Market Update
S&P 500 Index In 4-day Rally and Investors Await Inflation Report
Barry Adams
11 Oct, 2023
New York City
Stocks meandered and the release of the FOMC policy meeting minutes did little to change direction.
Market indexes headed higher after Treasury yields edged lower for the fourth day in a row and averages dipped below the flatline by midday and managed to rebound in late afternoon trading.
The S&P 500 index traded between 0.4% and -0.2% and the Nasdaq Composite index ranged between 0.7% and -0.1% after the yield on 10-year U.S. Treasury notes declined 12 basis points.
Market sentiment was positive in early trading after Exxon Mobil announced a $60 billion deal to acquire shale oil producer Pioneer Natural Resources and double its energy production in the Permian Basin.
Investors also reviewed the minutes of the latest FOMC policy meeting minutes released today and participants were divided about an additional rate hike.
The Federal Reserve held fed funds steady at the end of a two-day meeting on September 20.
“A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted,” minutes of the meeting showed.
On the economic front, the producer price index rose 0.5% in September from the previous month, and slower than 0.7% in August, the U.S. Bureau of Labor Statistics reported Wednesday.
However, wholesale inflation on an annual basis accelerated to 2.2% in the month from 2.0% in the previous month and advanced for the third month in a row.
Investors are also awaiting the release of the Federal Reserve's policy meeting minutes later in the afternoon.
Market indexes are likely to trade volatile ahead of the release of September's consumer price inflation report on Thursday and economists are expecting annual inflation to jump as much as 3.6%.
U.S. Indexes & Yields
The S&P 500 index increased 0.2% to 4,365.59 and the Nasdaq Composite rose 0.5% to 13,618.85.
The yield on 2-year Treasury notes decreased to 4.99%, 10-year Treasury notes inched lower to 4.59% and 30-year Treasury bonds edged down to 4.75%.
Crude oil decreased $2.28 to $83.67 a barrel and natural gas prices eased 1 cent to $3.37 a thermal unit.
The dollar index edged higher to 105.68, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Humana Inc declined 1.2% to $494.0 after the health insurance company said chief executive Bruce Broussard will step down in the second-half of 2024.
The company named health care industry veteran Jim Rechtin as President and Chief Operating Officer effective January 8, 2024, as part of a long-planned CEO transition and Rechtin will assume chief executive's role after Broussard steps down.
Sherwin-Williams Company was unchanged at $252.0 and the company said President Heidi G Petz will assume additional role of chief executive from the start of 2024.
Novo Nordisk AS jumped 3.4% to $96.34 after the Danish company said it will stop kidney trials earlier because of promising results.
The company's drug therapy Ozempic uses active ingredient semaglutide, which the company also uses in the making of its weight-loss drug Wegovy.
After the Novo Nordisk's news, Davita Inc plunged 18% to $54.58 and Fresenius Medical Care dropped 16.7% to $17.45.
Pioneer Natural Resources Company jumped 1.9% to $241.79 after the company agreed to be acquired by Exxon Mobil in an all-stock merger for $253 a share or $60 billion.
European Markets and Bond Yields Eased
Stocks in Europe hovered near flatline as investors prepared for a barrage of earnings next week.
Market indexes in London, Paris and Frankfurt lacked direction and investors debated interest rate paths amid resurgent crude oil and natural gas prices.
Central bank policymakers are sending mixed signals about the future direction and level of interest rates.
Policymakers stress their commitments in lowering inflation but show no urgency or set a timetable to bring down inflation, and at the same time inflationary forces are spreading across the wider areas of economy.
Longer inflation stays elevated, harder it will become to dislodge without dipping the economy into a severe recession.
Europe Indexes & Yields
The DAX index decreased 0.01% to 15,460.01, the CAC-40 index fell 0.4% to 7,131.21 and the FTSE 100 index eased 0.1% to 7,620.03.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.27%, the UK gilts edged down to 4.32% and Italian bonds rose to 4.68%.
The euro edged lower to a three-month low to $1.06, the British pound to $1.222 and the U.S. dollar fetched 90.32 Swiss cents.
Brent crude decreased $1.39 to $86.24 a barrel and the Dutch TTF natural gas edged lower by €2.26 to €47.20 per MWh.
Europe Stock Movers
FirstGroup plc added 4.4% to 153.0 pence after the UK-based bus and rail group lifted its annual profit outlook.
Marston's Plc declined 4.3% to 27.60 pence despite the pub operator reporting an 11% rise in sales in the fiscal year ending in September.
Travis Perkins Plc dropped 5.7% to 759.60 pence after the U.K.'s largest distributor of building materials said annual earnings are likely to be below its forecast.
"With commodity deflation expected to continue and the exit rate from the third quarter indicating further challenging conditions for the balance of the year," the company said in a regulatory filing.
The company forecasted its adjusted operating profit in the range of £175 million to £195 million for the full-year.
Pagegroup dropped 4.0% to 407.0 pence after the UK-based recruitment company said its annual profits are likely to fall by a third because of ongoing macroeconomic headwinds in the UK, U.S. and Asia.
Accor SA advanced 1.4% to €31.98 after the French hospitality group launched a €400 million stock repurchase plan.
LVMH dropped 6.0% to €689.90 after the French luxury goods maker reported lower sales growth in the third quarter, prompting worries of an end of the post-pandemic luxury boom.
Luxury peers Kering SA and Hermes International declined 1.5%.
Producer Price Index Advanced In September
Brian Turner
11 Oct, 2023
New York City
The producer price index rose 0.5% in September from the previous month, and slower than 0.7% in August, the U.S. Bureau of Labor Statistics reported Wednesday.
However, wholesale inflation on an annual basis accelerated to 2.2% in the month from 2.0% in the previous month and advanced for the third month in a row.
The annual increase in wholesale was the largest since the gain of 2.3% in April.
Goods price index rose 0.9%, driven by 5.4% increase in gasoline prices.
Core wholesale prices, excluding foods, energy, and trade services, increased 0.2% from the previous month in September, the fourth consecutive increase.
Core wholesale inflation, on an annual basis, jumped 2.8%.
U.S. Movers: Exxon Mobil, Humana, Novo Nordisk, Pioneer Natural Resources, Sherwin William
Scott Peters
11 Oct, 2023
New York City
Benchmark indexes advanced for the third day in a row and crude oil prices edged slightly lower amid escalating tensions in the Middle East after Israel prepares for a military offensive in occupied Gaza.
The S&P 500 index increased 0.9% to 4,375.96 and the Nasdaq Composite rose 1.1% to 13,635.62.
The yield on 2-year Treasury notes decreased to 4.99%, 10-year Treasury notes inched lower to 4.59% and 30-year Treasury bonds edged down to 4.75%.
Humana Inc declined 1.2% to $494.0 after the health insurance company said chief executive Bruce Broussard will step down in the second-half of 2024.
The company named health care industry veteran Jim Rechtin as President and Chief Operating Officer effective January 8, 2024, as part of a long-planned CEO transition and Rechtin will assume chief executive's role after Broussard steps down.
Sherwin-Williams Company was unchanged at $252.0 and the company said President Heidi G Petz will assume additional role of chief executive from the start of 2024.
Novo Nordisk AS jumped 3.4% to $96.34 after the Danish company said it will stop kidney trials earlier because of promising results.
The company's drug therapy Ozempic uses active ingredient semaglutide, which the company also uses in the making of its weight-loss drug Wegovy.
After the Novo Nordisk's news, Davita Inc plunged 18% to $54.58 and Fresenius Medical Care dropped 16.7% to $17.45.
Pioneer Natural Resources Company jumped 1.9% to $241.79 after the company agreed to be acquired by Exxon Mobil in an all-stock merger for $253 a share or $60 billion.
Retreating U.S. Treasury Yields Support Advances In Stock Market Indexes
Barry Adams
11 Oct, 2023
New York City
Market indexes headed higher after Treasury yields edged lower for the fourth day in a row.
The S&P 500 index jumped 0.4% and the Nasdaq Composite index advanced 0.6% after the yield on 10-year U.S. Treasury notes declined 12 basis points.
Positive market sentiment was also supported after Exxon Mobil announced a $60 billion deal to acquire Pioneer Natural Resources and double its energy production in the Permian Basin.
On the economic front, the producer price index rose 0.5% in September from the previous month, and slower than 0.7% in August, the U.S. Bureau of Labor Statistics reported Wednesday.
However, wholesale inflation on an annual basis accelerated to 2.2% in the month from 2.0% in the previous month and advanced for the third month in a row.
Investors are also awaiting the release of the Federal Reserve's policy meeting minutes later in the afternoon.
Market indexes are likely to trade volatile ahead of the release of September's consumer price inflation report on Thursday.
U.S. Indexes & Yields
The S&P 500 index increased 0.9% to 4,375.96 and the Nasdaq Composite rose 1.1% to 13,635.62.
The yield on 2-year Treasury notes decreased to 4.99%, 10-year Treasury notes inched lower to 4.59% and 30-year Treasury bonds edged down to 4.75%.
Crude oil decreased $0.89 to $85.07 a barrel and natural gas prices increased 8 cents to $3.29 a thermal unit.
The dollar index edged higher to 105.68, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Humana Inc declined 1.2% to $494.0 after the health insurance company said chief executive Bruce Broussard will step down in the second-half of 2024.
The company named health care industry veteran Jim Rechtin as President and Chief Operating Officer effective January 8, 2024, as part of a long-planned CEO transition and Rechtin will assume chief executive's role after Broussard steps down.
Sherwin-Williams Company was unchanged at $252.0 and the company said President Heidi G Petz will assume additional role of chief executive from the start of 2024.
Novo Nordisk AS jumped 3.4% to $96.34 after the Danish company said it will stop kidney trials earlier because of promising results.
The company's drug therapy Ozempic uses active ingredient semaglutide, which the company also uses in the making of its weight-loss drug Wegovy.
After the Novo Nordisk's news, Davita Inc plunged 18% to $54.58 and Fresenius Medical Care dropped 16.7% to $17.45.
Pioneer Natural Resources Company jumped 1.9% to $241.79 after the company agreed to be acquired by Exxon Mobil in an all-stock merger for $253 a share or $60 billion.
Europe Movers: Accor, FirstGroup, LVMH, Marston's, Pagegroup, Travis Perkins
Inga Muller
11 Oct, 2023
Frankfurt
European market indexes struggled to get traction and bond yields edged lower
The DAX index decreased 0.01% to 15,423.79, the CAC-40 index fell 0.6% to 7,121.63 and the FTSE 100 index advanced 0.1% to 7,636.36.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.27%, the UK gilts edged down to 4.32% and Italian bonds rose to 4.68%.
FirstGroup plc added 4.4% to 153.0 pence after the UK-based bus and rail group lifted its annual profit outlook.
Marston's Plc declined 4.3% to 27.60 pence despite the pub operator reporting an 11% rise in sales in the fiscal year ending in September.
Travis Perkins Plc dropped 5.7% to 759.60 pence after the U.K.'s largest distributor of building materials said annual earnings are likely to be below its forecast.
"With commodity deflation expected to continue and the exit rate from the third quarter indicating further challenging conditions for the balance of the year," the company said in a regulatory filing.
The company forecasted its adjusted operating profit in the range of £175 million to £195 million for the full-year.
Pagegroup dropped 4.0% to 407.0 pence after the UK-based recruitment company said its annual profits are likely to fall by a third because of ongoing macroeconomic headwinds in the UK, U.S. and Asia.
Accor SA advanced 1.4% to €31.98 after the French hospitality group launched a €400 million stock repurchase plan.
LVMH dropped 6.0% to €689.90 after the French luxury goods maker reported lower sales growth in the third quarter, prompting worries of an end of the post-pandemic luxury boom.
LVMH said third quarter sales growth slowed to 9% from 17% in the second quarter and wine and spirit business revenue plunged 14% from a year ago.
Luxury peers Kering SA and Hermes International declined 1.5%.
European Bond Yield Eased, LVMH Growth Worries Dragged Luxury Stocks
Bridgette Randall
11 Oct, 2023
Frankfurt
Stocks in Europe hovered near flatline as investors prepared for a barrage of earnings next week.
Market indexes in London, Paris and Frankfurt lacked direction and investors debated interest rate paths amid resurgent crude oil and natural gas prices.
Central bank policymakers are sending mixed signals about the future direction and level of interest rates.
Policymakers stress their commitments in lowering inflation but show no urgency or set a timetable to bring down inflation, and at the same time inflationary forces are spreading across the wider areas of economy.
Longer inflation stays elevated, harder it will become to dislodge without dipping the economy into a severe recession.
Europe Indexes & Yields
The DAX index decreased 0.01% to 15,423.79, the CAC-40 index fell 0.6% to 7,121.63 and the FTSE 100 index advanced 0.1% to 7,636.36.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.27%, the UK gilts edged down to 4.32% and Italian bonds rose to 4.68%.
The euro edged lower to a three-month low to $1.06, the British pound to $1.222 and the U.S. dollar fetched 90.32 Swiss cents.
Brent crude decreased $0.35 to $87.29 a barrel and the Dutch TTF natural gas edged higher by €0.75 to €48.70 per MWh.
Europe Stock Movers
FirstGroup plc added 4.4% to 153.0 pence after the UK-based bus and rail group lifted its annual profit outlook.
Marston's Plc declined 4.3% to 27.60 pence despite the pub operator reporting an 11% rise in sales in the fiscal year ending in September.
Travis Perkins Plc dropped 5.7% to 759.60 pence after the U.K.'s largest distributor of building materials said annual earnings are likely to be below its forecast.
"With commodity deflation expected to continue and the exit rate from the third quarter indicating further challenging conditions for the balance of the year," the company said in a regulatory filing.
The company forecasted its adjusted operating profit in the range of £175 million to £195 million for the full-year.
Pagegroup dropped 4.0% to 407.0 pence after the UK-based recruitment company said its annual profits are likely to fall by a third because of ongoing macroeconomic headwinds in the UK, U.S. and Asia.
Accor SA advanced 1.4% to €31.98 after the French hospitality group launched a €400 million stock repurchase plan.
LVMH dropped 6.0% to €689.90 after the French luxury goods maker reported lower sales growth in the third quarter, prompting worries of an end of the post-pandemic luxury boom.
Luxury peers Kering SA and Hermes International declined 1.5%.
Investors Shift Attention to Earnings This Week and Banks In Focus
Barry Adams
10 Oct, 2023
New York City
Market sentiment recovered and stocks scaled higher for the second day in a row this week after investors shifted focus to the start of earnings season.
Stocks on Wall Street turned higher after Treasury yields edged lower and crude oil prices eased but investors took bets on bank stocks ahead of the release of earnings later in the week.
While world financial markets focused on the fast evolving deadly conflict between Israel and Hamas, investors feared that neighboring oil producing countries may be drawn in the conflict.
The worries of oil supply disruption receded on the fifth day of the conflict but natural gas prices soared for the second day in Europe after Israel asked Chevron to shut natural gas production for safety reasons.
Tech stocks led gainers on Wall Street and in broad rally benchmark indexes jumped more than 1% by midday.
U.S. bond market was closed on Monday to observe Columbus Day and bond investors reacted for the first time today after the flare up of Israel-Hamas conflict in the Middle East.
At the time of rising geopolitical tensions, investors sought safety in U.S. Treasury bonds, driving bond prices higher and lowering bond yields.
U.S. Indexes & Yields
The S&P 500 index increased 0.7% to 4,366.39 and the Nasdaq Composite rose 0.7% to 13,586.58.
The yield on 2-year Treasury notes decreased to 4.94%, 10-year Treasury notes inched lower to 4.64% and 30-year Treasury bonds edged down to 4.8%.
Crude oil decreased $0.28 to $86.09 a barrel and natural gas prices increased 1 cent to $3.38 a thermal unit.
The dollar index edged higher to 105.83, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
PepsiCo gained 1.5% to $163.81 after the beverage and food company reported its quarterly results and the company also lifted its full-year outlook.
Palantir Technologies Inc increased 2.7% to $18.09 on news that the U.S. Army assigned a $250 million contract to test and develop artificial Intelligence tools.
Unity Software Inc jumped 4% to $30.88 after the company said chief executive John Riccitiello plans to retire and James M Whitehurst will step in as an interim chief executive.
European Markets Rebounded, Bond yields Edged Lower
Stock markets across Europe rebounded and bond yields edged lower a day after chaotic trading.
Market indexes in London, Paris and Frankfurt advanced more than 1.5% and investors searched for bargains.
Market sentiment was also bolstered after crude oil prices edged lower and investors overlooked the jump in natural gas prices for the second day in a row.
Natural gas prices in Europe soared to a six-month high following a 15% advance in Monday's trading after the Israeli government requested Chevron to shut production because of safety concerns at its Tamar natural gas field near its northern coast.
Europe Indexes & Yields
The DAX index increased 1.8% to 15,423.52, the CAC-40 index rose 2.0% to 7,162.42 and the FTSE 100 index advanced 1.8% to 7,628.21.
The yield on 10-year German bonds decreased to 2.8%, French bonds traded lower to 3.40%, the UK gilts edged down to 4.50% and Italian bonds rose to 4.85%.
The euro edged lower to a three-month low to $1.058, the British pound to $1.218 and the U.S. dollar fetched 90.81 Swiss cents.
Brent crude decreased $0.66 to $87.48 a barrel and the Dutch TTF natural gas edged higher by €5.50 to €49.46 per MWh.
Europe Stock Movers
Elis SA increased 3.8% to €16.89 after the Brazil-based asset manager BWGI said it plans to acquire a 6% stake in the French cleaning service provider.
Euroapi SAS plunged 56.5% to €5.34 after the Sanofi spinoff lowered its 2023 sales outlook.
Eutelsat Communications SA rose 7.6% to €5.08 after the satellite company and a hybrid network provider Marlink signed a multi-year agreement to provide maritime connectivity over the Middle East, Africa and Europe.
YouGov Plc soared 23.2% to 850.0 pence after the British polling company reported a jump in pre-tax profit for 2023 on improved revenue.
Currys PLC rose 4.9% to 49.32 pence after the company said it has received several non-binding offers for its Kotsovolos business in Greece and Cyprus.
Croda international Plc increased 2.2% to 4,539.0 pence after several brokerage firms lifted their target stock price.
Rheinmetall AG advanced 1.5% to €254.20 after the German defense company won an order from German Bundeswehr to supply 150,000 rounds of artillery ammunition through a framework agreement.