- Barry Adams
- 25 Jan, 2024
- New York City
Benchmark indexes were little changed in early trading and investors reviewed another batch of financial results.
The S&P 500 index and the Nasdaq Composite edged slightly higher after both indexes closed higher in five previous consecutive sessions.
Better-than-expected earnings from Netflix supported the market advance, but in Thursday's trading Tesla dropped sharply after the company warned that vehicle sales volume may lag in 2024 compared to 2023.
Airlines were in focus as well after American Airlines and Southwest reported better-than-expected quarterly results.
American jumped 4%, Alaska Air Group advanced 0.4%, Southwest Airlines gained 1.5%.
Alaska Air said grounding of Boeing 737 Max 9 will cost the company $150 million and reported fourth-quarter loss of $2 million compared to a profit of $22 million a year ago.
U.S. Economic Growth Surpassed Expectations
The U.S. economy expanded at a faster-than-expected pace of 3.3% in the final quarter of 2023, the U.S. Bureau of Economic Analysis reported Thursday.
The interest rate tightening campaign is taking a toll on economic growth, but tight labor market conditions are still supporting the increase in wage and consumer spending.
The growth in the fourth quarter slowed from 4.9% in the third quarter.
For the full year 2023, the U.S. economy expanded 2.5% from the previous year.
ECB Holds Rates Steady Third Time
The European Central Bank held its key interest rates at multi-year highs for the third consecutive time in a row.
The move was widely anticipated, and the accompanying statement noted that inflation has been on a declining trend and previous interest rate increases are affecting financial conditions.
The central bank held its deposit facility rate at 4% and its main refinancing lending facility rate at a 22-year high of 4.5%.
Investors are looking forward to comments from ECB President Lagarde and getting deeper insights about the interest rate path in the near future.
U.S. Indexes and Yields
The S&P 500 index increased 0.1% to 4,902.73, and the Nasdaq Composite rose 0.2% to 15,674.24.
The yield on 2-year Treasury notes increased to 4.36%. 10-year Treasury notes declined to 4.14%, and 30-year Treasury bonds edged down to 4.38%.
WTI crude oil increased $0.53 to $75.66 a barrel, and natural gas prices increased 18 cents to $2.82 a thermal unit.
Gold increased by $1.37 to $2,013.92 an ounce and extended this week's gains after the U.S. dollar drifted slightly lower in international trading.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.27.
U.S. Stock Movers
Tesla declined 8% to $191.10 after the company reported quarterly results and issued a weak 2024 unit sales outlook.
The company said the vehicle volume growth rate in 2024 may be notably lower than the growth rate achieved in 2023 as the company prepares to launch the next-generation vehicle built at its factory in Texas.
Boeing declined 4.2% to $205.11 after the Federal Aviation Authority halted the company's plan to expand its production of 737 Max jets but also approved the company's plan to bring the Max 9 back into service.
IBM increased 7.3% to $186.59 after the technology company reported better-than-expected quarterly results.
American Airlines increased 4.3% to $14.53 after the international carrier reported quarterly results.
Full-year revenue surged 7.8% to record $52.8 billion from $48.9 billion, net income jumped to $822 million from $127 million, and diluted earnings per share advanced to $1.21 from 19 cents a year ago.
Alaska Air increased 0.5% to $36.02 after the regional airline reported mixed quarterly results.
Revenue in the fourth-quarter increased 3% to $2.6 billion from $2.5 billion, net income swung to a loss of $2 million from a profit of $22 million, and diluted earnings per share were (0.02) cents compared to 17 cents a year ago.
- Scott Peters
- 25 Jan, 2024
- New York City
Tesla declined 8% to $191.10 after the company reported quarterly results and issued a weak 2024 unit sales outlook.
Revenue in the fourth quarter increased 3% to $25.2 billion from $24.3 billion, net income soared 115% to $7.9 billion from $3.7 billion, and diluted earnings per share advanced to $2.27 from $1.07 a year ago.
The latest quarterly income included a one-time non-cash tax benefit of $5.9 billion.
Free cash flow in the quarter increased to $2.0 billion from $1.4 billion a year ago.
In 2023, total revenues soared 19% to $96.7 billion, net income attributable to shareholders jumped 19% to $15 billion, and diluted earnings per share advanced 19% to $4.30.
Vehicles delivered in 2023 increased by 38% to 1.8 million from a year ago, and supercharger stations soared by 27% to 5,952 from a year ago, respectively.
The company said the vehicle volume growth rate in 2024 may be notably lower than the growth rate achieved in 2023 as the company prepares to launch the next-generation vehicle built at its factory in Texas.
Boeing declined 4.2% to $205.11 after the Federal Aviation Authority halted the company's plan to expand its production of 737 Max jets but also approved the company's plan to bring the Max 9 back into service.
IBM increased 7.3% to $186.59 after the technology company reported better-than-expected quarterly results.
Revenue in the fourth quarter increased 4% to $17.4 billion from $16.7 billion, net income soared 3% to $3.3 billion from $2.7 billion, and diluted earnings per share jumped to $3.55 from $2.96 a year ago.
In the year 2023, revenue increased 2% to $61.9 billion, net income jumped to $7.5 billion from $1.6 billion, and diluted earnings per share advanced to $8.14 from $1.80 a year ago.
The technology company forecasted 2024 revenue to increase "mid-single-digit" and free cash flow to be around $12 billion.
American Airlines increased 4.3% to $14.53 after the international carrier reported quarterly results.
Total operating revenue in the fourth quarter decreased 1% to $13.0 billion from $13.2 billion, net income plunged to $19 million from $803 million, and diluted earnings per share dropped to 3 cents from $1.14 a year ago.
Full-year revenue surged 7.8% to record $52.8 billion from $48.9 billion, net income jumped to $822 million from $127 million, and diluted earnings per share advanced to $1.21 from 19 cents a year ago.
Passenger load factor in the quarter edged slightly lower to 83.6% from 83.9%, but total revenue per available seat mile declined 6.4% to 17.21 cents from 18.39 cents a year ago, respectively.
Alaska Air increased by 0.5% to $36.02 after the regional airline reported mixed quarterly results.
Revenue in the fourth quarter increased 3% to $2.6 billion from $2.5 billion, net income swung to a loss of $2 million from a profit of $22 million, and diluted earnings per share were (0.02) cents compared to 17 cents a year ago.
Alaska Air said the grounding of the Boeing 737 Max 9 will cost the company $150 million after a door panel blew off midair on January 5.
Alaska said it would resume service using a Boeing 737 Max 9 as early as Friday after the FAA approved the inspection instructions for the aircraft prior to placing it into operation.
- Inga Muller
- 25 Jan, 2024
- Frankfurt
European markets were on hold ahead of the ECB's interest rate decision and monetary policy outlook, and bond yields edged higher.
The DAX index decreased 0.3% to 16,831.69, the CAC-40 index fell 0.1% to 7,446.92, and the FTSE 100 index inched lower by 0.01% to 7,527.28.
The yield on 10-year German bonds edged up to 2.36%; French bonds inched higher to 2.86%; the UK gilts edged higher to 4.05%; and Italian bonds inched higher to 3.94%.
Givaudan SA rose 4.6% to CHF 3,470.0 after the maker of flavors and fragrances reported results that met market expectations.
2023 sales increased 4.1% to CHF6.9 billion, net income rose 4.3% to CHF893 million, and free cash flow jumped 92% to CHF920 million.
The company proposed a cash dividend of CHF 68 per share, an increase of 1.5% from a year ago.
Epiroc AB decreased 1.8% to SEK184.20 after the company reported mixed quarterly results.
Revenue in the fourth quarter increased 12% to SEK 15.6 billion from SEK 13.9 billion, and orders received rose 5% to SEK 14.7 billion from SEK 13.7 billion a year ago.
Profit after tax decreased 5% to SEK 2.2 billion from SEK 2.4 billion, and diluted earnings per share fell to SEK 1.87 from SEK 1.98 a year ago.
STMicroelectronics declined 2.3% to €41.63 after the semiconductor company reported revenue and earnings slightly below expectations.
Revenue in the fourth quarter declined 3.2% to $4.3 billion from $4.4 billion, net income dropped 13.8% to $1.07 billion from $1.09 billion, and diluted earnings per share fell to $1.14 from $1.32 a year ago.
The company forecast first-quarter revenue of $3.6 billion, a decline of 15.2% from a year ago and 15.9% from the previous quarter.
Full-year 2024 revenue is expected to range between $15.9 billion and $16.9 billion, and gross margin percentage is estimated between the lows and mid-40s.
Capital expenditure in 2024 is expected to be around $2.5 billion.
Nokia jumped 7.6% to €3.39 after the Finnish telecom equipment maker announced a €600 million stock repurchase program over a period of two years.
The company board also approved a 3 cents per share cash dividend to shareholders on record on January 30 to be paid on February 8.
Net sales in the fourth quarter declined 23% to €5.7 billion from €7.5 billion, net income swung to a loss of €33 million from a profit of €3.2 billion, and diluted earnings per share were (0.01) compared to 56 cents a year ago.
- Bridgette Randall
- 25 Jan, 2024
- Frankfurt
Stocks in Europe gyrated ahead of an interest rate announcement and monetary policy direction by the European Central Bank.
The ECB is widely expected to hold rates steady, but investors are looking ahead to the policymaker's view on the economy and the future direction of interest rates.
Benchmark indexes traded around the flatline, and bond yields edged higher.
Brent crude oil jumped to $80 a barrel on the expectation of a demand growth recovery after the People's Bank of China injected liquidity into the financial system and politicians vowed for more "forceful" measures to stabilize financial markets.
On the earnings front, investors are looking ahead to quarterly results from Louis Vuitton, Christian Dior, SEB, Epiroc, Tryg, STMicroelectronics, and Givaudan.
Spain's PPI Declined 10th Consecutive Month
Spain's producer price inflation declined for the 10th month in a row in December, the National Statistics Institute, or INE, reported Thursday.
Producer prices declined by 6.3% in December from a year ago and fell from the upwardly revised 7.6% in the previous month.
The decline in energy costs drove the fall in overall producer prices, and energy prices fell by 20.6% in the month after falling by 23.5% in the previous month.
Europe Indexes and Yields
The DAX index decreased 0.3% to 16,831.69, the CAC-40 index fell 0.1% to 7,446.92, and the FTSE 100 index inched lower by 0.01% to 7,527.28.
The yield on 10-year German bonds edged up to 2.36%; French bonds inched higher to 2.86%; the UK gilts edged higher to 4.05%; and Italian bonds inched higher to 3.94%.
The euro edged lower to $1.089, the British pound inched higher to $1.272, and the U.S. dollar gained to 86.39 Swiss cents.
Brent crude increased $0.91 to $80.95 a barrel, and the Dutch TTF natural gas decreased by €0.05 to €28.88 per MWh.
Europe Stock Movers
Givaudan SA rose 4.6% to CHF 3,470.0 after the maker of flavors and fragrances reported results that met market expectations.
2023 sales increased 4.1% to CHF6.9 billion, net income rose 4.3% to CHF893 million, and free cash flow jumped 92% to CHF920 million.
The company proposed a cash dividend of CHF 68 per share, an increase of 1.5% from a year ago.
Epiroc AB decreased 1.8% to SEK184.20 after the company reported mixed quarterly results.
Revenue in the fourth quarter increased 12% to SEK 15.6 billion from SEK 13.9 billion, and orders received increased 5% to SEK 14.7 billion from SEK 13.7 billion a year ago.
Profit after tax decreased 5% to SEK 2.2 billion from SEK 2.4 billion, and diluted earnings per share fell to SEK 1.87 from SEK 1.98 a year ago.
STMicroelectronics declined 2.3% to €41.63 after the semiconductor company reported revenue and earnings slightly below expectations.
Revenue in the fourth quarter declined 3.2% to $4.3 billion from $4.4 billion, net income dropped 13.8% to $1.07 billion from $1.09 billion, and diluted earnings per share fell to $1.14 from $1.32 a year ago.
The company forecast first-quarter revenue of $3.6 billion, a decline of 15.2% from a year ago and 15.9% from the previous quarter.
Full-year 2024 revenue is expected to range between $15.9 billion and $16.9 billion, and gross margin percentage is estimated between the lows and mid-40s.
Capital expenditure in 2024 is expected to be around $2.5 billion.
- Arjun Pandit
- 25 Jan, 2024
- Mumbai
Asian markets generally advanced in Thursday's trading on the hopes that the People's Bank of China and Chinese government will soon announce more concrete policy measures to support financial markets.
In overnight trading, market indexes on Wall Street closed higher after a tech rally supported the rise of the S&P 500 index and the Nasdaq 100 index to record levels.
Electric vehicle components and electric display makers in Tokyo, Shanghai, and Seoul declined after Tesla reported weaker-than-expected earnings in the fourth quarter.
Moreover, Tesla guided a "notable decline in sales volume" in 2024 on global macroeconomic headwinds and rising competition from low-priced Chinese electric vehicle makers.
European markets also advanced following the rise in U.S. stocks, and tech stocks soared by as much as 5%.
Crude oil prices traded higher amid ongoing tensions in the Middle East and Red Sea, and merchant ships continued to avoid transporting through troubled waters.
Nikkei Struggled to Get Traction on BoJ Policy Shift Worries
The Nikkei 225 advanced 0.2% to 36,290.62 after falling as much as 0.2% in the morning session.
The Nikkei has been volatile over the last two days, hovering near a 34-year high on the basis of growing worries that the Bank of Japan is likely to end its ultra-loose monetary policy sooner than expected.
The Japanese yen edged higher near 147 against the U.S. dollar, and investors are awaiting the release of Tokyo inflation data on Friday.
Electric vehicle components and suppliers declined after Tesla reported weaker-than-expected earnings in the fourth quarter and guided a sharp decline in unit sales volume in 2024.
Nidec Corp. declined 3.7%, Disco Corp. jumped 1.7%, and Panasonic Holdings dropped 2.2%.
South Korea's 2023 GDP Growth Slowed
South Korea's gross domestic product growth was unchanged from the previous quarter, after government spending accelerated but consumer spending growth remained muted.
The gross domestic product in the fourth quarter increased by 0.6% from the previous quarter, matching the rate in the third and second quarters, the Bank of Korea reported Thursday.
On an annual basis, the economy expanded at a faster pace of 2.2% from the 1.4% rate increase in the previous quarter.
Government spending accelerated to 0.4% from 0.2% in the previous quarter, and consumer spending edged up 0.2% from unchanged.
Export growth slowed to 2.6% from 3.4% in the previous quarter, and import growth eased to 1% from 2.3%, respectively.
For all of 2023, the economy expanded by 1.4%, and economic growth slowed for the second year in a row, after expanding at 2.2% in 2022 and 4.3% in 2021.
In stock trading, the KOSPI index decreased 0.07% to 2,468.0 and extended this year's loss to 7.5%.
China Indexes Extended Rally to Third Day
China stocks rebounded for the third day in a row after investors put more faith in the recently announced stimulus measures.
The CSI index advanced 1.8% to 3,334.94, and the Hang Seng index soared 1.9% to 16,193.49 and extended the 3-day gain to over 5%.
The People's Bank of China lowered its bank reserve requirement for the first time in four months, injecting as much as $140 billion of liquidity into its financial system.
Moreover, the central bank also permitted banks to accept commercial real estate as collateral to seek funding to repay existing debts.
The move was widely welcomed by investors, but the measures are likely to fall short of reviving consumer confidence and market sentiment in the long term.
Alibaba Group advanced 0.8%, Tencent jumped 2.8%, Baidu advanced 3.2%, China Resources Land added 1.4%, and Longfor Group advanced 4.8%.
Li Auto, Xpeng, and Nio declined between 1.5% and 4.9% after Tesla earnings were below market expectations and the electric vehicle maker guided a decline in sales volume in 2024.
India Indexes Faced Headwinds After Mixed Quarterly Results
Stocks in Mumbai edged lower, and investors reviewed a flood of corporate earnings results.
The Nifty and the Sensex indexes traded down, and banks were in focus after Canara Bank, Bank of Baroda, and Indian Bank reported strong quarterly results.
Tech Mahindra dropped following the decline in revenue and profit, and Bajaj Auto faced headwinds from the persistent weakness in export sales growth.
The Sensex index decreased 287.67 points to 70,772.64, and the Nifty index fell 63.20 points to 21,390.75.
On the Mumbai stock exchange, 156 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds increased to 7.17%, and the Indian rupee edged lower to ₹83.13 against the U.S. dollar.
- Arun Goswami
- 24 Jan, 2024
- Mumbai
Stocks in Mumbai edged lower, and investors reviewed a flood or corporate earnings results.
The Sensex index decreased 287.67 points to 70,772.64, and the Nifty index fell 63.20 points to 21,390.75.
On the Mumbai stock exchange, 134 stocks traded at their 52-week highs and 8 stocks traded at their 52-week lows.
Tata Steel increased 3.7% to ₹134.90 after the company swung to a profit in its latest quarter.
Consolidated revenue in the December quarter decreased 3.1% to 55,311.9 crore, and the company swung to a profit of 513.4 crore from a loss of 2,223.5 crore a year ago.
Dalmia Bharat gained 2.8% to ₹2,168.55 after the company reported quarterly results.
Revenue in the December quarter rose 7% to ₹3,600 crore, and net profit advanced 29% to 263 crore from a year ago.
CEAT Ltd. jumped 4.5% to ₹2,880.10 after the company reported a surge in revenue and profit in its latest quarter.
Revenue in the December quarter rose 8.6% to ₹2,963.1 crore, and net income soared five-fold to ₹181.5 crore from a year ago.
Indian Oil Corporation advanced 3.8% to ₹144.20 after the company reported a sharp jump in quarterly earnings.
Net income in the December quarter soared 12-fold to ₹9,030 crore from ₹773 crore in the corresponding period a year ago.
Bajaj Auto added 2% to ₹7,360.0 after the company reported positive quarterly results.
Revenue in the December quarter increased by 30% to ₹12,165 crore, and net income advanced by 38% to ₹2,032 crore a year ago.
Tech Mahindra declined 4.5% to ₹1,349.10 after the company reported weaker-than-expected quarterly results.
Revenue in the December quarter decreased 4.6% to ₹13,101 crore, and net income plunged 60.6% to ₹510.4 crore from a year ago.
Indian Bank gained 3.3% to ₹455.0 after the company reported a surge in profit and revenue in its latest quarter.
Revenue in the December quarter rose 18.8% to ₹16,099 crore, and profit after-tax surged 52% to ₹2,119 crore from ₹1,396 crore a year ago.
Canara Bank added 1.1% to ₹459.60, and the company reported a double-digit increase in revenue and earnings.
Total net income in the December quarter rose 9.5% to ₹9,417 crore, and after-tax profit jumped 26.9% to ₹3,656 crore from a year ago.
Bank of Baroda added 0.02% to ₹228.55 after the company raised ₹5,000 crore through the sale of 10-year infrastructure bonds paying an interest rate of 7.57%.