U.S. Market Averages Struggle, Home Builders Extend Yearly Gains, Global Indexes Slide

Barry Adams
26 Jun, 2023
New York City

Stocks on Wall Street looked down after major indexes declined 1% in the previous week. 

The S&P 500 index and the Nasdaq Composite index turned lower as investors assessed the implications of higher rates staying longer and looming economic slowdown. 

The tech stocks driven eight-week rally halted last week after Fed Chairman Powell reminded investors that the central bank is not done with raising rates. 

The Federal Reserve is expected to raise rates at least by 25 basis points two times before the end of 2023, according to the latest projections provided by the central bank while announcing its rate decision on June 14. 

 

Crude Oil and Natgas Volatile After Russian Mutiny Aborted

Over the weekend, crude oil traded volatile and natural gas prices shot up more than 10% in European trading after Russia's mercenary forces ended its rebellion. 

Yevgeny Prigozhin led Wagner Group gave up on its plan to march to Moscow, but not before challenging Russian president Vladimir Putin's 23-year hold on power. 

Prigozhin agreed to exile in Belarus, according to Kremlin controlled news services Pravda. 

Crude oil jumped 2% before its retreat and the Russian ruble plunged to a 13-month low of 87 against the U.S. dollar before recovering to 84.40.. 

 

U.S. Indexes & Yields 

The S&P 500 index decreased 0.3% to 43,36.92 and the Nasdaq Composite declined 0.9% to 13,378.61.  

The yield on 2-year Treasury notes increased to 4.73%, 10-year Treasury notes inched lower to 3.70% and 30-year Treasury bonds edged down to 3.79%. 

Crude oil increased $0.64 to $69.80 a barrel and natural gas prices increased 3 cents to $2.76 a thermal unit. 

 

U.S. Stock Movers

Lucid Group jumped 9.4% to $5.47 after the company signed an agreement with the UK-based Aston Martin to supply power train and battery systems. 

Aston also agreed to sell 3.7% stake in the company to Lucid for $232 million. 

Carnival Corp plunged 9.7% to $14.20 after release of the company's quarterly results. 

Revenue in the quarter ending in May increased to $4.9 billion from $2.4 billion and net loss shrank to $407 million from $1.8 billion and diluted loss per share dropped to 32 cents from $1.61 a year ago. 

For the full year 2023, the company forecasted adjusted EBITDA of $4.10 billion to $4.25 billion, above March guidance's range and with a midpoint increase of $175 million. 

Cruise stocks have been on upswing since April on the expectations of a rebound in reservations after travel demand recovered following the Covid-19 pandemic. 

PacWest Bancorp jumped 7% to $7.71 after the company sold a $3.5 billion specialty finance portfolio of senior and secured maturities to Ares Management. 

Home builder continued to climb for the second week in a row and extend 2023 gains. 

NVR Inc gained 0.6% to $6,196.51 and extended this year's gain to 35% and PulteGroup, Inc advanced 0.3% to $76.47 and extended this year's gains to 65.5%.   

Palo Alto Networks Inc increased 0.6% to $245.50 and extended this year's gains to 77%. 

 

European Markets Trade In tight Range, Natural Gas Turns Volatile 

European markets struggled on Monday after investors reviewed energy markets and bond yields held steady following the events over the weekend. 

The Russian paramilitary Wagner group gave up their threat to advance to Mosco and avoided a potentially bloody confrontation with the Russian military. 

Despite the ending of mutiny by the Russian rebel group, worries persisted about the security of the nuclear arsenal. 

The Wagner group's threat to march to Mosco unnerved energy markets and natural gas prices shot up as much as 10% in Amsterdam trading. 

Crude oil prices soared as much as 2% before retreating to the level last seen on Friday. 

The Russian ruble dropped to as low as 87 against the U.S. dollar and extended this year's loss to 17%. 

 

German Business Confidence Drops to 6-month Low 

The German IFO Business Climate Index declined to 88.5 in June from the downwardly revised 91.5 in May, the IFO Institute reported Monday. 

The business confidence index dropped to the lowest level since December on persistent worries about economic uncertainties and manufacturing reported falling new orders after rates around the world continued to advance.  

 

Spain's Wholesale Inflation Declined for 3rd Month In a Row

Spain's producer price index declined 6.9% in May following the fall of 4.5% in April, the National Statistics Institute reported Monday. 

The measure of wholesale prices declined for the third month in a row after energy prices plunged 24.9% and intermediate goods decreased 4% but prices for consumer goods rose 10.5%.  

On a monthly basis, the producer price index declined 1.6% following 1.9% fall in April. 

 

Europe Indexes & Yields 

The DAX index decreased 0.2% to 15,813.06,  the CAC-40 index gained 0.3% to 7,1814.35 and the FTSE 100 index dropped 0.1% to 7,453.38.

The yield on 10-year German Bunds inched lower to 2.31%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.30% and Italian bonds decreased to 3.94%.

The euro edged higher to $1.09, the British pound to $1.273 and the U.S. dollar fetched 89.32 Swiss cents.

The ruble recovered to 84.40 after falling sharply over the weekend after the paramilitary Wagner group threatened to march to Moscow, challenging President Putin's 23-year rule. 

Brent crude increased $0.49 to $74.34 a barrel and the Dutch TTF natural gas increased €0.53 to €33.98 per MWh.

 

Europe Stock Movers

Bank stocks were hit the hardest in today's session after political turmoil heightened energy supply worries and stoked fears of renewed inflation. 

Commerzbank, Deutsche Bank, Lloyds Banking Credit Agricole and BNP Paribas declined between 2% and 3%. 

Aston Martin Lagonda Global Holdings Plc soared 9.4% to 358 pence after the luxury automaker struck a deal with the U.S.-based Lucid Group to manufacture "high performance" electric vehicles. 

Associated British Foods plc decreased 0.9% to 1,934.50 pence despite the company lifting its outlook for the fiscal year. 

Euronext NV declined 0.6% to €63.05 after the stock exchange group agreed to sell its 11.1% stake in LCH SA to LCH Group Holdings Limited for €111 million. 

SCOR SE increased 0.8% to €24.95 after the company appointed Fabrice Bregier as chairman of the company's board. 

SBB Group soared 11.6% to SKK 3.67 after the embattled Swedish property group said it is actively looking to sell its remaining 51% stake in its education unit. 

 

China Stocks Extend Losses 

Chinese stocks extended losses for the seventh day in a row after trading resumed following an extended weekend to celebrate Dragon Boat Festival. 

The CSI 300 index closed down 1.4% and extended decline to 9.3% from a high in January on the ongoing economic worries, demographic challenges and high level of debt across all levels of government.