- Bridgette Randall
- 07 Nov, 2023
- Frankfurt
Stock market indexes in Europe traded down after China reported mixed international trade data.
Market indexes in Frankfurt, Paris, and London edged lower after China's exports declined for the sixth month in a row, but imports unexpectedly increased.
German industrial production declined for the fourth month in a row, and industrial producer prices in the eurozone declined at a record pace in September.
China Exports and Trade Surplus Dropped
Exports declined in October by 6.4% to $274.3 billion, and imports rose 3.0% to $218.3 billion, the General Administration of Customs reported Tuesday.
Imports rose for the first time since February, suggesting that the Chinese government's plan to stimulate the economy is having a positive impact.
Sluggish exports dragged the trade surplus in October to $56.5 billion from $77.7 billion in September.
Exports declined to the U.S. by 8.2%, Japan by 13.0%, ASEAN by 15.1%, South Korea by 17%, and the European Union by 12.6%.
German Industrial Production Declined for 4th Consecutive Month In September
Germany's industrial production declined for the fourth month in a row, highlighting ongoing economic weakness in the Euro Area's largest economy.
Industrial production declined 1.4% in September from the previous month, following the downwardly revised 0.1% fall in August, Destatis reported Tuesday.
On an annual basis, industrial production declined 3.7% from a year ago.
The sharp fall of 5% from the previous month in automobile production led to the decline in the month, followed by a 4.4% decline in electrical equipment and a 9.2% fall in the pharmaceutical industry, offset by a 4.1% rise in mechanical engineering.
Outside the manufacturing industry, energy production fell by 1.7% in September, and construction production was unchanged from the previous month.
Record Decline In Eurozone Producer Prices In September
Industrial producer prices declined 12.4% from a year ago in the euro area in September, Eurostat reported Tuesday.
The measure of wholesale prices dropped at the fastest pace on record, driven by a 31.3% plunge in energy prices and 4.8% in intermediate goods.
Meanwhile, prices rose at a slower pace of 3.9% compared to 4.4% in August for capital goods, durable goods inflation eased to 4.3% from 4.7%, and non-durable consumer goods slowed to 5.5% from 6.6%.
Excluding energy, producer price inflation decelerated to 0.5% from a year ago in September, down from 1.0% in August.
On a monthly basis, producer prices rose by 0.5%, the second month of an increase in a row.
UK Home Prices Extended Sixth Month Decline In October
UK home prices continued to fall in October as buyers struggled with elevated home prices and surging mortgage rates.
The Halifax House Price Index fell 3.2% from a year ago in October, following a revised 4.5% in September, Halifax and the Bank of Scotland reported Tuesday.
On an annual basis, home prices declined in all regions across the UK, with the Southeast leading with a fall of 6.0% and London property prices easing by 4.6%.
On a monthly basis, home prices rose 1.1%, following a decline for six months in a row due to the lack of availability of homes for sale.
Europe Indexes and Yields
The DAX index decreased 0.3% to 15,092.93, the CAC-40 index fell 0.5% to 6,977.85, and the FTSE 100 index fell 0.1% to 7,409.80.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.29%, the UK gilts edged down to 4.30%, and Italian bonds inched higher to 4.52%.
The euro rebounded to $1.069, the British pound at $1.232, and the U.S. dollar at 89.99 Swiss cents.
Brent crude decreased $1.84 to $83.34 a barrel, and the Dutch TTF natural gas edged higher by €1.87 to €46.71 per MWh.
Europe Stock Movers
Energy and resource companies were in focus after China reported mixed international trade data and tensions in the Middle East receded.
BP plc fell 1.2% to 485.40 pence, Shell PLC dropped 1.5% to €30.79, and TotalEnergies SE eased 1.4% to €61.76.
UBS Group AG gained 3% CHF 22.54 after the Swiss banking group reported progress in trimming costs and stronger-than-expected client inflows.
Watches of Switzerland Group PLC jumped 8.2% to €6.55 after the luxury watch retailer reported improving sales in its fiscal second quarter, and the retailer set the target to double its sales and profit by fiscal year 2028.
Persimmon plc increased 4.6% to 1,132.0 pence after the UK-based home builder lifted its estimate of new home completions.
Associated British Foods plc soared 6.4% to 2,237.0 pence after the Primark owner reported a 5% increase in annual income and the food company declared a special dividend.
Engie SA increased 2.1% to €15.46 after the French energy company said operating earnings for the nine-month period rose 14.7% to €8.3 billion from €7.3 billion in the same period a year ago.
The company also revised its annual outlook.
- Barry Adams
- 06 Nov, 2023
- New York City
Market indexes on Wall Street turned lower, and bond yields extended the previous week's decline after interest rate uncertainties eased.
Benchmark indexes erased morning gains in Monday's trading, and the market mood turned to caution after three hours of trading, as investors took a breather after the best weekly performance last week in 2023.
The S&P 500 index and the Nasdaq Composite advanced 5% in the previous week, the best weekly gains since November 2022.
Investors returned to add stock exposure in the hopes that the Federal Reserve is done raising interest rates for now and may hold rates for the third time at the next and final rate-setting meeting on December 13.
Market sentiment was bolstered after the 10-year Treasury note yield trended lower from the 16-year high of 5% after expectations rose that the Federal Reserve would hold rates steady till the first two-day meeting of 2024 ending on January 31.
Last week, a softer increase in nonfarm payroll in October supported the Fed's case for a rate hike pause. further emboldening investors to increase stock exposure.
In Monday's trading, benchmark indexes advanced for the fifth day in a row on stable rates, improving earnings, and stronger-than-expected economic growth driven by resilient consumer spending and not-too-tight labor conditions, which are also supporting the rise in stock market indexes.
But worries about stretched valuations and the impact of a surge in interest rates on interest-sensitive sectors like real estate dragged the indexes lower.
The commercial real estate sector is taking a large hit since interest rates have surged from near zero to 5.5% in the last eighteen months.
Moreover, the residential real estate market is also facing tough headwinds after mortgage rates jumped to 15-year highs and existing home sales transactions in October dropped to the annual pace of 3.9 million, the level last seen in 2007-8 housing market crisis.
U.S. indexes and Yields
The S&P 500 index decreased 0.2% to 4,351.22, and the Nasdaq Composite declined 0.2% to 13,446.85.
The yield on 2-year Treasury notes increased to 4.88%, 10-year Treasury notes inched higher to 4.60%, and 30-year Treasury bonds edged down to 4.78%.
Crude oil increased $1.40 to $81.91 a barrel, and natural gas prices fell 25 cents to $3.25 a thermal unit.
Gold decreased $10.46 to $1,981.92 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.95.
U.S. Stock Movers
Citigroup added 0.1% to $42.31, and the bank is looking to trim as many as 10,000 jobs from its total payroll of 240,000.
The news was first reported by CNBC without naming sources.
Berkshire Hathaway Class B increased 0.6% to $353.99 after the reinsurance insurance-anchored diversified conglomerate reported a surge in quarterly profits.
Operating earnings in the third quarter increased 40% to $10.76 billion from $7.6 billion, driven by a sharp increase in its insurance business.
Insurance underwriting swung to a profit of $2.4 billion from a loss of $1.07 billion, and insurance investment income soared to $2.5 billion from $1.4 billion a year ago.
Investment income jumped after interest rates jumped in the twelve-month period to the end of the third quarter, after the Federal Reserve carried out its aggressive rate hike campaign between March 2022 and June 2023.
Total revenues increased to $93.2 billion from $76.9 billion, net loss attributable to shareholders increased to $12.7 billion from $2.7 billion, and diluted loss per Class A share increased to $8,824 from $1,907 a year ago.
Based on GAAP accounting, net income also reflected the quarterly unrealized investment losses of $29.8 billion compared to $13.5 billion in the corresponding quarter a year ago.
Cash and equivalent securities held by the company at the end of September jumped to $157.2 billion from $128.5 billion a year ago.
European Markets Halted 5-day Rally, Bond Yields Drifted Lower
European markets lacked direction in Monday's trading following a 5-day rally.
In cautious market sentiment, stocks drifted lower and bond yields continued to slide for the second week in a row after interest rate uncertainties eased following the rate hike pause in the U.S. and U.K.
Investors are struggling to recalibrate expectations in the face of a looming economic slowdown, tight labor market conditions, and rising interest rates driven by elevated inflation.
Inflation has been falling in the Euro Area, and consumer price inflation has steadily declined from a peak of 10.1% in November 2022 to 2.9% in October.
The European Central Bank has raised interest rates several times, but consumer inflation is still higher than the target rate of 2%. The recent decrease in inflation is due to lower energy prices and a higher base for the previous year.
Market indexes in Frankfurt, London, and Paris edged slightly lower, and investors reviewed updates on the UK's construction industry, German factory orders, and eurozone business activity.
German Factory Orders Advanced In September
German factory orders adjusted for seasonal factors, and the calendar unexpectedly rose 0.2% from the previous month in September, the Destatis reported Monday.
Factory orders fell 4.3% from a year ago.
August orders were downwardly revised to a 1.9% increase from the previous estimate of 3.9% following the revision of incorrect data in the manufacturing of electronic, optical, and computer products.
Domestic orders fell 5.9% and foreign orders were up 4.2%, after orders in the eurozone increased 6.2% and orders from the rest of the world rose 2.9%.
In other economic news, the HCOB Eurozone PMI compiled by S&P Global declined to 46.5 in October from 47.2 in September, the weakest reading since November 2020.
The purchasing managers' index highlighted different conditions in Spain and Italy.
The PMI for Spain in October was little changed at 50.0 from 50.1 in September, indicating stable conditions in the country.
The service PMI for Italy in October decreased to 47.7 from 49.9 in September, and the index contracted at the fastest pace in a year because of a decline in service output and activity.
The U.K. construction PMI rose to 45.6 in October from 45.0 in September, reflecting ongoing weakness in residential construction.
Home building declined for the eleventh month in a row, and civil construction activities declined at the sharpest pace since July 2020.
Europe Indexes and Yields
The DAX index decreased 0.3% to 15,135.95, the CAC-40 index fell 0.5% to 7,013.73, and the FTSE 100 index was flat at 7,417.76.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.29%, the UK gilts edged down to 4.33%, and Italian bonds inched higher to 4.52%.
The euro rebounded to $1.075, the British pound at $1.242, and the U.S. dollar at 89.61 Swiss cents.
Brent crude increased $0.96 to $85.85 a barrel, and the Dutch TTF natural gas edged lower by €3.23 to €44.83 per MWh.
Europe Stock Movers
Telecom Italia SpA declined 0.3% to €0.25 after the company agreed to sell its landline business to the U.S.-based private equity group KKR LP for €19 billion.
PostNL NV dropped 11% to €1.59 after the Dutch parcel delivery company reported a quarterly loss and forecasted annual profit to fall near the low end of its previous estimate.
Ryanair Holdings plc increased 6.6% to €16.21 after the discount airline forecasted a record annual profit and indicated its plan to pay a regular dividend.
Scottish Mortgage Investment Trust PLC declined 0.5% to 684.48 pence after the company reported a decline in net asset value in the first half of the fiscal year.
Prudential plc decreased 0.8% to 892.60 pence after the insurance company reported a slower pace of growth in the third quarter from the previous quarter.
Melrose Industries PLC rose 3.5% to 507.0 pence after the company's unit, GKN Aerospace, signed a new agreement with GE Aerospace.
- Scott Peters
- 06 Nov, 2023
- New York City
Bluegreen Vacation Holding Corp. soared 108.8% to $73.09 after the company agreed to be acquired by Hilton Grand Vacations Inc. for $75.0 per share in an all-cash transaction.
The transaction values the company at $1.5 billion, including net debt.
Hilton Grand Vacations Inc. declined 9.4% to $33.75.
Citigroup added 0.1% to $42.31, and the bank is looking to trim as many as 10,000 jobs from its total payroll of 240,000.
The news was first reported by CNBC without naming sources.
Berkshire Hathaway Class B increased 0.6% to $353.99 after the reinsurance-anchored diversified conglomerate reported a surge in quarterly profits.
Operating earnings in the third quarter increased 40% to $10.76 billion from $7.6 billion, driven by a sharp increase in its insurance business.
Insurance underwriting swung to a profit of $2.4 billion from a loss of $1.07 billion, and insurance investment income soared to $2.5 billion from $1.4 billion a year ago.
Investment income jumped after interest rates jumped in the twelve-month period to the end of the third quarter, after the Federal Reserve carried out its aggressive rate hike campaign between March 2022 and June 2023.
Total revenues increased to $93.2 billion from $76.9 billion, net loss attributable to shareholders increased to $12.7 billion from $2.7 billion, and diluted loss per Class A share increased to $8,824 from $1,907 a year ago.
Based on GAAP accounting, net income also reflected the quarterly unrealized investment losses of $29.8 billion compared to $13.5 billion in the corresponding quarter a year ago.
Cash and equivalent securities held by the company at the end of September jumped to $157.2 billion from $128.5 billion a year ago.
Dish Network Corp. dropped 20% to $4.39 after the communication company reported third-quarter financial results.
Revenue in the third quarter declined 9.5% to $3.7 billion from $4.1 billion, and the company swung to a net loss of $116.8 million from a profit of $429.6 million, and diluted earnings per share were a loss of 26 cents compared to 65 cents a year ago.
In the quarter, Pay TV subscribers fell by 64,000, and the loss of wireless subscribers accelerated, ending the quarter with 7.5 million retail wireless subscribers.
Retail wireless net subscribers decreased by approximately 225,000 in the third quarter, compared to a net increase of 1,000 in the year-ago quarter.
In addition, the company agreed to sell its wireless spectrum assets and about 120,000 wireless subscribers in the U.S. Virgin Islands and Puerto Rico to Liberty Latin America.
The sale of the assets and subscriber base was valued at $256 million, paid in cash and international roaming credits, and the transaction is expected to close in the first half of 2024.
The company announced the resignation of CEO Erik Carlson effective November 12, and Hamid Akhavan, the current CEO of EchoStar Corp., is expected to lead the company.
- Barry Adams
- 06 Nov, 2023
- New York City
Stocks on Wall Street edged higher, and bond yields drifted lower after interest rate uncertainties eased.
Benchmark indexes advanced in Monday's trading following stronger-than-expected earnings, and investors searched for bargains in recently beaten-down tech and financial sectors.
The S&P 500 index and the Nasdaq Composite advanced 5% in the previous week, the best weekly gains since November 2022.
Investors returned to add stock exposure in the hopes that the Federal Reserve is done raising interest rates for now and may hold rates for the third time at the next and final rate-setting meeting on December 13.
Market sentiment was bolstered after the 10-year Treasury note yield trended lower from the 16-year high of 5% after expectations rose that the Federal Reserve would hold rates steady till the first two-day meeting of 2024 ending on January 31.
Last week, a softer increase in nonfarm payroll in October supported the Fed's case for a rate hike pause. further emboldening investors to increase stock exposure.
Benchmark indexes advanced for the fifth day in a row on stable rates, improving earnings, and stronger-than-expected economic growth driven by resilient consumer spending and not-too-tight labor conditions, which are also supporting the rise in stock market indexes.
U.S. indexes and Yields
The S&P 500 index increased 0.2% to 4,295.13, and the Nasdaq Composite advanced 0.2% to 13,232.06.
The yield on 2-year Treasury notes increased to 4.88%, 10-year Treasury notes inched higher to 4.60%, and 30-year Treasury bonds edged down to 4.78%.
Crude oil increased $0.93 to $81.55 a barrel, and natural gas prices fell 16 cents to $3.43 a thermal unit.
Gold decreased $7.84 to $1,985.03 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.95.
U.S. Stock Movers
Citigroup added 0.1% to $42.31, and the bank is looking to trim as many as 10,000 jobs from its total payroll of 240,000.
The news was first reported by CNBC without naming sources.
Berkshire Hathaway Class B increased 0.6% to $353.99 after the reinsurance insurance-anchored diversified conglomerate reported a surge in quarterly profits.
Operating earnings in the third quarter increased 40% to $10.76 billion from $7.6 billion, driven by a sharp increase in its insurance business.
Insurance underwriting swung to a profit of $2.4 billion from a loss of $1.07 billion, and insurance investment income soared to $2.5 billion from $1.4 billion a year ago.
Investment income jumped after interest rates jumped in the twelve-month period to the end of the third quarter, after the Federal Reserve carried out its aggressive rate hike campaign between March 2022 and June 2023.
Total revenues increased to $93.2 billion from $76.9 billion, net loss attributable to shareholders increased to $12.7 billion from $2.7 billion, and diluted loss per Class A share increased to $8,824 from $1,907 a year ago.
Based on GAAP accounting, net income also reflected the quarterly unrealized investment losses of $29.8 billion compared to $13.5 billion in the corresponding quarter a year ago.
Cash and equivalent securities held by the company at the end of September jumped to $157.2 billion from $128.5 billion a year ago.
- Inga Muller
- 06 Nov, 2023
- Frankfurt
European stock markets halted a 5-day rally, bond yields drifted lower for the second week in a row, and the euro and the pound edged higher.
The DAX index decreased 0.3% to 15,149.54, the CAC-40 index fell 0.3% to 7,025.69, and the FTSE 100 index was flat at 7,417.97.
Telecom Italia SpA declined 0.3% to €0.25 after the company agreed to sell its landline business to the U.S.-based private equity group KKR LP for €19 billion.
PostNL NV dropped 11% to €1.59 after the Dutch parcel delivery company reported a quarterly loss and forecasted annual profit to fall near the low end of its previous estimate.
Ryanair Holdings plc increased 6.6% to €16.21 after the discount airline forecasted a record annual profit and indicated its plan to pay a regular dividend.
The discount carrier said its fares increased by 24% during the summer, and fares are likely to remain high for years because of limited capacity.
Europe’s largest airline by passenger numbers estimated a full-year after-tax profit to fall between €1.85 billion and €2.05 billion for its financial year ending in March, ahead of the previous record in 2018.
Scottish Mortgage Investment Trust PLC declined 0.5% to 684.48 pence after the company reported a decline in net asset value in the first half of the fiscal year.
Prudential plc decreased 0.8% to 892.60 pence after the insurance company reported a slower pace of growth in the third quarter from the previous quarter.
Melrose Industries PLC rose 3.5% to 507.0 pence after the company's unit, GKN Aerospace, signed a new agreement with GE Aerospace.
- Bridgette Randall
- 06 Nov, 2023
- Frankfurt
European markets lacked direction in Monday's trading following a 5-day rally.
In cautious market sentiment, stocks drifted lower and bond yields continued to slide for the second week in a row after interest rate uncertainties eased following the rate hike pause in the U.S. and U.K.
Investors are struggling to recalibrate expectations in the face of a looming economic slowdown, tight labor market conditions, and rising interest rates driven by elevated inflation.
Inflation has been falling in the Euro Area, and consumer price inflation has steadily declined from a peak of 10.1% in November 2022 to 2.9% in October.
The European Central Bank has raised interest rates several times, but consumer inflation is still higher than the target rate of 2%. The recent decrease in inflation is due to lower energy prices and a higher base for the previous year.
Market indexes in Frankfurt, London, and Paris edged slightly lower, and investors reviewed updates on the UK's construction industry, German factory orders, and eurozone business activity.
German Factory Orders Advanced In September
German factory orders adjusted for seasonal factors, and the calendar unexpectedly rose 0.2% from the previous month in September, the Destatis reported Monday.
Factory orders fell 4.3% from a year ago.
August orders were downwardly revised to a 1.9% increase from the previous estimate of 3.9% following the revision of incorrect data in the manufacturing of electronic, optical, and computer products.
Domestic orders fell 5.9% and foreign orders were up 4.2%, after orders in the eurozone increased 6.2% and orders from the rest of the world rose 2.9%.
In other economic news, the HCOB Eurozone PMI compiled by S&P Global declined to 46.5 in October from 47.2 in September, the weakest reading since November 2020.
The purchasing managers' index highlighted different conditions in Spain and Italy.
The PMI for Spain in October was little changed at 50.0 from 50.1 in September, indicating stable conditions in the country.
The service PMI for Italy in October decreased to 47.7 from 49.9 in September, and the index contracted at the fastest pace in a year because of a decline in service output and activity.
The U.K. construction PMI rose to 45.6 in October from 45.0 in September, reflecting ongoing weakness in residential construction.
Home building declined for the eleventh month in a row, and civil construction activities declined at the sharpest pace since July 2020.
Europe Indexes and Yields
The DAX index decreased 0.3% to 15,149.54, the CAC-40 index fell 0.3% to 7,025.69, and the FTSE 100 index was flat at 7,417.97.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.29%, the UK gilts edged down to 4.33%, and Italian bonds inched higher to 4.52%.
The euro rebounded to $1.075, the British pound at $1.242, and the U.S. dollar at 89.61 Swiss cents.
Brent crude increased $1.43 to $86.43 a barrel, and the Dutch TTF natural gas edged lower by €1.63 to €46.43 per MWh.
Europe Stock Movers
Telecom Italia SpA declined 0.3% to €0.25 after the company agreed to sell its landline business to the U.S.-based private equity group KKR LP for €19 billion.
PostNL NV dropped 11% to €1.59 after the Dutch parcel delivery company reported a quarterly loss and forecasted annual profit to fall near the low end of its previous estimate.
Ryanair Holdings plc increased 6.6% to €16.21 after the discount airline forecasted a record annual profit and indicated its plan to pay a regular dividend.
Scottish Mortgage Investment Trust PLC declined 0.5% to 684.48 pence after the company reported a decline in net asset value in the first half of the fiscal year.
Prudential plc decreased 0.8% to 892.60 pence after the insurance company reported a slower pace of growth in the third quarter from the previous quarter.
Melrose Industries PLC rose 3.5% to 507.0 pence after the company's unit, GKN Aerospace, signed a new agreement with GE Aerospace.