- Inga Muller
- 18 Oct, 2023
- Frankfurt
European markets declined on interest rate uncertainties, looming economic slowdown and the rising prospects of a wider conflict in the Middle East.
The DAX index decreased 0.6% to 15,158.37, the CAC-40 index fell 0.6% to 6,987.70 and the FTSE 100 index fell 0.7% to 7,621.56.
The yield on 10-year German bonds increased to 2.87%, French bonds traded higher to 3.50%, the UK gilts edged down to 4.55% and Italian bonds eased to 4.91%.
Adidas AG increased 3.8% to €177.50 after the athletic shoemaker lifted its annual revenue growth outlook.
Revenue in the third quarter declined 6.4% to €5.99 billion from €6.4 billion and gross margin improved to 49.3% from 49.1% a year ago.
Operating income fell to €409 million from €564 million from a year ago.
The sportswear maker forecasted its annual currency-neutral revenue to decline at a low-single-digit rate compared to the previous estimate of a decline in mid-single-digit.
The company also estimated operating profit from continuing operations to increase to €100 million from the previous estimate of a breakeven.
Just Eat Takeaway.com advanced 1.1% to €12.05 after the company raised its full-year adjusted operating earnings outlook.
ABB Ltd declined 6.1% to CHF 30.68 after the Swiss engineering company forecasted slower revenue growth in the fourth quarter.
TotalEnergies SE increased 0.9% to €63.76 and BP Plc advanced 0.7% to 559.10 pence after Brent crude oil prices soared 2% in London following the worries of a wider conflict in the Middle East.
China-linked luxury stocks in Paris advanced after China reported faster-than-expected economic growth in the third quarter and industrial output and retail sales were ahead of market's expectations.
LVMH edged up 0.02% to €668.50, Kering SA edged up 0.2% to €671.50 and Richemont SA was unchanged at €74.18.
Barratt Developments PLC dropped 3% to 410.94 pence after the UK-based home builder said new home bookings are likely to ease 10% in the fiscal first quarter.
Marshalls PLC jumped 4.6% to 207.20 pence after the concrete products maker reiterated its full-year outlook.
- Bridgette Randall
- 18 Oct, 2023
- Frankfurt
European markets trended lower in range bound trading and investors stayed focused on earnings releases.
In cautious trading, investors worried that the latest flare up between Israel and Hamas may widen to Lebanon, Turkey and Egypt and even draw neighboring oil producing nations.
Crude oil prices surged more than 2% as traders feared supply disruptions and Israel military's ground invasion in Gaza.
Diplomats in the region worry that Israel's reaction to Hamas' kidnapping and attacks may be perceived as aggressive by the militants in Lebanon, Iran and Egypt.
On Monday, an Israeli bombing campaign killed at least 500 people at a hospital in Gaza City, prompting worries of more retaliatory attacks from Hamas led militants.
Israel denied the attack and said that the explosion was linked to the mishandled rocket launch by Hamas-controlled operators.
In Asia, China's economy expanded at 4.9% annual pace in the third quarter, slower than the 6.2% increase in the second quarter, National Bureau of Statistics reported Tuesday.
Economists were looking for the second quarter growth of 4.5%, and faster-than-expected growth raised hopes that the second largest economy may achieve the government' annual growth target rate of 5.0%.
China's retail sales rose at the fastest pace in four months in September by 5.5% after rising at 4.6% in the previous month, the statistical agency said in a separate report.
Investors reacted negatively to the rise in retail sales in the U.S. indicating that the U.S. economy is strong enough to withstand higher interest rates.
U.S. retail sales jumped 0.7% in September from the previous month, indicating resilient consumer spending and supported the case for policymakers' to continue rate hikes and keep higher rates through 2024.
Closer to home on the economic front, the Eurozone annual inflation in September was 4.3%, weaker than 5.2% in August, Eurostat confirmed in its second estimate.
UK Inflation Held Steady In September
The U.K. inflation in September held steady at 6.7% after weaker food price inflation was overshadowed by a rebound in transportation costs.
The consumer price inflation held at18-month low after food prices rose at 12.1% compared to 13.7% in August and energy costs declined 0.2% compared to 3.2% fall in the previous month.
Core inflation, which excludes volatile food and energy prices, eased to 6.1% and fell to the lowest level since January.
Europe Indexes & Yields
The DAX index decreased 0.6% to 15,158.37, the CAC-40 index fell 0.6% to 6,987.70 and the FTSE 100 index fell 0.7% to 7,621.56.
The yield on 10-year German bonds increased to 2.87%, French bonds traded higher to 3.50%, the UK gilts edged down to 4.55% and Italian bonds eased to 4.91%.
The euro hovered near a three-month low to $1.055, the British pound to $1.217 and the U.S. dollar fetched 89.92 Swiss cents.
Brent crude increased $2.53 to $92.47 a barrel and the Dutch TTF natural gas edged higher by €1.67 to €50.57 per MWh.
Europe Stock Movers
Adidas AG increased 3.8% to €177.50 after the athletic shoemaker lifted its annual revenue outlook.
Just Eat Takeaway.com advanced 1.1% to €12.05 after the company raised its full-year adjusted operating earnings outlook.
ABB Ltd declined 6.1% to CHF 30.68 after the Swiss engineering company forecasted slower revenue growth in the fourth quarter.
TotalEnergies SE increased 0.9% to €63.76 and BP Plc advanced 0.7% to 559.10 pence after Brent crude oil prices soared 2% in London following the worries of a wider conflict in the Middle East.
China-linked luxury stocks in Paris advanced after China reported faster-than-expected economic growth in the third quarter and industrial output and retail sales were ahead of market's expectations.
LVMH edged up 0.02% to €668.50, Kering SA edged up 0.2% to €671.50 and Richemont SA was unchanged at €74.18.
Barratt Developments PLC dropped 3% to 410.94 pence after the UK-based home builder said new home bookings are likely to ease 10% in the fiscal first quarter.
Marshalls PLC jumped 4.6% to 207.20 pence after the concrete products maker reiterated its full-year outlook.
- Barry Adams
- 17 Oct, 2023
- New York City
Stocks on Wall Street lacked direction as traders reviewed corporate earnings and Treasury yields rebounded to 2007-highs.
Investors struggled to be optimist after positive earnings from big banks last week and better-than-expected earnings from Bank of America, Goldman Sachs, Lockheed Martin.
Market sentiment was also bolstered after Choice Hotels launched a public offer to buy Wyndham Hotels after merger talks broker down following six months of discussions and two raised bids.
But it was the hotter-than-expected retail sales that put market on the defensive.
The yield on 10-year U.S. Treasury notes rose to 4.8%, the high reached in 2007, indicated that the bond market is factoring another rate hike by the Federal Reserve before the end of 2023.
The yield on 30-year Treasury note inched higher to 4.95% and 2-year note jumped to 5.2%.
Resilient Consumer Spending Lifts Retail Sales In September
Retail and food services sales unadjusted for inflation rose 0.7% from the previous month and advanced 3.8% from the previous year in September from an upwardly revised 0.8% increase in August.
The retail and food services sales are adjusted for seasonal and calendar changes but not adjusted for price changes or inflation.
Retail trade sales were up 0.7% from August, and up 3.0% above last year and nonstore retail sales were up 8.4% and food services and drinking places sales were up 9.2% from a year ago respectively.
Seasonally adjusted sales rose for the sixth month in a row on a monthly basis and advanced at the fastest pace in seven months when measured on an annual basis.
The hotter-than-expected retail sales data lifted 10-year U.S. Treasury yield to 4.80% and the yield hovered near 16-year high.
Benchmark indexes traded down after the release of retail sales figures supported the case for one more rate hike in 2023 and higher rates through 2024.
U.S. Indexes & Yields
The S&P 500 index decreased 0.2% to 4,364.92 and the Nasdaq Composite fell 0.4% to 13,515.26.
The yield on 2-year Treasury notes increased to 5.22%, 10-year Treasury notes inched higher to 4.80% and 30-year Treasury bonds edged up to 4.95%.
Crude oil increased $0.33 to $87.02 a barrel and natural gas prices eased 1 cent to $3.09 a thermal unit.
The dollar index edged higher to 106.48, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Bank of America Corp increased 1.3% to $27.33 after the financial services company reported quarterly results.
Revenue in the third quarter increased 3% to $25.2 billion from $24.5 billion and net interest income jumped 4% to $14.4 billion driven by higher interest rates and loan growth.
Net income in the quarter increased to $7.8 billion from $7.4 billion and diluted earnings per share edged up to 90 cents from 88 cents a year ago.
The provision for loan losses edged up by $336 million to $1.2 billion, reflecting weakening commercial real estate market conditions and stretched consumers.
Goldman Sachs was unchanged at $314.50 after the financial services provider reported mixed quarterly results.
Third quarter revenue edged slightly lower to $11.8 billion from $11.97 billion and net income dropped to $2.1 billion from $3.1 billion and diluted earnings per share fell to $5.47 from $8.25 a year ago..
The 6% decline in revenue in asset management was overshadowed by an 8% increase in global investment banking fees.
Johnson & Johnson added 0.1% to $157.57 after the company reported slightly better-than-expected quarterly results.
Revenue in the third quarter increased 6.8% to $21.3 billion from $19.99 billion and net earnings was flat at $4.3 billion and diluted earnings per share edged up 4% to $1.69 from $1.62 a year ago.
Sales in the U.S. increased 11.1% to $12 billion from $10.8 billion and international sales rose 1.6% to $9.3 billion from $9.2 billion a year ago.
The company revised higher its estimate of non-GAAP annual sales growth estimate to between 8.5% and 9.0% from the previous estimate between 8.0% and 8.5%.
European Markets Erased Day's Losses
European markets traded in a tight range with a downward bias amid heightened geopolitical tensions in the Middle East.
Market sentiment in Paris, London and Frankfurt was mixed as earnings season picked up pace and investors reviewed the latest economic signals from the UK and Germany.
Germany's ZEW economic sentiment index improved to -1.1 in October from -11.4 in September, marking the highest reading since April, the Center for Economic Research reported Monday.
The private survey indicated that over three quarters of participants expected a steady improvement in inflation and estimated short term interest rates have stabilized in the Euro Area.
Separately, the average earnings growth in three months to August in the UK eased slightly, but the increase was still one of the largest gains since record keeping began in 2001.
Average weekly earnings, including bonuses rose 8.1% from a year ago to £661 and excluding bonuses gained 7.8% from a year ago £619, the Office for National Statistics reported Monday.
The weekly earnings from a year ago rose 12.7% in the public sector and increased 7.1% in the private sector, following the one-time payments to civil servants and NHS in June, July and August.
Annual growth in real terms, adjusted for inflation. rose 1.3% for total wages including bonuses and inched up 1.1% excluding bonuses.
Europe Indexes & Yields
The DAX index increased 0.09% to 15,251.69, the CAC-40 index edged up 0.1% to 7,029.70 and the FTSE 100 index added 0.6% to 7,675.21.
The yield on 10-year German bonds increased to 2.80%, French bonds traded higher to 3.43%, the UK gilts edged down to 4.48% and Italian bonds eased to 4.81%.
The euro hovered near a three-month low to $1.055, the British pound to $1.216 and the U.S. dollar fetched 90.11 Swiss cents.
Brent crude decreased $0.29 to $89.35 a barrel and the Dutch TTF natural gas edged higher by €0.80 to €47.67 per MWh.
Europe Stock Movers
Luxury stocks in Paris and Switzerland edged down ahead of the release of the key economic data in China.
Hermes International, LVMH, Kering SA and Richemont declined between 0.3% and 1.5%.
China is scheduled to release third quarter GDP, retail sales and industrial output data later in the week.
Rolls-Royce Holdings PLC increased 0.6% to 214.90 pence after the UK-based aviation and defense contractor said it plans to eliminate 2,500 jobs.
Bellway Plc inched up 1% to 2,184.0 pence after the UK-based home builder estimated new home sales in the fiscal 2024 to drop as much as 31% citing elevated home prices and a surge in interest rates.
Lonza Group AG plunged 10.5% to CHF 383.60 after the Swiss product development services provider to pharmaceutical and nutrition companies issued an earnings warning citing the recent loss of business from Moderna.
LM Ericsson Class B dropped 8.6% to Skr 49.30 after the Swedish telecom equipment maker reported a decline in third quarter revenue.
Deutsche Post AG declined 1.4% to €38.48 and the Germany logistics company's subsidiary DHL said it plans to invest €350 million over the next five years in Southeast Asia to expand its workforce and warehousing capacity.
- Brian Turner
- 17 Oct, 2023
- New York City
Retail and food services sales unadjusted for inflation rose 0.7% from the previous month and advanced 3.8% from the previous year in September from an upwardly revised 0.8% increase in August.
The retail sales are adjusted for seasonal and calendar changes but not adjusted for price changes or inflation.
Retail trade sales were up 0.7% from August, and up 3.0% above last year and nonstore retail sales were up 8.4% and food services and drinking places sales were up 9.2% from a year ago respectively.
Retail sales rose for the sixth month in a row when measured on a monthly basis and advanced at the fastest pace in seven months on an annual basis.
The hotter-than-expected retail sales data lifted 10-year U.S. Treasury yield to 4.80% and the yield hovered near 16-year high.
Benchmark indexes traded down after the release of retail sales figures supported the case for one more rate hike in 2023 and higher rates through 2024.
- 16 Oct, 2023
- Scott Peters
- 17 Oct, 2023
- New York City
Stocks faced headwinds after hotter-than-expected retail sales in September supported the case for one more rate hike in the year and higher rates through 2024.
The S&P 500 index decreased 0.2% to 4,364.92 and the Nasdaq Composite fell 0.4% to 13,515.26.
The yield on 2-year Treasury notes increased to 5.13%, 10-year Treasury notes inched higher to 4.76% and 30-year Treasury bonds edged up to 4.91%.
Bank of America Corp increased 1.3% to $27.33 after the financial services company reported quarterly results.
Revenue in the third quarter increased 3% to $25.2 billion from $24.5 billion and net interest income jumped 4% to $14.4 billion driven by higher interest rates and loan growth.
Net income in the quarter increased to $7.8 billion from $7.4 billion and diluted earnings per share edged up to 90 cents from 88 cents a year ago.
The provision for loan losses edged up by $336 million to $1.2 billion, reflecting weakening commercial real estate market conditions and stretched consumers.
Goldman Sachs was unchanged at $314.50 after the financial services provider reported mixed quarterly results.
Third quarter revenue edged slightly lower to $11.8 billion from $11.97 billion and net income dropped to $2.1 billion from $3.1 billion and diluted earnings per share fell to $5.47 from $8.25 a year ago..
The 6% decline in revenue in asset management was overshadowed by an 8% increase in global investment banking fees.
Johnson & Johnson added 0.1% to $157.57 after the company reported slightly better-than-expected quarterly results.
Revenue in the third quarter increased 6.8% to $21.3 billion from $19.99 billion and net earnings was flat at $4.3 billion and diluted earnings per share edged up 4% to $1.69 from $1.62 a year ago.
Sales in the U.S. increased 11.1% to $12 billion from $10.8 billion and international sales rose 1.6% to $9.3 billion from $9.2 billion a year ago.
The company revised higher its estimate of non-GAAP annual sales growth estimate to between 8.5% and 9.0% from the previous estimate between 8.0% and 8.5%.
Advanced chipmakers traded down after the U.S. Commerce Department said it plans to unveil additional restrictions on the sale of artificial intelligence chips to China.
Intel Corp declined 2% to $35.83, Advanced Micro Devices fell 1.0% to $105.40 and Broadcom Inc dropped 2.5% to $880.63.
Wyndham Hotels & Resorts Inc soared 10.4% to $76.28 after Choice Hotels International made a public offer to acquire the budget hotel chain operator.
Choice offered $90 a share, $49.50 in cash and 0.324 of its own stock, about 30% premium to its closing price in the previous regular trading session.
Choice decided to take its $7.8 billion offer directly to shareholders after merger talks between the two companies broke down after six months of discussion.
Before the merger talks broke down, Choice had increased its initial offer of $80 a share to $85 a share, but two parties failed to agree on a deal after discussions stalled since May.
Lockheed Martin Corp jumped 1% to $444.71 after the defense contractor reiterated its full-year guidance and released its latest quarterly results.
Revenue in the third quarter ending on September 24 rose 2% to $16.9 billion and net income declined to $1.7 billion from $1.8 billion and diluted earnings per share edged up to $6.73 from $6.71 a year ago.
Lockheed reiterated its full-year revenue range between $66.25 billion and $66.75 billion and diluted earnings per share between $27.0 and $27.20 and free cash flow of $6.2 billion.
- Barry Adams
- 17 Oct, 2023
- New York City
Stocks on Wall Street headed lower after interest rate and inflation worries resurfaced.
Retail and food services sales unadjusted for inflation rose 0.7% from the previous month and advanced 3.8% from the previous year in September from an upwardly revised 0.8% increase in August.
The retail sales are adjusted for seasonal and calendar changes but not adjusted for price changes or inflation.
Retail trade sales were up 0.7% from August, and up 3.0% above last year and nonstore retail sales were up 8.4% and food services and drinking places sales were up 9.2% from a year ago respectively.
The hotter-than-expected retail sales data lifted 10-year U.S. Treasury yield to 4.80% and the yield hovered near 16-year high.
Benchmark indexes traded down after the release of retail sales figures supported the case for one more rate hike in 2023 and higher rates through 2024.
U.S. Indexes & Yields
The S&P 500 index decreased 0.2% to 4,364.92 and the Nasdaq Composite fell 0.4% to 13,515.26.
The yield on 2-year Treasury notes increased to 5.13%, 10-year Treasury notes inched higher to 4.76% and 30-year Treasury bonds edged up to 4.91%.
Crude oil increased $0.33 to $87.02 a barrel and natural gas prices eased 1 cent to $3.09 a thermal unit.
The dollar index edged higher to 106.48, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.
U.S. Stock Movers
Bank of America Corp increased 1.3% to $27.33 after the financial services company reported quarterly results.
Revenue in the third quarter increased 3% to $25.2 billion from $24.5 billion and net interest income jumped 4% to $14.4 billion driven by higher interest rates and loan growth.
Net income in the quarter increased to $7.8 billion from $7.4 billion and diluted earnings per share edged up to 90 cents from 88 cents a year ago.
The provision for loan losses edged up by $336 million to $1.2 billion, reflecting weakening commercial real estate market conditions and stretched consumers.
Goldman Sachs was unchanged at $314.50 after the financial services provider reported mixed quarterly results.
Third quarter revenue edged slightly lower to $11.8 billion from $11.97 billion and net income dropped to $2.1 billion from $3.1 billion and diluted earnings per share fell to $5.47 from $8.25 a year ago..
The 6% decline in revenue in asset management was overshadowed by an 8% increase in global investment banking fees.
Johnson & Johnson added 0.1% to $157.57 after the company reported slightly better-than-expected quarterly results.
Revenue in the third quarter increased 6.8% to $21.3 billion from $19.99 billion and net earnings was flat at $4.3 billion and diluted earnings per share edged up 4% to $1.69 from $1.62 a year ago.
Sales in the U.S. increased 11.1% to $12 billion from $10.8 billion and international sales rose 1.6% to $9.3 billion from $9.2 billion a year ago.
The company revised higher its estimate of non-GAAP annual sales growth estimate to between 8.5% and 9.0% from the previous estimate between 8.0% and 8.5%.
- Inga Muller
- 17 Oct, 2023
- Frankfurt
European markets edged lower and trimmed gains in the year-to-date on the worries of economic slowdown and interest rate uncertainties and a rebound in inflation.
The DAX index decreased 0.2% to 15,216.43, the CAC-40 index fell 0.02% to 7,020.40 and the FTSE 100 index added 0.3% to 7,654.36.
The yield on 10-year German bonds increased to 2.80%, French bonds traded higher to 3.43%, the UK gilts edged down to 4.48% and Italian bonds eased to 4.81%.
Luxury stocks in Paris and Switzerland edged down ahead of the release of the key economic data in China.
Hermes International, LVMH, Kering SA and Richemont declined between 0.3% and 1.5%.
China is scheduled to release third quarter GDP, retail sales and industrial output data later in the week.
Rolls-Royce Holdings PLC increased 0.6% to 214.90 pence after the UK-based aviation and defense contractor said it plans to eliminate 2,500 jobs.
Bellway Plc inched up 1% to 2,184.0 pence after the UK-based home builder estimated new home sales in the fiscal 2024 to drop as much as 31% citing elevated home prices and a surge in interest rates.
Lonza Group AG plunged 10.5% to CHF 383.60 after the Swiss product development services provider to pharmaceutical and nutrition companies issued an earnings warning citing the recent loss of business from Moderna.
LM Ericsson Class B dropped 8.6% to Skr 49.30 after the Swedish telecom equipment maker reported a decline in third quarter revenue.
Sales in the quarter decreased 5% to 64.5 billion kronor from 68 billion kronor and net income swung to a loss of 30.6 billion kronor from a profit of 5.2 billion kronor and diluted earnings per share was (9.21 kronor) compared to 1.56 kronor a year ago.
The quarterly results were hurt by the one-time goodwill impairment charge of 31.9 billion kronor linked to the acquisition of the U.S.-based Vonage Holdings Corp in July 2022 for $6.2 billion.
The company forecasted weak market conditions are likely to persist in the fourth quarter citing sharp fall in sales in the U.S. after companies delay network equipment deployment.
Deutsche Post AG declined 1.4% to €38.48 and the Germany logistics company's subsidiary DHL said it plans to invest €350 million over the next five years in Southeast Asia to expand its workforce and warehousing capacity.