- Scott Peters
- 05 Jul, 2023
- New York City
Casino Guichard Perrachon SA traded sharply lower after two offers to inject capital in the troubled French retailer demanded sharp dilution for current shareholders and sacrifice from secured creditors.
Casino Guichard plunged 29.2% to €3.22 after the company disclosed two competing offers from two billionaires for equity recapitalization.
French telecommunication entrepreneur Xavier Niel led group, 3F, offered Є450 million in equity into the business but also demanded commitment of Є450 million from secured creditors.
The second offer led by Czech financier Daniel Kretinsky offered to inject Є1.35 billion in equity in the business.
Kretinsky controlled EPCG and Marc Ladreit de Lacharriere controlled Fimalac will provide the proposed equity and both are current shareholders in the company.
EPCG/Fimalac offered to inject Є860 million and anticipated Є290 million from secured creditors in equity investments and additional Є200 million through a rights offering.
Both proposals see value in the current real estates and proposed to extend Є553 million debt maturity by four more years.
The company said it plans to meet with representatives of creditors and the French Finance Ministry and court appointed observers.
The French retailer is also pursuing its own plan to sell non-core assets including businesses in Latin America but keep its money losing hypermarket business which is facing tough competition from a much larger competitor Carrefour SA.
On June 28, the company said for it to operate it needs 900 million in new equity capital and covert all of unsecured debt of Є3.5 billion into equity and convert at least between Є1.0 billion and Є1.5 billion of Є4.0 billion secured debt to equity as well.
Under both offers, existing shareholders will be sharply diluted and current shareholders' stake in the EPCG/Fimalac proposal will be reduced to 0.2% and in the 3F & Partners offer down to 0.03%.
Both plans may fall short of the company's need in reducing debt to meet its cash flow target set in its 2025 business plan that also anticipates the grocer reducing its net debt to EBITDA to 1.0.
According to restructuring plans the equity stake of 3F and partners will hold an equity stake of 57.19% and 50.10% in the plan proposed by EPGC and Fimalac.
Casino Guichard has been operating under a heavy debt load and the company's woes only worsened during the pandemic years.
The company recently sold its remaining 11.6% stake in Brazil-based retailer Assia for Є326 million, after accounting for taxes and transaction costs.
The retailer is also looking to sale or spinoff Group Exito, consisting its stores in Colombia, Uruguay and Argentina and the company said in a presentation to investors in November 2022 that it is on target to dispose of assets worth Є4.5 billion before the end of 2023.
- Brian Turner
- 05 Jul, 2023
- New York City
Factory orders in May increased for five of the last six months, driven by large ticket transportation orders, the U.S. Census Bureau reported Wednesday.
New orders for manufactured goods increased 0.3% to $578.0 billion, matching the rise in the previous month.
Durable goods orders increased 1.8%, after transportation orders rose 3.8%. Non-durable goods orders declined 1.2%.
Shipments for manufactured durable goods orders increased 1.8% following 0.6% increase in April.
Transportation equipment shipment increased 4..8% and nondurable goods orders shipments declined 1.2% following a 0.7% fall in April.
Unfilled orders for manufactured durable goods increased 0.8% in May and matched the rate in April.
Inventories of manufactured durable goods orders increased 0.2% following a 1.0% rise in April.
- Scott Peters
- 05 Jul, 2023
- New York City
The S&P 500 index traded down 0.4% to 4,438.49 and the Nasdaq Composite edged lower 0.3% to 13,776.85.
The yield on 2-year Treasury notes increased to 4.91%, 10-year Treasury notes inched higher to 3.86% and 30-year Treasury bonds edged up to 3.89%.
Electric vehicle makers were in focus for the second day this week after Tesla and Rivian reported production data.
Rivian Automotive Inc gained 4% to $20.29 and on Monday the company said vehicle deliveries in the June quarter surged 59% from a year ago to 12,640 units.
Tesla Inc edged slightly higher to $280.11 and extended Monday's gains of 5% after the company reported vehicle production in the June quarter increased 83% to about 477,000.
United Parcel Service, Inc declined 2.4% to $179.45 after talks with the labor union reached an impasse.
The current labor agreement between UPS and Teamster expires at the end of July.
On Wednesday, the Teamsters union said in a press release that UPS "walked away from table" but the company countered saying it had not walked away from negotiations and was hoping for the union to resume negotiations.
American Equity Investment Life Holding increased 1.0% to $52.30 after the company agreed to be acquired by Brookfield Reinsurance for $4.3 billion.
Wolfspeed Inc surged 13.2% to $64.26 after the company signed a multiyear agreement with Renesas to provide 150mm and 200mm silicon carbide wafers and epitaxial wafers for $2 billion.
Compared to conventional silicon power semiconductors, silicon carbide devices enable higher energy efficiency, greater power density and a lower system cost.
- Barry Adams
- 05 Jul, 2023
- New York City
Market averages traded lower as trading resumed in holiday-shortened week and investors awaited minutes of Fed's policy meeting.
Tech stocks traded lower after rallying for six weeks following optimism related to artificial intelligence fueled demand for semiconductor chips.
Minutes from the Fed's policy meeting ending on June 14 are scheduled to be released later in the day by the Federal Reserve.
Investors are looking for additional insights surrounding the decision to pause rate hike. Though the rate pause was widely invested, investors were surprised to learn that rates could rise as much as 50 basis points before the year's end.
Investors also digested service sector surveys data from China, the Euro Area and the UK.
Market indexes in Paris, Frankfurt and London edged down after the latest measures of the service sector showed a slower growth in the UK, the Euro Area and China but industrial activities in France and Spain were ahead of expectations.
Eurozone Services PMI decreased to 52.0 in June from 55.1 in May, according to a final survey update released by S&P Global. In addition, the service sector expanded in the UK but at a slower pace.
Any measure below 50 indicates contraction in growth and above shows expansion.
The private survey of China's service industry conducted by Caixin/S&P Global indicated a decline to 53.9 in June from 57.1 in May. The growth in the sector declined to the slowest pace since January.
Market indexes edged higher on Monday and built on solid gains in the first half and financial markets were closed on Tuesday.
The S&P 500 index jumped 15.9% in the first half, its best return in the period since 2019 and the Nasdaq Composite index advanced 32.7%, its best performance in four decades.
U.S. Indexes & Yields
The S&P 500 index traded down 0.4% to 4,438.49 and the Nasdaq Composite edged lower 0.3% to 13,776.85.
The yield on 2-year Treasury notes increased to 4.91%, 10-year Treasury notes inched higher to 3.86% and 30-year Treasury bonds edged up to 3.89%.
Crude oil decreased $0.07 to $71.22 a barrel and natural gas prices decreased 2 cents to $2.72 a thermal unit.
U.S. Stock Movers
Electric vehicle makers were in focus for the second day this week after Tesla and Rivian reported production data.
Rivian Automotive Inc gained 4% to $20.29 and on Monday the company said vehicle deliveries in the June quarter surged 59% from a year ago to 12,640 units.
Tesla Inc edged slightly higher to $280.11 and extended Monday's gains of 5% after the company reported vehicle production in the June quarter increased 83% to about 477,000.
United Parcel Service, Inc declined 2.4% to $179.45 after talks with the labor union reached an impasse.
The current labor agreement between UPS and Teamster expires at the end of July.
On Wednesday, the Teamsters union said in a press release that UPS "walked away from table" but the company countered saying it had not walked away from negotiations and was hoping for the union to resume negotiations.
American Equity Investment Life Holding increased 1.0% to $52.30 after the company agreed to be acquired by Brookfield Reinsurance for $4.3 billion.
- Bridgette Randall
- 05 Jul, 2023
- Frankfurt
European markets declined after economic growth worries resurfaced following a decline in services sector indicators in the Euro Area, UK and China.
The DAX index decreased 0.5% to 15,954.99, the CAC-40 index declined 0.6% to 7,322.75 and the FTSE 100 index decreased 0.5% to 7,481.25.
The yield on 10-year German Bunds inched higher to 2.41%, French bonds traded lower to 2.96%, the UK gilts edged up to 4.41% and Italian bonds decreased to 4.13%.
Evotec SE increased 3.4% to €20.93 after the German drug company said its unit has secured a second contract from the U.S. Department of Defense for $74 million.
Numis Corporation Plc increased 0.1% to 332.94 pence despite the UK-based investment bank warning of lower deal volume amid ongoing market weakness.
SIG Plc plunged 10.4% to 30.90 pence after the UK-based construction materials firm issued a profit warning.
Keller Group Plc soared 11.5% to 787.55 pence on the expectations of positive earnings. Earlier the geotechnical specialist contractor had indicated strong activities in the first half and forecasted record revenue in the period.
Impellam Group Plc jumped 6.6% to 730.30 pence after the UK-based staffing company said it is in a potential merger discussion with HeadFirst Global.
Casino Guichard plunged 29.2% to €3.22 after the company disclosed two competing offers for equity recapitalization.
Under both offers, existing shareholders will be sharply diluted and current shareholders stake in the EPCG/Fimalac proposal will be reduced to 0.2% and in the 3F & Partners offer down to 0.03%.
- Bridgette Randall
- 05 Jul, 2023
- Frankfurt
European markets traded lower and investors reviewed the latest indicators of the service sector.
Market indexes in Paris, Frankfurt and London edged down after the latest measures of the service sector showed a slower growth in the UK, the Euro Area and China but industrial activities in France and Spain were ahead of expectations.
Eurozone Services PMI decreased to 52.0 in June from 55.1 in May, according to a final survey update released by S&P Global. In addition, the service sector expanded in the UK but at a slower pace.
Any measure below 50 indicates contraction in growth and above shows expansion.
The HCOB Italy Services PMI fell to 52.2 in June from 54.0 in May and dropped to the lowest level in four months.
The HCOB Spain Composite PMI declined to 52.6 in June from 55.2 in May and declined for the third month in a row and fell to the slowest pace since January.
The service PMI slowed to 53.4 in June from 56.7 in May but the manufacturing sector deepened the contraction to 48..0 from 48.40 respectively.
The private survey of China's service industry conducted by Caixin/S&P Global indicated a decline to 53.9 in June from 57.1 in May. The growth in the sector declined to the slowest pace since January.
Eurozone Wholesale Inflation Turned Negative
The measure of wholesale price inflation turned negative for the first time in May since December 2020 after energy costs dropped 13.3% and intermediate goods prices fell 1.5%.
Producer price inflation in the Euro Are declined by 1.5% in May following a downwardly revised increase of 0.9% in April, the statistical office of the European Union reported Wednesday.
On a monthly basis, producer price inflation declined 1.9% in May, a fifth monthly decline in a row.
Europe Indexes & Yields
The DAX index decreased 0.5% to 15,954.99, the CAC-40 index declined 0.6% to 7,322.75 and the FTSE 100 index decreased 0.5% to 7,481.25.
The yield on 10-year German Bunds inched higher to 2.41%, French bonds traded lower to 2.96%, the UK gilts edged up to 4.41% and Italian bonds decreased to 4.13%.
The euro edged higher to $1.087, the British pound to $1.27 and the U.S. dollar fetched 89.85 Swiss cents
Brent crude decreased $0.11 to $76.13 a barrel and the Dutch TTF natural gas increased €0.39 to €35.18 per MWh.
Europe Stock Movers
Evotec SE increased 3.4% to €20.93 after the German drug company said its unit has secured a second contract from the U.S. Department of Defense for $74 million.
Numis Corporation Plc increased 0.1% to 332.94 pence despite the UK-based investment bank warning of lower deal volume amid ongoing market weakness.
SIG Plc plunged 10.4% to 30.90 pence after the UK-based construction materials firm issued a profit warning.
Keller Group Plc soared 11.5% to 787.55 pence on the expectations of positive earnings. Earlier the geotechnical specialist contractor had indicated strong activities in the first half and forecasted record revenue in the period.
Impellam Group Plc jumped 6.6% to 730.30 pence after the UK-based staffing company said it is in a potential merger discussion with HeadFirst Global.
- Bridgette Randall
- 04 Jul, 2023
- New York City
The DAX index decreased 0.3% to 16,042.66, the CAC-40 index declined 0.06% to 7,381.09 and the FTSE 100 index increased 0.1% to 7,537.54.
Mining and energy companies were among the leading decliners after commodities and energy prices remained under pressure on the demand worries linked to China.
Glencore, Antofagasta and Anglo American rose between 0.6% and 1.1% on the hopes that the People's Republic of China will announce new measures to revive the property sector.
Shell Plc, TotalEnergies, BP Plc, Eni SpA and Repsol traded volatile and in mixed trading and bounced around 0.5% band.
UK homebuilders were under pressure on the looming recession worries and slowdown in home sales amid the ongoing rate hikes.
Barratt Developments Plc fell as much as 0.4% and Taylor Wimpey Plc decreased 0.3%
Wizz Air Holdings Plc increased 2% to 2,853 pence after the deep discount airline reported a higher passenger traffic in June compared to a year ago.
Casino Guichard Perrachon SA soared 16% to €4.57 after the troubled French retailer received two equity investment offers.
The company received proposals from 3F Holding and from a group of investors EP Global Commerce and Fimalac, and details of the proposals will be made public after a meeting with creditors on July 5.
J Sainsbury's Plc decreased 2.0% to 269.0 pence despite the British retailer reported improved first quarter results and reiterated its full-year outlook.
Total retail sales excluding fuel in the first quarter ending on June 24 increased 9.2% and comparable sales rose 9.8%.
Grocery sales increased 11%, general merchandise sales jumped 3.1%, Argos retail sales advanced 5.1% but apparel sales declined 3.7%.
The retailer reiterated its forecast for fiscal year 2024 4 underlying profit before-tax of between £640 million and £700 million and generate at least £500 million of retail free cash flow.
Aegon NV rose 1.7% to €4.80 after the Dutch insurer said it has integrated its pension, life and non-life insurance, mortgage and banking activities with ASR.
- Bridgette Randall
- 04 Jul, 2023
- Frankfurt
European markets edged slightly lower in thin trading and investors digested a fresh batch of economic data in the region.
Spain's registered unemployed people remained below 3 million for 14th month in a row in June and Germany's trade surplus declined to a five-month low after exports fell to the U.S, UK and China.
Trading on European bourses was thin because of the July 4 Independence Day holiday in the U.S.
Crude oil traded near its recent lows on persistent demand growth worries following the uneven economic rebound in China after the end of Covid-19 restrictions.
The Reserve Bank of Australia held its cash rate at 4.1% following the policy meeting today after increasing rates by 25 basis points to in the previous meeting in June and increasing by a total of 400 basis points since May 2022.
Spain's Jobless Rate Declined
Spain's jobless rate fell by 1.8% or 50,268 people from the previous month in June to 2.69 million, the lowest level since September 2008, the Ministry of Labor and Social Economy reported Tuesday.
From a year ago, the number of people registered as jobless fell by 191,740 and the decline was widespread in all age groups and across all regions of the nation.
The registered unemployed people stayed below 3 million for the 14 month in a row.
The number of unemployed in services declined by 42,133, in industry by 4,888 and construction 1,688.
Across regions, the largest decline was registered in Andalusia by 8,780, Catalonia by 6,359 and Galicia by 5,410.
In the first half of 2023, 7.6 million job contracts have been signed, 2 million fewer than a year ago.
German Trade Surplus Falls to 5-month Low
Seasonally adjusted German trade surplus decreased to Є14.5 billion in May from downwardly revised surplus of Є16.5 billion in April and Є4.4 billion a year ago.
Trade surplus was the smallest since last December.
Exports declined 0.1% from the previous month to Є130.5 billion after sales to member states in the EU declined 1.5% to Є70.3 billion and rose 1.5% to Є60.5 billion.
On a yearly basis, exports declined 4% in May after falling 1.7% in April and imports dropped 10.6% after declining 11.2% respectively.
Most German exports went to the U.S. and sales decreased 3.6% to Є12.7 billion, fell 1.6% to Є8.6 billion to China and 5.8% to Є6.4 billion to the UK.
Overall imports increased 1.7% to Є116.1 billion after imports from the member states of the EU increased 3.5% to Є61.6 billion and from the non-member states decreased 0.3% to Є54.5 billion.
Most German imports came from the People's Republic of China and imports declined 2.7% to Є13.3 billion, followed by the United States and the UK.
Imports from the U.S. declined 5.7% to Є7.6 billion and from the UK fell 15.3% to Є3.3 billion.
Exports to the Russian Federation declined 7.4% from the previous month to Є0.7 billion and plunged 34.4% from a year ago after Russia invaded Ukraine.
Imports from Russia declined 17.3% to Є0.3 billion from the previous month and plunged 92.6% from a year ago.
Europe Indexes & Yields
The DAX index decreased 0.3% to 16,042.66, the CAC-40 index declined 0.06% to 7,381.09 and the FTSE 100 index increased 0.1% to 7,537.54.
The yield on 10-year German Bunds inched higher to 2.47%, French bonds traded lower to 3.02%, the UK gilts edged up to 4.44% and Italian bonds decreased to 4.22%.
The euro edged higher to $1.09, the British pound to $1.27 and the U.S. dollar fetched 89.56 Swiss cents
Brent crude increased $0.6 to $75.26 a barrel and the Dutch TTF natural gas increased €0.22 to €34.14 per MWh.
Europe Stock Movers
Mining and energy companies were among the leading decliners after commodities and energy prices remained under pressure on the demand worries linked to China.
Glencore, Antofagasta and Anglo American rose between 0.6% and 1.1% on the hopes that the People's Republic of China will announce new measures to revive the property sector.
Shell Plc, TotalEnergies, BP Plc, Eni SpA and Repsol traded volatile and in mixed trading and bounced around 0.5% band.
UK homebuilders were under pressure on the looming recession worries and slowdown in home sales amid the ongoing rate hikes.
Barratt Developments Plc fell as much as 0.4% and Taylor Wimpey Plc decreased 0.3%
Wizz Air Holdings Plc increased 2% to 2,853 pence after the deep discount airline reported a higher passenger traffic in June compared to a year ago.
Casino Guichard Perrachon SA soared 16% to €4.57 after the troubled French retailer received two equity investment offers.
J Sainsbury Plc decreased 2.0% to 269.0 pence despite the British retailer reported improved first quarter results and reiterated its full-year outlook.
Aegon NV rose 1.7% to €4.80 after the Dutch insurer said it has integrated its pension, life and non-life insurance, mortgage and banking activities with ASR.
- Barry Adams
- 03 Jul, 2023
- New York City
Stocks on Wall Street traded flat on the first day of trading in the second half and electric vehicle makers were in focus after Tesla and Rivian reported quarterly production data.
Market indexes showed little movement at the start of the second half after surging in the first half and regular trading hours ended at 1:00 p.m. ET ahead of market holiday on July 4.
The tech stock heavy Nasdaq Composite index reported its best performance in the period in four decades on the back of optimism surrounding artificial intelligence driven demand for semiconductor and software.
The S&P 500 index advanced 15.9% and the Nasdaq Composite index jumped 31.7% in the first half.
Investors are hoping that despite the Federal Reserve's hawkish stance and the expected increase in interest rates by another 50 basis points, the U.S. economy may experience a shallow recession.
The S&P 500 index advanced over 5% in June and jumped over 7% in the second quarter and soared 15.9% in the first half.
The Nasdaq Composite increased over 5% in June, advanced over 12% in the second quarter and jumped nearly 31.7% in the first half.
Electric vehicles makers jumped after Tesla reported an 83% jump in vehicle deliveries in the second quarter, partly driven by federal tax incentives and company discounts.
Rivian reiterated its annual electric vehicle production target of 50,000 pickups and SUVs.
Crude oil prices declined 7% in the second quarter and extended the first half fall to 12%.
U.S. Indexes & Yields
The S&P 500 index traded up 0.1% to 4,455.59 and the Nasdaq Composite edged higher 0.2% to 13,816.77.
The S&P 500 index advanced 5.2% in June and jumped 7% in the second quarter, third quarterly gain in a row and jumped 15.9% in the first half.
The Nasdaq Composite increased 5.1% in June, advanced 11.2% in the second quarter and soared nearly 31.7% in the first half of 2023.
The yield on 2-year Treasury notes increased to 4.93%, 10-year Treasury notes inched higher to 3.85% and 30-year Treasury bonds edged up to 3.86%.
Crude oil advanced after Saudi Arabia and Russia announced production cuts to bolster international prices.
Saudi Arabia said it will extend its voluntary production cut of one million barrels per day to August and added it may prolong cuts further.
Saudi Arabia's daily production is expected to drop to 9 million barrels per day, the lowest since 2017.
Russia said it will lower its exports by 500,000 barrels per day in July.
Crude oil decreased $0.49 to $70.15 a barrel and natural gas prices decreased 8 cents to $2.71 a thermal unit.
U.S. Stock Movers
Tesla Inc jumped 8.5% to $283.86 after the maker of electric vehicles reported deliveries and production of electric vehicles in the second quarter.
Chinese electric vehicle makers trading in New York advanced after Tesla reported higher-than-expected quarterly production and deliveries.
Xpeng Inc jumped 7% and Nio Inc gained 5%.
BYD jumped 4% in Hong Kong and Shanghai trading after the Shenzhen-based company backed by Berkshire Hathaway shipped 253,046 vehicles in June, 5.3% more than in May when it shipped 239,092 vehicles.
BYD released the data in a filing with the Hong Kong Stock Exchange earlier in the day.
The largest Chinese automaker delivered 1.26 million vehicles in the first half, compared to 1.86 million vehicles in all of 2022 and 320,810 in 2020.
Apple Inc edged down 0.6% to $192.94 after a report suggested that the company is looking to scale back production of Vision Pro headsets.
European Markets Turned Higher
European markets retained upward bias and investors awaited the release of manufacturing data in the region.
Market indexes in Frankfurt and Paris advanced for the third quarter in a row and indexes extended gains after inflation in the currency union eased but stayed above the European Central Bank's 2% target.
Investors are anticipating policymakers to continue advancing interest rates in the months ahead but hoping that the labor market strength, weakening energy prices and robust exports will help the region's economy fall into a recession.
The Eurozone PMI index in the final reading declined after demand for goods fell sharply towards the end of the second quarter, S&P Global reported in its survey on Monday.
The Manufacturing Purchasing Managers' Index fell to 43.4 in June from 43.6 in May.
The Italian operating conditions weakened in June, according to the latest manufacturing industry survey by S&P Global.
Purchasing Managers' Index declined 43.8 from 45.9 in May, the largest fall in operating environment since April 2020, after production fell the most in three years and sales weakened to an eight-month low.
In other economic news, Swiss inflation eased to 1.7% in June from 2.2% in May, Swiss Federal Statistical Office reported Monday.
Falling energy prices, strong Swiss franc and tight price controls kept inflation forces in control.
In the week ahead, investors are awaiting payrolls data from the U.S. and minutes of meeting from the U.S. Federal Reserve.
Europe Indexes & Yields
The DAX index decreased 0.4% to 16,081.04, the CAC-40 index fell 0.2% to 7,386.70 and the FTSE 100 index decreased 0.05% to 7,527.26.
The yield on 10-year German Bunds inched higher to 2.39%, French bonds traded lower to 2.93%, the UK gilts edged down to 4.39% and Italian bonds decreased to 4.08%.
The euro edged higher to $1.088, the British pound to $1.267 and the U.S. dollar fetched 89.99 Swiss cents
Brent crude decreased $0.348to $74.90 a barrel and the Dutch TTF natural gas decreased €2.96 to €34.15 per MWh.
Europe Stock Movers
Tesla Inc soared in Frankfurt trading after the maker of electric vehicles reported record deliveries in the second quarter on Sunday.
Mining companies gained on the hopes of stimulus from the Chinese government after China's manufacturing index declined in June.
Glencore, Antofagasta, and Anglo American advanced between 2% and 4%.
Nokia Oyj increased 2.5% to €3.93 after the company signed a new patent cross-licensing agreement with Apple Inc.
AstraZeneca Plc declined 5.6% to 10,638.0 after the latest results from a broad study for a cancer drug lagged expectations.
Saint Gobain SA increased 0.6% to €56.04 after the company signed an agreement to sell its glass processing division COVIPOR in Portugal to PNI Portugal.
Generali SpA gained 3.3% to €19.24 after Delfin won a regulatory approval to hold more than 10% stake in the Italian insurance company.
Technip Energies NV increased 0.5% to €20.91 after the French engineering and technology firm said it acquired the sustainable process development company Processium for an undisclosed amount.
Asian Markets Closed Higher
Japan's business sentiment improved in the second quarter, according to the Tankan survey conducted by the Bank of Japan.
Sentiment among large manufacturing businesses improved +5, rebounding from +1 in the first quarter and the sentiment index for non-manufacturing businesses increased +23 from +22 in March, and increased to the highest level since June 2019.
China's manufacturing activities expanded at a slower pace in June, according to a survey conducted by Caixin.
Manufacturing purchasing managers' index eased to 50.5 in June from 50.9 in May and reflecting the weakness reported by the National Bureau of Statistics in its official index to 49.0 in June compared to 48.8 in May.
The Nikkei 225 index in Tokyo advanced 1.7%, the Hang Seng index jumped 2% on the back of a rally in tech stocks.
The Shanghai SSE Composite index increased 1.3% on the hopes that the Chinese government will announce more stimulus measures after a private survey showed contraction in manufacturing for the second month in a row in June.
The Sensex index in Mumbai soared 0.8% and closed at a new record high on economic optimism and sustained buying by foreign investors.
- Scott Peters
- 03 Jul, 2023
- New York City
The S&P 500 index traded nearly unchanged at 4,452.02 and the Nasdaq Composite edged higher 0.3% to 13,830.38..
The S&P 500 index advanced 5.2% in June and jumped 7% in the second quarter, the third quarterly gain in a row and jumped 15.9% in the first half.
The Nasdaq Composite increased 5.1% in June, advanced 11.2% in the second quarter and soared nearly 31.7% in the first half of 2023.
Tesla Inc jumped 8.5% to $283.86 after the maker of electric vehicles reported deliveries and production of electric vehicles in the second quarter.
Tesla shares are up 156% in the year sofar.
The company produced 479,700 vehicles and delivered 466,140 in the second quarter.
The company produced 258,500 vehicles and delivered 254,695 vehicles in the quarter a year ago.
Sales in the latest quarter were supported by as much as $10,000 incentives and $7,500 federal tax credit under the U.S. Inflation Reduction Act.
Rivian Automotive Inc jumped 14.8% to $19.14 after the maker of pickups and SUVs said it delivered 12,640 vehicles in the second quarter, an increase of 59% from the previous quarter.
The company reiterated its annual production target of 50,000.
Chinese electric vehicle makers trading in New York advanced after Tesla reported higher-than-expected quarterly production and deliveries.
Xpeng Inc jumped 7% and Nio Inc gained 5%.
Apple Inc edged down 0.6% to $192.94 after a report suggested that the company is looking to scale back production of Vision Pro headsets.
AstraZeneca Plc declined 5.6% to 10,638.0 pence in London and fell 8.9% to $65.19 in New York trading after the latest results from a broad study for a cancer drug lagged expectations.
The company announced disappointing preliminary results for a phase three trial of experimental lung cancer treatment drug.
- Barry Adams
- 03 Jul, 2023
- New York City
Stocks on Wall Street traded flat on the first day of trading in the second half.
Market indexes showed little movement at the start of the second half after surging in the first half and the Nasdaq Composite index driven by the tech stocks reported its best performance in the period in four decades.
The S&P 500 index advanced 15.9% and the Nasdaq Composite index jumped 31.7% in the first half.
Investors are hoping that despite the Federal Reserve's hawkish stance and the expected increase in interest rates by another 50 basis points, the U.S. economy may experience a shallow recession.
The S&P 500 index advanced over 5% in June and jumped over 7% in the second quarter and soared 15.9% in the first half.
The Nasdaq Composite increased over 5% in June, advanced over 12% in the second quarter and jumped nearly 31.7% in the first half.
European markets closed higher on Friday and extended gains in the second quarter and in the first half.
At the end of the first half, the DAX index advanced 14.8%, the CAC-40 index gained 12.2% but the FTSE 100 index fell 0.3%.
Crude oil prices declined 7% in the second quarter and extended the first half fall to 12%.
In other overseas news, Japan's business sentiment improved in the second quarter, according to the Tankan survey conducted by the Bank of Japan.
Sentiment among large manufacturing businesses improved +5, rebounding from +1 in the first quarter and the sentiment index for non-manufacturing businesses increased +23 from +22 in March, and increased to the highest level since June 2019.
China's manufacturing activities expanded at a slower pace in June, according to a survey conducted by Caixin.
Manufacturing purchasing managers' index eased to 50.5 in June from 50.9 in May and reflecting the weakness reported by the National Bureau of Statistics in its official index to 49.0 in June compared to 48.8 in May.
U.S. Indexes & Yields
The S&P 500 index traded nearly unchanged at 4,452.02 and the Nasdaq Composite edged higher 0.3% to 13,830.38..
The S&P 500 index advanced 5.2% in June and jumped 7% in the second quarter, third quarterly gain in a row and jumped 15.9% in the first half.
The Nasdaq Composite increased 5.1% in June, advanced 11.2% in the second quarter and soared nearly 31.7% in the first half of 2023.
The yield on 2-year Treasury notes increased to 4.93%, 10-year Treasury notes inched higher to 3.85% and 30-year Treasury bonds edged up to 3.86%.
Crude oil advanced after Saudi Arabia and Russia announced production cuts to bolster international prices.
Saudi Arabia said it will extend its voluntary production cut of one million barrels per day to August and added it may prolong cuts further.
Saudi Arabia's daily production is expected to drop to 9 million barrels per day, the lowest since 2017.
Russia said it will lower its exports by 500,000 barrels per day in July.
Crude oil increased $0.22 to $70.85 a barrel and natural gas prices decreased 8 cents to $2.71 a thermal unit.
U.S. Stock Movers
Tesla Inc jumped 8.5% to $283.86 after the maker of electric vehicles reported deliveries and production of electric vehicles in the second quarter.
Chinese electric vehicle makers trading in New York advanced after Tesla reported higher-than-expected quarterly production and deliveries.
Xpeng Inc jumped 7% and Nio Inc gained 5%.
Apple Inc edged down 0.6% to $192.94 after a report suggested that the company is looking to scale back production of Vision Pro headsets.
- Bridgette Randall
- 03 Jul, 2023
- Frankfurt
The DAX index increased 0.1% to 16,160.39, the CAC-40 index jumped 0.1% to 7,409.80 and the FTSE 100 index increased 0.3% to 7,554.28.
The yield on 10-year German Bunds inched higher to 2.39%, French bonds traded lower to 2.93%, the UK gilts edged down to 4.39% and Italian bonds decreased to 4.08%.
Tesla Inc soared in Frankfurt trading after the maker of electric vehicles reported record deliveries in the second quarter on Sunday.
Mining companies gained on the hopes of stimulus from the Chinese government after China's manufacturing index declined in June.
Glencore, Antofagasta, and Anglo American advanced between 2% and 4%.
Nokia Oyj increased 2.5% to €3.93 after the company signed a new patent cross-licensing agreement with Apple Inc.
AstraZeneca Plc declined 5.6% to 10,638.0 after the latest results from a broad study for a cancer drug lagged expectations.
Saint Gobain SA increased 0.6% to €56.04 after the company signed an agreement to sell its glass processing division COVIPOR in Portugal to PNI Portugal.
Generali SpA gained 3.3% to €19.24 after Delfin won a regulatory approval to hold more than 10% stake in the Italian insurance company.
Technip Energies NV increased 0.5% to €20.91 after the French engineering and technology firm said it acquired the sustainable process development company Processium for an undisclosed amount.
- Bridgette Randall
- 03 Jul, 2023
- Frankfurt
European markets retained upward bias and investors awaited the release of manufacturing data in the region.
Market indexes in Frankfurt and Paris advanced for the third quarter in a row and indexes extended gains after inflation in the currency union eased but stayed above the European Central Bank's 2% target.
Investors are anticipating policymakers to continue advancing interest rates in the months ahead but hoping that the labor market strength, weakening energy prices and robust exports will help the region's economy fall into a recession.
The Eurozone PMI index in the final reading declined after demand for goods fell sharply towards the end of the second quarter, S&P Global reported in its survey on Monday.
The Manufacturing Purchasing Managers' Index fell to 43.4 in June from 43.6 in May.
The Italian operating conditions weakened in June, according to the latest manufacturing industry survey by S&P Global.
Purchasing Managers' Index declined 43.8 from 45.9 in May, the largest fall in operating environment since April 2020, after production fell the most in three years and sales weakened to an eight-month low.
In other economic news, Swiss inflation eased to 1.7% in June from 2.2% in May, Swiss Federal Statistical Office reported Monday.
Falling energy prices, strong Swiss franc and tight price controls kept inflation forces in control.
In the week ahead, investors are awaiting payrolls data from the U.S. and minutes of meeting from the U.S. Federal Reserve.
Europe Indexes & Yields
The DAX index increased 0.1% to 16,160.39, the CAC-40 index jumped 0.1% to 7,409.80 and the FTSE 100 index increased 0.3% to 7,554.28.
The yield on 10-year German Bunds inched higher to 2.39%, French bonds traded lower to 2.93%, the UK gilts edged down to 4.39% and Italian bonds decreased to 4.08%.
The euro edged higher to $1.088, the British pound to $1.267 and the U.S. dollar fetched 89.99 Swiss cents
Brent crude increased $0.68 to $76.69 a barrel and the Dutch TTF natural gas increased €0.38 to €36.70 per MWh.
Europe Stock Movers
Tesla Inc soared in Frankfurt trading after the maker of electric vehicles reported record deliveries in the second quarter on Sunday.
Mining companies gained on the hopes of stimulus from the Chinese government after China's manufacturing index declined in June.
Glencore, Antofagasta, and Anglo American advanced between 2% and 4%.
Nokia Oyj increased 2.5% to €3.93 after the company signed a new patent cross-licensing agreement with Apple Inc.
AstraZeneca Plc declined 5.6% to 10,638.0 after the latest results from a broad study for a cancer drug lagged expectations.
Saint Gobain SA increased 0.6% to €56.04 after the company signed an agreement to sell its glass processing division COVIPOR in Portugal to PNI Portugal.
Generali SpA gained 3.3% to €19.24 after Delfin won a regulatory approval to hold more than 10% stake in the Italian insurance company.
Technip Energies NV increased 0.5% to €20.91 after the French engineering and technology firm said it acquired the sustainable process development company Processium for an undisclosed amount.
- Scott Peters
- 02 Jul, 2023
- New York City
World markets rallied in the first half, surprising most experts and market watchers after inflation receded and rate hike worries subsided.
Despite the easing of inflation in the U.S. and Europe, prices are still rising at a rapid clip and faster than 2% target set by central banks around the world.
Central bankers used a gathering in Portugal to remind investors that policymakers are not done with lifting rates, and more restrictive rates are on the way.
The chorus of heads of central banks of the U.S., European Union, UK and Japan reiterated inflation in the Western economies is still too high and rates have a long way to go before central banks will consider pausing.
Market rallied on the final day of the week, month, quarter and the first half.
U.S. Economic Data Show Positive Trends
Key economic evets of the week included GDP, new home sales and durable goods orders and a key measure of inflation in the U.S.
The Price Consumption Expenditure index, a measure of inflation, increased 3.8% in May from a year ago and rose 0.1% from the previous month.
Core PCE index, which excludes food and energy, increased 0.3% as expected and rose 4.6% from a year ago.
The overall inflation and core inflation measures slowed from the previous month and from a year ago, extending the trends seen in the last five months.
In the third estimate, real U.S. economic growth was revised sharply higher to 2.0% from 1.3% in the previous estimate. In the fourth quarter of 2022, real GDP increased 2.6%.
Higher consumer and public spending and exports contributed to the upward revision.
U.S. international goods trade deficit in May declined 6.1% to $91.1 billion from $97.1 billion.
Durable goods orders rose more than expected and new home sales also advanced. Durable goods orders expanded in May 1.7%, faster than upwardly revised 1.2% in April.
New home sales jumped 12.2% to 763,000 units on a seasonally adjusted basis.
The annual rate jumped to a high not seen since February of last year and increased 20% from a year ago when the annual rate was estimates at 636,000 homes.
European Markets Rallied After Inflation Eased
Consumer price inflation in the eurozone eased to 5.5% in June from 6.1% in May and the consumer inflation rate dropped for the third month in a row and fell to the level last seen in January 2022 or 17 months ago.
On a monthly basis, consumer price inflation and core inflation were 0.3% in June.
Investors cheered the steady decline in inflation but the level remained above the European Central Bank's target rate of 2%.
Moreover, core inflation, which excludes volatile food and energy, increased to 5.4% from 5.3% and stayed near the recent peak of 5.7%.
In the currency union, inflation in Germany accelerated to 6.8% from 6.3% but slowed in Austria, the Netherlands, Portugal, Italy and France.
Inflation in Spain, Luxembourg and Belgium dropped below the ECB's target level of 2%.
Spain's retail sales in May surged 6% from a year ago from the revised 5.7% in April and sales in May increased for the sixth month in a row.
Record Low Unemployment In Europe
The seasonally adjusted unemployment rate in the Euro Area held at 6.5% in May and matched previous month's rate but fell from 6.7% in the month a year ago.
The record low unemployment rate highlighted tight labor market conditions and the number of unemployed declined by 57,000 from the previous month to 11 million, the lowest level since record keeping began in 1995.
Compared to a year ago, unemployment decreased by 257,000 in the European Union and 227,000 in the Euro Area.
Jobless rate among young workers, those below the age of 25, held at 13.9% or 2.226 million compared to previous month.
Swedish Krona Dropped to New Low Against Euro
The central bank of Sweden lifted its policy rate by 25 basis points to 3.75%, seventh rate increase in a row.
The central bank raised rates to the level last seen in 2008 and left its inflation outlook to 8.9% in the current year but revised higher to 4.3% from the previous estimate of 4% in 2024.
Swedish krona faced fresh selloff after the central bank lifted rates at a slower pace.
The krona dropped to 10.8 against the dollar and plunged to a record low 11.8 against the euro after weaker-than-expected rate increase and risk aversion kept the currency under pressure.
Sentiment for the currency weakened on the fears that the central bank has little flexibility in lifting rates on the worries of a deepening rout in the property sector, after higher rates plunged property prices by 20% from the peak in March 2022.
China's Manufacturing Contracted Again, Record Youth Unemployment
In Asia, China’s factory activities remained in contraction for third month in a row, according to the official data.
The official composite PMI, which includes both manufacturing and services activity, fell to 52.3 in June, from 52.9 in May.
China’s economic recovery has also been hit by rising youth unemployment as well as disappointing retail sales and industrial production.
Youth unemployment in China rose to a new high of 20.8% in June despite the overall jobless rate remained unchanged at 5.2% in May. Youth jobless rate is expected to rise in coming months as about 11 million college graduates start looking for jobs.
Marriages or wedding registrations in China dropped to 6.8 million in 2022, the lowest level since 1979 after peaking above 11.5 million in 2013.
Japan Inflation Stays Elevated
Turning our attention to Japan, retail sales rose 5.7% in May, an increase above 5% for the fifth month in a row.
Japan’s industrial production declined 1.6% in May and fell for the first time in four months but despite the decline most economists are anticipating production to rebound in the quarter.
Tokyo consumer inflation rose 3.1% in June and accelerated for the second time in three months, raising expectations that the Bank of Japan will revise higher its inflation forecast.
Japanese Yen Level Raises Fears of Intervention
The yen dropped below 145 against the dollar for the first time since November on Friday, inching closer to a level where Japan intervened for the first time since 1998.
Rising Service Exports Improve India's Current Account Deficit
India’s current account deficit declined in the March quarter to $1.5 billion, a sharp fall from the previous quarter after service exports surged and import fell on weaker prices of commodities.
In the financial year 2023 ending in March, the current account deficit increased to $67 billion or 2.0% of GDP from $38.7 billion or 1.2% of GDP in the previous year, reflecting a sharp jump in international trade deficit to $265.3 billion from $189.5 billion.
Global Markets Rallied 2%, Reversing Previous Week's Loss
Stocks market rallied in the U.S., Europe, Japan and India and closed the first half on a high note.
Despite the Federal Reserve, the European Central Bank and the Bank of England strongly reiterating the need to raise rates, markets continued to power ahead.
The S&P 500 index advanced over 5% in June and jumped over 7% in the second quarter and soared 16.5% in the first half.
The Nasdaq Composite increased over 5% in June, advanced over 12% in the second quarter and jumped nearly 33% in the first half.
European markets closed higher on Friday and extended gains in the second quarter and in the first half.
At the end of the first half, the DAX index advanced 14.8%, the CAC-40 index gained 12.2% but the FTSE 100 index fell 0.3%.
Economic Calendar Week Ahead
In the week ahead, the U.S. is set to release non-farm payrolls data for June.
In Europe, France is schedule to release its international trade data, Germany will report foreign trade, factory orders and industrial production for May.
In Asia, India and China are expected to release manufacturing surveys and Japan is set to report Tankan large manufacturers index for the second quarter.
Indonesia and Philippines are set to announce inflation indexes.
- Scott Peters
- 30 Jun, 2023
- New York City
Stocks advanced on the final day of the week, quarter and first half.
The S&P 500 index and the Nasdaq Composite index are set to extend weekly gains of near 1% as investors digest the latest news on inflation.
The S&P 500 index increased 0.7% to 4,469.28 and the Nasdaq Composite edged higher 1.1% to 13,709.16.
Apple Inc jumped 1.2% to $191.90 on the optimism that a slow but steady rebound in the Chinese economy and new products in the U.S. will drive sales higher in the remainder of the year.
The stock also got a boost after Citi revised higher its price target on the stock to $240.
Nike Inc declined 2.3% to $110.06 after the company reported weaker-than-expected quarterly results.
Revenue in the fiscal fourth quarter ending in May increased 5% to $12.8 billion, including direct online sales rose 15% to $5.5 billion.
Revenue of NIKE brand sales rose 5% to $12.2 billion and Converse sales fell 1% to $586 million.
Net income declined 28% to $1.0 billion from $1.4 billion and diluted earnings per share dropped to 66 cents from 90 cents a year ago.
In the fourth quarter, the company returned $1.9 billion to shareholders, including $524 million in dividends and repurchased 11.5 million shares for $1.4 billion as a part of the four-year share repurchase program approved in June 2022.
The company declared a dividend of 34 cents a common share.
Savers Value Village edged lower by 2.6% on the second day of trading after surging 27% in the previous session after the for-profit thrift priced its initial public offering at $18 a share and closed at $22.90.
Constellation Brands, Inc declined 2% to $241.90 despite the owner of Corona and Pacifico reporting better-than-expected revenue and earnings in its latest quarter.
Revenue in the fiscal first quarter ending in May increased to $2.5 billion from $2.3 billion and net income declined to $139 million from $399.3 million and diluted earnings per share dropped to 74 cents from $2.06 a year ago.
The board of directors declared a quarterly cash dividend of 89 cents to shareholders on record August 10 payable on August 24.
The company guided fiscal year 2024 earnings per share between $9.35 and $9.65.
Dominion Energy declined 2.5% to $50.55 after the company lowered its operating earnings outlook for the second quarter because of milder-than-usual weather and unplanned outages at the Millstone Nuclear Power Station in Connecticut.
The company lowered its second quarter operating earnings per share forecast to between 44 cents and 50 cents from the previous range between 58 cents and 68 cents .