Market Update
Market Rotation Gathers Pace On Wall Street as Rate Cut Expectations Build
Alexander Garcia
16 Jul, 2024
Miami
The market rally broadened beyond mega-cap stocks as investors jockeyed for positions ahead of the widely anticipated rate cut by the Federal Reserve.
Stock market indexes advanced as the market rally broadened to small- and mid-cap stocks, supported by positive earnings from Bank of America, Morgan Stanley, and UnitedHealth Group.
The S&P 500 index advanced 0.4%, and the Russell 2000 index jumped 2% and extended gains for the fifth session in a row. However, the tech-heavy Nasdaq eased, as investors lightened positions in mega-cap tech stocks.
Market sentiment was bolstered after retail sales in June were ahead of estimates, indicating consumers are still spending.
Retail sales strength and the expected rate cut in the next three months drove investors to consumer cyclical stocks, which rely on economic conditions, namely automobile, housing, retail, and entertainment stocks.
Retail and food services sales, not adjusted for inflation but adjusted for calendar, increased 2.3% in June, according to the monthly update released by the U.S. Census Bureau.
May retail sales were upwardly revised to a 2.6% annual pace, but the sales increase in June slowed to a three-month low.
Retail and food services sales were unchanged from the previous month at $704.3 billion; motor vehicles and parts sales eased to $130.7 billion from $133.3 billion; and gasoline station sales eased to $51.9 billion from $53.3 billion in the previous month, respectively.
Nonstore retail sales increased 1.9%, gasoline station sales decreased 3%, and motor vehicle and parts dealer sales fell 2% in June from the previous month.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.3% to 5,648.04, and the Nasdaq Composite fell 0.3% to 18,418.49.
The yield on 2-year Treasury notes edged lower to 4.47%, 10-year Treasury notes increased to 4.21%, and 30-year Treasury bonds edged higher to 4.42%.
WTI crude oil decreased $1.20 to $80.67 a barrel, and natural gas prices edged up 3 cents to $2.19 a thermal unit.
Gold increased by 20.69 to $2,442.47 an ounce, and silver rose 22 cents to $30.83.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.39.
U.S. Stock Movers
Bank of America increased 4.4% to $43.73 after the financial services company reported better-than-expected second-quarter results.
Revenue in the quarter increased 1% to $25.4 billion from $25.2 billion, net income declined to $6.9 billion from $7.4 billion, and diluted earnings per share eased to 83 cents from 88 cents a year ago.
Net interest income decreased 3% to $13.9 billion from $13.7 billion, and credit loss provision increased to $1.5 billion from $1.3 billion in the previous quarter and $1.1 billion in the period a year ago.
The average deposit balance in the quarter increased by 2%, or $35 billion, to $1.9 trillion, and the company returned to shareholders $5.4 billion, $3.5 billion in stock repurchases, and $1.9 billion in stock dividends.
Morgan Stanley advanced 1.1% to $106.65 after the investment bank reported better-than-expected quarterly results.
Revenue in the second quarter increased to $15.0 billion from $13.5 billion, net income rose to $3.1 billion from $2.2 billion, and diluted earnings per share advanced to $1.82 from $1.24 a year ago.
The wealth management unit's revenue increased to $6.8 billion from $6.7 billion, driven by a positive market environment and cumulative fee-based asset flows.
Institutional securities increased to $7.0 billion from $5.7 billion, driven by higher trading activities by clients, strong investment banking fees, and a rise in debt underwriting fees.
UnitedHealth Group rose 5.6% to $544.54 after the health insurance company reported better-than-expected quarterly results.
Revenue in the second quarter increased to $98.9 billion from $92.9 billion, net income fell to $4.4 billion from $5.5 billion, and diluted earnings per share advanced to $4.54 from $5.82 a year ago.
The company adjusted its full-year earnings per share outlook to between $15.95 and $16.40, reflecting the sale of its remaining stake in its South African unit. The company also completed the sale of its large Brazilian operations in the first quarter.
European Indexes Extended Weekly Losses, Eurozone Trade Balance Swung to Surplus
European markets extended losses this week as investors reviewed the latest batch of corporate quarterly results.
Benchmark indexes in Paris, London, and Frankfurt declined amid rate-part uncertainty, valuation worry, and a weakening macroeconomic backdrop.
Despite the domestic economic weakness, exports continue to remain a bright spot in the eurozone.
The international trade balance swung to a surplus of Є13.9 billion in May from a deficit of Є0.4 billion the corresponding month a year ago, Eurostat reported Tuesday.
Exports eased 0.5% to Є241.5 billion, and imports dropped 6.4% to Є227.6 billion.
Among leading trade partners, exports to the U.S. rose 6.8% to Є44 billion, but shipments to China decreased 5.3% to Є18.1 billion, to Switzerland fell 4.3% to Є16.3 billion, and to the UK decreased 0.5% to Є28.4 billion.
Italy's exports in May decreased by 1.7% to Є56.2 billion and imports slumped by 5% to Є49.7 billion, according to the latest data released by the statistical agency, ISTAT, on Tuesday.
The trade surplus in May expanded to Є6.4 billion from Є4.8 in the corresponding month a year ago.
Italy's trade surplus has been expanding in the last several months after the import price of commodities eased following Russia's invasion of Ukraine.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,518.03; the CAC-40 index fell by 0.7% to 7,580.03; and the FTSE 100 index rose by 0.2% to 8,164.90.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.36 Swiss cents.
Brent crude decreased $0.96 to $83.89 a barrel, and the Dutch TTF natural gas rose by €1.11 to €32.78 per MWh.
Europe Stock Movers
Hugo Boss decreased 8.4% to €37.0, and the German fashion company lowered its annual revenue outlook, citing a China-led slowdown.
The apparel retailer lowered its full-year revenue outlook to 4.35 billion from the previous estimate of 4.45 billion.
The company said second-quarter revenue declined 1% to $1.02 billion, driven by a fall in sales in Asia and Europe.
Richemont increased 0.6% to CHF 137.90, and the parent company of Cartier and Mont Blanc reported a marginal increase in sales in the fiscal first quarter ending in June.
Sales in constant currency rose 1% but declined 1% in nominal terms to Є5.27 billion from Є5.32 billion a year earlier.
Challenging macroeconomic conditions slowed down the growth from 19% to 14% in the corresponding period a year ago.
Sales in Japan surged 59%, in Europe advanced 5%, in the Americas gained 10%, but plunged 27% in Greater China.
SCOR SE dropped 25.4% to €19.43 after the French insurance company said its L&H insurance service unit would deliver a loss of €0.4 billion in the second quarter.
Rio Tinto declined 5.4% to 5,013.0 pence after the iron ore mining company reported second-quarter shipments falling short of estimates.
Glencore, Anglo American, and Antofagasta declined between 1% and 2% after copper prices eased for the second day in a row after China reported mixed economic data on Monday.
Ocado jumped 9.8% to 373.90 pence after the online retailer raised the profit outlook for its technology unit.
B&M European Value Retail SA increased 4.4% to 466.40 pence after the discount retailer reported a 2.4% increase in sales in the first quarter and signaled a positive outlook for the full year.
Japan Indexes Trim Morning Gains as the Yen Wobbles
Stock market indexes dissipated morning gains after investors returned from a three-day holiday.
The Nikkei 225 and the broader market index Topix cut morning gains as investors bid up stocks following the overnight gains in New York.
Market indexes have struggled to resume their advance over the last month amid rate path uncertainty and the Bank of Japan's reluctance to increase rates and shrink the yawning yield gap between the U.S. and Japanese bonds.
The lack of urgency on the part of the Bank of Japan's policymakers is weighing on the yen as domestic investors shift more attention to higher-yielding bonds and securities overseas.
The Bank of Japan is expected to announce its monthly purchase plan to trim the current $6 trillion bond purchase, and speculations are high that the central bank will taper the purchase to as low as 3 trillion yen.
The twin uncertainty of the rate path and the government bond purchase plans continue to drag down the yen, and currency traders are preparing for the yen to drop as low as 170 before it finds its stable bottom.
The Japanese yen rebounded to 158.64 against the U.S. dollar after the currency declined more than 2% in the previous week.
Tech stocks were among the leading winners following the gains in the sector in New York, and artificial intelligence-linked stocks led the gainers in Tokyo.
Japan Stock Movers
The Nikkei 225 stock average gained 0.2% to 41,277.52, and the Topix index added 0.4% to 2,908.24.
Softbank Group increased 0.2% to ¥11,410.0, and the venture capital fund led a $300 million investment round for the start-up Skild AI, which focuses on the core processes for generative AI.
Financial stocks were among the leading gainers in Tokyo trading on Tuesday.
Mitsubishi UFJ, Sumitomo Mitsui, and Mizhuo Financial advanced between 1% and 2%.
Vehicle exporters were also in focus after the persistent weakness in the yen, which is expected to boost the profits of automakers.
Honda Motor, Toyota Motor, and Nissan Motor gained between 1% and 2%.
Taiyo Yuden jumped 9.4% to ¥5,037.0, and the electronics materials maker extended gains for the second week in a row amid expectations of higher sales in the current financial year.
Murata Manufacturing, Kawasaki Heavy Industry (IHI), Alps Alpine, Fanuc, and TDK gained between 4% and 6%.
Chinese Companies Line Up to Sell U.S. Dollar Bonds as Stock Indexes Search for Lower Levels
Amid a growing cautious outlook for the second half, investors dialed back their economic growth outlook after a string of weak economic data releases on Monday.
The Hang Seng index fell as much as 1.5%, and the CSI 300 index, tracking larger stocks on the mainland, edged slightly lower and extended losses for the second session in a row.
Investors continued to lighten their holdings after China's second quarter economic growth, retail sales, and fixed-asset investment fell short of expectations.
Policymakers in Beijing are struggling to develop a plan to rebuild consumer confidence and financial market-supportive measures amid falling consumer demand and a multi-year decline in broader market indexes.
The Chinese government has limited financial flexibility as the country's debt hovers near 300% of GDP, and banks are struggling to account for losses linked to the residential property market.
The Chinese Communist Party's third plenum is expected to release its broad outline of macroeconomic plans to bolster economic growth at the end of a four-day meeting on Thursday.
However, investors have lowered their expectations of deep economic reform, including local and regional governments' huge losses that are not reflected in their annual finances.
Meanwhile, private businesses continue to keep foreign earnings overseas amid widespread belief that the People's Bank of China is not in a position to sustain the current level of the yuan as economic growth continues to slow to 2% annual long-term growth.
China Stock Movers
The Hang Seng index decreased 1.4% to 17,770.46, and the CSI 300 index added 0.1% to 3,480.74.
Tech stocks were among the leading decliners in Tuesday's trading.
Alibaba Group declined 1.4% to HK $75.50, Baidu fell 3.6% to HK $90.60, Tencent Holdings decreased 2.2% to HK $381.80, and Meituan eased 1% to HK $118.0.
Ping An Insurance Group declined 5.2% to HK $34.20, and the insurance giant announced its plan to sell $3.5 billion of convertible bonds.
Several Chinese companies prepared to float U.S. dollar bonds amid growing expectations that U.S. interest rates are likely to ease in the coming months after the latest comments from Federal Reserve Chair Jerome Powell supported the possibility of a rate cut as early as September.
China Cinda, SM Investments, and Mitsubishi HC Finance are looking to sell bonds denominated in the U.S. dollar as early as in the third quarter.
U.S. Movers: Bank of America, Morgan Stanley, UnitedHealth Group
Scott Peters
16 Jul, 2024
New York City
Bank of America increased 4.4% to $43.73 after the financial services company reported better-than-expected second-quarter results.
Revenue in the quarter increased 1% to $25.4 billion from $25.2 billion, net income declined to $6.9 billion from $7.4 billion, and diluted earnings per share eased to 83 cents from 88 cents a year ago.
Net interest income decreased 3% to $13.9 billion from $13.7 billion, and credit loss provision increased to $1.5 billion from $1.3 billion in the previous quarter and $1.1 billion in the period a year ago.
The average deposit balance in the quarter increased by 2%, or $35 billion, to $1.9 trillion, and the company returned to shareholders $5.4 billion, $3.5 billion in stock repurchases, and $1.9 billion in stock dividends.
Morgan Stanley advanced 1.1% to $106.65 after the investment bank reported better-than-expected quarterly results.
Revenue in the second quarter increased to $15.0 billion from $13.5 billion, net income rose to $3.1 billion from $2.2 billion, and diluted earnings per share advanced to $1.82 from $1.24 a year ago.
The wealth management unit's revenue increased to $6.8 billion from $6.7 billion, driven by a positive market environment and cumulative fee-based asset flows.
Institutional securities increased to $7.0 billion from $5.7 billion, driven by higher trading activities by clients, strong investment banking fees, and a rise in debt underwriting fees.
UnitedHealth Group rose 5.6% to $544.54 after the health insurance company reported better-than-expected quarterly results.
Revenue in the second quarter increased to $98.9 billion from $92.9 billion, net income fell to $4.4 billion from $5.5 billion, and diluted earnings per share advanced to $4.54 from $5.82 a year ago.
The company adjusted its full-year earnings per share outlook to between $15.95 and $16.40, reflecting the sale of its remaining stake in its South African unit. The company also completed the sale of its large Brazilian operations in the first quarter.
U.S. Market Rally Broadens Beyond Mega-cap Tech Stocks, Retail Sale Beat Expectations
Barry Adams
16 Jul, 2024
New York City
Stock market indexes advanced as the market rally broadened to small- and mid-cap stocks amid positive earnings from Bank of America, Morgan Stanley, and UnitedHealth Group.
The S&P 500 index and the Nasdaq Composite advanced a fraction, and the Russell 2000 index jumped 1% and extended gains for the fifth session in a row.
Market sentiment was bolstered after retail sales in June were ahead of estimates, indicating consumers are still spending.
Retail and food services sales, not adjusted for inflation but adjusted for calendar, increased 2.3% in June, and sales increased slowed for the third month in a row, according to the monthly update released by the U.S. Census Bureau.
May retail sales were upwardly revised to 2.6%.
Retail and food services sales were unchanged from the previous month at $704.3 billion, motor vehicles and parts sales eased to $130.7 billion from $133.3 billion, and gasoline station sales eased to $51.9 billion from $53.3 billion in the previous month, respectively.
Nonstore retail sales increased 1.9%, gasoline station sales decreased 3%, and motor vehicle and parts dealer sales fell 2% in June from the previous month.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to 5,651.06, and the Nasdaq Composite rose 0.2% to 18,510.50.
The yield on 2-year Treasury notes edged lower to 4.47%, 10-year Treasury notes increased to 4.21%, and 30-year Treasury bonds edged higher to 4.42%.
WTI crude oil decreased $1.20 to $80.67 a barrel, and natural gas prices edged up 3 cents to $2.19 a thermal unit.
Gold increased by 20.69 to $2,442.47 an ounce, and silver rose 22 cents to $30.83.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.39.
U.S. Stock Movers
Bank of America increased 4.4% to $43.73 after the financial services company reported better-than-expected second-quarter results.
Revenue in the quarter increased 1% to $25.4 billion from $25.2 billion, net income declined to $6.9 billion from $7.4 billion, and diluted earnings per share eased to 83 cents from 88 cents a year ago.
Net interest income decreased 3% to $13.9 billion from $13.7 billion, and credit loss provision increased to $1.5 billion from $1.3 billion in the previous quarter and $1.1 billion in the period a year ago.
The average deposit balance in the quarter increased by 2%, or $35 billion, to $1.9 trillion, and the company returned to shareholders $5.4 billion, $3.5 billion in stock repurchases, and $1.9 billion in stock dividends.
Morgan Stanley advanced 1.1% to $106.65 after the investment bank reported better-than-expected quarterly results.
Revenue in the second quarter increased to $15.0 billion from $13.5 billion, net income rose to $3.1 billion from $2.2 billion, and diluted earnings per share advanced to $1.82 from $1.24 a year ago.
The wealth management unit's revenue increased to $6.8 billion from $6.7 billion, driven by a positive market environment and cumulative fee-based asset flows.
Institutional securities increased to $7.0 billion from $5.7 billion, driven by higher trading activities by clients, strong investment banking fees, and a rise in debt underwriting fees.
UnitedHealth Group rose 5.6% to $544.54 after the health insurance company reported better-than-expected quarterly results.
Revenue in the second quarter increased to $98.9 billion from $92.9 billion, net income fell to $4.4 billion from $5.5 billion, and diluted earnings per share advanced to $4.54 from $5.82 a year ago.
The company adjusted its full-year earnings per share outlook to between $15.95 and $16.40, reflecting the sale of its remaining stake in its South African unit. The company also completed the sale of its large Brazilian operations in the first quarter.
Europe Movers: B&M Retail, Hugo Boss, Ocado, SCOR, Richemont, Rio Tinto
Inga Muller
16 Jul, 2024
Frankfurt
European markets turned lower amid rate jitters and macroeconomic anxieties as investors reviewed the latest batch of earnings.
The Euro Area trade balance swung to a surplus in May after imports fell faster than exports.
The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
Hugo Boss decreased 8.4% to €37.0, and the German fashion company lowered its annual revenue outlook, citing a China-led slowdown.
The apparel retailer lowered its full-year revenue outlook to 4.35 billion from the previous estimate of 4.45 billion.
The company said second-quarter revenue declined 1% to $1.02 billion, driven by a fall in sales in Asia and Europe.
Richemont increased 0.6% to CHF 137.90, and the parent company of Cartier and Montblanc reported a marginal increase in sales in the fiscal first quarter ending in June.
Sales in constant currency rose 1% but declined 1% in nominal terms to Є5.27 billion from Є5.32 billion a year earlier.
Challenging macroeconomic conditions slowed down the growth from 19% to 14% in the corresponding period a year ago.
Sales in Japan surged 59%, in Europe advanced 5%, in the Americas gained 10%, but plunged 27% in Greater China.
SCOR SE dropped 25.4% to €19.43 after the French insurance company said its L&H insurance service unit would deliver a loss of €0.4 billion in the second quarter.
Rio Tinto declined 5.4% to 5,013.0 pence after the iron ore mining company reported second-quarter shipments falling short of estimates.
Glencore, Anglo American, and Antofagasta declined between 1% and 2% after copper prices eased for the second day in a row after China reported mixed economic data on Monday.
Ocado jumped 9.8% to 373.90 pence after the online retailer raised the profit outlook for its technology unit.
B&M European Value Retail SA increased 4.4% to 466.40 pence after the discount retailer reported a 2.4% increase in sales in the first quarter and signaled a positive outlook for the full year.
European Stock Indexes Extended Weekly Losses, Eurozone Trade Balance Swung to Surplus
Bridgette Randall
16 Jul, 2024
London
European markets extended losses this week as investors reviewed the latest batch of corporate quarterly results.
Benchmark indexes in Paris, London, and Frankfurt declined amid rate-part uncertainty, valuation worry, and a weakening macroeconomic backdrop.
Despite the domestic economic weakness, exports continue to remain a bright spot in the eurozone.
The international trade balance swung to a surplus of Є13.9 billion in May from a deficit of Є0.4 billion in the corresponding month a year ago, Eurostat reported Tuesday.
Exports eased 0.5% to Є241.5 billion, and imports dropped 6.4% to Є227.6 billion.
Among leading trade partners, exports to the U.S. rose 6.8% to Є44 billion, but shipments to China decreased 5.3% to Є18.1 billion, to Switzerland fell 4.3% to Є16.3 billion, and to the UK decreased 0.5% to Є28.4 billion.
Italy's exports in May decreased by 1.7% to Є56.2 billion and imports slumped by 5% to Є49.7 billion, according to the latest data released by the statistical agency, ISTAT, on Tuesday.
The trade surplus in May expanded to Є6.4 billion from Є4.8 in the corresponding month a year ago.
Italy's trade surplus has been expanding in the last several months after the import price of commodities eased following Russia's invasion of Ukraine.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.36 Swiss cents.
Brent crude decreased $0.14 to $84.89 a barrel, and the Dutch TTF natural gas rose by €0.39 to €31.18 per MWh.
Europe Stock Movers
Hugo Boss decreased 8.4% to €37.0, and the German fashion company lowered its annual revenue outlook, citing a China-led slowdown.
The apparel retailer lowered its full-year revenue outlook to 4.35 billion from the previous estimate of 4.45 billion.
The company said second-quarter revenue declined 1% to $1.02 billion, driven by a fall in sales in Asia and Europe.
Richemont increased 0.6% to CHF 137.90, and the parent company of Cartier and Mont Blanc reported a marginal increase in sales in the fiscal first quarter ending in June.
Sales in constant currency rose 1% but declined 1% in nominal terms to Є5.27 billion from Є5.32 billion a year earlier.
Challenging macroeconomic conditions slowed down the growth from 19% to 14% in the corresponding period a year ago.
Sales in Japan surged 59%, in Europe advanced 5%, in the Americas gained 10%, but plunged 27% in Greater China.
SCOR SE dropped 25.4% to €19.43 after the French insurance company said its L&H insurance service unit would deliver a loss of €0.4 billion in the second quarter.
Rio Tinto declined 5.4% to 5,013.0 pence after the iron ore mining company reported second-quarter shipments falling short of estimates.
Glencore, Anglo American, and Antofagasta declined between 1% and 2% after copper prices eased for the second day in a row after China reported mixed economic data on Monday.
Ocado jumped 9.8% to 373.90 pence after the online retailer raised the profit outlook for its technology unit.
B&M European Value Retail SA increased 4.4% to 466.40 pence after the discount retailer reported a 2.4% increase in sales in the first quarter and signaled a positive outlook for the full year.
Japan Indexes Trim Morning Gains as the Yen Wobbles
Akira Ito
16 Jul, 2024
Tokyo
Stock market indexes dissipated morning gains after investors returned from a three-day holiday.
The Nikkei 225 and the broader market index Topix cut morning gains as investors bid up stocks following the overnight gains in New York.
Market indexes have struggled to resume their advance over the last month amid rate path uncertainty and the Bank of Japan's reluctance to increase rates and shrink the yawning yield gap between the U.S. and Japanese bonds.
The lack of urgency on the part of the Bank of Japan's policymakers is weighing on the yen as domestic investors shift more attention to higher-yielding bonds and securities overseas.
The Bank of Japan is expected to announce its monthly purchase plan to trim the current $6 trillion bond purchase, and speculations are high that the central bank will taper the purchase to as low as 3 trillion yen.
The twin uncertainty of the rate path and the government bond purchase plans continue to drag down the yen, and currency traders are preparing for the yen to drop as low as 170 before it finds its stable bottom.
The Japanese yen rebounded to 158.64 against the U.S. dollar after the currency declined more than 2% in the previous week.
Tech stocks were among the leading winners following the gains in the sector in New York, and artificial intelligence-linked stocks led the gainers in Tokyo.
Japan Stock Movers
The Nikkei 225 stock average gained 0.2% to 41,277.52, and the Topix index added 0.4% to 2,908.24.
Softbank Group increased 0.2% to ¥11,410.0, and the venture capital fund led a $300 million investment round for the start-up Skild AI, which focuses on the core processes for generative AI.
Financial stocks were among the leading gainers in Tokyo trading on Tuesday.
Mitsubishi UFJ, Sumitomo Mitsui, and Mizhuo Financial advanced between 1% and 2%.
Vehicle exporters were also in focus after the persistent weakness in the yen, which is expected to boost the profits of automakers.
Honda Motor, Toyota Motor, and Nissan Motor gained between 1% and 2%.
Taiyo Yuden jumped 9.4% to ¥5,037.0, and the electronics materials maker extended gains for the second week in a row amid expectations of higher sales in the current financial year.
Murata Manufacturing, Kawasaki Heavy Industry (IHI), Alps Alpine, Fanuc, and TDK gained between 4% and 6%.
Chinese Companies Line Up to Sell U.S. Dollar Bonds as Stock Indexes Search for Lower Levels
Li Chen
16 Jul, 2024
Hong Kong
Amid a growing cautious outlook for the second half, investors dialed back their economic growth outlook after a string of weak economic data releases on Monday.
The Hang Seng index fell as much as 1.5%, and the CSI 300 index, tracking larger stocks on the mainland, edged slightly lower and extended losses for the second session in a row.
Investors continued to lighten their holdings after China's second quarter economic growth, retail sales, and fixed-asset investment fell short of expectations.
Policymakers in Beijing are struggling to develop a plan to rebuild consumer confidence and financial market-supportive measures amid falling consumer demand and a multi-year decline in broader market indexes.
The Chinese government has limited financial flexibility as the country's debt hovers near 300% of GDP, and banks are struggling to account for losses linked to the residential property market.
The Chinese Communist Party's third plenum is expected to release its broad outline of macroeconomic plans to bolster economic growth at the end of a four-day meeting on Thursday.
However, investors have lowered their expectations of deep economic reform, including local and regional governments' huge losses that are not reflected in their annual finances.
Meanwhile, private businesses continue to keep foreign earnings overseas amid widespread belief that the People's Bank of China is not in a position to sustain the current level of the yuan as economic growth continues to slow to 2% annual long-term growth.
China Stock Movers
The Hang Seng index decreased 1.4% to 17,770.46, and the CSI 300 index added 0.1% to 3,480.74.
Tech stocks were among the leading decliners in Tuesday's trading.
Alibaba Group declined 1.4% to HK $75.50, Baidu fell 3.6% to HK $90.60, Tencent Holdings decreased 2.2% to HK $381.80, and Meituan eased 1% to HK $118.0.
Ping An Insurance Group declined 5.2% to HK $34.20, and the insurance giant announced its plan to sell $3.5 billion of convertible bonds.
Several Chinese companies prepared to float U.S. dollar bonds amid growing expectations that U.S. interest rates are likely to ease in the coming months after the latest comments from Federal Reserve Chair Jerome Powell supported the possibility of a rate cut as early as September.
China Cinda, SM Investments, and Mitsubishi HC Finance are looking to sell bonds denominated in the U.S. dollar as early as in the third quarter.
India Movers: Angel One, Asian Hotels North, Hatsun Agro, HUL, Jio Financial, Tata Steel, Vedanta, Zee Entertainment
Arun Goswami
16 Jul, 2024
Mumbai
India indexes advanced as investors reacted to the latest batch of earnings. Wholesale price inflation accelerated in June from May amid sustained food price inflation.
The Sensex index increased by 0.01% to 80,736.20, and the Nifty index rose by 0.1% to 24,614.85.
On the Mumbai stock exchange, 111 stocks traded at their 52-week highs, and 9 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 6.97%, and the Indian rupee edged higher to ₹83.58 against the U.S. dollar.
Zee Entertainment gained 0.8% to ₹161.35, and the embattled media company's shareholders approved the company's plans to raise up to ₹2,000 crore through the sale of shares.
Asian Hotels (North) Ltd. increased 5% to ₹170.33, and the company's chief executive and managing director, Amritesh Jatia, resigned effective July 15.
Hatsun Agro Products jumped 6.7% to ₹1,267.0 after the dairy operator and a distributor reported a surge in revenue and earnings in the June quarter and declared a cash dividend of ₹6 per share.
Revenue increased by 10.6% to ₹2,375 crore, and net income soared 63% to ₹130.5 crore from a year earlier, respectively.
Angel One decreased 0.5% to ₹2,268.70 after the financial services company reported a double-digit increase in revenue and earnings in the June quarter.
Revenue increased 74% to ₹1,406 crore, and net income soared 33% to ₹292.7 crore from a year earlier, respectively.
Vedanta increased 0.6% to ₹462.0, and the company launched its secondary offering to raise with a floor price of ₹461.25 per share.
Hindustan Unilever increased 0.8% to ₹2,641.0, and the company's board approved the sale of its Pureit, a water purification unit, to AO Smith India Water Products for 601 crore, or $72 million.
Jio Financial Services declined 2.1% to ₹348.25, and the company reported weaker-than-expected June quarter results.
Revenue edged slightly lower to 417.8 crore from 418.1 crore, and net income decreased 0.6% to 312.6 crore from 310.6 crore in the previous quarter, respectively.
Tata Steel increased 0.9% to ₹168.36, and the company said its UK-based operation will continue with its plans to transition to a new electric arc furnace, despite resistance from the labor union.
U.S. Market Rally Enters Seventh Week, China Economic Data Confirms Slowdown
Alexander Garcia
15 Jul, 2024
Miami
Market indexes extended gains for the seventh week in a row as investors geared for the next batch of earnings this week.
The S&P 500 index and the Nasdaq Composite advanced on Monday as the earnings season gathered momentum, and investors are hoping that a strong economic backdrop will provide support for earnings momentum.
Goldman Sachs reported better-than-expected quarterly results, and BlackRock said assets under management advanced in the second quarter, boosting market sentiment.
This week, investors are looking forward to quarterly results from more than 700 U.S. companies, including Charles Schwab, United Health, American Express, Blackstone, Novartis, and J&J.
The Russell 2000 index gained for the fourth day in a row as investors rotated out of large-cap tech stocks to smaller companies.
The small-cap focused stocks advanced 2% and extended this year's gain to 8.9%, still lagging the 19% increase in the S&P 500 index.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.6% to 5,650.28, and the Nasdaq Composite rose 0.8% to 18,540.77.
The yield on 2-year Treasury notes edged lower to 4.497, 10-year Treasury notes increased to 4.22%, and 30-year Treasury bonds edged higher to 4.47%.
WTI crude oil decreased $0.12 to $82.08 a barrel, and natural gas prices edged down 10 cents to $2.23 a thermal unit.
Gold increased by $22.38 to $2,433.64 an ounce, and silver rose 15 cents to $30.92.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.10.
U.S. Stock Movers
Goldman Sachs increased by 0.7% to $483.0 after the financial services company reported better-than-expected revenue and earnings in the second quarter.
The company reported revenue of $12.73 billion and pre-tax earnings per share of $8.62.
BlackRock declined 0.5% to $824.27, and the exchange-traded funds manager reported quarterly results that surpassed market expectations.
Super Micro increased 3.2% to $939.0, and the company is scheduled to be included in the Nasdaq 100 index before July 22.
Trump Media & Technology soared 52% to $47.23 after Sunday's assassination attempt on former president Donald Trump at a political rally in Pennsylvania.
Trump was released from the hospital, and the gunman was killed by the security service, but the gunman managed to fire multiple shots before he was killed by a secret service agent.
Alphabet declined 0.2% to $186.31, and the parent company of Google is in advanced talks to acquire cloud company Wiz for as much as $23 billion.
The news was first reported by the Wall Street Journal.
European Markets Turned Lower, Industrial Output Eased In May
European markets halted a three-day rally as investors reviewed global developments.
Benchmark indexes in Paris, London, and Frankfurt declined around 0.5% after China reported mixed economic data, and U.S. election uncertainty reached a new high after an assassination attempt on former president Donald Trump.
Closer to home, industrial output fell less than expected in May, Eurostat reported Monday.
Industrial output declined by 0.6% from the previous month in May, following a flat reading in the previous month.
On an annual basis, output decreased 2.9% in May from an upwardly revised 3.1% in April.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.36 Swiss cents.
Brent crude decreased $0.14 to $84.89 a barrel, and the Dutch TTF natural gas rose by €0.39 to €31.18 per MWh.
Europe Stock Movers
The Swatch Group dropped 10.9% to CHF 169.60 after the Swiss watch group reported a sharp decline in sales and earnings in the first half due to a slowdown in China.
Burberry Group plunged 16.9% to 738.60 pence after the UK-based luxury group issued a profit warning and rehired its chief executive.
Luxury stocks in Paris declined after China reported mixed economic data and slower-than-estimated second-quarter economic growth of 4.7%.
LVMH, Kering, and Hermes declined between 2% and 4%.
Ericsson AB decreased 1.1% to SEK 70.10, and the Swedish telecom equipment maker signed a cross-licensing patent agreement with the China-based mobile handset maker Oppo.
Brunner Investment Trust increased 1.1% to 1,390.0 pence after the investment fund reported an increase in profit in the first half.
ME Group International PLC gained 0.5% to 182.68 pence, and the UK-based vending machine operator reported strong results in the six months ending in April.
BayWa plunged 33% to €15.18 after the Germany-based agriculture nutrition company said that the financially challenged company is seeking a restructuring opinion.
CompuGroup Medical decreased 0.1% to €15.97 after the German medical software company reported its second quarter results.
Japanese Market Indexes Expected To Trade Volatile Tracking Yen Turbulence
Benchmark indexes in Tokyo dropped sharply in Friday's trading after the yen jumped more than 3%.
The Nikkei 225 stock average and the Topix declined between 2% and 1%, respectively.
Financial markets are closed on Monday in Japan for a public holiday.
The suspected market intervention by the Bank of Japan and the ministry of finance lifted the battered yen to 157.85 against the U.S. dollar for the second session in a row.
Moreover, the Bank of Japan stepped up pressure on currency traders and conducted exchange rate verification for the euro-yen trade.
The Bank of Japan has been struggling to balance its government bond purchase plan while keeping the yen from falling rapidly.
However, mixed messages from the Bank of Japan policymakers exacerbated the yen weakness due to the wide yield differential between Japanese and U.S. government bonds.
Tech stocks were among the leading decliners in Friday's trading, following the weakness in the sector after investors rotated out to smaller company stocks in New York.
China Stocks Declined After Weak Economic Growth and Retail Sales Data
Amid cautious market sentiment, indexes in Shanghai and Hong Kong traded down after weaker-than-expected economic data.
The Hang Seng index plunged as much as 1.5%, and the CSI 300 index traded volatile but stayed closed to the flatline.
GDP growth in the second quarter fell short of market expectations, and a significant increase in retail sales in June showed persistent consumer demand weakness.
China's economy expanded at an annual pace of 4.7% in the second quarter, falling short of the market estimate of an increase of 5.1%, the National Bureau of Statistics reported Monday.
Growth in the second quarter slowed to 0.7% from the increase of 1.6% in the first quarter, due to persistent demand weakness amid a protracted property market slump.
In separate reports, the statistical agency said retail sales in June from a year ago rose 2.0%, slower than 3.7% in May, and industrial output growth slowed to an annual pace of 5.3% from 5.6% in May.
Property market weakness continues to hamper China's overall fixed-asset investment growth.
Fixed-asset investment increased 3.9% in the five-month period to May from a 4% annual pace in the period a year ago.
Property investment declined 10.1% in June, matching the rate in the previous month.
The weakness in the property market, compounded by the slowdown in retail sales and fixed-asset investment, is likely to keep the second-largest economy's growth in check and may miss the 5% annual growth target set by the government.
Moreover, China's urban jobless rate held steady at 5% in June, matching the rate in the previous month.
China's economic data, especially the job market update, are widely viewed with skepticism because local governments have fudged economic growth estimates for years.
Aggregate new home prices in the 70 largest cities in China declined 0.7% from the previous month in June and slowed to 0.71% in May, the National Bureau of Statistics reported Monday.
New home prices declined 4.5% from a year ago in June, accelerating from a 3.9% decline in the previous month.
Moreover, property prices declined for the 12th month in a row and dropped at the fastest pace since June 2015.
Except for Shanghai, prices declined in all major cities across China.
However, existing home prices declined at a slower pace of 0.9% in June from the 1% fall in May, a separate report from the statistical agency showed.
China Stock Movers
The Hang Seng index decreased 1.5% to 18,021.19, and the CSI 300 index added 0.1% to 3,475.09.
Tech stocks led the decline in Hong Kong trading, and financial, industrial, and travel-related stocks were also among the decliners.
Baidu decreased 6% to HK $93.65, Tencent Holdings dropped 2% to HK $389.20, and Meituan fell 2.4% to HK $118.90.
Property stocks were also under pressure after property prices continued to decline in June and fixed-asset investment in the sector fell in June.
China Vanke decreased 2.2% to HK $4.66, China Resources Land declined 3.2% to HK $27.05, and Evergrande Property Services Group fell 4.2% to HK $0.68.
U.S. Movers: Alphabet, BlackRock, Goldman Sachs, Super Micro, Trump Media
Scott Peters
15 Jul, 2024
New York City
Goldman Sachs increased by 0.7% to $483.0 after the financial services company reported better-than-expected revenue and earnings in the second quarter.
The company reported revenue of $12.73 billion and pre-tax earnings per share of $8.62.
BlackRock declined 0.5% to $824.27, and the exchange-traded funds manager reported quarterly results that surpassed market expectations.
Super Micro increased 3.2% to $939.0, and the company is scheduled to be included in the Nasdaq 100 index before July 22.
Trump Media & Technology soared 52% to $47.23 after Sunday's assassination attempt on former president Donald Trump at a political rally in Pennsylvania.
Trump was released from the hospital after a few hours, and the gunman was killed by the security service, but the gunman managed to fire multiple shots before he was killed by a secret service agent.
Alphabet declined 0.2% to $186.31, and the parent company of Google is in advanced talks to acquire cloud company Wiz for as much as $23 billion.
The news was first reported by the Wall Street Journal.
U.S. Major Averages Advanced as Earnings Roll In
Barry Adams
15 Jul, 2024
New York City
Benchmark indexes on Wall Street advanced as investors looked forward to a flood of earnings this week.
The S&P 500 index and the Nasdaq Composite advanced in early trading on Monday as the earnings season picked up pace this week.
Market sentiment was boosted after Goldman Sachs reported better-than-expected earnings and BlackRock said assets under management advanced in the second quarter.
This week, investors are looking forward to quarterly results from more than 700 companies, including Charles Schwab, United Health, American Express, Blackstone, Novartis, and J&J.
The Russell 2000 index gained for the fourth day in a row as investors rotated out of large-cap tech stocks to smaller companies.
The small-cap focused stocks advanced 1% and extended this year's gain to 7.8%, still lagging the 19% increase in the S&P 500 index.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to 5,643.08, and the Nasdaq Composite rose 0.8% to 18,539.12.
The yield on 2-year Treasury notes edged lower to 4.49%, 10-year Treasury notes increased to 4.22%, and 30-year Treasury bonds edged higher to 4.47%.
WTI crude oil decreased $0.03 to $82.20 a barrel, and natural gas prices edged down 10 cents to $2.22 a thermal unit.
Gold increased by $4.90 to $2,415.07 an ounce, and silver fell 15 cents to $30.62.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.15.
U.S. Stock Movers
Goldman Sachs increased by 0.7% to $483.0 after the financial services company reported better-than-expected revenue and earnings in the second quarter.
The company reported revenue of $12.73 billion and pre-tax earnings per share of $8.62.
BlackRock declined 0.5% to $824.27, and the exchange-traded funds manager reported quarterly results that surpassed market expectations.
Super Micro increased 3.2% to $939.0, and the company is scheduled to be included in the Nasdaq 100 index before July 22.
Trump Media & Technology soared 52% to $47.23 after Sunday's assassination attempt on former president Donald Trump at a political rally in Pennsylvania.
Trump was released from the hospital, and the gunman was killed by the security service, but the gunman managed to fire multiple shots before he was killed by a secret service agent.
Alphabet declined 0.2% to $186.31, and the parent company of Google is in advanced talks to acquire cloud company Wiz for as much as $23 billion.
The news was first reported by the Wall Street Journal.
Europe Movers: BayWa, Burberry Group, Brunner Trust, CompuGroup, Ericsson, Luxury Stocks, ME Group, Swatch Group
Inga Muller
15 Jul, 2024
Frankfurt
European markets halted a 3-day rally, and luxury stocks declined after China reported mixed economic data.
Industrial output in the eurozone declined less than expected in May.
The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
The Swatch Group dropped 10.9% to CHF 169.60 after the Swiss watch group reported a sharp decline in sales and earnings in the first half due to a slowdown in China.
Burberry Group plunged 16.9% to 738.60 pence after the UK-based luxury group issued a profit warning and rehired its chief executive.
Luxury stocks in Paris declined after China reported mixed economic data and slower-than-estimated second-quarter economic growth of 4.7%.
LVMH, Kering, and Hermes declined between 2% and 4%.
Ericsson AB decreased 1.1% to SEK 70.10, and the Swedish telecom equipment maker signed a cross-licensing patent agreement with the China-based mobile handset maker Oppo.
Brunner Investment Trust increased 1.1% to 1,390.0 pence after the investment fund reported an increase in profit in the first half.
ME Group International PLC gained 0.5% to 182.68 pence, and the UK-based vending machine operator reported strong results in the six months ending in April.
BayWa plunged 33% to €15.18 after the Germany-based agriculture nutrition company said that the financially challenged company is seeking a restructuring opinion.
CompuGroup Medical decreased 0.1% to €15.97 after the German medical software company reported its second quarter results.
European Markets Turned Lower, Industrial Output Eased In May
Bridgette Randall
15 Jul, 2024
London
European markets halted a three-day rally as investors reviewed global developments.
Benchmark indexes in Paris, London, and Frankfurt declined around 0.5% after China reported mixed economic data, and U.S. election uncertainty reached a new high after an assassination attempt on former president Donald Trump.
Closer to home, industrial output fell less than expected in May, Eurostat reported Monday.
Industrial output declined by 0.6% from the previous month in May, following a flat reading in the previous month.
On an annual basis, output decreased 2.9% in May from an upwardly revised 3.1% in April.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,676.88; the CAC-40 index fell by 0.7% to 7,673.76; and the FTSE 100 index rose by 0.4% to 8,224.75.
The yield on 10-year German bonds edged lower to 2.49%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.11%; and Italian bonds decreased to 3.77%.
The euro edged lower to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 89.36 Swiss cents.
Brent crude decreased $0.14 to $84.89 a barrel, and the Dutch TTF natural gas rose by €0.39 to €31.18 per MWh.
Europe Stock Movers
The Swatch Group dropped 10.9% to CHF 169.60 after the Swiss watch group reported a sharp decline in sales and earnings in the first half due to a slowdown in China.
Burberry Group plunged 16.9% to 738.60 pence after the UK-based luxury group issued a profit warning and rehired its chief executive.
Luxury stocks in Paris declined after China reported mixed economic data and slower-than-estimated second-quarter economic growth of 4.7%.
LVMH, Kering, and Hermes declined between 2% and 4%.
Ericsson AB decreased 1.1% to SEK 70.10, and the Swedish telecom equipment maker signed a cross-licensing patent agreement with the China-based mobile handset maker Oppo.
Brunner Investment Trust increased 1.1% to 1,390.0 pence after the investment fund reported an increase in profit in the first half.
ME Group International PLC gained 0.5% to 182.68 pence, and the UK-based vending machine operator reported strong results in the six months ending in April.
BayWa plunged 33% to €15.18 after the Germany-based agriculture nutrition company said that the financially challenged company is seeking a restructuring opinion.
CompuGroup Medical decreased 0.1% to €15.97 after the German medical software company reported its second quarter results.
Japanese Market Indexes Expected To Trade Volatile Tracking Yen Turbulence
Akira Ito
15 Jul, 2024
Tokyo
Benchmark indexes in Tokyo dropped sharply in Friday's trading after the yen jumped more than 3%.
The Nikkei 225 stock average and the Topix declined between 2% and 1%, respectively.
Financial markets are closed on Monday in Japan for a public holiday.
The suspected market intervention by the Bank of Japan and the ministry of finance lifted the battered yen to 157.85 against the U.S. dollar for the second session in a row.
Moreover, the Bank of Japan stepped up pressure on currency traders and conducted exchange rate verification for the euro-yen trade.
The Bank of Japan has been struggling to balance its government bond purchase plan while keeping the yen from falling rapidly.
However, mixed messages from the Bank of Japan policymakers exacerbated the yen weakness due to the wide yield differential between Japanese and U.S. government bonds.
Tech stocks were among the leading decliners in Friday's trading, following the weakness in the sector after investors rotated out to smaller company stocks in New York.
In other economic news in the region, China's economic growth and retail sales in the second quarter fell short of market expectations.
Growth in the second quarter in the world's second-largest economy slowed to 4.7%, and retail sales slowed to 2% in June, the government data showed.
Moreover, fixed-asset investment growth eased to 3.9% in the first five months of May after property market investment plunged sharply from a year ago.
Moreover, the jobless rate held at 5% in June, matching the rate in the previous month.
Japan Stock Movers
In Friday's trading, the Nikkei 225 stock average dropped 2.5% to 41,190.68, and the Topix index declined 1.1% to 2,894.56.
Tokyo Electron, Advantest, Disco Corp., Lasertec, and SoftBank declined between 2% and 4%.