- Scott Peters
- 21 Nov, 2023
- New York City
Lowe's Companies dropped 5.3% to $193.59 after the home improvement retailer lowered its full-year sales and earnings outlook.
Net sales in the third quarter declined to $20.5 billion from $23.5 billion, net income soared to $1.8 billion from $154 million, and diluted earnings per share rose to $3.06 from 25 cents a year ago.
Earnings in the prior year included an impairment charge of $2.1 billion after the company sold its Canadian retail business.
During the quarter, the company repurchased approximately 7.3 million shares for $1.6 billion and paid $642 million in dividends.
Comparable sales in the quarter declined 7.4% after the pandemic-fueled demand for home improvement projects moderated.
The company lowered its full-year 52-week sales estimate to $86 billion from the previous estimate range of $87 billion to $89 billion.
Comparable sales are expected to decline 5% from the previously estimated range of 2% to 4%.
The company also lowered its adjusted diluted earnings per share estimate to $13.0 from the previous estimate between $13.20 and $13.60.
Zoom Video Communication declined 1.4% to $65.03 after the company released quarterly results.
Revenue in the fiscal third quarter ending in October increased 3.2% to $1.2 billion from $1.1 billion, net income advanced to $141.2 million from $48.2 million, and diluted earnings per share rose to 47 cents from 16 cents a year ago.
Enterprise subscribers continued to expand and rose 5% from a year ago to 219,700.
About 3,731 customers, an increase of 13.5% from a year ago, paid more than $100,000 in the trailing twelve months.
The company guided fiscal fourth quarter revenue between $1.125 billion and $1.130 billion, and non-GAAP diluted earnings per share are estimated between $1.13 and $1.15.
Zoom lifted its fiscal year 2024 revenue estimate to between $4.506 billion and $4.511 billion, and non-GAAP diluted earnings per share to between $4.93 and $4.95.
Best Buy Company declined 5.2% to $64.60 after the retailer lowered its annual and quarterly sales outlook.
Revenue in the third quarter declined to $9.7 billion from $10.6 billion, net income fell to $263 million from $277 million, and diluted earnings per share declined to $1.21 from $1.22 a year ago.
Domestic comparable sales declined 7.3% after falling 10.5% in the quarter a year ago, and the company said comparable sales tend to fall between 3% and 7%.
However, the retailer said non-GAAP operating costs in the quarter are likely to rise between 4.7% and 5.0%, matching the increase of 4.8% in the quarter a year ago.
Best Buy estimated fiscal year 2024 revenue for 53 weeks to range between $43.1 billion and $43.7 billion, lower than the previous estimate between $43.8 billion and $44.5 billion.
Comparable sales in the fiscal year are expected to fall between 6.0% and 7.5%, compared to the previous estimate of a decrease between 4.5% and 6.0%.
Abercrombie & Fitch declined 4.9% to 68.0 after the retailer reported quarterly results.
Net sales in the fiscal third quarter increased 20% to $1.1 billion from $880 million, and the retailer swung to a net income of $97.7 million from a loss of $718 million, and diluted earnings per share were $1.83 compared to a loss of 4 cents per share a year ago.
Comparable sales across both brands increased 16% after a 26% jump in Abercrombie & Fitch and a 7% rise in Hollister stores.
Sales in the fiscal fourth quarter are expected to rise in low double-digits from $1.2 billion a year ago, and the retailer said operating margins are estimated to improve from the previous year because of higher retail prices and lower freight costs.
The company lifted its 2023 sales growth outlook to between 12% and 14% from $3.7 billion in 2022, compared to the previous growth estimate of 10%.
Abercrombie revised its operating margin to be around 10%, up from the previous estimate between 8% and 9%, which includes the 250 basis point benefits of lower freight costs.
- Barry Adams
- 21 Nov, 2023
- New York City
Stock futures edged lower, and investors awaited another batch of earnings and the Federal Reserve meeting minutes.
The S&P 500 index and the Nasdaq advanced for five days in a row after two popular benchmark indexes advanced in Monday's trading.
Investors reviewed earnings from Zoom Video and Lowe's Companies and are awaiting results from Nvidia, Dell, and HP later in the day.
The Federal Reserve is also scheduled to release the minutes of a two-day meeting ending November 1 at 2 p.m. ET.
Market participants are hoping to get more clues in the decision-making of policymakers' and looking for signs of the rate path ahead.
Most investors are anticipating the Federal Reserve holding rates for the third time in a row after the December meeting, providing a stable rate outlook all the way to the end of January 2024, when policymakers are scheduled to gather again.
U.S. Indexes and Yields
The S&P 500 index edged up 0.01% to 4,547.03, and the Nasdaq Composite increased 0.02% to 14,284.05.
The yield on 2-year Treasury notes increased to 4.91%, 10-year Treasury notes inched higher to 4.42%, and 30-year Treasury bonds edged higher to 4.56%.
Crude oil decreased $0.35 to $77.46 a barrel, and natural gas prices fell 0.1 cent to $2.88 a thermal unit.
Gold increased $8.88 to $1,987.08 an ounce after Treasury yields dropped further away from 2007-highs of 5% reached in October.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.34.
U.S. Stock Movers
Lowe's Companies dropped 5.3% to $193.59 after the home improvement retailer lowered its full-year sales and earnings outlook.
Net sales in the third quarter declined to $20.5 billion from $23.5 billion, net income soared to $1.8 billion from $154 million, and diluted earnings per share rose to $3.06 from 25 cents a year ago.
Earnings in the prior year included an impairment charge of $2.1 billion after the company sold its Canadian retail business.
During the quarter, the company repurchased approximately 7.3 million shares for $1.6 billion and paid $642 million in dividends.
Comparable sales in the quarter declined 7.4% after the pandemic-fueled demand for home improvement projects moderated.
The company lowered its full-year 52-week sales estimate to $86 billion from the previous estimate range of $87 billion to $89 billion.
Comparable sales are expected to decline 5% from the previously estimated range of 2% to 4%.
The company also lowered its adjusted diluted earnings per share estimate to $13.0 from the previous estimate between $13.20 and $13.60.
- Inga Muller
- 21 Nov, 2023
- Frankfurt
Benchmark indexes across Europe lacked direction, and the euro and the Swiss franc hovered near a three-month high.
The DAX index increased 0.1% to 15,915.55, the CAC-40 index fell 0.3% to 7,226.51, and the FTSE 100 index fell 0.5% to 7,461.70.
The yield on 10-year German bonds increased to 2.592%; French bonds traded lower to 3.152%; the UK gilts increased to 4.11%; and Italian bonds inched lower to 4.32%.
Sonova Holding AG increased 7.5% to CHF 251.40 despite the Swiss hearing aid maker lowering its annual core profit forecast.
CRH PLC increased 1.8% to 4,827.0 pence after the building materials solution provider agreed to acquire a cement plant and 20 ready concrete mix plants in Texas from Martin Marietta Materials, Inc. for $2.1 billion.
International Consolidated Airlines Group decreased 2.4% to 159.85 pence, despite the parent company of British Air reaffirming its annual outlook.
Cranswick plc increased 1.5% to 3,700.0 pence after the meat producer estimated its annual profit near the upper end of the estimated range by analysts.
Rheinmetall AG jumped 4% to €292.80 after the German defense contractor released its mid-term strategy.
Banca Monte dei Paschi di Siena SpA dropped 8.5% to €2.81 after the Italian government sold its 25% stake in the bailed-out bank.
- Bridgette Randall
- 21 Nov, 2023
- Frankfurt
European markets traded mixed, and the euro hovered near the three-month high.
Benchmark indexes in Frankfurt, Paris, and London traded sideways ahead of comments from several European Central Bank officials and the release of minutes of the November meeting by the U.S. Federal Reserve.
Positive market sentiment over the last two weeks drove market indexes higher after interest rate hike worries receded, and the stable interest rate outlook also supported market enthusiasm.
Investors also welcomed the increase in vehicle sales in October, suggesting resilient consumer spending.
EU Passenger Vehicle Sales Expanded Fifteenth Consecutive Month
Vehicle sales in the European Union continued to expand as buyers returned to purchase electric vehicles and producers faced a few supply chain issues, the European Automobile Manufacturers Association reported today.
New vehicle sales rose for the fifteenth month in a row.
Passenger vehicle sales in October jumped 14.6% from a year ago to 855,484 units, and the market share of fully electric vehicles increased to 14.2% from 12% in the previous month.
Battery-powered electric vehicle sales for the ten months to October jumped to 14%, surpassing diesel vehicles for the first time.
Three of the four largest vehicle markets in the European Union posted double-digit gains.
Vehicle registration in France rose 21.9%, Italy gained 20%, and Spain advanced 18.1%.
UK Public Sector Borrowing Expands
The UK's public sector net borrowing, excluding banks, increased to £14.9 billion, compared to £10.5 billion a year ago, the Office for National Statistics reported Tuesday.
The net borrowing in October was the second largest in the month since record-keeping began in 1993.
The UK government's total spending increased 7.7% to £99.8 because higher family benefits offset the ending of energy subsidies.
In addition, the government's revenue increased by 3.3% to £85.2 billion, driven by a £2.7 billion increase in central government tax revenue.
Despite the increase in net borrowings in the last three months in a row, borrowing between April and October totaled £98.3 billion, £17 billion less than estimated by the Office for Budget Responsibility.
Europe Indexes and Yields
The DAX index increased 0.1% to 15,915.55, the CAC-40 index fell 0.3% to 7,226.51, and the FTSE 100 index fell 0.5% to 7,461.70.
The yield on 10-year German bonds increased to 2.592%; French bonds traded lower to 3.152%; the UK gilts increased to 4.11%; and Italian bonds inched lower to 4.32%.
The euro continued to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.
The euro rebounded to $1.094, the British pound at $1.253, and the U.S. dollar at 88.38 Swiss cents.
Brent crude decreased $0.43 to $81.91 a barrel, and the Dutch TTF natural gas edged lower by €0.38 to €45.44 per MWh.
Europe Stock Movers
Sonova Holding AG increased 7.5% to CHF 251.40 despite the Swiss hearing aid maker lowering its annual core profit forecast.
CRH PLC increased 1.8% to 4,827.0 pence after the building materials solution provider agreed to acquire a cement plant and 20 ready concrete mix plants in Texas from Martin Marietta Materials, Inc. for $2.1 billion.
International Consolidated Airlines Group decreased 2.4% to 159.85 pence, despite the parent company of British Air reaffirming its annual outlook.
Cranswick plc increased 1.5% to 3,700.0 pence after the meat producer estimated its annual profit near the upper end of the estimated range by analysts.
Rheinmetall AG jumped 4% to €292.80 after the German defense contractor released its mid-term strategy.
Banca Monte dei Paschi di Siena SpA dropped 8.5% to €2.81 after the Italian government sold its 25% stake in the bailed-out bank.
- Barry Adams
- 20 Nov, 2023
- New York City
Benchmark indexes on Wall Street extended the 3-week rally, and growth stocks led the gainers.
U.S. markets will be closed Thursday to celebrate the Thanksgiving holiday, and trading will close early on Friday.
High-growth companies dominated Monday's trading.
Microsoft struck a deal with ousted OpenAI chief executive Sam Altman to lead the company's AI research team, and Nvidia and Zoom were in focus ahead of their earnings results.
In the previous three weeks in a row, investors bid up growth stocks after the Federal Reserve held rates steady for the second time in a row, and markets continued to advance after consumer price, producer price, and import price inflation slowed.
The weakening inflationary forces raised hopes that the central bank has greater-than-expected flexibility in keeping economic growth intact while cooling inflation and supporting labor market expansion.
After consumer price inflation dropped to 3.2% in October, investors raised the possibility of a rate cut in early 2024 and drove growth stocks higher for the third week in a row.
But there are warning signs on the horizon, and despite resilient consumers, retail sales declined 0.1% in October unadjusted for inflation, the first decline in seven months.
Moreover, the largest U.S. retailers, Walmart, Home Depot, and Macy's, also offered a cautious outlook for holiday sales.
German Producer Prices Drop 4th Consecutive Month, China Holds Rates
On the global economic front, the People's Bank of China held its 1-year loan prime rate at 3.45% and its 5-year rate at 4.2%.
The one-year rate has been held steady since August, when it was lowered from 3.55%, and the 5-year rate has been held steady since June, when it was lowered from 4.3%.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
U.S. Indexes and Yields
The S&P 500 index edged up 0.7% to 4,544.49, and the Nasdaq Composite increased 1.1% to 14,278.45.
The yield on 2-year Treasury notes increased to 4.92%, 10-year Treasury notes inched higher to 4.42%, and 30-year Treasury bonds edged higher to 4.57%.
Crude oil increased $2.36 to $78.41 a barrel, and natural gas prices fell 6 cents to $2.90 a thermal unit.
Gold decreased $2.33 to $1,977.48 an ounce on the receding fears of inflation.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.41.
U.S. Stock Movers
Microsoft increased 2.2% to $377.95 after chief executive Satya Nadella said ousted OpenAI chief Sam Altman will lead a new AI research team at Microsoft.
At least 500 OpenAI employees have threatened to resign if the current board fails to resign and reinstate former chief executive Sam Altman.
Nvidia gained 1.6% to $501.0 ahead of the company's quarterly results on Tuesday.
The advanced chipmaker is estimated to report at least $3.08 per diluted share on revenue of $14.89 billion, compared to 58 cents a share and $5.93 billion in revenue a year ago.
Zoom Video Communications Inc. rose 2.5% to $65.70 ahead of the company's quarterly results after the close on Monday.
The video communication company estimated revenue in the fiscal third quarter ending in October between $1.15 billion and $1.2 billion and non-GAAP adjusted earnings between $1.07 and $1.09.
Previously, Zoom had estimated revenue in fiscal 2024 ending in January to range between $4.485 billion and $4.495 billion and adjusted earnings per share between $4.63 and $4.67.
Volatile Trading In European Markets, Euro Approaches 3-moth High
European markets traded with a downward bias in Monday's trading, and bond yields continued to drift lower.
Benchmark indexes in Frankfurt, London, and Paris headed lower following gains in the previous week after inflation in advanced economies fell in October.
The lower inflation supported the case of central banks holding rates steady for a couple of months.
Markets are also awaiting comments later today from the heads of the central banks of France, Spain, and the U.K.
Moreover, the U.S. Federal Reserve is scheduled to release its minutes of the last meeting on Tuesday and provide additional clarity in the policymakers decision.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
The measure of producer inflation decreased for the fourth month in a row due to the sharp decline in energy prices.
The annual decline in inflation in September was 14.7%, which was the largest fall since record-keeping began in 1949.
Europe Indexes and Yields
The DAX index decreased 0.1% to 15,901.33, the CAC-40 index rose 0.2% to 7,246.94, and the FTSE 100 index fell 0.1% to 7,496.36.
In the previous week, the DAX index increased 4.2%, the CAC-40 index advanced 2.2%, and the FTSE 100 index inched higher by 1%.
The yield on 10-year German bonds increased to 2.59%; French bonds traded higher to 3.15%; the UK gilts eased to 4.09%; and Italian bonds inched higher to 4.33%.
The euro continue to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.
The euro rebounded to $1.093, the British pound at $1.248, and the U.S. dollar at 88.32 Swiss cents.
Brent crude increased $2.27 to $82.90 a barrel, and the Dutch TTF natural gas edged higher by €0.74 to €45.82 per MWh.
Europe Stock Movers
Energy stocks traded higher after crude oil prices extended Friday's sharp jump of 4% on reports that Saudi Arabia is looking to extend voluntary production cuts into next year.
BP, Shell, Repsol, Eni, and TotalEnergies gained between 0.4% and 1.5%.
Bayer AG plunged 19.4% to €33.85 after the German pharmaceutical and biotech company lost a key U.S. trial against its weed killer Roundup.
Moreover, the company also stopped the main study of its top experimental drug.
A Missouri jury ordered the company to pay $1.56 billion to four plaintiffs who successfully argued in court that the company's weed killer caused health injuries, including cancer.
After the trial, the jury found the company's Monsanto business liable for negligence, design defects, and the company's failure to inform customers of the potential dangers of using Roundup.
Julius Baer Gruppe AG dropped 10.6% to CHF 49.81 after the Swiss financial service company lowered its annual profit expectations.
The company said its 2023 net income is expected to be lower than in the previous year because of a higher year-to-date effective income tax rate and higher loan loss provisions in November.
Net assets under management in the first ten months to October increased by 3%, or CHF 11 billion, to CHF 435 billion.
Ashtead Group plc dropped 10.1% to 4,712.10 pence after the UK-based power equipment rental company said its annual profit is likely to fall short of market expectations.
Compass Group plc declined 4.5% to 1,999.50 pence after the UK-based catering service provider reported lower-than-expected earnings.
Halma plc advanced 2.4% to 2,101.0 pence after the UK-based safety equipment company agreed to acquire the TeDan group of companies for $89.1 million with additional milestone payments.
- Scott Peters
- 20 Nov, 2023
- New York City
Microsoft increased 1.4% to $374.85 after chief executive Satya Nadella said ousted OpenAI chief Sam Altman will lead a new AI research team at Microsoft.
Nvidia gained 0.7% to $496.51 ahead of the company's quarterly results on Tuesday.
The advanced chipmaker is estimated to report at least $3.08 per diluted share on revenue of $14.89 billion, compared to 58 cents a share and $5.93 billion in revenue a year ago.
Zoom Video Communications Inc. rose 0.6% to $64.50 ahead of the company's quarterly results after the close on Monday.
The video communication company estimated revenue in the fiscal third quarter ending in October between $1.15 billion and $1.2 billion and non-GAAP adjusted earnings between $1.07 and $1.09.
Previously, Zoom had estimated revenue in fiscal 2024 ending in January to range between $4.485 billion and $4.495 billion and adjusted earnings per share between $4.63 and $4.67.
Best Buy Company increased 0.5% to $68.60 ahead of the retailer's quarterly results on Tuesday.
The retailer is expected to report a decline in revenue of at least 6% to $9.8 billion and quarterly earnings per share of $1.14, according to a survey of three analysts by Ticker.com.
Deer & Company fell 0.6% to $68.60 to $382.0 ahead of the company's quarterly results on Wednesday.
Deere reported in the previous quarter total revenue of $15.8 billion, net income of $2.97 billion, and diluted earnings per share of $10.20.
- Barry Adams
- 20 Nov, 2023
- New York City
U.S. stock futures rested near the flatline ahead of the start of holiday-shortened trading this week.
U.S. markets will be closed Thursday to celebrate the Thanksgiving holiday, and trading will close early on Friday.
Investors are looking to extend the three-week rally after consumer price inflation, producer price inflation, and import inflation indexes declined.
The weakening inflationary forces raised hopes that the central bank has greater-than-expected flexibility in keeping economic growth intact while cooling inflation and supporting labor market expansion.
After consumer price inflation dropped to 3.2% in October, investors raised the possibility of a rate cut in early 2024 and drove growth stocks higher for the third week in a row.
But there are warning signs on the horizon, and despite resilient consumers, retail sales declined 0.1% in October unadjusted for inflation, the first decline in seven months.
Moreover, the largest U.S. retailers, Walmart, Home Depot, and Macy's, also offered a cautious outlook for holiday sales.
German Producer Prices Drop 4th Consecutive Month, China Holds Rates
On the global economic front, the People's Bank of China held its 1-year loan prime rate at 3.45% and its 5-year rate at 4.2%.
The one-year rate has been held steady since August, when it was lowered from 3.55%, and the 5-year rate has been held steady since June, when it was lowered from 4.3%.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
The measure of producer inflation decreased for the fourth month in a row due to the sharp decline in energy prices.
The annual decline in inflation in September was 14.7%, which was the largest fall since record-keeping began in 1949.
U.S. Indexes and Yields
The S&P 500 index edged slightly lower to 4,511.02, and the Nasdaq Composite was unchanged at 14,124.93.
The yield on 2-year Treasury notes increased to 4.91%, 10-year Treasury notes inched higher to 4.46%, and 30-year Treasury bonds edged higher to 4.62%.
Crude oil increased $1.06 to $77.11 a barrel, and natural gas prices fell 7 cents to $2.77 a thermal unit.
Gold decreased 0.3%, or $5.42, to $1,977.48 an ounce on the receding fears of inflation.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.51.
U.S. Stock Movers
Microsoft increased 1.4% to $374.85 after chief executive Satya Nadella said ousted OpenAI chief Sam Altman will lead a new AI research team at Microsoft.
Nvidia gained 0.7% to $496.51 ahead of the company's quarterly results on Tuesday.
The advanced chipmaker is estimated to report at least $3.08 per diluted share on revenue of $14.89 billion, compared to 58 cents a share and $5.93 billion in revenue a year ago.
Zoom Video Communications Inc. rose 0.6% to $64.50 ahead of the company's quarterly results after the close on Monday.
The video communication company estimated revenue in the fiscal third quarter ending in October between $1.15 billion and $1.2 billion and non-GAAP adjusted earnings between $1.07 and $1.09.
Previously, Zoom had estimated revenue in fiscal 2024 ending in January to range between $4.485 billion and $4.495 billion and adjusted earnings per share between $4.63 and $4.67.
- Inga Muller
- 20 Nov, 2023
- Frankfurt
European market indexes lacked direction after last week's rally, and bond yields drifted lower on the stable interest rate outlook for the next two months.
The DAX index decreased 0.1% to 15,902.18, the CAC-40 index rose 0.2% to 7,250.84, and the FTSE 100 index fell 0.1% to 7,494.94.
The yield on 10-year German bonds increased to 2.59%; French bonds traded higher to 3.15%; the UK gilts eased to 4.09%; and Italian bonds inched higher to 4.33%.
Energy stocks traded higher after crude oil prices extended Friday's sharp jump of 4% on reports that Saudi Arabia is looking to extend voluntary production cuts into next year.
BP, Shell, Repsol, Eni, and TotalEnergies gained between 0.4% and 1.5%.
Bayer AG plunged 19.4% to €33.85 after the German pharmaceutical and biotech company lost a key U.S. trial against its weed killer Roundup.
Moreover, the company also stopped the main study of its top experimental drug.
A Missouri jury ordered the company to pay $1.56 billion to four plaintiffs who successfully argued in court that the company's weed killer caused health injuries, including cancer.
After the trial, the jury found the company's Monsanto business liable for negligence, design defects, and the company's failure to inform customers of the potential dangers of using Roundup.
Julius Baer Gruppe AG dropped 10.6% to CHF 49.81 after the Swiss financial service company lowered its annual profit expectations.
The company said its 2023 net income is expected to be lower than in the previous year because of a higher year-to-date effective income tax rate and higher loan loss provisions in November.
Net assets under management in the first ten months to October increased by 3%, or CHF 11 billion, to CHF 435 billion.
Ashtead Group plc dropped 10.1% to 4,712.10 pence after the UK-based power equipment rental company said its annual profit is likely to fall short of market expectations.
Compass Group plc declined 4.5% to 1,999.50 pence after the UK-based catering service provider reported lower-than-expected earnings.
Halma plc advanced 2.4% to 2,101.0 pence after the UK-based safety equipment company agreed to acquire the TeDan group of companies for $89.1 million with additional milestone payments.
- Bridgette Randall
- 20 Nov, 2023
- Frankfurt
European markets traded with a downward bias in Monday's trading, and bond yields continued to drift lower.
Benchmark indexes in Frankfurt, London, and Paris headed lower following gains in the previous week after inflation in advanced economies fell in October.
The lower inflation supported the case of central banks holding rates steady for a couple of months.
Markets are also awaiting comments later today from the heads of the central banks of France, Spain, and the U.K.
Moreover, the U.S. Federal Reserve is scheduled to release its minutes of the last meeting on Tuesday and provide additional clarity in the policymakers decision.
Germany's producer prices fell 11% from a year ago in October, Destatis reported today.
The measure of producer inflation decreased for the fourth month in a row due to the sharp decline in energy prices.
The annual decline in inflation in September was 14.7%, which was the largest fall since record-keeping began in 1949.
Europe Indexes and Yields
The DAX index decreased 0.1% to 15,902.18, the CAC-40 index rose 0.2% to 7,250.84, and the FTSE 100 index fell 0.1% to 7,494.94.
In the previous week, the DAX index increased 4.2%, the CAC-40 index advanced 2.2%, and the FTSE 100 index inched higher by 1%.
The yield on 10-year German bonds increased to 2.59%; French bonds traded higher to 3.15%; the UK gilts eased to 4.09%; and Italian bonds inched higher to 4.33%.
The euro continue to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.
The euro rebounded to $1.093, the British pound at $1.248, and the U.S. dollar at 88.32 Swiss cents.
Brent crude increased $0.77 to $81.37 a barrel, and the Dutch TTF natural gas edged higher by €1.88 to €46.94 per MWh.
Europe Stock Movers
Energy stocks traded higher after crude oil prices extended Friday's sharp jump of 4% on reports that Saudi Arabia is looking to extend voluntary production cuts into next year.
BP, Shell, Repsol, Eni, and TotalEnergies gained between 0.4% and 1.5%.
Bayer AG plunged 19.4% to €33.85 after the German pharmaceutical and biotech company lost a key U.S. trial against its weed killer Roundup.
Moreover, the company also stopped the main study of its top experimental drug.
A Missouri jury ordered the company to pay $1.56 billion to four plaintiffs who successfully argued in court that the company's weed killer caused health injuries, including cancer.
After the trial, the jury found the company's Monsanto business liable for negligence, design defects, and the company's failure to inform customers of the potential dangers of using Roundup.
Julius Baer Gruppe AG dropped 10.6% to CHF 49.81 after the Swiss financial service company lowered its annual profit expectations.
The company said its 2023 net income is expected to be lower than in the previous year because of a higher year-to-date effective income tax rate and higher loan loss provisions in November.
Net assets under management in the first ten months to October increased by 3%, or CHF 11 billion, to CHF 435 billion.
Ashtead Group plc dropped 10.1% to 4,712.10 pence after the UK-based power equipment rental company said its annual profit is likely to fall short of market expectations.
Compass Group plc declined 4.5% to 1,999.50 pence after the UK-based catering service provider reported lower-than-expected earnings.
Halma plc advanced 2.4% to 2,101.0 pence after the UK-based safety equipment company agreed to acquire the TeDan group of companies for $89.1 million with additional milestone payments.
- Scott Peters
- 17 Nov, 2023
- New York City
Gap Inc. jumped 18.7% to $16.21 after the apparel retailer reported quarterly results.
Revenue in the fiscal third quarter decreased 7% to $3.8 billion from $4.0 billion, net income dropped to $218 million from $282 million, and diluted earnings per share fell to 58 cents from 77 cents a year ago.
The decline in net sales included a negative impact of 2 percentage points on the sales of Gap China.
Comparable sales declined 2%, and online sales fell 8% from the previous year and represented 38% of total sales.
Gross margin improved 390 points to 41.3% after commodity prices eased and the promotional environment improved.
The company is estimating fourth quarter net sales, inclusive of the 14th week, "to be at to slightly negative" compared to last year's net sales of $4.2 billion as positive signs at Old Navy and Gap balance the weakness in Athleta and Banana Republic.
Bath & Body Works edged higher by 0.8% after falling 7% in the previous session to $30.10 after the specialty retailer estimated lower sales in the fiscal year.
Revenue in the third quarter declined 2.6% to $1.56 billion from $1.60 billion, net income advanced to $119 million from $91 million, and diluted earnings per share rose to 52 cents from 40 cents a year ago.
The company estimated full-year sales to decline between 2.5% and 4.0% from $7.56 billion and diluted earnings per share between $2.99 and $3.19.
ChargePoint Holdings plunged 30% to $2.19 after the company lowered its third-quarter revenue estimate and announced a management shakeup.
The company lowered its third-quarter revenue estimate to between $108 million and $113 million from the previous range of between $150 million and $165 million.
The company blamed the revenue shortfall on weak macroeconomic conditions and delays in fleet and commercial electric vehicle delivery.
Applied Materials dropped 7.2% to $143.55 after the company reported quarterly earnings, but a criminal investigation by the Department of Justice for shipments to China weighed on the stock.
Revenue in the fiscal fourth quarter ending in October was flat at $6.7 billion, and gross margin improved to 47.1% from 45.9% a year ago.
Net income advanced to $2.0 billion from $1.6 billion, and diluted earnings per share rose to $2.38 from $1.35 a year ago.
In fiscal 2023, the company generated a record $8.70 billion in cash from operations and distributed $3.16 billion to shareholders, including $2.19 billion in share repurchases and $975 million in dividends.
In the first quarter of fiscal 2024, Applied expects net sales to be approximately $6.47 billion, with a band of $400 million, and adjusted diluted earnings per share between $1.72 and $2.08.
- Barry Adams
- 17 Nov, 2023
- New York City
Benchmark indexes looked higher in early trading, and investors hoped that the recent market advance would hold in Friday's trading.
The S&P 500 index advanced 0.3% and the Nasdaq Composite gained 0.1%, and two widely followed indexes are set to close higher for the third week in a row.
In November, the Nasdaq gained 9.8%, and the S&P 500 index advanced 7.5% to Thursday's close.
Three inflation reports—the consumer price index, the producer price index, and the import price index—showed weakening inflationary pressures, encouraging investors to add exposure to interest rate-sensitive stocks.
Investors were also encouraged by the stable rate outlook for the next two months, and most investors are factoring in that the Federal Reserve is likely to hold rates at the end of the next meeting in December.
Crude oil prices rebounded after dropping more than 5% in the previous session due to rising U.S. supplies, elevated inventories, and worries about an uncertain demand outlook in China.
Crude oil prices are set to close down for the fourth week in a row, and the decline in the period is approaching a bear market plunge.
U.S. Indexes and Yields
The S&P 500 index jumped 0.3% to 4,509.12, and the Nasdaq Composite added 0.1% to 14,107.05.
The yield on 2-year Treasury notes decreased to 4.83%, 10-year Treasury notes inched lower to 4.41%, and 30-year Treasury bonds edged down to 4.59%.
Crude oil increased $0.82 to $73.72 a barrel, and natural gas prices held steady at $3.06 a thermal unit.
Gold increased 0.4%, or $8.64, to $1,989.88 an ounce after bond yields traded down after the interest rate hike worries receded.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.16.
U.S. Stock Movers
Gap Inc. jumped 18.7% to $16.21 after the apparel retailer reported quarterly results.
Revenue in the fiscal third quarter decreased 7% to $3.8 billion from $4.0 billion, net income dropped to $218 million from $282 million, and diluted earnings per share fell to 58 cents from 77 cents a year ago.
The decline in net sales included a negative impact of 2 percentage points on the sales of Gap China.
Comparable sales declined 2%, and online sales fell 8% from the previous year and represented 38% of total sales.
Gross margin improved 390 points to 41.3% after commodity prices eased and the promotional environment improved.
Bath & Body Works edged higher by 0.8% after falling 7% in the previous session to $30.10 after the specialty retailer estimated lower sales in the fiscal year.
Revenue in the third quarter declined 2.6% to $1.56 billion from $1.60 billion, net income advanced to $119 million from $91 million, and diluted earnings per share rose to 52 cents from 40 cents a year ago.
The company estimated full-year sales to decline between 2.5% and 4.0% from $7.56 billion and diluted earnings per share between $2.99 and $3.19.
ChargePoint Holdings plunged 30% to $2.19 after the company lowered its third-quarter revenue estimate and announced a management shakeup.
The company lowered its third-quarter revenue estimate to between $108 million and $113 million from the previous range of between $150 million and $165 million.
The company blamed the revenue shortfall on weak macroeconomic conditions and delays in fleet and commercial electric vehicle delivery.
Applied Materials dropped 7.2% to $143.55 after the company reported quarterly earnings, but a criminal investigation by the Department of Justice for shipments to China weighed on the stock.
Revenue in the fiscal fourth quarter ending in October was flat at $6.7 billion, and gross margin improved to 47.1% from 45.9% a year ago.
Net income advanced to $2.0 billion from $1.6 billion, and diluted earnings per share rose to $2.38 from $1.35 a year ago.
In fiscal 2023, the company generated a record $8.70 billion in cash from operations and distributed $3.16 billion to shareholders, including $2.19 billion in share repurchases and $975 million in dividends.
In the first quarter of fiscal 2024, Applied expects net sales to be approximately $6.47 billion, with a band of $400 million, and adjusted diluted earnings per share between $1.72 and $2.08.