- Barry Adams
- 15 Jun, 2023
- New York City
Major averages accelerated gains for the sixth session in a row as tech stocks led gainers.
The S&P 500 index advanced for the sixth day in a row and closed at a new 13-month high after tech and growth stocks led gainers.
Investors bid up stocks on the hopes that the Federal Reserve is nearing its tightening cycle and a resilient economy and job market are likely to provide a sustained boost to corporate earnings this quarter and in 2023.
The Federal Reserve held the federal funds rate as expected but sent clear signals that its inflation fight is not done yet and policymakers are prepared to lift rates to cool inflation to 2%.
In a balancing act, the central bank is attempting to cool inflation while avoiding the economy from slipping into a recession and avoiding widespread unemployment.
The tough act of keeping the economic expansion at a steady pace and enlarging job market without fueling too strong price pressures, got easier after crude oil prices dropped 40% in the year so far and supply chain issues largely under control.
The Federal Reserve is not in a position to influence supply chain issues or commodities prices but has a significant impact on the aggregate demand.
Microsoft hit a new record high after optimism surrounding AI driven demand lifted several stocks for the second week in a row.
Investors also digested the latest jobless claims and retail sales data.
Jobless Claims Held at Elevated Levels
Initial jobless claims for the week ending on June 10 were 262,000, matching the previous week's level, the U.S. Department of Labor reported Thursday.
Continuing claims for four weeks increased 20,000 from the previous week to 1,775 million.
Retail Sales Unexpectedly Rose In May
U.S. retail sales rose 0.3% in May following a 0.4% rise in April, the U.S. Census Bureau reported Thursday.
Retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.6 billion, up 0.3% from the previous month, and up 1.6% from a year ago.
Retail trade sales were up 0.3% from April 2023, and up 0.7 percent (±0.5 percent) above last year.
Nonstore retailers were up 6.5% while food services and drinking places were up 8.0% from a year ago.
U.S. Indexes & Yields
The S&P 500 index increased 1.2% to 4,426.01 and the Nasdaq Composite increased 1.2% to 13,782.82.
The yield on 2-year Treasury notes decreased to 4.65%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds eased to 3.83%.
Crude oil increased $2.38 to $70.59 a barrel and natural gas prices increased 22 cents to $2.56 a thermal unit.
U.S. Stock Movers
Cava Group soared more than 110% and traded as high as $45 after the restaurant company completed its initial public offering.
Cava sold 14.4 million shares at $22 each and raised $318 million.
Toyota Motor Corp increased 1.9% to $168.72 and the stock extended its weekly gain after shareholders reelected company chairman Akio Toyoda yesterday.
Kroger Co declined 2.8% to $45.88 after the company reiterated its same store sales excluding gasoline sales for the year.
Lennar Corp advanced 3.5% to $118.78 after the home builder reported better-than-expected fiscal second quarter results and the company lifted its unit sales outlook for the year.
European Markets Lacked Direction, ECB Signaled More Rate Hikes
European markets remained under pressure and the central bank lifted rates higher.
Market averages in London, Paris and Frankfurt traded down after the rate decision was announced and more rate hike worries dragged the indexes lower.
“We are not thinking about pausing," said ECB president Christine Lagarde at a press conference after the rate decision.
The central bank also revised higher its estimate of the headline inflation and core inflation for 2023 and lowered its economic growth outlook.
Investors largely ignore the improvement in international goods trade deficit data in April after imports fell at a faster pace than expected.
Tech stocks led decliners in trading across the region followed by declines in construction and telecom stocks.
In other news, China lowered its medium term lending facility rate by 10 basis points to revive the faltering economic growth.
The People's Bank of China lowered its one-year medium term rate following the decision to lower short term 7-day reverse repo rate by 10 basis points to 1.9% on Tuesday.
The central bank is expected to lower its loan prime rate by a similar amount on June 20.
ECB Lifted Reference Rates 0.25%
The European Central Bank decided to lift its lending rate for the eighth time in a row and revised its annual inflation outlook and lowered its annual economic growth estimate for 2023.
The Governing Council decided to lift the three key ECB interest rates by 25 basis points.
The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively, with effect from June 21.
The central bank also estimated average annual inflation of 5.4% in 2023 before it cools to 3.0% in 2024 and 2.2% in 2025.
Core inflation, excluding food and energy, is estimated to average 5.1% in 2023 and 3.0% in 2024.
Economic growth was revised slightly lower to 0.9% in 2023 and to 1.5% in 2024.
Eurozone Trade Deficit Shrank In April
The Euro Area international goods trade deficit in April shrank to €11.7 billion from €34.5 billion a year ago.
Exports declined 3.6% to €216.0 billion and imports dropped 11.9% to €227.7 billion.
In January to April 2023, euro area exports of goods to the rest of the world rose 5.4% from a year ago to €940.0 billion, and imports fell 2.9% to €957.2 billion.
Exports to the U.S. increased 2.5%, to China advanced 2.5%, to Turkey soared 26% and the UK jumped 6% but shipments to Russia declined 32% and Japan dropped 12.5%.
Imports from Russia plunged 73% and from China declined 10.5%.
Europe Indexes & Yields
The DAX index decreased 0.6% to 16,205.64, the CAC-40 index declined 0.8% to 7,270.65 and the FTSE 100 index increased 0.07% to 7,608.02.
The yield on 10-year German Bunds inched higher to 2.50%, French bonds traded higher to 3.03%, the UK gilts edged up to 4.42% and Italian bonds increased to 4.18%.
The euro edged lower to $1.08, the British pound to $1.26 and the Swiss franc to 90.26 cents.
Brent crude increased $2.32 to $75.54 a barrel and the Dutch TTF natural gas increased €2.80 to €41.15 per MWh.
Europe Stock Movers
Informa PLC increased 2.5% to 722.0 pence after the publisher and event organizer lifted its annual outlook.
Origin Enterprises Plc gained 1.7% to €3.51 after the agriculture services provider said revenue in the fiscal year 2023 increased to €1.9 billion.
Halma Plc declined 4.90% to 2,310.0 pence after the company posted lower net income attributable to stockholders.
H&M Group increased 3.3% to kr150.50 after the Swedish apparel retailer said net sales increased 6% in the three months to May.
Legal & General Group Plc declined 2.4% to 231.97 pence after the company appointed an outsider as its next chief executive.
Siemens AG added 0.3% to €164.82 after the German industrial conglomerate said it plans to invest €2 billion and build a new manufacturing plant in Singapore and expand its production facility in Chengdu, China.
Hugo Boss AG declined 2% to €68.70 after the German apparel designer and retailer said it is ahead on its target to reach €4 billion in sales by two years.
- Scott Peters
- 15 Jun, 2023
- New York City
Cava Group soared more than 110% and traded as high as $45 after the restaurant company completed its initial public offering.
Cava sold 14.4 million shares at $22 each and raised $318 million.
Toyota Motor Corp increased 1.9% to $168.72 and the stock extended its weekly gain after shareholders reelected company chairman Akio Toyoda yesterday.
Kroger Co declined 2.8% to $45.88 after the company reiterated its same store sales excluding gasoline sales for the year.
Sales in the first quarter increased to $45.1 billion from $44.6 billion and net income increased $962 million and diluted earnings per share increased to $1.32 from 90 cents a year ago.
The company reaffirmed Identical sales excluding gasoline sales to grow between 1.0% and 2.0%, with underlying growth between 2.5% and 3.5% after adjusting for the effect of Express Scripts.
Adjusted net earnings per diluted share between $4.45 and $4.60, including an estimated benefit from the 53rd week of approximately $0.15.
Lennar Corp advanced 3.5% to $118.78 after the home builder reported better-than-expected fiscal fourth quarter results and the company lifted its unit sales outlook for the year.
Total revenue increased 21% to $10.2 billion from $8.4 billion and net income edged up to $1.3 billion from $1.2 billion and diluted earnings per share advanced to $4.55 from $3.91 a year ago.
Homes delivered increased 13% to 20,064 and order backlog dropped 21% to 18,869 and backlog order value dropped 23% to $8.7 billion.
The company guided new orders and home deliveries in the quarter between 12,000 and 13,500 and average sales price between $440,000 and $450,000 and gross margin of 21%.
Autozone Inc jumped 3.5% to $2,489.51 after the specialty retailer expanded its stock repurchase program by $2 billion.
John Wiley & Sons Inc dropped 13.5% to $31.43 after the company reported a decline in quarterly sales and management announced a restructuring plan including the sale of non-core education businesses.
Revenue in the fiscal fourth quarter ending in April declined 4% to $526 million and net income increased to $68.3 million from $43.2 million and diluted earnings per share advanced to $1.22 from 76 cents a year ago.
- Brian Turner
- 15 Jun, 2023
- New York City
U.S. retail sales rose 0.3% in May following a 0.4% rise in April, the U.S. Census Bureau reported Thursday.
Retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.6 billion, up 0.3% from the previous month, and up 1.6% from a year ago.
Retail trade sales were up 0.3% from April 2023, and up 0.7 percent (±0.5 percent) above last year.
Nonstore retailers were up 6.5% while food services and drinking places were up 8.0% from a year ago.
- Barry Adams
- 15 Jun, 2023
- New York City
Stocks on Wall Street overcame morning doldrums and extended gains a day after the Federal Reserve paused its monetary tightening cycle.
The Federal Reserve held the federal funds rate as expected but sent clear signals that its inflation fight is not done yet and policymakers are prepared to lift rates to cool inflation to 2%.
In a balancing act, the central bank is attempting to cool inflation while avoiding the economy to slip into a recession and not cause widespread unemployment.
Investors also digested the latest jobless claims and retail sales data.
Jobless Claims Held at Elevated Levels
Initial jobless claims for the week ending on June 10 were 262,000, matching the previous week's level, the U.S. Department of Labor reported Thursday.
Continuing claims for four weeks increased 20,000 from the previous week to 1,775 million.
Retail Sales Unexpectedly Rose In May
U.S. retail sales rose 0.3% in May following a 0.4% rise in April, the U.S. Census Bureau reported Thursday.
Retail and food services sales for May, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $686.6 billion, up 0.3% from the previous month, and up 1.6% from a year ago.
Retail trade sales were up 0.3% from April 2023, and up 0.7 percent (±0.5 percent) above last year.
Nonstore retailers were up 6.5% while food services and drinking places were up 8.0% from a year ago.
U.S. Indexes & Yields
The S&P 500 index increased 0.9% to 4,410.29 and the Nasdaq Composite increased 0.7% to 13,726.93.
The yield on 2-year Treasury notes decreased to 4.65%, 10-year Treasury notes edged down to 3.73% and 30-year Treasury bonds eased to 3.83%.
Crude oil increased $0.92 to $69.19 a barrel and natural gas prices increased 8 cents to $2.42 a thermal unit.
U.S. Stock Movers
Cava Group soared more than 110% and traded as high as $45 after the restaurant company completed its initial public offering.
Cava sold 14.4 million shares at $22 each and raised $318 million.
Toyota Motor Corp increased 1.9% to $168.72 and the stock extended its weekly gain after shareholders reelected company chairman Akio Toyoda yesterday.
Kroger Co declined 2.8% to $45.88 after the company reiterated its same store sales excluding gasoline sales for the year.
Lennar Corp advanced 3.5% to $118.78 after the home builder reported better-than-expected fiscal second quarter results and the company lifted its unit sales outlook for the year.
- Bridgette Randall
- 15 Jun, 2023
- Frankfurt
European markets remained under pressure and the central bank lifted rates higher.
Market averages in London, Paris and Frankfurt traded down after the rate decision was announced and more rate hike worries dragged the indexes lower.
“We are not thinking about pausing," said ECB president Christine Lagarde at a press conference after the rate decision.
The central bank also revised higher its estimate of the headline inflation and core inflation for 2023 and lowered its economic growth outlook.
Investors largely ignore the improvement in international goods trade deficit data in April after imports fell at a faster pace than expected.
Tech stocks led decliners in trading across the region followed by declines in construction and telecom stocks.
In other news, China lowered its medium term lending facility rate by 10 basis points to revive the faltering economic growth.
The People's Bank of China lowered its one-year medium term rate following the decision to lower short term 7-day reverse repo rate by 10 basis points to 1.9% on Tuesday.
The central bank is expected to lower its loan prime rate by a similar amount on June 20.
ECB Lifted Reference Rates 0.25%
The European Central Bank decided to lift its lending rate for the eighth time in a row and revised its annual inflation outlook and lowered its annual economic growth estimate for 2023.
The Governing Council decided to lift the three key ECB interest rates by 25 basis points.
The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively, with effect from June 21.
The central bank also estimated average annual inflation of 5.4% in 2023 before it cools to 3.0% in 2024 and 2.2% in 2025.
Core inflation, excluding food and energy, is estimated to average 5.1% in 2023 and 3.0% in 2024.
Economic growth was revised slightly lower to 0.9% in 2023 and to 1.5% in 2024.
Eurozone Trade Deficit Shrank In April
The Euro Area international goods trade deficit in April shrank to €11.7 billion from €34.5 billion a year ago.
Exports declined 3.6% to €216.0 billion and imports dropped 11.9% to €227.7 billion.
In January to April 2023, euro area exports of goods to the rest of the world rose 5.4% from a year ago to €940.0 billion, and imports fell 2.9% to €957.2 billion.
Exports to the U.S. increased 2.5%, to China advanced 2.5%, to Turkey soared 26% and the UK jumped 6% but shipments to Russia declined 32% and Japan dropped 12.5%.
Imports from Russia plunged 73% and from China declined 10.5%.
Europe Indexes & Yields
The DAX index decreased 0.6% to 16,205.64, the CAC-40 index declined 0.8% to 7,270.65 and the FTSE 100 index increased 0.07% to 7,608.02.
The yield on 10-year German Bunds inched higher to 2.50%, French bonds traded higher to 3.03%, the UK gilts edged up to 4.42% and Italian bonds increased to 4.18%.
The euro edged lower to $1.08, the British pound to $1.26 and the Swiss franc to 90.26 cents.
Brent crude increased $0.82 to $74.02 a barrel and the Dutch TTF natural gas increased €7.60 to €46.0 per MWh.
Europe Stock Movers
Informa PLC increased 2.5% to 722.0 pence after the publisher and event organizer lifted its annual outlook.
Origin Enterprises Plc gained 1.7% to €3.51 after the agriculture services provider said revenue in the fiscal year 2023 increased to €1.9 billion.
Halma Plc declined 4.90% to 2,310.0 pence after the company posted lower net income attributable to stockholders.
H&M Group increased 3.3% to kr150.50 after the Swedish apparel retailer said net sales increased 6% in the three months to May.
Legal & General Group Plc declined 2.4% to 231.97 pence after the company appointed an outsider as its next chief executive.
Siemens AG added 0.3% to €164.82 after the German industrial conglomerate said it plans to invest €2 billion and build a new manufacturing plant in Singapore and expand its production facility in Chengdu, China.
Hugo Boss AG declined 2% to €68.70 after the German apparel designer and retailer said it is ahead on its target to reach €4 billion in sales by two years.
- Barry Adams
- 14 Jun, 2023
- New York City
Stocks and Treasury yields turned volatile after the Federal Reserve paused its monetary tightening cycle but forecasted more hikes in the year.
As widely expected on Wall Street, the Federal Reserve decided to hold rates but continue to sell its holding of government debt.
Despite ten multiple rate hikes in a row over the last fifteen months, the economy has been resilient, labor market conditions are still tight and inflation is significantly above the Fed's target rate of 2%.
Fed Chairman Jerome Powell said in a speech after the rate decision that the full impact of cumulative rate hikes are still not fully felt by the economy.
“We have been seeing the effects of our policy tightening and demand in the most interest rate sensitive sectors of the economy, especially housing and investment," Powell commented in a presentation after the rate decision.
“It will take time however, for the full effects of monetary restraint to be realized, especially on inflation,” highlighting lagged effects of the rate decisions over the last one year.
The Federal Reserve 2023 GDP growth rate was revised higher to 1.1% from the previous estimate of 0.4% in March and the unemployment rate estimate was revised lower to 4.1% from 4.5%.
The PCE inflation was revised to 3.2% from 3.3% in March but core PCE was revised higher to 3.9% from 3.6%.
The federal funds rate at the end of 2023 was revised higher to 5.6% from 5.1%, suggesting as many as two likely rate hikes in the second half of the year.
Fed Holds Rates for Now, More Hikes to Follow
The Federal Reserve in an unanimous decision agreed to leave the target range for the federal funds unchanged at 5% to 5.25%.
The Federal Open Market Committee paused rates for the first time after lifting rates for ten times in a row since March 2022, when rates were revised higher by 500 basis points over the last fifteen months.
The Fed left the door open for future rate hikes and added that the central bank will continue to reduce its holding of Treasury securities and agency debt and agency mortgage-backed securities.
The Federal Reserve is hoping that multiple rate hikes since March 15 will impact broader economic activities and slowdown inflation forces to the Fed's target rate of 2%.
"The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the accompanying statement noted.
Wholesale Inflation Declined In May
Producer prices for final demand declined 0.3% in May from the previous month, following a 0.2% rise in April, the U.S. Bureau of Labor Statistics reported Wednesday.
Goods prices declined 1.6%, the largest decline since July 2022 and services prices increased 0.2%.
Most of the May decline is attributable to the index for final demand energy, which dropped 6.8%. Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8% drop in prices for gasoline.
Prices for final demand foods moved down 1.3%.
In contrast, the index for final demand goods less foods and energy increased 0.1%.
Service inflation increased 0.2% in May and over 40 percent of the increase in prices can be attributed to margins for automobiles and automobile parts retailing, which rose 4.2%.
On an annual basis, core inflation, which excludes food, energy and trade, eased to 2.8% in May from 3.3% in April and 6.8% a year ago.
U.S. Indexes & Yields
The S&P 500 index was unchanged at 4,370.65 and the Nasdaq Composite increased 0.2% to 13,594.84.
The yield on 2-year Treasury notes decreased to 4.69%, 10-year Treasury notes edged down to 3.79% and 30-year Treasury bonds eased 3.88%.
Crude oil increased $0.71 to $70.03 a barrel and natural gas prices increased 3 cents to $2.37 a thermal unit.
U.S. Stock Movers
Advanced Micro Devices, Inc jumped 2.2% to $127.09 and the company said on Tuesday it is ready to ship its latest chip for artificial intelligence.
Vodafone Group Plc increased 1.9% to $9.32 after the company and CK Hutchison owned Three UK agreed to merge their UK businesses.
After the merger, the UK will have only three mobile network operators - BT, Virgin Media O2 and Vodafone-Three UK.
Alphabet Inc Class A declined 0.9% to $122.78 after the European Union charged Google's parent for violating antitrust rules in adtech business.
UnitedHealth Group Inc dropped 7.2% to $455.97 after the company's chief financial officer John Rex said at a conference that non-emergency surgeries rates this quarter are running above the average level.
On the back of the news, Cigna declined 5.3% to $257.82 and Humana Inc dropped 13.5% to $443.0.
Toyota Motor Corp jumped 4.5% to $165.41 after chairman Akio Toyoda was reelected by shareholders, endorsing a new electric vehicle strategy.
Toyota traded at about a 9-month high in New York and closed at 16-month high ¥2,310.0 in Tokyo.
European Markets Closed Higher Ahead of Rate Decisions
Stocks advanced in the eurozone but gains were muted ahead of decisions.
Benchmark indexes edged higher in London after crude oil and commodities prices rebounded and luxury stocks led gainers in Paris.
Eurozone industrial production reversed previous month's decline in April after capital goods orders rebounded.
British GDP expanded 0.2% from the previous month in April, the Office for National Statistics reported Wednesday.
The retail and wholesale trade lifted service sector activities by 0.3% in April after falling 0.5% in March.
On the other hand, production output declined 0.3% after expanding 0.7% in March and construction output declined 0.6% after advancing 0.2%.
Investors are awaiting rate decision from the Federal Reserve at 2:00 p.m. ET and from the European Central Bank Thursday.
Euro Area Industrial Production Rebounded In April
Eurozone industrial production increased 1.0% in April, reversing 3.8% decline in March, the Eurostat reported Wednesday.
On an annual basis, industrial production increased 0.2%.
On a monthly basis in April production of capital goods advanced 14.7% and energy 1.0%, while production of intermediate goods fell 1.0%, durable consumer goods 2.6% and non-durable consumer goods 3.0%
On an annual basis in April, production of capital goods rose 8.3% and nondurable consumer goods 0.6%, while production of durable consumer goods fell 4.6%, intermediate goods 6.2% and energy 7.4%.
Among member states, industrial production soared 21.5% in Ireland, rose 0.8% in France and flat in Germany while declined 1.8% in Spain and fell 1.9% in Italy.
Europe Indexes & Yields
The DAX index increased 0.6% to 16,319.97, the CAC-40 index increased 0.9% to 7,355.93 and the FTSE 100 index increased 0.6% to 7,637.82.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded higher to 2.98%, the UK gilts edged up to 4.43% and Italian bonds increased to 4.08%.
The euro edged higher to $1.08, the British pound edged up to $1.26 and the Swiss franc traded at 90.26 cents.
Brent crude increased $1.19 to $73.12 a barrel and the Dutch TTF natural gas increased €2.26 to €38.36 per MWh.
Europe Stock Movers
Shell PLC increased 1.7% to 2,336.50 pence after the company said it plans to increase dividend and accelerate stock buybacks.
Puma SE increased 0.6% to €51.60 after the German footwear company announced a corporate reorganization.
Wacker Neuson SE soared 6% to €21.85 after the Germany-based construction equipment company set a target to increase its sales by 78% in 2030.
Entain Plc declined 8% to 1,212.0 pence after the company agreed to acquire Poland-based STS Holdings for £750 million.
Heidelberger Druckmaschinen AG declined 6.5% to €1.59 after the company forecasted cautious outlook for the current fiscal year.
Safestore Holdings plc decreased 1.5% to 917.0 pence after the company said its pre-tax profit in the first-half declined 64%.
Grifols SA Class A soared 8.3% to €11.99 after the Spanish pharmaceutical company announced its plan to sell its stake in Shanghai RAAS for $1.5 billion.
Logitech International SA plunged 10% to CHF 51.68 after the company said its chief executive officer Bracken Darrell plans to leave the company.
- Brian Turner
- 14 Jun, 2023
- New York City
The Federal Reserve in an unanimous decision agreed to leave the target range for the federal funds unchanged at 5% to 5.25%.
The Federal Open Market Committee paused rates for the first time after lifting rates for ten times in a row since March 2022, when rates were revised higher by 500 basis points over the last fifteen months.
The Fed left the door open for future rate hikes and added that the central bank will continue to reduce its holding of Treasury securities and agency debt and agency mortgage-backed securities.
The Federal Reserve is hoping that multiple rate hikes since March 15 will impact broader economic activities and slowdown inflation forces to the Fed's target rate of 2%.
"The Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the accompanying statement noted.
- Scott Peters
- 14 Jun, 2023
- New York City
Shell PLC increased 2.5% to $59.85 after the UK-based energy company said it plans to increase dividend and accelerate stock buybacks.
The company announced its plan to buy back at least $5 billion of its in the second half, 15% increase in dividend from the second quarter and shareholder distribution increased to 30% to 40% of cash flow from operations.
Logitech International SA plunged 11.9% to $56.26 after the company said its chief executive officer Bracken Darrell plans to leave the company.
Advanced Micro Devices, Inc jumped 2.2% to $127.09 and the company said on Tuesday it is ready to ship its latest chip for artificial intelligence.
Vodafone Group Plc increased 1.9% to $9.32 after the company and CK Hutchison owned Three UK agreed to merge their UK businesses.
After the merger, the UK will have only three mobile network operators - BT, Virgin Media O2 and Vodafone-Three UK.
Alphabet Inc Class A declined 0.9% to $122.78 after the European Union charged Google's parent for violating antitrust rules in adtech business.
UnitedHealth Group Inc dropped 7.2% to $455.97 after the company's chief financial officer John Rex said at a conference that non-emergency surgeries rates this quarter are running above the average level.
On the back of the news, Cigna declined 5.3% to $257.82 and Humana Inc dropped 13.5% to $443.0.
Lumen Technologies Inc jumped 7.8% to $2.29 after the company announced partnership with Google and Microsoft for its new network interconnection ecosystem.
Toyota Motor Corp jumped 4.5% to $165.41 after chairman Akio Toyoda was reelected by shareholders, endorsing a new electric vehicle strategy.
Toyota traded at about a 9-month high in New York and closed at 16-month high ¥2,310.0 in Tokyo.
- Brian Turner
- 14 Jun, 2023
- New York City
Producer prices for final demand declined 0.3% in May from the previous month, following a 0.2% rise in April, the U.S. Bureau of Labor Statistics reported Wednesday.
Goods prices declined 1.6%, the largest decline since July 2022 and services prices increased 0.2%.
Most of the May decline is attributable to the index for final demand energy, which dropped 6.8%.
Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8% drop in prices for gasoline.
Prices for final demand foods moved down 1.3%.
In contrast, the index for final demand goods less foods and energy increased 0.1%.
Service inflation increased 0.2% in May and over 40 percent of the increase in prices can be attributed to margins for automobiles and automobile parts retailing, which rose 4.2%.
On an annual basis, core inflation, which excludes food, energy and trade, eased to 2.8% in May from 3.3% in April and 6.8% a year ago.
- Barry Adams
- 14 Jun, 2023
- New York City
Stocks continued to advance ahead of the Federal Reserve's rate decision and comments about the state of the economy.
The S&P 500 index and the Nasdaq Composite index traded at new 13-month highs on the hopes that the central bank may leave rates unchanged after increasing ten times in a row since March 2012.
The latest read on producer price inflation followed the release of consumer inflation data on Tuesday which declined to a two-year low of 4.0% in May.
After multiple rate hikes consumer and wholesale inflation measures have cooled from as high as 9% and 11% respectively, inflation still remains significantly above the central bank's target rate of 2%.
Real rates are still not restrictive enough as suggested by elevated housing market, low treasury yields and broad price pressures.
Wholesale Inflation Declined In May
Producer prices for final demand declined 0.3% in May from the previous month, following a 0.2% rise in April, the U.S. Bureau of Labor Statistics reported Wednesday.
Goods prices declined 1.6%, the largest decline since July 2022 and services prices increased 0.2%.
Most of the May decline is attributable to the index for final demand energy, which dropped 6.8%. Sixty percent of the May decline in the index for final demand goods can be traced to a 13.8% drop in prices for gasoline.
Prices for final demand foods moved down 1.3%.
In contrast, the index for final demand goods less foods and energy increased 0.1%.
Service inflation increased 0.2% in May and over 40 percent of the increase in prices can be attributed to margins for automobiles and automobile parts retailing, which rose 4.2%.
On an annual basis, core inflation, which excludes food, energy and trade, eased to 2.8% in May from 3.3% in April and 6.8% a year ago.
U.S. Indexes & Yields
The S&P 500 index increased 0.3% to 4,379.74 and the Nasdaq Composite added 0.3% to 13,605.72.
The yield on 2-year Treasury notes increased to 4.64%, 10-year Treasury notes edged down to 3.69% and 30-year Treasury bonds rose 3.91%.
Crude oil increased $0.71 to $70.03 a barrel and natural gas prices increased 3 cents to $2.37 a thermal unit.
U.S. Stock Movers
Shell PLC increased 2.5% to $59.85 after the UK-based energy company said it plans to increase dividend and accelerate stock buybacks.
The company announced its plan to buy back at least $5 billion of its in the second half, 15% increase in dividend from the second quarter and shareholder distribution increased to 30% to 40% of cash flow from operations.
Logitech International SA plunged 11.9% to $56.26 after the company said its chief executive officer Bracken Darrell plans to leave the company.
Advanced Micro Devices, Inc jumped 2.2% to $127.09 and the company said on Tuesday it is ready to ship its latest chip for artificial intelligence.
Vodafone Group Plc increased 1.9% to $9.32 after the company and CK Hutchison owned Three UK agreed to merge their UK businesses.
After the merger, the UK will have only three mobile network operators - BT, Virgin Media O2 and Vodafone-Three UK.
Alphabet Inc Class A declined 0.9% to $122.78 after the European Union charged Google's parent for violating antitrust rules in adtech business.
- Bridgette Randall
- 14 Jun, 2023
- Frankfurt
The DAX index increased 0.6% to 16,319.97, the CAC-40 index increased 0.9% to 7,355.93 and the FTSE 100 index increased 0.6% to 7,637.82.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded higher to 2.98%, the UK gilts edged up to 4.43% and Italian bonds increased to 4.08%.
Shell PLC increased 1.7% to 2,336.50 pence after the company said it plans to increase dividend and accelerate stock buybacks.
The company announced its plan to buyback at least $5 billion of its in the second half, 15% increase in dividend from the second quarter and shareholder distribution increased to 30% to 40% of cash flow from operations.
Puma SE increased 0.6% to €51.60 after the German footwear company announced a corporate reorganization.
Wacker Neuson SE soared 6% to €21.85 after the Germany-based construction equipment company set a target to increase its sales by 78% in 2030.
Entain Plc declined 8% to 1,212.0 pence after the company agreed to acquire Poland-based STS Holdings for £750 million.
Heidelberger Druckmaschinen AG declined 6.5% to €1.59 after the company forecasted cautious outlook for the current fiscal year.
Safestore Holdings plc decreased 1.5% to 917.0 pence after the company said its pre-tax profit in the first-half declined 64%.
Grifols SA Class A soared 8.3% to €11.99 after the Spanish pharmaceutical company announced its plan to sell its stake in Shanghai RAAS for $1.5 billion.
Logitech International SA plunged 10% to CHF 51.68 after the company said its chief executive officer Bracken Darrell plans to leave the company.
- Bridgette Randall
- 14 Jun, 2023
- Frankfurt
Stocks advanced in the eurozone but gains were muted ahead of decisions.
Benchmark indexes edged higher in London after crude oil and commodities prices rebounded and luxury stocks led gainers in Paris.
Eurozone industrial production reversed previous month's decline in April after capital goods orders rebounded.
British GDP expanded 0.2% from the previous month in April, the Office for National Statistics reported Wednesday.
The retail and wholesale trade lifted service sector activities by 0.3% in April after falling 0.5% in March.
On the other hand, production output declined 0.3% after expanding 0.7% in March and construction output declined 0.6% after advancing 0.2%.
Investors are awaiting rate decision from the Federal Reserve at 2:00 p.m. ET and from the European Central Bank Thursday.
Euro Area Industrial Production Rebounded In April
Eurozone industrial production increased 1.0% in April, reversing 3.8% decline in March, the Eurostat reported Wednesday.
On an annual basis, industrial production increased 0.2%.
On a monthly basis in April production of capital goods advanced 14.7% and energy 1.0%, while production of intermediate goods fell 1.0%, durable consumer goods 2.6% and non-durable consumer goods 3.0%
On an annual basis in April, production of capital goods rose 8.3% and nondurable consumer goods 0.6%, while production of durable consumer goods fell 4.6%, intermediate goods 6.2% and energy 7.4%.
Among member states, industrial production soared 21.5% in Ireland, rose 0.8% in France and flat in Germany while declined 1.8% in Spain and fell 1.9% in Italy.
Europe Indexes & Yields
The DAX index increased 0.6% to 16,319.97, the CAC-40 index increased 0.9% to 7,355.93 and the FTSE 100 index increased 0.6% to 7,637.82.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded higher to 2.98%, the UK gilts edged up to 4.43% and Italian bonds increased to 4.08%.
The euro edged lower to $1.08, the British pound to $1.26 and the Swiss franc to 90.26 cents.
Brent crude increased $1.13 to $75.42 a barrel and the Dutch TTF natural gas increased €2.50 to €33.56 per MWh.
Europe Stock Movers
Shell PLC increased 1.7% to 2,336.50 pence after the company said it plans to increase dividend and accelerate stock buybacks.
Puma SE increased 0.6% to €51.60 after the German footwear company announced a corporate reorganization.
Wacker Neuson SE soared 6% to €21.85 after the Germany-based construction equipment company set a target to increase its sales by 78% in 2030.
Entain Plc declined 8% to 1,212.0 pence after the company agreed to acquire Poland-based STS Holdings for £750 million.
Heidelberger Druckmaschinen AG declined 6.5% to €1.59 after the company forecasted cautious outlook for the current fiscal year.
Safestore Holdings plc decreased 1.5% to 917.0 pence after the company said its pre-tax profit in the first-half declined 64%.
Grifols SA Class A soared 8.3% to €11.99 after the Spanish pharmaceutical company announced its plan to sell its stake in Shanghai RAAS for $1.5 billion.
Logitech International SA plunged 10% to CHF 51.68 after the company said its chief executive officer Bracken Darrell plans to leave the company.
- Barry Adams
- 13 Jun, 2023
- New York City
Stocks rallied, crude oil rebounded and Treasury yields inched higher after consumer price inflation eased.
Consumer price inflation in May decreased to 4.0% after energy prices weakened and food price inflation slowed but shelter inflation drove the inflation higher.
Attention now shifted to the release of wholesale price inflation before the market opening tomorrow and the Fed's rate decision early afternoon tomorrow.
Most market participants are expecting the Federal Reserve to stay on the sidelines after the latest inflation report showed progress.
But the Federal Reserve may focus on core inflation, which has stayed stubbornly high after ten rate hikes in a row since March 2022, and increase rate at the end of the next policy meeting Wednesday.
Crude oil rebounded after declining for four days in a row after the People's Bank of China cut its short term lending rate by 10 basis points to support weak economic recovery.
Overall CPI Eased In May, Core Inflation Stayed Elevated
Consumer price index for May eased to 4.0% in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported Tuesday.
The inflation rate dropped to the slowest pace since March 2021, but prices are still rising at a faster pace than preferred by the Federal Reserve.
On a monthly basis prices rose 0.1% in May, slower than 0.4% rise in April.
Core inflation, which excludes food and energy, slowed to 5.3% in May from 5.5% in April, the slowest annual pace since November 2021.
The shelter index increased 8.0% over the last year, accounting for over 60% of the total increase in all items less food and energy.
U.S. Indexes & Yields
The S&P 500 index increased 0.7% to 4,369.01 and the Nasdaq Composite added 0.8% to 13,573.32.
The yield on 2-year Treasury notes increased to 4.52%, 10-year Treasury notes edged down to 3.72% and 30-year Treasury bonds eased 3.88%.
Crude oil increased $1.94 to $69.05 a barrel and natural gas prices increased 8 cents to $2.34 a thermal unit.
U.S. Stock Movers
Oracle Corporation jumped 4.8% to $122 after the database developer reported better-than-expected fiscal fourth quarter results.
GameStop Corp surged 6% to $25.80 after Chairman Ryan Cohen disclosed in a regulatory filing the purchase of 443,842 shares of the video game developer.
The purchase amounts to $10.8 million based on Monday's closing price.
Exxon Mobil and Chevron Corporation edged up 1.4% after crude oil prices rebounded.
Home builders were in focus after inflation dropped in May raising hopes that the Federal Reserve will pause its rate hike cycle at the end of a two-day meeting on Wednesday.
Lennar Corp, Toll Brothers Inc, PulteGroup and NVR Inc advanced between 0.6% and 1.2%.
European Markets Rebounded
European markets traded in a tight range after German inflation eased and China unexpectedly lowered interest rates.
Benchmark indexes traded sideways after German inflation declined in May but core inflation stayed above 5% for the sixth month in a row, highlighting widespread price pressures in the economy.
Moreover, China unexpectedly lowered its short term lending rate to revive economic growth.
The People's Bank of China lowered its seven day reverse repo rate by 10 basis points to 1.9% from 2.0%.
The unusual move to lower short term rate before lowering the long term rate, highlights the sense of urgency felt by the policymakers in shoring the economy.
The central bank is likely to lower its benchmark loan prime lending rate used for mortgage and consumer lending by the same amount next Tuesday.
German Inflation Eased, Core Inflation Stayed Above 5%
German inflation eased to 6.1% from a year ago in May, the Federal Statistics Office said Tuesday.
Inflation slowed from 7.2% in April and price increase was the weakest since March 2022 when prices rose 5.9%.
Inflation when measured on the EU-harmonized basis decreased to 6.3% from 7.6% in April.
Energy price inflation slowed to 2.6% in May from 6.8% in April but food price inflation remained elevated at 14.9% despite easing from 17.2% in April.
Food prices remained the main driver of inflation among all product groups. Excluding energy prices, inflation rose 6.5% and excluding food and energy, inflation was 5.4%.
Core inflation, which excludes food and energy, has been above 5% since December 2022 and has accelerated every month since then reaching high of 5.8% in March and April before trending lower in May.
On a monthly basis, consumer price inflation declined 0.1% in May, reversing 0.4% increase in April.
Europe Indexes & Yields
The DAX index increased 0.8% to 16,230.68, the CAC-40 index increased 0.6% to 7,289.83 and the FTSE 100 index traded down 0.3% to 7,594.80.
The yield on 10-year German Bunds inched higher to 2.37%, French bonds traded higher to 2.91%, the UK gilts edged up to 4.40% and Italian bonds decreased to 4.05%.
The euro edged lower to $1.079, the British pound to $1.256 and the Swiss franc to 90.62 cents.
Brent crude increased $2.16 to $73.98 a barrel and the Dutch TTF natural gas decreased €5.06 to €36.05 per MWh.
Europe Stock Movers
Luxury stocks in Paris advanced after China lowered its short term lending rate to shore up weak economic recovery.
LVMH increased 0.2% to €836.50 and Hermes International SCA edged up 0.1% to €1,975.60.
Mining and resource companies traded higher following a rebound in base metal and crude oil prices.
Antofagasta, Anglo American and Glencore jumped between 2% and 4%.
Centrica Plc fell 0.8% to 117.05 pence after the company posted strong results in the first five months of 2023 and reiterated its annual outlook near the top end of the market expectations.
Durr Group increased 4% after the plant engineering company said it has agreed to acquire BBS Automation Group.
- Scott Peters
- 13 Jun, 2023
- New York City
The S&P 500 index increased 0.5% to 4,321.57 and the Nasdaq Composite added 1.1% to 13,401.41.
The yield on 2-year Treasury notes increased to 4.52%, 10-year Treasury notes edged down to 3.72% and 30-year Treasury bonds eased 3.88%.
Oracle Corporation jumped 4.8% to $122 after the database developer reported better-than-expected fiscal fourth quarter results.
Revenue in the fiscal fourth quarter ending in May increased 17% to $13.8billion and net income increased to $3.3 billion from $3.2billion and diluted earnings per share rose to $1.19 from $1.16 a year ago.
Cloud segment revenue soared 54% to $4.4 billion and cloud infrastructure jumped 76% to $1.6 billion.
The board of directors declared a quarterly dividend of 40 cents to shareholders on record July 12 payable on July26.
GameStop Corp surged 6% to $25.80 after Chairman Ryan Cohen disclosed in a regulatory filing the purchase of 443,842 shares of the video game developer.
The purchase amounts to $10.8 million based on Monday's closing price.
Exxon Mobil, Valero Energy, Chevron Corporation, Marathon Petroleum Corporation, EQT Corp and EOG Resources increased between 0.5% and 2% after crude oil prices rebounded.
Home builders were in focus after inflation dropped in May raising hopes that the Federal Reserve will pause its rate hike cycle at the end of a two-day meeting on Wednesday.
Lennar Corp, Toll Brothers Inc, PulteGroup and NVR Inc advanced between 0.6% and 1.2%.
Zions Bancorporation decreased 2.5% to $29.58 after the company said its net interest outlook is "decreasing" in a presentation posted on the company's website on Monday.
A shift in funding from deposits to short-term borrowings "negatively impacted" the margin in first quarter 2023 to 3.33% from3.53% a year ago and trending towards 2.85% as of June 12.
At the end of first quarter 2023, average total loans increased to $56.2 billion from $50.9 billion and total yield jumped to 5.3% from 3.52% from a year ago.
Average total deposits declined from $81.6 billion in the first quarter to $70.2 billion and cost of total deposits increased to 0.47% from 0.03% a year ago.