Market Update
European Markets Fall, Draghi Survives Confidence Vote but Coalition Breaks
Bridgette Randall
20 Jul, 2022
New York City
European markets traded higher after Italian Prime Minister Mario Draghi told lawmakers in the upper house of the parliament that he will continue to lead the nation if he wins the confidence vote.
Later in the afternoon, Draghi won the confidence vote but three parties boycotted the vote.
Despite Draghi's calls for unity earlier in the day, 5-Start Movement, Forza Italia, and League boycotted the election prompting stark rebuke from several leaders.
"On this day of madness, Parliament decided to go against Italy," tweeted former Prime Minister Enrico Letta.
Draghi is set to address lawmakers in the lower house of parliament tomorrow.
Draghi's commitment to stay in the office comes at a crucial time for Italy as the nation needs to finalize its annual budget and pass reforms in the next few weeks ahead of receiving the next tranche of post-pandemic funding of 20 billion euros from the European Union.
Last week, Draghi offered his resignation to Italian president after bickering coalition partner Five Star Movement pulled its support ahead of confidence vote,
Draghi's resignation prompted a huge outpouring of public support urging him to stay in the office and lead the nation. Draghi was appointed in the office 17 months ago.
The DAX index fell 0.2% to 13,281.98, the CAC-40 eased 0.3% to 6,184.66, and the FTSE 100 index dropped 0.44% to 7,264.31.
Royal Mail Plc declined 1.8% to 279.87 pence after the U.K.-based mail service provider said fiscal first year revenues declined 11.5% from a year ago to 11.5 billion pounds.
Group revenues, including GLS N.V., dropped 5.1% to 2.998 billion pounds.
Parcels shipped in the June quarter declined 15% to 314 million from 371 million a year ago.
ASML Holding NV gained 3.4% to 501.20 euros after the semiconductor equipment maker trimmed its fiscal full-year 2022 outlook.
Uniper SE increased 12.8% to 11.72 euros after the German utility is nearing an agreement to sell a stake to the German government in exchange for a bailout package.
The news was first reported by Bloomberg News and independently verified by Ticker.com
Asian markets broadly closed higher on the receding worries that China's campaign against tech companies may be nearing end.
The Nikkei index soared 2.7% to 27,680.27, the Hang Seng index added 1.1% to 20,890.22, and the Sensex index jumped 1.2% to 55,397.53.
The People's Bank of China held its key lending rate for five-year loans at 4.45% as mortgage boycotts are spreading across the nation.
The central bank lowered its rate by 15 basis points in May and by 5 basis points in January.
Nasdaq Jumps 1%, Netflix Soars 7%
Barry Adams
20 Jul, 2022
New York City
U.S. stocks advanced and investors digest the latest batch of earnings.
The S&P 500 index increased 0.8% to 3,869.45 and the Nasdaq Composite index advanced 1.8% to 11,925.83.
Futures of crude oil decreased 72 cents to $103.45 a barrel and natural gas increased 15 cents to $7.42 a unit.
The yield on 10-year Treasury notes increased to 3.038%.
Mortgage demand plunged to the lowest in 22 years, according to the data released by the Mortgage Bankers Association.
Stocks advanced on Wall Street on the earnings optimism and investors looked ahead to results from at least 100 more companies this week.
Netflix increased 7.3% to $216.20 after the steaming services provider reported fewer than expected subscriber losses.
In the second quarter, Netflix lost 970,000 subscribers, less than the previous estimate of 2 million. Moreover, earnings were ahead of expectations.
Baker Hughes dropped 8.01% to $25.98 after the oil field services company reported sharply lower than expected earnings.
European markets traded higher after Italian Prime Minister Mario Draghi told lawmakers in the upper house of the parliament that he will continue to lead the nation if he wins the confidence vote.
Draghi is set to address lawmakers in the lower house of parliament tomorrow.
Draghi's commitment to stay in the office comes at a crucial time for Italy as the nation needs to finalize its annual budget and pass reforms in the next few weeks ahead of receiving the next tranche of post-pandemic funding of 20 billion euros from the European Union.
Last week, Draghi offered his resignation to Italian president after bickering coalition partner Five Star Movement pulled its support ahead of confidence vote,
Draghi's resignation prompted a huge outpouring of public support urging him to stay in the office and lead the nation. Draghi was appointed in the office 17 months ago.
The DAX index fell 0.2% to 13,287.91, the CAC-40 eased 0.1% to 6,194.13, and the FTSE 100 index dropped 0.4% to 7,264.33.
Asian markets broadly closed higher on the receding worries that China's campaign against tech companies may be nearing end.
The Nikkei index soared 2.7% to 27,680.27, the Hang Seng index added 1.1% to 20,890.22, and the Sensex index jumped 1.2% to 55,397.53.
The People's Bank of China held its key lending rate for five-year loans at 4.45% as mortgage boycotts are spreading across the nation.
The central bank lowered its rate by 15 basis points in May and by 5 basis points in January.
Wall Street Rally Gathers Momentum After Fresh Batch of Earnings
Barry Adams
19 Jul, 2022
New York City
Rally on Wall Street gathered momentum as investors warmed up to the latest batch of earnings.
Corporate earnings generally matched expectations set by analysts and companies are facing strong headwinds from the rising U.S. dollar.
The S&P 500 index increased 2.5% to 3,927.48 and the Nasdaq Composite index advanced 2.9% to 11,688.64.
Twitter gained 3.8% to $39.86 after the social media platform operator won a motion to expedite trial to force investor Elon Musk to complete purchase and satisfy the acquisition terms.
European Markets Rebound to Close Up 2%
Bridgette Randall
19 Jul, 2022
New York City
European markets advanced amid mixed economic reports in the region and rising hopes that the natural gas flow will resume this week from Russia.
Eurozone inflation accelerated in June according to the final data released by the Eurostat on Tuesday. The final data matched the flash estimate.
The harmonized Index of consumer prices in June increased 8.6% on a yearly basis, faster than the 8.1% rise in May, final data from Eurostat showed on Tuesday.
The eurozone construction output increased 0.4% in May from April when the output was revised to a decline of 1.0% from the previous estimate of 1.1% decline, the Eurostat reported on Tuesday.
On a yearly basis construction output increased to 2.9% in May from 2.8% in April.
The UK unemployment remained unchanged in the three months to May, according to the Office of National Statistics on Tuesday.
The jobless rate was 3.8% at the end of the three-month period to May matching the rate for the period ending in April.
The DAX index surged 2.7% to 13,308.41, the CAC-40 index soared 1.8% to 6,201.22, and the FTSE 100 index gained 1.01% to 7,296.28.
The euro rebounded to a two-week high of $1.0236.
Novartis AG increased 3.7% to 83.32 swiss francs after the drug maker said it no longer expects its Sandoz division.
Telenor ASA declined 0.8% to 12.40 euros after the Norwegian telecom operator reported a second quarter loss of 1.1 billion kroner compared to 2.19 billion kroner a year ago.
Electricite de France soared 14.7% to 11.73 euros after the French government offered 12 euros a share to acquire the remaining stake in the nuclear power utility company and nationalize the Europe's largest nuclear power utility.
The buyout offer of 9.7 billion euros is expected to be completed before the year's end.
Alstom SA declined 2.6% to 24.14 euros and said sales in the fiscal year first quarter ending in June increased 8% to 4.0 billion euros and booked 5.6 billion euros of new orders, increasing the order book to 83.4 billion euros.
The company cited supply chain issues and rising input costs may impact profitability and guided dividend payout ratio between 25% and 35%.
Kier Group increased 2.5% to 77.20 pence after the construction services company reiterated its full-year outlook.
China's Cash Crisis Prompts Central Bank Action
Arjun Pandit
19 Jul, 2022
New York City
Asian stocks edged lower as investors worried about the growing cash crisis with Chinese banks.
The People's Bank of China injected more liquidity in the banking system after a growing number of regional and provincial banks restricted cash withdrawals for retail customers and the U.S. dollar withdrawal for corporations.
Agricultural Bank of China, Shanghai Pudong Bank, and ICBC are restricting customer withdrawals.
Mortgage boycotts are widening in China as more buyers demand the delivery of promised homes on time.
Home owners are increasingly organizing street protests in several second-tier and third-tier cities across China as authorities crackdown on social media dissent.
Hong Kong's Hang Seng Index declined 0.9% to 20,661.06 as the central bank took steps to shore up confidence in the housing market and prevent the cash crisis to engulfing a wider list of banks.
The Nikkei 225 Index gained 0.7% to 26,961.68 after a 3-day weekend ahead of the Bank of Japan meeting later in the week.
Heavy equipment makers rose in trading after the Nikkei reported that the Japanese government is likely to remove a cap on defense spending from the next fiscal year..
Mitsubishi Heavy Industries gained 2.5% and Kawasaki Heavy Industries jumped 5.2%.
The Kospi edged down 0.2% to close at 2,370.97 on the worries that the central bank will lift rates higher and faster and the rate path may drive the economy into a recession.
The Sensex in Mumbai closed higher 0.5% to 54,767.52 in a late rally on the earnings optimism and the rising demand for vehicles after the strong start of the monsoon season.
IBM Revenue Growth Hit by Strong Dollar
Scott Peters
18 Jul, 2022
New York City
IBM revenues in the quarter rose and earnings surged despite the headwinds from a strong dollar.
However, the tech company tightened its free cash flow outlook for the year.
IBM said second quarter revenues increased 9% to $15.5 billion.
Net income rose to $1.39 billion or $1.61 a diluted share from $1.33 billion or $1.47 a share.
Net income from continuing operations surged 81% to $1.5 billion or $1.61 a diluted share from $810 million or $0.90 a share.
Software revenues increased 6% to $6.17 billion, consulting revenues rose 10% to $4.81 billion, and infrastructure revenues rose 19% to $4.24 billion.
Hybrid cloud revenues surged 16% to $21.7 billion in the past 12 months.
Gross margin in the quarter declined to 53.4% from 55.2% in the quarter a year ago and said consulting unit margin faced headwind on the rising costs of talent.
IBM
Morning Rally Turns Afternoon Losses On Wall Street
Barry Adams
18 Jul, 2022
New York City
Stocks turned lower in the afternoon and Bank of America and Goldman Sachs reported better than expected quarterly results.
The S&P 500 index decreased 0.8% to 3,830.85 and the Nasdaq Composite index fell 0.8% to 11,360.06.
Futures of crude oil prices increased $4.53 to $102.09 and natural gas advanced 43 cents to $7.44 a unit.
The yield on 10-year U.S. Treasury notes increased to 2.98%.
Market sentiment turned negative after Goldman said it is looking to reinstate job cuts at the end of the year and a report suggested Apple plans to slow hiring, joining other tech companies in looking to curtail hiring.
Goldman Sachs gained 2.6% to $301.26 after the financial services company said a surge in bond trading revenues helped to offset the weakness in investment banking revenues in the latest quarter ending in June.
Revenues in the quarter declined 26% to $11.86 billion and net income fell 47% to $2.9 billion or $7.73 a diluted share from $5.4 billion or $15.02 a share a year ago.
Goldman lifted its quarterly dividend to $2.50 a share in the third quarter.
Bank of America increased 0.1% to $32.34 after the lender benefited from the rising rate environment.
Revenues, net of interest expenses, increased 6% to $22.7 billion and net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Investors are also awaiting earnings this week from 135 companies including Tesla, Netflix, United Airlines, Union Pacific, Johnson & Johnson, and Verizon.
Boeing Co increased 4.5% to $154.60 after Delta Airlines placed an order for 100 737 MAX 10 jets.
"The aircraft will be 20%-30% more fuel efficient than the retiring Delta planes," Delta added in a press statement released at the signing ceremony at the 2022 Farnborough International Airshow.
Nearly one-third of the aircraft
Bank of America Revenues Rise on Strong Consumer, Profit Falls On Weak Business Deals
Scott Peters
18 Jul, 2022
New York City
Bank of America said its latest quarterly results benefited from the rising rate environment.
Bank of America said revenues in the second quarter ending in June net of interest expenses, increased 6% to $22.7 billion.
Net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Total loans and leases at the end of the quarter increased to $1.03 trillion from $918 billion a year ago.
Total deposits increased to $1.989 trillion from $1.909 trillion a year ago.
Non-performing loans declined to $4.1 billion or 0.41% loan loss ratio from $4.9 billion or 0.54% ratio from a year ago.
Consumer Banking
Consumer banking segment revenues increased 12% to $9.1 billion but net income declined 5% to $2.9 billion.
Net income was impacted by higher credit loss provision of $350 billion on loan growth and dampened macroeconomic outlook.
At the end of the quarter, the bank added 241,000 net new consumer accounts totaling 35.1 million and business accounts increased 5% to 3.7 million.
Account balances increased 4% to $1.6 trillion and combined credit and debit card spending increased 10% to $221 billion, 17% increase in credit card and 6% in debit card spending.
Average credit card outstanding balance increased to $81.0 billion from $73.4 billion a year ago.
Global Wealth and Investment Management
Revenues increased 7% to $5.4 billion on higher interest rates and higher balances.
Assets under management decreased 8% to $3.4 trillion reflecting lower market valuation and offset by new asset flows of $53 billion.
Merrill Lynch wealth management unit added 4,500 new household clients and client balances were $2.8 trillion with $1.1 trillion in assets under management.
Total investment banking fees decreased 47% or $994 million to $1.1 billion.
Global Banking
Revenues decreased 2% to $5.0 billion reflecting lower investment banking fees, mark-to-market losses related to leveraged finance positions and lower leasing-related revenue.
These were partially offset by higher net interest income from the benefit of higher interest rates and strong loan growth.
Total investment banking fees (excl. self-led) decreased $994 million, or 47%, to $1.1 billion.
Global Markets
Revenues decreased 5% to $4.5 billion reflecting lower investment banking fees and mark-to-market losses related to leveraged finance positions, partially offset by higher sales and trading revenue.
Sales and trading revenue increased 17% to $4.2 billion driven by 19% increase in fixed income, commodities and currencies trading to $2.3 billion and 2% rise in equities trading to $1.7 billion.
Company and Stock
Bank of America increased 1.1% to $32.64 and extended this year's loss to 30.1%.
Bank of America operates 3,984 centers and the bank's investment units has 650 research analysts covering 3,400 companies, 1,140 corporate bond issuers across 56 economies and 24 industries.
Movers: Bank of America, Boeing, Coinbase, Delta, Goldman Sachs, IBM
Barry Adams
18 Jul, 2022
New York City
Bank of America increased 1.1% to $32.64 after the lender benefited from the rising rate environment.
Revenues, net of interest expenses, increased 6% to $22.7 billion and net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Boeing Co increased 4.5% to $154.60 after Delta Airlines placed an order for 100 737 MAX 10 jets.
Coinbase Global increased 16.2% to $62.49 after the Norway based DNB Asset Management purchased share of the cryptocurrency exchange.
DNB initiated position in the company with 13,641 shares in the second quarter, according to a regulatory filing with the SEC.
Delta Air increased 5.4% to $31.70 after the airlines placed its first plane order in about a decade.
"The aircraft will be 20%-30% more fuel efficient than the retiring Delta planes," Delta added in a press statement released at the signing ceremony at the 2022 Farnborough International Airshow.
Nearly one-third of the aircraft
U.S. Stocks Advance Ahead of Busy Week of Earnings, Goldman Sachs and Bank of America Rise
Barry Adams
18 Jul, 2022
New York City
Stocks on Wall Street advanced and Bank of America and Goldman Sachs reported better than expected earnings.
The S&P 500 index increased 0.8% to 3,896.20 and the S&P 500 index advanced 1.2% to 11,589.56.
Futures of crude oil prices increased $4.23 to $101.86 and natural gas advanced 39 cents to $7.39 a unit.
The yield on 10-year U.S. Treasury notes increased to 2.98%.
Goldman Sachs gained 4.2% to $306.19 after the financial services company said a surge in bond trading revenues helped to offset the weakness in investment banking revenues in the latest quarter ending in June.
Bank of America increased 1.1% to $32.64 after the lender benefited from the rising rate environment.
Revenues, net of interest expenses, increased 6% to $22.7 billion and net income declined to $5.9 billion or 73 cents a diluted share from $8.9 billion or $1.03 a diluted share.
The bank also took a charge of $523 million for the provision of credit losses.
Investors are also awaiting earnings this week from 135 companies including Tesla, Netflix, United Airlines, Union Pacific, Johnson & Johnson, and Verizon.
IBM is scheduled to report earnings after the regular hours trading today.
Boeing Co increased 4.5% to $154.60 after Delta Airlines placed an order for 100 737 MAX 10 jets.
European Markets Rally
European markets advanced following the optimism in New York and on the hopes that natural gas will start flowing again through Nord Stream 1 pipeline network this week.
European investors are also looking ahead at the European Central Bank's policy meeting on July 21 and a rate hike of 25 basis points followed by a 50 basis points increase at its September meeting.
The DAX index increased 0.7% to 12,962.08, the CAC-40 index added 0.9% to 6,90.20, and the FTSE 100 index advanced 0.98% to 7,228.69.
The euro edged up to trade at $1.015.
Investors also looked ahead to the Italian Prime Minister Mario Draghi's address to the parliament this Wednesday.
H & M Hennes & Mauritz AB declined 0.5% to skr 125.60 and the Swedish apparel retailer said it has stopped its retail selling in Russia since March and has started the process of winding down its operation in the country.
GSK Plc declined 3.3% to 1,386.60 after the British pharmaceutical maker completed the spinoff of its $36 billion consumer healthcare business.
Stellantis NV declined 0.3% to 12.0 euros after the Italian automotive group said it will end its joint venture with a company that makes and sells the Jeep brand in China.
Asian Markets Advance
Markets across Asia closed higher after Chinese regulators urged the central bank to provide financial support to real estate developers.
Mortgage boycotts are spreading in China and home buyers in 12 cities are protesting and suspending monthly payments as unfinished residential real estate projects pile.
About 5 million home buyers with more than $40 billion mortgages have suspended payments according to local media reports in China.
As many as one third of recently sold residential units are facing extended delays or lack of progress on construction sites.
China's economy is struggling after two months of severe lockdowns and the continued restrictions in social gathering for more than 250 million people in at least 20 cities.
Shanghai and Tianjin ordered mass Covid-19 testing following its zero-Covid-19 policy.
The fresh outbreak of infections highlights the risks of new lockdowns and slows the economic rebound in the second largest economy of the world.
The Hang Seng Index soared 2.7% to 20,846.18, the Sensex index gained 1.4% to 54,521.15, and the the Kospi average climbed 1.90% to close at 2,375.25
Markets in Tokyo were closed for a holiday.
European Markets Advance and Look Beyond Rate Hike This Week
Bridgette Randall
18 Jul, 2022
New York City
European markets advanced following the optimism in New York and on the hopes that natural gas will start flowing again through Nord Stream 1 pipeline network this week.
European investors are also looking ahead at the European Central Bank's policy meeting on July 21 and a rate hike of 25 basis points followed by a 50 basis points increase at its September meeting.
The DAX index increased 0.7% to 12,962.08, the CAC-40 index added 0.9% to 6,90.20, and the FTSE 100 index advanced 0.98% to 7,228.69.
Investors also looked ahead to the Italian Prime Minister Mario Draghi's address to the parliament this Wednesday.
H & M Hennes & Mauritz AB declined 0.5% to skr 125.60 and the Swedish apparel retailer said it has stopped its retail selling in Russia since March and has started the process of winding down its operation in the country.
GSK Plc declined 3.3% to 1,386.60 after the British pharmaceutical maker completed the spinoff of its $36 billion consumer healthcare business.
Stellantis NV declined 0.3% to 12.0 euros after the Italian automotive group said it will end its joint venture with a company that makes and sells the Jeep brand in China.
Citigroup Revenues Rise On Fixed Income Trading Revenues
Scott Peters
15 Jul, 2022
New York City
Citigroup said second quarter revenues increased 19% to $19.6 billion on higher net interest income and strong volumes in the personal banking and institutional clients group.
Net income declined 27% to $4.5 billion on higher cost of credit and an 8% increase in expenses more than offset the 11% increase in revenues.
Diluted earnings per share declined 27% to $2.19 from $2.85 a year ago.
Return on average common equity fell to 9.7% from 13.0%.
Total deposits at the end of the quarter increased 1% to $1.3 trillion and loans declined 3% to $657.0 billion.
At the end of the June quarter, loan loss reserves were $16.0 billion or loan loss reserves of 2.44% compared to $19.2 billion or 2.88% a year ago.
Institutional Revenues Soar 20%
Institutional Clients Group increased 20% to $11.4 billion including higher revenues from loan hedges and partially offset by a decrease in Investment Banking revenues.
Markets segment revenues increased 25% to $5.3 billion driven by higher volatility leading to higher trading activities.
Fixed Income Markets revenues increased 31% to $4.1 billion on higher trading volumes in the rates, currencies and commodities businesses.
Equity Markets revenues rose 8% to $1.2 billion on strong equity derivatives trading.
Investment Banking revenues plunged 46% to $805 million on weak capital market and merger and acquisition activities and the decline in banking was offset by higher revenues in corporate lending.
During the quarter, Citigroup returned $1.3 billion to shareholders in the form of dividends and repurchases.
Personal Banking Revenues Rose 9%
U.S. personal banking revenues increased 9% to $4.1 billion and branded cards revenues increased 10% to $2.2 billion on interest on higher loan balances.
New accounts and card spend volumes increased 18%, while average loans increased 11%.
Retail services revenues increased 7% to $1.3 billion on higher interest on higher loan balances, partially offset by higher partner payments.
Retail banking revenues increased 6% to $656 million on higher deposit spreads and volumes.
Global Wealth Management Revenues Flat
Global wealth management revenues were flat at $1.9 billion were flat on lower investment fee, particularly in Asia, offset by growth in average deposits and loans.
Company and Stock
The 212-year old banking institution Citigroup provides financial services to individuals, corporations and governments and the bank has about 72 million credit card customers.
Citigroup soared 10.5% to $48.52 after the release of earnings and the stock has fallen 20.8% in the year so far.
Bank of New York Assets Under Management Fell 17%
Scott Peters
15 Jul, 2022
New York City
Bank of New York said revenues in the second quarter ending in June increased 7% to $4.3 billion driven by an increase of 4% in fees and 28% in net interest income.
Assets under management declined 17% to $1.9 trillion and under custody fell 4% to $43.0 trillion.
Net income declined 16% to $835 million or $1.03 a diluted share from $991 million or $1.13 a diluted share a year ago.
The company lifted its quarterly dividend by 9% to 37 cents a share.
Bank of New York Mellon added 4.8% to $42.37.
S&P 500 Rebounds 2%, Banks Advance
Barry Adams
15 Jul, 2022
New York City
U.S. stocks advanced after retail sales increased more than estimated following a surge in inflation reports earlier in the week.
Retail sales' increase in June was welcomed by investors after two inflation reports earlier in the week showed elevated levels for consumer and wholesale prices.
In volatile trading, stocks climbed higher on the strength in consumer spending and on the hopes that the Fed will lift rates no higher than 75 basis points at its next policy meeting in two weeks.
Investors drove banks higher after Citigroup, Wells Fargo, PNC Financial, and U.S. Bancorp reported earnings.
Banks are benefiting from the rising rate environments but earnings at some banks took a hit on the weaknesses in mortgage and private equity businesses.
Banks are also setting aside more capital to cover losses emerging from bad loans, but there are few signs of impending recession in the bank's results.
Retail sales in June rose 1% from the revised 0.1% decline in May, the Commerce Department reported today.
Sales rose 8.4% from a year ago and in the three month period to June surged 8.1% from the same period a year ago.
Retail sales are not adjusted for inflation which rose 1.3% from May indicating real retail sales fell.
Stocks advanced sharply after the release of strong retail sales data indicating consumers are resilient despite 4-decade high inflation.
Gasoline sales rose 3.6%, sales at bars and restaurants jumped 1%, furniture and home store sales jumped 1.4%, and online sales jumped 2.2%.
The S&P 500 index jumped 1.92% to 3,863.16 and the Nasdaq Composite index edged up 1.79% to 11,452.42.
Futures of crude oil increased $1.79 to $97.57 and natural gas rose 51 cents to $7.11 a unit.
The yield on 10-year U.S. Treasury notes edged down 3 ticks to 2.921%.
For the week, the S&P 500 declined 0.9% and the Nasdaq dropped 1.6%.
European Bond Yields Rise After Italy Plunges In Political Turmoil
European markets advanced following the surge in the U.S. and bond yields were in focus after Italy's prime minister resigned.
Prime Minister Mario Draghi offered his resignation after the coalition partner 5-Star Movement refused to back the government in a no confidence vote on a disagreement with a plan in combating rising consumer prices.
President Sergio Mattarella rejected Draghi's resignation and asked him to address the parliament next week.
Bond market was on alert after Draghi's resignation, and yield on 10-year Italian bonds rose to 3.260%, a one month high and spread with the German bond of similar maturity widened to 2.2% for the second day in a row.
Bond yields in the region edged slightly lower today but remained elevated on the Italian and British uncertainties.
The yield on the 10-year bond of Germany traded at 1.13%, France at 1.73% and the U.K. at 2.091%.
Conservative Party in the U.K. narrowed the list to 6 from 12 contenders to lead the party after the party's parliamentary members revolted against Prime Minister Boris Johnson, forcing his unscheduled departure last week.
The DAX index gained 2.76% to 12,864.72, the CAC-40 index increased 2.04% to 5,962.87, and the FTSE 100 index added 1.7% to 7,159.01.
China's Economy Barely Grew In June
China reported lower than expected economic growth in June quarter.
GDP expanded at 0.4% from a year ago falling well short of expectations between 0.7% and 1.2%, the National Bureau of Statistics said on Friday.
The economic activities fell sharply after months of lockdowns and dragged the GDP growth down from 4.8% annual rate in the first quarter.
The economy expanded at the slowest pace since the first quarter of 2020 when GDP shrank 6.8% after initial outbreak of coronavirus in Wuhan brough the second largest economy to a complete halt.
For the first half, the economy expanded at 2.5% rate well below the annual target rate of 5.5% set by the Chinese government.
Real estate sector continued to drag the economy with property investment dropping 9.4% but retail sales in June rose 3.1% driven by higher automobile sales.
Industrial production also jumped 3.9% from a year ago.
The delays in housing construction has sparked a wave of mortgage boycotts in several cities in the last few days after home buyers refused to pay for unfinished homes.
Movers: BlackRock, Bank of NY, Citigroup, PNC, Pinterest, State Street, UnitedHealth, Wells Fargo
Barry Adams
15 Jul, 2022
New York City
BlackRock gained 0.3% to $590.04 after the company said second quarter revenues declined 5% to $4.5 billion from $4.82 billion a year ago.
Net income fell 22% to $1.08 billion or $7.06 a diluted share from $1.38 billion or $8.92 a share.
Assets under management fell 11% to $8.5 trillion from $9.5 trillion a year ago.
Bank of New York Mellon added 4.8% to $42.37 after the company said second quarter revenues increased 7% to $4.3 billion driven by an increase of 4% in fees and 28% in net interest income.
Assets under management declined 17% to $1.9 trillion and under custody fell 4% to $43.0 trillion.
Net income declined 16% to $835 million or $1.03 a diluted share from $991 million or $1.13 a diluted share a year ago.
The company lifted its quarterly dividend by 9% to 37 cents a share.
Citigroup soared 10.5% to $48.52 after the bank said second quarter revenues increased 19% to $19.6 billion on higher net interest income and strong volumes in the personal banking and institutional clients group.
Net income declined 27% to $4.5 billion on higher cost of credit and an 8% increase in expenses more than offset the 11% increase in revenues.
Diluted earnings per share declined 27% to $2.19 from $2.85.
Total deposits at the end of the quarter increased 1% to $1.3 trillion and loans declined 3% to $657.0 billion.
At the end of the June quarter, loan loss reserves were $16.0 billion or loan loss reserves of 2.44% compared to $19.2 billion or 2.88% a year ago.
PNC Financial Services edged up 0.6% to $151.89 after the bank said second quarter revenues increased 9% to $5.1 billion from $4.7 billion a year ago largely driven by 22 basis points increase in net interest margin.
Net income rose to $1.5 billion or $3.39 per diluted share from $1.1 billion or $2.43 a share.
Deposits increased to $446.5 billion from $401.7 billion and loans increased to $304.8 billion from $255.6 billion a year ago.
Pinterest jumped 12.5% to $19.76 on a Wall Street Journal report that activist investor Elliott Management acquired a 9% stake in the company.
State Street traded higher 4.3% to $62.32 after the financial services provider said second quarter revenues declined 3% to $2.95 billion from a year ago.
Net income dropped 2% to $747 million from $763 million a year ago. Diluted earnings per share fell 8% to $1.91 from $2.07 a year ago.
At the end of the quarter, assets under management declined 11% to $3.47 trillion and under custody fell 2% to $38.2 trillion from a year ago.
U.S. Bancorp gained 4.9% to $46.42 said second quarter revenues increased 4% to $6.0 billion from $5.8 billion a year ago.
Net income fell 23.5% to $1.46 billion from $1.91 billion a year ago and diluted earnings per share declined to 99 cents from $1.28 a year ago..
Average total loans in the quarter increased 10.2% to $324.2 billion from $294.3 billion and average total deposits increased 6.4% to $456.5 billion from $429.2 billion a year ago.
UnitedHealth increased 4.9% to $526.82 after the health insurance company said second quarter revenues increased 13% to $80.5 billion.
Net income in the quarter increased to 16% to $5.0 billion from $4.3 billion a year ago. Diluted earnings per share increased to $5.34 from $4.46 a year ago.
The company increased its full year net earnings outlook to $20.45 to $20.95 per share and adjusted net earnings to $21.40 to $21.90 per share
Wells Fargo advanced 7.3% to $41.73 said second quarter revenues declined 16% to $17.0 billion from $20.3 billion a year ago.
Net income fell 48% to $3.2 billion from $3.7 billion a year ago and diluted earnings per share declined 46% to 74 cents from $1.38 a year ago.
Net Interest income rose 16% to $10.2 billion and non-interest income plunged 40% to $6.8 billion from a year ago.
Noninterest income decreased primarily from the weak results in private equity and venture capital business and fall in revenues because of lower origination of mortgage loans and lower gains from the re-securitization of loans purchased from securitization pools.
At the end of the quarter, total deposits increased 1% to $1.444 trillion and total loans rose 8% to $925.6 billion.