Market Update
Personal Income, Spending Rise; PCE Price Index Growth Slows
Brian Turner
01 Dec, 2022
New York City
Personal Spending and Income Rose
Personal spending in October rose 0.8% following 0.6% in September and personal income increased 0.7%, the most in a year, the U.S. BEA reported Thursday.
Personal income increased 0.7% to $155.3 billion in October and disposable personal income increased 0.7% to $132.9 billion and personal consumption expenditures or PCE increased 0.8% to $147.9 billion.
PCE Price Index Growth Slows
The price consumption expenditure, the Federal Reserve's preferred measure of inflation which takes into account customers substituting higher-priced goods for cheaper alternatives, rose at the same rate in October but slowed to the lowest level from a year ago.
The PCE price index increased 0.3% in October from September and rose 6.0% from a year ago, the lowest in the year so far.
The monthly increase in the index in October matched the rates for the previous two months.
Prices for goods increased 7.2% and services rose 5.4% from a year ago.
The core PCE Index, which excludes food and energy, slowed to 5.0% from 5.2% in the previous month.
Weekly Jobless Claims Declined
Brian Turner
01 Dec, 2022
New York City
Initial jobless claims for the week ending November 26 declined to 226,000 from the upwardly revised 241,000 in the previous week, the Department of Labor reported Thursday.
The previous week's level was revised up by 1,000 from 240,000 to 241,000.
The 4-week moving average increased by 1,750 to 228,750 from the previous week's revised average by 250 from 226,750 to 227,000.
Stocks Turn Lower and Alternative Inflation Measure Cooled
Barry Adams
01 Dec, 2022
New York City
Stocks pared some of the gains of the previous session and investors digested latest economic data on personal income, spending and inflation.
Investors also reacted to corporate news after Salesforce Inc unexpectedly announced the resignation of its co-CEO.
Latest earnings from Five Below, Victoria's Secret and Snowflake also impacted stocks.
Personal Spending and Income Rose
Personal spending in October rose 0.8% following 0.6% in September and personal income increased 0.7%, the most in a year, the U.S. BEA reported Thursday.
PCE Price Index Growth Slows
The price consumption expenditure, the Federal Reserve's preferred measure of inflation which takes into account customers substituting higher-priced goods for cheaper alternatives, rose at the same rate in October but slowed to the lowest level from a year ago.
The PCE price index increased 0.3% in October from September and rose 6.0% from a year ago, the lowest in the year so far.
The monthly increase in the index in October matched the rates for the previous two months.
Prices for goods increased 7.2% and services rose 5.4% from a year ago.
The core PCE Index, which excludes food and energy, slowed to 5.0% from 5.2% in the previous month.
Weekly Jobless Claims Decline
Initial jobless claims for the week ending November 26 declined to 226,000 from the upwardly revised 241,000 in the previous week, the Department of Labor reported Thursday.
The previous week's level was revised up by 1,000 from 240,000 to 241,000.
The 4-week moving average increased by 1,750 to 228,750 from the previous week's revised average by 250 from 226,750 to 227,000.
Markets Overview
The S&P 500 index declined 0.3% to 4,066.80 and the Nasdaq Composite traded lower 0.2% to 11,440.70.
Crude oil increased $2.40 to $82.94 a barrel and natural gas increased 2 cents to $6.95 a thermal unit.
The yield on 2-year Treasury notes declined to 4.32%, 10-year Treasury notes eased to 3.62% and 30-year Treasury bonds traded at 3.74%.
U.S. Stock Movers
Salesforce Inc declined 9.5% to $145.11 after the company said co-CEO Bret Taylor has decided to step down from the company without giving any reasons.
This is the second time in four years that the co-CEO has resigned from the company.
The software developer said fiscal third quarter revenue increased 14% to $7.8 billion and earnings declined to $210 million from $468 million or 21 cents from 48 cents a year ago.
Victoria's Secret & Company fell 6.7% to $42.91 after the company reported weaker-than-anticipated quarterly results.
Revenue in the fiscal third quarter fell 8.5% to $1.32 billion and earnings plunged to $24.4 million from $75.2 million or 29 cents from 81 cents a year ago.
Five Below soared 16.6% to $187.48 after the deep discount retailer reported stronger-than-anticipated quarterly results.
Revenue in the fiscal third quarter increased 6.2% to $645 million but net income plunged to $16.2 million from $24.2 million or 29 cents from 43 cents a year ago.
Costco Wholesale Corporation declined 6.2% to $505.83 after the company reported weak November sales and e-commerce sales fell.
Costco Wholesale said November sales increased 5.7% to $19.1 billion but e-commerce sales dropped 10.1% from a year ago.
Euro zone jobless rate eased to a new record low of 6.5% in October from 6.6% in September, Eurostat said Thursday.
01 Dec, 2022
Powell Powers Rally On Wall Street, Techs Lead Gainers
Barry Adams
30 Nov, 2022
New York City
Market indexes jumped following morning doldrums after comments from the Fed Chairman indicated rate hike moderation may begin at the next policy meeting in December.
"Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt.
Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.
The time for moderating the pace of rate increases may come as soon as the December meeting," said Chairman Jay Powell in a speech Wednesday.
However, Powell cautioned that rates may have to go higher for a longer period than previously anticipated and stay higher to keep the rates sufficiently restrictive and bring down inflation to the target rate of 2%.
Investors reacted positively and bid up stocks with the technology sector leading the gainers.
The S&P 500 index soared more than 3% and ended 3-day decline and the Nasdaq Composite surged above 4% and reached a 2-month high.
Q3 GDP Growth Revised Higher
U.S. economic growth in the third quarter was revised higher to 2.9% from the previous estimate of 2.6%, the U.S. Bureau of Economic Analysis reported Wednesday.
The international trade contribution was revised higher to 2.93 percentage points from 2.77 percentage points in the advance estimate after exports rose and imports shrank more than estimated.
Consumer spending growth was revised higher to 1.7% from the previous estimate of 1.4%.
Job Openings Fall In October
The number of job openings fell by 353,000 to 10.3 million in October, JOLT report from the U.S. Bureau of Labor Statistics showed Wednesday.
The number of hires were nearly unchanged at 6.0 million and separations were stable at 5.7 million.
Of the total separations in October, 4.0 million employees quit and layoffs and discharges were 1.7 million.
Mortgage Applications Ease
Mortgage application volume declined 0.8% in the week ending on November 25 from the previous, the Mortgage Bankers Association reported Wednesday.
The seasonally adjusted data included the observance of Thanksgiving holiday and application volume plunged 33% on an unadjusted basis.
The Refinance Index decreased 13% from the previous week and was 86% lower than the same week a year ago.
Mortgage rates declined to 6.49% from 6.67% in the previous week for 30-year fixed loans with 20% down payment.
U.S. Markets Soar After Powell Comments
The S&P 500 index increased 3.1% to 4,080.11 and the Nasdaq Composite index increased 4.4% to 11,468.0.
Crude oil prices rose $2.0 to $81.19 a barrel and natural gas prices eased 34 cents to $6.88 a thermal unit.
The yield on 2-year U.S. Treasury notes rose to 4.49%, 10-year Treasury notes increased to 3.69% and 30-year U.S. Treasury bonds advanced to 3.81%.
U.S. Stock Movers
Petco Health & Wellness Company Inc soared 13.9% to $10.81 after the retailer of pet food and products reported better-than-expected quarterly results.
Same store sales in its latest quarter increased 4.1% and net revenue in the fiscal third quarter ending in October rose 4.0% to $1.5 billion.
Net income declined 62% to $19.9 million from $52.7 million and diluted earnings per share fell to 7 cents from 20 cents a year ago.
DoorDash Inc increased 7.7% to $57.43 after the company CEO Tony XU said it plans to layoff 1,250 corporate staff amid economic slowdown and the need to cut costs.
The company employed about 8,600 at the end of 2021 and about 50% of its staff has been with the company less than two years, according to the filings with the SEC.
Crowdstrike Holdings Inc plunged 16.6% to $115.16 after the cybersecurity company reported higher-than-expected sales and earnings in its latest quarter.
However, the company guided weaker-than-expected revenue growth.
Salesforce declined 7% after the company announced an unscheduled departure of co-CEO Bret Taylor.
The company also reported better-than-expected quarterly sales and earnings.
Costco Wholesale Corp fell 3% after the membership warehouse club said total sales in November increased 5.7% to $19.1 billion and e-commerce sales plunged 10.1% from a year ago.
Five Below Inc increased 8.4% to $174.11 in after-hours trading after the discount retailer reported revenue in its latest quarter increased 6.2% to $645 million.
Net income fell to $16.2 million from $24.2 million and diluted earnings per share fell to 29 cents from 43 cents a year ago.
Euro Zone Inflation Eases, German Jobless Rate Rises
European markets closed higher after inflation eased in the euro zone and higher closing in Asian markets.
Market sentiment was mildly positive and after the close, U.S. Federal Reserve Chairman said in a speech that future rate hikes may need to be moderated.
Chairman Powell added that the full impact of the recent rate hikes in interest rates are still to be felt.
Powell went on to add that it may make sense to moderate future rate increases as rates approach restrictive levels and we have a better understanding of the impact of higher rates on the economy.
"Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt.
Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.
The time for moderating the pace of rate increases may come as soon as the December meeting," said Chairman Jay Powell in a speech Wednesday.
However, Powell cautioned that rates may have to go higher for a longer period than previously anticipated and stay higher to keep the rates sufficiently restrictive and bring down inflation to the target rate of 2%.
Euro Zone Inflation Eases
Consumer price inflation in November declined to 10.0% in the euro zone from a record high 10.6% in October, Eurostat data showed Wednesday.
The headline inflation slowed for the first time since June 2021 and the core rate of inflation excluding food and energy was unchanged at 5.0%.
Energy price inflation in November, slowed toto 34.9% from 41.5% and food inflation continued to advance.
Food, alcohol and tobacco price increase accelerated to 13.6% after rising 13.1% a month ago.
France's Consumer Inflation Steady
Consumer prices in France increased 6.2% in November, matching the rate in October, the French statistical agency INSEE reported Wednesday.
Energy price inflation slowed to 18.5% from 19.1% and food price inflation increased to 12.2% from 12.0%.
German Jobless Rate Rises
Jobless rate rose to 5.6% in November from 5.5% in October, the Federal Labor Agency reported Wednesday.
The number of unemployed increased by 17,000 in November, following 9,000 in October.
A separate survey released by the German statistical office showed the seasonally adjusted jobless rate held steady at 3.0% in October.
The number of unemployed decreased by 1,700 to 1,33 million.
Natural Gas Prices Surge Again
European natural gas prices soared 10% as storage dipped in several countries and temperatures dipped and Norway and the UK face difficulties at gas terminals.
Brent crude oil increased $2.54 to $89.52 a barrel and Dutch TTF natural gas price soared 10.7% to 146.40 MWh.
Europe Market Indexes
The DAX index increased 0.3% to 14,397.04, the CAC-40 index advanced 1.04% to 6,738.55 and the FTSE 100 index gained 0.8% to 7,573.05.
The yield on 10-year German Bunds decreased to 1.89%, French bonds eased to 2.40%, the U.K. Gilt to 3.16% and Italian bonds to 3.87%.
The euro edged up to $1.04 and the British pound to $1.20.
Europe Stock Movers
AstraZeneca increased 1.2% to 11,194.0 after the pharmaceutical company said it sold its manufacturing site located in Wester Chester, Ohio to National Resilience, Inc..
Pennon Group dropped as much as 5% but managed to close down 0.5% to 934.74 after the waste and waste water management company reported first-half pre-tax profit declined.
SEGRO Plc declined 1.1% to 799.32 pence after the property investment and development company launched a unsecured 19-year bond offering for 350 million pounds.
BioNTech SE increased 1.1% to
Euro Zone Inflation Eases, German Jobless Rate Rises
Bridgette Randall
30 Nov, 2022
Frankfurt
European markets closed higher after inflation eased in the euro zone and higher closing in Asian markets.
Market sentiment was mildly positive and after the close, U.S. Federal Reserve Chairman said in a speech that future rate hikes may need to be moderated.
Chairman Powell added that the full impact of the recent rate hikes in interest rates are still to be felt.
Powell went on to add that it may make sense to moderate future rate increases as rates approach restrictive levels and we have a better understanding of the impact of higher rates on the economy.
"Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt.
Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.
The time for moderating the pace of rate increases may come as soon as the December meeting," said Chairman Jay Powell in a speech Wednesday.
However, Powell cautioned that rates may have to go higher for a longer period than previously anticipated and stay higher to keep the rates sufficiently restrictive and bring down inflation to the target rate of 2%.
Euro Zone Inflation Eases
Consumer price inflation in November declined to 10.0% in the euro zone from a record high 10.6% in October, Eurostat data showed Wednesday.
The headline inflation slowed for the first time since June 2021 and the core rate of inflation excluding food and energy was unchanged at 5.0%.
Energy price inflation in November, slowed toto 34.9% from 41.5% and food inflation continued to advance.
Food, alcohol and tobacco price increase accelerated to 13.6% after rising 13.1% a month ago.
France's Consumer Inflation Steady
Consumer prices in France increased 6.2% in November, matching the rate in October, the French statistical agency INSEE reported Wednesday.
Energy price inflation slowed to 18.5% from 19.1% and food price inflation increased to 12.2% from 12.0%.
German Jobless Rate Rises
Jobless rate rose to 5.6% in November from 5.5% in October, the Federal Labor Agency reported Wednesday.
The number of unemployed increased by 17,000 in November, following 9,000 in October.
A separate survey released by the German statistical office showed the seasonally adjusted jobless rate held steady at 3.0% in October.
The number of unemployed decreased by 1,700 to 1,33 million.
Natural Gas Prices Surge Again
European natural gas prices soared 10% as storage dipped in several countries and temperatures dipped and Norway and the UK face difficulties at gas terminals.
Brent crude oil increased $2.54 to $89.52 a barrel and Dutch TTF natural gas price soared 10.7% to 146.40 MWh.
Europe Market Indexes
The DAX index increased 0.3% to 14,397.04, the CAC-40 index advanced 1.04% to 6,738.55 and the FTSE 100 index gained 0.8% to 7,573.05.
The yield on 10-year German Bunds decreased to 1.89%, French bonds eased to 2.40%, the U.K. Gilt to 3.16% and Italian bonds to 3.87%.
The euro edged up to $1.04 and the British pound to $1.20.
Europe Stock Movers
AstraZeneca increased 1.2% to 11,194.0 after the pharmaceutical company said it sold its manufacturing site located in Wester Chester, Ohio to National Resilience, Inc..
Pennon Group dropped as much as 5% but managed to close down 0.5% to 934.74 after the waste and waste water management company reported first-half pre-tax profit declined.
SEGRO Plc declined 1.1% to 799.32 pence after the property investment and development company launched a unsecured 19-year bond offering for 350 million pounds.
BioNTech SE increased 1.1% to