Market Update
World Stocks Extended Weekly Rally After U.S. Inflation Cooled
Barry Adams
12 Jan, 2023
New York City
Benchmark indexes traded higher after inflation moderated in December raising hopes of yet another trim in rate hike at the next meeting at the end of the month.
Consumer prices rose at a slower pace in December, the slowest in fifteen months, after gasoline inflation cooled at the fastest pace in the year.
Rising transportation costs and elevated housing costs, fueled the inflation in December.
Weakening inflation extended gains in tech stocks for the fifth session in a row and the Nasdaq Composite advanced 4.1% in the week so far.
Moreover, weekly jobless claims fell 1,000 to 205,000 for the week ending on January 7, the Department of Labor reported Thursday.
The initial jobless claims dropped to a one-month low highlighting the labor market strength despite seven rate hikes in 2022.
U.S. December Inflation Moderated
The Consumer Price Index inflation fell 0.1% in December from November and eased to 6.5% on an annual basis, the BLS reported Thursday.
The inflation index declined for the first time since May 2020 and seems to have peaked at 9.1% in June 2020.
Energy prices rose 7.3% and food prices advanced 10.4% from a year ago and price increases for both categories were smaller than the rise in November.
Core inflation accelerated to 0.3% from November and eased to 5.7% from a year ago.
Cost of shelter stayed elevated and increased 0.8% on a monthly basis and jumped 7.5% from a year ago.
Despite the easing of inflation, price increases are still significantly ahead of the Federal Reserve's target of 2%.
U.S. Indexes In Review
Benchmark indexes struggled in early trading after consumer price inflation was in line with expectations.
The S&P 500 index increased 0.3% to 3,983.17 and the Nasdaq Composite index increased 0.6% to 11,001.10.
Crude oil rose 93 cents to $78.34 a barrel and natural gas increased 1 cent to $3.69 a thermal unit.
The yield on 2-year Treasury notes eased to 4.13%, 10-year Treasury notes edged lower to 3.42% and 30-year Treasury bonds inched lower to 3.56%.
U.S. Stock Movers
American Airlines Group Inc jumped 5.2% to $16.13 after the airline raised its fourth quarter revenue outlook on higher demand stronger-than-estimated prices.
The company estimated fourth quarter total revenue to rise between 16% and 17% from the comparable quarter in 2019, higher than its prior guidance of up 11% to 13%.
The airline also lifted its adjusted earnings per share outlook range between $1.12 and $1.17 from 50 cents to 70 cents.
The company said it has achieved more than half of its goal to reduce total debt by $15 billion by the end of 2025, with total debt down more than $7.5 billion in the first 18 months of the program.
Delta Air, United Airlines and Southwest rose between 2% and 3%.
Bed Bath & Beyond added 15.5% to $4.02 extended rally to the second day after meme-stocks gained and speculators bid up stock of the struggling retailer.
Bed Bath & Beyond stock has soared more 170% in the last five trading days.
Cleveland-Cliffs Inc jumped 4.4% to $20.09 after Morgan Stanley lifted its stock rating to "overweight" from an "equal-weight."
Morgan Stanley analyst lifted its stock price target to $26 from $13.60.
Revenue in the third quarter ending in September declined to $5.7 billion from $6.0 billion a year ago. Net income fell to $165 million or 29 cents from $1.3 billion or $2.33 a diluted earnings per share.
Cognizant Technology Solutions Corp soared 8.1% to $66.44 after the company appointed former Infosys president Ravi Kumar as chief executive and a member of the board.
The company also raised its estimate for the fourth quarter to $4.8 billion from the previous range between $4.72 billion and $4.77 billion.
The company also estimated full-year 2022 adjusted earnings per share between $4.38 and $4.40 from the previous guidance between $4.43 and $4.46.
Walt Disney Co increased 3.4% to $99.30 after the company elected independent director Mark Parker as chairman of the board and geared up for a proxy battle with activist investor Nelson Peltz.
Infosys Ltd ADR increased 0.6% to $18.23 after the India-based tech services provider reported December quarter revenue increased 9.6% to $4.66 billion.
Net income in the quarter increased to $800 million from $774 million and diluted earnings per share rose to 19 cents from 18 cents a year ago.
The company also said it has initiated the purchase of its stock on December 7 and as of today acquired 31.3 million or $600 million worth of its stock.
The company has acquired 51.5% of total authorization of ?9,300 crore (about $1.15 billion) at an average price of ?1,531 per share (or $18.80), compared to maximum buyback price of ?1,850 per share (or $22.70).
KB Home declined 3.4% to $34.71 after the home-builder reported slightly weaker-than-expected quarterly results.
Revenue in the fourth quarter 16% to $1.94 billion and homes delivered increased 3% to 3,786 and average selling price rose 13% to $510,400.
Net income increased to $216.4 million from $174.2 million and diluted earnings per share increased to $2.47 from $1.96 a year ago.
The home-builder estimated revenue in the fiscal first quarter to range between $125 billion and $1.4 billion and average home price to range between $490,000 and $500,000.
Logitech International SA plunged 17.1% to $56.35 after the computing devices maker lowered its sales outlook.
Logitech said preliminary revenue in the fiscal third quarter ending In December between $1.26 billion and $1.27 billion, a decline between 22% and 23% in the U.S. dollars.
Preliminary GAAP operating income is estimated to range between $171 million and $176 million, down between 33% and 35%, compared to $263 million in the same quarter a year ago.
European Markets Advance to 9-month Highs
European markets extended gains to 9-month highs on the expectations of moderating inflation worldwide and ahead of the U.S. inflation report later today.
The indexes accelerated gains after the U.S. inflation eased to 6.5% in December on the sharp decline in gasoline prices and declined 0.1% from the previous month, the Bureau of Labor Statistics reported Thursday.
Europe Indexes In Review
The DAX index increased 0.7% to 15,058.30, the CAC-40 index advanced 0.7% to 6,975.68 and the FTSE 100 index traded higher 0.9% to 7,794.04.
Brent crude oil closed up $1.56 to $84.23 a barrel and the Dutch natural gas futures contract price rose 2.2% to
Europe Movers: Centrica, M&S, Persimmon, Porsche, Roche, Tesco, Suedzucker, Vodafone
Bridgette Randall
12 Jan, 2023
Frankfurt
Suedzucker AG rose as much as 2% before turning lower 3% to
European Markets Extended Gains, Yield Eased, Pound, Euro and Swiss Franc Edge Higher
Bridgette Randall
12 Jan, 2023
Frankfurt
European markets extended gains to 9-month highs on the expectations of moderating inflation worldwide and ahead of the U.S. inflation report later today.
The indexes accelerated gains after the U.S. inflation eased to 6.5% in December on the sharp decline in gasoline prices and declined 0.1% from the previous month, the Bureau of Labor Statistics reported Thursday.
Europe Indexes In Review
The DAX index increased 0.7% to 15,058.30, the CAC-40 index advanced 0.7% to 6,975.68 and the FTSE 100 index traded higher 0.9% to 7,794.04.
Brent crude oil closed up $1.56 to $84.23 a barrel and the Dutch natural gas futures contract price rose 2.2% to
Falling Gasoline Price Slowed Inflation In December, Housing Inflation Stays Elevated
Brian Turner
12 Jan, 2023
New York City
The Consumer Price Index inflation fell 0.1% in December from November and eased to 6.5% on an annual basis, the Bureau of Labor Statistics reported Thursday.
The inflation index declined for the first time since May 2020 and seems to have peaked at 9.1% in June 2020.
Energy prices rose 7.3% and food prices advanced 10.4% from a year ago and price increases for both categories were smaller than the rise in November.
Used vehicle prices declined 8.8% in December after falling at 3.3% in November and fell 2.5% from the previous month.
Gasoline prices at the pump stations in December declined 9.4% from the previous month and fell 1.5% from a year ago and fuel prices have declined in the last five of the last six months after reaching a peak in June 2022.
Core inflation, which excludes energy and food, accelerated to 0.3% from November and eased to 5.7% from a year ago.
Cost of shelter stayed elevated and increased 0.8% on a monthly basis and jumped 7.5% from a year ago.
Despite the easing of inflation, price increases are still significantly ahead of the Federal Reserve's target of 2%.
Movers: American Airlines, Cleveland-Cliffs, Cognizant, Disney, Infosys, KB Home, Logitech
Scott Peters
12 Jan, 2023
New York City
American Airlines Group Inc jumped 5.2% to $16.13 after the airline raised its fourth quarter revenue outlook on higher demand stronger-than-estimated prices.
The company estimated fourth quarter total revenue to rise between 16% and 17% from the comparable quarter in 2019, higher than its prior guidance of up 11% to 13%.
The airline also lifted its adjusted earnings per share outlook range between $1.12 and $1.17 from 50 cents to 70 cents.
The company said it has achieved more than half of its goal to reduce total debt by $15 billion by the end of 2025, with total debt down more than $7.5 billion in the first 18 months of the program.
Delta Air, United Airlines and Southwest rose between 2% and 3%.
Bed Bath & Beyond added 15.5% to $4.02 extended rally to the second day after meme-stocks gained and speculators bid up stock of the struggling retailer.
Bed Bath & Beyond stock has soared more 170% in the last five trading days.
Cleveland-Cliffs Inc jumped 4.4% to $20.09 after Morgan Stanley lifted its stock rating to "overweight" from an "equal-weight."
Morgan Stanley analyst lifted its stock price target to $26 from $13.60.
Revenue in the third quarter ending in September declined to $5.7 billion from $6.0 billion a year ago. Net income fell to $165 million or 29 cents from $1.3 billion or $2.33 a diluted earnings per share.
Cognizant Technology Solutions Corp soared 8.1% to $66.44 after the company appointed former Infosys president Ravi Kumar as chief executive and a member of the board.
The company also raised its estimate for the fourth quarter to $4.8 billion from the previous range between $4.72 billion and $4.77 billion.
The company also estimated full-year 2022 adjusted earnings per share between $4.38 and $4.40 from the previous guidance between $4.43 and $4.46.
Walt Disney Co increased 3.4% to $99.30 after the company elected independent director Mark Parker as chairman of the board and geared up for a proxy battle with activist investor Nelson Peltz.
Infosys Ltd ADR increased 0.6% to $18.23 after the India-based tech services provider reported December quarter revenue increased 9.6% to $4.66 billion.
Net income in the quarter increased to $800 million from $774 million and diluted earnings per share rose to 19 cents from 18 cents a year ago.
The company also said it has initiated the purchase of its stock on December 7 and as of today acquired 31.3 million or $600 million worth of its stock.
The company has acquired 51.5% of total authorization of ?9,300 crore (about $1.15 billion) at an average price of ?1,531 per share (or $18.80), compared to maximum buyback price of ?1,850 per share (or $22.70).
KB Home declined 3.4% to $34.71 after the home-builder reported slightly weaker-than-expected quarterly results.
Revenue in the fourth quarter 16% to $1.94 billion and homes delivered increased 3% to 3,786 and average selling price rose 13% to $510,400.
Net income increased to $216.4 million from $174.2 million and diluted earnings per share increased to $2.47 from $1.96 a year ago.
The home-builder estimated revenue in the fiscal first quarter to range between $125 billion and $1.4 billion and average home price to range between $490,000 and $500,000.
Logitech International SA plunged 17.1% to $56.35 after the computing devices maker lowered its sales outlook.
Logitech said preliminary revenue in the fiscal third quarter ending In December between $1.26 billion and $1.27 billion, a decline between 22% and 23% in the U.S. dollars.
Preliminary GAAP operating income is estimated to range between $171 million and $176 million, down between 33% and 35%, compared to $263 million in the same quarter a year ago.
Inflation Moderated In December After Energy Prices Declined
Barry Adams
12 Jan, 2023
New York City
Benchmark indexes traded higher after the inflation report came in line with expectations.
The Consumer Price Index inflation fell 0.1% in December from November and eased to 6.5% on an annual basis, the BLS reported Thursday.
The inflation index declined for the first time since May 2020 and seems to have peaked at 9.1% in June 2020.
Energy prices rose 7.3% and food prices advanced 10.4% from a year ago and price increases for both categories were smaller than the rise in November.
Core inflation accelerated to 0.3% from November and eased to 5.7% from a year ago.
Cost of shelter stayed elevated and increased 0.8% on a monthly basis and jumped 7.5% from a year ago.
Despite the easing of inflation, price increases are still significantly ahead of the Federal Reserve's target of 2%.
U.S. Indexes In Review
Benchmark indexes struggled in early trading after consumer price inflation was in line with expectations.
The S&P 500 index fell 0.1% to 3,965.62 and the Nasdaq Composite index dropped 0.2% to 10,913.17.
Crude oil rose 90 cents to $78.31 a barrel and natural gas advanced 11 cents to $3.78 a thermal unit.
The yield on 2-year Treasury notes eased to 4.21%, 10-year Treasury notes edged lower to 3.50% and 30-year Treasury bonds inched lower to 3.62%.
European Markets
European markets extended gains to 9-month highs on the expectations of moderating inflation worldwide and ahead of the U.S. inflation report later today.
The indexes accelerated gains after the U.S. inflation eased to 6.5% in December on the sharp decline in gasoline prices and declined 0.1% from the previous month, the Bureau of Labor Statistics reported Thursday.
The DAX index increased 0.8% to 15,071.75, the CAC-40 index advanced 1.1% to 6,998.64 and the FTSE 100 index traded higher 0.6% to 7,768.75.
Suedzucker AG rose as much as 2% before turning lower 3% to
Japan's Current Account Turned to Surplus, China's Inflation Accelerated
Arjun Pandit
12 Jan, 2023
New York City
The Nikkei 225 index inched up 3.82 points to 26,449.82 traded in a tight range and the yen was in focus ahead of the release of the U.S. inflation data.
Total bank lending increased 2.7% from a year ago in December and unchanged from November to 596.525 trillion yen, the Bank of Japan said Thursday.
Overall bank lending in the fourth quarter increased 2.7% from a year ago.
The yen traded lower to 131.75 against the U.S. dollar and financials and tech stocks led the gainers for the second week in a row.
Japan's current account surplus rose 16.4% to 1,803.6 billion yen in November, the Ministry of Finance said Thursday. Current account deficit in October was 64.1 billion yen.
November exports increased 20.7% from a year ago to 9.008 trillion yen and imports soared 33.8% to 10.546 trillion yen resulting in a trade deficit of 1.537 trillion yen.
China's December Inflation Accelerates
China's consumer price index rebounded to 1.8% in December from an 8-month low of 1.6% in November driven by a 4.8% rise in food prices. Core inflation accelerated to 0.7% in December from 0.6% in November.
The Shanghai Composite Index edged up 1.61 points to 3,163.45 and the Hang Seng index increased 0.4% or 78.05 points to 21,514.10.
India's Inflation Unexpectedly Falls In December
The Sensex index in Mumbai edged lower 0.3% or 147.47 points and December inflation unexpectedly eased.
India's consumer price index eased to 5.72% in December from 5.8% in November after vegetable prices fell 15% but fuel and power prices rose 11%. On a monthly basis, the index fell 0.45%.
India's industrial output rebounded to 7.1% increase in November from a fall of 4.1% in October. Mining output increased 9.7%, power production rose 12.7% and manufacturing advanced 5%.
HCL said Dec quarter revenue increased 19.6% to ?26,700 crore and net income increased 19% to ?4,096 crore and diluted earnings per share rose 3.7% to ?50.94.
Infosys said December quarter revenues increased 20% to ?38,318 crore and net profit rose 13.4% to ?6,586 crore or earnings per share of ?15.72.
Investors Bid Up Stocks Ahead Of Inflation Report
Barry Adams
11 Jan, 2023
New York City
Benchmark indexes closed higher and tech heavy indexes rose on the hopes of moderating inflation in December.
The Nasdaq Composite index increased for the fourth session in a row on the expectations that moderating inflation may slow future rate hikes.
Investors are looking for inflation to moderate to as low as 6.7% after gasoline prices plunged 12% in December from the previous month.
On a monthly basis, inflation is expected to be flat after rising for four months in a row and 0.1% increase in November.
Core inflation which excludes food and energy prices are expected to accelerate on a monthly basis to 0.4% in December from 0.2% in November.
Consumer price index in November rose 7.1% on an annual basis and core inflation excluding food and energy jumped 6.0%, the Bureau of Labor Statistics reported last month.
JP Morgan, Wells Fargo, Bank of New York Mellon, Citigroup and Bank of America are scheduled to release earnings on Friday.
U.S. Indexes In Review
The S&P 500 index increased 1.3% to 3,969.61 and the Nasdaq Composite index rose 1.8% to 10,931.67.
Crude oil prices rose as much as 2% on the hopes of recovering global demand as business activities in China recover and the government takes steps to support higher economic growth.
Crude oil increased $2.78 to $77.83 a barrel and natural gas rose 5 cents to $3.69 a thermal unit.
Treasury bond yields edged lower ahead of the inflation report as investors estimated moderating of inflation in December after the recent drop in energy prices.
The yield on 2-year Treasury notes edged lower to 4.22%, 10-year Treasury notes to 3.54% and 30-year Treasury bonds to 3.67%.
European Markets Extend Gains On Moderating Inflation
European markets extended this year's gains on the hopes of inflation moderation.
ECB board member Isabel Schnabel and the governing council member Robert Holzmann made comments supporting a gradual increase in rates to restrictive levels to lower inflation to 2%.
Government bond yields in the region drifted lower and extended the two-week decline on the hopes of moderating rate hikes.
The yield on Italian government bonds dropped to 4% and the German Bunds traded below 2.2%, away from the 11-year high 2.6% reached on December 30.
Investors also awaited the release of December month U.S. inflation data on Thursday.
U.S. consumer price index in November rose 7.1% on an annual basis and core inflation excluding food and energy jumped 6.0%,the Bureau of Labor Statistics reported last month.
The December month inflation is expected to hover near 7% and core inflation is expected to edge slightly lower.
JP Morgan, Wells Fargo, Bank of New York Mellon, Citigroup and Bank of America are scheduled to release earnings on Friday.
Italy's Retail Sales Rebounded In November
Italy's retail sales in November rose 0.8% after falling 0.3%in October, data from the statistical office Istat showed Wednesday.
Sales of food increased 0.3% and non-food items rose 1.0% on a monthly basis and on an annual basis retail sales jumped 4.4% after rising 1.2% in October.
Retail sales have been rising since March 2021.
European Bond Yields Slide On Moderating Inflation Hopes
The yield on 10-year German Bunds decreased to 2.19%, French bonds decreased to 2.67%, UK Gilts to 3.39% and Italian bonds to 4.03%.
The euro edged higher to $1.07 and the British pound increased to $1.21.
Crude Oil Advances On China Hopes
Crude oil prices rose as much as 2% on the hopes of recovering global demand as business activities in China recover and the government takes steps to support higher economic growth.
Brent crude oil increased $1.37 to $81.45 a barrel and the Dutch TTF natural gas futures contract edged down 6.3% to
Movers: Bed Bath & Beyond, Expedia, Intuitive Surgical, Pool Corp, Tesla, Toll Brothers
Scott Peters
11 Jan, 2023
New York City
Bed Bath & Beyond soared 51% to $3.12 after retail investors bid up stock of the struggling retailer in a speculative frenzy.
Expedia Group increased 4.5% to $99.24 after Oppenheimer lifted its stock rating of the travel services provider to "outperform" from "perform" citing depressed valuation.
Intuitive Surgical Inc. declined 4.2% to $259.96 after the surgical systems maker issued a cautious outlook and issued preliminary fourth quarter 2022 results.
Preliminary fourth quarter revenue increased 7% to $1.66 billion from $1.55 billion a year ago and full-year 2022 revenue jumped 9% to $6.22 billion.
The da Vinci Surgical Systems installations declined 4% to 369 in the fourth quarter from 385 a year ago and fell 6% to 1,264 in the year 2022.
Pool Corp rose 5.4% to $342.81 after Deutsche Bank upgraded its rating on the swimming pool supplies provider's stock "buy" from "hold" citing higher-than-expected sales and earnings.
Tesla Inc gained 2.8% to $122.18 after the electric vehicle maker said it plans to expand its Austin, Texas factory and invest as much as $700 million.
Toll Brothers increased 2.8% to $55.45 after Bank of America upgraded its view on the stock to "buy" from "hold."
European Bond Yields Drift Lower, Stocks Extend Gains
Bridgette Randall
11 Jan, 2023
Frankfurt
European markets extended this year's gains on the hopes of inflation moderation.
ECB board member Isabel Schnabel and the governing council member Robert Holzmann made comments supporting a gradual increase in rates to restrictive levels to lower inflation to 2%.
Government bond yields in the region drifted lower and extended the two-week decline on the hopes of moderating rate hikes.
The yield on Italian government bonds dropped to 4% and the German Bunds traded below 2.2%, away from the 11-year high 2.6% reached on December 30.
Investors also awaited the release of December month U.S. inflation data on Thursday.
U.S. consumer price index in November rose 7.1% on an annual basis and core inflation excluding food and energy jumped 6.0%,the Bureau of Labor Statistics reported last month.
The December month inflation is expected to hover near 7% and core inflation is expected to edge slightly lower.
JP Morgan, Wells Fargo, Bank of New York Mellon, Citigroup and Bank of America are scheduled to release earnings on Friday.
Italy's Retail Sales Rebounded In November
Italy's retail sales in November rose 0.8% after falling 0.3%in October, data from the statistical office Istat showed Wednesday.
Sales of food increased 0.3% and non-food items rose 1.0% on a monthly basis and on an annual basis retail sales jumped 4.4% after rising 1.2% in October.
Retail sales have been rising since March 2021.
European Bond Yields Slide On Moderating Inflation Hopes
The yield on 10-year German Bunds decreased to 2.19%, French bonds decreased to 2.67%, UK Gilts to 3.39% and Italian bonds to 4.03%.
The euro edged higher to $1.07 and the British pound increased to $1.21.
Crude Oil Advances On China Hopes
Crude oil prices rose as much as 2% on the hopes of recovering global demand as business activities in China recover and the government takes steps to support higher economic growth.
Brent crude oil increased $1.37 to $81.45 a barrel and the Dutch TTF natural gas futures contract edged down 6.3% to