- Arun Goswami
- 02 May, 2024
- Mumbai
Stocks in Mumbai traded down after investors returned from a holiday and digested the latest updates on GST collections and core industry output.
Core industry output rose at a slower pace of 5.2% in March, after rising at an annual pace of 7.1% in the previous month, but faster than the 4.2% pace in the month a year ago, the ministry of commerce and industry announced in a report on Wednesday.
GST collections in April rose 12.4% to a record high of 2.10 lakh crore, the ministry of finance reported Wednesday.
The Sensex index decreased by 0.23% to 74,078.82, and the Nifty index fell by 0.2% to 22,530.06.
On the Mumbai stock exchange, 119 stocks traded at their 52-week highs, and 6 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 7.20%, and the Indian rupee edged lower at ₹83.43 against the U.S. dollar.
Godrej Group companies were in focus after the family reached an agreement to split the conglomerate.
Brothers Adi and Nadir Godrej will own publicly listed companies, while cousin Jamshyd Godrej will own a land portfolio and privately held companies.
Hero MotoCorp increased 2.2% to ₹4,551.0 after the company said two-wheeler vehicle sales in April increased 34.7% from a year ago to 533,585 units.
Eicher Motors increased 1% to ₹4,615.50 after the company said domestic truck and bus sales increased 20% and international sales rose 38.5%.
Maruti Suzuki advanced 0.9% to ₹12,800.0 after the passenger car maker said vehicle sales in April were unchanged from a year ago at 168,000.
Tata Motors increased 0.7% to ₹1,008.0 after the company said total global vehicle sales in April increased 31% from a year ago to 77,521 units from 69,599.
Global commercial vehicle sales increased by 31% to 29,538 units, and passenger car sales rose by 2% to 47,983 units from a year ago, respectively.
Jindal Stainless rose 1% to ₹707.0, and the company announced its plans to invest 5,400 crore to meet its expansion plans.
- Li Chen
- 02 May, 2024
- Hong Kong
Stocks in Hong Kong advanced after investors returned from a holiday, and financial markets in China are closed for the week.
Optimism ruled Hong Kong trading after the U.S. Federal Reserve held steady its benchmark rate, driving financial and insurance stocks higher.
The Hong Kong Monetary Authority held its reference rate steady at 5.75%, following the move by the U.S. Federal Reserve, under its linked exchange rate system reflecting the Hong Kong dollar's peg to the U.S. dollar.
The interest rate move supported the rise in financial and insurance stocks, and HSBC, Ping An, and AIA rose between 0.9% and 3.5%.
Property developers rose after the interest rate decision announcement, and U.S. Federal Reserve Chair Jerome Powell ruled out rate hikes in the near future.
Longfor Group added 7.3% to HK$12.72, China Vanke soared 10.5% to $5.10, and China Resources Land jumped 4.5% to HK$29.65.
Henderson Land increased 1.4% to HK$24.20, and Sun Hung Kai Properties jumped 2.4% to HK$74.05.
The Hang Seng index rose 2.2% to 18,150.91, and the Hang Seng Tech index jumped 3.5%.
Tech leaders also participated in the market rally, and Tencent Holdings, Meituan, Baidu, and Alibaba Group jumped between 2% and 9%.
Electric vehicle makers were in focus after the three leading makers reported mixed sales in April amid a brutal price war as the automakers struggled to gain market share amid slowing domestic demand growth.
Li Auto jumped 2.2% to HK$106.30 after the electric vehicle maker said April sales decreased 0.4% from the previous month to 25,787 units.
Sales in the first four months to April 2024 advanced 35.6% from a year ago to 106,187 units.
Xpeng soared 7.4% to HK$33.90 after the company said electric vehicle sales in April rose 4% from the previous month to 9,393 units.
Year-to-date sales rose 23% to 31,214 vehicles.
The company is engaged in a brutal price war amid fierce competition in the mid-price segment for cars priced between 200,000 and 300,000 yuan.
BYD jumped 4.3% to HK$225.60 after the largest electric vehicle maker in China said sales in April rose 3.6% to 313,245 units.
Year-to-date sales surged 49% to 210,295 units.
Nio soared 21.4% to HK$43.40 after the electric vehicle maker said April sales soared 31.6% from the previous month to 15,620 units, the largest monthly increase among the four leading automakers.
Sales in the first four months of April rose 21% from a year ago to 45,673 units.
- Alexander Garcia
- 01 May, 2024
- Miami
Benchmark indexes on Wall Street retained a downward bias as investors await the Fed's rate decision.
The S&P 500 index and the Nasdaq Composite declined 0.2% ahead of the Federal Reserve's rate decisions and comments on the appropriate level of interest rates.
At the start of the year, the Fed had raised expectations of as many as four rate cuts in the year and suggested that while the economy is strong, there has been considerable progress in curbing inflationary pressures.
However, as the year progressed, those expectations of rate cuts were dashed after inflation stalled near 3%, primarily because of the elevated inflation in the service sector.
The Federal Reserve has raised interest rates eleven times between March 2022 and July 2023, lifting rates from zero to 5.5%.
But as inflation began to ease from the 40-year high peak of 9.1% in June 2022 and hovered above 3% in the second half of 2023 and first quarter of 2024, investors expectations rose that the Fed may have flexibility in decreasing rates as early as June.
However, progress in bringing down inflation to a 2% annual rate has stalled in the last six months, amid a resilient economy and moderating but tight labor market conditions.
The Fed's own projection on inflation at the beginning of the year also stoked speculation that policymakers are laying the groundwork for rate cuts in the second half.
The latest updates on inflation indicators, nonfarm payrolls, GDP growth, retail sales, and durable goods orders suggested that rates are not restrictive enough and wages are rising at rates not commensurate with the Fed's inflation target rate of 2%.
Job Openings Dropped to a 3-year Low
Job openings in March declined by 325,000 and dropped to the lowest level since February 2021, signaling moderating labor market conditions.
Job postings fell 0.2 percentage points to 5.1% of all workers, according to the Job Openings and Labor Turnover Survey released Wednesday.
Openings declined by 1.1 million from a year ago, as openings in construction fell by 182,000, declined in finance and insurance by 158,000, but increased in state and local government education by 68,000.
Over the month, both hiring and separations changed little, indicating labor market conditions are still tight but moderating.
In March, hirings declined by 455,000 to 5.5 million, while the total number of separations decreased by 339,000 to 5.2 million.
Taking into account the regional distribution, job openings in the West fell by 194,000, in the Midwest by 112,000, in the South by 41,000, but rose in the Northeast by 22,000.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.2% to 5,022.73, and the Nasdaq Composite fell 0.3% to 15,610,50.
The yield on 2-year Treasury notes edged higher to 5.04%, 10-year Treasury notes inched higher to 4.68%, and 30-year Treasury bonds edged lower to 4.78%.
WTI crude oil decreased $2.10 to $79.57 a barrel, and natural gas prices decreased 6 cents to $1.92 a thermal unit.
Gold increased by $16.52 to $2,307.93 an ounce, and silver rose 18 cents to $26.53.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 106.17.
U.S. Stock Movers
Starbucks Corp. dropped 13% to $77.0 after the coffee chain operator reported weaker-than-expected revenue and earnings in the first quarter.
Pinterest soared 16.6% to $39.03 after the social media company reported better-than-expected revenue and earnings in the first quarter.
Super Micro Computer dropped 14% to $738.50 after the company announced lower-than-expected third-quarter revenue of $3.85 billion and higher-than-expected adjusted earnings per share of $6.65.
Amazon.com rose 1.6% to $177.85 after the online retailer and cloud services provider reported better-than-expected revenue and earnings in the first quarter after advertising revenue soared 24%.
The company said revenue in the current quarter is expected to range between $144 billion and $149 billion, representing an increase between 7% and 11%.
The Amazon Web Services business soared 17% to $25 billion, calming the worries that the division's growth had topped out following slower growth last year.
AMD fell 6.8% to $147.70 after the advanced chipmaker reiterated its full-year outlook, dampening expectations of sales and earnings revisions.
FTSE 100 Index Trades Higher, European Markets Closed for May Day Holiday
The benchmark index in London edged slightly higher as financial markets in Continental Europe were closed for the May Day holiday.
The FTSE 100 index opened higher and bond yields held firm in thin trading as most traders were away in Zurich, Paris, Milan, and Frankfurt.
In April, benchmark indexes in London rose about 2.5%, but the DAX CAC-40 indexes dropped about 2% as investors adjusted rate-cut expectations and reacted to local corporate earnings.
In the absence of local and regional economic news, investors awaited the release of the U.S. Fed's monetary policy announcements later in the day after the close.
Fed policymakers are widely expected to hold the interest rate range between 5.25% and 5.50%, and investors are awaiting the Fed's direction on the level of interest rates.
Investors had bid up stocks in the first quarter in the hopes that policymakers were ready to begin rate cuts as early as June, followed by as many as three additional cuts later in the year.
However, those expectations have been lowered after several economic reports suggested that the U.S. economy and labor market conditions are more resilient than previously expected.
Moreover, several inflation indicators have stayed above the expectations set by economists, with service inflation staying above 3%, indicating that policymakers may await cooler inflation before lowering rates.
The lowered rate cut expectations had a direct and negative effect on investor sentiment, driving the U.S. benchmark indexes lower by more than 4% in April.
Europe Indexes and Yields
Financial markets in Frankfurt and Paris were close for the May Day holiday, and the FTSE 100 index in London inched lower by 0.3% to 8,120.97.
The yield on 10-year German bonds edged up to 2.58%; French bonds inched higher to 3.07%; the UK gilts edged higher to 4.38%; and Italian bonds inched lower to 3.87%.
The euro edged higher to $1.066; the British pound inched higher to $1.249; and the U.S. dollar edged higher to 92.06 Swiss cents.
Brent crude decreased $1.97 to $83.99 a barrel, and the Dutch TTF natural gas fell by €0.69 to €28.70 per MWh.
Europe Stock Movers
Aston Martin Lagonda Global declined 4.6% to 141.43 pence after the luxury automaker reported a wider-than-expected loss in the first quarter.
Revenue in the first quarter declined by 26% to £945 million from £1.3 billion; pre-tax losses expanded to £138.8 million from £74.2 million; and net debt increased by 20% to £1.04 billion from £868.1 million a year ago.
The company said vehicle sales declined in the quarter after it introduced new products, ended production of several core products, and ramped up production of the new Vantage, upgraded DBX 707, and V12 sports car.
Vehicle sales in the first quarter dropped 26% to 945 from 1,269 units in the corresponding period a year ago.
Next plc increased 0.1% to 9,020.49 pence after the apparel retailer reiterated its full-year outlook.
Revenue in the first quarter increased 5.7% from a year ago, driven by an 8.8% rise in online sales and flat in-store sales.
The retailer projected a full-year 2024 consolidated sales increase of 6% to £6.2 billion, a pre-tax profit rise of 4.6% to £960 million, and an after-tax earnings per share gain of 4.8% to 606.3 pence.
GSK plc increased 2.2% to 1,706.75 pence after the pharmaceutical company reported a better-than-expected 27% increase in its core operating profit in the first quarter.
Revenue in the first quarter increased 10% to 7.4 billion, core operating profit soared 27% to 2.4 billion, and earnings per share declined 19% to 25.7 pence.
The company announced a 15-pence per share cash dividend.
The pharmaceutical company's full-year sales are likely towards the upper end of its previously announced sales growth range of between 5% and 7%, with core operating profit rising between 9% and 11% and core earnings per share rising between 8% and 10%.
Domino's Pizza Group PLC decreased 0.7% to 323.40 pence after the company reported weaker-than-expected quarterly results.
Comparable sales in the first quarter declined by 0.5%, and total orders fell by 0.8% from the previous year, but on a two-year basis, comparable sales rose by 8.4%.
Total system sales in the first quarter declined 0.4% to £385.1 million from £386.6 million, and total orders on a comparable basis fell 0.8% to 17.7 million from 17.8 million a year ago.
Total orders fell 1.8% to 17.7 million from 18.0 million.
Japan's Manufacturing Contraction Extends to Eleventh Month
Stocks in Tokyo traded lower in thin trading and erased some of the gains in the previous two sessions as investors remained cautious amid the flood of earnings.
Market indexes fell in a broad selloff that saw technology and financial stocks leading the decliners following sharp declines in overnight trading in New York.
Market indexes fell nearly 1% on Wall Street after a measure of wages and benefits rose at the fastest pace in one year at 1.2%, supporting the case for the Federal Reserve to wait longer before lowering interest rates.
The expectations of fewer and delayed U.S. rate cuts soured market sentiment in New York, overhanging Tokyo trading.
Japan's manufacturing sector continued to contract for the eleventh month in a row, but at a slower pace in April, S&P Global reported in its final update.
The au Jibun Japan Manufacturing PMI eased to 49.6 in April from 49.9 in the preliminary estimate and a final 48.2 in March.
Manufacturing activities contracted at a slower pace in April as output and new orders shrank at a slower pace in the month.
However, business sentiment was unchanged from March, driven in part by improving demand, the report noted.
The Nikkei 225 Stock Average declined 0.2% to 38,356.20, and the Topix index dropped 0.3% to 2,733.96.
Tokyo Electron, Advantest, Screen Holdings, and SoftBank fell between 1.5% and 3.5%.
Toyota Motor, Honda Motor, and Nissan Motor declined between 0.4% and 1.1%.
Financial stocks were among the leading decliners, and Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui Financial Group decreased between 0.2% and 1.4%.
Rising travel demand lifted the revenue of three Japanese railway companies, driven by the ending of the travel restrictions imposed during COVID-19 and the return of international tourists.
East Japan Railway consolidated revenue in the year ending in March rose 13.5% to 2,730 billion yen, and West Japan Railway revenue rose 17.2% to 1,635 billion yen.
Central Japan Railway revenue surged 22.1% to 1,710 billion yen.
West Japan Railway increased 8% to ¥3,233.0; East Japan Railway added 3.3% to ¥2,987.50; and Central Japan Railway declined 0.1% to ¥3,614.0.
Lasertec Reports Strong Quarterly Results and Announces Executive Changes
Lasertec Corporation soared 15.8% to ¥40,080.0 after the company reported higher-than-expected sales and earnings in the nine-month period ending in March.
Consolidated nine-month revenue increased 97.9% to 157.2 billion yen from 79.4 billion yen, ordinary income soared 109.8% to 58.7 billion yen, and diluted earnings per share rose to 460.02 yen compared to 229.53 a year ago.
The company estimated sales in the fiscal year ending in June 2024 to increase by 27.6% to 195 billion yen, ordinary income to increase by 5.2% to 67 billion yen, and diluted earnings per share to be 543.32 yen.
The company reiterated its plans to pay a total cash dividend of 191 yen, higher than 180 yen a year ago.
The company also promoted its chief sales officer, Tetsuya Sendoda, as the new chief executive officer and the current CEO, Osamu Okabayashi, as the new chairman.
- Brian Turner
- 01 May, 2024
- Washington, D.C.
Job openings in March declined by 325,000 and dropped to the lowest level since February 2021, signaling moderating labor market conditions.
Job postings fell 0.2 percentage points to 5.1% of all workers, according to the Job Openings and Labor Turnover Survey released Wednesday.
Openings declined by 1.1 million from a year ago, as openings in construction fell by 182,000, declined in finance and insurance by 158,000, but increased in state and local government education by 68,000.
Over the month, both hiring and separations changed little, indicating labor market conditions are still tight but rapidly easily after openings peaked at 12.2 million in March 2022.
In March, hirings declined by 455,000 to 5.5 million, while the total number of separations decreased by 339,000 to 5.2 million.
Taking into account the regional distribution, job openings in the West fell by 194,000, in the Midwest by 112,000, in the South by 41,000, but rose in the Northeast by 22,000.
- Barry Adams
- 01 May, 2024
- New York City
With all eyes on the Federal Reserve, benchmark indexes in early trading edged lower and extended the previous session's losses.
The S&P 500 index and the Nasdaq Composite declined 0.2% ahead of the Federal Reserve's rate decisions and comments on the level of interest rates.
At the start of the year, the Fed had raised expectations of as many as four rate cuts in the year and suggested that while the economy is strong, there has been considerable progress in curbing inflationary pressures.
However, as the year progressed, those expectations of rate cuts were dashed after inflation stalled near 3%, primarily because of the elevated inflation in the service sector.
The Federal Reserve has raised interest rates eleven times between March 2022 and July 2023, lifting rates from zero to 5.5%.
But as inflation began to ease from the 40-year high peak of 9.1% in June 2022 and hovered above 3% in the second half of 2023 and first quarter of 2024, investors expectations rose that the Fed may have flexibility in decreasing rates as early as June.
However, progress in bringing down inflation to a 2% annual rate has stalled in the last six months, amid a resilient economy and moderating but tight labor market conditions.
The Fed's own projection on inflation at the beginning of the year also stoked speculation that policymakers are laying the groundwork for rate cuts in the second half.
The latest updates on inflation indicators, nonfarm payrolls, GDP growth, retail sales, and durable goods orders suggested that rates are not restrictive enough and wages are rising at rates not commensurate with the Fed's inflation target rate of 2%.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 0.1% to 5,015.04, and the Nasdaq Composite fell 0.3% to 15,582,72.
The yield on 2-year Treasury notes edged higher to 5.04%, 10-year Treasury notes inched higher to 4.68%, and 30-year Treasury bonds edged lower to 4.78%.
WTI crude oil decreased $1.48 to $80.45 a barrel, and natural gas prices decreased 5 cents to $1.93 a thermal unit.
Gold increased by $3.36 to $2,294.30 an ounce, and silver rose 11 cents to $26.48.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 106.29.
U.S. Stock Movers
Starbucks Corp. dropped 13% to $77.0 after the coffee chain operator reported weaker-than-expected revenue and earnings in the first quarter.
Pinterest soared 16.6% to $39.03 after the social media company reported better-than-expected revenue and earnings in the first quarter.
Super Micro Computer dropped 14% to $738.50 after the company announced lower-than-expected third-quarter revenue of $3.85 billion and higher-than-expected adjusted earnings per share of $6.65.
Amazon.com rose 1.6% to $177.85 after the online retailer and cloud services provider reported better-than-expected revenue and earnings in the first quarter after advertising revenue soared 24%.
The company said revenue in the current quarter is expected to range between $144 billion and $149 billion, representing an increase between 7% and 11%.
The Amazon Web Services business soared 17% to $25 billion, calming the worries that the division's growth had topped out following slower growth last year.
AMD fell 6.8% to $147.70 after the advanced chipmaker reiterated its full-year outlook, dampening expectations of sales and earnings revisions.
- Scott Peters
- 01 May, 2024
- New York City
Starbucks Corp. dropped 13% to $77.0 after the coffee chain operator reported weaker-than-expected revenue and earnings in the first quarter.
The expensive coffee chain is battling an uneven and fragile economic recovery in China, its second-largest market, and elevated inflation in the U.S. is keeping customers away from discretionary purchases.
Global comparable store sales declined 4%, driven by a 6% decline in comparable transactions, partially offset by a 2% increase in average ticket.
North America and U.S. comparable store sales declined 3%, driven by a 7% decline in comparable transactions, partially offset by a 4% increase in average ticket.
Consolidated revenue in the fiscal second quarter ending in arch declined 1.8% to $8.6 billion from $8.7 billion, net income dropped 15% to $772.4 million from $908.3 million, and diluted earnings per share declined to 68 cents from 79 cents a year ago.
The company increased cash dividends per share to 57 cents from 53 cents a year ago.
Pinterest soared 16.6% to $39.03 after the social media company reported better-than-expected revenue and earnings in the first quarter.
Revenue in the first quarter increased 23% to $740 million from $603 million, net loss shrank to $24.8 million from $208.6 million, and diluted loss per share eased to 4 cents from 31 cents a year ago.
The company projected second-quarter revenue between $835 million and $850 million, representing growth between 18% and 20% from a year ago.
Super Micro Computer dropped 14% to $738.50 after the company announced lower-than-expected third-quarter revenue of $3.85 billion and higher-than-expected adjusted earnings per share of $6.65.
Net sales in the fiscal third quarter ending in March increased to $3.85 billion from $1.28 billion, net income soared to $402.5 million from $85.5 million, and diluted earnings per share advanced to $6.56 from $1.53 a year ago.
The company estimated for the fiscal fourth quarter ending in June revenue between $5.1 billion and $5.5 billion and diluted earnings per share between $7.20 and $8.05, including $30 million in expenses related to stock-based compensation.
Amazon.com rose 1.6% to $177.85 after the online retailer and cloud services provider reported better-than-expected revenue and earnings in the first quarter after advertising revenue soared 24%.
Net sales in the first quarter increased 13% to $143.3 billion from $127.4 billion, net income soared to $10.3 billion from $3.2 billion, and diluted earnings per share advanced to 98 cents from 31 cents a year ago.
Sales in North America increased 12% from a year ago to $86.3 billion, and international sales rose 10%, or 11% in constant currency, to $31.9 billion.
The company said revenue in the current quarter is expected to range between $144 billion and $149 billion, representing an increase between 7% and 11%.
The Amazon Web Services business soared 17% to $25 billion, calming the worries that the division's growth had topped out following slower growth last year.
The company said it plans to invest $10 billion in Mississippi, the single largest capital investment in the state's history, and build two data center complexes and generate 1,000 jobs.
AMD fell 6.8% to $147.70 after the advanced chipmaker reiterated its full-year outlook, dampening expectations of sales and earnings revisions.
Revenue in the first quarter increased 2% to $5.47 billion from $5.35 billion, net income swung to a profit of $123 million from a loss of $139 million, and diluted earnings per share were 7 cents compared to a loss of 9 cents a year ago.
For the second quarter, AMD projected revenue of $5.7 billion with a band of $300 million, representing growth of 6% from a year ago at the midpoint of the revenue range.
- Inga Muller
- 01 May, 2024
- Frankfurt
Aston Martin Lagonda Global declined 4.6% to 141.43 pence after the luxury automaker reported a wider-than-expected loss in the first quarter.
Revenue in the first quarter declined by 26% to £945 million from £1.3 billion; pre-tax losses expanded to £138.8 million from £74.2 million; and net debt increased by 20% to £1.04 billion from £868.1 million a year ago.
The company said vehicle sales declined in the quarter after it introduced new products, ended production of several core products, and ramped up production of the new Vantage, upgraded DBX 707, and V12 sports car.
Vehicle sales in the first quarter dropped 26% to 945 from 1,269 units in the corresponding period a year ago.
Next plc increased 0.1% to 9,020.49 pence after the apparel retailer reiterated its full-year outlook.
Revenue in the first quarter increased 5.7% from a year ago, driven by an 8.8% rise in online sales and flat in-store sales.
The retailer projected a full-year 2024 consolidated sales increase of 6% to £6.2 billion, a pre-tax profit rise of 4.6% to £960 million, and an after-tax earnings per share gain of 4.8% to 606.3 pence.
GSK plc increased 2.2% to 1,706.75 pence after the pharmaceutical company reported a better-than-expected 27% increase in its core operating profit in the first quarter.
Revenue in the first quarter increased 10% to 7.4 billion, core operating profit soared 27% to 2.4 billion, and earnings per share declined 19% to 25.7 pence.
The company announced a 15-pence per share cash dividend.
The pharmaceutical company's full-year sales are likely towards the upper end of its previously announced sales growth range of between 5% and 7%, with core operating profit rising between 9% and 11% and core earnings per share rising between 8% and 10%.
Domino's Pizza Group PLC decreased 0.7% to 323.40 pence after the company reported weaker-than-expected quarterly results.
Comparable sales in the first quarter declined by 0.5%, and total orders fell by 0.8% from the previous year, but on a two-year basis, comparable sales rose by 8.4%.
Total system sales in the first quarter declined 0.4% to £385.1 million from £386.6 million, and total orders on a comparable basis fell 0.8% to 17.7 million from 17.8 million a year ago.
Total orders fell 1.8% to 17.7 million from 18.0 million.
- Bridgette Randall
- 01 May, 2024
- Frankfurt
The benchmark index in London edged slightly higher as financial markets in Continental Europe were closed for the May Day holiday.
The FTSE 100 index opened higher and bond yields held firm in thin trading as most traders were away in Zurich, Paris, Milan, and Frankfurt.
In April, benchmark indexes in London rose about 2.5%, but the DAX CAC-40 indexes dropped about 2% as investors adjusted rate-cut expectations and reacted to local corporate earnings.
In the absence of local and regional economic news, investors awaited the release of the U.S. Fed's monetary policy announcements later in the day after the close.
Fed policymakers are widely expected to hold the interest rate range between 5.25% and 5.50%, and investors are awaiting the Fed's direction on the level of interest rates.
Investors had bid up stocks in the first quarter in the hopes that policymakers were ready to begin rate cuts as early as June, followed by as many as three additional cuts later in the year.
However, those expectations have been lowered after several economic reports suggested that the U.S. economy and labor market conditions are more resilient than previously expected.
Moreover, several inflation indicators have stayed above the expectations set by economists, with service inflation staying above 3%, indicating that policymakers may await cooler inflation before lowering rates.
The lowered rate cut expectations had a direct and negative effect on investor sentiment, driving the U.S. benchmark indexes lower by 4% in April.
Europe Indexes and Yields
Financial markets in Frankfurt and Paris were close for the May Day holiday, and the FTSE 100 index in London inched higher by 0.1% to 8,150.17.
The yield on 10-year German bonds edged up to 2.58%; French bonds inched higher to 3.07%; the UK gilts edged higher to 4.38%; and Italian bonds inched lower to 3.87%.
The euro edged higher to $1.066; the British pound inched higher to $1.249; and the U.S. dollar edged higher to 92.06 Swiss cents.
Brent crude decreased $1.50 to $84.82 a barrel, and the Dutch TTF natural gas fell by €0.69 to €28.70 per MWh.
Europe Stock Movers
Aston Martin Lagonda Global declined 4.6% to 141.43 pence after the luxury automaker reported a wider-than-expected loss in the first quarter.
Revenue in the first quarter declined by 26% to £945 million from £1.3 billion; pre-tax losses expanded to £138.8 million from £74.2 million; and net debt increased by 20% to £1.04 billion from £868.1 million a year ago.
The company said vehicle sales declined in the quarter after it introduced new products, ended production of several core products, and ramped up production of the new Vantage, upgraded DBX 707, and V12 sports car.
Vehicle sales in the first quarter dropped 26% to 945 from 1,269 units in the corresponding period a year ago.
Next plc increased 0.1% to 9,020.49 pence after the apparel retailer reiterated its full-year outlook.
Revenue in the first quarter increased 5.7% from a year ago, driven by an 8.8% rise in online sales and flat in-store sales.
The retailer projected a full-year 2024 consolidated sales increase of 6% to £6.2 billion, a pre-tax profit rise of 4.6% to £960 million, and an after-tax earnings per share gain of 4.8% to 606.3 pence.
GSK plc increased 2.2% to 1,706.75 pence after the pharmaceutical company reported a better-than-expected 27% increase in its core operating profit in the first quarter.
Revenue in the first quarter increased 10% to 7.4 billion, core operating profit soared 27% to 2.4 billion, and earnings per share declined 19% to 25.7 pence.
The company announced a 15-pence per share cash dividend.
The pharmaceutical company's full-year sales are likely towards the upper end of its previously announced sales growth range of between 5% and 7%, with core operating profit rising between 9% and 11% and core earnings per share rising between 8% and 10%.
Domino's Pizza Group PLC decreased 0.7% to 323.40 pence after the company reported weaker-than-expected quarterly results.
Comparable sales in the first quarter declined by 0.5%, and total orders fell by 0.8% from the previous year, but on a two-year basis, comparable sales rose by 8.4%.
Total system sales in the first quarter declined 0.4% to £385.1 million from £386.6 million, and total orders on a comparable basis fell 0.8% to 17.7 million from 17.8 million a year ago.
Total orders fell 1.8% to 17.7 million from 18.0 million.
- Akira Ito
- 01 May, 2024
- Tokyo
Stocks in Tokyo traded lower in thin trading and erased some of the gains in the previous two sessions as investors remained cautious amid the flood of earnings.
Market indexes fell in a broad selloff that saw technology and financial stocks leading the decliners following sharp declines in overnight trading in New York.
Market indexes fell nearly 1% on Wall Street after a measure of wages and benefits rose at the fastest pace in one year at 1.2%, supporting the case for the Federal Reserve to wait longer before lowering interest rates.
The expectations of fewer and delayed U.S. rate cuts soured market sentiment in New York, overhanging Tokyo trading.
Japan's manufacturing sector continued to contract for the eleventh month in a row, but at a slower pace in April, S&P Global reported in its final update.
The au Jibun Japan Manufacturing PMI eased to 49.6 in April from 49.9 in the preliminary estimate and a final 48.2 in March.
Manufacturing activities contracted at a slower pace in April as output and new orders shrank at a slower pace in the month.
However, business sentiment was unchanged from March, driven in part by improving demand, the report noted.
The Nikkei 225 Stock Average declined 0.2% to 38,356.20, and the Topix index dropped 0.3% to 2,733.96.
Tokyo Electron, Advantest, Screen Holdings, and SoftBank fell between 1.5% and 3.5%.
Toyota Motor, Honda Motor, and Nissan Motor declined between 0.4% and 1.1%.
Financial stocks were among the leading decliners, and Mitsubishi UFJ, Mizuho Financial, and Sumitomo Mitsui Financial Group decreased between 0.2% and 1.4%.
Rising travel demand lifted the revenue of three Japanese railway companies, driven by the ending of the travel restrictions imposed during COVID-19 and the return of international tourists.
East Japan Railway consolidated revenue in the year ending in March rose 13.5% to 2,730 billion yen, and West Japan Railway revenue rose 17.2% to 1,635 billion yen.
Central Japan Railway revenue surged 22.1% to 1,710 billion yen.
West Japan Railway increased 8% to ¥3,233.0; East Japan Railway added 3.3% to ¥2,987.50; and Central Japan Railway declined 0.1% to ¥3,614.0.
Lasertec Reports Strong Quarterly Results and Announces Executive Changes
Lasertec Corporation soared 15.8% to ¥40,080.0 after the company reported higher-than-expected sales and earnings in the nine-month period ending in March.
Consolidated nine-month revenue increased 97.9% to 157.2 billion yen from 79.4 billion yen, ordinary income soared 109.8% to 58.7 billion yen, and diluted earnings per share rose to 460.02 yen compared to 229.53 a year ago.
The company estimated sales in the fiscal year ending in June 2024 to increase by 27.6% to 195 billion yen, ordinary income to increase by 5.2% to 67 billion yen, and diluted earnings per share to be 543.32 yen.
The company reiterated its plans to pay a total cash dividend of 191 yen, higher than 180 yen a year ago.
The company also promoted its chief sales officer, Tetsuya Sendoda, as the new chief executive officer and the current CEO, Osamu Okabayashi, as the new chairman.
- Alexander Garcia
- 30 Apr, 2024
- Miami
Market indexes on Wall Street dropped following the fresh worry of an inflation rebound ahead of the Federal Reserve's monetary policy decision on Wednesday.
The Employment Cost Index rose 1.2% from a year ago in the first quarter, the Labor Department reported Tuesday.
The measure of wages and benefits rose at the fastest pace in a year and drove the short-term Treasury yield above 5%.
Persistent wage pressures are likely to support the Fed's case to keep elevated interest rates for longer, and policymakers may opt to wait for more data before deciding to lower rates.
Market indexes turned lower after struggling in early trading following the employment cost data, as investors feared that the Federal Reserve may not lower the rate till the end of the year.
Investors are widely anticipating that the Federal Reserve will hold steady interest rates after the two-day policy meeting on Wednesday.
Despite the eleven rate hikes between March 2022 and July 2023, inflation is still above the Fed's target range of 2%, driven by nearly 4% inflation in the service sector.
After rallying for six months in a row, major indexes are set to close down in April, as investors' hopes of as many as four rate cuts are not likely to materialize.
Investors have lowered rate-cut expectations to just one after inflation stayed elevated over the last four months.
In April, the S&P 500 index and the Nasdaq Composite were down 3.3%, bringing the year-to-date gains to 7%.
Corporate quarterly results also impacted trading on Wall Street.
McDonald's reported weaker-than-expected same-store sales growth, Coca-Cola lifted its full-year organic revenue outlook, Eli Lilly reported a surge in quarterly sales, and NXP Semiconductors announced better-than-expected adjusted quarterly earnings.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 1% to 5,066.0, and the Nasdaq Composite fell 1.2% to 15,792,70.
The yield on 2-year Treasury notes edged higher to 5.02%, 10-year Treasury notes inched lower to 4.66%, and 30-year Treasury bonds edged lower to 4.78%.
WTI crude oil decreased $1.03 to $81.68 a barrel, and natural gas prices decreased 2 cents to $2.01 a thermal unit.
Gold decreased by $37.95 to $2,295.47 an ounce, and silver fell 68 cents to $26.39.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.95.
U.S. Stock Movers
McDonald's decreased 0.8% to $271.36 after the fast food company reported mixed quarterly results and sales took a hit from the boycott in the Middle East.
Revenue in the first quarter increased 5% to $6.2 billion from $5.9 billion, net income rose 7% to $1.9 billion from $1.8 billion, and diluted earnings per share advanced to $2.66 from $2.45.
Global comparable same-store sales slowed sharply in the first quarter to 1.9% from 12.6%, and U.S. sales slowed to 2.5% from 12.6% in the corresponding period a year ago.
NXP Semiconductors gained 4.2% to $257.50 after the advanced chipmaker reported better-than-expected quarterly results.
Revenue in the first quarter increased by 0.2% to $3.13 billion, net income increased to $639 million from $615 million, and diluted earnings per share advanced to $2.47 from $2.35 a year ago.
Coca-Cola decreased 0.1% to $62.0 despite the beverage company reporting better-than-expected quarterly results and raising its annual outlook.
Consolidated net operating revenue in the first quarter increased 3% to $11.3 billion from $10.98 billion, net income rose 2% to $3.18 billion from $3.11 billion, and diluted earnings per share advanced to 74 cents from 72 cents a year ago.
Eli Lilly & Co. increased 6.9% to $788.0 after the drugmaker reported better-than-expected quarterly results and raised its full-year outlook.
Revenue in the first quarter soared 26% to $8.7 billion from $6.9 billion, net income advanced 67% to $2.2 billion from $1.3 billion, and diluted earnings per share rose 58% to $2.58 from $1.62 a year ago.
Sales growth in the quarter was driven by increases of 16% in volume and 10% due to higher realized prices.
The volume increase was primarily driven by growth from Mounjaro, Zepbound, Verzenio, and Jardiance, partially offset by declines in Trulicity.
The company continues to expand manufacturing capacity, with the most significant production increases in 2024 expected in the second half of the year.
New Products revenue grew by $1.79 billion to $2.39 billion in Q1 2024, led by its blockbuster diabetes drug Mounjaro and weight loss treatment Zepbound.
Eurozone Inflation Holds Steady In April and GDP Expands In the First Quarter
Benchmark indexes in Europe meandered after investors reviewed a fresh batch of economic data and corporate quarterly results.
Market indexes in Frankfurt and Paris declined, but they rose in London after the eurozone GDP rose faster than anticipated and inflation held steady.
The Euro Area GDP in the first quarter increased by 0.3% from the previous quarter and rose by 0.4% from a year ago, Eurostat reported in its preliminary report Tuesday.
The faster-than-expected economic expansion in the first quarter highlighted strengthening economic recovery after the region suffered a mild recession towards the end of 2023.
On an annual basis, the economy of Germany shrank by 0.2%, France expanded by 1.1%, Italy rose by 0.6%, and Spain soared by 2.4%.
Germany, the largest economy in the region, avoided a technical recession after GDP rose to 0.2% in the first quarter from the previous quarter, when it shrank to the revised 0.5%.
The annual rate of consumer inflation in the eurozone held steady at 2.4% in April, the statistical agency noted in a separate report on Tuesday.
The core rate of inflation, which excludes food, tobacco, and alcohol prices, rose 2.8%.
Energy prices decreased at a slower pace of 0.6% compared to 1.8%, non-energy industrial goods inflation slowed to 0.9% from 1.1%, and service inflation slowed to 3.7% from 4.0%.
Despite the multiple rate hikes of the last two years and interest rates at a multi-decade high, prices are still rising faster than the European Central Bank's target rate of 2%.
Europe Indexes and Yields
The DAX index decreased by 1.1% to 17,932.17; the CAC-40 index fell by 1% to 7,984.93; and the FTSE 100 index inched lower by 0.04% to 8,144.13.
In April, the DAX declined 1.9%, the CAC -40 fell 1.7%, but the FTSE 100 index rose 2.6%.
The yield on 10-year German bonds edged up to 2.54%; French bonds inched lower to 3.05%; the UK gilts edged lower to 4.31%; and Italian bonds inched lower to 3.85%.
The euro edged higher to $1.071; the British pound inched higher to $1.254; and the U.S. dollar edged higher to 91.14 Swiss cents.
Brent crude decreased $0.87 to $86.31 a barrel, and the Dutch TTF natural gas fell by €1.14 to €29.39 per MWh.
Europe Stock Movers
Mercedes-Benz Group declined 3.9% to €71.72 after the German luxury automaker reported a 30% fall in annual operating earnings in the first quarter.
Volkswagen declined 2.2% to €118.10 after the German automaker reported a 20% decline in operating profit in the first quarter.
Stellantis dropped 3.2% to €22.48 after the Franco-Italian-American automaker reported a 12% decline in revenue in the first quarter.
Vonovia increased 5.1% to €27.46 after the German real estate group reiterated its full-year outlook despite a decline in first-quarter profit.
Air France KLM fell 3.7% to €9.70 after the international carrier reported a wider operating loss in the first quarter.
Adidas revenue decreased 1.3% to €229.20 after the German athletic shoemaker unexpectedly lifted its annual profit outlook.
Revenue in the first quarter increased 4% to €5.5 billion from €5.3 billion, and operating profit soared to €336 million from €60 million a year ago.
Gross margin improved sharply by 6.4 percentage points to 51.2% from 44.8%, driven by tighter cost management and an increase in the sale of higher-margin products.
Net income from continuing operations swung to a profit of €171 million from a net loss of €24 million, and basic earnings per share rose to 96 cents from a loss of 18 cents in the year ago period, respectively.
The company estimated full-year revenue in 2024 to increase by a mid-to-high single-digit rate and operating profit in the year to be as high as €700 million.
Japan Indexes Play Catch Up After 3-day Weekend
Market indexes in Tokyo traded higher after investors returned from a three-day weekend as investors digested the latest economic updates.
Japan's government reported updates on factory output, retail sales, and jobless rates.
The flood of economic data highlighted short-term challenges but confirmed that Japan's economy is likely to rebound in the second quarter after struggling in the first quarter.
The Nikkei 225 Stock Average rose 0.8% to 38,218.36, and the Topix index advanced 1.6% to 2,730.42.
Industrial Production Rebounded In March
Seasonally adjusted industrial production increased 3.8% from the previous month, but the unadjusted index from a year ago dropped 6.7%, the ministry of economy, trade, and industry reported Tuesday.
Industrial production plunged 5.4% in the first quarter from the previous quarter as manufacturing struggled to recover from the earthquake near Tokyo at the beginning of the year.
Shipments increased 4.3% from the previous month and declined 7.1% from a year ago, and inventories rose 1.1% from the previous month but fell 0.9% from a year ago.
Toyota's suspension of production at its smaller unit, Daihatsu, also negatively impacted production during the period.
However, March's production rebounded after vehicle production rose 9.6% from the previous month, after Toyota restarted diesel engine production at its subsidiary following a certification scandal in February.
Electronic parts and accessories production increased 9.2%, and machinery production, including semiconductor equipment, rose 11.6% from the previous quarter.
The ministry anticipates factory output to increase on a monthly basis by 4.1% in April and by 4.4% in May.
Retail Sales Expanded, Jobless Rate Held Steady
Overall commercial sales increased 1.7% from a year ago to 53.3 trillion yen, driven by an increase in retail sales of 1.2% to 14.7 trillion yen, the ministry said in a separate report.
Japan's labor market remained tight in March as employers struggled to find skilled workers; the job-to-applicant ratio edged up to 1.28, the labor ministry said in a note released Tuesday.
The unemployment rate remained unchanged at 2.6%, the ministry of internal affairs reported Tuesday.
Yen's Recovery Prompts Market Intervention Speculation
The Japanese yen was in focus, and the embattled currency rebounded to 156.80 against the U.S. dollar after crossing the 160-mark on the presumed market intervention by Japanese authorities.
Japan Stock Movers
In stock trading, tech and industrial companies led gainers in heavy trading after the release of economic updates.
Tokyo Electron, Advantest, Screen Holdings, and SoftBank advanced between 1.5% and 3.5%.
Toyota Motor, Honda Motor, and Nissan Motor gained between 0.2% and 0.7% after the persistent weakness in the yen raised the prospect of higher earnings in domestic currency.
Hitachi jumped 8.2% to ¥14,620.0 after the diversified engineering company projected robust growth and a strong shareholder return in the current fiscal year.
Asian Markets Advance
Across Asia, market indexes advanced tracking gains in overnight trading in New York in tech stocks.
Market indexes in Mumbai, Seoul, Hong Kong, and Sydney advanced between 0.2% and 0.5%, but they declined 0.3% in Shanghai.
China Business Activities Show Moderate Expansion
Market indexes in Shanghai struggled, the Chinese yuan retained a downward bias, and the yield on the Chinese government bond hovered and approached a record high.
China's manufacturing and service activity growth moderated, according to a private and government survey released on Tuesday.
The government's survey includes a sample of state-owned companies.
The official manufacturing purchasing managers' index decreased to 50.4 in April from a one-year high of 50.8 in March, the National Bureau of Statistics reported Tuesday.
The official non-manufacturing PMI fell to a three-month low of 51.2 in April from 52.0 in March, the statistical bureau reported in a separate report Tuesday.
The private survey of the manufacturing industry, which tracks a larger segment of private companies active in exports and international trade, showed expansion.
The Caixin China General Manufacturing PMI increased to 51.4 in April from 51.1 in March, S&P Global reported Tuesday.
China Stock Movers
The CSI 300 index decreased 0.2% to 3,616.76, and the Hang Seng Index advanced 0.1% to 17,770.43.
Financial markets are closed on Wednesday in Hong Kong for Labor Day, and markets in Shanghai are closed for the rest of the week.
The Hang Seng index jumped the most among its global peers, as the index rebounded after state-controlled entities stepped up buying activities following a string of positive earnings.
Haier Smart Home jumped 7.2% to HK$29.05 after the home appliance maker reported a 20% surge in profit in the March quarter.
ICBC and Agriculture Bank Report Declining Earnings
Industrial and Commercial Bank of China, ICBC, decreased 0.4% to HK$4.22 after the largest Chinese bank reported March quarter net income declined 2.8% to 87.7 billion yuan, or $12.1 billion.
The net interest margin narrowed to 1.48% from 1.63% in the previous quarter ending in December 2023.
Agriculture Bank of China fell 1.5% to HK$3.53 after the bank reported its first profit decline in a year.
Net income fell 1.6% to 70.4 billion yuan, or just under $10 billion; the net interest margin shrank to 1.44% from 1.6%; and the non-performing loan ratio decreased to 1.32%.
State-controlled banks are likely to face smaller net interest margin after as the government is likely to demand banks to increase lending to large and state-owned developers.
Moreover, banks earnings are likely to face significant headwinds as banks book larger losses amid a protracted property market slump.
Asian Markets Extend a 2-Day Rally
Across Asia, market indexes advanced tracking gains in overnight trading in New York in tech stocks.
Market indexes in Seoul and Sydney advanced between 0.2% and 0.5%, but they declined 0.3% in Mumbai.