Stock Markets Across Atlantic Rest, Sustained Global Demand Lifts China's Exports

Alexander Garcia
10 Dec, 2024
Miami

Wall Street indexes struggled to advance ahead of rate decisions from central banks and the U.S. inflation reports. 

The S&P 500 index increased a fraction, but the Nasdaq Composite advanced 0.7% as investors stayed focused on mega-cap companies, including Microsoft, Meta Platforms, Google-parent Alphabet, and Amazon.com. 

A string of positive labor market reports and factory orders last week supported the case for the Federal Reserve to consider one more rate cut at the last policy meeting of 2024 next week. 

Investors are hoping that consumer and producer price inflation reports later in the week confirm the disinflationary trend in place for more than a year. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.01% to 6,052.58, the Nasdaq Composite rose 0.1% to 19,756.70, and the Russell 2000 index rose by 0.3% to 2,399.60. 

The yield on 2-year Treasury notes edged higher to 4.15%, 10-year Treasury notes inched up to 4.23%, and 30-year Treasury bonds increased to 4.43%.

WTI crude oil increased $0.49 to $68.86 a barrel, and natural gas prices edged down 4 cents to $3.13 a thermal unit.

Gold increased by $34.01 to $2,694.63 an ounce, and silver rose by $0.16 to $32.06. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower by 0.40 to 106.54.

 

Stock Movers 

Oracle Corp. dropped 6.5% to $178.06 after the database developer and cloud services provider reported strong revenue growth in the fiscal second quarter, but earnings fell short of expectations. 

Total revenue in the quarter increased 9% to $14.1 billion, driven by a 24% surge in cloud service revenue of $5.9 billion. 

Net income jumped 26% to $3.2 billion from $2.5 billion, and diluted earnings per share advanced to $1.10 from 89 cents a year ago. 

The company's board of directors declared a cash dividend of 40 cents per share payable on January 23 to shareholders on record on January 9. 

MongoDB declined 7.4% to $325.50 after the database developer lifted its outlook for the fourth quarter. 

Total revenue in the third quarter increased 22% to $529.4 million, net loss shrank to $9.8 million from $29.3 million, and diluted loss per share eased to 13 cents from 41 cents a year ago. 

The company estimated fourth quarter revenue to range between $515 million and $519 million, adjusted operating income between $55 million and $58 million, and adjusted earnings per share between 62 cents and 65 cents. 

Vail Resorts jumped 4% to $198.50 after the ski resort operator reported quarterly results. 

Revenue in the fiscal first quarter ending in October increased to $260.3 million from $258.6 million, net loss shrank to $172.8 million from $175.5 million, and diluted loss per share edged up to $4.61 from $4.60 a year ago. 

For the fiscal year 2025, the company revised its estimate of operating earnings to range between $240 million and $316 million from $224 million to $300 million. 

The company declared a cash dividend of $2.22 per share, payable on January 9 to shareholders on record on December 26. 

 

 

Political Uncertainty In Germany and France Keeps European Market Indexes Under Pressure

European markets struggled to advance ahead of the rate decisions and ongoing political turmoil in Germany and France. 

Benchmark indexes in Paris, Frankfurt, Milan, and London struggled to stay above the flatline as France struggled to form the next government, and the ECB is set to announce its rate decisions on Thursday.

President Emmanuel Macron invited leaders of political parties to discuss the selection of the next prime minister, excluding the far-right National Rally party and the far-left party France La Insoumise. 

Historically, French politics has avoided coalitions of parties that compromise on ideas, but with not a single party holding a majority to form the government, political leaders are learning the art of compromise. 

On the economic front, Germany's consumer price inflation edged higher to 2.2% in November from 2.0% in October, confirming the preliminary estimate released by the Destatis. 

Consumer price inflation in Norway dropped to 2.4% in November from 2.6% in October, Statistics Norway reported Tuesday. 

Consumer prices rose at the slowest pace since December 2020 in the energy-rich nation, primarily due to the slowdown in housing and utility costs to 2.1% from 4.5% in the previous month.   

Mining stocks in London and luxury goods stocks in Paris faced selling pressure after China's exports rose at a slower-than-expected pace in November. 

 

Europe Indexes and Yields

The DAX index decreased by 0.1% to 20,329.16; the CAC-40 index fell by 1.1% to 7,394.78; and the FTSE 100 index inched lower by 0.9% to 8,280.36.

The yield on 10-year German bonds edged higher to 2.12%, French bonds inched down to 2.85%, the UK gilts increased to 4.30%, and Italian bonds increased to 3.20%.

The euro edged higher to $1.05; the British pound inched up to $41.27; and the U.S. dollar eased to 87.99 Swiss cents.

Brent crude decreased $0.39 to $72.52 a barrel, and the Dutch TTF natural gas rose by €0.72 to €45.64 per MWh. 

 

Europe Stock Movers

Delivery Hero SE plunged 10.2% to €31.92 after the Germany-based delivery company's Middle Eastern unit Talabat completed its initial public offering and commenced trading in Dubai. 

The United Arab Emirates' largest public offering in 2024 was priced at 1.60 dirham and advanced 6% to 1.70 dirham in trading. 

Delivery Hero sold a 20% stake in the company and raised about €1.9 billion. 

Volkswagen AG increased 1.3% to €88.25, and the company and workers' union agreed to extend talks to agree on a framework for plant closures. 

TeamViewer SE declined 12.7% to €10.99, and the German remote access and support software developer agreed to acquire the UK-based 1E for an enterprise value of $720 million.

Centrica PLC decreased 0.2% to 131.10 pence after the parent company of British Gas expanded its stock repurchase plan by £300 million to £1.5 billion. 

Ashtead Group declined 12.5% to 5,489.59 pence after the equipment rental company said it plans to move its stock listing to New York from London. 

FirstGroup plc increased 4% to 160.30 pence after the company agreed to acquire RATP London from RATP Developpement for an enterprise value of £90 million. 

 

China's Export Growth Slowed In November 

China's export growth slowed down in November, but the overall exports stayed elevated amid the sustained demand for its products in the ASEAN region, the European Union, and the U.S. 

On an annual basis, China's exports increased 6.7% to $312.3 billion, and imports declined 3.9% to $214.9 billion, resulting in a trade surplus surge of 40% to $97.4 billion. 

Exports to the U.S. rose 8%, to the European Union by 7.2%, to Japan by 6.4%, and to the ASEAN region by 20.1%. 

China's exports in the first eleven months to November increased 5.4% to $3.24 trillion, driven by higher shipments of textiles, aluminum products, and mechanical and electrical products.