World Markets Rest, Earnings In Focus In Europe and China

Barry Adams
25 Mar, 2024
New York City

Stocks on Wall Street traded down for the second session in a row as investors stayed on the sidelines following the advance in the previous weeks. 

The S&P 500 index and the Nasdaq Composite decreased 0.2%, and investors reacted to corporate news. 

Market indexes advanced in the previous week's trading after the U.S. Federal Reserve maintained its rate-cut outlook for 2024 and held steady the Fed Funds range. 

Investors are looking forward to the release of personal consumption expenditure price indexes, personal income and outlays, and durable goods orders.

The PCE price index, the Fed's preferred and watered-down measure of inflation, is scheduled to be released on Friday. 

Trading on Wall Street is expected to be subdued during the holiday-shortened week, and the market will get the first chance to react to the release of the PCE data on Monday.

 

U.S. New Home Sales Eased in February  

Single-family house sales eased 0.3% from the previous month and rose 5.9% from a year ago in February to a seasonally adjusted rate of 662,000. 

The median sale price of a new house sold was $400,500, and the average sale price was $485,000, according to the latest government statistics. 

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the new residential statistics Monday. 

The seasonally adjusted estimate of new homes for sale at the end of February was 463,000, a supply of 8.4 months at the current sales rate. 

Home price affordability and elevated mortgage rates have kept first-time home buyers away from the market, as mortgage rates have continued to advance over the last year. 

 

 

U.S. Indexes and Yields

The S&P 500 index decreased 0.2% to 5,225.67, and the Nasdaq Composite fell 0.03% to 16,424.30. 

The yield on 2-year Treasury notes increased to 4.61%, 10-year Treasury notes inched down to 4.23%, and 30-year Treasury bonds edged down to 4.41%.

WTI crude oil increased $1.15 to $81.78 a barrel, and natural gas prices decreased 3 cents to $1.62 a thermal unit.

Gold decreased by $12.73 to $2,177.04 an ounce, and silver fell 9 cents to $24.67. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.19.

 

U.S. Stock Movers

Boeing increased 1.2% to $191.10 after the company announced a leadership shakeup. 

Chief executive Dave Calhoun will step down as a part of a broader management reorganization, and chairman of the board Larry Kellner will resign in May after the company's annual meeting. 

Boeing has suffered several manufacturing quality setbacks, and recently, a door panel blew out of a Boeing 737 Max 9 aircraft while flying an Alaska Air flight on January 5. 

Alphabet, Apple, and Meta declined between 0.5% and 1.4% after the European Union launched an investigation under its new Digital Markets Act. 

 

European Markets Rest, Spain's Wholesale Inflation Plunges

European markets traded mixed at the start of the holiday-shortened week amid ongoing trade tensions between the U.S. and China. 

Investors stayed on the sidelines after benchmark indexes traded at a new record high at the end of the previous week as rate-cut expectations drove market sentiment. 

Last week, major central bank announcements dominated market news after the U.S. Federal Reserve left its key lending rate range unrevised for the fifth time in a row and also maintained its possible three rate-cut projections for the year. 

Moreover, the Bank of Japan also ended its negative rate-cut regime after eight years and lifted its policy rate range for the first time in 17 years. 

Closer to home, the Bank of England and Norges Bank held their lending rates, but the Swiss National Bank cut its policy rate by 25 basis points to 1.5%. 

Spain's producer price inflation plunged 8.2% from a year ago in February, following a slightly revised 3.9% decline in the previous month, the National Statistics Institute reported Monday. 

Investors are also looking forward to the release of preliminary consumer inflation data in France, Spain, and Italy later in the week. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 18,261.23, the CAC-40 index fell by a fraction to 8,151.60, and the FTSE 100 index inched lower by 0.6% to 7,917.57.

The yield on 10-year German bonds edged down to 2.34%; French bonds inched lower to 2.82%; the UK gilts edged higher to 4.0%; and Italian bonds inched higher to 3.67%.

The euro edged higher to $1.082, the British pound inched higher to $1.263, and the U.S. dollar held steady at 89.80 Swiss cents.

Brent crude increased $0.92 to $86.35. a barrel, and the Dutch TTF natural gas rose by €0.71 to €28.49 per MWh.

 

Europe Stock Movers

Kingfisher plc edged up 0.2% to 234.16 pence after the UK-based home-improvement retailer reported a sharp decline in its fiscal year annual profit. 

Pre-tax profit in the fiscal year plunged 22.3% to £475 million from £611 million a year ago. 

Henry Boot dropped 1% to 182.11 pence after the UK-based property developer reported fiscal 2024 pre-tax profit decreased 18% to £37.3 million from £45.6 million. 

Delivery Hero SE declined 2.1% to €26.41 after the company said chief financial officer Emmanuel Thomassin would resign from his job at the end of September. 

The company's supervisory board is looking for a replacement. 

Pennon Group decreased 2.3% to 654.50 pence after the UK-based water utility company reported fiscal year results in line with management expectations. 

Gamma Communications PLC increased 0.1% to 1,350.80 pence after the company reported an increase in pre-tax annual profit. 

Direct Line Insurance dropped 12% to 183.47 pence after the Belgian insurance company Ageas said it would not make a third takeover offer. 

 

Profit Booking Drives Nikkei Lower, Meituan Earnings Lifts China Indexes Higher 

Market indexes in Tokyo and Seoul edged lower but advanced in China and Sydney in Monday's trading. 

Financial markets in India were closed to celebrate the Holi festival. Several markets are scheduled to be closed in Europe and Asia this Friday for a holiday. 

Stocks lacked direction after major central bank announcements dominated trading in the previous week. 

The central bank in Switzerland lowered its policy rate, trumping other major central banks around the world, and the Bank of Japan ended its negative rate regime after eight years and lifted its policy rate for the first time in 17 years. 

Investors are hoping that Chinese authorities will provide additional measures to stabilize markets, after the annual gathering of lawmakers failed to offer any new measures to support the slumping property market. 

 

Profit Taking Drives Japan Indexes Lower

Benchmark indexes in Tokyo traded down in Monday's trading, and investors booked profits in leading financial and tech stocks after a surge of 6% in the previous week. 

Market sentiment turned cautious ahead of the release of key economic data later in the week. 

Investors are awaiting the release of retail sales, industrial production, the unemployment rate, and the minutes of the BOJ’s last policy meeting. 

The Nikkei 225 Stock Average dropped 0.6% to 40,634.01, and the Topix index dropped 0.8% to 2,790.49. 

SoftBank, Tokyo Electron, Screen Holdings, and Advantest are between 1% and 2.5%. 

Banks and financial services providers were also among the leading decliners. 

Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui declined between 0.6% and 1.5%. 

 

China Stocks Trade Higher Ahead of Earnings Release; Meituan Soars 8% 

Benchmark indexes in Shanghai and Hong Kong advanced as investors awaited earnings announcements from leading Chinese companies later in the week. 

Investors also reviewed Premier Li Qiang's comments delivered at the China Development Forum over the weekend, which brought together Chinese officials, academics, and foreign business leaders. 

Premier Qiang said that China is working to improve market access, data transparency, and cross-border data flows for foreign businesses.

Foreign investors have been leaving China as Chinese officials ramp up their investigation of foreign businesses under the expanded espionage laws, and the second-largest economy has placed severe restrictions on capital repatriations, essentially banning capital outflow. 

Trading was driven by institutional investors adjusting their portfolio holdings in anticipation of earnings releases.

The CSI 300 index gained 0.4% to 3,558.59, and the Hang Seng index added 0.5% to 16,578.99. 

Market jitters kept tech stocks under check, and Lenovo Group declined 7% to HK$9.05, Alibaba Group dropped 1.3% to HK$70.10, and Baidu Group jumped 6% to HK$104.50. 

After Friday's close, Meituan and China Honqgiao Group reported sharply higher earnings. 

China Hongqiao Group soared 14% to $8.42 after the aluminum maker reported a 32% rise in annual earnings in 2023 from a year ago. 

Meituan rebounded 8% to HK$95.90 after the food delivery platform swung to net income in the fourth quarter. 

Revenue in the fourth quarter increased by 22.6% to 73.6 billion yuan, or $10.2 billion, and net income swung to a profit of 2.22 billion yuan compared to a loss of 1.08 billion yuan. 

The company's core local commerce revenue increased by 26.8% to 55.1 billion yuan. 

For the full year, revenue increased 25.8% to 276.6 billion yuan, and net income swung to 13.8 billion yuan from a loss of 6.7 billion yuan. 

The number of on-demand transactions on its delivery platform rose 25% to 6.0 billion yuan in the quarter and jumped 23.9% to 21.9 billion in the year from a year ago, respectively. 

 

India Markets Closed to Celebrate Holi 

Financial markets in India were closed to celebrate the Holi festival and the arrival of spring. 

In Friday's trading, benchmark indexes closed higher after shaking off morning volatility amid sustained buying in beaten-down small and mid-cap stocks. 

Market sentiment remained cautious in the final hour of trading, and the Sensex and the Nifty indexes extended weekly gains of 0.3%.

The Sensex index increased 0.2% to 72,831.94, and the Nifty index edged up 0.4% to 22,096.75. 

The yield on the 10-year Indian government bonds increased to 7.08%, and the Indian rupee edged lower to ₹83.58 against the U.S. dollar.