Market Update
Europe Movers: BMW, Barratt Developments, Enagas, Evotec, Travis Perkins, VW
Inga Muller
10 Jul, 2024
Frankfurt
With rising political turmoil and leading nations of the European Union, the euro may face an uncertain future in the months ahead.
French lawmakers struggled to form an alliance amid deep divisions, which could force President Macron to appoint a technocrat as the next prime minister.
The DAX index increased by 0.8% to 18,373.27; the CAC-40 index rose by 0.9% to 7,574.88; and the FTSE 100 index rose by 0.6% to 8,186.21.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.10%; and Italian bonds decreased to 3.85%.
BMW increased 0.9% to €88.40, despite the German luxury automaker reporting weak vehicle sales in the second quarter.
Vehicle sales in the second quarter decreased 1.3% from a year ago to 618,826 units, and electric vehicle sales rose 8.5% to 146,483 units.
Volkswagen AG decreased 0.8% to €105.75 after the German automaker said it plans to close its facility in Brussels for Audi due to an ongoing decline in sales of electric vehicles.
Evotec SE soared 4% to €9.76 after the company announced a collaboration with Pfizer to accelerate drug discovery efforts in France.
Enagas gained 4.3% to €13.36 after the Spanish natural gas distribution grid operator said it agreed to sell its 30.2% stake in the Tallgrass to Blackstone for $1.1 billion.
Enagas and Blackstone teamed up in 2019 to acquire a 10.93% initial stake in the Kansas-based Tallgrass Energy, a US energy infrastructure company founded in 2012.
It owns three inter-state gas pipelines regulated by the Federal Energy Regulatory Commission, with a total of 11,000 km of gas transmission pipelines, 2,400 km of gas gathering pipelines, and a 1,300 km oil pipeline.
Barratt Developments PLC declined 1.4% to 484.40 pence after the UK-based home builder said it is lowering its home sales estimate in the second half, citing elevated mortgage rates and challenging macroeconomic conditions.
Travis Perkins jumped 6.5% to 853.0 pence after the construction materials maker appointed a new chief executive.
Travis Perkins appointed Pete Redfern as Director and Chief Executive Officer on September 16, succeeding Nick Roberts, who will resign from the office on the same day.
European Stocks Halted 3-Day Slump, Euro In Focus Amid Growing Political Turmoil In France
Bridgette Randall
10 Jul, 2024
London
European markets rebounded from a three-day slump, but political uncertainty loomed in France as lawmakers struggled to form an alliance after a heated snap election.
Benchmark indexes in Paris, London, and Frankfurt jumped as much as 0.8% as investors overlooked the brewing political malaise in France and focused on the upcoming earnings season.
French President Emmanuel Macron, breaking tradition, allowed ministers of the recently resigned government to hold positions and conduct daily activities after a change of majority in parliament.
With a hung parliament, France's leading position in the European Union is diminished, allowing it to influence political outcomes and nudge policies in its favor.
In addition, political disarray in Germany is also negatively impacting sentiment for the euro.
On the economic front, investors are also looking forward to the release of inflation data from France, Italy, and Spain this week.
Europe Indexes and Yields
The DAX index increased by 0.8% to 18,373.27; the CAC-40 index rose by 0.9% to 7,574.88; and the FTSE 100 index rose by 0.6% to 8,186.21.
The yield on 10-year German bonds edged lower to 2.51%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.10%; and Italian bonds decreased to 3.85%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.80 Swiss cents.
Brent crude decreased $0.14 to $84.51 a barrel, and the Dutch TTF natural gas rose by €0.33 to €31.42 per MWh.
Europe Stock Movers
BMW increased 0.9% to €88.40, despite the German luxury automaker reporting weak vehicle sales in the second quarter.
Volkswagen AG decreased 0.8% to €105.75 after the German automaker said it plans to close its facility in Brussels for Audi due to an ongoing decline in sales of electric vehicles.
Evotec SE soared 4% to €9.76 after the company announced a collaboration with Pfizer to accelerate drug discovery efforts in France.
Enagas gained 4.3% to €13.36 after the Spanish natural gas distribution grid operator said it agreed to sell its 30.2% stake in the Tallgrass to Blackstone for $1.1 billion.
Enagas and Blackstone teamed up in 2019 to acquire a 10.93% initial stake in Tallgrass Energy, a US energy infrastructure company founded in 2012.
It owns three inter-state gas pipelines regulated by the Federal Energy Regulatory Commission, with a total of 11,000 km of gas transmission pipelines, 2,400 km of gas gathering pipelines, and a 1,300 km oil pipeline.
Barratt Developments PLC declined 1.4% to 484.40 pence after the UK-based home builder said it is lowering its home sales estimate in the second half, citing elevated mortgage rates and challenging macroeconomic conditions.
Travis Perkins jumped 6.5% to 853.0 pence after the construction materials maker appointed a new chief executive.
Travis Perkins appointed Pete Redfern as Director and Chief Executive Officer on September 16, succeeding Nick Roberts, who will resign from the office on the same day.
Another Day, Another High In Japan's Nikkei 225 as the Yen Drifts to a New 38-year Low
Akira Ito
10 Jul, 2024
Tokyo
Market indexes in Tokyo advanced to new record highs following the market gains in New York.
The Nikkei 225 index and the Topix index gained to close at new record highs after the producer price index rose for the 41st month in a row.
Producer price index increased at an annual pace of 2.9% in June, following the upwardly revised 2.6% gain in the previous month.
Prices rose at the fastest pace since August 2023 as input costs and import costs continued to climb, and producer inflation was positive for the 41st month in a row.
The acceleration in inflation supported the case for the Bank of Japan to adjust its benchmark rate higher after the next policy meeting at the end of July.
The central bank is also scheduled to release its bond purchase tapering plan, which could increase confidence that policymakers are serious about narrowing the yield gap between the U.S. and Japan.
The yen resumed its upward march and traded at 141.36 against the U.S. dollar amid the persistently wide yield differential between the U.S. and Japanese bonds.
Japan Stock Movers
The Nikkei 225 stock averages increased by 0.6% to 41,831.99, and the Topix index advanced by 0.5% to 2,909.20.
Recruit Holdings jumped 3.6% to ¥9,484.0 after the company said it plans to buyback up to 5.7% of its outstanding shares over the next 12 months.
Tech stocks were among the most active, and Tokyo Electron, Advantest, Disco Corp., and SoftBank hovered around the flatline.
Tokio Marine jumped 4.8% to ¥6,596.0, MS&AD rose 4.2% to ¥3,930.0, and Mitsubishi Motors jumped 8.6% to ¥493.30.
GS Yuasa declined 5.9% to ¥2,938.0 and Lasertec Corp. declined 2.6% to ¥33,610.0.
China's Weak Consumer Inflation Highlights Broader Economic Malaise
Li Chen
10 Jul, 2024
Hong Kong
Stocks traded volatile in Shanghai and Hong Kong after sluggish inflation data signaled weak consumer demand.
The Hang Seng index and the CSI 300 index declined as much as 0.5% after rallying in the morning hours in the hopes of additional market-supportive measures from policymakers.
Consumer price inflation slowed to an annual pace of 0.2% in June from 0.3% in May, the National Bureau of Statistics reported on Wednesday.
Consumer prices rose for the fifth month in a row, but the price increase slowed, suggesting weak consumer demand amid job market uncertainty and a protracted property market slump.
Core consumer price inflation, which excludes food and energy prices, rose 0.6% from a year earlier.
Consumer price inflation has stayed near zero since April last year, the longest period of deflation since the 2009 global financial crisis.
Annual inflation is expected to hover between 0.5% and 0.6%, sharply lower than the 3.0% target set by the central government's policymakers.
Producer prices declined 0.8% in June, and the measure of wholesale prices eased for the 21st month in a row as factory order growth remained weak, the statistical agency said in a separate report released on Wednesday.
China Stock Movers
The Hang Seng index decreased 0.05% to 17,516.64, and the CSI 300 index declined 0.2% to 3,432.29.
Baidu jumped 11.4% to HK$96.35, and the company's driverless robotaxi won early popularity in Wuhan, Hubei.
Additionally, Beijing city authorities are likely to permit the use of robots in ride-sharing services in the near future.
Nongfu Spring soared 4% to HK $35.10 on a report suggesting that the founder, Zhong Shanshan, is looking to increase his stake in the company by purchasing HK $2 billion or $256 million worth of stocks over the next six months.
Nongfu Spring is one of the largest bottled-water companies in China, and in the previous full-year, the company posted revenue of 42.6 billion yuan and net income of 12 billion yuan.
Four companies started trading on Hong Kong and mainland exchanges today.
Ruichang International, a maker of petroleum refining equipment, priced its initial public offering at HK $1.36 per share and raised HK $131.6 million.
Chenqi Technology priced its initial public offering at HK $35 per share and raised HK $1.01 billion, but the stock dropped as much as 15% in early trading.
Shanghai Voicecomm, the developer of conversational artificial intelligence technology, raised HK $572 million in its initial public offering and priced its stock at HK $152 per share.
Jirfine Intelligence Equipment soared to 57.30 yuan; the maker of CNC machines listed its stock at 26.50 yuan per share on the Shenzhen Stock Exchange and raised 800 million yuan.
India Movers: Adani Port, Adani Power, Angel One, Delhivery, Mankind Pharma, Shilpa Medicare, Tata Motors
Arun Goswami
10 Jul, 2024
Mumbai
Benchmark indexes traded down, and investors turned cautious ahead of the release of inflation data and the start of the earnings season.
The Sensex index decreased by 0.8% to 79,721.50, and the Nifty index declined by 0.8% to 24,244.15.
On the Mumbai stock exchange, 156 stocks traded at their 52-week highs, and 12 stocks traded at their 52-week lows.
Angel One increased 0.8% to ₹2,258.95, despite reports suggesting that a hacker has leaked personal information of 79 lakh account holders of the Mumbai-based brokerage firm, including contact details and account size, on a website.
Adani Ports gained 0.4% to ₹1,484.20 after the company won a concession to develop and operate a terminal located at Deendayal Port, Kandla, Gujarat, for 30 years through a competitive bidding process.
Adani Power advanced 0.3% to ₹726.40, and the company's subsidiary signed a 20-year agreement to sell 500 MW of power to Reliance Industries.
Reliance Industries agreed to acquire a 26% stake in the 600 MW thermal power plant operated by the subsidiary Mahan Energen Ltd.
Mankind Pharma jumped 2.5% to ₹2,153.40, and an affiliate of Capital Group plans to sell a 0.9% stake for ₹763 crore in the company at a price of ₹2,061 per share.
Delhivery declined 0.5% to ₹389.75, and several news reports suggested that the Canada Pension Plan Investment Board plans to sell its entire 3.18% stake in the company for ₹886 crore through a block trade seeking a price between ₹378 and ₹389 per share.
Shilpa Medicare decreased 0.6% to ₹655.15 despite the pharmaceutical company's Raichur facility meeting the manufacturing standard required by Brazil's drug agency.
Tata Motors declined 0.3% to ₹1,011.45, and the company said it revised down the selling price for Harrier and Safari SUVs by as much as ₹1.5 lakh.
The automaker's revised price for the Harrier is lowered to ₹15 lakh and the Safari to ₹15.5 lakh.
HG Infra Engineering gained 0.4% to ₹1,706.10, and the company won solar energy projects worth ₹465 crore from Ultra Vibrant Solar Energy Pvt. Ltd., according to a filing with exchanges.
Powell Comments Shed Little Light on Rate Path, Markets In Europe and China Struggle
Alexander Garcia
09 Jul, 2024
Miami
Benchmark indexes on Wall Street inched higher as investors reviewed comments from Federal Reserve Chair Jerome Powell.
Stock market indexes continued to advance higher for the sixth week in a row ahead of earnings season and optimism about artificial intelligence applications-linked spending.
The S&P 500 index and the Nasdaq Composite advanced more than 0.3% and traded at new record highs after mega-cap stocks inched higher.
Nvidia advanced 3%, Apple gained 0.6%, Meta gained 0.9%, and Amazon added 0.3%, but Microsoft decreased 0.3%.
Fed Chair Powell delivered his semiannual testimony on monetary policy before the Senate Banking Committee, and reiterated the central bank's commitment to finely balance the policy to support economic activities and employment.
In prepared remarks, Fed Chair Powell stressed that inflation has slowed but prices are still rising faster than 2% target rate, and lowering rates too soon could stall or reverse the progress made so far.
On the other hand, "reducing policy restraint too late or too little could unduly weaken economic activity and employment," Powell added.
Fed Chair Powell is scheduled to appear on Wednesday before the U.S. House Financial Services Committee.
Powell's remarks come before the release of consumer price inflation data on Thursday and producer price inflation on Friday.
Despite eleven rate hikes over 2022 and 2023, inflation has still stayed well above the 2% target rate and shows no signs of easing, and record high food, transportation, and home prices have pushed millions of families into cost-of-living crises.
While Fed Chair Powell talks tough on inflation, the surge in inflation and record prices were started by the Federal Reserve by pumping trillions of dollars during the pandemic years in the name of avoiding economic depression.
Earnings season kicks off this week with earnings from PepsiCo, and leading banks including JP Morgan, Citigroup, Wells Fargo, and Bank of New York Mellon are set to report.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,584.31, and the Nasdaq Composite rose 0.4% to 18,466.78.
The yield on 2-year Treasury notes edged higher to 4.65%, 10-year Treasury notes increased to 4.29%, and 30-year Treasury bonds edged lower to 4.48%.
WTI crude oil decreased $0.38 to $81.83 a barrel, and natural gas prices edged up 3 cents to $2.40 a thermal unit.
Gold decreased by $2.47 to $2,364.57 an ounce, and silver rose 17 cents to $31.02.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.04.
U.S. Stock Movers
BP plc declined 4% to $35.01 after the British oil company announced an impairment charge of up to $2 billion and weaker refining margin in the second quarter.
The oil explorer and refiner said the after-tax impact of the charge could be between $1 billion and $2 billion, primarily linked to a review of a refinery in Germany and other worldwide assets.
The company added weaker refining margins are likely to negatively impact earnings between $500 million and $700 million, primarily because of the narrower margin differential in the U.S. refining.
Refining margins are likely to be adversely impacted "mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, and a higher level of turnaround activity, partially offset by the absence of the first quarter Whiting refinery outage of around $0.5 billion.
The oil trading result is expected to be weak following a strong result in the first quarter," the company said in a regulatory filing in the U.K.
The company said its capital expenditure plans of $16 billion are likely to be evenly split between the first and second half, and it estimated $1.2 billion of payment in 2024 related to the Gulf of Mexico oil spill.
Nvidia Corp. soared 3.9% to $132.88 after KeyBanc increased its target price for the stock to $180.
Europe Indexes Turns Lower Amid Political Uncertainty and Debt Worries
European markets turned lower after investors reassessed the political landscape in the UK and France, and bond yields stayed near two-month highs.
Benchmark indexes in London, Paris, and Frankfurt eased on the worry that the hung parliament in France may lead to political gridlock for several months.
The centrist alliance led by President Emmanuel Macron, the recently formed Popular Front, and the National Rally Party formed three leading blocs, but neither group won a clear majority.
Market participants are worried that if the political impasse drags on beyond a month, the CAC-40 index may decline between 5% and 20% from its current level, putting additional pressure on the euro.
The euro held stable and the French bond yield hovered near a two-week high, but France is likely to go through several months of political instability before a new government is established.
If parties fail to agree on a prime minister, President Macron may appoint a technocrat leader, avoiding a political impasse.
On the economic front this week, France, Germany, and Spain are set to release their inflation updates.
Europe Indexes and Yields
The DAX index decreased by 1.4% to 18,223.94; the CAC-40 index fell by 1.6% to 7,508.66; and the FTSE 100 index declined by 0.7% to 8,139.81.
The yield on 10-year German bonds edged lower to 2.54%. French bonds inched lower to 3.16%; the UK gilts inched lower to 4.16%; and Italian bonds decreased to 3.92%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.82 Swiss cents.
Brent crude increased $1.12 to $84.62 a barrel, and the Dutch TTF natural gas fell by €0.97 to €31.17 per MWh.
Europe Stock Movers
Saint Gobain SA decreased 2.2% to €76.06, and the construction material maker said it has completed the acquisition of Australia-based building materials maker CSR for A$4.3 billion.
CSR is saddled with at least $187 million of asbestos-related liabilities, as the company was a leading blue asbestos miner.
Dassault Systems declined 4.5% to €33.75 after the engineering software company lowered its 2024 earnings outlook.
PageGroup declined 5.7% to 398.37 pence after the UK-based recruitment company said fiscal year earnings in the current year are likely to drop as much as 50% from a year earlier.
Indivior plunged 35% to 760.0 pence after the UK-based drug maker lowered its annual earnings outlook and said it was discontinuing production of Perseris, a schizophrenia drug.
The drugmaker revised down its 2024 revenue outlook to between $1.15 billion and $1.22 billion from the earlier guidance range of between $1.24 billion and $1.33 billion.
The company lowered its adjusted operating profit range between $285 million and $320 million from the previous estimate of between $330 million and $380 million.
Strength In Tech Stocks and Weakness In Yen Pushes Japan Indexes to New Highs
Japan's benchmark indexes soared to new record highs, pushed by tech stocks and persistent weakness in the yen.
The Nikkei 225 gained 2% and the Topix index jumped 1% following the enthusiasm about artificial intelligence and related technologies.
Market sentiment was also bolstered after the S&P 500 and the Nasdaq Composite closed at new record highs in overnight trading in New York.
Investors also digested the current account surplus and the persistent weakness in real wages in May, released on Monday.
The Bank of Japan said M2 money supply increased 1.5% to 1.257 trillion yen in June from a year earlier, and M3 money supply rose 1.0% to 1.63 trillion yen, slower than 1.3% in the previous month.
Investors are looking forward to the release of machinery orders later in the week amid high expectations of a rebound in new orders.
The yen traded around 160.65 against the U.S. dollar, and the yield on 10-year Japanese government bonds was near 1.09%.
Investors are hoping that the Bank of Japan will provide clarity about the future interest rate path and the central bank's government bond purchase plan at the end of the two-day next policy meeting on July 31.
Japan Stock Movers
The Nikkei 225 stock average jumped 2% to 41,580.17, and the Topix index gained 1% to 2,895.55.
Tech stocks were among the leading gainers in Tokyo's trading on Tuesday.
Tokyo Electron, Advantest, Disco Corp., and Screen Holdings jumped between 2% and 4%.
Hitachi Ltd. jumped 5.4% to ¥3,834.0 after the conglomerate announced its plans to integrate artificial intelligence-based industrial solutions.
Leading exporters traded mixed amid weakness in the yen.
Canon advanced 1.8% to ¥4,511.0, and Sony Group jumped 5.2% to ¥14,605.0.
However, Panasonic declined 0.2% to ¥1,319.0, and Mitsubishi Electric edged up a fraction to ¥2,740.50.
Fujikura Holdings soared 11.3% to ¥3,439.0, and Furukawa Electric gained 4.4% to ¥4,081.0.
China Deflation Worries Dominate Shanghai and Hong Kong Trading
China stocks were under pressure ahead of the release of several key economic indicators, including inflation updates, this week.
The Hang Seng index and CSI 300 index struggled to get their footing amid market jitters before the release of closely watched inflation updates released by the statistics bureau on Wednesday.
China's consumer price inflation is estimated to increase by at least 0.3%, and the producer price index decreased by 0.7% in June, according to a survey conducted by Ticker.com.
Producer prices are likely to decline for the 21st month in a row as manufacturers struggle with overcapacity in several key industries and weak domestic demand.
Later in the week, the National Bureau of Statistics is scheduled to release international trade, money supply, and foreign direct investment data.
The Chinese economy is struggling amid weak consumer sentiment, sustained capital flight, and ongoing weakness in the property and job markets.
Meanwhile, Chinese policymakers are scheduled to meet on Monday for the much-delayed third plenum, which could lead to the announcement of new economic reforms and market-supportive measures.
Investors have lowered their expectations for deep and meaningful reforms that could stop the capital outflow and revive consumer sentiment.
China Stock Movers
The Hang Seng Index declined 0.3% to 17,478.72, and the CSI 300 index rose 0.1% to 3,406.16.
Tingyi Holding decreased 3% to HK $9.83 after the maker of instant noodles raised prices on 12 products.
Investors are worried that the price hike may backfire because of weak consumer demand amid high job market uncertainty.
Anta Sports declined 2.7% to HK $69.55 after cautious comments from Citigroup raised the prospects of a lower stock price.
Three new companies were listed on stock exchanges in China.
Fangzhou Inc. increased to HK $4.82, and the online disease management platform priced its initial public offering at HK $4.50 per share.
Baiwang Co. Ltd. increased a fraction to HK$36.05, and the enterprise software solution provider priced its initial public offering at HK$36 per share and raised HK$228.87 million.
China Shenzhen International Warehouse Logistics Closed-end Infrastructure Fund, a real estate investment trust, priced its public offering and raised 1.2 billion yuan, or $160 million.
China Shenzhen International traded at 2.45 yuan on the first day of its trading in Shenzhen.
U.S. Movers: BP, indivior, Nvidia
Scott Peters
09 Jul, 2024
New York City
BP plc declined 4% to $35.01 after the British oil company announced an impairment charge of up to $2 billion and weaker refining margin in the second quarter.
The oil explorer and refiner said the after-tax impact of the charge could be between $1 billion and $2 billion, primarily linked to a review of a refinery in Germany and other worldwide assets.
The company added weaker refining margins are likely to negatively impact earnings between $500 million and $700 million, primarily because of the narrower margin differential in the U.S. refining.
Refining margins are likely to be adversely impacted "mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, and a higher level of turnaround activity, partially offset by the absence of the first quarter Whiting refinery outage of around $0.5 billion.
The oil trading result is expected to be weak following a strong result in the first quarter," the company said in a regulatory filing in the U.K.
The company said its capital expenditure plans of $16 billion are likely to be evenly split between the first and second half, and it estimated $1.2 billion of payment in 2024 related to the Gulf of Mexico oil spill.
Nvidia Corp. soared 3.9% to $132.88 after KeyBanc increased its target price for the stock to $180.
Indivior PLC plunged 35% to $9.85 after the UK-based drug maker lowered its annual earnings outlook and said it was discontinuing production of Perseris, a schizophrenia drug.
The drugmaker revised down its 2024 revenue outlook to between $1.15 billion and $1.22 billion from the earlier guidance range of between $1.24 billion and $1.33 billion.
The company lowered its adjusted operating profit range between $285 million and $320 million from the previous estimate of between $330 million and $380 million.
U.S. Major Averages Inch Further In Record Territory Ahead of Fed Chair Powell Comments
Barry Adams
09 Jul, 2024
New York City
Stock market indexes continued to advance higher for the sixth week in a row ahead of earnings season and optimism about artificial intelligence applications-linked spending.
The S&P 500 index and the Nasdaq Composite advanced more than 0.3% and traded at new record highs after mega-cap stocks inched higher.
Nvidia advanced 4%, Apple gained 0.6%, Meta gained 0.9%, and Amazon added 0.3%, but Microsoft decreased 0.3%.
Fed Chair Powell is scheduled to deliver his semiannual testimony on monetary policy before the Senate Banking Committee on Tuesday, followed by a presentation on Wednesday to the U.S. House Financial Services Committee.
Powell's remarks come before the release of consumer price inflation data on Thursday and producer price inflation on Friday.
Earnings season kicks off this week with earnings from PepsiCo, and leading banks including JP Morgan, Citigroup, Wells Fargo, and Bank of New York Mellon are set to report.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,584.31, and the Nasdaq Composite rose 0.4% to 18,466.78.
The yield on 2-year Treasury notes edged higher to 4.65%, 10-year Treasury notes increased to 4.29%, and 30-year Treasury bonds edged lower to 4.48%.
WTI crude oil decreased $0.38 to $81.83 a barrel, and natural gas prices edged up 3 cents to $2.40 a thermal unit.
Gold decreased by $2.47 to $2,364.57 an ounce, and silver rose 17 cents to $31.02.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.04.
U.S. Stock Movers
BP plc declined 4% to $35.01 after the British oil company announced an impairment charge of up to $2 billion and weaker refining margin in the second quarter.
The oil explorer and refiner said the after-tax impact of the charge could be between $1 billion and $2 billion, primarily linked to a review of a refinery in Germany and other worldwide assets.
The company added weaker refining margins are likely to negatively impact earnings between $500 million and $700 million, primarily because of the narrower margin differential in the U.S. refining.
Refining margins are likely to be adversely impacted "mainly relating to weaker middle distillate margins and narrower North American heavy crude oil differentials, and a higher level of turnaround activity, partially offset by the absence of the first quarter Whiting refinery outage of around $0.5 billion.
The oil trading result is expected to be weak following a strong result in the first quarter," the company said in a regulatory filing in the U.K.
The company said its capital expenditure plans of $16 billion are likely to be evenly split between the first and second half, and it estimated $1.2 billion of payment in 2024 related to the Gulf of Mexico oil spill.
Nvidia Corp. soared 3.9% to $132.88 after KeyBanc increased its target price for the stock to $180.
Europe Movers: Dassult, Indivior, PageGroup, Saint Gobain
Inga Muller
09 Jul, 2024
Frankfurt
European markets extended weekly losses as France struggled to form a new government.
The UK's newly appointed government plans to ramp up infrastructure spending, driving a higher budget deficit.
The DAX index decreased by 0.4% to 18,391.69; the CAC-40 index fell by 0.9% to 7,561.27; and the FTSE 100 index declined by 0.3% to 8,171.46.
The yield on 10-year German bonds edged lower to 2.54%. French bonds inched lower to 3.16%; the UK gilts inched lower to 4.16%; and Italian bonds decreased to 3.92%.
Saint Gobain SA decreased 2.2% to €76.06, and the construction material maker said it has completed the acquisition of Australia-based building materials maker CSR for A$4.3 billion.
CSR is saddled with at least $187 million of asbestos-related liabilities, as the company was a leading blue asbestos miner.
Dassault Systems declined 4.5% to €33.75 after the engineering software company lowered its 2024 earnings outlook.
PageGroup declined 5.7% to 398.37 pence after the UK-based recruitment company said fiscal year earnings in the current year are likely to drop as much as 50% from a year earlier.
Indivior plunged 35% to 760.0 pence after the UK-based drug maker lowered its annual earnings outlook and said it was discontinuing production of Perseris, a schizophrenia drug.
The drugmaker revised down its 2024 revenue outlook to between $1.15 billion and $1.22 billion from the earlier guidance range of between $1.24 billion and $1.33 billion.
The company lowered its adjusted operating profit range between $285 million and $320 million from the previous estimate of between $330 million and $380 million.
Europe Market Indexes Turns Lower Amid Political Uncertainty and Debt Worries
Bridgette Randall
09 Jul, 2024
London
European markets turned lower after investors reassessed the political landscape in the UK and France, and bond yields stayed near two-month highs.
Benchmark indexes in London, Paris, and Frankfurt eased on the worry that the hung parliament in France may lead to political gridlock for several months.
The centrist alliance led by President Emmanuel Macron, the recently formed Popular Front, and the National Rally Party formed three leading blocs, but neither group won a clear majority.
Market participants are worried that if the political impasse drags on beyond a month, the CAC-40 index may decline between 5% and 20% from its current level, putting additional pressure on the euro.
The euro held stable and the French bond yield hovered near a two-week high, but France is likely to go through several months of political instability before a new government is established.
If parties fail to agree on a prime minister, President Macron may appoint a technocrat leader, avoiding a political impasse.
On the economic front this week, France, Germany, and Spain are set to release their inflation updates.
Europe Indexes and Yields
The DAX index decreased by 0.4% to 18,391.69; the CAC-40 index fell by 0.9% to 7,561.27; and the FTSE 100 index declined by 0.3% to 8,171.46.
The yield on 10-year German bonds edged lower to 2.54%. French bonds inched lower to 3.16%; the UK gilts inched lower to 4.16%; and Italian bonds decreased to 3.92%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.82 Swiss cents.
Brent crude increased $0.22 to $85.42 a barrel, and the Dutch TTF natural gas fell by €0.45 to €31.70 per MWh.
Europe Stock Movers
Saint Gobain SA decreased 2.2% to €76.06, and the construction material maker said it has completed the acquisition of Australia-based building materials maker CSR for A$4.3 billion.
CSR is saddled with at least $187 million of asbestos-related liabilities, as the company was a leading blue asbestos miner.
Dassault Systems declined 4.5% to €33.75 after the engineering software company lowered its 2024 earnings outlook.
PageGroup declined 5.7% to 398.37 pence after the UK-based recruitment company said fiscal year earnings in the current year are likely to drop as much as 50% from a year earlier.
Indivior plunged 35% to 760.0 pence after the UK-based drug maker lowered its annual earnings outlook and said it was discontinuing production of Perseris, a schizophrenia drug.
The drugmaker revised down its 2024 revenue outlook to between $1.15 billion and $1.22 billion from the earlier guidance range of between $1.24 billion and $1.33 billion.
The company lowered its adjusted operating profit range between $285 million and $320 million from the previous estimate of between $330 million and $380 million.
Strength In Tech Stocks and Weakness In Yen Pushes Japan Indexes to New Record Highs
Akira Ito
09 Jul, 2024
Tokyo
Japan's benchmark indexes soared to new record highs, pushed by tech stocks and persistent weakness in the yen.
The Nikkei 225 gained 2% and the Topix index jumped 1% following the enthusiasm about artificial intelligence and related technologies.
Market sentiment was also bolstered after the S&P 500 and the Nasdaq Composite closed at new record highs in overnight trading in New York.
Investors also digested the current account surplus and the persistent weakness in real wages in May, released on Monday.
The Bank of Japan said M2 money supply increased 1.5% to 1.257 trillion yen in June from a year earlier, and M3 money supply rose 1.0% to 1.63 trillion yen, slower than 1.3% in the previous month.
Investors are looking forward to the release of machinery orders later in the week amid high expectations of a rebound in new orders.
The yen traded around 160.65 against the U.S. dollar, and the yield on 10-year Japanese government bonds was near 1.09%.
Investors are hoping that the Bank of Japan will provide clarity about the future interest rate path and the central bank's government bond purchase plan at the end of the two-day next policy meeting on July 31.
Japan Stock Movers
The Nikkei 225 stock average jumped 2% to 41,580.17, and the Topix index gained 1% to 2,895.55.
Tech stocks were among the leading gainers in Tokyo's trading on Tuesday.
Tokyo Electron, Advantest, Disco Corp., and Screen Holdings jumped between 2% and 4%.
Hitachi Ltd. jumped 5.4% to ¥3,834.0 after the conglomerate announced its plans to integrate artificial intelligence-based industrial solutions.
Leading exporters traded mixed amid weakness in the yen.
Canon advanced 1.8% to ¥4,511.0, and Sony Group jumped 5.2% to ¥14,605.0.
However, Panasonic declined 0.2% to ¥1,319.0, and Mitsubishi Electric edged up a fraction to ¥2,740.50.
Fujikura Holdings soared 11.3% to ¥3,439.0, and Furukawa Electric gained 4.4% to ¥4,081.0.
China Deflation Worries Dominate Shanghai and Hong Kong Stock Trading
Li Chen
09 Jul, 2024
Hong Kong
China stocks were under pressure ahead of the release of several key economic indicators, including inflation updates, this week.
The Hang Seng index and CSI 300 index struggled to get their footing amid market jitters before the release of closely watched inflation updates released by the statistics bureau on Wednesday.
China's consumer price inflation is estimated to increase by at least 0.3%, and the producer price index decreased by 0.7% in June, according to a survey conducted by Ticker.com.
Producer prices are likely to decline for the 21st month in a row as manufacturers struggle with overcapacity in several key industries and weak domestic demand.
Later in the week, the National Bureau of Statistics is scheduled to release international trade, money supply, and foreign direct investment data.
The Chinese economy is struggling amid weak consumer sentiment, sustained capital flight, and ongoing weakness in the property and job markets.
Meanwhile, Chinese policymakers are scheduled to meet on Monday for the much-delayed third plenum, which could lead to the announcement of new economic reforms and market-supportive measures.
Investors have lowered their expectations for deep and meaningful reforms that could stop the capital outflow and revive consumer sentiment.
China Stock Movers
The Hang Seng Index declined 0.3% to 17,478.72, and the CSI 300 index rose 0.1% to 3,406.16.
Tingyi Holding decreased 3% to HK $9.83 after the maker of instant noodles raised prices on 12 products.
Investors are worried that the price hike may backfire because of weak consumer demand amid high job market uncertainty.
Anta Sports declined 2.7% to HK $69.55 after cautious comments from Citigroup raised the prospects of a lower stock price.
Three new companies were listed on stock exchanges in China.
Fangzhou Inc. increased to HK $4.82, and the online disease management platform priced its initial public offering at HK $4.50 per share.
Baiwang Co. Ltd. increased a fraction to HK$36.05, and the enterprise software solution provider priced its initial public offering at HK$36 per share and raised HK$228.87 million.
China Shenzhen International Warehouse Logistics Closed-end Infrastructure Fund, a real estate investment trust, priced its public offering and raised 1.2 billion yuan, or $160 million.
China Shenzhen International traded at 2.45 yuan on the first day of its trading in Shenzhen.
India Movers: Bajaj Finserv, Concor, HDFC Life, Nestle India, Pitt Engineering, SBI Life
Arun Goswami
09 Jul, 2024
Mumbai
Benchmark indexes hovered near record highs amid sustained buying from domestic investors and a supportive economic backdrop ahead of the start of the earnings season.
The Sensex index increased by 0.3% to 80,186.89, and the Nifty index advanced by 0.2% to 24,374.30.
On the Mumbai stock exchange, 99 stocks traded at their 52-week highs, and 7 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.98%, and the Indian rupee edged higher to ₹83.51 against the U.S. dollar.
Pitti Engineering increased 3.5% to ₹1,196.95, and the electrical machinery component maker said it plans to raise as much as 360 crore through a secondary offering.
The offering is expected to be priced at $1,054.25 per share.
Mahanagar Gas increased 1.2% to ₹1,689.0, and the natural gas distributor announced a price increase for compressed natural gas and piped gas delivery from July 10.
The price of compressed natural gas will increase by ₹1.50 to ₹75 per kilo, and the price of piped natural gas will increase by ₹1 to ₹48 per standard cubic meter.
Container Corporation of India decreased 0.9% to ₹1,033.30, and the transportation company said the number of containers handled increased by 6% in the June quarter from the year earlier.
The total number of containers handled increased to 11.59 lakh twenty-foot equivalent units from 10.93 TEU.
HDFC Life Insurance gained 0.5% to ₹624.05 after the total industry premium increased 15% from a year earlier to ₹42,434 crore in June, according to data released by the Life Insurance Council on Monday.
The insurance premiums for HDFC Life Insurance increased by 8%, ICICI Prudential Life Insurance jumped by 14%, SBI Life advanced by 22%, and LIC increased by 14%.
Bajaj Finserv increased 0.2% to ₹1,571.70 after the company's two insurance subsidiaries reported a sharp increase in insurance premium revenue in June.
The gross direct premium underwritten by Bajaj Allianz General Insurance was ₹1,234 crore and by Bajaj Allianz Life Insurance was ₹1,082 crore.
Nestle India decreased 0.05% to ₹2,602.05, and the company's shareholder approved the current rate of 4.5% royalty payment to its Swiss parent company.
U.S. Indexes Meander Ahead of Inflation Reports, Global Markets Face Headwinds
Alexander Garcia
08 Jul, 2024
Miami
Inflation takes center stage this week, as the latest updates are likely to show waning price pressures across the economy.
The S&P 500 index and the Nasdaq Composite traded up after closing at record highs in Friday's trading and extending weekly gains for the fifth week in a row.
Benchmark indexes gained in Monday's trading, and the two widely popular indexes advanced following the gains in the previous sessions.
The S&P 500 index and the Nasdaq Composite traded up after closing at record highs in Friday's trading and extending weekly gains for the fifth week in a row.
The two benchmark indexes have barreled through 34 highs this year amid better-than-expected earnings, a supportive economic backdrop, and interest rate-cut expectations.
Bond traders are still estimating as many as two interest rate cuts of 25 basis points this year, starting as early as September.
Investors are looking forward to the release of consumer price index and producer price index data for June on Thursday and Friday, respectively.
Both inflation indexes are expected to rise by 0.1% from the previous month and show waning inflationary pressures, supporting the case for rate cuts.
Consumer price inflation may be slowing, but prices are still rising, and consumers are fed up with high prices, smaller sizes or portions, and deteriorating quality.
Moreover, rents and home prices in the top 20 urban areas are up between 60% and 130% from pre-pandemic 2019 levels, and food prices are at least up between 50% and 100% at most grocery stores.
Fed Chair Powell is scheduled to deliver his semiannual testimony on monetary policy before the U.S. Senate Banking Committee on Tuesday.
Earnings season kicks off this week with earnings from PepsiCo, and leading banks including JP Morgan, Citigroup, Wells Fargo, and Bank of New York Mellon are set to report.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.1% to 5,570.92, and the Nasdaq Composite rose 0.3% to 18,411.12.
The yield on 2-year Treasury notes edged lower to 4.63%, 10-year Treasury notes decreased to 4.28%, and 30-year Treasury bonds edged lower to 4.47%.
WTI crude oil decreased $1.15 to $82.22 a barrel, and natural gas prices edged up 2 cents to $2.35 a thermal unit.
Gold decreased by $33.52 to $2,354.55 an ounce, and silver fell 62 cents to $30.58.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.93.
U.S. Stock Movers
Boeing Company rose 2.2% to $190.13 after the aviation company agreed to plead guilty to criminal fraud charges and pay a $243.6 million fine.
In addition, the company agreed to have an independent compliance monitor for three years and invest at least $455 million in compliance and safety programs.
After several months of negotiations with lawmakers and government regulators, the aviation company agreed it violated its previous agreement reached in the 2021 fatal 747 Max crashes.
Paramount Global jumped 4.7% to $21.44 after the company agreed to merge with Skydance Media following contentious and protracted merger negotiations over several months.
France Faces Political Gridlock After Left Alliance Wins Big But Lacks Majority
European markets advanced despite France heading for months of political gridlock after neither party came close to winning a majority seat to form a government after the second phase of the snap election this Sunday.
The recently formed alliance of left-leaning parties, the New Popular Front, won the largest bloc of seats, winning 182 seats in France's 577-member parliament.
President Emmanuel Macron's coalition, Ensemble, the centrist alliance, won the second largest bloc with 163 seats, followed by the far-right National Rally Party with 143 seats.
Any governing party needs at least 289 seats to form the next government.
France is in uncharted territory as the country has always had a dominant party to form the government, avoiding the need for coalitions among leading parties with different views.
Two weeks ago, the European Commission said it intends to initiate an excessive deficit procedure against France after the nation failed to keep its deficit under 3% of its gross domestic product limit as required by the European Union.
Currently, seven of the twelve countries in the European Union that have breached the 3% limit, including France, Italy, Slovakia, Hungary, Poland, Malta, and Belgium, are likely to face closer scrutiny from the European Commission, which could lead to the European Central Bank suspending countries from its bond buying program.
German Exports and Trade Surplus Expanded In May
On the economic front, Germany's exports declined for the first time in three months in May, data from the Federal Statistical Office, Destatis, showed on Monday.
Exports declined 3.6% from the previous month to €131.6 billion, and imports fell 6.6% to €106.7 billion, resulting in a trade surplus of €24.9 billion.
The trade surplus in May jumped to €24.9 billion from €19 billion a year ago.
Exports to the member states of the European Union decreased by 2.5% to €72.3 billion, and imports from the region fell by 8.9% to €55.7 billion.
Exports to the U.S., the largest market for German goods, declined 2.9% to €13.8 billion, and to the People's Republic of China, they decreased 10.2% to €7.6 billion.
Imports from the People's Republic of China, the largest source of imports, rose 1.7% to €13.0 billion, followed by imports from the United States worth 7.9 billion, an increase of 4.6%.
Europe Indexes and Yields
The DAX index increased by 0.1% to 18,488.68; the CAC-40 index fell by 0.6% to 7,627.45; and the FTSE 100 index decreased by 0.1% to 8,193.49.
The yield on 10-year German bonds edged lower to 2.54%. French bonds inched lower to 3.15%; the UK gilts inched lower to 4.13%; and Italian bonds decreased to 3.92%.
The euro edged lower to $1.08; the British pound inched higher to $1.28; and the U.S. dollar weakened to 89.62 Swiss cents.
Brent crude increased $1.10 to $85.76 a barrel, and the Dutch TTF natural gas fell by €0.83 to €32.18 per MWh.
Europe Stock Movers
The French banks rallied after the far-right National Rally Party failed to win a majority in the second round of the snap election on Sunday.
Credit Agricole, Societe Generale, and BNP Paribas advanced between 1% and 2%.
Britvic Plc increased 4.6% to 1,265.0 pence after the Danish brewer agreed to acquire the British soft drink maker for £3.3 billion.
Carlsberg jumped 4.4% to DKK 873.20.
Marston's PLC jumped 15% to 35.29 pence after the pub and hotel group agreed to sell its 40% stake in the brewing joint venture with Carlsberg.
HgCapital Trust increased by 0.1% to 485.62 pence after the private equity company sold its remaining stake in the business software company TeamSystem.
Delivery Hero decreased 5.2% to €19.93 after the German food delivery company said it may face a fine of more than €400 million from the European Union for violating antitrust rules.
Japan's Current Account Surplus Widened and Real Wages Continue to Decline In May
Benchmark indexes in Tokyo turned lower for the second day in a row after real wages declined in May for the 26th month in a row.
The Nikkei declined 0.3% and the broader Topix dropped more than 0.5% amid interest rate uncertainty and weak consumer sentiment.
Japan's average nominal wages for full-time workers increased 2.1% to 378,803 yen, and part-time workers rose 3.2% to 108,511 yen.
Excluding bonuses and incentive pays, average wages increased 2.5% to 263,539 yen, and overtime and other allowances advanced 2.3% to 19441 yen.
The 5.1% rise in negotiated pay by the workers union at the largest companies during the annual wage negotiation this spring supported the wage gains, but smaller and medium-sized companies raised wages between 2% and 3%, closer to the long-term average over the last decade.
Cash earnings for an average worker, including base and overtime, increased 1.9% to 297,151 yen or $1,850.
Despite the nominal wage gains, real wages, after adjusting for inflation, decreased 1.4% in May following the revised decline of 1.2% in April, according to the monthly report released on Monday by the Ministry of Health, Labor, and Welfare.
Meanwhile, Japan's current account surplus rose more than expected in May.
Current account surplus increased to 2,849.9 billion yen from 2,010.1 billion in the same month a year earlier, the Ministry of Finance reported Monday.
The current account generated surplus for the 16th month in a row as primary income surplus expanded to 4,211.1 billion yen from 3,726.7 billion in the previous year.
The goods trade deficit narrowed to 1,108.9 billion yen from 1,199.8 billion yen after exports rose 12.1% and imports advanced 9.3%.
Japan Stock Movers
The Nikkei 225 stock average decreased 0.3% to 40,780.70, and the Topix Index dropped 0.6% to 2,867.61.
Tech stocks traded volatile, but artificial intelligence-linked stocks struggled after advancing in the morning session.
Tokyo Electron, Screen Holdings, Advantest, and SoftBank edged down a fraction.
Banks were also among the leading decliners in Monday's trading.
Sumitomo Mitsui, Mizuho Financial, and Mitsubishi UFJ declined between 0.3% and 1.2%.
Export-linked companies declined for the second week in a row on the looming market intervention to support the yen.
Kawasaki Kisen Kaisha, Omron, Canon, Hitachi Zosen declined more than 3%.
Retail stocks declined after advancing for two weeks in a row.
J. Front Retail, Seven & I, Isetan Mitsukoshi, Takashimaya, and Fast Retailing traded in a tight range between a decline of 0.3% and a rise of 1.2%.
China Stocks Face Renewed Downward Pressure
Stocks in Hong Kong and Shanghai traded down on Monday after a week of choppy trading.
The Hang Seng index dropped nearly 2%, and the CSI 300 index declined close to 1% due to persistent economic growth worries.
The market rally powered by the state-controlled bank intervention lost steam as investors shifted their focus to the upcoming earnings season and a gathering of policymakers.
Investors are hoping that policymakers may announce significant reforms at the end of the third four-day plenary session of 300 communist party policymakers this week.
However, hopes are receding for deep and broad reforms because of the central government's lack of financial headroom and weak consumer sentiment.
The growth in exports has contributed to the economic growth in the current year, but the growth is expected to slow down in the second half as the economies in the U.S. and the European Union are expected to face further headwinds.
Moreover, rising trade tensions with the European Union are also weighing on market sentiment, and the commerce ministry said it plans to hold an anti-dumping hearing next week for the import of brandy from the region.
In Europe, the euro edged slightly lower after France's second round of parliamentary elections showed a hung parliament with three major blocks but no clear majority.
France's newly formed New Popular Front won 182 seats, President Emmanuel Macron's coalition ensemble clinched 168, and the far-right National Rally Party won 143 seats.
China Stock Movers
The Hang Seng index decreased 1.7% to 17,499.27, and the CSI 300 index dropped 0.7% to 3,408.55.
Shipping stocks remained under pressure for the second week in a row.
COSCO Shipping declined 7.2% to HK $12.46, and Orient Overseas dropped 6.4% to HK $120.20.
Ganfeng Lithium fell 4.7% to HK $15.30 after the mining company said the mainland financial regulator fined the company for insider trading.
Property developers continued to slide for the second week in a row amid worries of a lack of demand outside the top-tier cities.
Longfor Group decreased 3.5% to HK $10.74, China Vanke fell 4.5% to HK $4.49, and China Resources Land decreased 3% to HK $26.60.
U.S. Major Averages Extend Rally from Peak to Peak for Five Consecutive Weeks
Barry Adams
08 Jul, 2024
New York City
Benchmark indexes gained in Monday's trading, and the two widely popular indexes advanced following the gains in the previous sessions.
The S&P 500 index and the Nasdaq Composite traded up after closing at record highs in Friday's trading and extending weekly gains for the fifth week in a row.
The two benchmark indexes have barreled through multiple highs this year amid better-than-expected earnings, a supportive economic backdrop, and interest rate-cut expectations.
Bond traders are still estimating as many as two interest rate cuts of 25 basis points, starting as early as September.
Investors are looking forward to the release of consumer price index and producer price index data for June on Thursday and Friday, respectively.
Both inflation indexes are expected to rise by 0.1% from the previous month.
Moreover, Fed Chair Powell is scheduled to deliver his semiannual testimony on monetary policy before Congress.
Earnings season kicks off this week with earnings from PepsiCo, and leading banks including JP Morgan, Citigroup, Wells Fargo, and Bank of New York Mellon are set to report.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.2% to 5,577.31, and the Nasdaq Composite rose 0.1% to 18,368.94.
The yield on 2-year Treasury notes edged lower to 4.63%, 10-year Treasury notes decreased to 4.28%, and 30-year Treasury bonds edged lower to 4.47%.
WTI crude oil decreased $0.75 to $82.71 a barrel, and natural gas prices edged up 4 cents to $2.37 a thermal unit.
Gold decreased by $16.75 to $2,373.77 an ounce, and silver fell 19 cents to $31.01.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.83.
U.S. Stock Movers
Boeing Company rose 2.2% to $190.13 after the aviation company agreed to plead guilty to criminal fraud charges and pay a $243.6 million fine.
In addition, the company agreed to have an independent compliance monitor for three years and invest at least $455 million in compliance and safety programs.
After several months of negotiations with lawmakers and government regulators, the aviation company agreed it violated its previous agreement reached in the 2021 fatal 747 Max crashes.
Paramount Global jumped 4.7% to $21.44 after the company agreed to merge with Skydance Media following contentious and protracted merger negotiations over several months.