Market Update
China Indexes Lack Momentum and Direction, Tier-1 Property Market Shows Strength
Li Chen
04 Jul, 2024
Hong Kong
Stock market indexes in Hong Kong and Shanghai lacked direction, and investors looked overseas amid a lack of new catalysts.
The Hang Seng index and the CSI 300 index traded around the flatline amid a fragile and uneven economic recovery, weak consumer sentiment, and a lack of broad policy reforms.
Investors took an optimistic view of the latest slew of soft U.S. economic data after private sector payrolls rose less than expected in June and initial unemployment claims rose for the fourth week in a row.
Moreover, the service sector unexpectedly contracted in June, supporting the case that the Federal Reserve may cut rates as early as September.
Closer to home, purchasing managers' index for the service sector eased to 48.2 in June from 49.2 in May, according to the latest data provided by S&P Global.
The business activity index contracted for the second month in a row, as any reading below 50 indicates contraction.
Elections in the UK and France are likely to dominate news flow, and bond yields are likely to stay elevated in Europe.
Voters in the UK are set to vote in a parliamentary election on Thursday, and the Labour Party is likely to win the largest share of seats in a historic vote.
Preliminary polls suggest that voters are likely to deliver the biggest shakeup of UK politics in decades, after 14 years of Conservative Party government.
The Labour Party is estimated to win as many as 484 seats in the 650-seat House of Commons' election scheduled for July 4, according to the latest poll released by Survation.
The Conservative Party is estimated to garner only 64 seats, barely reaching the minimum seats needed to be an official opposition party.
China Stock Movers
The Hang Seng index was nearly unchanged at 17,977.45, and the CSI 300 index declined 0.1% to 3,459.11.
Tech stocks were in focus amid speculation that earnings in the second quarter are likely to exceed market expectations.
Meituan jumped 2.3% to HK $119.80, Baidu gained 0.8% to HK $86.90, and Alibaba Group added 1.1% to HK $73.05.
Property stocks were under pressure despite the improving sentiment in the tier-1 cities.
Existing home sales in the largest 14 cities in mainland China in June increased 11.2% on the month and 27.9% from 119,470 units a year ago, the Zhuge Real Estate Data Research Center said on Wednesday.
The monthly sales were the highest since May 2023.
Henderson Land Development, China Vanke, China Resources Land, and Longfor Group declined between 0.1% and 1.3%.
BYD, Li Auto, and Xpeng gained between 2% and 3% on speculation that the European Union may slow or water down the upcoming additional tariffs on Chinese electric vehicles.
India Movers: Bajaj Finance, Bandhan Bank, GE T&D, ITD Cementation, Suraj Estate, Taneja Aerospace, Yatharth Hospital
Arun Goswami
04 Jul, 2024
Mumbai
Stocks extended their recent record-breaking rally, and the Sensex and Nifty indexes advanced to new intraday highs amid supporting international market sentiment.
The Sensex index increased by 0.5% to 80,349.37, and the Nifty index rose by 0.4% to 24,384.65.
On the Mumbai stock exchange, 205 stocks traded at their 52-week highs, and 8 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.99%, and the Indian rupee weakened to ₹83.53 against the U.S. dollar.
Bajaj Finance decreased 0.3% to ₹7,239.95, and the non-bank financial services provider said deposits at the end of the June quarter increased 26% from a year ago to 62,750 crore.
Assets under management jumped 31% to ₹3.54 lakh crore.
GE T&D India gained 5% to ₹1,720.80, and the company said it won an order worth Є64 million from Grid Solutions SAS to supply high-voltage products.
ITD Cementation India declined 7.5% to ₹529.95, and a report suggested that the company's promoter, Italian Thai Development Public Company, is looking to divest its entire holding in the company.
Yatharth Hospital & Trauma Care Services increased 0.3% to ₹414.50, and the ICICI Prudential Mutual Fund acquired an additional 2.3% stake in the company at an average price of ₹405 per share.
Bandhan Bank decreased 0.3% to ₹209.79, and the bank said total outstanding loans increased 21.8% to ₹1.03 lakh crore and deposits advanced 22.8% to ₹1.08 lakh crore.
Suraj Estate Developers soared 6.9% to ₹615.25, and the company signed an agreement to sell 22,410 square feet of space for ₹89.8 crore to Clearing Corporation of India.
Taneja Aerospace and Aviation gained 4% to ₹616.0, and the company secured an order from Bharat Electronics.
Inox Wind soared 10.8% to ₹157.79 after the company received an infusion of ₹900 crore capital from a promoter.
Cello World jumped 4% to ₹999.50, and the company launched an institutional offering to raise up to ₹730 crore.
U.S. Trade Deficit Widened In May to an 18-month High
Brian Turner
03 Jul, 2024
Washington, D.C.
International goods and services trade deficit widened to $75.1 billion in May, the U.S. Bureau of Economic Analysis reported Wednesday.
Trade deficit widened to the largest level since October 2022 after exports fell more than imports in the month.
Exports decreased 0.7% to $261.7 billion and imports fell 0.3% to $336.7 billion, resulting in a trade deficit of $75.1 billion.
Deficit with China in May increased to $24 billion from $20.1 billion in the previous month, widened with Mexico to $14.8 billion from $13.7 billion, and narrowed with the European Union to $22.7 billion from $25.9 billion.
Rate Cut Hopes Boost S&P 500 and Nasdaq to New Record Highs
Alexander Garcia
03 Jul, 2024
Miami
Benchmark indexes advanced to new highs in a shortened session as investors overlooked softer economic data.
Benchmark indexes flatlined earlier in the session, and the S&P 500 index and the Nasdaq Composite advanced to new record highs in the final hour of trading.
Two widely followed market indexes closed at new highs as investors bid up mega-cap tech stocks after the service sector index unexpectedly contracted in June, strengthening the case for a rate cut later in the year.
Market sentiment was also bolstered after the latest weekly jobless claims rose for the ninth week in a row and private payroll growth slowed in June.
The service sector index eased to 48.8 from 53.8 in May, contracting at the sharpest rate since April 2020, according to the Institute for Supply Management.
Any reading below 50 indicates a contraction, and the sharp decline in business activity was driven by a fall in new orders and employment at the fastest pace in three months.
Earlier in the week, market participants were worried that the nine-weeklong market gain was based on a narrow list of stocks.
Moreover, investors were also concerned that high valuations may not be sustainable in the second half if corporate earnings fail to meet investor expectations.
Initial jobless claims in the previous week rose more than expected, from 4,000 to 238,000, and continuing claims increased by 26,000 to 1.858 million in the earlier week, the U.S. Department of Labor said in its weekly update on Wednesday.
The New York Stock Exchange closed at 1:00 p.m. ET, and the exchange and other financial markets are closed on Thursday to celebrate Independence Day.
U.S. Trade Deficit Widened In May to an 18-month High
International goods and services trade deficit widened to $75.1 billion in May, the U.S. Bureau of Economic Analysis reported Wednesday.
Trade deficit widened to the largest level since October 2022 after exports fell more than imports in the month.
Exports decreased 0.7% to $261.7 billion and imports fell 0.3% to $336.7 billion, resulting in a trade deficit of $75.1 billion.
Deficit with China in May increased to $24 billion from $20.1 billion in the previous month, widened with Mexico to $14.8 billion from $13.7 billion, and narrowed with the European Union to $22.7 billion from $25.9 billion.
Private Payroll Growth Slows in June
Private payrolls expanded by 150,000 in June, lower than market expectations and the lowest since January, a report by ADP showed on Wednesday.
The payroll increase slowed from the upwardly revised 157,000 in May.
The service sector added 136,000 jobs, and the goods-producing sector created 14,000 jobs.
The leisure and hospitality sector added 63,000, professional and business services 25,000, trade, transportation, and utilities 15,000, and financial services 11,000.
Meanwhile, information services providers cut jobs by 3,000.
In the goods-producing sector, construction added 27,000 jobs, but natural resources and mining shed 8,000 and manufacturing cut 5,000 jobs, respectively.
"Job growth has been solid but not broad-based. Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month," said Nela Richardson, chief economist at ADP.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.5% to 5,537.62, and the Nasdaq Composite rose 0.9% to 18,184.90.
The yield on 2-year Treasury notes edged lower to 4.70%, 10-year Treasury notes decreased to 4.35%, and 30-year Treasury bonds edged higher to 4.52%.
WTI crude oil increased $0.13 to $82.93 a barrel, and natural gas prices fell 0.1 cents to $2.43 a thermal unit.
Gold decreased by $15.81 to $2,345.98 an ounce, and silver rose 71 cents to $30.28.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.62.
U.S. Stock Movers
Constellation Brands gained 2.8% to $266.24, and the alcoholic beverage distributor reported better-than-expected quarterly results.
Tesla Inc. advanced 2.4% to $236.02 and extended the previous session's gain of 10%.
On Tuesday, Tesla said it sold 443,956 vehicles in the June quarter, 4.8% lower than a year ago, which helped with incentives and price cuts.
Paramount Global jumped 13.5% to $12.13 after media reports suggested that Skydance Media had reached a preliminary agreement to acquire the controlling shareholder, National Amusements.
The news of the deal was first reported by The New York Times and the Wall Street Journal.
European Markets Rebound. Eurozone Producer Price Deflation Extends to 13th Month
European markets rebounded, the euro held firm, and bond yields in the currency union edged higher as focus shifted to elections.
Benchmark indexes in Paris soared 1.5%, in London advanced 0.6%, and in Frankfurt gained 1% as investors debated the future rate path and awaited the release of corporate earnings.
The Labour Party is likely to win as many as 484 seats in the parliamentary election scheduled for July 4, according to the latest poll released by Survation.
The Conservative Party is estimated to garner only 64 seats, barely reaching the minimum seats needed to be an official opposition party.
In France, President Emmanuel's coalition struck a deal with the newly formed Popular Front to prevent the National Rally Party from winning majority seats in the second round of parliamentary elections on July 7.
About 200 candidates withdrew after the far-left party and President Macron's Renaissance party united.
On the economic front, producer prices in the eurozone declined 4.2% from a year ago in May, Eurostat, the statistical agency of the currency union, reported Wednesday.
Producer prices declined, slowed from the 5.7% fall in April, and marked the 13th consecutive month of annual deflation.
Energy prices declined 11.4% from a year ago, and intermediate goods fell 2.9%.
Excluding energy, producer prices fell 0.4%, less than a 0.9% decline in April.
On a monthly basis, producer prices in the eurozone fell 0.2% following the 1% decline in April and extended the decline for the seventh month in a row.
Europe Indexes and Yields
The DAX index increased by 1.2% to 18,374.53; the CAC-40 index rose by 1.2% to 7,632.08; and the FTSE 100 index rose by 0.6% to 8,171.12.
The yield on 10-year German bonds edged lower to 2.59%; French bonds inched lower to 3.24%; the UK gilts inched lower to 4.23%; and Italian bonds decreased to 4.03%.
The euro edged lower to $1.07; the British pound inched higher to $1.27; and the U.S. dollar weakened to 90.28 Swiss cents.
Brent crude increased $0.32 to $86.55 a barrel, and the Dutch TTF natural gas fell by €0.27 to €32.14 per MWh.
Europe Stock Movers
Skanska AB increased by 0.7% to SEK 187.20 after the Swedish company won a $97 million construction order.
Bpost SA decreased 6.4% to €2.94 after the Belgian postal company's annual profit outlook fell short of market expectations.
Topps Tiles decreased 2.8% to 39.60 pence after the retailer said sales declined in the fiscal third quarter.
Johnson Matthey rose 3.2% to 1,628.0 pence after the engineering and specialty chemical company launched a stock buyback plan.
Airbus SE rose 2.6% to €135.34 after the French aerospace company received an order from the discount air carrier Cebu Air.
The order for up to 152 A321 Neo aircraft is estimated to total $24 billion based on the list price of the plane.
Higher copper prices lifted resource stocks in London trading.
Glencore PLC jumped 1.8% to 474.45 pence, Antofagasta advanced 2% to 2,125.0 pence, and Anglo American gained 0.1% to 2,397.0 pence.
Nikkei Extended Rally to Fourth Day, Japan's Service Sector Contracted
Investors bid up stocks in Tokyo and overlooked the latest update on the service sector.
The Nikkei 225 and the Topix indexes jumped following the gains in overnight trading in New York that pushed the S&P 500 index and the Nasdaq Composite to new record highs.
Tech stocks led the gainers amid optimism about earnings, and mega-cap stocks in the sector led the market's advance.
The yen drifted to a new 38-year low of 161.85 against the U.S. dollar as the Bank of Japan's policymakers struggled to devise a plan to shrink the yield gap between the U.S. and Japan.
The au Jibun Bank Japan Services PMI for June was revised down to 49.4 from the preliminary estimate of 49.8, S&P Global reported Wednesday.
The service sector activity contracted for the first time since August 2022, after all sub-sectors excluding information and communication shrank in the month.
The index reversed from 53.8 in May.
The input costs in the service sector rose to a 10-month high, but the prices charged to customers rose at the slowest pace since November 2023.
Market indexes in Tokyo have faced selling pressure in the second quarter as foreign investors lighten positions and look elsewhere in the region to China and India.
Despite the gains in the Nikkei 225 index over the last four days, investors are cautious because of the lack of progress on corporate governance reform and interest rate uncertainty.
Moreover, the Bank of Japan is set to reduce its Japanese government bond buying as early as next month.
Japan Stock Movers
The Nikkei 225 stock average increased 1.2% to 40,567.79, and the Topix index added 0.4% to 2,868.18.
Retail stocks were in focus after the yen hovered at a 38-year low, and the upsurge in foreign tourists from China, the U.S., and South Korea is expected to boost revenue this summer.
The number of U.S. tourists visiting Japan by air rose 17.4% to 900,000 in the first five months to May 2024, according to the data released by the International Trade Administration.
The U.S. arrivals soared 35.5% from the previous pre-pandemic peak in 2019, after Japan ended its travel restrictions and dropped to a multi-decade low.
Fast Retailing jumped 1.8% to ¥42,120.0, J. Front Retailing gained 0.4% to ¥1,910.50, Takashimaya declined 0.3% to ¥2,943.50, and Seven & I Holdings advanced 0.2% to ¥1,977.50.
Tech stocks were among the leading gainers following the rise in the sector in overnight trading in New York.
Tokyo Electron, Advantest, Screen Holdings, and Disco Corp. advanced between 1.5% and 3.0%.
Exporters fell despite the yen's weakness.
Panasonic, Canon, and Sony declined more than 1%, but Mitsubishi Electric advanced 1%.
TDK, Chugai Pharma, IHI, Murata Manufacturing, and Mitsubishi Heavy Industries gained between 3% and 5%.
However, NTT Data, Yokohama Rubber, and Chiba Bank declined more than 3%.
Hong Kong Rally Extends to Third Day, China Service Growth Drops
Investors battled mixed emotions, and market indexes diverged in Hong Kong and Shanghai.
Benchmark indexes in Hong Kong gained for the third consecutive day in a row as mainland investors added exposure to dividend-paying stocks.
Tech stocks led the market gainers after Alibaba said it completed its $5 billion stock repurchase plan in the last quarter.
Market enthusiasm was capped after the service sector growth rate dropped to an 8-month low.
The Caixin China service purchasing managers' index eased to 51.2 in June from 54.0 in May, S&P Global reported Wednesday.
China's services sector is one of the few bright spots in the economy, as the manufacturing sector struggles amid weak domestic demand and the construction sector continues to shrink after weak consumer confidence.
China Stock Movers
The Hang Seng index increased 1.4% to 17,978.52, and the CSI 300 index decreased 0.3% to 3,466.80.
Alibaba Group jumped 2.9% to HK $72.50, Meituan added 2.4% to HK $115.50, and Baidu jumped 3.2% to HK $86.55.
Electric vehicle makers were focused on the expectation that domestic and export sales would continue to advance despite the rising tensions with the US and the European Union.
On Tuesday, Tesla said it sold 443,956 vehicles in the June quarter, 4.8% lower than a year ago, which helped with incentives and price cuts.
BYD increased 0.5% to HK $229.40, Li Auto soared 5% to HK $77.55, and Xpeng gained 2% to HK $30.45.
Three new companies listed their shares on the stock exchanges in Hong Kong and Shanghai.
Shanghai Ananda Drive Techniques soared to 44.20 yuan after the driving equipment maker priced its initial public offering at 20.56 per share and raised 596 million yuan.
Zhonggan Communication Group plunged 37% to 79 HK cents, and the company priced its initial public offering price at HK 1.25 per share.
Xi'an Kingfar Property Services dropped 15% to HK $6.45, and the company priced its initial public offering at HK $7.50 per share and raised HK $125 million.
U.S. Movers: Constellation Brands, Ford Motor, Paramount Global, Southwest Airlines
Scott Peters
03 Jul, 2024
New York City
The S&P 500 index and the Nasdaq Composite held near the record highs reached in the previous session.
Private sector payrolls in June expanded at a slower-than-expected pace, and initial jobless claims rose more than estimated in the previous week.
The U.S. goods and service trade deficit in May widened after exports decreased more than imports.
The S&P 500 index increased 0.1% to 5,513.95, and the Nasdaq Composite rose 0.1% to 18,041.26.
The yield on 2-year Treasury notes edged higher to 4.78%, 10-year Treasury notes increased to 4.43%, and 30-year Treasury bonds edged higher to 4.60%.
Constellation Brands gained 2.8% to $266.24, and the alcoholic beverage distributor reported better-than-expected quarterly results.
Tesla Inc. advanced 2.4% to $236.02 and extended the previous session's gain of 10%.
On Tuesday, Tesla said it sold 443,956 vehicles in the June quarter, 4.8% lower than a year ago, which helped with incentives and price cuts.
Paramount Global jumped 13.5% to $12.13 after media reports suggested that Skydance Media had reached a preliminary agreement to acquire the controlling shareholder, National Amusements.
The news of the deal was first reported by The New York Times and the Wall Street Journal.
Southwest Airlines increased 0.6% to $28.43, and the company adopted a shareholder rights plan, also known as a poison pill after, activist investor Elliott Management acquired an 11% stake in the company.
Under the so-called poison pill plan, existing shareholders will have the right to purchase additional shares in the company at a 50% discount.
Elliott Management said in a regulatory filing that it has acquired an 11% stake in the regional airline for $1.9 billion.
Ford Motor Company gained 0.1% to $12.89, and the company said total vehicle sales in the second quarter increased 1% from a year ago.
Total truck sales, including pickups and vans, increased 5% to 308,920, representing the best second-quarter truck sales since 2019.
Sales of Ford electric vehicles soared 61% to 23957 units, and the company said the Mustang Mach E and F-150 Lighting are drawing new customers to the company.
S&P 500 and Nasdaq Hold Near Record Highs, Private Payrolls Growth Slowed In June
Barry Adams
03 Jul, 2024
New York City
Benchmark indexes flatlined a day after the S&P 500 index and the Nasdaq Composite advanced to new record highs.
Two widely followed market indexes hovered near record highs as investors bid up mega-cap tech stocks fueled by the artificial intelligence craze.
Market participants are worried that the nine-weeklong market gain is based on a narrow list of stocks.
Moreover, investors are also concerned that high valuations may not be sustainable in the second half if corporate earnings fail to meet investor expectations.
Initial jobless claims in the previous week rose more than expected, from 4,000 to 238,000, and continuing claims increased by 26,000 to 1.858 million in the earlier week, the U.S. Department of Labor said in its weekly update on Wednesday.
Stock market trading volume is likely to be light, and the New York Stock Exchange is set to close early at 1:00 p.m. ET.
The NYSE and other financial markets will be closed on Thursday to celebrate Independence Day.
Private Payroll Growth Slows in June
Private payrolls expanded by 150,000 in June, lower than market expectations and the lowest since January, a report by ADP showed on Wednesday.
The payroll increase slowed from the upwardly revised 157,000 in May.
The service sector added 136,000 jobs, and the goods-producing sector created 14,000 jobs.
The leisure and hospitality sector added 63,000, professional and business services 25,000, trade, transportation, and utilities 15,000, and financial services 11,000.
Meanwhile, information services providers cut jobs by 3,000.
In the goods-producing sector, construction added 27,000 jobs, but natural resources and mining shed 8,000 and manufacturing cut 5,000 jobs, respectively.
"Job growth has been solid but not broad-based. Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month," said Nela Richardson, chief economist at ADP.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.1% to 5,513.95, and the Nasdaq Composite rose 0.1% to 18,041.26.
The yield on 2-year Treasury notes edged higher to 4.78%, 10-year Treasury notes increased to 4.43%, and 30-year Treasury bonds edged higher to 4.60%.
WTI crude oil increased $0.13 to $82.93 a barrel, and natural gas prices fell 0.1 cents to $2.43 a thermal unit.
Gold decreased by $15.81 to $2,345.98 an ounce, and silver rose 71 cents to $30.28.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.62.
U.S. Stock Movers
Constellation Brands gained 2.8% to $266.24, and the alcoholic beverage distributor reported better-than-expected quarterly results.
Tesla Inc. advanced 2.4% to $236.02 and extended the previous session's gain of 10%.
On Tuesday, Tesla said it sold 443,956 vehicles in the June quarter, 4.8% lower than a year ago, which helped with incentives and price cuts.
Paramount Global jumped 13.5% to $12.13 after media reports suggested that Skydance Media had reached a preliminary agreement to acquire the controlling shareholder, National Amusements.
The news of the deal was first reported by The New York Times and the Wall Street Journal.
Europe Movers: Airbus, Bpost, Johnson Matthey, Topps Tiles, Skanska
Inga Muller
03 Jul, 2024
Frankfurt
The UK parliamentary elections are likely to hand power to the Labour Party, but the country's economic woes and cost of living crisis are likely to worsen in the months ahead.
The DAX index increased by 1.0% to 18,336.78; the CAC-40 index rose by 1.5% to 7,650.72; and the FTSE 100 index rose by 0.6% to 8,167.37.
The yield on 10-year German bonds edged lower to 2.59%; French bonds inched lower to 3.24%; the UK gilts inched lower to 4.23%; and Italian bonds decreased to 4.03%.
Skanska AB increased by 0.7% to SEK 187.20 after the Swedish company won a $97 million construction order.
Bpost SA decreased 6.4% to €2.94 after the Belgian postal company's annual profit outlook fell short of market expectations.
Topps Tiles decreased 2.8% to 39.60 pence after the retailer said sales declined in the fiscal third quarter.
Johnson Matthey rose 3.2% to 1,628.0 pence after the engineering and specialty chemical company launched a stock buyback plan.
Airbus SE rose 2.6% to €135.34 after the French aerospace company received an order from the discount air carrier Cebu Air.
The order for up to 152 A321 Neo aircraft is estimated to total $24 billion based on the list price of the plane.
Higher copper prices lifted resource stocks in London trading.
Glencore PLC jumped 1.8% to 474.45 pence, Antofagasta advanced 2% to 2,125.0 pence, and Anglo American gained 0.1% to 2,397.0 pence.
European Markets Rebound. Eurozone Producer Price Deflation Extends to 13th Month
Bridgette Randall
03 Jul, 2024
Frankfurt
European markets rebounded, the euro held firm, and bond yields in the currency union edged higher as focus shifted to elections.
Benchmark indexes in Paris soared 1.5%, in London advanced 0.6%, and in Frankfurt gained 1% as investors debated the future rate path and awaited the release of corporate earnings.
The Labour Party is likely to win as many as 484 seats in the parliamentary election scheduled for July 4, according to the latest poll released by Survation.
The Conservative Party is estimated to garner only 64 seats, barely reaching the minimum seats needed to be an official opposition party.
In France, President Emmanuel's coalition struck a deal with the newly formed Popular Front to prevent the National Rally Party from winning majority seats in the second round of parliamentary elections on July 7.
About 200 candidates withdrew after the far-left party and President Macron's Renaissance party united.
On the economic front, producer prices in the eurozone declined 4.2% from a year ago in May, Eurostat, the statistical agency of the currency union, reported Wednesday.
Producer prices declined, slowed from the 5.7% fall in April, and marked the 13th consecutive month of annual deflation.
Energy prices declined 11.4% from a year ago, and intermediate goods fell 2.9%.
Excluding energy, producer prices fell 0.4%, less than a 0.9% decline in April.
On a monthly basis, producer prices in the eurozone fell 0.2% following the 1% decline in April and extended the decline for the seventh month in a row.
Europe Indexes and Yields
The DAX index increased by 1.0% to 18,336.78; the CAC-40 index rose by 1.5% to 7,650.72; and the FTSE 100 index rose by 0.6% to 8,167.37.
The yield on 10-year German bonds edged lower to 2.59%; French bonds inched lower to 3.24%; the UK gilts inched lower to 4.23%; and Italian bonds decreased to 4.03%.
The euro edged lower to $1.07; the British pound inched higher to $1.27; and the U.S. dollar weakened to 90.28 Swiss cents.
Brent crude increased $0.14 to $86.37 a barrel, and the Dutch TTF natural gas fell by €0.17 to €32.14 per MWh.
Europe Stock Movers
Skanska AB increased by 0.7% to SEK 187.20 after the Swedish company won a $97 million construction order.
Bpost SA decreased 6.4% to €2.94 after the Belgian postal company's annual profit outlook fell short of market expectations.
Topps Tiles decreased 2.8% to 39.60 pence after the retailer said sales declined in the fiscal third quarter.
Johnson Matthey rose 3.2% to 1,628.0 pence after the engineering and specialty chemical company launched a stock buyback plan.
Airbus SE rose 2.6% to €135.34 after the French aerospace company received an order from the discount air carrier Cebu Air.
The order for up to 152 A321 Neo aircraft is estimated to total $24 billion based on the list price of the plane.
Higher copper prices lifted resource stocks in London trading.
Glencore PLC jumped 1.8% to 474.45 pence, Antofagasta advanced 2% to 2,125.0 pence, and Anglo American gained 0.1% to 2,397.0 pence.
Nikkei Extended Rally to Fourth Day, Japan's Service Sector Contracted In June
Akira Ito
03 Jul, 2024
Tokyo
Investors bid up stocks in Tokyo and overlooked the latest update on the service sector.
The Nikkei 225 and the Topix indexes jumped following the gains in overnight trading in New York that pushed the S&P 500 index and the Nasdaq Composite to new record highs.
Tech stocks led the gainers amid optimism about earnings, and mega-cap stocks in the sector led the market's advance.
The yen drifted to a new 38-year low of 161.85 against the U.S. dollar as the Bank of Japan's policymakers struggled to devise a plan to shrink the yield gap between the U.S. and Japan.
The au Jibun Bank Japan Services PMI for June was revised down to 49.4 from the preliminary estimate of 49.8, S&P Global reported Wednesday.
The service sector activity contracted for the first time since August 2022, after all sub-sectors excluding information and communication shrank in the month.
The index reversed from 53.8 in May.
The input costs in the service sector rose to a 10-month high, but the prices charged to customers rose at the slowest pace since November 2023.
Market indexes in Tokyo have faced selling pressure in the second quarter as foreign investors lighten positions and look elsewhere in the region to China and India.
Despite the gains in the Nikkei 225 index over the last four days, investors are cautious because of the lack of progress on corporate governance reform and interest rate uncertainty.
Moreover, the Bank of Japan is set to reduce its Japanese government bond buying as early as next month.
Japan Stock Movers
The Nikkei 225 stock average increased 1.2% to 40,567.79, and the Topix index added 0.4% to 2,868.18.
Retail stocks were in focus after the yen hovered at a 38-year low, and the upsurge in foreign tourists from China, the U.S., and South Korea is expected to boost revenue this summer.
The number of U.S. tourists visiting Japan by air rose 17.4% to 900,000 in the first five months to May 2024, according to the data released by the International Trade Administration.
The U.S. arrivals soared 35.5% from the previous pre-pandemic peak in 2019, after Japan ended its travel restrictions and dropped to a multi-decade low.
Fast Retailing jumped 1.8% to ¥42,120.0, J. Front Retailing gained 0.4% to ¥1,910.50, Takashimaya declined 0.3% to ¥2,943.50, and Seven & I Holdings advanced 0.2% to ¥1,977.50.
Tech stocks were among the leading gainers following the rise in the sector in overnight trading in New York.
Tokyo Electron, Advantest, Screen Holdings, and Disco Corp. advanced between 1.5% and 3.0%.
Exporters fell despite the yen's weakness.
Panasonic, Canon, and Sony declined more than 1%, but Mitsubishi Electric advanced 1%.
TDK, Chugai Pharma, IHI, Murata Manufacturing, and Mitsubishi Heavy Industries gained between 3% and 5%.
However, NTT Data, Yokohama Rubber, and Chiba Bank declined more than 3%.
Hang Seng Rally Extends to Third Day, China Service Sector Growth Drops to an 8-month Low
Li Chen
03 Jul, 2024
Hong Kong
Investors battled mixed emotions, and market indexes diverged in Hong Kong and Shanghai.
Benchmark indexes in Hong Kong gained for the third consecutive day in a row as mainland investors added exposure to dividend-paying stocks.
Tech stocks led the market gainers after Alibaba said it completed its $5 billion stock repurchase plan in the last quarter.
Market enthusiasm was capped after the service sector growth rate dropped to an 8-month low.
The Caixin China service purchasing managers' index eased to 51.2 in June from 54.0 in May, S&P Global reported Wednesday.
China's services sector is one of the few bright spots in the economy, as the manufacturing sector struggles amid weak domestic demand and the construction sector continues to shrink after weak consumer confidence.
China Stock Movers
The Hang Seng index increased 1.4% to 17,978.52, and the CSI 300 index decreased 0.3% to 3,466.80.
Alibaba Group jumped 2.9% to HK $72.50, Meituan added 2.4% to HK $115.50, and Baidu jumped 3.2% to HK $86.55.
Electric vehicle makers were focused on the expectation that domestic and export sales would continue to advance despite the rising tensions with the US and the European Union.
On Tuesday, Tesla said it sold 443,956 vehicles in the June quarter, 4.8% lower than a year ago, which helped with incentives and price cuts.
BYD increased 0.5% to HK $229.40, Li Auto soared 5% to HK $77.55, and Xpeng gained 2% to HK $30.45.
Three new companies listed their shares on the stock exchanges in Hong Kong and Shanghai.
Shanghai Ananda Drive Techniques soared to 44.20 yuan after the driving equipment maker priced its initial public offering at 20.56 per share and raised 596 million yuan.
Zhonggan Communication Group plunged 37% to 79 HK cents, and the company priced its initial public offering price at HK 1.25 per share.
Xi'an Kingfar Property Services dropped 15% to HK $6.45, and the company priced its initial public offering at HK $7.50 per share and raised HK $125 million.
India Movers: Britannia Industries, Concor, Force Motor, M&M Financial, Rail Vikas Nigam, Zomato
Arun Goswami
03 Jul, 2024
Mumbai
The Sensex and the Nifty indexes advanced to record territory amid positive market sentiment despite the worries of elevated valuations.
The Sensex index decreased by 0.1% to 79,384.47, and the Nifty index fell by 0.1% to 24,109.90.
On the Mumbai stock exchange, 93 stocks traded at their 52-week highs, and 4 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.0%, and the Indian rupee weakened to ₹83.52 against the U.S. dollar.
Rail Vikas Nigam Ltd. gained 1.7% to ₹418.10, and the company won an order worth ₹132.6 crore from Central Railways to upgrade the Nagpur division.
Container Corporation declined 0.2% to ₹1,024.95, and the central government is likely to consider selling a smaller stake of less than 7% in the company.
Earlier, the government was looking to privatize the entire company.
Zomato declined 0.7% to ₹207.93, and the food delivery company said it has withdrawn its RBI application to start a non-banking financial services company.
Britannia Industries gained 1.6% to ₹5,488.45 after the food products maker appointed Sunil Siddharth Lalbhai and former RBI Governor Urjit Patel as non-executive and independent directors of the company.
Force Motors declined 0.7% to ₹9,139.20 after the automotive company said June sales decreased 3% to 2,553 vehicles.
Mahindra & Mahindra Financial Services decreased 0.7% to ₹300.35, and the company said new loans in the June quarter increased 5% from a year ago to ₹12,730 crore.
S&P 500 and Nasdaq Scale New Highs After Powell Comments
Alexander Garcia
02 Jul, 2024
Miami
Benchmark indexes on Wall Street lacked direction as investors stayed on the sidelines in the absence of domestic catalysts.
The S&P 500 index and the Nasdaq Composite hovered near the flatline amid a lack of domestic catalysts and valuation worries.
Job openings edged slightly higher in May, but hovered near the three-year low reached in April.
The number of job openings rose by 221,000 from the previous month to 8.14 million in May, following a downwardly revised 7.9 million in April, the U.S. Bureau of Labor Statistics reported Tuesday.
The number of job openings is hovering near a three-year low, but openings are still above the pre-pandemic level of 7.2 million, indicating job market conditions are moderating but still tight.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.4% to 5,495.28, and the Nasdaq Composite rose 0.7% to 17,994.47.
The yield on 2-year Treasury notes edged higher to 4.75%, 10-year Treasury notes increased to 4.43%, and 30-year Treasury bonds edged higher to 4.60%.
WTI crude oil increased $0.58 to $83.94 a barrel, and natural gas prices fell 3 cents to $2.46 a thermal unit.
Gold decreased by $3.21 to $2,328.79 an ounce, and silver rose 32 cents to $29.32.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.81.
U.S. Stock Movers
Tesla jumped 4.8% to $220.01 after the electric vehicle maker reported better-than-expected vehicle sales in the second quartet.
The company said its worldwide global sales increased to 440,000 units and produced 411,000 units.
Atlassin Corp. advanced 4.3% to $185.85 after Piper Sandler upgraded its stock ranking to "overweight," and analyst Rob Owen said the current price is attractive for investors to accumulate stock.
Paramount Global Class B jumped 4% to $10.56 on a CNBC report that the company's streaming division is in merger talks with several potential partners.
General Motors edged up 0.1% to $46.70 after the company's Board approved a new $6 billion stock repurchase plan.
Polestar decreased 0.3% to $0.14 after the electric vehicle maker said first quarter loss widened to $274.3 million from $37.7 million a year ago.
Election Uncertainties Weigh On European Trading Sentiment
European markets traded down amid election uncertainty, a weak economic outlook, and ongoing tensions with Russia.
Benchmark indexes in Paris and London fell ahead of parliamentary elections in the UK on July 4 and the second round of elections in France on July 7.
Market sentiment was weak, and bond yields advanced in the currency union as investors feared that lawmakers in the soon-to-be-appointed new parliaments in France and the UK may struggle to cut spending and lower national debt.
Eurozone Inflation Eased in June
Consumer price inflation in the eurozone eased to 2.5% in June after edging higher to 2.6% in May, Eurostat, the statistical agency of the European Union, reported Tuesday.
Prices for food, tobacco, and alcohol rose at a slower pace of 2.5% compared to 2.6% in the previous month and energy at 0.2% from 0.3%.
Meanwhile, inflation was steady for non-energy industrial goods at 0.7% and for services at 4.1%.
Core inflation, which excludes food, energy, tobacco, and alcohol, was unchanged at 2.9%.
Among the largest economies, inflation eased in Germany to 2.5% from 2.8%, in France to 2.5% from 2.6%, and in Spain to 3.5% from 3.8%, but rose in Italy to 0.9% from 0.8%.
Eurozone Unemployment Rate Remained Steady in June
The jobless rate in the eurozone held steady at the record low of 6.4% in May, matching the rate in the previous month, Eurostat reported Tuesday.
The number of unemployed people increased by 38,000 from the previous month to 11.1 million; however, the jobless rate among those younger than 25 was 14.1%, matching the revised rate in April.
Among the four largest economies in the currency union, Spain recorded the highest rate of 11.7%, followed by France at 7.4%, Italy at 6.8%, and Germany at 3.3%.
The unemployment rate in the eurozone was 6.5% a year ago in the corresponding month.
Europe Indexes and Yields
The DAX index decreased by 1.0% to 18,113.82; the CAC-40 index fell by 0.8% to 7,499.98; and the FTSE 100 index fell by 0.4% to 8,136.02.
The yield on 10-year German bonds edged higher to 2.60%; French bonds inched higher to 3.31%; the UK gilts edged higher to 4.25%; and Italian bonds increased to 4.13%.
The euro edged lower to $1.07; the British pound inched lower to $1.264; and the U.S. dollar advanced to 90.38 Swiss cents.
Brent crude increased $0.68 to $87.25 a barrel, and the Dutch TTF natural gas fell by €0.09 to €33.34 per MWh.
Europe Stock Movers
Ryanair Holdings declined 3% to €16.15, despite the budget airline reporting record passenger counts in June.
Sodexo declined 4.4% to €81.90 after the food service provider and facilities management company reported weaker-than-expected revenue in the fiscal third quarter.
J. Sainsbury declined 1.5% to 253.73 pence after the grocery chain operator said that adverse weather had negatively impacted recent volume growth.
Revenue, excluding fuel, in the sixteen-week period ending on June 22 increased by 2.6%, and comparable sales rose by 3.0%.
The company reiterated its commitment to returning £250 million to shareholders after the sale of its core banking business to NatWest.
Additionally, the company plans to complete its £200 million stock repurchase program in the current fiscal year.
Japan's First Quarter GDP Contracted at a Faster Pace, Nikkei Extended Rally to Third Day
The persistent weakness in the yen boosted stock market indexes for the third session in a row.
The Nikkei and the Topix indexes jumped more than 1% in the hopes that export-heavy industries are likely to benefit from the falling yen.
Currency traders prepared for another round of market intervention as the yen drifted to a new 38-year low of 161.63 against the U.S. dollar.
The Finance Ministry and the Bank of Japan have signaled that the rapid decline in the yen is likely to invite market intervention.
Despite the jawboning, the Bank of Japan has still lagged in adjusting its monetary policy and shrinking the wide interest rate differential with the U.S. bonds.
Moreover, the central bank continues to fund elevated levels of government bond purchases, which adds to the already high government deficit.
Investors also reassessed the economic growth outlook after Japan's economy shrank more than initially estimated.
Japan revised its first quarter real economic growth contraction to an annual pace of 2.9% from the preliminary estimate of 1.8% decline, the Cabinet Office said in an unscheduled release on Monday.
The GDP data revision reflected the weaker-than-previously estimated construction orders.
The Cabinet Office also cut growth in the December quarter to an increase of 0.1% from the previous estimate of 0.4%.
Investors overlooked inflation worries after crude oil prices jumped to a two-month high amid rising demand and supply cuts by the OPEC+.
Japan Stock Movers
The Nikkei 225 stock average jumped 1.1% to 40,074.69, and the Topix index advanced 1.2% to 2,856.62.
Retailers were in focus for the second week in a row after J. Front reported better-than-expected net income.
Moreover, Japan is expecting record tourist arrivals this summer as foreigners take advantage of weak currency and increased mobility of Chinese tourists after the end of COVID-19 restrictions.
J. Front rose 1.8% to ¥3,145.0, Takashimaya declined 2% to ¥2,948.0, Seven &I Holdings added 0.7% to ¥1,973.50, and Isetan Mitsukoshi gained 1.8% to ¥3,210.0.
Dai-ichi Life, Daiwa Securities, T&D Holdings, and MS&AD gained between 3% and 4%. amid a rebound in financial services stocks.
Dentsu Group declined 2.1% to ¥ 3,945.0, and Sumitomo Pharma dropped 2.2% to €2.14.
China's Property Sales Decline Slowed and June Auto Sales Eased
Market indexes in Hong Kong rebounded after investors returned from a public holiday and reacted for the first time to the latest updates in manufacturing activities.
The Hang Seng index jumped more than 0.5%, but the indexes in mainland China continued to drift lower.
The Caixin manufacturing purchasing managers' index advanced to 51.8 in June from 51.7 in the previous month, S&P Global reported Monday.
The private survey, which tracked a wider set of small and medium enterprises with significant activities, contrasted with the government data, which showed contraction for the second month in a row.
The Hang Seng index has been under pressure after peaking on May 20 due to a weak policy response, a lack of progress in the revival of the property market, and a rising tide of capital flight.
Moreover, Chinese policymakers are struggling to hold the yuan as the Bank of Japan lets the yen drift to a new 38-year low and avoids expensive market intervention.
The weaker yen is putting additional pressure on the yuan as businesses keep foreign earnings overseas and more capital leaves China for the third year in a row.
China Stock Movers
The CSI 300 index decreased 0.03% to 3,476.93, and the Hang Seng index jumped 0.5% to 17,815.61.
Li Auto jumped 5.3% to HK$74.0 after the leading electric vehicle maker reported a rise in sales in June.
China's automobile sales contracted in June by 2.9% to 1.91 million units, the first monthly decline since January.
However, sales in the first-half increased 2.5% to 9.65 million units, according to the data released by the CPCA.
Chinese property developers edged higher after the decline in home sales eased in June.
Top 100 developers reported home sales declined 16.7% to 438.9 billion yuan, or $60.4 billion, but advanced 36% from May, according to data released by CRIC.
Property transactions improved the most in the top-tier cities of Beijing, Shanghai, Shenzhen, and Guangzhou.
The average price of a new home increased by 0.2% in 100 large cities, slightly weaker than the 0.2% increase in May.
China's new home sales at the top 100 real estate companies in the period between January and June plunged 41.6% from a year ago, the China Index Academy said in a report released on Monday.
Indexes On Wall Street Rest, Job Openings Stay Near 3-year Low In May
Barry Adams
02 Jul, 2024
New York City
Stocks lacked direction in early Tuesday trading, and Treasury yields jumped higher.
The S&P 500 index and the Nasdaq Composite hovered near the flatline amid a lack of domestic catalysts and valuation worries.
The number of job openings rose by 221,000 from the previous month to 8.14 million in May, following a downwardly revised 7.9 million in April, the U.S. Bureau of Labor Statistics reported Tuesday.
The number of job openings is hovering near a three-year low, but openings are still above the pre-pandemic level of 7.2 million, indicating job market conditions are moderating but still tight.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.01% to 5,473.12, and the Nasdaq Composite rose 0.03% to 17,885.52.
The yield on 2-year Treasury notes edged higher to 4.75%, 10-year Treasury notes increased to 4.43%, and 30-year Treasury bonds edged higher to 4.60%.
WTI crude oil increased $0.58 to $83.94 a barrel, and natural gas prices fell 3 cents to $2.46 a thermal unit.
Gold decreased by $3.21 to $2,328.79 an ounce, and silver rose 32 cents to $29.32.
The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 105.81.
U.S. Stock Movers
Tesla jumped 4.8% to $220.01 after the electric vehicle maker reported better-than-expected vehicle sales in the second quartet.
The company said its worldwide global sales increased to 440,000 units and produced 411,000 units.
Atlassin Corp. advanced 4.3% to $185.85 after Piper Sandler upgraded its stock ranking to "overweight," and analyst Rob Owen said the current price is attractive for investors to accumulate stock.
Paramount Global Class B jumped 4% to $10.56 on a CNBC report that the company's streaming division is in merger talks with several potential partners.
Europe Movers: Ryanair, Sainsbury, Sodexo
Inga Muller
02 Jul, 2024
Frankfurt
Election uncertainties in France and the UK overshadowed market trading in the eurozone and London.
The jobless rate in the currency union held steady at a record low in May, and consumer price inflation eased in May.
The DAX index decreased by 1.0% to 18,113.82; the CAC-40 index fell by 0.8% to 7,499.98; and the FTSE 100 index fell by 0.4% to 8,136.02.
The yield on 10-year German bonds edged higher to 2.60%; French bonds inched higher to 3.31%; the UK gilts edged higher to 4.25%; and Italian bonds increased to 4.13%.
Ryanair Holdings declined 3% to €16.15, despite the budget airline reporting record passenger counts in June.
Sodexo declined 4.4% to €81.90 after the food service provider and facilities management company reported weaker-than-expected revenue in the fiscal third quarter.
J. Sainsbury declined 1.5% to 253.73 pence after the grocery chain operator said that adverse weather had negatively impacted recent volume growth.
Revenue, excluding fuel, in the sixteen-week period ending on June 22 increased by 2.6%, and comparable sales rose by 3.0%.
The company reiterated its commitment to returning £250 million to shareholders after the sale of its core banking business to NatWest.
Additionally, the company plans to complete its £200 million stock repurchase program in the current fiscal year.
Election Uncertainties Weigh On European Trading Sentiment
Bridgette Randall
02 Jul, 2024
Frankfurt
European markets traded down amid election uncertainty, a weak economic outlook, and ongoing tensions with Russia.
Benchmark indexes in Paris and London fell ahead of parliamentary elections in the UK on July 4 and the second round of elections in France on July 7.
Market sentiment was weak, and bond yields advanced in the currency union as investors feared that lawmakers in the soon-to-be-appointed new parliaments in France and the UK may struggle to cut spending and lower national debt.
Eurozone Inflation Eased in June
Consumer price inflation in the eurozone eased to 2.5% in June after edging higher to 2.6% in May, Eurostat, the statistical agency of the European Union, reported Tuesday.
Prices for food, tobacco, and alcohol rose at a slower pace of 2.5% compared to 2.6% in the previous month and energy at 0.2% from 0.3%.
Meanwhile, inflation was steady for non-energy industrial goods at 0.7% and for services at 4.1%.
Core inflation, which excludes food, energy, tobacco, and alcohol, was unchanged at 2.9%.
Among the largest economies, inflation eased in Germany to 2.5% from 2.8%, in France to 2.5% from 2.6%, and in Spain to 3.5% from 3.8%, but rose in Italy to 0.9% from 0.8%.
Eurozone Unemployment Rate Remained Steady in June
The jobless rate in the eurozone held steady at the record low of 6.4% in May, matching the rate in the previous month, Eurostat reported Tuesday.
The number of unemployed people increased by 38,000 from the previous month to 11.1 million; however, the jobless rate among those younger than 25 was 14.1%, matching the revised rate in April.
Among the four largest economies in the currency union, Spain recorded the highest rate of 11.7%, followed by France at 7.4%, Italy at 6.8%, and Germany at 3.3%.
The unemployment rate in the eurozone was 6.5% a year ago in the corresponding month.
Europe Indexes and Yields
The DAX index decreased by 1.0% to 18,113.82; the CAC-40 index fell by 0.8% to 7,499.98; and the FTSE 100 index fell by 0.4% to 8,136.02.
The yield on 10-year German bonds edged higher to 2.60%; French bonds inched higher to 3.31%; the UK gilts edged higher to 4.25%; and Italian bonds increased to 4.13%.
The euro edged lower to $1.07; the British pound inched lower to $1.264; and the U.S. dollar advanced to 90.38 Swiss cents.
Brent crude increased $0.68 to $87.25 a barrel, and the Dutch TTF natural gas fell by €0.09 to €33.34 per MWh.
Europe Stock Movers
Ryanair Holdings declined 3% to €16.15, despite the budget airline reporting record passenger counts in June.
Sodexo declined 4.4% to €81.90 after the food service provider and facilities management company reported weaker-than-expected revenue in the fiscal third quarter.
J. Sainsbury declined 1.5% to 253.73 pence after the grocery chain operator said that adverse weather had negatively impacted recent volume growth.
Revenue, excluding fuel, in the sixteen-week period ending on June 22 increased by 2.6%, and comparable sales rose by 3.0%.
The company reiterated its commitment to returning £250 million to shareholders after the sale of its core banking business to NatWest.
Additionally, the company plans to complete its £200 million stock repurchase program in the current fiscal year.