U.S. and World Market Indexes Advance In Range-bound Trading

Barry Adams
26 Mar, 2024
New York City

Benchmark indexes advanced and extended the previous week's rally, and Treasury yields held steady. 

The S&P 500 index and the Nasdaq Composite edged higher, and crude oil prices remained volatile. 

Investors remained on the sidelines in the holiday-shortened week as market participants debated the future rate path and macroeconomic conditions. 

Crude oil prices retained an upward bias in volatile trading amid rising tensions in the Middle East and Red Sea lanes. 

The U.S. voted in favor of the United Nations Security Council adopting a resolution demanding an immediate Israel and Hamas ceasefire for two weeks. 

The extraordinary move is not likely to sway Israel from carrying out its bombing raids in Gaza, which have killed more than 25,000 people. 

Moreover, Russia carried out missile strikes targeting key infrastructure in the capital, Kyiv, and border town, Lviv, in Ukraine. 

The latest strikes come after Russia acknowledged Islamic State militant group were involved in the recent terrorist attack in Moscow that killed at least 145 people. 

However, Russia insisted that Tajikistan-born four terrorists had ties to several Islamist terrorist groups with links to Ukraine without offering any evidence. 

 

Durable Goods Orders and Shipments Advanced In February 

Durable goods orders rose 1.4% from the previous month and increased 1.8% from a year ago in February, from the downwardly revised fall of 6.9% in the previous month, the U.S. Census Bureau reported Tuesday. 

Excluding transportation, new orders increased by 0.5%, and excluding defense, new orders increased by 2.2%. 

Transportation equipment, also up following two consecutive monthly decreases, increased by 3.3%.

New orders for non-defense capital goods after excluding aircraft, generally viewed as a barometer for business spending, increased 0.7% after falling 0.4% in January.

Non-defense capital goods, excluding aircraft, increased 1.3%, and shipments rose 3.4% from a year ago. 

Shipments of manufactured durable goods in February, up following two consecutive monthly decreases, increased 1.2% from the previous month of 3.4% from a year ago.

 

 

U.S. Indexes and Yields

The S&P 500 index increased 0.2% to 5,229.40, and the Nasdaq Composite advanced 0.3% to 16,435.66. 

The yield on 2-year Treasury notes decreased to 4.60%, 10-year Treasury notes inched up to 4.24%, and 30-year Treasury bonds edged down to 4.41%.

WTI crude oil decreased $0.31 to $81.60 a barrel, and natural gas prices decreased 1 cent to $1.78 a thermal unit.

Gold decreased by $6.13 to $2,177.41 an ounce, and silver fell 21 cents to $24.46. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.24.

 

U.S. Stock Movers

Krispy Kreme jumped 19.4% to $14.86 after the company said it plans to sell donuts in McDonald's restaurants across the nation by 2026. 

McCormick jumped 6.6% to $74.60 after the spice company reported better-than-expected revenue and earnings in its latest quarter. 

Hershey Co. decreased 1.3% to $190.13, and Mondelez International declined 0.7% to $70.80 after the price of cocoa surged to a record high above $10,030 per ton in Tuesday's trading before edging down to $9.712 per ton. 

The supply of cocoa from Western African nations is likely to drop by as much as 60% because of dry weather conditions and the spread of a virus that damaged crop yields. 

The cocoa price has soared more than 135% in the year so far. 

 

European Markets Inch Higher

European markets inched further into record territories as investors overlooked rising geopolitical tensions and debated macroeconomic developments. 

Benchmark indexes in Paris, London, and Frankfurt advanced, and government bond yields hovered near three-month lows. 

Investors bid up stocks in the holiday-shortened week after major central banks held key interest rates steady, keeping expectations of rate cuts alive in the second half of the year. 

Moreover, investors also took a cautious view of China's economy after the government failed to provide additional stimulus measures to stabilize financial markets. 

Leading Chinese companies reported sharply higher 2023 annual earnings, stoking speculation that the recent market rebound may be more sustainable. 

PetroChina, China Merchants, China Resources Land, and Meituan reported better-than-expected annual earnings. 

 

Spain's GDP Growth Improves In Fourth Quarter

Closer to home, Spain's economic growth in the fourth quarter improved from the third quarter, the statistical agency INE reported Tuesday. 

Gross domestic product in the fourth quarter expanded by 0.6% from the third quarter, when the nation's output rose by 0.4%. 

The latest GDP data confirmed the estimate released on January 30. 

When compared to a year ago, economic growth accelerated to 2.0% from 1.9% in the third quarter. 

GDP growth in 2023 slowed to 2.5% from the previous year, and economic growth slowed for the third year in a row, from 5.8% in 2022 and 6.4% in 2021. 

 

Europe Indexes and Yields

The DAX index increased by 0.7% to 18,384.43, the CAC-40 index rose by 0.4% to 8,184.75, and the FTSE 100 index inched higher by 0.2% to 7,930.96.

The yield on 10-year German bonds edged down to 2.34%; French bonds inched lower to 2.81%; the UK gilts edged lower to 3.97%; and Italian bonds inched higher to 3.63%.

The euro edged higher to $1.085, the British pound inched higher to $1.265, and the U.S. dollar held steady at 90.09 Swiss cents.

Brent crude decreased $0.40 to $86.33. a barrel, and the Dutch TTF natural gas fell by €0.94 to €27.55 per MWh.

 

Europe Stock Movers

Ocado Group jumped 7.7% to 487.40 pence after the grocery delivery company reported better-than-expected first-quarter results, driven by a 10.6% increase in revenues. 

Flutter Entertainment edged up 0.2% to 17,255.0 pence after the online sports betting and gambling company reported better-than-expected 2023 financial results. 

Nordex SE increased 0.8% to €12.15 after the wind turbine company won an order to supply and install 57 turbines in its Delta 4000 series to a customer in South Africa. 

Smiths Group advanced 3.5% to 1,714.0 pence after the engineering company reported strong interim results and launched a £100 million stock repurchase program. 

 

China Earnings and Yen Worries Drive Asian Trading 

Asian markets traded mixed amid rising geopolitical tensions and rising crude oil prices. 

Market sentiment was weak on the ongoing worries of rising tensions in the Red Sea and Russia enlarging its bombing campaign to key targets in Kyiv and Lviv, a town close to a border with Poland.

 

Japanese Stocks Rest, Yen Hovers Near 4-month Low 

Benchmark indexes in Tokyo rebounded after weak trading in the previous session. 

Investors focused on the volatility in the yen, and the currency stabilized around 151.40 against the U.S. dollar in the hopes of government intervention. 

Tech and financial stocks were among the leading gainers in the hopes of faster economic growth as domestic investors step up investing in large-cap stocks. 

Investors are awaiting the release of retail sales, industrial production, and the unemployment rate later in the week. 

The Nikkei 225 Stock Average decreased 0.1% to 40,370.29, and the Topix edged down 0.01% to 2,777.31. 

Softbank, Tokyo Electron, Advantest, and Screen Holdings edged up between 0.5% and 1.5%. 

 

China Indexes Edge Higher Amid Positive Earnings

Benchmark indexes in Shanghai and Hong Kong retained an upward bias as investors reviewed the latest earnings from PetroChina, China Resources Land, and China Merchants Bank. 

In cautious trading, market indexes struggled to gain traction, and investors worried that the latest intervention-driven rebound in stocks may not be durable despite a string of positive earnings. 

Investors are awaiting the release of earnings from at least 20 leading companies this week. 

The CSI 300 index declined 0.04% to 3,524.39, and the Hang Seng index decreased 0.06% to 16,461.11. 

China Merchants Bank advanced 4.5% to HK$31.35 after the financial services company reported a 6.2% increase in annual earnings in 2023 to 146.6 billion yuan, or $10.2 billion. 

China Resources Land gained 1.4% to HK$24.65 after the property developer reported better-than-expected 2023 earnings of 31.4 billion yuan, or $4.4 billion. 

Revenue in the full-year increased 21.3% to 251.1 billion yuan, and profit attributable to shareholders rose 11.7% to record 31.4 billion yuan from 28.1 billion a year ago. 

Core profit, excluding investment gains, edged up 2.7% to 27.8 billion yuan. 

The company's board recommended a final dividend of 1.243 yuan per share, and together with the interim dividend of 0.198 yuan per share, the total dividend for 2023 increased by 2.9% from a year ago to 1.441 yuan per share.

As of the end of the year 2023, the net long-term debt-to-equity ratio eased 6.2 percentage points from a year ago to 32.6%, while the weighted average cost of debt decreased 19 basis points to a ten-year low of 3.56%.

Earnings per share advanced to 4.40 yuan from 3.94 yuan a year ago. 

PetroChina, the listed arm of the state-controlled China National Petroleum Corporation, increased 0.6% to HK$6.50 after the oil exploration and refinery company reported a record annual profit in 2023. 

2023 revenue declined 7% to 3.0 trillion yuan from 3.3 trillion yuan, and profit attributable to shareholders increased 8% to 161.1 billion yuan from 148.7 billion yuan a year ago. 

 

India Indexes Look Down in Cautious Trading

Stocks in Mumbai traded down as investors returned after a long holiday weekend. 

The Sensex index and the Nifty Composite edged down 0.1% in early trading amid mixed markets in Asia and elevated crude oil prices in international trading. 

Popular benchmark indexes declined in a holiday-shortened week with only three trading days this week. 

Financial markets were closed on Monday to celebrate the festival of color Holi and mark the arrival of spring, and markets were closed on Friday to celebrate Good Friday. 

The financial markets are closed on Friday in Europe and the U.S., and they are closed on Monday in Europe. 

India's foreign exchange reserve increased to a record high of $642.3 billion at the end of the week ending March 15, the Reserve Bank of India reported in its latest update. 

Rising service exports, falling energy imports, and a steady inflow of foreign remittances are supporting the growth in foreign reserves. 

The Sensex index decreased 0.2% to 72,659.64, and the Nifty index edged down 0.2% to 22,044.50. 

On the Mumbai stock exchange, 44 stocks traded at their 52-week highs and 24 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.08%, and the Indian rupee edged lower to ₹83.35 against the U.S. dollar.