- Arjun Pandit
- 15 Sep, 2023
- Mumbai
Market indexes in Asia traded higher and China's economic data showed improving monthly data.
China's retail sales and industrial output rose more than expected in August, but the economy is struggling to find its traction.
New home prices in 70 large and medium cities in China declined 0.3% in August from the previous month, following a 0.2% decline in July, the National Bureau of Statistics showed Friday.
Price increases were seen only 18 cities in August, compared to 20 in August.
The People's Bank of China on Thursday that it plans to cut reserve requirement ratio for all banks by 25 basis points from Friday for all banks, except banks that have lowered the reserve ratio to 5%.
But despite the supporting measures by the government and the central bank, the property market slump is likely to persist for another year on weak sentiment among buyers.
SoftBank Group Corp increased 2% to ¥6,718.0 after the company successfully completed initial public offering of Arm in New York and raised $4.9 billion.
Arm sold 95.5 million shares at $51 a share, near the top end of its pricing range, and the stock closed up 25% to $61.
China Retail Sales and Industrial Output Expanded
China's retail sales and industrial output expanded at a faster pace after the government stepped up stimulus measures.
China's retail sales growth accelerated in August to a 3-month high of 4.6% from a year ago after increasing at a 2.5% in the previous month, the National Bureau of Statistics reported Friday.
Industrial production rose 4.5% in August following the 3.7% rise in July, the government statistics agency reported Friday in a separate report.
The European Central Bank lifted its key lending rates for the 10th time in a row in over a year and the central bank said inflation is still too high and for too long.
But the statement released by the central bank also noted that policymakers may be nearing its aggressive rate hike campaign and are reviewing the cumulative impact of 425 basis points rate hikes.
Main deposit facility rate was revised higher by 25 basis points to record high 4.0% from -0.5% in June 2022,
Main refinancing operation and marginal lending facility rates were revised higher by 25 basis points to 4.5% and 4.75% respectively.
Asia Market Indexes
In Friday's trading, the Nikkei index increased 1.1% to 33,533.09, the Shanghai SSE Composite index decreased 0.3% to 3,117.34, the Hang Seng index added 1% to 18,226.58 and the KOSPI index increased 1.1% to 2,601.28.
Despite the tough talks from the finance ministry officials, the Japanese yen continued to drift lower and traded at 147.70 against the U.S. dollar in Tokyo.
Investors bid up stocks in Mumbai and bond yield edged lower after the release of inflation reports this week.
Popular market indexes edged higher to new records following the easing of wholesale price consumer price inflation, but rising oil prices in international markets kept gains in check.
Market sentiment was positive and the Sensex and the Nifty indexes extended gains for the third week in a row after falling in previous six weeks in a row.
For the week, the Nikkei index jumped 2.8%, the SSE Composite index edged lower 0.06%, the Hang Seng index added 1.6% and the KOSPI index added 2.1%.
In August, the Nikkei index fell 0.6%, the SSE Composite index declined 5.2%, the Hang Seng index fell 8.2% and the KOSPI index decreased 4.2%.
- Barry Adams
- 14 Sep, 2023
- New York City
Broad rally on Wall Street gathered steam after Arm successfully priced its initial public offering and investors digested news on the economy.
The UK-based chip design company Arm priced its initial public offering at the top end of its pricing range between $47 and $51.
Arm sold 95.5 million shares and raised $4.9 billion at $51 billion market capitalization.
August retail sales rose suggesting that consumer spending is resilient despite higher prices and higher rates and wholesale prices accelerated but not fast enough so that economy slows too fast.
Investors have been divided over the future direction and terminal level of interest rate as economy keeps sending mixed signals.
Despite elevated prices and borrowing costs, consumer spending is resilient and housing market continues to report transactions levels that are above Covid-19 levels.
The Federal Reserve is expected pause rate hike after it policy meeting next week, but the European Central Bank lifted its policy rates to record levels after hiking rates by 25 basis points.
However, the ECB noted that inflation is easing and policymakers may be ready to pause rates after lifting rates for ten times in a row.
Retail Sales Inched Higher In August
Retail sales increased 0.6% from the previous month in August, faster increase than the downwardly revised 0.5% rise in July.
Retail sales are adjusted for seasonal factors but not for prices.
Despite higher prices and rising costs, consumer spending continues to rise supported by higher wages.
Sales at gasoline stations increased 6.2% after gasoline prices rose 10%.
Retail sales excluding fuel, food services, automobiles and building materials, increased 0.1% in August.
On a yearly basis, retail sales to 2.47% in August, slower than 2.67% in the previous month.
Producer Prices Index Accelerated In August
Producer price index in August rose 0.7% from the previous month, faster than 0.4% in July, the U.S. Bureau of Labor Statistics reported Thursday.
Goods prices increased 2%, driven by a 10.5% rise in energy costs and prices for services edged up 0.2%, largely because of rising transportation and warehousing costs by 1.4%.
Core wholesale inflation, which excludes energy and food, rose 0.2%, following a rise of 0.4% in July.
From a year ago, producer price index increased a four-month high of 1.6% and core index rose 2.2%, the weakest level since January 2021.
U.S. Indexes & Yields
The S&P 500 index inched up 0.4% to 4,483.21 and the Nasdaq Composite added 0.2% to 13,834.97.
The yield on 2-year Treasury notes hovered near 5.01%, 10-year Treasury notes inched slightly higher to 4.28% and 30-year Treasury bonds edged up to 4.38%.
Crude oil increased $1.13 to $89.65 a barrel and natural gas prices increased 10 cents to $2.78 a thermal unit.
The dollar index edged higher to 105.22, the level last seen in March but higher than the low of 99.85 on July 13.
Last week, the dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally Friday but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates.
U.S. Stock Movers
AMC Entertainment Holdings Inc gained 3.3% to $8.52 after the company said it completed said it completed secondary stock offering announced few weeks ago.
AMC raised $325.5 million through the sale of 40 million shares at an average price of $8.14.
Yum China Holdings Inc 5.2% to $56.0 after the company forecasted 20,000 restaurants in China by 2026 at a gathering of investors.
Semtech Corp jumped 4.6% to $23.90 after the company reported better-than-expected quarterly results and current quarter forecast.
The company estimated fiscal third quarter revenue in the range between $190 million and $210 million and loss per share between 9 cents and 22 cents.
Energy stocks traded higher after crude oil traded at a 2023 high on supply worries after Saudi Arabia and Russia announced to extend voluntary production cuts till the end of 2023.
West Texas Intermediate crude oil price jumped to $89.98 and Brent crude advanced to $93.27 a barrel.
Chevron, ExxonMobil, Murphy Oil, Occidental Petroleum rose between 1% and 2%.
Delta Air Lines, Inc decreased 0.8% to $39.22 after the company joined other airlines and lowered its profit estimate citing higher operating and fuel costs.
The airline said third quarter adjusted earnings per share to fall between $1.86 and $2.05 compared to the previous estimate between $2.20 and $2.50.
The airline however raised its revenue growth estimate to be closer to its upper end of the range between 11% and 14%, because of the strong demand for transatlantic travel.
The company also reiterated its full-year adjusted earnings per share to fall between $6 and $7.
ECB Lifted Rates to Record High and Signaled May Pause
European markets traded sideways ahead of the rate decisions and inflation data.
The European Central Bank raised rates by 25 basis points for its three key lending services as widely expected.
The central bank policymakers lifted rates for the 10th time in a row and added inflation is likely to stay too high for too long.
After the increase, the ECB's main refinancing rate rose to a 22-year high to 4.5% and deposit rate to a new record high of 4.0%. Marginal lending facility rate was revised higher by the same amount to 4.75%.
Despite multiple rate hikes by the central bank inflation has hovered near 5% and significantly ahead of the central bank's target rate of 2%.
The ECB has raised rates at the end of every policy meeting held since July and cumulatively increased 450 basis points since July 2022.
The ECB also revised higher its 2023 inflation projection to 5.6% and 3.2% for 2024, reflecting a rebound in energy prices.
The central bank also revised down its estimate of annual core inflation in 2023 to 5.1%, in 2024 to 2.9% and in 2025 to 2.2%.
The central bank also confirmed that its asset purchase program portfolio is declining at a "measured and predictable pace" and the bank is no longer reinvesting principal payments from maturing securities.
Europe Indexes & Yields
The DAX index increased 1.0% to 15,805.29, the CAC-40 index increased 1.2% to 7,308.67 and the FTSE 100 index inched up 1.85% to 7,673.08.
The yield on 10-year German bonds increased to 2.64%, French bonds traded higher to 3.19%, the UK gilts edged up to 4.33% and Italian bonds rose to 4.44%.
The euro edged lower to a three-month low to $1.076, the British pound to $1.246 and the U.S. dollar fetched 89.34 Swiss cents.
Brent crude decreased $1.76 to $93.64 a barrel and the Dutch TTF natural gas decreased €1.35 to €35.62 per MWh.
Europe Stock Movers
Air Liquide SA declined 0.4% to €163.66 and the company announced to invest €400 million to build 200 MW Normad'Hy electrolyzer.
Trainline Plc soared 11.2% to 275.40 pence after the online rail ticketing service provider announced a £50 million stock repurchase plan after reporting better-than-expected first-half results.
IG Group Holdings plc inched higher 1.4% to 677.0 pence after the online trading platform reported a marginal increase in its fiscal first quarter revenue.
LondonMetric Property plc decreased 0.9% to 173.60 pence after the company announced the sale of a portfolio of industrial estates to Hines for £40.5 million.
Nordex SE jumped 4.8% to €11.92 after the wind turbine maker won orders in Spain to supply and install 24 N163 turbines to the renewable energy company BayWa r.e.
Automakers across Europe declined after Beijing blasted the European Commission's investigation into Chinese subsidies to electric vehicle makers.
BMW, Renault, Volkswagen and Mercedes Benz declined between 2% and 3% on the worries of a Chinese retaliation against the European automakers.
ThyssenKrupp AG decreased 2.3% to €7.0 after the company said it plans to reorganize its businesses around key technologies that promote decarbonization.
- Scott Peters
- 14 Sep, 2023
- New York City
AMC Entertainment Holdings Inc gained 3.3% to $8.52 after the company said it completed secondary stock offering announced few weeks ago.
AMC raised $325.5 million through the sale of 40 million shares at an average price of $8.14.
Yum China Holdings Inc 5.2% to $56.0 after the company forecasted 20,000 restaurants in China by 2026 at a gathering of investors.
Semtech Corp jumped 4.6% to $23.90 after the company reported better-than-expected quarterly results and current quarter forecast.
The company estimated fiscal third quarter revenue in the range between $190 million and $210 million and loss per share between 9 cents and 22 cents.
Energy stocks traded higher after crude oil traded at a 2023 high on supply worries after Saudi Arabia and Russia announced to extend voluntary production cuts till the end of 2023.
West Texas Intermediate crude oil price jumped to $89.98 and Brent crude advanced to $93.27 a barrel.
Chevron, ExxonMobil, Murphy Oil, Occidental Petroleum rose between 1% and 2%.
Delta Air Lines, Inc decreased 0.8% to $39.22 after the company joined other airlines and lowered its profit estimate citing higher operating and fuel costs.
The airline said third quarter adjusted earnings per share to fall between $1.86 and $2.05 compared to the previous estimate between $2.20 and $2.50.
The airline however raised its revenue growth estimate to be closer to its upper end of the range between 11% and 14%, because of the strong demand for transatlantic travel.
The company also reiterated its full-year adjusted earnings per share to fall between $6 and $7.
- Barry Adams
- 14 Sep, 2023
- New York City
Market indexes on Wall Street rebounded after weak trading for three days in a row and investors reviewed retail sales and wholesale inflation data.
Investors have been divided over the future direction and terminal level of interest rate as economy keeps sending mixed signals.
Despite elevated prices and borrowing costs, consumer spending is resilient and housing market continues to report transactions levels that are above Covid-19 levels.
The Federal Reserve is expected pause rate hike after it policy meeting next week, but the European Central Bank lifted its policy rates to record levels after hiking rates by 25 basis points.
However, the ECB noted that inflation is easing and policymakers may be ready to pause rates after lifting rates for ten times in a row.
Retail Sales Inched Higher In August
Retail sales increased 0.6% from the previous month in August, faster increase than the downwardly revised 0.5% rise in July.
Retail sales are adjusted for seasonal factors but not for prices.
Despite higher prices and rising costs, consumer spending continue to rise supported by higher wages.
Sales at gasoline stations increased 6.2% after gasoline prices rose 10%.
Retail sales excluding fuel, food services, automobiles and building materials, increased 0.1% in August.
On a yearly basis, retail sales to 2.47% in August, slower than 2.67% in the previous month.
Producer Prices Index Accelerated In August
Producer price index in August rose 0.7% from the previous month, faster than 0.4% in July, the U.S. Bureau of Labor Statistics reported Thursday.
Goods prices increased 2%, driven by a 10.5% rise in energy costs and prices for services edged up 0.2%, largely because of rising transportation and warehousing costs by 1.4%.
Core wholesale inflation, which excludes energy and food, rose 0.2%, following a rise of 0.4% in July.
From a year ago, producer price index increased a four-month high of 1.6% and core index rose 2.2%, the weakest level since January 2021.
U.S. Indexes & Yields
The S&P 500 index inched up 0.4% to 4,483.21 and the Nasdaq Composite added 0.2% to 13,834.97.
The yield on 2-year Treasury notes hovered near 5.01%, 10-year Treasury notes inched slightly higher to 4.28% and 30-year Treasury bonds edged up to 4.38%.
Crude oil increased $1.13 to $89.65 a barrel and natural gas prices increased 10 cents to $2.78 a thermal unit.
The dollar index edged higher to 105.22, the level last seen in March but higher than the low of 99.85 on July 13.
Last week, the dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally Friday but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates.
U.S. Stock Movers
AMC Entertainment Holdings Inc gained 3.3% to $8.52 after the company said it completed said it completed secondary stock offering announced few weeks ago.
AMC raised $325.5 million through the sale of 40 million shares at an average price of $8.14.
Yum China Holdings Inc 5.2% to $56.0 after the company forecasted 20,000 restaurants in China by 2026 at a gathering of investors.
Semtech Corp jumped 4.6% to $23.90 after the company reported better-than-expected quarterly results and current quarter forecast.
The company estimated fiscal third quarter revenue in the range between $190 million and $210 million and loss per share between 9 cents and 22 cents.
Energy stocks traded higher after crude oil traded at a 2023 high on supply worries after Saudi Arabia and Russia announced to extend voluntary production cuts till the end of 2023.
West Texas Intermediate crude oil price jumped to $89.98 and Brent crude advanced to $93.27 a barrel.
Chevron, ExxonMobil, Murphy Oil, Occidental Petroleum rose between 1% and 2%.
Delta Air Lines, Inc decreased 0.8% to $39.22 after the company joined other airlines and lowered its profit estimate citing higher operating and fuel costs.
The airline said third quarter adjusted earnings per share to fall between $1.86 and $2.05 compared to the previous estimate between $2.20 and $2.50.
The airline however raised its revenue growth estimate to be closer to its upper end of the range between 11% and 14%, because of the strong demand for transatlantic travel.
The company also reiterated its full-year adjusted earnings per share to fall between $6 and $7.
- Inga Muller
- 14 Sep, 2023
- Frankfurt
European markets lacked direction and the European Central Bank lifted three key lending rates by 25 basis points, 10th rate increase in a row.
The DAX index decreased 0.06% to 15,646.76, the CAC-40 index increased 0.07% to 7,227.50 and the FTSE 100 index inched up 0.7% to 7,575.60.
Air Liquide SA declined 0.4% to €163.66 and the company announced to invest €400 million to build 200 MW Normad'Hy electrolyzer.
Trainline Plc soared 11.2% to 275.40 pence after the online rail ticketing service provider announced a £50 million stock repurchase plan after reporting better-than-expected first-half results.
IG Group Holdings plc inched higher 1.4% to 677.0 pence after the online trading platform reported a marginal increase in its fiscal first quarter revenue.
LondonMetric Property plc decreased 0.9% to 173.60 pence after the company announced the sale of a portfolio of industrial estates to Hines for £40.5 million.
Nordex SE jumped 4.8% to €11.92 after the wind turbine maker won orders in Spain to supply and install 24 N163 turbines to the renewable energy company BayWa r.e.
Automakers across Europe declined after Beijing blasted the European Commission's investigation into Chinese subsidies to electric vehicle makers.
BMW, Renault, Volkswagen and Mercedes Benz declined between 2% and 3% on the worries of a Chinese retaliation against the European automakers.
ThyssenKrupp AG decreased 2.3% to €7.0 after the company said it plans to reorganize its businesses around key technologies that promote decarbonization.
- Bridgette Randall
- 14 Sep, 2023
- New York City
European markets traded sideways ahead of the rate decisions and inflation data.
The European Central Bank raised rates by 25 basis points for its three key lending services as widely expected.
The central bank policymakers lifted rates for the 10th time in a row and added inflation is likely to stay too high for too long.
After the increase, the ECB's main refinancing rate rose to a 22-year high to 4.5% and deposit rate to a new record high of 4.0%. Marginal lending facility rate was revised higher by the same amount to 4.75%.
Despite multiple rate hikes by the central bank inflation has hovered near 5% and significantly ahead of the central bank's target rate of 2%.
The ECB has raised rates at the end of every policy meeting held since July and cumulatively increased 375 basis points since July 2022.
The ECB also revised higher its 2023 inflation projection to 5.6% and 3.2% for 2024, reflecting a rebound in energy prices.
The central bank also revised down its estimate of annual core inflation in 2023 to 5.1%, in 2024 to 2.9% and in 2025 to 2.2%.
The central bank also confirmed that its asset purchase program portfolio is declining at a "measured and predictable pace" and the bank is no longer reinvesting principal payments from maturing securities.
Europe Indexes & Yields
The DAX index decreased 0.06% to 15,646.76, the CAC-40 index increased 0.07% to 7,227.50 and the FTSE 100 index inched up 0.7% to 7,575.60.
The yield on 10-year German bonds increased to 2.64%, French bonds traded higher to 3.19%, the UK gilts edged up to 4.33% and Italian bonds rose to 4.44%.
The euro edged lower to a three-month low to $1.076, the British pound to $1.246 and the U.S. dollar fetched 89.34 Swiss cents.
Brent crude decreased $1.21 to $93.07 a barrel and the Dutch TTF natural gas decreased €0.85 to €35.97 per MWh.
Europe Stock Movers
Air Liquide SA declined 0.4% to €163.66 and the company announced to invest €400 million to build 200 MW Normad'Hy electrolyzer.
Trainline Plc soared 11.2% to 275.40 pence after the online rail ticketing service provider announced a £50 million stock repurchase plan after reporting better-than-expected first-half results.
IG Group Holdings plc inched higher 1.4% to 677.0 pence after the online trading platform reported a marginal increase in its fiscal first quarter revenue.
LondonMetric Property plc decreased 0.9% to 173.60 pence after the company announced the sale of a portfolio of industrial estates to Hines for £40.5 million.
Nordex SE jumped 4.8% to €11.92 after the wind turbine maker won orders in Spain to supply and install 24 N163 turbines to the renewable energy company BayWa r.e.
Automakers across Europe declined after Beijing blasted the European Commission's investigation into Chinese subsidies to electric vehicle makers.
BMW, Renault, Volkswagen and Mercedes Benz declined between 2% and 3% on the worries of a Chinese retaliation against the European automakers.
ThyssenKrupp AG decreased 2.3% to €7.0 after the company said it plans to reorganize its businesses around key technologies that promote decarbonization.
- Barry Adams
- 13 Sep, 2023
- New York City
Market indexes on Wall Street traded higher after investors reviewed the latest inflation report.
Investors overlooked mixed signals from the August month inflation report after price rose at a faster pace month because of a surge in gasoline prices but prices for other products and services rose at a slower pace.
Attention on Wall Street now shifted to the wholesale inflation report Thursday and and retail sales data on Friday.
Housing stocks were in focus after weekly mortgage activities indicated weakening demand for mortgage refinancing and elevated mortgage rates put buyers and sellers on hold.
European markets were in holding pattern ahead of rate decisions on Thursday and markets in Japan and India advanced but in China remained under pressure for the second week in a row.
August CPI Report Sends Mixed Signals
Overall inflation accelerated for the second month in August to 3.7% from 3.2% in July, the U.S. Bureau of Labor Statistics reported Wednesday.
The inflation picked up following the increase in oil prices in the last two months and weaker comparison from the previous year and cost of transportation services picked up in the month.
Core inflation, which excludes energy and food, slowed for the fifth month in a row to 4.3% from a year ago and rose 0.3% from the previous month.
The inflation data measured by the government understates the price increases faced my most urban families with children. The government data vastly understates housing price inflation and cost of shelter in most urban cities across the nation.
Overall inflation faced my most families, when including home price inflation, could run into upper double digits.
The yield on U.S. Treasury bonds and notes were nearly unchanged after the release of consumer price inflation data and focus shifted to wholesale price inflation data scheduled to be released on Thursday.
Despite multiple interest rate hikes over the last sixteen months, inflation has cooled largely because of base effect and rate of price increases has stayed above the Fed's preferred target range of 2%.
Mortgage Applications Drop to 25-year Low
Mortgage applications decreased 0.8% in the week ending September 8, 2023, following a 2.9% drop in the previous week, and reaching a new low since December 1996, the Mortgage Bankers Association data showed.
Mortgage refinance applications decreased 5.4% while for a new home purchase rose 1.3%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $726,200 or less edged up 6 basis points to 7.27%, the level not seen since December 2000.
"Given how high rates are right now, there continues to be minimal refinance activity and a reduced incentive for homeowners to sell and buy a new home at a higher rate,” said Joel Kan, MBA's Vice President and Deputy Chief Economist.
U.S. Indexes & Yields
The S&P 500 index inched up 0.2% to 4,472.03 and the Nasdaq Composite added 0.3% to 13,809.52.
The yield on 2-year Treasury notes hovered near 5.01%, 10-year Treasury notes inched slightly higher to 4.28% and 30-year Treasury bonds edged down to 4.37%.
Crude oil increased $0.29 to $89.12 a barrel and natural gas prices increased 0.05 cent to $2.69 a thermal unit.
The dollar index edged lower to 104.62 mark and hovered near the 105 mark reached last week but higher than the low of 99.85 on July 13.
Last week, the dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally Friday but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates.
U.S. Stock Movers
American Airlines Group Inc declined 4.5% to $13.42 after the international carrier said higher crude oil prices are expected to hurt quarterly profit.
The airline estimated third quarter adjusted earnings per share between 20 cents and 30 cents, citing higher fuel prices and a new compensation terms with pilot unions.
Spirit Airlines Inc dropped 3.3% to $16.70 after the discount carrier lowered its third quarter revenue estimate and operating margin of as much as -15.5% from the previous estimate of between -5.5% and -7.5%.
Moderna Inc increased 5.1% to $110.82 after the Center for Disease Control and Prevention recommended new Covid 19 vaccine for all Americans older than 6 months and older.
European Markets Hold Ahead of Rate Decisions
Stock markets in Europe traded down after weak regional economic data added to investor anxieties ahead of interest rate decisions on Thursday.
Popular indexes in Frankfurt, London and Paris eased lower and the euro dropped to a three-month low ahead of the widely anticipated 25 basis points rate hike by the European Central Bank.
Euro Area Industrial Production Declined In July
Industrial output in the Euro Are declined 1.1% from the previous month in July, Eurostat reported Wednesday.
The weakness in durable goods production overshadowed the increase in energy production and the rebound in intermediate goods and non-durable goods output.
Industrial production declined 2.2% in July, and fell for the fifth month in a row and fell six months in the last nine months.
UK GDP Shrank In July
The U.K. economy shrank at the fastest pace in seven months in July, the Office for National Statistics reported Wednesday.
Weakness in the service sector of 0.5% was the main contributor to the decline in overall activities, driving the weakness in healthcare and computer programming related activities.
GDP decreased 0.5% from the previous month reversing the gain of 0.5% in June.
For the three months to July, GDP expanded 0.2%.
Europe Indexes & Yields
The DAX index decreased 0.5% to 15,663.17, the CAC-40 index eased 0.1% to 7,269.66 and the FTSE 100 index inched down 0.02% to 7,525.99.
The yield on 10-year German bonds increased to 2.68%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.41% and Italian bonds rose to 4.47%.
The euro edged lower to a three-month low to $1.071, the British pound to $1.243 and the U.S. dollar fetched 89.25 Swiss cents.
Brent crude decreased $0.24 to $92.36 a barrel and the Dutch TTF natural gas decreased €2.48 to €37.18 per MWh.
Europe Stock Movers
Inditex SA decreased 2.4% to €35.05 despite the parent of Zara reporting a 40% jump in profit in the first-half.
BP Plc decreased 1.2% to 516.30 pence and chief executive Bernard Looney resigned over personal relationships with colleagues.
Renault SA advanced 1.9% to €37.43 and the European Commission launched an investigation into subsidies received by electric vehicle makers in China.
Europe is "Open to competition but not for a race to the bottom," said European Commission President Ursula von der Leyen.
Hunting Plc jumped 4.4% to 270.50 pence after the engineering company reiterated its fiscal 2023 and 2024 outlook and forecasted growth for the rest of the decade.
Aviva Plc rose 2.9% to 387.20 pence after the British insurance company said it plans to exit from its Singlife joint venture.
Aviva plans to sell its 25.9% stake in Singapore Life Holdings and two debt securities to Japan based Sumitomo Life for £800 million.
Nikkei Extended 4-day Rally, China Indexes Struggled
Stocks in Asia traded mixed after the benchmark index in Tokyo advanced nearly 1% and in India traded hear record highs.
The Nikkei index in Tokyo advanced as investors piled into banks on the hopes that the Bank of Japan will soon shift its yield curve management and close yield gap with other advanced economies.
In Tuesday's trading. the yield on 20-year and 30-year Japanese Government Bonds rose as high as 1.47% and 1.725% respectively, highs not seen in nine years.
The yield on newly issued 10-year Japanese Government Bond rose to 0.72%, a level not seen since 2014 after the Bank of Japan Governor signaled tolerance for higher rates last week.
In economic news, Japan's producer price index, a measure of wholesale price inflation, declined for the eighth month in a row.
Producer price index in Japan rose 3.2% from a year ago in August, slowing from a downwardly revised 3.4% increase in July and dropping to the lowest level since March 2021.
Market indexes in China lacked direction after indexes declined for five days in a row in Hong Kong.
The Hang Seng index traded as high as 1% in earlier trading before reversing the direction on the hopes that the recent restriction of new public offering by the Chinese regulators may lift market indexes higher.
The number of new listings in September have fallen to 8 from 37 in July and 33 in June, according to data available from Post, Bloomberg and KPMG.
The new issue market in A-shares on Chinese exchanges raised about 30% less in the first half compared to last year, despite more companies completing public offering.
Asia Market Indexes
In Wednesday's trading, the Nikkei index increased 0.95% to 32,776.37, the Shanghai SSE Composite index jumped 0.2% to 3,137.06, the Hang Seng index declined 0.2% to 17,992.98 and the KOSPI index decreased 0.8% to 2,536.58
Stocks in Mumbai lacked direction and popular market indexes hovered near record highs.
Consumer price inflation in August eased to 6.83% in August from 7.44% in July, the MOSPI reported Wednesday.
The Sensex index decreased 18.16 points to 67,202.98 and the Nifty index fell 9.40 points to 19,986.30.
On the Mumbai stock exchange, 83 stocks traded at their 52-week highs and 14 traded at their 52-week lows.
In August, the Nikkei index fell 0.6%, the SSE Composite index declined 5.2%, the Hang Seng index fell 8.2% and the KOSPI index decreased 4.2%.
- Scott Peters
- 12 Sep, 2023
- New York City
WestRock agreed to merge with Smurfit Kappa and form one of the largest packaging companies in the world.
Smurfit WestRock, the newly formed holding company will be headquartered in Dublin, Ireland and will be listed on the London Stock Exchange and the New York Stock Exchange.
WestRock stockholders will receive one Smurfit WestRock share and $5 cash and Smurfit Kappa shareholders will receive one share of the newly formed company.
Smurfit Kappa shareholders will own 50.4% of the newly merged company.
The combined packaging company will have about $34 billion in annual sales with about 65% of the revenue located in the Americas.
WestRock jumped 7.7% to $36.75 and Smurfit Kappa Group Plc declined 8.0% in London trading to 2,824.0 pence.
Smurfit Kappa has regional headquarters in Amsterdam, Holland and Miami, Florida.
- Brian Turner
- 13 Sep, 2023
- New York City
Overall inflation accelerated for the second month in August to 3.7% from 3.2% in July, the U.S. Bureau of Labor Statistics reported Wednesday.
The inflation picked up following the increase in oil prices in the last two months and weaker comparison from the previous year and cost of transportation services picked up in the month.
Core inflation, which excludes energy and food prices, slowed for the fifth month in a row to 4.3% from a year ago and rose 0.3% from the previous month.
Higher gas prices dominated the overall price increases but core inflation rate rose at the slowest pace in two years, but still faster than the Fed's target of 2%.
On a monthly basis, overall inflation rose 0.6%, the largest increase in more than a year after gasoline prices jumped 10.6% from the previous month.
Gasoline prices at pump stations have at least stabilized in the last two weeks and the AAA said gasoline prices averaged $3.84 on Tuesday, nearly unchanged from the previous month.
The inflation data measured by the government understates the price increases faced my most urban families with children. The government data vastly understates housing price inflation and cost of shelter in most urban cities across the nation.
Overall inflation faced my most families, when including home price inflation, could run into upper double digits.
The yield on U.S. Treasury bonds and notes were nearly unchanged after the release of consumer price inflation data and focus shifted to wholesale price inflation data scheduled to be released on Thursday.
Despite multiple interest rate hikes over the last sixteen months, inflation has cooled largely because of base effect and rate of price increases has stayed above the Fed's preferred target range of 2%.
- Scott Peters
- 13 Sep, 2023
- New York City
U.S. stocks and Treasury yields lacked direction after the consumer price inflation accelerated in August and core inflation eased on an annual basis.
The S&P 500 index inched up 0.2% to 4,472.03 and the Nasdaq Composite added 0.3% to 13,809.52.
American Airlines Group Inc declined 4.5% to $13.42 after the international carrier said higher crude oil prices are expected to hurt quarterly profit.
The airline estimated third quarter adjusted earnings per share between 20 cents and 30 cents, citing higher fuel prices and a new compensation terms with pilot unions.
Spirit Airlines Inc dropped 3.3% to $16.70 after the discount carrier lowered its third quarter operating margin of as much as -15.5% from the previous estimate of between -5.5% and -7.5%.
The discount airline lowered its third quarter revenue range between $1.245 billion and $1.255 billion from the previous estimate between $1.30 billion and $1.32 billion.
Moderna Inc increased 5.1% to $110.82 after the Center for Disease Control and Prevention recommended company's new Covid-19 vaccine for all Americans older than 6 months and older.
- Arjun Pandit
- 13 Sep, 2023
- New York City
Market indexes on Wall Street traded higher after investors reviewed the latest inflation report.
Overall inflation accelerated for the second month in August to 3.7% from 3.2% in July, the U.S. Bureau of Labor Statistics reported Wednesday.
The inflation picked up following the increase in oil prices in the last two months and weaker comparison from the previous year and cost of transportation services picked up in the month.
Core inflation, which exclude energy and food, slowed for the fifth month in a row to 4.3% from a year ago and rose 0.3% from the previous month.
The inflation data measured by the government understates the price increases faced my most urban families with children. The government data vastly understates housing price inflation and cost of shelter in most urban cities across the nation.
Overall inflation faced my most families, when including home price inflation, could run into upper double digits.
The yield on U.S. Treasury bonds and notes were nearly unchanged after the release of consumer price inflation data and focus shifted to wholesale price inflation data scheduled to be released on Thursday.
Despite multiple interest rate hikes over the last sixteen months, inflation has cooled largely because of base effect and rate of price increases has stayed above the Fed's preferred target range of 2%.
U.S. Indexes & Yields
The S&P 500 index inched up 0.2% to 4,472.03 and the Nasdaq Composite added 0.3% to 13,809.52.
The yield on 2-year Treasury notes hovered near 5.01%, 10-year Treasury notes inched slightly higher to 4.28% and 30-year Treasury bonds edged down to 4.37%.
Crude oil increased $0.29 to $89.12 a barrel and natural gas prices increased 0.05 cent to $2.69 a thermal unit.
The dollar index edged lower to 104.62 mark and hovered near the 105 mark reached last week but higher than the low of 99.85 on July 13.
Last week, the dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally Friday but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates.
U.S. Stock Movers
American Airlines Group Inc declined 4.5% to $13.42 after the international carrier said higher crude oil prices are expected to hurt quarterly profit.
The airline estimated third quarter adjusted earnings per share between 20 cents and 30 cents, citing higher fuel prices and a new compensation terms with pilot unions.
Spirit Airlines Inc dropped 3.3% to $16.70 after the discount carrier lowered its third quarter revenue estimate and operating margin of as much as -15.5% from the previous estimate of between -5.5% and -7.5%.
Moderna Inc increased 5.1% to $110.82 after the Center for Disease Control and Prevention recommended new Covid 19 vaccine for all Americans older than 6 months and older.
- Inga Muller
- 13 Sep, 2023
- Frankfurt
European markets lacked direction ahead of the rate decisions by the European Central Bank on Thursday.
The DAX index decreased 0.8% to 15,593.30, the CAC-40 index eased 0.1% to 7,269.66 and the FTSE 100 index inched down 0.4% to 7,499.80.
Inditex SA decreased 2.4% to €35.05 despite the parent of Zara reporting a 40% jump in profit in the first-half.
BP Plc decreased 1.2% to 516.30 pence and chief executive Bernard Looney resigned over personal relationships with colleagues.
Renault SA advanced 1.9% to €37.43 and the European Commission launched an investigation into subsidies received by electric vehicle makers in China.
Europe is "Open to competition but not for a race to the bottom," said European Commission President Ursula von der Leyen.
Hunting Plc jumped 4.4% to 270.50 pence after the engineering company reiterated its fiscal 2023 and 2024 outlook and forecasted growth for the rest of the decade.
Aviva Plc rose 2.9% to 387.20 pence after the British insurance company said it plans to exit from its Singlife joint venture.
Aviva plans to sell its 25.9% stake in Singapore Life Holdings and two debt securities to Japan based Sumitomo Life for £800 million.
- Bridgette Randall
- 13 Sep, 2023
- Frankfurt
Stock markets in Europe traded down after weak regional economic data added to investor anxieties ahead of interest rate decisions on Thursday.
Popular indexes in Frankfurt, London and Paris eased lower and the euro dropped to a three-month low ahead of the widely anticipated 25 basis points rate hike by the European Central Bank.
Euro Area Industrial Production Declined In July
Industrial output in the Euro Are declined 1.1% from the previous month in July, Eurostat reported Wednesday.
The weakness in durable goods production overshadowed the increase in energy production and the rebound in intermediate goods and non-durable goods output.
Industrial production declined 2.2% in July, and fell for the fifth month in a row and fell six months in the last nine months.
UK GDP Shrank In July
The U.K. economy shrank at the fastest pace in seven months in July, the Office for National Statistics reported Wednesday.
Weakness in the service sector of 0.5% was the main contributor to the decline in overall activities, driving the weakness in healthcare and computer programming related activities.
GDP decreased 0.5% from the previous month reversing the gain of 0.5% in June.
For the three months to July, GDP expanded 0.2%.
Europe Indexes & Yields
The DAX index decreased 0.8% to 15,593.30, the CAC-40 index eased 0.1% to 7,269.66 and the FTSE 100 index inched down 0.4% to 7,499.80.
The yield on 10-year German bonds increased to 2.68%, French bonds traded higher to 3.22%, the UK gilts edged up to 4.41% and Italian bonds rose to 4.47%.
The euro edged lower to a three-month low to $1.071, the British pound to $1.243 and the U.S. dollar fetched 89.25 Swiss cents.
Brent crude decreased $0.47 to $92.52 a barrel and the Dutch TTF natural gas decreased €0.78 to €35.48 per MWh.
Europe Stock Movers
Inditex SA decreased 2.4% to €35.05 despite the parent of Zara reporting a 40% jump in profit in the first-half.
BP Plc decreased 1.2% to 516.30 pence and chief executive Bernard Looney resigned over personal relationships with colleagues.
Renault SA advanced 1.9% to €37.43 and the European Commission launched an investigation into subsidies received by electric vehicle makers in China.
Europe is "Open to competition but not for a race to the bottom," said European Commission President Ursula von der Leyen.
Hunting Plc jumped 4.4% to 270.50 pence after the engineering company reiterated its fiscal 2023 and 2024 outlook and forecasted growth for the rest of the decade.
Aviva Plc rose 2.9% to 387.20 pence after the British insurance company said it plans to exit from its Singlife joint venture.
Aviva plans to sell its 25.9% stake in Singapore Life Holdings and two debt securities to Japan based Sumitomo Life for £800 million.
- Arjun Pandit
- 13 Sep, 2023
- New York City
Stocks in Asia traded mixed after the benchmark index in Tokyo advanced nearly 1% and in India traded hear record highs.
The Nikkei index in Tokyo advanced as investors piled into banks on the hopes that the Bank of Japan will soon shift its yield curve management and close yield gap with other advanced economies.
In Tuesday's trading. the yield on 20-year and 30-year Japanese Government Bonds rose as high as 1.47% and 1.725% respectively, highs not seen in nine years.
The yield on newly issued 10-year Japanese Government Bond rose to 0.72%, a level not seen since 2014 after the Bank of Japan Governor signaled tolerance for higher rates last week.
In economic news, Japan's producer price index, a measure of wholesale price inflation, declined for the eighth month in a row.
Producer price index in Japan rose 3.2% from a year ago in August, slowing from a downwardly revised 3.4% increase in July and dropping to the lowest level since March 2021.
Market indexes in China lacked direction after indexes declined for five days in a row in Hong Kong.
The Hang Seng index traded as high as 1% in earlier trading before reversing the direction on the hopes that the recent restriction of new public offering by the Chinese regulators may lift market indexes higher.
The number of new listings in September have fallen to 8 from 37 in July and 33 in June, according to data available from Post, Bloomberg and KPMG.
The new issue market in A-shares on Chinese exchanges raised about 30% less in the first half compared to last year, despite more companies completing public offering.
Asia Market Indexes
In Wednesday's trading, the Nikkei index increased 0.95% to 32,776.37, the Shanghai SSE Composite index jumped 0.2% to 3,137.06, the Hang Seng index declined 0.2% to 17,992.98 and the KOSPI index decreased 0.8% to 2,536.58
Stocks in Mumbai lacked direction and popular market indexes hovered near record highs.
Consumer price inflation in August eased to 6.83% in August from 7.44% in July, the MOSPI reported Wednesday.
The Sensex index decreased 18.16 points to 67,202.98 and the Nifty index fell 9.40 points to 19,986.30.
On the Mumbai stock exchange, 83 stocks traded at their 52-week highs and 14 traded at their 52-week lows.
In August, the Nikkei index fell 0.6%, the SSE Composite index declined 5.2%, the Hang Seng index fell 8.2% and the KOSPI index decreased 4.2%.
- Barry Adams
- 12 Sep, 2023
- New York City
Trading in tech stocks dominated market sentiment and popular indexes traded down after Oracle's quarterly results disappointed some investors.
Oracle hardware and software license sales fell short of market expectations and also the guidance for the current quarter put the market on alert for a possible weakness in corporate spending.
Moreover, nervous investors sold stocks ahead of two inflation reports and retail sales data later in the week.
Crude oil jumped to a new 10-month high on the supply worries and sustained demand despite the recent increases in prices.
Energy stocks led gainers in early trading, following the rise in crude oil prices after the OPEC estimated global crude oil demand to grow by 225 million barrels per day, but lower than 2.44 million barrels per day increase estimated in 2023.
Investors are awaiting consumer price inflation data on Wednesday and economists are expecting core inflation rate to hold steady but overall inflation may edge slightly lower in August
U.S. Indexes & Yields
The S&P 500 index traded down 0.6% to 4,461.09 and the Nasdaq Composite eased 1.04% to 13,773.61.
The yield on 2-year Treasury notes decreased to 5.01%, 10-year Treasury notes inched lower to 4.28% and 30-year Treasury bonds edged down to 4.37%.
Crude oil increased $1.51 to $88.86 a barrel and natural gas prices increased 0.06 cent to $2.67 a thermal unit.
The dollar index edged lower to 104.90 mark and hovered near the 105 mark reached last week but higher than the low of 99.85 on July 13.
Last week, the dollar index, which tracks the price of the U.S. dollar against major currencies, halted a five-day rally Friday but extended gains to the eight week in a row and rose to a six-month high on the expectations of higher interest rates.
U.S. Stock Movers
WestRock agreed to merge with Smurfit Kappa and form one of the largest packaging companies in the world.
Smurfit WestRock, the newly formed holding company will be headquartered in Dublin, Ireland and will be listed on the London Stock Exchange and the New York Stock Exchange.
WestRock stockholders will receive one Smurfit WestRock share and $5 cash and Smurfit Kappa shareholders will receive one share of the newly formed company.
Smurfit Kappa shareholders will own 50.4% of the newly merged company.
The combined packaging company will have about $34 billion in annual sales with about 65% of the revenue located in the Americas.
WestRock jumped 7.7% to $36.75 and Smurfit Kappa Group Plc declined 8.0% in London trading to 2,824.0 pence.
Oracle Corp dropped 9.2% to $126.71 after the database company reported weaker-than-expected revenue in the fiscal first quarter.
Revenue in the quarter was $12.45 billion and adjusted earnings per share was $1.19, both fell short of some analysts' expectations.
The company also guided lighter-than-expected revenue growth in the fiscal second quarter between 5% and 7% and adjusted earnings per share between $1.30 and $1.34.
Cloud services and license support segment revenue increased 13% from a year ago to $9.55 billion but the cloud license and on-premises license segment revenue decreased 10% to $809 million.
Hardware revenue fell 6% to $714 million.
Casey's General Stores Inc jumped 4% to $246.30 after the retail chain reported better-than-expected quarterly results.
Quarterly revenue increased to $3.87 billion and diluted earnings per share rose to$4.52.
European Markets Turn Lower Ahead of Rate Decisions
European markets traded mixed and investors awaited interest rate decisions from the European Central Bank and the U.S. inflation data.
Investors looked for bargains in cautious trading amid uncertainty about the interest rate policy and looming global economic slowdown.
German wholesale inflation declined for the fifth month in a row, the Federal Statistics Office or Destatis reported Tuesday.
Producer price index declined 2.7% in August from a year ago because of a 15.8% decline in mineral oil products after prices eased from elevated prices compared to the previous year.
Producer prices rose 0.2% from the previous month, reversing a 0.2% decline in July.
On a monthly basis, mineral oil products prices rose 6.9% in August.
The U.K. jobless rate rose to 4.3% in the three months to July from 4.2% in the previous three months, the Office for National Statistics reported Tuesday.
UK weekly average earnings excluding bonuses rose 7.8% from a year ago to £617 in the three months to July 2023, the Office for National Statistics reported Tuesday.
The weekly average wage growth rose by the same amount as in the previous period, matching the highest regular annual growth rate since comparable records began in 2001.
Finance and business services reported the largest increase of 9.5%, followed by the manufacturing sector with 8.1%, one of the largest annual regular growth rates for the manufacturing sector since 2001.
Europe Indexes & Yields
The DAX index decreased 0.5% to 15,715.33, the CAC-40 index eased 0.1% to 7,270.28 and the FTSE 100 index inched up 0.6% to 7,527.53.
In the previous week, the DAX declined 1.6%, the CAC 40 fell 2.0% and the FTSE index dropped 0.3%.
The yield on 10-year German bonds increased to 2.63%, French bonds traded lower to 3.17%, the UK gilts edged up to 4.43% and Italian bonds rose to 4.38%.
The euro edged lower to $1.071, the British pound to $1.246 and the U.S. dollar fetched 89.19 Swiss cents.
Brent crude increased $1.21 to $92.21 a barrel and the Dutch TTF natural gas decreased €0.58 to €35.26 per MWh.
Europe Stock Movers
Smurfit Kappa Group Plc declined 9.7% to 2,772.0 pence after the packaging company announced a merger deal with the U.S. based WestRock.
Vallourec SA increased 0.2% to €12.32 after the French geothermal company reiterated its operating earnings outlook for the full-year 2023.
SAP SE declined 2.9% to €125.20 after the U.S. rival Oracle reported weaker-than-expected software license and hardware revenue in the fiscal first quarter.
Associated British Foods plc soared 7.0% to 2,141.04 pence after the company raised its full-year profit estimate for the second time in four months.