- Inga Muller
- 14 Aug, 2024
- Frankfurt
The Eurozone's GDP in the second quarter accelerated from the previous quarter, and industrial output declined from a year ago in June. Consumer price inflation in the UK edged up in July.
The DAX index increased by 0.4% to 17,879.06; the CAC-40 index rose by 0.3% to 7,299.45; and the FTSE 100 index advanced by 0.2% to 8,253.56.
The yield on 10-year German bonds edged lower to 219%, French bonds inched down to 2.93%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.58%.
UBS Group AG jumped 3.5% to CHF 26.0, and the Swiss bank reported that second-quarter profit jumped to $1.1 billion.
Straumann Holding soared 12.8% to CHF 125.20 after the dental implant maker lifted its 2024 guidance.
Revenue in the first half increased 16.1% to 1.3 billion.
The company also announced the sale of its DrSmile aligner business to Barcelona-based Impress Group in exchange for a 20% stake in the dental clinic network operator in Spain, the UK, Italy, and Portugal.
Aviva plc increased 0.2% to 489.70 pence after the insurance company reported a better-than-expected 14% increase in operating profit in the first half.
Balfour Beatty decreased 2.3% to 398.82 pence, despite the construction service provider reporting an increase in earnings for the first half.
Flutter Entertainment jumped 8.7% to 15,930.0 pence, and the world's largest online betting firm reported better-than-expected second quarter results and lifted its annual outlook.
TUI AG increased 2.6% to €5.69, and the tour operator reported better-than-expected profit in the fiscal third quarter.
ThyssenKrupp declined 4% to €3.16 after the steelmaker lowered its annual profit estimate for the third time this year.
Revenue in the third quarter decreased to €9.0 billion from €9.6 billion, adjusted EBIT fell to €149 million from €243 million, and new orders slowed to €8.4 billion from €9.4 billion a year ago, respectively.
The steel company revised its annual sales to decline between 6% and 8% and adjusted EBIT to be around 500 million from the previous estimate of an "increase in the high three-digit million euros range."
- Bridgette Randall
- 14 Aug, 2024
- London
European markets edged slightly higher, and investors reviewed key economic data in the eurozone and the U.K.
Benchmark indexes in Paris, London, and Frankfurt advanced after the eurozone GDP in the second quarter was confirmed to expand 0.3% from the previous quarter, matching the flash estimate.
On an annual basis, GDP expanded by 0.6% in the second quarter, following the 0.5% increase in the first quarter, Eurostat reported Wednesday.
Eurozone's industrial output, adjusted for seasonal factors, declined 3.9% on the year and gained 0.3% from the previous month in June, Eurostat reported in a separate report Wednesday.
Energy production increased 1.4%, intermediate goods production rose 0.7%, capital goods advanced 0.9%, consumer durable goods production increased 3.2%, and consumer non-durable goods production decreased 2.0%.
Consumer price inflation in the U.K. accelerated to an annual pace of 2.2% from 2.0% in June, the Office for National Statistics reported Wednesday.
Consumer prices accelerated for the first time since December, and the core rate of inflation, which excludes energy and food prices, eased to 3.3% from 3.5% in the previous month.
Europe Indexes and Yields
The DAX index increased by 0.4% to 17,879.06; the CAC-40 index rose by 0.3% to 7,299.45; and the FTSE 100 index advanced by 0.2% to 8,253.56.
The yield on 10-year German bonds edged lower to 2.19%, French bonds inched down to 2.93%, the UK gilts edged lower to 3.85%, and Italian bonds inched up to 3.58%.
The euro edged down to $1.10; the British pound inched lower to $1.282; and the U.S. dollar weakened to 86.30 Swiss cents.
Brent crude decreased $0.16 to $82.52 a barrel, and the Dutch TTF natural gas fell by €0.04 to €39.32 per MWh.
Europe Stock Movers
UBS Group AG jumped 3.5% to CHF 26.0, and the Swiss bank reported that second-quarter profit jumped to $1.1 billion.
Straumann Holding soared 12.8% to CHF 125.20 after the dental implant maker lifted its 2024 guidance.
Revenue in the first half increased 16.1% to 1.3 billion.
The company also announced the sale of its DrSmile aligner business to Barcelona-based Impress Group in exchange for a 20% stake in the dental clinic network operator in Spain, the UK, Italy, and Portugal.
Aviva plc increased 0.2% to 489.70 pence after the insurance company reported a better-than-expected 14% increase in operating profit in the first half.
Balfour Beatty decreased 2.3% to 398.82 pence, despite the construction service provider reporting an increase in earnings for the first half.
Flutter Entertainment jumped 8.7% to 15,930.0 pence, and the world's largest online betting firm reported better-than-expected second quarter results and lifted its annual outlook.
TUI AG increased 2.6% to €5.69, and the tour operator reported better-than-expected profit in the fiscal third quarter.
ThyssenKrupp declined 4% to €3.16 after the steelmaker lowered its annual profit estimate for the third time this year.
Revenue in the third quarter decreased to €9.0 billion from €9.6 billion, adjusted EBIT fell to €149 million from €243 million, and new orders slowed to €8.4 billion from €9.4 billion a year ago, respectively.
The steel company revised its annual sales to decline between 6% and 8% and adjusted EBIT to be around 500 million from the previous estimate of an "increase in the high three-digit million euros range."
- Akira Ito
- 14 Aug, 2024
- Tokyo
Market indexes in Tokyo extended gains for the second day in a row following a sharp rebound in overnight trading in New York.
The Nikkei 225 index gained 0.7% and the Topix index advanced more than 1%, driven by a rise in tech and financial stocks.
Market sentiment recovered for the second day in a row, but enthusiasm was tempered amid lingering worries about the rate path and the appropriate level of the yen-dollar exchange rate.
Investors have been on edge after the Bank of Japan unexpectedly raised rates at the end of July and signaled more rate hikes to follow, supporting the strengthening of the yen.
However, investors are still worried that the yen may face renewed pressure because of the large yield gap between the Japanese and U.S. bonds.
That rate gap could shrink in the fourth quarter if the U.S. Federal Reserve lowers rates by as much as 75 basis points and the Bank of Japan lifts rates by another 25 basis points.
The yen closed at 147.15 against the U.S. dollar in Tokyo trading.
Benchmark indexes experienced a wild swing in the last week after the BoJ's hawkish outlook, coupled with economic slowdown worries in the U.S.
On the economic front, the Reuters Tankan Survey showed business sentiment among manufacturing companies weakened in August amid lackluster demand from China.
Prime Minister Fumio Kishida informed leaders of the Liberal Democratic Party that he is not planning to seek reelection at the end of his three-year term in September.
Kishida's move now shifts the focus to younger leaders at the party's election next month.
Japan Movers
The Nikkei 225 Stock Average jumped 0.7% to 36,495.29, and the Topix index gained 1.2% to 2,584.10.
Tech and semiconductor equipment makers rebounded for the second day in a row after the Nasdaq Composite jumped more than 2% in overnight trading.
Advantest, Tokyo Electron, Screen Holdings, Lasertec, and SoftBank advanced between 2% and 4%.
Mercari dropped 7.4% to ¥2,013.50, and the online marketplace operator signaled challenges in its U.S. operations.
The company said revenue in the financial year ending in June increased 9% and core operating profit advanced 13% from a year ago, respectively.
- Li Chen
- 14 Aug, 2024
- Hong Kong
Stocks in China faced headwinds as weak demand for new loans raised additional worries about the economic growth outlook.
The Hang Seng index decreased 0.4% and the CSI 300 index fell 0.5% as investors awaited the release of retail sales and industrial output data on Thursday.
The Hang Seng halted its five-day rally amid worries about the macroeconomic backdrop and weak outlook for corporate earnings.
China's new loans plunged 88% to 260 billion yuan, or $36.3 billion, in July, driven by weak credit demand, the People's Bank of China reported late Tuesday.
New loans in June were 2.13 trillion yuan and 345.9 billion yuan a year earlier.
The weakness in corporate loans and residential mortgage loans dragged the overall demand for new credit, driven by seasonal factors that also played a role, as July is generally a weak month for new loans.
China's new loan demand is on the slide as new residential property construction plunges and demand from local government financing vehicles sharply falls.
Investors are bracing for more weak economic data on Thursday, and retail sales are likely to rise less than 3% and manufacturing production is expected to show broad weakness despite the strong export shipments.
China Stock Movers
The Hang Seng index declined 0.4% to 17,110.23 and the CSI 300 index dropped 0.5% to 3,316.61.
Tencent Holdings declined 2.7% to HK $370.40, Alibaba Holding decreased 0.3% to HK $78.40, and Baidu fell 0.2% to HK $82.45.
Zhejiang Weihua New Material soared 40% to 23.81 yuan on its first day of trading in Shanghai, and the maker of fluorinated fine chemicals raised 1.5 billion yuan in an initial public offering.
- Alexander Garcia
- 13 Aug, 2024
- Miami
Benchmark indexes raced to one-month high levels as market sentiment stabilized after wild swings in the previous week.
Stocks advanced in a broad rally as investors bid up stocks after the release of the producer price inflation report.
The S&P 500 index gained 1.5% and the Nasdaq Composite jumped 2.7% as investors kept hopes of a rate cut alive after producer price inflation slowed in July.
Factory gate prices rose 0.1% on the month in July, slower than the 0.2% rise in June, and core PPI was unchanged from the prior month, the U.S. Bureau of Labor Statistics reported Tuesday.
On an annual basis, producer price inflation rose at a slower pace of 2.2% from an upwardly revised 2.7% in June.
A softer increase in producer prices also raised hopes that consumer price inflation, scheduled to be released on Wednesday, will also rise at a slower pace of 0.2% from the previous month in July and 3% from a year ago.
Investors are counting on at least a 25 basis point cut in interest rate after the September policy meeting, but those hopes may be in vain if inflation fails to weaken to 2%, the target level set by the Fed's policymakers.
U.S. Indexes and Treasury Yields
The S&P 500 index gained 1.4% to 5,424.24, the Nasdaq Composite advanced 2.2% to 17,159.31, and the Russell 2000 index increased 1.2% to 2,086.34.
The yield on 2-year Treasury notes edged lower to 3.98%, 10-year Treasury notes increased to 3.98%, and 30-year Treasury bonds inched lower to 4.19%.
WTI crude oil decreased $1.36 to $78.69 a barrel, and natural gas prices edged down 3 cents to $2.15 a thermal unit.
Gold increased by $5.70 to $2,469.02 an ounce, and silver decreased by $0.24 to $27.76.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.01.
U.S. Stock Movers
Starbucks surged 16% to $89.47 after the coffee chain announced a surprise CEO change, replacing Laxman Narasimhan with Brian Niccol, the current CEO of Chipotle Mexican Grill.
Laxman appears to have been forced out by the company under mounting pressure from activist investors Starboard Value and Elliott Investment.
Chipotle Mexican Grill dropped 8.6% to $51.06.
Home Depot dropped 1.5% to $340.43, and the home improvement retailer estimated a larger comparable same-store sales decline in 2024.
The retailer estimated comparable sales to fall between 3% and 4% from the previous estimate of a 1% decline.
Total revenue is expected to rise between 2.5% and 3.5%, higher than the previous estimate of a 1% increase.
Super Micro Computer increased 2.9% to $555.91 and extended its two-day gains to 10%.
The server and data storage company plunged 20% after reporting weaker-than-expected quarterly earnings, but sales were ahead of market expectations.
ON Holding AG decreased 0.5% to $39.35, and the Swiss athletic apparel and accessories company reported better-than-expected revenue in the second quarter, but earnings per share missed analyst expectations.
Revenue increased 28% to CHF 567.7 million, income increased eightfold to CHF 30.8 million from CHF 3.3 million, and basic earnings per share soared to 10 Swiss cents from 1 cent a year ago.
European Indexes Lacked Direction, Investor Sentiment Plunged
European markets lacked direction in Tuesday's trading, and investors awaited the release of key economic data in the eurozone, the U.S., and the U.K.
Benchmark indexes in Paris, London, and Frankfurt headed lower and extended recent losses amid rate path uncertainties and a weak economic outlook.
The U.K. jobless rate eased to 4.2% in the three months to June from 4.4% in the period to May, according to the latest data released by the Office for National Statistics.
Regular pay excluding bonuses increased 5.4% to £645 per week in three months to June, according to a separate report released by the ONS.
The weekly pay increase slowed from 5.8% in the previous three-month period ending in May.
Adjusted for inflation, regular weekly pay, excluding bonus, increased to 2.4%, slower than 2.5% in the previous three-month period.
The ZEW Indicator of Economic Sentiment for the eurozone decreased for the second month in a row in August 2024, falling 25.8 points to a nine-month low of 17.9.
The weakening domestic economic backdrop, rising tensions in the Middle East, and ongoing war in Ukraine contributed to the deterioration in sentiment for the second month in a row.
In the meantime, the indicator of the current economic situation increased by 3.7 points to -32.4, and inflation expectations edged up by 2 points to -39.1.
Europe Indexes and Yields
The DAX index increased by 0.4% to 17,812.45; the CAC-40 index rose by 0.4% to 7,275.87; and the FTSE 100 index gained by 0.3% to 8,235.23.
The yield on 10-year German bonds edged lower to 2.20%, French bonds inched down to 2.95%, the UK gilts edged lower to 3.90%, and Italian bonds inched up to 3.61%.
The euro edged down to $1.09; the British pound inched lower to $1.272; and the U.S. dollar weakened to 86.69 Swiss cents.
Brent crude decreased $1.32 to $80.96 a barrel, and the Dutch TTF natural gas fell by €0.45 to €39.36 per MWh.
Europe Stock Movers
Just Group soared 17% to 137.20 pence after the retirement income and services provider reported better-than-expected first-half results and lifted its 2024 estimates.
Dowlais Group decreased 8% to 53.85 pence after the UK-based automotive parts maker reported a wider loss in the first half and the company lowered its annual revenue outlook.
Valneva SE increased 5.2% to €3.23, and the French biotech company's net income in the first half swung to profit and confirmed its annual revenue outlook.
Brenntag declined 1% to €63.22, and the German chemical distributor lowered its full-year estimate.
Evotec SE gained 3.4% to €5.58, and the German drug maker achieved a significant milestone in its partnership with Bristol Myers Squibb, triggering a performance-based payment of $75 million.
HelloFresh SE jumped 10.9% to €5.99 after the meal-kit provider reported better-than-expected results in the second quarter.
Japan Indexes Soared 3% After Wholesale Inflation Accelerated In July
Investors bid up stocks following a three-day holiday as market sentiment stabilized after wild swings in the previous week.
The Nikkei 225 stock average gained 3%, and the Topix index gained 2.6%.
Market sentiment turned positive after a week of tumultuous trading that saw the Nikkei plunge 12.4%, recording the single-largest point decline, but managed to recover the losses in the following session, in the record point gains.
Bank of Japan's unexpected rate cut and hawkish rate outlook contributed to the wild swings in markets last week, forcing Deputy Governor of the Bank of Japan Shinichi Uchida to comment that the central bank will refrain from raising rates when markets are unstable, calming market nerves.
The yen traded at 147.67 against the U.S. dollar and weakened from the eight-month high as investors worried that the Bank of Japan's reluctance to lift rates will continue to keep pressure on the yen.
Market sentiment was also bolstered after the producer price index increased 3% in July, the Bank of Japan reported Tuesday.
Producer prices increased after energy costs rose, driven by the ending of government subsidies.
Producer prices accelerated for the sixth month in a row and increased to 3% for the first time since August 2023, after the yen-denominated costs of imported goods and materials soared 10.8%.
Producer price inflation in June was 2.9%.
Weaker yen has contributed to higher prices for imported food, fuel, and materials, but the recent rebound in the yen may slow inflation in the months ahead.
Japan Stock Movers
The Nikkei 225 stock average jumped 3% to 36,096.44, and the Topix index advanced 2.6% to 2,546.76.
Tech stocks were among the leading gainers Tuesday's trading following the rebound in artificial intelligence-linked stocks in New York.
Tokyo Electron gained 6.3% to ¥27,430.0, Advantest Corp. jumped 7.3% to ¥6,217.0, and Screen Holdings increased 7.3% to ¥10,390.0.
Rakuten Group advanced 8.8% to ¥847.90, and Trend Micro jumped 5.4% to ¥8157.0.
Mitsubishi UFJ Financial increased 1.7% to ¥1,435.0, Sumitomo Mitsui advanced 3.6% to ¥9,296.0, and Mizuho Financial gained 2.7% to ¥2,855.0.
Sharp Corp. declined 5.7% to ¥817.60 and Nippon Express declined 2.5% to ¥6,717.0.
Meiji Holdings dropped 5.2% to ¥3,452.0, and the company reported better-than-expected June quarter revenue of 279 billion yen and earnings per share of 50.23 yen.
Hong Kong Indexes Extended 5-day Rally
Benchmark indexes in Shanghai and Hong Kong struggled to advance amid ongoing economic growth worries and mixed corporate performance.
The Hang Seng Index added 0.2%, but the CSI 300 index edged down 0.2% as investors awaited the release of a flood of economic data later in the week.
The Hang Seng index extended gains for the fifth session in a row, and the benchmark index rebounded but hovered near its three-month low.
Moreover, trading contracted on the Hong Kong Stock Exchange, and stock trading volume dropped to a six-month low of HK $70.3 billion or US$9 billion on Monday, according to the data available from the exchange.
China's statistics bureau is scheduled to release retail sales, industrial output, fixed asset investment, and home price data later in the week.
Market sentiment has been cautious after consumer price inflation advanced for the sixth month in a row in July, but producer price inflation declined for the 22nd month in a row, confirming the deflation trend.
Investors are also worried that the recent gains in exports may come to a halt in the second half as punitive tariffs kick in in the U.S. and Europe, contributing to the economic slowdown in the period.
China Stock Movers
The Hang Seng index increased 0.3% to 17,155.99, and the CSI 300 index fell 0.2% to 3,320.61.
Tencent Holdings jumped 1% to HK $378.60, and the diversified Internet services provider is scheduled to release its earnings on Wednesday.
Investors are estimating earnings to jump more than 50% in the second quarter compared to a year ago.
Country Garden Services decreased 5.5% to HK $4.44, and the company said profit in the first half declined 37% from a year ago to 1.7 billion yuan, or $237 million.
Country Garden Services estimated first-half revenue between 20.9 billion yuan and 21.2 billion yuan and net income between 1.47 billion yuan and 1.65 billion yuan.
The company said it lowered its revenue estimate because of property market weakness and reduced investment income.
Despite the current market weakness, the company expects over $12.2 billion in cash reserves at the end of the first half, as it plans to tighten its risk management and cut costs to improve profitability.
- Scott Peters
- 13 Aug, 2024
- New York City
Starbucks surged 16% to $89.47 after the coffee chain announced a surprise CEO change, replacing Laxman Narasimhan with Brian Niccol, the current CEO of Chipotle Mexican Grill.
Laxman was forced out by the company under mounting pressure from activist investors Starboard Value and Elliott Investment.
Chipotle Mexican Grill dropped 8.6% to $51.06.
Home Depot dropped 1.5% to $340.43, and the home improvement retailer estimated a larger comparable same-store sales decline in 2024.
The retailer estimated comparable sales to fall between 3% and 4% from the previous estimate of a 1% decline.
Total revenue is expected to rise between 2.5% and 3.5%, higher than the previous estimate of a 1% increase.
Super Micro Computer increased 2.9% to $555.91 and extended its two-day gains to 10%.
The server and data storage company plunged 20% after reporting weaker-than-expected quarterly earnings, but sales were ahead of market expectations.
On Holding AG decreased 0.5% to $39.35, and the Swiss athletic apparel and accessories company reported better-than-expected revenue in the second quarter, but earnings per share missed analyst expectations.
Revenue increased 28% to CHF 567.7 million, income increased eightfold to CHF 30.8 million from CHF 3.3 million, and basic earnings per share soared to 10 Swiss cents from 1 cent a year ago.
- Barry Adams
- 13 Aug, 2024
- New York City
Stocks advanced in a broad rally as investors bid up stocks after the release of the producer price inflation report.
The S&P 500 index gained 0.7% and the Nasdaq Composite jumped 1.4% as investors kept hopes of a rate cut alive after producer price inflation slowed in July.
Factory gate prices rose 0.1% on the month in July, slower than the 0.2% rise in June, and core PPI was unchanged from the prior month, the U.S. Bureau of Labor Statistics reported Tuesday.
On an annual basis, producer price inflation rose at a slower pace of 2.2% from an upwardly revised 2.7% in June.
A softer increase in producer prices also raised hopes that consumer price inflation, scheduled to be released on Wednesday, will also rise at a slower pace of 0.2% from the previous month in July and 3% from a year ago.
U.S. Indexes and Treasury Yields
The S&P 500 index gained 0.7% to 5,386.57, the Nasdaq Composite advanced 1.4% to 17,014.70, and the Russell 2000 index increased 0.8% to 2,079.04.
The yield on 2-year Treasury notes edged lower to 3.98%, 10-year Treasury notes increased to 3.98%, and 30-year Treasury bonds inched lower to 4.19%.
WTI crude oil decreased $0.28 to $79.76 a barrel, and natural gas prices edged up 2 cents to $2.20 a thermal unit.
Gold increased by $9.09 to $2,466.54 an ounce, and silver decreased by $0.31 to $27.69.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.01.
U.S. Stock Movers
Starbucks surged 16% to $89.47 after the coffee chain announced a surprise CEO change, replacing Laxman Narasimhan with Brian Niccol, the current CEO of Chipotle Mexican Grill.
Laxman was forced out by the company under mounting pressure from activist investors Starboard Value and Elliott Investment.
Chipotle Mexican Grill dropped 8.6% to $51.06.
Home Depot dropped 1.5% to $340.43, and the home improvement retailer estimated a larger comparable same-store sales decline in 2024.
The retailer estimated comparable sales to fall between 3% and 4% from the previous estimate of a 1% decline.
Total revenue is expected to rise between 2.5% and 3.5%, higher than the previous estimate of a 1% increase.
Super Micro Computer increased 2.9% to $555.91 and extended its two-day gains to 10%.
The server and data storage company plunged 20% after reporting weaker-than-expected quarterly earnings, but sales were ahead of market expectations.
ON Holding AG decreased 0.5% to $39.35, and the Swiss athletic apparel and accessories company reported better-than-expected revenue in the second quarter, but earnings per share missed analyst expectations.
Revenue increased 28% to CHF 567.7 million, income increased eightfold to CHF 30.8 million from CHF 3.3 million, and basic earnings per share soared to 10 Swiss cents from 1 cent a year ago.
- Inga Muller
- 13 Aug, 2024
- Frankfurt
European markets struggled to advance amid rate path uncertainties and weakening investor sentiment.
The DAX index decreased by 0.2% to 17,689.34; the CAC-40 index fell by 0.3% to 7,233.12; and the FTSE 100 index decreased by 0.1% to 8,197.14.
The yield on 10-year German bonds edged lower to 2.20%, French bonds inched down to 2.95%, the UK gilts edged lower to 3.90%, and Italian bonds inched up to 3.61%.
Just Group soared 17% to 137.20 pence after the retirement income and services provider reported better-than-expected first-half results and lifted its 2024 estimates.
Dowlais Group decreased 8% to 53.85 pence after the UK-based automotive parts maker reported a wider loss in the first half and the company lowered its annual revenue outlook.
Valneva SE increased 5.2% to €3.23, and the French biotech company's net income in the first half swung to profit and confirmed its annual revenue outlook.
Brenntag SE declined 1% to €63.22, and the German chemical distributor lowered its full-year estimate.
Evotec SE gained 3.4% to €5.58, and the German drug maker achieved a significant milestone in its partnership with Bristol Myers Squibb, triggering a performance-based payment of $75 million.
HelloFresh SE jumped 10.9% to €5.99 after the meal-kit provider reported better-than-expected results in the second quarter.
- Bridgette Randall
- 13 Aug, 2024
- London
European markets lacked direction in Tuesday's trading, and investors awaited the release of key economic data in the eurozone, the U.S., and the U.K.
Benchmark indexes in Paris, London, and Frankfurt headed lower and extended recent losses amid rate path uncertainties and a weak economic outlook.
The U.K. jobless rate eased to 4.2% in the three months to June from 4.4% in the period to May, according to the latest data released by the Office for National Statistics.
Regular pay excluding bonuses increased 5.4% to £645 per week in three months to June, according to a separate report released by the ONS.
The weekly pay increase slowed from 5.8% in the previous three-month period ending in May.
Adjusted for inflation, regular weekly pay, excluding bonus, increased to 2.4%, slower than 2.5% in the previous three-month period.
The ZEW Indicator of Economic Sentiment for the eurozone decreased for the second month in a row in August 2024, falling 25.8 points to a nine-month low of 17.9.
The weakening domestic economic backdrop, rising tensions in the Middle East, and ongoing war in Ukraine contributed to the deterioration in sentiment for the second month in a row.
In the meantime, the indicator of the current economic situation increased by 3.7 points to -32.4, and inflation expectations edged up by 2 points to -39.1.
Europe Indexes and Yields
The DAX index decreased by 0.2% to 17,689.34; the CAC-40 index fell by 0.3% to 7,233.12; and the FTSE 100 index decreased by 0.1% to 8,197.14.
The yield on 10-year German bonds edged lower to 2.20%, French bonds inched down to 2.95%, the UK gilts edged lower to 3.90%, and Italian bonds inched up to 3.61%.
The euro edged down to $1.09; the British pound inched lower to $1.272; and the U.S. dollar weakened to 86.69 Swiss cents.
Brent crude decreased $0.69 to $82.03 a barrel, and the Dutch TTF natural gas fell by €0.41 to €39.41 per MWh.
Europe Stock Movers
Just Group soared 17% to 137.20 pence after the retirement income and services provider reported better-than-expected first-half results and lifted its 2024 estimates.
Dowlais Group decreased 8% to 53.85 pence after the UK-based automotive parts maker reported a wider loss in the first half and the company lowered its annual revenue outlook.
Valneva SE increased 5.2% to €3.23, and the French biotech company's net income in the first half swung to profit and confirmed its annual revenue outlook.
Brenntag declined 1% to €63.22, and the German chemical distributor lowered its full-year estimate.
Evotec SE gained 3.4% to €5.58, and the German drug maker achieved a significant milestone in its partnership with Bristol Myers Squibb, triggering a performance-based payment of $75 million.
HelloFresh SE jumped 10.9% to €5.99 after the meal-kit provider reported better-than-expected results in the second quarter.
- Akira Ito
- 13 Aug, 2024
- Tokyo
Investors bid up stocks after trading resumed following a three-day holiday as market sentiment stabilized after wild swings in the previous week.
The Nikkei 225 stock average gained 3%, and the Topix index gained 2.6%.
Market sentiment turned positive after a week of tumultuous trading that saw the Nikkei plunge 12.4%, recording the single-largest point decline, but managed to recover the losses in the following session, in the record point gains.
Bank of Japan's unexpected rate cut and hawkish rate outlook contributed to the wild swings in markets last week, forcing Deputy Governor of the Bank of Japan Shinichi Uchida to comment that the central bank will refrain from raising rates when markets are unstable, calming market nerves.
The yen traded at 147.67 against the U.S. dollar and weakened from the eight-month high as investors worried that the Bank of Japan's reluctance to lift rates will continue to keep pressure on the yen.
Market sentiment was also bolstered after the producer price index increased 3% in July, the Bank of Japan reported Tuesday.
Producer prices increased after energy costs rose, driven by the ending of government subsidies.
Producer prices accelerated for the sixth month in a row and increased to 3% for the first time since August 2023, after the yen-denominated costs of imported goods and materials soared 10.8%.
Producer price inflation in June was 2.9%.
Weaker yen has contributed to higher prices for imported food, fuel, and materials, but the recent rebound in the yen may slow inflation in the months ahead.
Japan Stock Movers
The Nikkei 225 stock average jumped 3% to 36,096.44, and the Topix index advanced 2.6% to 2,546.76.
Tech stocks were among the leading gainers Tuesday's trading following the rebound in artificial intelligence-linked stocks in New York.
Tokyo Electron gained 6.3% to ¥27,430.0, Advantest Corp. jumped 7.3% to ¥6,217.0, and Screen Holdings increased 7.3% to ¥10,390.0.
Rakuten Group advanced 8.8% to ¥847.90, and Trend Micro jumped 5.4% to ¥8157.0.
Mitsubishi UFJ Financial increased 1.7% to ¥1,435.0, Sumitomo Mitsui advanced 3.6% to ¥9,296.0, and Mizuho Financial gained 2.7% to ¥2,855.0.
Sharp Corp. declined 5.7% to ¥817.60 and Nippon Express declined 2.5% to ¥6,717.0.
Meiji Holdings dropped 5.2% to ¥3,452.0, and the company reported better-than-expected June quarter revenue of 279 billion yen and earnings per share of 50.23 yen.
- Li Chen
- 13 Aug, 2024
- Hong Kong
Benchmark indexes in Shanghai and Hong Kong struggled to advance amid ongoing economic growth worries and mixed corporate performance.
The Hang Seng Index added 0.2%, but the CSI 300 index edged down 0.2% as investors awaited the release of a flood of economic data later in the week.
The Hang Seng index extended gains for the fifth session in a row, and the benchmark index rebounded but hovered near its three-month low.
Moreover, trading contracted on the Hong Kong Stock Exchange, and stock trading volume dropped to a six-month low of HK $70.3 billion or US$9 billion on Monday, according to the data available from the exchange.
China's statistics bureau is scheduled to release retail sales, industrial output, fixed asset investment, and home price data later in the week.
Market sentiment has been cautious after consumer price inflation advanced for the sixth month in a row in July, but producer price inflation declined for the 22nd month in a row, confirming the deflation trend.
Investors are also worried that the recent gains in exports may come to a halt in the second half as punitive tariffs kick in in the U.S. and Europe, contributing to the economic slowdown in the period.
China Stock Movers
The Hang Seng index increased 0.3% to 17,155.99, and the CSI 300 index fell 0.2% to 3,320.61.
Tencent Holdings jumped 1% to HK $378.60, and the diversified Internet services provider is scheduled to release its earnings on Wednesday.
Investors are estimating earnings to jump more than 50% in the second quarter compared to a year ago.
Country Garden Services decreased 5.5% to HK $4.44, and the company said profit in the first half declined 37% from a year ago to 1.7 billion yuan, or $237 million.
Country Garden Services estimated first-half revenue between 20.9 billion yuan and 21.2 billion yuan and net income between 1.47 billion yuan and 1.65 billion yuan.
The company said it lowered its revenue estimate because of property market weakness and reduced investment income.
Despite the current market weakness, the company expects over $12.2 billion in cash reserves at the end of the first half, as it plans to tighten its risk management and cut costs to improve profitability.
- Arun Goswami
- 13 Aug, 2024
- Mumbai
Consumer price inflation slowed in July because of a higher food price base effect, and industrial output slowed in June, driven by a slowdown in government spending during the national election period.
The Sensex index decreased by 0.2% to 79,504.21, and the Nifty index fell 0.2% to 24,301.20.
On the Mumbai stock exchange, 122 stocks traded at their 52-week highs, and 10 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.88%, and the Indian rupee weakened to ₹83.95 against the U.S. dollar.
Power Grid Corporation increased 0.3% to ₹342.0, and the company said it won a contract to build and operate a power transmission network connecting Rajasthan REZ Phase II for a 20 GW power supply.
Balrampur Chini Mills gained 0.2% to ₹497.15, and the sugar producer reported a decline in profit in the June quarter because of the shortage of sugarcane crops.
Revenue increased 2.3% to ₹1,421.6 crore from ₹1,389.6 crore, but net income declined 4.6% to ₹70.2 crore from ₹73.50 crore a year ago.
Hindustan Copper added 4.2% to ₹315.45, and the mining company said consolidated net income in the June quarter more than doubled.
Revenue increased to ₹500.4 crore from ₹384.7 crore, and net income soared to ₹113.4 crore from ₹47.3 crore a year ago, respectively.
NMDC advanced 1% to ₹232.09, and the iron ore mining company reported flat consolidated revenue in the June quarter.
Demand for iron ore was driven by higher infrastructure spending by the government.
Revenue stood at ₹5,414.2 crore, and net income increased 19% to ₹1,971 crore from ₹1,652.2 crore a year ago.
IRFC gained 2.2% to ₹188.52, and the railway finance company reported a slight increase in earnings in the June quarter.
Revenue increased 1.4% to ₹6,765.63 crore from ₹6,673.87 crore, and net income advanced 1.6% to ₹1,576.83 crore from ₹1,551.27 crore a year ago, respectively.
- Alexander Garcia
- 12 Aug, 2024
- Miami
Market indexes in New York struggled to extend gains after a week of wild gyration and heightened volatility.
Earlier in previous the week, benchmark indexes extended the previous week's losses to 10%, but they recovered and reversed all losses as market sentiment stabilized.
Last week's global market rout was rooted in worries about the U.S. economic slowdown after nonfarm payrolls in July rose at a slower than expected pace and the tightening of labor market conditions.
However, market sentiment recovered after initial jobless claims fell more than expected, suggesting the labor market is still healthier than previously estimated.
This week, investors are looking forward to the release of producer price inflation on Tuesday, consumer price inflation on Wednesday, and retail sales on Thursday.
Investors are hoping that the Federal Reserve is set to start the rate-cut cycle with the first cut after the September meeting; however, those hopes may be dashed if inflation stays near or above 3%, as it has for several months now.
Federal Reserve Chair Jerome Powell has confirmed after the latest policy meeting that policymakers are open to trimming interest rates if inflation continues to follow a downward path to its target rate of 2%.
However, despite multiple rate hikes over 2022 and 2023, inflation has slowed from as high as nearly 9% to 3%.
July’s consumer price inflation is estimated at 2.9%, and core inflation is estimated to stay near 3.2%, higher than the Fed’s target rate of 2%.
Retail sales, unadjusted for inflation but adjusted for calendar and seasonal factors, in July are likely to expand by 0.3%.
U.S. Indexes and Treasury Yields
The S&P 500 index gained 0.2% to 5,354.41, the Nasdaq Composite advanced 0.5% to 16,829.33, and the Russell 2000 index declined 1.0% to 2,059.10.
The yield on 2-year Treasury notes edged higher to 4.08%, 10-year Treasury notes increased to 3.96%, and 30-year Treasury bonds inched lower to 4.24%.
WTI crude oil increased $2.31 to $79.15 a barrel, and natural gas prices edged up 4 cents to $2.18 a thermal unit.
Gold increased by $33.84 to $2,464.44 an ounce, and silver increased by $0.48 to $27.93.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.16.
U.S. Stock Movers
Starbucks increased 2.3% to $76.82 after The Wall Street Journal reported that activist investor Starboard Value acquired a stake in a coffee retail store chain to seek a higher stock price.
JetBlue Airways dropped 10.8% to $5.41, and the regional airline said it plans to issue $400 million of convertible senior notes in 2029.
KeyCorp jumped 16.6% to $17.04, and The Bank of Nova Scotia acquired a 14.9% stake in the Cleveland-based bank for $2.8 billion in cash.
European Indexes Trim Early Gains Amid Rate Path Anxieties
European markets attempted to shake off economic growth anxieties after a week of wild gyrations.
Benchmark indexes in London, Paris, and Frankfurt traded around flatline as investors looked forward to the release of key economic data in the U.S. and Europe later in the week.
The Euro Area’s second-quarter GDP is expected to grow by 0.3%, as confirmed by the second estimate scheduled to be released next week, and the international trade balance in the Eurozone is expected to show a modest increase in its surplus.
In the UK, investors are looking forward to the release of second-quarter GDP growth of 0.6%, and the jobless rate is estimated at 4.5%.
In the U.S., consumer price and producer price inflation reports and retail sales updates are expected to shed more light on the future interest rate course.
July’s consumer price inflation is estimated at 2.9%, and core inflation is estimated to stay near 3.2%, higher than the Fed’s target rate of 2%.
Retail sales, unadjusted for inflation but adjusted for calendar and seasonal factors, in July are likely to expand by 0.3%.
In the absence of economic data, investors reacted to the latest corporate earnings announcements from Hanover Re, Munich Re, L'Occitane, Remy Cointreau, British Land Company, and Severn Trent.
Europe Indexes and Yields
The DAX index increased by 0.02% to 17,726.47; the CAC-40 index fell by 0.3% to 7,250.67; and the FTSE 100 index advanced by 0.5% to 8,210.25.
The yield on 10-year German bonds edged higher to 2.24%, French bonds inched higher to 2.99%, the UK gilts inched higher to 3.96%, and Italian bonds inched up to 3.66%.
The euro edged down to $1.09; the British pound inched lower to $1.272; and the U.S. dollar weakened to 86.92 Swiss cents.
Brent crude increased $1.59 to $81.55 a barrel, and the Dutch TTF natural gas fell by €0.15 to €39.91 per MWh.
Europe Stock Movers
Hanover Re rose 4.7% to €226.30, and the reinsurance company reported higher sales and earnings and confirmed its annual outlook.
Munich Re gained 1.2% to €440.0, and the German reinsurance company reported better-than-expected second quarter sales and earnings.
Revenue increased 12% to €15.4 billion, and net income soared 41% to €1.62 billion, driven by a higher profit margin of 11% compared to 8.4% a year ago.
China-linked luxury stocks traded down amid ongoing economic slowdown worries and a protracted property market slump.
Kering SA dropped 1.4% to €250.90, LVMH decreased 0.01% to €636.10, and Remy Cointreau fell 1% to €70.45.
Land Securities Group decreased 0.3% to 618.50 pence, and British Land Company declined 0.6% to 395.0 pence.
Investors Brace for Volatile Yen Amid BoJ's Reluctance to Lift Rates
Benchmark indexes in Japan rebounded in Friday's trading as market sentiment stabilized after a week of wild swings, sharp declines, and rebounds.
Financial markets are closed on Monday to celebrate the Mountain Day holiday.
In Friday's trading, the Nikkei 225 stock average gained 0.6% and the Topix index jumped close to 1% as investors reassessed the future rate path and its implications for the yen.
The yen traded at 147.23 against the U.S. dollar after the Bank of Japan's unexpected rate increase lifted the currency to an eight-month high last week.
Despite the two-day rebound in stock market indexes, investors are expecting the yen to resume its slide toward the 160 level because of the yawning gap between Japan and U.S. government bond yields.
Moreover, corporate earnings have been in focus as investors look forward to the release of quarterly results from leading industrial and financial companies later this week.
On the economic front, investors are looking ahead to the release of Japan’s second quarter GDP to show a slight pick-up from the first quarter, driven by an increase in exports and higher domestic demand for industrial goods.
Japan Stock Movers
The Nikkei 225 stock average increased 0.6% to 35,025.0, and the Topix index gained 0.9% to 2,483.30.
Technology and chip-related stocks led the gainers in Monday's trading as investors returned to increase exposure to advanced semiconductor equipment makers.
Advantest, Screen Holdings, and Lasertec fell between 0.5% and 0.9%, but Tokyo Electron advanced 0.7%.
Toyota Motor and Nissan Motor declined 0.5%, and Honda Motor advanced 0.3% in muted trading on Friday.
China Stocks Resume Downward Slide
Stocks in Hong Kong and Shanghai struggled to advance in Monday's trading as investors awaited key economic data later in the week.
The Hang Seng index and the CSI 300 index traded around the flatline amid hopes of more policy support from the People's Bank of China.
Retail sales in July are expected to show an increase of 2.5%, and industrial output is likely to increase more than 5%, according to an informal survey of nine economists in Shanghai and Hong Kong conducted by Ticker.com.
Chinese stocks have been under pressure, and benchmark indexes have erased this year's gains amid persistent worries about weak consumer demand growth, the protracted real estate market crisis, and the uneven and fragile economic recovery.
The People's Bank of China is expected to cut its reserve ratio for banks by 25 basis points to facilitate the sale of long-term bonds by the Chinese government.
Corporate earnings so far in the quarter have lagged market expectations amid weak domestic demand growth and falling investment in property-related industry sectors.
China's current account surplus narrowed to $54.9 billion in the second quarter from $59.3 billion in the corresponding quarter in the previous year, according to data released by the China's State Administration of Foreign Exchange.
The international goods surplus widened to $167.1 billion from $160.3 billion, but service deficit widened to $61.7 billion from $49.2 billion in the period a year ago.
China Stock Movers
The Hang Seng index edged up 0.01% to 17,095.06, and the CSI 300 index decreased 0.1% to 3,327.74.
Guangzhou R&F Properties was nearly unchanged at HK 79 cents, and the real estate development company said in a filing with an exchange that its unit missed interest payments of $147 million.
The company said it is in negotiations with its lender to find a workable solution and may revise its future payment plans.
Galaxy Entertainment Group decreased 4.9% to HK$29.30 after local authorities planned to crackdown on unlicensed money exchange service providers for gambling.
Technology stocks traded volatile in Hong Kong following a muted rebound in Friday's trading in New York.
Alibaba Group jumped 0.8% to HK $78.45, Baidu decreased 1% to HK $82.35, and Meituan dropped 2.7% to $103.30.
- Barry Adams
- 12 Aug, 2024
- New York City
Stocks lacked direction in early trading on Monday as investors reassessed wild swings from the previous week.
Earlier in the week, benchmark indexes extended the previous week's losses to 10%, but they recovered and reversed all losses as market sentiment stabilized.
Last week's global market rout was rooted in worries about the U.S. economic slowdown after nonfarm payrolls in July rose at a slower than expected pace and the tightening of labor market conditions.
However, market sentiment recovered after initial jobless claims fell more than expected, suggesting the labor market is still healthier than previously estimated.
This week, investors are looking forward to the release of producer price inflation on Tuesday, consumer price inflation on Wednesday, and retail sales on Thursday.
Investors are hoping that the Federal Reserve is set to start the rate-cut cycle with the first cut after the September meeting; however, those hopes may be dashed if inflation stays near or above 3%, as it has for several months now.
Federal Reserve Chair Jerome Powell has confirmed after the latest policy meeting that policymakers are open to trimming interest rates if inflation continues to follow a downward path to its target rate of 2%.
However, despite multiple rate hikes over 2022 and 2023, inflation has slowed from as high as nearly 9% to 3%.
July’s consumer price inflation is estimated at 2.9%, and core inflation is estimated to stay near 3.2%, higher than the Fed’s target rate of 2%.
Retail sales, unadjusted for inflation but adjusted for calendar and seasonal factors, in July are likely to expand by 0.3%.
U.S. Indexes and Treasury Yields
The S&P 500 index gained 0.1% to 5,344.58, the Nasdaq Composite advanced 0.2% to 16,772.65, and the Russell 2000 index declined 0.2% to 2,080.92.
The yield on 2-year Treasury notes edged higher to 4.08%, 10-year Treasury notes increased to 3.96%, and 30-year Treasury bonds inched lower to 4.24%.
WTI crude oil increased $1.06 to $77.89 a barrel, and natural gas prices edged up 7 cents to $2.22 a thermal unit.
Gold increased by $14.09 to $2,444.67 an ounce, and silver increased by $0.38 to $27.82.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.25.
U.S. Stock Movers
Starbucks increased 2.3% to $76.82 after The Wall Street Journal reported that activist investor Starboard Value acquired a stake in a coffee retail store chain to seek a higher stock price.
JetBlue Airways dropped 10.8% to $5.41, and the regional airline said it plans to issue $400 million of convertible senior notes in 2029.
KeyCorp jumped 16.6% to $17.04, and The Bank of Nova Scotia acquired a 14.9% stake in the Cleveland-based bank for $2.8 billion in cash.
- Inga Muller
- 12 Aug, 2024
- Frankfurt
European market indexes struggled to advance after a week of wild gyrations in global markets.
Hannover Re and Munch Re reported better-than-expected financial results.
The DAX index increased by 0.2% to 17,766.44; the CAC-40 index rose by 0.03% to 7,272.09; and the FTSE 100 index advanced by 0.6% to 8,214.71.
The yield on 10-year German bonds edged higher to 2.24%, French bonds inched higher to 2.99%, the UK gilts inched higher to 3.96%, and Italian bonds inched up to 3.66%.
Hanover Re rose 4.7% to €226.30, and the reinsurance company reported higher sales and earnings and confirmed its annual outlook.
Munich Re gained 1.2% to €440.0, and the German reinsurance company reported better-than-expected second quarter sales and earnings.
Revenue increased 12% to €15.4 billion, and net income soared 41% to €1.62 billion, driven by a higher profit margin of 11% compared to 8.4% a year ago.
China-linked luxury stocks traded down amid ongoing economic slowdown worries and a protracted property market slump.
Kering SA dropped 1.4% to €250.90, LVMH decreased 0.01% to €636.10, and Remy Cointreau fell 1% to €70.45.
Land Securities Group decreased 0.3% to 618.50 pence, and British Land Company declined 0.6% to 395.0 pence.