adyen NV advanced 8.7% to €1,236.80, and the Dutch payment solution provider reported strong first-half results and announced its plans to expand its business in India.
Orsted AS decreased 6.8% to DKK 393.60, and the largest offshore wind farm operator reported weaker-than-expected results because of significant impairment charges.
Net loss in the second quarter expanded to DKK 1.7 billion from DKK 538 million, driven by impairment losses of DKK 3.2 billion linked to the FlagshipONE project in Northern Sweden and delays related to the onshore substation Revolution Wind project near the shores of Rhode Island, U.S.A.
Geberit AG dropped 3.5% to CHF 509.80 after the Swiss sanitary products maker reported quarterly results.
Revenue in the second quarter increased by 4.4% to CHF 800.7 million from CHF 769.1 million, net income advanced by 4.1% to CHF 159.8 million from CHF 153.5 million, and earnings per share rose to CHF 4.82 from CHF 4.55 a year ago.
The sanitary products company estimated 2024 sales in local currencies to match the previous year and the EBITDA margin to ease to 29%.
The company also announced a stock buyback plan of CHF 300 million over the next two years.
Japan's Second Quarter GDP Rebounds as Private Consumption Rises
Akira Ito
15 Aug, 2024
Tokyo
Japan market indexes extended gains for the fourth session in a row after economic growth rebounded in the second quarter.
The Nikkei 225 Stock Average and the Topix index advanced 0.8% after the faster-than-expected increase in GDP growth in the second quarter bolstered market sentiment.
GDP in the second quarter expanded by 0.8% on a quarterly basis, reversing the 0.6% decline in the first quarter, the Cabinet Office reported Thursday.
The second quarter data is preliminary, and the estimate is likely to be revised in the coming months.
On an annualized basis, economic growth rebounded to an increase of 3.1% in the second quarter from the decline in the first quarter of 2.3%.
The first quarter annualized growth rate was revised from a decrease of 2.9%.
Private consumption, which includes consumer spending, increased 1.0% from the previous quarter and expanded for the first time in five quarters.
Durable goods purchases, including appliances and automobiles, soared 8.1%, and the purchase of non-durable goods, which includes food and beverage items, edged up 0.8%.
However, service spending was unchanged in the quarter.
The faster rise in imports was a drag on the economy, after exports rose 1.4% and imports advanced 1.7%.
Government spending inched slightly higher by 0.1%, and public investment expanded by 4.5%.
Japan has struggled to regain its economic growth momentum since the collapse of the asset bubble nearly three decades ago, and the economy continues to bounce between periods of decline and short spurts of growth.
The yen held firm at 147.23 against the U.S. dollar after the release of the GDP data.
Japan Movers
The Nikkei 225 stock average increased 0.8% to 36,721.55, and the Topix index advanced 0.8% to 2,602.50.
Tech companies advanced following the softer increase in consumer price inflation data in the U.S.
Advantest, Tokyo Electron, Socionext, Lasertec, and Screen Holdings increased between 1% and 5%.
Financial stocks also participated in the market advance in the hopes that the faster GDP increase may provide additional support to policymakers looking to increase interest rates.
Sumitomo Mitsui Financial, Mitsubishi UFJ, and Mizuho Financial gained between 0.5% and 1.4%.
Kawasaki Heavy Industries soared 7.3% to ¥4,845.0 after the company reported a record June quarter profit amid rising demand and reiterated its annual outlook.
Dentsu Group soared 10.3% to ¥4,266.0 despite the advertising agency lowering its annual outlook.
The company lowered its annual earnings outlook and now expects net income of 36.7 billion yen compared to the previous estimate of 61.7 billion yen.
However, the company retained its annual sales outlook at 1.36 trillion yen.
Net sales for the second quarter increased 17% to 348.03 billion yen, and net income plunged to 10 million yen from 3.44 billion in the quarter a year ago.
China Property Price Decline Accelerated to Nine-Year High; Retail Sales Rebounded In July
Li Chen
15 Aug, 2024
Hong Kong
Stocks in Shanghai and Hong Kong advanced following a mixed batch of key economic data.
The Hang Seng index gained 0.4% and the CSI 300 index advanced more than 1% after China's statistical agency released retail sales, industrial output, and home price data for July on Thursday.
Retail sales rebounded to an increase of 2.7% from a year ago, after falling to a 2% increase in June from 3.7% in May, the National Bureau of Statistics reported.
China Retail Sales Growth Expanded 18th Consecutive Month
Retail sales rose for the 18th month in a row, driven by a rising demand for beverages, sports and recreational goods, and communication equipment.
On a monthly basis, retail sales rebounded to 0.4% in July from a downwardly revised 0.1% decline in June.
Retail sales have been under pressure after rising between 7% and 20% a year between 2001 and 20219, as consumer confidence continues to decline following the protracted property market collapse.
Industrial output edged slightly lower to 5.1% in July from 5.3% in June, the statistical agency reported in a separate report on Thursday.
China New Home Price Dropped at Fastest Pace In Nine Years
New home prices in 70 of the largest cities declined 4.9% from a year ago in July, extending the decline to the 13th month in a row, the statistical agency said in a note on Thursday.
The prices declined at the fastest pace since June 2015, and the property market rout spread from the second-tier cities to the top-tier cities.
The decline in home prices accelerated in Beijing to 3.3% from 2.4% in the previous month, in Shenzhen to 8.0% from 7.3%, in Guangzhou to 9.9% from 9.3%, and in Chongqing to 4.9% from 3.4%.
Shanghai recorded a price increase of 4.4%, matching the rate of increase in the previous month.
Monthly home prices eased for the third month in a row (0.7% in July), and the decrease was the largest since October 2014.
The residential property market is likely to remain depressed for the rest of the decade, amid falling demand, a lack of policy support for new construction, weak financial positions of property developers, and shifting demographic patterns.
China Stock Movers
The Hang Seng index increased 0.4% to 17,171.01, and the CSI 300 index advanced 1.1% to 3,347.40.
Samsonite SA dropped 12.8% to HK $18.52, and the travel goods maker plans a second listing in the U.S., expands its investor base, and improves stock liquidity.
Samsonite stock has fallen about 25% in the year so far and plunged nearly 40% from its peak in March.
CK Infrastructure Holdings declined 0.8% to HK $55.90 after the largest infrastructure company based in Hong Kong received approval for a secondary stock listing in London.
Last week, a consortium led by the company's energy unit agreed to acquire a portfolio of 32 wind farms located in England, Scotland, and Wales from insurer Aviva for £350 million.
The company also reported a 2% increase in its earnings in the first half, driven by higher sales in its UK-based portfolio of properties.
UK-based infrastructure assets accounted for the largest earnings driver for the company and generated 36% of the company's earnings.
Tencent Holdings Net Income Jumped 79% In Second Quarter
Tencent Holdings declined 0.8% to HK $370.80, despite the diversified Internet platform company reporting a 79% increase in profit in its latest quarter.
Revenue in the second quarter increased 8% to 161.1 billion yuan, or $22.6 billion; profit jumped 79% to 48.4 billion yuan, or $6.8 billion; and free cash flow soared to 40.4 billion yuan, or $5.7 billion.
In the second quarter, diluted earnings per share increased to 4.99 yuan from 2.69 yuan in the period a year ago.
During the second quarter, the company repurchased approximately 103.7 million shares on the Hong Kong Stock Exchange for approximately HK$ 37.5 billion and paid HK$ 31.7 billion for the final dividend in respect of the year ended December 2023.
Slower U.S. Inflation Indicates Sky High Prices Are Still Rising, Global Markets Trade Sideways
Alexander Garcia
14 Aug, 2024
Miami
Stocks on Wall Street struggled to advance after consumer inflation dropped to a three-year low.
The S&P 500 index and the Nasdaq Composite edged lower in active trading as closely watched consumer price inflation eased in July.
Consumer price inflation slowed to 2.9% in July from 3.0% in June, and the measure of price increase fell to the lowest level since March 2021, the Bureau of Labor Statistics reported Wednesday.
Core inflation, which excludes food and energy prices, slowed for the fourth month in a row to 3.2%.
On a monthly basis, CPI increased by 0.2%, and core inflation increased by 0.2% from 0.1% in the previous month.
A softer inflation report followed the softer producer price inflation report on Tuesday, raising hopes that the Federal Reserve is more likely to lower rates after the September policy meeting.
Investors are looking forward to the release of retail sales data on Thursday.
Despite the cooling of inflation, prices are still rising from a higher base, and the price of homes, automobiles, food, consumer services, and energy products is still higher by between 50% and 100% from the pre-pandemic levels in 2019.
Most consumers are still feeling stretched because wage gains have lagged inflation significantly over the last five years.
The Federal Reserve's premature rate reduction will only fan inflationary forces and revive price increases at a faster pace in the fourth quarter and beyond, which could start another round of the inflation cycle.
U.S. Indexes and Treasury Yields
The S&P 500 index rose 0.2% to 5,444.64, the Nasdaq Composite decreased 0.2% to 17,148.66, and the Russell 2000 index decreased 0.7% to 2,079.75.
The yield on 2-year Treasury notes edged lower to 3.96%, 10-year Treasury notes decreased to 3.83%, and 30-year Treasury bonds inched lower to 4.13%.
WTI crude oil decreased $0.81 to $77.52 a barrel, and natural gas prices edged down 4 cents to $2.34 a thermal unit.
Gold decreased by $19.99 to $2,444.13 an ounce, and silver fell by $0.52 to $27.31.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 102.38.
U.S. Stock Movers
Kellanova surged 7.8% to $80.35 after the snack maker agreed to be acquired by Mars for $83.50 per share in cash, or a total consideration of $35.9 billion, including debt.
The purchase price represents a premium of approximately 44% to Kellanova’s unaffected 30-trading day volume weighted average price and a premium of approximately 33% to Kellanova’s unaffected 52-week high as of August 2, 2024.
The total consideration represents an acquisition multiple of 16.4 of adjusted operating earnings as of June 29.
Brinker International decreased 13.4% to $60.97, and the parent company of Chili's restaurant chain reported weaker-than-expected fiscal fourth quarter earnings. The company's annual guidance fell short of market expectations.
Revenue in the quarter ending on June 26 increased to $1.2 billion from $1.1 billion, net income edged up to $57.3 million from $54.2 million, and diluted earnings per share expanded to $1.24 from $1.19 a year ago.
Comparable restaurant sales increased by 13.5%, driven by a 14.8% increase at Chili's and a 2.5% increase at Maggiano's restaurant chains.
Alphabet Class A declined 3.6% to $158.19 after a Bloomberg New report suggested that U.S. regulators are considering a break-up of mega-cap tech companies.
European Markets Extended Recent Rally
European markets edged slightly higher, and investors reviewed key economic data in the eurozone and the U.K.
Benchmark indexes in Paris, London, and Frankfurt advanced after the eurozone GDP in the second quarter was confirmed to expand 0.3% from the previous quarter, matching the flash estimate.
On an annual basis, GDP expanded by 0.6% in the second quarter, following the 0.5% increase in the first quarter, Eurostat reported Wednesday.
Eurozone's industrial output, adjusted for seasonal factors, declined 3.9% on the year and gained 0.3% from the previous month in June, Eurostat reported in a separate report Wednesday.
Energy production increased 1.4%, intermediate goods production rose 0.7%, capital goods advanced 0.9%, consumer durable goods production increased 3.2%, and consumer non-durable goods production decreased 2.0%.
Consumer price inflation in the U.K. accelerated to an annual pace of 2.2% from 2.0% in June, the Office for National Statistics reported Wednesday.
Consumer prices accelerated for the first time since December, and the core rate of inflation, which excludes energy and food prices, eased to 3.3% from 3.5% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.4% to 17,885.60; the CAC-40 index rose by 0.8% to 7,333.36; and the FTSE 100 index advanced by 0.6% to 8,281.05.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched down to 2.93%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.58%.
The euro edged down to $1.10; the British pound inched lower to $1.282; and the U.S. dollar weakened to 86.30 Swiss cents.
Brent crude decreased $0.29 to $80.39 a barrel, and the Dutch TTF natural gas fell by €0.41 to €38.95 per MWh.
Europe Stock Movers
UBS Group AG jumped 3.5% to CHF 26.0, and the Swiss bank reported that second-quarter profit jumped to $1.1 billion.
Straumann Holding soared 12.8% to CHF 125.20 after the dental implant maker lifted its 2024 guidance.
Revenue in the first half increased 16.1% to 1.3 billion.
The company also announced the sale of its DrSmile aligner business to Barcelona-based Impress Group in exchange for a 20% stake in the dental clinic network operator in Spain, the UK, Italy, and Portugal.
Aviva plc increased 0.2% to 489.70 pence after the insurance company reported a better-than-expected 14% increase in operating profit in the first half.
Balfour Beatty decreased 2.3% to 398.82 pence, despite the construction service provider reporting an increase in earnings for the first half.
Flutter Entertainment jumped 8.7% to 15,930.0 pence, and the world's largest online betting firm reported better-than-expected second quarter results and lifted its annual outlook.
TUI AG increased 2.6% to €5.69, and the tour operator reported better-than-expected profit in the fiscal third quarter.
ThyssenKrupp declined 4% to €3.16 after the steelmaker lowered its annual profit estimate for the third time this year.
Revenue in the third quarter decreased to €9.0 billion from €9.6 billion, adjusted EBIT fell to €149 million from €243 million, and new orders slowed to €8.4 billion from €9.4 billion a year ago, respectively.
The steel company revised its annual sales to decline between 6% and 8% and adjusted EBIT to be around 500 million from the previous estimate of an "increase in the high three-digit million euros range."
Japan Indexes Extend 2-day Rally, Prime Minister Kishida Announces to Resign
Market indexes in Tokyo extended gains for the second day in a row following a sharp rebound in overnight trading in New York.
The Nikkei 225 index gained 0.7% and the Topix index advanced more than 1%, driven by a rise in tech and financial stocks.
Market sentiment recovered for the second day in a row, but enthusiasm was tempered amid lingering worries about the rate path and the appropriate level of the yen-dollar exchange rate.
Investors have been on edge after the Bank of Japan unexpectedly raised rates at the end of July and signaled more rate hikes to follow, supporting the strengthening of the yen.
However, investors are still worried that the yen may face renewed pressure because of the large yield gap between the Japanese and U.S. bonds.
That rate gap could shrink in the fourth quarter if the U.S. Federal Reserve lowers rates by as much as 75 basis points and the Bank of Japan lifts rates by another 25 basis points.
The yen closed at 147.15 against the U.S. dollar in Tokyo trading.
Benchmark indexes experienced a wild swing in the last week after the BoJ's hawkish outlook, coupled with economic slowdown worries in the U.S.
On the economic front, the Reuters Tankan Survey showed business sentiment among manufacturing companies weakened in August amid lackluster demand from China.
Prime Minister Fumio Kishida informed leaders of the Liberal Democratic Party that he is not planning to seek reelection at the end of his three-year term in September.
Kishida's move now shifts the focus to younger leaders at the party's election next month.
Japan Movers
The Nikkei 225 Stock Average jumped 0.7% to 36,495.29, and the Topix index gained 1.2% to 2,584.10.
Tech and semiconductor equipment makers rebounded for the second day in a row after the Nasdaq Composite jumped more than 2% in overnight trading.
Advantest, Tokyo Electron, Screen Holdings, Lasertec, and SoftBank advanced between 2% and 4%.
Mercari dropped 7.4% to ¥2,013.50, and the online marketplace operator signaled challenges in its U.S. operations.
The company said revenue in the financial year ending in June increased 9% and core operating profit advanced 13% from a year ago, respectively.
China's Weak Credit Demand Highlights Changing and Slowing Economic Activities
Stocks in China faced headwinds as weak demand for new loans raised additional worries about the economic growth outlook.
The Hang Seng index decreased 0.4% and the CSI 300 index fell 0.5% as investors awaited the release of retail sales and industrial output data on Thursday.
The Hang Seng halted its five-day rally amid worries about the macroeconomic backdrop and weak outlook for corporate earnings.
China's new loans plunged 88% to 260 billion yuan, or $36.3 billion, in July, driven by weak credit demand, the People's Bank of China reported late Tuesday.
New loans in June were 2.13 trillion yuan and 345.9 billion yuan a year earlier.
The weakness in corporate loans and residential mortgage loans dragged the overall demand for new credit, driven by seasonal factors that also played a role, as July is generally a weak month for new loans.
China's new loan demand is on the slide as new residential property construction plunges and demand from local government financing vehicles sharply falls.
Investors are bracing for more weak economic data on Thursday, and retail sales are likely to rise less than 3% and manufacturing production is expected to show broad weakness despite the strong export shipments.
China Stock Movers
The Hang Seng index declined 0.4% to 17,110.23 and the CSI 300 index dropped 0.5% to 3,316.61.
Tencent Holdings declined 2.7% to HK $370.40, Alibaba Holding decreased 0.3% to HK $78.40, and Baidu fell 0.2% to HK $82.45.
Zhejiang Weihua New Material soared 40% to 23.81 yuan on its first day of trading in Shanghai, and the maker of fluorinated fine chemicals raised 1.5 billion yuan in an initial public offering.