Investors Refocus On Tech and Semiconductor Stocks, Global Markets Advanced

Barry Adams
30 Mar, 2023
New York City

Benchmark indexes spent most of the session in the plus territory after investors warmed up to tech stocks. 

With no new bad news from regional banks and stable treasury yields also strengthened interest in growth stocks - mid and large caps. 

Major averages jumped as much as 0.7% in the early trading but steadily lost ground, however market sentiment improved in late afternoon and benchmark indexes rebounded to the intra-day highs. 

Tech stocks led the gainers and mega cap tech leaders including Meta Platforms, Apple Inc, Netflix Inc, Amazon.com Inc and Tesla Inc advanced between 1% and 2%. 

Investors also reviewed the latest downward revision of the fourth quarter real GDP growth but noticed the core PCE Price Index remained elevated. 

 

Weekly Jobless Claims Advanced 

Weekly jobless claims increased by 7,000 to 198,000 for the week ending March 25, the U.S Department of Labor reported Thursday. 

The initial claims declined from the previous week's unrevised level of 191,000. 

The 4-week moving average increased 2,000 to 198,250 from the previous week's unrevised average of 196,250.

 

Real GDP Estimate Revised Lower In Fourth Quarter  

Real gross domestic product growth for the final quarter of 2022 was revised lower, according to the third and final estimate released by the U.S. Bureau of Economic Analysis Thursday. 

The U.S. economy expanded at an annual pace of 2.6% in the December quarter, slower than the previous estimate of 2.7% and 3.2% in the third quarter. 

Consumer spending increase was revised lower to 1.0% from the previous estimate of 1.4% and international 

Real GDP increased 2.1% in 2022, compared with an increase of 5.9% in 2021. 

The increase in real GDP in 2022 primarily reflected increases in consumer spending, exports, private inventory investment, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and federal government spending. 

Despite the cooling of energy prices and slowing of goods inflation, elevated inflation remains well anchored in the economy. 

The price index for gross domestic purchases increased 6.8% in 2022, compared with an increase of 4.2% in 2021. 

The PCE price index, a preferred measure of inflation by policy makers, increased 6.3%, compared with an increase of 4.0%. 

Excluding volatile food and energy prices, the core PCE price index increased 5.0%, compared with an increase of 3.5%.

The Federal Reserve has vowed to bring down inflation to 2% but despite the nine-rate hikes, prices are still rising at a faster pace than the Fed's preferred level.  

 

U.S. Indexes & Yields 

The S&P 500 index increased 0.6% to 4,050.83 and the Nasdaq Composite index rose 0.7% to 12,013.47. 

For the month, the S&P 500 index is up 2.5% and the Nasdaq Composite index 5.6%. 

The yield on 2-year Treasury notes increased 3 basis points to 4.11%, 10-year Treasury notes advanced 2 basis points to 3.55% and 30-yearTreasury bonds  edged down 4 basis point to 3.74%. 

Crude oil advanced $1.21 to $74.18 a barrel and natural gas fell 7 cents to $2.11 a thermal unit. 

 

US Movers 

Bed Bath & Beyond Inc dropped 23.3% to 61 cents after the struggling home goods retailer filed to raise $300 million in stock offering but also raised the prospect of a bankruptcy filing. 

Evgo Inc soared 24.5% to $7.16 after the electric vehicle charging network company reported a surge in fourth quarter revenue and a rise in network throughput. 

AMC Entertainment Holdings Inc edged down 0.4% to $4.98 after surging more than 13% in the last three days of trading on a speculation that Amazon.com Inc may acquire the network of movie theater  operators. 

 Zebra Technologies Corp increased 3.1% to $305.33 after the mobile computing and scanning solutions provider announced a leadership change. 

The company appointed Joe White as new Chief Product & Solutions Officer, replacing Bill Burns who became the company's CEO earlier this month. 

Investors' enthusiasm for electronics production services providers lifted select stocks to record highs.

Cirrus Logic, the maker of fabless semiconductors and integrated circuits closed at a new high of $109.56 and Jabil Inc advanced to a record high of $86.74.

Both Cirrus and Jabil are making new highs for the last three months in a row.  

Graphic Packaging closed at a new record high of $25.26 and the stock extended its monthly gains for the third month in a row.

 

European Markets Approached 3-week Highs After Inflation and Bank Worries Eased 

European markets advanced for the third day in a row after investors looked beyond the recent banking crisis in the U.S. and Switzerland. 

Market indexes advanced on the hopes that the decline in energy prices will continue to weaken goods price inflation and policymakers may slow interest rate hikes. 

Spain's inflation fell sharply in March after electricity and fuel prices declined and the UK's automobile production rebounded after parts shortages eased. 

Italy's jobless rate held at 7.0% in February, matching the rate in January, the statistical office ISTAT said Thursday. 

 

Spain's Inflation Weakened In March 

Consumer price inflation  in Spain slowed at a slower pace in March after energy and fuel price fell, the statistical office INE reported Thursday. 

Consumer price inflation on an annual basis in March rose at 3.3%, slower than 6.0% in February and the prices rose at the slowest pace since August 2021. 

Core inflation, which excludes non-processed food and energy. eased slightly to 7.5% from 7.6% in February. 

On a monthly basis, overall consumer prices rose 0.4%, slower than 0.9% increase in February. 

The Bank of Spain has estimated EU harmonized inflation rate in Spain to drop to 3.7% in 2023 and weaken to 3.6% in 2024.   

 

UK Automobile Production Rebounded In February 

The UK automobile production in February rose 13.1% to 69.707 units after electronic chips and components shortages eased, the Society of Motor Manufacturers and Traders reported Thursday. 

Passenger car production for the home market increased 20.3% to 13,073 units and exports rose 11.5% to 56,634 units. 

Exports to international markets accounted for 81.2% of total production. 

  

Europe Indexes & Yields 

The DAX index increased 1.1% to 15,499.89, the CAC-40 index advanced 1.2% to 7,273.02 and the FTSE 100 index added 0.8% to 7,624.49. 

The yield on 10-year German Bunds rose to 2.32%, French bonds traded at 2.82%, the UK gilts at 3.46% and Italian bonds hovered near 4.14%. 

The euro advanced to $1.086, the British pound to $1.234 and the Swiss franc to 91.51 cents.  

Brent crude oil added 55 cents to $78.84 a barrel and the Dutch natural gas added 77 cents to Є43.57 a MWh. 

 

Europe Movers 

Resource stocks led the gainers after crude oil, copper and iron ore prices advanced. 

Shell Plc, BP Plc, Glencore, Antofagasta, and Anglo American increased between 1% and 3%. 

Vestas Wind Systems A/S added 5.0% to DKK 197.92 after the Danish wind turbine maker won a 1.31 GW onshore order in Brazil. 

Casa dos Ventos Energias Renovaveis S/A placed an order for 756 MW wind turbine order for Rio Grande do Norte (Serra do Tigre) and 554 MW Bahia (Babilônia Centro) orders to be commissioned by 2025. 

H & M Hennes & Mauritz AB surged 16.3% to DKK 142.88 after the apparel retailer reported a surprise operating profit in the quarter ending in February. 

Revenue in the fiscal first quarter increased 12% to SEK 54.8 billion and operating profit rose to SEK 725 million from SEK 458 million a year ago. 

Sellpy, the second-hand platform and an associated  company is consolidated into the H&M group from the first quarter resulting in a one-time gain SEK 999 million. 

After-tax net income in the fiscal first quarter increased to SEK 540 million compared to SEK 217 million and earnings per share rose to SEK 0.33 from SEK 0.13 a year ago. 

Moonpig Group Plc soared 14.7% to 130.30 pence after the online greeting card and gifting platform in the UK and the Netherlands reiterated its annual revenue and adjusted earnings outlook. 

The company estimated annual revenue for the financial year ending April remain "unchanged" at around £320 million. 

The company added adjusted operating earnings guidance for the year also "remain unchanged."