Major Averages Inch Higher On Wall Street, EV Makers Surge Ahead

Barry Adams
03 Jul, 2023
New York City

Stocks on Wall Street traded flat on the first day of trading in the second half and electric vehicle makers were in focus after Tesla and Rivian reported quarterly production data. 

Market indexes showed little movement at the start of the second half after surging in the first half and regular trading hours ended at 1:00 p.m. ET ahead of market holiday on July 4. 

The tech stock heavy Nasdaq Composite index reported its best performance in the period in four decades on the back of optimism surrounding artificial intelligence driven demand for semiconductor and software.  

The S&P 500 index advanced 15.9% and the Nasdaq Composite index jumped 31.7% in the first half. 

Investors are hoping that despite the Federal Reserve's hawkish stance and the expected increase in interest rates by another 50 basis points, the U.S. economy may experience a shallow recession. 

The S&P 500 index advanced over 5% in June and jumped over 7% in the second quarter and soared 15.9% in the first half. 

The Nasdaq Composite increased over 5% in June, advanced over 12% in the second quarter and jumped nearly 31.7% in the first half. 

Electric vehicles makers jumped after Tesla reported an 83% jump in vehicle deliveries in the second quarter, partly driven by federal tax incentives and company discounts. 

Rivian reiterated its annual electric vehicle production target of 50,000 pickups and SUVs.  

Crude oil prices declined 7% in the second quarter and extended the first half fall to 12%. 

 

U.S. Indexes & Yields 

The S&P 500 index traded up 0.1% to 4,455.59 and the Nasdaq Composite edged higher 0.2% to 13,816.77.  

The S&P 500 index advanced 5.2% in June and jumped 7% in the second quarter, third quarterly gain in a row and jumped 15.9% in the first half. 

The Nasdaq Composite increased 5.1% in June, advanced 11.2% in the second quarter and soared nearly 31.7% in the first half of 2023. 

The yield on 2-year Treasury notes increased to 4.93%, 10-year Treasury notes inched higher to 3.85% and 30-year Treasury bonds edged up to 3.86%. 

Crude oil advanced after Saudi Arabia and Russia announced production cuts to bolster international prices. 

Saudi Arabia said it will extend its voluntary production cut of one million barrels per day to August and added it may prolong cuts further. 

Saudi Arabia's daily production is expected to drop to 9 million barrels per day, the lowest since 2017. 

Russia said it will lower its exports by 500,000 barrels per day in July. 

Crude oil decreased $0.49 to $70.15 a barrel and natural gas prices decreased 8 cents to $2.71 a thermal unit. 

 

U.S. Stock Movers

Tesla Inc jumped 8.5% to $283.86 after the maker of electric vehicles reported deliveries and production of electric vehicles in the second quarter. 

Chinese electric vehicle makers trading in New York advanced after Tesla reported higher-than-expected quarterly production and deliveries. 

Xpeng Inc jumped 7% and Nio Inc gained 5%. 

BYD jumped 4% in Hong Kong and Shanghai trading after the Shenzhen-based company backed by Berkshire Hathaway shipped 253,046 vehicles in June, 5.3% more than in May when it shipped 239,092 vehicles. 

BYD released the data in a filing with the Hong Kong Stock Exchange earlier in the day. 

The largest Chinese automaker delivered 1.26 million vehicles in the first half, compared to 1.86 million vehicles in all of 2022 and 320,810 in 2020. 

Apple Inc edged down 0.6% to $192.94 after a report suggested that the company is looking to scale back production of Vision Pro headsets.  

 

European Markets Turned Higher 

European markets retained upward bias and investors awaited the release of manufacturing data in the region. 

Market indexes in Frankfurt and Paris advanced for the third quarter in a row and indexes extended gains after inflation in the currency union eased but stayed above the European Central Bank's 2% target. 

Investors are anticipating policymakers to continue advancing interest rates in the months ahead but hoping that the labor market strength, weakening energy prices and robust exports will help the region's economy fall into a recession. 

The Eurozone PMI index in the final reading declined after demand for goods fell sharply towards the end of the second quarter, S&P Global reported in its survey on Monday. 

The Manufacturing Purchasing Managers' Index fell to 43.4 in June from 43.6 in May.  

The Italian operating conditions weakened in June, according to the latest manufacturing industry survey by S&P Global. 

Purchasing Managers' Index declined 43.8 from 45.9 in May, the largest fall in operating environment since April 2020, after production fell the most in three years and sales weakened to an eight-month low. 

In other economic news, Swiss inflation eased to 1.7% in June from 2.2% in May, Swiss Federal Statistical Office reported Monday. 

Falling energy prices, strong Swiss franc and tight price controls kept inflation forces in control. 

In the week ahead, investors are awaiting payrolls data from the U.S. and minutes of meeting from the U.S. Federal Reserve. 

 

Europe Indexes & Yields 

The DAX index decreased 0.4% to 16,081.04, the CAC-40 index fell 0.2% to 7,386.70 and the FTSE 100 index decreased 0.05% to 7,527.26. 

The yield on 10-year German Bunds inched higher to 2.39%, French bonds traded lower to 2.93%, the UK gilts edged down to 4.39% and Italian bonds decreased to 4.08%.

The euro edged higher to $1.088, the British pound to $1.267 and the U.S. dollar fetched 89.99 Swiss cents

Brent crude decreased $0.348to $74.90 a barrel and the Dutch TTF natural gas decreased €2.96 to €34.15 per MWh.

 

Europe Stock Movers

Tesla Inc soared in Frankfurt trading after the maker of electric vehicles reported record deliveries in the second quarter on Sunday. 

Mining companies gained on the hopes of stimulus from the Chinese government after China's manufacturing index declined in June. 

Glencore, Antofagasta, and Anglo American advanced between 2% and 4%. 

Nokia Oyj increased 2.5% to €3.93 after the company signed a new patent cross-licensing agreement with Apple Inc.  

AstraZeneca Plc declined 5.6% to 10,638.0 after the latest results from a broad study for a cancer drug lagged expectations. 

Saint Gobain SA increased 0.6% to €56.04 after the company signed an agreement to sell its glass processing division COVIPOR in Portugal to PNI Portugal. 

Generali SpA gained 3.3% to €19.24 after Delfin won a regulatory approval to hold more than 10% stake in the Italian insurance company. 

Technip Energies NV increased 0.5% to €20.91 after the French engineering and technology firm said it acquired the sustainable process development company Processium for an undisclosed amount. 

 

Asian Markets Closed Higher

Japan's business sentiment improved in the second quarter, according to the Tankan survey conducted by the Bank of Japan. 

Sentiment among large manufacturing businesses improved +5, rebounding from +1 in the first quarter and the sentiment index for non-manufacturing businesses increased +23 from +22 in March, and increased to the highest level since June 2019.  

China's manufacturing activities expanded at a slower pace in June, according to a survey conducted by Caixin. 

Manufacturing purchasing managers' index eased to 50.5 in June from 50.9 in May and reflecting the weakness reported by the National Bureau of Statistics in its official index to 49.0 in June compared to 48.8 in May.  

The Nikkei 225 index in Tokyo advanced 1.7%, the Hang Seng index jumped 2% on the back of a rally in tech stocks. 

The Shanghai SSE Composite index increased 1.3% on the hopes that the Chinese government will announce more stimulus measures after a private survey showed contraction in manufacturing for the second month in a row in June. 

The Sensex index in Mumbai soared 0.8% and closed at a new record high on economic optimism and sustained buying by foreign investors.