- Inga Muller
- 05 Aug, 2024
- Frankfurt
European markets continued their decline for the second day on Monday amid growing worries about the U.S. economy's strength.
Market sentiment deteriorated after the eurozone economy stalled in July, as weak domestic demand overshadowed relative strength in exports.
The DAX index decreased by 2.5% to 17,209.20; the CAC-40 index fell by 2.4% to 7,105.90; and the FTSE 100 index declined by 2.6% to 7,961.64.
European bond yields dropped to six-month lows as investors sought safety in government securities amid growing worries about the global economic slowdown and rising geopolitical tensions.
The yield on 10-year German bonds edged lower to 2.10%, French bonds inched lower to 2.92%, the UK gilts inched lower to 3.77%, and Italian bonds decreased to 3.62%.
Clarkson PLC plunged 10.4% to 3,875.0 pence after the UK-based shipping broker reported a decline in sales and earnings in the first half.
OCI NV increased 10.3% to €23.82 after Woodside Energy agreed to acquire the Netherlands-based chemical maker's clean ammonia plant in Texas for 2.35 billion.
Woodside Energy decreased 2.5% to 1,302.0 pence.
Senior plc plunged 7.7% to 145.4 pence, despite the UK-based engineering company reporting a 10% increase in its first-half profit.
Aurubis AG rose 9.2% to €62.50 after the non-ferrous metal producer and copper recycler reported third-quarter operating earnings below market expectations.
Galderma AG increased 4.6% to CHF 70.09 after L'Oreal said it acquired a 10% stake in the dermatology company for an undisclosed amount.
- Bridgette Randall
- 05 Aug, 2024
- London
European markets extended losses from last week as investors adjusted their global growth outlook amid a weakening economic backdrop.
Benchmark indexes in Paris, Frankfurt, and London dropped between 2% and 4% as weaker-than-expected earnings from mega-cap tech companies were compounded by the weakening economic drop in the U.S.
Large European companies relied on export growth to the U.S. and China, which is the main driver of earnings growth, because of the stagnant economic conditions in the European Union.
However, in recent quarters, most of the earnings growth has been driven by U.S. demand growth, offset by China's weaker-than-expected economic recovery.
Now if the U.S. economy weakens, that could severely impact demand for European industrial and luxury goods, providing another headwind for earnings at European companies.
In domestic economic news, a survey showed the eurozone economy stalled in July as demand for goods and services deteriorated.
The HCOB composite PMI output index fell to a five-month low of 50.2 from 50.9 in June, S&P Global reported Monday.
In the week ahead, investors are awaiting the release of German factory orders and industrial production data, both of which are expected to show a rebound, and final inflation data is expected to confirm acceleration in July.
In the eurozone, investors are looking forward to the release of retail sales and producer price indexes, industrial production in Spain, the unemployment rate in France, and an inflation update in Italy.
Europe Indexes and Yields
The DAX index decreased by 2.5% to 17,209.20; the CAC-40 index fell by 2.4% to 7,105.90; and the FTSE 100 index declined by 2.6% to 7,961.64.
European bond yields dropped to six-month lows as investors sought safety in government securities amid growing worries about the global economic slowdown and rising geopolitical tensions.
The yield on 10-year German bonds edged lower to 2.10%, French bonds inched lower to 2.92%, the UK gilts inched lower to 3.77%, and Italian bonds decreased to 3.62%.
The euro edged down to $1.09; the British pound inched lower to $1.272; and the U.S. dollar weakened to 85.05 Swiss cents.
Brent crude decreased $1.35 to $75.44 a barrel, and the Dutch TTF natural gas fell by €1.80 to €34.85 per MWh.
Europe Stock Movers
Clarkson PLC plunged 10.4% to 3,875.0 pence after the UK-based shipping broker reported a decline in sales and earnings in the first half.
OCI NV increased 10.3% to €23.82 after Woodside Energy agreed to acquire the Netherlands-based chemical maker's clean ammonia plant in Texas for 2.35 billion.
Woodside Energy decreased 2.5% to 1,302.0 pence.
Senior plc plunged 7.7% to 145.4 pence, despite the UK-based engineering company reporting a 10% increase in its first-half profit.
Aurubis AG rose 9.2% to €62.50 after the non-ferrous metal producer and copper recycler reported third-quarter operating earnings below market expectations.
Galderma AG increased 4.6% to CHF 70.09 after L'Oreal said it acquired a 10% stake in the dermatology company for an undisclosed amount.
- Akira Ito
- 05 Aug, 2024
- Tokyo
Market indexes in Tokyo plunged in Monday's trading steepened three-day losses amid a growing list of worries as investors adjusted to the hawkish central bank.
The Nikkei 225 stock average plunged more than 12% and extended three-day losses to 20% as the Bank of Japan unexpectedly increased interest rates and sparked a sharp reversal in the Japanese yen.
Last Thursday, the Bank of Japan increased interest rates for the second time since March by 15 basis points to 0.25% and held out for more interest rate increases in the imminent future.
Investors were also under pressure after a string of weak earnings from mega-cap U.S. technology companies, which also led to the unwinding of the artificial intelligence-linked rally, dragging semiconductor equipment makers.
The yen continued to advance for the second week in a row and strengthened as much as 4% to close at 142.45 against the U.S. dollar, a sharp jump from 162 only three weeks ago.
The minutes of the Bank of Japan's policy meeting held on June 13–14 indicated members noted modest economic recovery, and participants decided to delay the release of a detailed bond purchase program until the next meeting.
The yield on 10-year Japanese government bonds dropped to 0.775% from 1.07% in Friday's trading.
Japan Stock Movers
The Nikkei 225 stock average recorded the largest decline in points in the index's history, and registered the second largest decline in percentage terms.
The Nikkei 225 stock average declined 3,836 points on October 20, 1987, the day after following the sharp plunge on Black Monday in New York.
The Nikkei 225 stock average plunged 12.4% or 4,451.28 points to 31,458.42, and the Topix index declined 12.2% to 2,227.15.
Banks, technology stocks, and industrial and automotive stocks led the decliners for the second day in a row.
Mitsubishi UFJ Financial plunged 17.8% to ¥1,245.50, Sumitomo Mitsui Financial dropped 15.5% to ¥8,162.0, and Mizuho Financial fell 19% to ¥2,452.0.
Over the last three trading sessions, Mitsubishi UFJ declined 33%, Mitsui Financial plunged 20%, and Mizuho Financial chopped 27%.
Softbank Group plunged 19% to ¥6,400.0, Advantest Corp. slid 15.5% to ¥5,313.0, and Screen Holdings dropped 12.7% to ¥9,080.0.
Over the last three trading sessions, Softbank plunged 31%, Advantest dropped 22%, Tokyo Electron decreased 25%, and Screen Holdings decreased 27%.
Toyota Motor declined 13.5% to ¥2,232.0, Honda Motor decreased 17.5% to ¥1,251.50, and Nissan Motor fell 14.5% to ¥378.10.
- Li Chen
- 05 Aug, 2024
- Hong Kong
Market sentiment continued to weaken in Shanghai and Hong Kong as fears of the U.S. recession grew.
The Hang Seng index declined nearly 3% and dropped to a 3-month low, and the CSI index fell, tracking losses in Asia.
Investor sentiment deteriorated after a string of U.S. economic data suggested that the economy may be heading into a recession, reversing the popular narrative of strong consumer spending and business investments.
The U.S. payrolls expanded at the slowest pace in several years in July, and the jobless rate rose for the fourth month in a row to 4.3%, indicating labor market conditions are moderating.
In addition, last week, factory activities shrank for the third month in a row, and initial jobless claims approached a one-year high.
The sudden reversal in market sentiment from soft landing to hard landing was further supported by weak earnings from Intel, Amazon, Alphabet, and Tesla.
Investors are now thinking that the Federal Reserve may have held interest rates too high for too long and that the central bank may lower rates sooner than expected.
Closer to home, China's service sector showed an improvement in July, driven by an acceleration in export demand and rising employment, according to a private survey.
The Caixin China General Services PMI increased to 52.1 from 51.2 in June, according to a survey released by S&P Global.
China Stock Movers
The Hang Seng index declined 2.6% to 16,512.61, and the CSI 300 index dropped 1% to 3,352.63.
Internet stocks were among the leading decliners amid worries of a further weakening in earnings.
Alibaba Group fell 2.2% to HK $73.65, Tencent Holding decreased 1.6% to HK $352.40, and Baidu plunged 4.2% to HK $80.05.
Electric vehicle markets fell as investors avoided high-flying stocks.
BYD declined 2.2% to HK $214.40, Li Auto fell 3.2% to HK $71.55, and Xpeng decreased 3% to HK $28.55.
China Vanke declined 1.7% to HK $3.98, China Resources Land dropped 2.2% to HK $21.85, and Henderson Land Development eased 0.5% to HK $21.80.
HSBC Holdings plc declined 5.3% to HK $62.15, and Standard Chartered plc plunged 6.2% to HK $68.15.
- Arun Goswami
- 05 Aug, 2024
- Mumbai
A global market sell-off for the second day in a row dragged market indexes in India amid rising concerns that the U.S. economic slowdown may negatively impact exports to the world's largest economy.
The Sensex index decreased by 2.5% to 78,968.21, and the Nifty index fell by 2.4% to 24,121.15.
On the Mumbai stock exchange, 171 stocks traded at their 52-week highs, and 51 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched lower to 6.98%, and the Indian rupee edged lower to ₹83.78 against the U.S. dollar.
State Bank of India declined 2.2% to ₹828.70, and the largest financial service company in India reported better-than-expected June quarter results.
The gross non-performing assets ratio declined to 2.2% from 2.7%, and net income declined 1% to ₹17,035.2 crore.
Titan Company declined 0.5% to ₹3,443.95, and the specialty retailer reported a decline in its June quarter profit to ₹770 crore from ₹777 crore a year ago.
Britannia Industries rose 1.3% to ₹5,794.10, and the food products maker reported June quarter net income increased 11% to ₹506 crore from ₹453 crore a year ago.
Net revenue increased 6% to ₹4,250 crore from ₹4,015 crore in the period a year ago and rose 4% from ₹4,086 crore in the previous quarter.
Bank of India declined 4.9% to ₹119.90, and the financial services company said consolidate net income in the June quarter increased 10% to ₹1,702 crore from ₹1,551 crore a year ago.
JK Tyre & Industries declined 2.5% to ₹420.35, and the industrial company reported consolidated net income rose 37% to ₹211 crore from ₹154 crore a year ago.
Divi's Laboratories declined 3.3% to ₹4,822.25 after the generic pharmaceutical maker reported a double-digit increase in revenue and earnings in the June quarter.
Revenue increased 19% to ₹2,118 crore, and net income advanced 21% to ₹430 crore from a year ago, respectively.
- Scott Peters
- 02 Aug, 2024
- New York City
Apple Inc. increased 2.2% to $222.75 after the iPhone maker reported better-than-expected quarterly results and sales hit hew highs amid rinsing sales in India.
Revenue in the fiscal third quarter ending in June increased 5% to $85.8 billion from $81.8 billion, net income jumped to $21.4 billion from $19.9 billion, and diluted earnings per share advanced to $1.40 from $1.26 a year ago.
On a regional basis, Greater China sales edged down to $14.7 billion from $15.8 billion, Japan sales edged up to $5.1 billion from $4.8 billion, and Americas sales advanced to $37.7 billion from $35.4 billion a year ago, respectively.
Across products and services, iPhone sales edged slightly lower to $39.3 billion from $39.7 billion, and services sales increased to $24.2 billion from $21.2 billion a year ago, respectively.
Amazon.com Inc. dropped 12.2% to $161.83 after the online retailer and cloud service provider reported weaker-than-expected second quarter revenue and issued a disappointing estimate.
Revenue in second quarter increased 10% to $148 billion from $134.4 billion, net income rose to $13.5 billion from $6.7 billion, and diluted earnings per share advanced to $1.26 from 65 cents a year ago.
Intel plunged 29% to $20.74 after the advanced chipmaker reported weaker-than-expected second quarter results, announced job cuts of 15,000, and issued a weak outlook.
Revenue in the second quarter declined 1% to $12.8 billion from $12.9 billion, net income swung to a loss of $1.6 billion from a profit of $1.5 billion, and diluted earnings per share were a loss of 38 cents compared to a profit of 35 cents a year ago.
The advanced chipmaker announced its deepest restructuring plan in forty years and planned to eliminate 15,000 jobs in an effort to reduce costs by $10 billion.
The company announced a quarterly dividend of 12.5 cents per share payable on September 1 to shareholders on record on August 7.
In addition, the company announced the suspension of its dividend starting in the fourth quarter.
Exxon Mobil Corporation inched up 0.1% to $117.05, and the energy company reported better-than-expected second quarter earnings driven by record energy production in Guyana and the Permian Basin oil fields.
Total revenue increased to $93.1 billion from $82.9 billion, net income attributable to shareholders rose to $9.2 billion from $7.5 billion, and diluted earnings per share advanced to $2.14 billion from $1.94 a year ago.
In the quarter, the company distributed $9.5 billion to shareholders, including $4.3 billion in dividends and $5.2 billion of share repurchases.
Net production in the second quarter increased 15% to 4.4 million oil-equivalent barrels per day due to contributions from the recent acquisition of Pioneer Natural Resources and higher production from energy fields in Guyana and heritage Permian.
On May 3, ExxonMobil completed the acquisition of Pioneer Natural Resources through the exchange of 545 million shares of ExxonMobil common stock valued at $63 billion and the assumption of $5 billion of debt.
Chevron Corp. declined 2.5% to $148.85 after the energy company reported weaker-than-expected second-quarter earnings due to weak crude oil refining margins.
Revenue increased to $51.2 billion from $48.9 billion, net income decreased to $4.4 billion from $6.0 billion, and diluted earnings per share fell to $2.43 from $3.20 a year ago.
Chevron's global production increased by 11% because of higher production at oil fields in the Permian and Denver-Julesburg basins and contributions from the recent acquisition of PDC Energy.
Chevron also executed agreements in Namibia, Brazil, Equatorial Guinea, and Angola to increase the company’s global exploration acreage footprint.
The company returned $6 billion of cash to shareholders during the quarter, including dividends of $3 billion and share repurchases of $3 billion.
The company's board declared $1.63 per share of quarterly dividend payable on September 10 to shareholders on record on August 19.
- Barry Adams
- 02 Aug, 2024
- New York City
Market sentiment on Wall Street deteriorated in Friday's trading after a weak jobs report added to the string of economic reports suggesting a weakening U.S. economic backdrop.
The S&P 500 index fell 2.2%, the Nasdaq Composite declined more than 2%, and the Russell 2000 index dropped more than 4%.
Investors sold stocks amid growing evidence that the U.S. economy may face recessionary conditions after nonfarm payroll increases were sharply lower than expected.
Earlier in the week, investors cheered Fed Chair Powell's comments, suggesting that a rate cut may be likely after the September meeting.
However, market excitement turned to despair on Thursday after factory activities contracted for the third quarter in a row in July, and weaker-than-expected results from Amazon and Intel overshadowed market sentiment.
In Friday's trading, market anxieties were further heightened by the fewer-than-expected increase in July payrolls.
The U.S. economy added 114,000 net new jobs in July, following the downwardly revised 179,000 gains in June, the U.S. Bureau of Labor Statistics reported Friday.
Total nonfarm payroll employment edged up, but the increase was below the average monthly gain of 215,000 over the prior 12 months.
In July, employment continued to trend up in health care, in construction, and in transportation and warehousing, while information lost jobs.
Meanwhile, the jobless rate rose to 4.3%.
Average hourly earnings for all nonfarm payrolls increased by 8 cents, or 0.2%, from the previous month or 3.6% from a year ago to $35.07.
For the week, the S&P 500 index is set to close down 3.5%, the Nasdaq Composite falls 4%, and the Russell 2000 index declines by 7.2%.
U.S. Indexes and Treasury Yields
The S&P 500 index decreased 2.2% to 5,314.60, the Nasdaq Composite fell 3.3% to 16,658.98, and the Russell 2000 index declined 4.1% to 2,098.06.
The yield on 2-year Treasury notes edged lower to 3.82%, 10-year Treasury notes decreased to 3.91%, and 30-year Treasury bonds decreased to 4.15%.
WTI crude oil decreased $2.22 to $73.75 a barrel, and natural gas prices edged up 2 cents to $1.99 a thermal unit.
Gold decreased by $10.35 to $2,435.22 an ounce, and silver declined by $0.29 to $28.18.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.20.
U.S. Stock Movers
Apple Inc. increased 2.2% to $222.75 after the iPhone maker reported better-than-expected quarterly results, and sales hit hew highs amid rinsing sales in India.
Amazon.com Inc. dropped 12.2% to $161.83 after the online retailer and cloud service provider reported weaker-than-expected second quarter revenue and issued a disappointing estimate.
Intel plunged 29% to $20.74 after the advanced chipmaker reported weaker-than-expected second quarter results, announced job cuts of 15,000, and issued a weak outlook.
Exxon Mobil inched up 0.1% to $117.05 after the energy company reported better-than-expected quarterly earnings driven by record energy production in Guyana and the Permian Basin.
Chevron Corp. declined 2.5% to $148.85 after the energy company reported weaker-than-expected second-quarter earnings due to weak crude oil refining margins.
- Inga Muller
- 02 Aug, 2024
- Frankfurt
European markets extended weekly losses amid worries of domestic economic stagnation, a weakening economic backdrop in the U.S., and persistent deflation worries in China.
The DAX index decreased by 1.6% to 17,792.84; the CAC-40 index fell by 0.8% to 7,315.21; and the FTSE 100 index declined by 0.2% to 8,267.81.
European bond yields dropped to six-month lows as investors sought safety in government securities amid growing worries about the global economic slowdown and rising geopolitical tensions.
The yield on 10-year German bonds edged lower to 2.20%, French bonds inched lower to 2.97%, the UK gilts inched lower to 3.86%, and Italian bonds decreased to 3.63%.
Chip equipment makers were under pressure after Intel announced another disappointing quarter and its plans to lay off 15% of its staff.
ASML declined 7.5% to €767.30, BE Semiconductor dropped 8.5% to €104.85, and Infineon Technologies dropped 4.2% to €29.81.
AXA investments increased 2.4% to €32.59, and the French insurance company entered into talks with BNP Paribas to sell its investment unit, AXA Investment Managers, for €5.1 billion.
Engie SA increased 3% to €14.95, and the French energy utility and natural gas distributor lifted its annual 2024 outlook, citing its strong first-half results and lower-than-expected financial costs.
Capita declined 9.2% to 17.37 pence after the UK-based outsourcing company reported a decline in first-half revenue.
International Consolidated Airlines Group, or IAG, rose 6% to 169.40 pence, and the parent company of British Airways and Iberian Air reported strong first-half results.
The airline group also announced its plans to reinstate its dividend for the first time since the start of the COVID-19 pandemic.
Wizz Air Holdings decreased 4.6% to 1,411.80 pence after the discount airline reported a decline in seating capacity and passenger count in July.
- Bridgette Randall
- 02 Aug, 2024
- London
European markets extended losses for the second session in a row amid rising worries about the U.S. economy's health and its impact on the eurozone economy.
Benchmark indexes in Frankfurt, Paris, and London declined in Friday's trading, and the widely followed indexes are set to close down between 1% and 4% for the week.
The sharp reversal in market sentiment came about because several key U.S. economic indicators showed a weakening economic backdrop.
Initial claims of jobless benefits approached a one-year high for the last week, and unit labor costs in the second quarter advanced at a slower pace of 0.5% in the second quarter.
In addition, a private survey showed U.S. factory activities in July contracted for the third month in a row, signaling a weakening outlook.
Moreover, the U.S. nonfarm payroll increase in July slowed to 114,000 from the downwardly revised 179,000 jobs in June, according to the latest data released by the U.S. Bureau of Labor Statistics.
Closer to home, French industrial output rose 0.8% on the month in June from a decline of 2.2% in May, driven by a rebound in transport equipment orders, according to a report released by the statistical agency INSEE.
On an annual basis, industrial output declined 1.2%, and manufacturing production decreased 1.4%.
Europe Indexes and Yields
The DAX index decreased by 1.6% to 17,792.84; the CAC-40 index fell by 0.8% to 7,315.21; and the FTSE 100 index declined by 0.2% to 8,267.81.
European bond yields dropped to six-month lows as investors sought safety in government securities amid growing worries about the global economic slowdown and rising geopolitical tensions.
The yield on 10-year German bonds edged lower to 2.20%, French bonds inched lower to 2.97%, the UK gilts inched lower to 3.86%, and Italian bonds decreased to 3.63%.
The euro edged down to $1.08; the British pound inched lower to $1.274; and the U.S. dollar weakened to 87.09 Swiss cents.
Brent crude decreased $0.74 to $78.81 a barrel, and the Dutch TTF natural gas fell by €0.35 to €40.75 per MWh.
Europe Stock Movers
Chip equipment makers were under pressure after Intel announced another disappointing quarter and its plans to lay off 15% of its staff.
ASML declined 7.5% to €767.30, BE Semiconductor dropped 8.5% to €104.85, and Infineon Technologies dropped 4.2% to €29.81.
AXA investments increased 2.4% to €32.59, and the French insurance company entered into talks with BNP Paribas to sell its investment unit, AXA Investment Managers, for €5.1 billion.
Engie SA increased 3% to €14.95, and the French energy utility and natural gas distributor lifted its annual 2024 outlook, citing its strong first-half results and lower-than-expected financial costs.
Capita declined 9.2% to 17.37 pence after the UK-based outsourcing company reported a decline in first-half revenue.
International Consolidated Airlines Group, or IAG, rose 6% to 169.40 pence, and the parent company of British Airways and Iberian Air reported strong first-half results.
The airline group also announced its plans to reinstate its dividend for the first time since the start of the COVID-19 pandemic.
Wizz Air Holdings decreased 4.6% to 1,411.80 pence after the discount airline reported a decline in seating capacity and passenger count in July.
- Akira Ito
- 02 Aug, 2024
- Tokyo
Stocks in Tokyo plunged the most in the last four decades after key economic data in the U.S. stoked fears of a recession.
The Nikkei 225 stock average declined 5.8%, and the Topix index plunged 6% amid a global sell-off after weak U.S. manufacturing and labor market data.
The Nikkei 225 drop on Friday was only surpassed by the fall on Black Monday of October 1987, when the index plunged by 3,836.48 points.
Diverging monetary policy and the yen's weakness contributed to market jitters, driving hedge funds to sell their positions.
Investors shifted their attitude to the growing possibilities of a U.S. recession after weekly initial jobless claims approached a one-year high, unit labor cost increases slowed to 0.5% in the second quarter, and factory activities shrank at a faster pace for the third month in a row in July.
The Bank of Japan's hawkish shift also contributed to market jitters, and the yen rebounded to 148.67 against the U.S. dollar.
The unwinding of the speculative trade, where hedge funds borrow in the yen and lend in the U.S. dollar or the euro, also contributed to a sharp reversal in the sentiment.
The Bank of Japan unexpectedly lifted its policy rate to 0.25% from a range between zero and 0.1%, surprising market watchers, as policymakers responded to political pressure after the yen sank to 162 against the yen.
Japan Stock Movers
The Nikkei 225 dropped to the lowest level since January 22, and the Topix index declined to the level last seen at the end of January.
The Nikkei 225 stock average dropped 5.8% to 35,909.70, and the Topix index declined 6.2% to 2,537.60.
Financial, chipmakers, industrial and vehicle exporters, and technology stocks were among the leading decliners in Friday's trading.
Tokyo Electron, Advantest, Screen Holdings, and Lasertec plunged between 14% and 9%.
Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, and Mizuho Financial declined between 11% and 13%.
The largest trading companies, or sogo shosha, Marubeni, Mitsubishi, Mitsui, and Itochu, declined between 11% and 14%.
Konami Group Corp. jumped 2.8% to ¥11,420.0 after the gaming company reported better-than-expected quarterly results in the fiscal first quarter ending in June.
Revenue increased 24% to 90 billion yen, and net income advanced 43% to 19.2 billion yen from a year ago, respectively.
The company estimated fiscal year 2025 revenue of 380 billion yen, lower than the previously estimated 393.8 billion yen, and net income of 59.5 billion yen, lower than the previous estimate of 66.34 billion yen.