U.S. Stocks, Oil, Yields Ease, Record Trade Surplus In China

Barry Adams
08 Aug, 2022
New York City

Stocks on Wall Street rested on Monday in light trading after popular indexes advanced for the third week in a row. 

Investors looked ahead to the inflation report after the July payroll increased more-than-expected 528,000. 

Investors are increasingly factoring a larger rate hike of at least 75 basis points at the Fed Reserve's next policy meeting in September. 

The S&P 500 index was nearly unchanged at 4,142.75 and the Nasdaq Composite index gained 0.07% or 8.43 to 12,644.46. 

Semiconductor stocks were under pressure on the demand worries after NVIDIA said revenues from the sale of chips for gaming devices dropped sharply. 

Futures of crude oil increased $1.0 to $89.98 and natural gas 42 cents to $7.64 a thermal unit. 

Crude oil futures rose after a fire at Cuba's central fuel storage engulfed a third large tank on Monday. 

On Friday, a lightning strike set off a fire at the fuel storage terminal located at the port of the industrial city of Matanzas, about 50 miles east of Havana.   

The yield on 10-year Treasury notes eased to 2.768% and on the 2-year notes declined to 3.24%. 

Berkshire Hathaway Inc increased 0.3% to $293.16 after the insurance and industrial conglomerate swung to a second quarter loss of 43.8 billion from a profit of $28.1 billion a year ago.

The GAAP accounting includes the quarterly loss of $53.0 billion in investment security investments. 

Operating earnings in the second quarter increased to $9.3 billion from $6.7 billion a year ago.

Berkshire spent $1.0 billion to acquire its shares and increased the total to $4.2 billion in the first-half of 2022. 

Insurance float, the net liabilities assumed by the company under insurance contracts, was relatively unchanged from the end of 2021 to approximately $147 billion.

Barrick Gold gained 4.5% to $16.37 after the mining company reported better-than-expected earnings on higher copper production. 

Nvidia fell 7.5% to $175.66 after the advanced chipmaker reported second quarter revenues of $6.70 billion, below the company estimate of $8.10 billion. 

The revenue shortfall was driven by a decline in gaming products after the end of Covid-19 pandemic driven boom and the rising macro headwinds. 

Bed Bath & Beyond soared 37.8% to $11.22 and AMC Entertainment surged 15.1% to $25.53 on no company news. 

Both stocks were driven higher after investors expressed optimism on popular chat boards and social media posts. 

Palantir Technologies Inc declined 12.1% to $10.08 after the technology contractor for the federal government reported a wider quarterly loss. 

Revenues in the second quarter increased 26% to $473 million and a net loss of $179 million or 9 cents a diluted share from $138.5 million or 7 cents a diluted share. 

For the third quarter, the company guided revenues between $474 million and $475 million and adjusted income from operations between $54 million and $55 million.

 

European Markets Close Higher, Swiss Jobless Rate Held Steady 

European markets traded higher following the market advances in the U.S. and Asia. 

Investors overlooked the simmering tensions between the U.S. and China and shifted focus to regional economic news and corporate earnings. 

China extended its military exercises in waters around Taiwan and stepped up cyberattacks against the island. 

The eurozone investor confidence improved marginally in August according to a closely watched survey released by the think tank Sentix on Monday. 

The investor confidence index rose to -25.2 in August from -26.4 in July but was lower than estimated by some analysts at -24.8 and the elevated energy prices and soaring inflation are keeping the optimism in check. 

The unadjusted employment rate in Switzerland held steady at 2.0% in July on a monthly basis but fell from 2.8% rate a year ago, according to the data released by the State Secretariat for Economic Affairs or SECO on Monday. 

Seasonally adjusted jobless rate was unchanged at 2.2% in July from the previous month.  

The DAX index increased 0.8% to 13,687.69, the CAC-40 advanced 0.80% to 6,524.45, and the FTSE 100 index gained 0.6% to 7,482.37. 

BioNTech SE declined 10.5% to $163.95 after the German biotech company reported weaker-than-expected quarterly results. 

The Covid-19 vaccine maker and a development partner with Pfizer said its latest vaccine to treat the latest virus variants is expected to benefit fourth quarter results. 

Siemens Energy gained 1.03% to 16.37 euros after the power equipment maker reported a wider quarterly loss. 

Joules Group Plc gained 33.5% to 44 pence after the company said it is in discussion with the rival fashion house Next Plc for the sale of a strategic sale.  

Next Plc increased 0.5% to 6,478.85 pence. 

Veolia Environnement SA after the French water utility confirmed the sale of Suez's U.K. waste operations to Australia-based Macquarie Group for around 2.4 billion euros.

Pagegroup Plc declined 6.1% 424.13 pence after the recruiting group highlighted the weakening market for job placement. 

 

Asian Markets Advance, China's Exports and Trade Surplus Soar

Asian stocks closed mixed and the indexes in Hong Kong fell on the worries that the higher rates in the U.S. will further depress valuation of future earnings stream of tech companies. 

Tokyo stocks advanced on a positive domestic corporate outlook. 

Suzuki Motor soared 10% after the company reiterated its annual outlook. 

Canon Inc surged 4.6% to 3,370 yen after the camera and office equipment maker announced its second stock repurchase program this year. 

Bandai Namco Holdings increased 4.06% to 10,020 yen after the video game maker reported a 55% jump in video game sales in the quarter ending in June. 

SoftBank Group increased 0.7% to 5,695.0 yen and the company reported a loss of more than $23 billion in the quarter ending in June reflecting the decline in tech stocks around the world following the increase in interest rates.   

China's trade surplus soared in July above $100 billion for the first-time after exports surged 18% but imports rose only 2.3% from a year ago on the sluggish demand for energy and raw materials. 

The Nikkei 225 index gained 0.3% to 28,24924, the Hang Seng index fell 0.8% to 20,045.77, and the Sensex index gained 0.8% to 58,853.07.

Stocks in India advanced as investors shifted to focus on domestic earnings and weakening crude oil prices. 

The Indian rupee held firm and closed at 79.51 against the U.S. dollar.