Market Update
Stocks On Wall Street Retain Upward Bias, Yields Scale Higher
Barry Adams
20 Oct, 2022
New York City
Stocks on Wall Street advanced following a stronger-than-anticipated batch of corporate earnings.
The S&P 500 index gained 0.9% to 3,728.21 and the Nasdaq Composite index advanced 1.3% to 10,814.40.
Crude oil advanced but natural gas prices fell and extended one-week losses on the falling demand and exports.
Crude oil edged up $1.12 to $86.67 and natural gas declined 17 cents to $5.29 a thermal unit.
Treasury yields continued to climb as worries of rate-path overshadowed positive earnings from the latest batch of corporate earnings.
The yield on 2-year Treasury notes increased to 4.60%, 10-year Treasury notes jumped to 4.16% and 30-year bonds increased to 4.16%.
IBM reported better-than-expected results and lifted its revenue forecast.
Tesla dropped 4.4% after the electric vehicle maker reported third quarter revenue increased 56% to $21.4 billion from $13.7 billion a year ago.
Net income in the quarter doubled to $3.3 billion from $1.6 billion and diluted earnings per share rose to 95 cents from 48 cents a year ago.
Cautious European Markets
Caution prevailed in European markets despite positive corporate results on the ongoing worries of elevated energy prices and aggressive rate hike worries.
The DAX index edged down 0.3% to 12,706.18, the CAC-40 index increased 0.3% to 6,058.01 and the FTSE index was nearly unchanged at 6,919.29.
The euro edged up to 98.02 U.S. cents and the British pound held near $1.12.
Brent crude increased $2.04 to $94.40 a barrel and TTF natural gas rose 12.5% to 126.52 euros a MWh.
Record Current Account Deficit In Euro Zone
The Euro zone's current account deficit shot up to a record high in August, according to the data released by the European Central Bank.
Deficit increased to 26.323 billion euros in August from 19.960 billion euros in August, and swung from 17.089 billion euros a year ago.
UK to Appoint Fifth Prime Minister In Six Years
Political chaos in the U.K. also weighed on the market sentiment.
Prime Minister Liz Truss announced her resignation and the UK will search for its fifth prime minister in the last six years. Prime Minister Truss survived in her position for about two months.
Political infighting and mini-budget missteps sapped support for Truss' leadership as post-Brexit turmoil reached a new high.
Asian Markets Fall On Diverging Monetary Policy
Benchmark indexes in Asia declined on the worries that the diverging monetary policies of the region with the U.S. may drive the region's currencies lower.
Nikkei 225 Average declined 0.9% to 27,006.96, the Hang Seng index dropped 1.4% to 16,280.22 and the Sensex index increased 0.2% to 59,202.90.
The yen dropped to 150 against the U.S. dollar, the lowest not seen since 1990 and the Japanese bond yield traded above the 0.25% limit set by the Bank of Japan.
Stocks in Mumbai opened lower but major averages pared losses on the corporate earnings optimism.
The rupee dropped to a new low and fell below 83 to a dollar after the reserve currency resumed its climb.
The yuan also dropped to a 14-year low of 7.2205 on the rising U.S. Treasury bond yields.
Tesla Third Quarter Earnings Double, Shanghai Picks Up Pace
Scott Peters
19 Oct, 2022
New York City
Tesla reported third quarter revenue increased 56% to $21.4 billion from $13.7 billion a year ago.
Net income in the quarter doubled to $3.3 billion from $1.6 billion and diluted earnings per share rose to 95 cents from 48 cents a year ago.
In the quarter, free cash flow jumped 148% to $3.3 billion from $1.3 billion a year ago and cash on hand increased to $21.1 billion from $16.09 billion.
Total vehicle production soared 54% to 365,923 units from 237,823 a year ago.
Supercharge stations increased 32% to 4,283 at the end of the third quarter from 3,254 a year ago.
Production at the Shanghai, China facility picked up pace in the third quarter after a production slowdown on the account of zero-Covid policy.
The Shanghai facility has installed production capacity of 750,000 of model 3 and model Y Tesla vehicles and remains a main hub in supplying vehicles to markets outside of North America.
Production facility in Berlin, Germany has an installed capacity of 250,000 Model Y vehicles and now reached weekly production of 2,000 vehicles.
The company guided initial phase of Tesla Semi is scheduled in December 2022.
Tesla closed up 0.8% to $222.04 at the end of the regular trading session and eased 5% to $210.95 in after-hour session and traded near the 2022-low of $209.
Stocks Meandered as Rate Path Worries Overshadowed Earnings
Barry Adams
19 Oct, 2022
New York City
Benchmark indexes on Wall Street declined as investors worried about the Federal Reserve's next move despite stronger-than-anticipated earning results.
Popular indexes declined after rising for two days in a row and bond yields resumed advance as the rate decision date approaches in two weeks.
The hawkish comments from Fed officials supported the yield's advance and Minneapolis Fed President Kashkari supported the view that rates may have to continue to rise beyond 4.75% if underlying inflation remains elevated.
"The Fed can't pause its campaign of monetary policy tightening once its benchmark interest rate reaches 4.5% to 4.75% if "underlying" inflation is still accelerating," Kashkari intoned in a panel discussion at a conference.
The S&P 500 index fell 0.7% to 3,695.16 and the Nasdaq Composite index declined 0.9% to 10,680.51.
Crude oil rose $3.11 to $85.90 a barrel and natural gas fell 25 cents to $5.48 a thermal unit.
The yield on 2-year Treasury notes edged up to 4.56%, 10-year Treasury notes increased to 4.15% and 30-year bonds edged higher to 4.13%.
After the close, IBM reported better-than-expected results and lifted its revenue forecast.
Tesla dropped in after hour trading after the electric vehicle maker reported third quarter revenue increased 56% to $21.4 billion from $13.7 billion a year ago.
Net income in the quarter doubled to $3.3 billion from $1.6 billion and diluted earnings per share rose to 95 cents from 48 cents a year ago.
September Housing Starts Declined
Housing starts fell 8.1% to an annualized rate of 1.439 million in September, lower than the revised 1.566 million rate in August, U.S. Census Bureau reported Wednesday.
Home sales have been on the decline after the sustained rise in home prices and a surge in mortgage rate.
Mortgage rates have risen from near 2.2% to above 7.2% in less than a year.
Single-family home starts declined 4.7% to 892,000 rate, the lowest since May 2020. Multi-family housing starts dropped 13.1% to 530,000.
U.S. Stock Movers
Generac Holdings Inc plunged 24.8% to $111.11 after the power company lowered its earnings and sales growth outlook.
The company revised its sales growth outlook in the range 22% and 24% from the previous estimate between 36% and 40%.
The company also lowered its full-year 2022 net income margin, before deducting for non-controlling interests, between 9.0% and 10.0% compared to the previous guidance of 13.0 to 14.0%.
The company said preliminary net sales increased 15% to approximately $1.09 billion during the third quarter of 2022 from $943 million in the prior-year third quarter.
Preliminary net income fell to $58 million or $0.83 a share compared to $132 million or $1.93.
Interactive Brokers Group, Inc advanced 6.5% to $75.77 after the company said third quarter revenues increased to $790 million from $464 million a year ago.
Diluted earnings per share increased to 97 cents from 43 cents a year ago.
Commission revenue increased 3% to $320 million and net interest income soared 73% to $473 million.
The company also declared a cash dividend of 10 cents a share.
Intuitive Surgical, Inc soared 9.4% to $211.90 after the medical equipment maker posted third quarter sales increased 11% to $1.56 billion from $1.40 billion a year ago.
Net income in the period fell to $324 million from $381 million and diluted earnings per share declined to 90 cents from $1.04 a year ago.
The company also grew its da Vinci Surgical System installed base by 13% to 7,364 systems at the end of the third quarter from 6,525 a year ago.
Netflix Inc soared 13.8% after the streaming service provider reported strong subscriber growth and revenue and earnings rose in the third quarter.
The company added 2.41 net new subscribers, more than twice the additions the company had estimated in the previous quarter.
Procter & Gamble jumped 2.2% after the consumer goods maker reported better-than-expected earnings.
United Airlines jumped more than 7% after the international airline said resilient travel demand is likely to lift annual earnings.
Winnebago Industries, Inc plunged 10.9% to $53.66 after the company reported earnings ahead of market expectations but the backlog plunged.
The maker of motorhomes said revenue in the fiscal fourth quarter ending in August increased 13.8% to $1.18 billion from $1.04 billion a year ago.
Net income in the quarter decreased 1.8% to $82.6 million from $84.1 million and diluted earnings per share increased to $2.61 from $2.45 a year ago.
Motorhomes backlog declined 26.7% to $1.7 billion at the end of the fiscal fourth quarter from a year ago on higher dealer inventories.
Towable segment backlog plunged 66.2% to $576.5 million "due to normalized dealer inventories" and backlog for the Marine segment was $314.7 million and "remain elevated as low dealer inventories persist."
European Markets Halt 4-day Winning Streak
European markets traded lower snapping a four-day winning streak after stocks in construction and financial services led the decliners.
Bond yields were on the rise in Europe after the consumer price inflation in the UK rose to 10.1% in September from 9.9% in August, the Office for National Statistics reported today.
The UK inflation rebounded to the level last seen in July stoking the fears of another large-size rate hike.
The eurozone inflation rate was revised lower to 9.9% in September from the previous estimate of 10.0%, Eurostat said in its final report on Wednesday.
Despite the slight downward revision, the inflation rate was record high since the comparable record keeping began in 1991, driven by a 40.7% surge in energy price following a 38.6% rise in August.
Major averages declined in Europe and bond yields rose.
The DAX index decreased 0.17%or 22.15 to 12,743.72, the CAC-40 index edged up 0.07% or 4.69 to 6,069.43 and the FTSE 100 index fell 0.07% or 5.43 to 6,931.31.
The yield on 10-year German bunds rose to 2.37%, French bonds increased to 2.95%, UK Gilts edged down to 3.88% and Italian bonds rose to 4.77%.
The euro edged down to 97.82 U.S. cents and the British pound turned lower to $1.124.
Brent crude oil edged up $1.30 to $91.39 a barrel and TTF natural gas futures rose 2% to 115.50 euros MWh.
Asian Markets Close Mixed
Asian markets closed mixed and bond yields rose across the region.
The Nikkei 225 average rose 0.4% to 27,257.38, the Hang Seng index dropped 2.4% to 16,511.28 and the Sensex index added 0.3% to 59,107.19.
The yen traded at a new 32-year low of 149.75 and the Indian rupee dropped to a new record low of 82.94 against the U.S. dollar.
The renminbi declined to 7.28 and the Korean won dropped to 1,434.67.
Movers: Ally, Baker Hughes, Generac, Interactive Brokers, Intuitive Surg, Netflix, P&G, Winnebago
Scott Peters
19 Oct, 2022
New York City
Ally Financial Inc declined 8.7% to $26.31 after the financial services company said total net revenues in the third quarter increased 2% to $2.02 billion from $1.99 billion a year ago.
Net income in the period plunged 60% to $272 million from $683 million and diluted earnings per share dropped to 88 cents from $1.89 a year ago.
Retail customer base increased to 2.6 million and retail deposit base increased $2.7 billion to $133.9 billion.
Provision for credit losses jumped by $362 million to $438 million, reflecting losses "which are normalizing in-line with expectations."
Baker Hughes Co increased 6.6% to $25.65 after the oil services company reported third quarter revenues increased 5% to $5.4 billion from $5.1 billion a year ago.
The company swung to a net loss of $17 million from a profit of $8 million and diluted loss was 2 cents from earnings of 1 cent a year ago.
"Despite these economic challenges, we remain positive on the outlook for oil and gas.
We believe the fundamentals remain supportive of a multi-year upturn in global upstream spending, and that elevated natural gas and LNG pricing remains constructive for future FIDs," said said chief executive Lorenzo Simonelli.
Housing Starts Declined In September
Brian Turner
19 Oct, 2022
New York City
Housing starts fell 8.1% to an annualized rate of 1.439 million in September, lower than the revised 1.566 million rate in August, U.S. Census Bureau reported Wednesday.
Home sales have been on the decline after the sustained rise in home prices and a surge in mortgage rate.
Mortgage rates have risen from near 2.2% to above 7.2% in less than a year.
Single-family home starts declined 4.7% to 892,000 rate, the lowest since May 2020. Multi-family housing starts dropped 13.1% to 530,000.
European Markets Halt 4-day Advances, Natural Gas at 4-month Low
Bridgette Randall
19 Oct, 2022
Frankfurt
European markets traded lower snapping a four-day winning streak after stocks in construction and financial services led the decliners.
Bond yields were on the rise in Europe after the consumer price inflation in the UK rose to 10.1% in September from 9.9% in August, the Office for National Statistics reported today.
The UK inflation rebounded to the level last seen in July stoking the fears of another large-size rate hike.
The eurozone inflation rate was revised lower to 9.9% in September from the previous estimate of 10.0%, Eurostat said in its final report on Wednesday.
Despite the slight downward revision, the inflation rate was record high since the comparable record keeping began in 1991, driven by a 40.7% surge in energy price following a 38.6% rise in August.
Major averages declined in Europe and bond yields rose.
The DAX index decreased 0.17%or 22.15 to 12,743.72, the CAC-40 index edged up 0.07% or 4.69 to 6,069.43 and the FTSE 100 index fell 0.07% or 5.43 to 6,931.31.
The yield on 10-year German bunds rose to 2.37%, French bonds increased to 2.95%, UK Gilts edged down to 3.88% and Italian bonds rose to 4.77%.
The euro edged down to 97.82 U.S. cents and the British pound turned lower to $1.124.
Brent crude oil edged up $1.30 to $91.39 a barrel and TTF natural gas futures rose 2% to 115.50 euros MWh.
Stocks Lack Direction and Bond Yields Resume Advance
Barry Adams
19 Oct, 2022
New York City
Stocks struggled for direction in early trading and investors worried that looming recession and elevated inflation may accelerate earnings shortfall.
The S&P 500 index fell 0.2% to 3,712.35 and the Nasdaq Composite index declined 0.3% to 10,743.57.
United Airlines jumped more than 7% after the international airline said resilient travel demand is likely to lift annual earnings.
Procter & Gamble jumped 2.2% after the consumer goods maker reported better-than-expected earnings.
Netflix Inc soared 13.8% after the streaming service provider reported strong subscriber growth and revenue and earnings rose in the third quarter.
Crude oil rose $1.42 to $84.12 a barrel and natural gas fell 16 cents to $5.56 a thermal unit.
The yield on 2-year Treasury notes edged up to 4.53%, 10-year Treasury notes increased to 4.10% and 30-year bonds edged higher to 4.09%.
September Housing Starts Fell
Housing starts fell 8.1% to an annualized rate of 1.439 million in September, lower than the revised 1.566 million rate in August, U.S. Census Bureau reported Wednesday.
Home sales have been on the decline after the sustained rise in home prices and a surge in mortgage rate.
Mortgage rates have risen from near 2.2% to above 7.2% in less than a year.
Single-family home starts declined 4.7% to 892,000 rate, the lowest since May 2020. Multi-family housing starts dropped 13.1% to 530,000.
Bond Yields Advance In Europe, Euro Eases
European markets traded lower snapping a four-day winning streak after stocks in construction and financial services led the decliners.
Bond yields were on the rise in Europe after the consumer price inflation in the UK rose to 10.1% in September from 9.9% in August, the Office for National Statistics reported today.
The UK inflation rebounded to the level last seen in July stoking the fears of another large-size rate hike.
The eurozone inflation rate was revised lower to 9.9% in September from the previous estimate of 10.0%, Eurostat said in its final report on Wednesday.
Despite the slight downward revision, the inflation rate was record high since the comparable record keeping began in 1991, driven by a 40.7% surge in energy price following a 38.6% rise in August.
Major averages declined in Europe and bond yields rose.
The DAX index decreased 0.17%or 22.15 to 12,743.72, the CAC-40 index edged up 0.07% or 4.69 to 6,069.43 and the FTSE 100 index fell 0.07% or 5.43 to 6,931.31.
The yield on 10-year German bunds rose to 2.37%, French bonds increased to 2.95%, UK Gilts edged down to 3.88% and Italian bonds rose to 4.77%.
The euro edged down to 97.82 U.S. cents and the British pound turned lower to $1.124.
Brent crude oil edged up $1.30 to $91.39 a barrel and TTF natural gas futures rose 2% to 115.50 euros MWh.
Asian Markets Close Mixed
Asian markets closed mixed and bond yields rose across the region.
The Nikkei 225 average rose 0.4% to 27,257.38, the Hang Seng index dropped 2.4% to 16,511.28 and the Sensex index added 0.3% to 59,107.19.
The yen traded at a new 32-year low of 149.75 and the Indian rupee dropped to a new record low of 82.94 against the U.S. dollar.
The renminbi declined to 7.28 and the Korean won dropped to 1,434.67.
Goldman Q3 Earnings Falls on Weak Investment Banking Offset by Higher Bond Trading Fees
Scott Peters
18 Oct, 2022
New York City
Goldman Sachs Group Inc increased 3.2% to $316.38 after the financial services provider reported lower but better-than-expected earnings supported by bond trading activities.
Net revenues in the quarter declined to $11.975 billion from $13.608 billion a year ago.
Net income declined to $3.06 billion from $5.4 billion a year ago and diluted earnings per share fell to $8.25 from $14.93.
Segment Breakdown
Global markets trading in bonds and equities dominated financial company's quarterly results.
Global markets, which includes commodities and currencies, increased 11% from a year ago but declined 4% from the previous quarter to $6.2 billion.
Net revenue in bonds, currencies and commodities increased 41% to $3.53 billion, primarily reflecting significantly higher net revenues in intermediation or brokerage fees, driven by significantly higher net revenues in interest rate products and currencies, and higher net revenues in commodities and credit products, partially offset by significantly lower net revenues in mortgages.
Revenues in the equities brokerage business declined 14% to $2.68 billion.
Net revenue in asset management unit declined 20% from a year ago and jumped 68% from the previous quarter to $1.82 billion, primarily reflecting lower net revenues in equity and debt products offset by higher management fees.
Weak market environment also impacted investment banking unit fees.
Investment banking revenues plunged 57% from a year ago and 26% lower than in the previous quarter to $1.58 billion, reflecting weak advisory and underwriting fees.
Consumer and wealth management fees increased 18% from a year ago and 9% from the previous quarter to $2.38 billion.
Net revenues in wealth management was nearly unchanged at $1.63 billion and consumer banking revenues nearly doubled to $744 million reflecting higher credit card balances and higher deposit spreads.
Provision for credit losses increased to $515 million from $175 million a year ago but fell from $667 million in the second quarter.
The allowance for credit losses was $5.59 billion as of September 30, 2022.
Geographic Breakdown
Americas revenues accounted for 63%, Europe and Middle East 26% and Asia accounted for 11% of total revenues in the third quarter.
Book Value
Book value per common share increased 2.1% during the quarter and 8.4% during the first nine months of 2022 to $308.22.
Movers: Carnival Corp, Goldman Sachs, Hasbro, Lockheed, Microsoft, Salesforce, XPO Logistics
Scott Peters
18 Oct, 2022
New York City
Goldman Sachs Group Inc increased 3.2% to $316.38 after the financial services provider reported lower but better-than-expected earnings supported by bond trading activities.
Salesforce Inc jumped 5.2% to $154.52 after activist investor Starboard took a position in the company.
Colgate Palmolive Company increased 0.8% to $72.71 after activist investor Dan Loeb controlled Third Point acquired a stake in the company.
The activist investor investments were reported by CNBC without citing sources.
Microsoft Corporation increased 0.7% to $239.01 and erased morning gains of 2.7% after the company confirmed it cut about 1,000 jobs as revenue growth slows. The news was first reported by Axios and independently verified by ticker.com.
Semiconductor stocks also declined on the worries that the current slowdown in personal computing devices may last longer than anticipated.
Intel Corporation declined 2.1% to $25.90, Advanced Micro Devices, Inc inched up 0.1% to $58.03, Nvidia edged up 1% to $120.02 and Taiwan Semiconductor dropped 1.7% to $63.74.
Home builders were in focus after the industry sentiment extended its recent plunge to a 12-year low, excluding a brief period during the start of the coronavirus pandemic in March 2020.
The National Association of Home Builders/Wells Fargo Housing Market Index declined 8 points to 38 in October from the previous month.
Any reading below 50 indicates negative sentiment.
Despite the weak reading on the sentiment, home builder stocks advanced.
Lennar Corp added 3.2% to $76.86, PulteGroup Inc jumped 3.1% to $39.48 and Toll Brothers increased 1.9% to $42.86.
Carnival Corp jumped 11.5% to $8.11 after the cruise company's subsidiary launched an offering of $1.25 billion senior priority notes due in 2028.
The notes will be backed by 12 unencumbered vessels with an aggregate net book value of approximately $8.2 billion and proceeds will be used to repay principal on 1.875% senior notes due in 2022.
XPO Logistics declined 2.1% to $47.48 after the freight transportation company issued an earnings alert ahead of its scheduled earnings report on October 31.
The company said third quarter revenue is estimated at $3.04 billion and operating earnings between $181 million and $185 million.
North American less-than-truckload segment revenue per hundredweight, excluding fuel, is expected to increase 7% in the third quarter.
Lockheed Martin Corporation soared 8.7% to $431.93 after the defense contractor reported third quarter net sales increased $16.6 billion from $16.0 billion a year ago.
Net income jumped to $1.8 billion or $6.71 per share compared to $614 million or $2.21 a year ago.
Hasbro, Inc declined 1.8% to $66.47 after the toy maker reported third quarter revenue declined 15% to $1.6 billion from a year ago.
"As expected, the third quarter is our most difficult comparison and was further impacted by increasing price sensitivity for the average consumer," said Chris Cocks, Hasbro chief executive officer.
Net income in the quarter plunged 49% to $129.2 million from $252.2 million a year ago and diluted earnings per share dropped to 93 cents from $1.83.
Stocks Extend Rally, Oil Under Pressure, Home Builders Sentiment Drops
Barry Adams
18 Oct, 2022
New York City
Major averages on Wall Street advanced on earnings optimism but bond yields remained near 14-year highs.
Goldman Sachs reported lower but better-than-expected earnings supported by bond trading activities.
Salesforce was also in focus after activist investor Starboard took a position in the company.
Colgate Palmolive added more than 2% after activist investor Dan Loeb controlled Third Point acquired a stake in the company.
The activist investor investments were reported by CNBC without citing sources.
Microsoft erased morning gains of 2.7% after the company confirmed it cut about 1,000 jobs as revenue growth slows. The news was first reported by Axios and independently verified by ticker.com.
Semiconductor stocks also declined on the worries that the current slowdown in personal computing devices may last longer than anticipated.
Home builders were in focus after the industry sentiment extended its recent plunge to a 12-year low, excluding a brief period during the start of the coronavirus pandemic in March 2020.
The National Association of Home Builders/Wells Fargo Housing Market Index declined 8 points to 38 in October from the previous month.
Any reading below 50 indicates negative sentiment.
The S&P 500 index jumped 0.9%or 32.53 to 3,710.81 and the Nasdaq Composite index increased 0.8% or 81.17 to 10,756.32.
Crude oil fell $2.93 to $82.43 a barrel and natural gas dropped 6 cents to $5.93 a thermal unit.
The yield on 2-year Treasury notes edged down to 4.42%, 10-year Treasury notes eased to 3.99% and FTSE 100 index dropped to 4.03%.
European Markets Advance, Natural Gas Drops to 4-month Low
European markets extended gains as natural gas price dropped to a 4-month low.
Natural gas declined for the fourth day in a row on milder than usual weather conditions across Europe and a large stockpile eased shortage worries.
Germany ordered two nuclear power plants to continue operating till mid-2023 and Spain's national gas grid operator Enagas said it may reject the next shipment of LNG on the account of lack of storage capacity.
Italy's trade account swung to a deficit in August and Spain's trade deficit widened in the month.
German business sentiment improved in October by 2.7 points to -59.2, from the previous month's 14-year low of 61.9, the Center for Economic Research said Tuesday.
Brent crude fell $2.66 to $88.94 a barrel and natural gas TTF futures dropped 11.7% to 113.11 euros MWh.
The DAX index jumped 1.75% or 221.99 to 12,869.00, the CAC-40 index increased 1.06% or 63.82 to 6,104.48.
The euro edged down to 98.28 U.S. cents and the British pound inched lower to $1.129.
The yield on 10-year German Bunds declined to 2.23%, French bonds edged lower to 2.817%, British Gilt to 3.92% and Italian bonds to 4.61%.
Asian Markets Extend Rally On Earnings Optimism
Stocks in Asia closed higher as investors focused on domestic earnings and the Hang Seng index soared.
BYD, the maker of electric vehicles, reported third quarter earnings soared more than three-fold.
The People's Bank of China pumped 500 billion renminbi or $70 billion of liquidity into the financial system on Monday.
The new medium term lending facility offered loans at 2.75%, the key rate that acts as a base for the prime lending rate.
The PoB is set to announce its rate decision on October 20 and rates are expected to be left unchanged.
The Nikkei 225 average rose 1.4% or 382.35 to 27,156.14, the Hang Seng index increased 1.8% or 301.68 to 16,914.58 and the Sensex index rose 0.9% or 549.62 to 58,960.60.
The Kospi gained 1.4% to close at 2,249.95 ahead of earnings from Hyundai Motor and several other large conglomerates.
Hyundai Motor added 0.6% and SK Telecom increased 2.5%.
Stocks in Mumbai advanced after the Reserve Bank of India highlighted resilient economic activities.
L&T Tech Services said fiscal second quarter revenue increased 24% and net income jumped 23% from a year ago.
Adani Defence & Aerospace agreed to acquire the largest independent air services contractor Air Works for 400 crore rupees or $50 million.
The yield on 10-year Japanese bonds held firm at 0.25%, Chinese bonds at 2.70% and Indian bonds at 7.42%.
The yen traded near a 32-year low of 149.11 against a dollar, the Indian rupee at 82.20 and Chinese yuan at 7.22.
European Markets Near One-month High, Naturas Gas Drops to 4-month Low
Bridgette Randall
18 Oct, 2022
Frankfurt
European markets extended gains as natural gas price dropped to a 4-month low.
Natural gas declined for the fourth day in a row on milder than usual weather conditions across Europe and a large stockpile eased shortage worries.
Germany ordered two nuclear power plants to continue operating till mid-2023 and Spain's national gas grid operator Enagas said it may reject the next shipment of LNG on the account of lack of storage capacity.
Italy's trade account swung to a deficit in August and Spain's trade deficit widened in the month.
German business sentiment improved in October by 2.7 points to -59.2, from the previous month's 14-year low of 61.9, the Center for Economic Research said Tuesday.
Brent crude fell $2.66 to $88.94 a barrel and natural gas TTF futures dropped 11.7% to 113.11 euros MWh.
The DAX index jumped 1.75% or 221.99 to 12,869.00, the CAC-40 index increased 1.06% or 63.82 to 6,104.48.
The euro edged down to 98.28 U.S. cents and the British pound inched lower to $1.129.
The yield on 10-year German Bunds declined to 2.23%, French bonds edged lower to 2.817%, British Gilt to 3.92% and Italian bonds to 4.61%.
Asian Markets Extend Rally On Earnings Optimism
Arjun Pandit
18 Oct, 2022
Mumbai
Stocks in Asia closed higher as investors focused on domestic earnings and the Hang Seng index soared.
BYD, the maker of electric vehicles, reported third quarter earnings soared more than three-fold.
The People's Bank of China pumped 500 billion renminbi or $70 billion of liquidity into the financial system on Monday.
The new medium term lending facility offered loans at 2.75%, the key rate that acts as a base for the prime lending rate.
The PoB is set to announce its rate decision on October 20 and rates are expected to be left unchanged.
The Nikkei 225 average rose 1.4% or 382.35 to 27,156.14, the Hang Seng index increased 1.8% or 301.68 to 16,914.58 and the Sensex index rose 0.9% or 549.62 to 58,960.60.
The Kospi gained 1.4% to close at 2,249.95 ahead of earnings from Hyundai Motor and several other large conglomerates.
Hyundai Motor added 0.6% and SK Telecom increased 2.5%.
Stocks in Mumbai advanced after the Reserve Bank of India highlighted resilient economic activities.
L&T Tech Services said fiscal second quarter revenue increased 24% and net income jumped 23% from a year ago.
Adani Defence & Aerospace agreed to acquire the largest independent air services contractor Air Works for 400 crore rupees or $50 million.
The yield on 10-year Japanese bonds held firm at 0.25%, Chinese bonds at 2.70% and Indian bonds at 7.42%.
The yen traded near a 32-year low of 149.11 against a dollar, the Indian rupee at 82.20 and Chinese yuan at 7.22.
Volatile S&P 500 and Nasdaq Soar 3% Following BofA Earnings
Barry Adams
17 Oct, 2022
New York City
Stocks on Wall Street jumped after Bank of America reported better-than-expected earnings and bond yields rose.
After a week of wild swings the S&P 500 declined 1.5% and the Nasdaq Composite dropped 3.1% and bond yields hovered above 4%.
In Monday's trading, major averages advanced and the yield on Treasuries rose as investors digested better-than-expected earnings from Bank of America.
The S&P 500 index jumped 2.65% or 94.88 to 3,677.95 and the Nasdaq Composite index soared 3.4% or 354.41 to 10,675.80.
Natural gas futures fell to a three-month low and below $6 on falling demand and rising supply, according to the Energy Information Agency report.
U.S. utilities increased natural gas storage by 125 billion cubic feet, an increase over 100 billion cubic feet for the fourth week in a row.
The natural gas price fell after the demand for power decreased following Hurricane Ian and a decline in LNG exports.
Crude oil fell 17 cents to $85.48 and natural gas declined 49 cents to $5.95 a thermal unit.
The Yield on 2-year Treasury notes increased to 4.45%, 10-year bonds edged higher to 4,01% and the 30-year bonds rose to 4.03%.
U.S. Movers
Bank of America Corp jumped 6.5% to $33.76 after the bank reported better-than-expected third quarter sales and earnings.
Revenue, net of interest income, in the third quarter increased 8% to $24.5 billion from $22.8 billion a year ago.
Net income soared to $7.1 billion or 81 cents from $6.2 billion or 73 cents a share.
"Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts," said chief executive officer Brian Moynihan.
Continental Resources, Inc gained 8.6% to $74.08 after founder and chairman Harold Hamm and his family agreed to acquire the remaining shares in the oil producer for $74.28 a share.
Credit Suisse increased4.5% to $4.57 after the company settled a lawsuit for $475 million stemming from the sale of mortgage backed securities dating as back as 2008 with New Jersey State.
The company is also looking to sell a stake to a group of investors according to reports on the weekend.
Dish Network Corp jumped 7.7% to $13.95 and rebounded from a loss of more than 7% last week after Conx Corp was in talks to acquire Boost Mobile from the company.
Fox Corp declined 9.4% to $28.58 and News Corp gained 3.8% to $16.20 after founder Rupert Murdoch formed a special committee to merge the two companies together.
Roblox Corp soared 20.7% to $42.88 after the online gaming company said average daily active users in September jumped 23% to 57.8 million
Estimated booking increased between 11% and 15% to between $212 million and $219 million from a year ago and estimated revenues increased between -2% and +3% to between $171 million and $180 million.
Splunk Inc increased 5.8% to $74.25 after the activist investor Starboard Value is said to hold approximately 5% stake in the company with a plan to boost shareholder value.
Europe Stock Movers
Credit Suisse AG gained 2.6% to 4.53 Swiss francs and the troubled investment bank reached a financial settlement with the New Jersey State regulator related to residential mortgage securities dating back to 2008.
ASOS Plc plunged 8.4% to 485 pence after the U.K.-based online fashion retailer confirmed that the company is in negotiations with lenders in revising credit facility terms.
Energy complex companies rose after crude oil prices rose more than 1% and the dollar edged down.
BP Plc, Eni SpA, Repsol SA, TotalEnergies SE and Shell Plc increased between 1% and 2.5%.
Hargreaves Lansdown plunged as much as 8% before recovering to close down 3.5% to 787.95 pence and the investment platform is facing multi-million pound lawsuits from thousands of investors over the fallen equity income fund managed by Neil Woodford.
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Movers: BofA, Continental Resources, Credit Suisse, Dish Network, Fox Corp, Roblox, Splunk
Scott Peters
17 Oct, 2022
New York City
Bank of America Corp jumped 6.5% to $33.76 after the bank reported better-than-expected third quarter sales and earnings.
Revenue, net of interest income, in the third quarter increased 8% to $24.5 billion from $22.8 billion a year ago.
Net income soared to $7.1 billion or 81 cents from $6.2 billion or 73 cents a share.
"Our U.S. consumer clients remained resilient with strong, although slower growing, spending levels and still maintained elevated deposit amounts," said chief executive officer Brian Moynihan.
Continental Resources, Inc gained 8.6% to $74.08 after founder and chairman Harold Hamm and his family agreed to acquire the remaining shares in the oil producer for $74.28 a share.
Credit Suisse increased4.5% to $4.57 after the company settled a lawsuit for $475 million stemming from the sale of mortgage backed securities dating as back as 2008 with New Jersey State.
The company is also looking to sell a stake to a group of investors according to reports on the weekend.
Dish Network Corp jumped 7.7% to $13.95 and rebounded from a loss of more than 7% last week after Conx Corp was in talks to acquire Boost Mobile from the company.
Fox Corp declined 9.4% to $28.58 and News Corp gained 3.8% to $16.20 after founder Rupert Murdoch formed a special committee to merge the two companies together.
Roblox Corp soared 20.7% to $42.88 after the online gaming company said average daily active users in September jumped 23% to 57.8 million
Estimated booking increased between 11% and 15% to between $212 million and $219 million from a year ago and estimated revenues increased between -2% and +3% to between $171 million and $180 million.
Splunk Inc increased 5.8% to $74.25 after the activist investor Starboard Value is said to hold approximately 5% stake in the company with a plan to boost shareholder value.
European Markets Jump 1.7%, UK Reverses Budget Proposals
Bridgette Randall
17 Oct, 2022
Frankfurt
European market indexes soared and bond yields declined after the UK finance minister reversed unfunded tax measures proposed in the mini-budget just a few weeks ago.
The DAX index increased 1.7% or 211.22 to 12,649.03, the CAC-40 index advanced 1.8%or 108.73 to 6,040.66 and the FTSE 100 index added 0.9% or 60.18 to 6,920.25.
The euro was nearly unchanged at 97.81 U.S. cents and the British pound increased 1.4% to $1.13.
The yield on 10-year German bunds declined to 2.22%, French bonds fell to 2.82%, the British Gilts to 3.96%, Swiss bonds eased to 1.2% and Italian bonds to 4.64%.
Brent crude edged up 84 cents to $92.45 and the TTF natural gas fell 8.1% to 130.34 euros a megawatt hour.
UK Reverses Tax Proposals, gilt Yields Drop, Pound Rises
The U.K. bond yields rose after the recently appointed finance minister Jeremy Hunt reversed all tax proposals released in the mini-budget ahead of parliamentary approval.
The Pound rebounded and the Gilt yields dropped the most in decades after the government reversal but the longevity and credibility of the British government in doubt.
The Liz Truss government is not likely to survive the remaining term ahead of the required general election in 2024.
The yields fell 40 basis points for the 20-year and the 30-year Gilts and the pound edged slightly higher but investors are concerned about how long the current government will survive.
The growing political chaos and the Conservative Party infighting may force the UK general election earlier than the required date in early 2024.
Europe Stock Movers
Credit Suisse AG gained 2.6% to 4.53 Swiss francs and the troubled investment bank reached a financial settlement with the New Jersey State regulator related to residential mortgage securities dating back to 2008.
ASOS Plc plunged 8.4% to 485 pence after the U.K.-based online fashion retailer confirmed that the company is in negotiations with lenders in revising credit facility terms.
Energy complex companies rose after crude oil prices rose more than 1% and the dollar edged down.
BP Plc, Eni SpA, Repsol SA, TotalEnergies SE and Shell Plc increased between 1% and 2.5%.
Hargreaves Lansdown plunged as much as 8% before recovering to close down 3.5% to 787.95 pence and the investment platform is facing multi-million pound lawsuits from thousands of investors over the fallen equity income fund managed by Neil Woodford.
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