- Inga Muller
- 14 Jul, 2023
- New York City
European markets gained 4% this week after inflation and interest rates worries eased.
The euro jumped to a 16-month high after the dollar eased on the expectations that the U.S. Federal Reserve may pause following steady decline in consumer and wholesale price inflation indexes.
The DAX index decreased 0.2% to 16,103.98, the CAC-40 index advanced 0.3% to 7,394.75 and the FTSE 100 index increased 0.2% to 7,454.87.
The yield on 10-year German Bunds inched higher to 2.44%, French bonds traded lower to 3.0%, the UK gilts edged up to 4.39% and Italian bonds increased to 4.14%.
Ericsson declined 9..9% to 52.73 kronor after the Swedish multinational company in the second quarter swung to a net loss of 0.6 billion kronor compared to a profit of 4.7 billion a year ago.
Nokia Oyj plunged 10% to €3.54 after the Finnish telecom company lowered its annual earnings outlook.
SBB AB plunged 11% to 5.34 kronor after the Swedish property company reported a wider-than-expected quarterly loss.
Ashmore Group plc declined 6% to 203.80 pence after the UK-based asset management company reported a 3% decline in asset management.
Zoo Digital Group Plc plunged 33% to 70.0 pence after the cloud services provider said revenue in the fiscal first quarter is likely to be lower than in the comparable period a year ago.
- Bridgette Randall
- 14 Jul, 2023
- Frankfurt
European markets advanced after inflation and rate worries eased and investors looked ahead to the start of earnings season.
The euro jumped to a 16-month high but yields on government bonds of Germany, France and Italy were little changed after rallying in two previous sessions.
Market indexes extended weekly gain in Europe following a rise in global markets this week.
Market indexes in the U.S. advanced for the fifth day in a row and indexes in China, India and Japan also traded higher this week.
In economic news, the Euro Area trade deficit declined sharply after imports fell faster than exports following the sharp decline in energy prices.
Euro Area Trade Deficit Dropped After Imports Plunged
The Euro Area trade deficit fell sharply in May after imports plunged and exports advanced, Eurostat reported Friday.
Trade deficit declined to €0.3 billion in May from the revised €30.3 billion in April.
Exports declined 2.3% to €241.9 billion and imports plunged 12.8% to €242.2 billion, resulting in a trade deficit of €0.3 billion.
In January to May 2023, euro area exports of goods to the rest of the world rose 3.7% to €1 181.9 billion, and imports fell 5.1% to €1,199.5 billion compared to a year ago.
As a result the euro area recorded a deficit of €17.6 billion, compared with €124.7 billion in the period a year ago.
In the period, trade surplus with the U.S. declined to €58.1 from 6€6.9 billion, rose with the UK to €59.2 billion from €48.5 billion, surged with Switzerland to €22.5 billion from €12.4 billion, and swung to a surplus with Turkey to €7.1 billion from a deficit of €2.4 billion.
Europe Indexes & Yields
The DAX index decreased 0.2% to 16,103.98, the CAC-40 index advanced 0.3% to 7,394.75 and the FTSE 100 index increased 0.2% to 7,454.87.
The yield on 10-year German Bunds inched higher to 2.44%, French bonds traded lower to 3.0%, the UK gilts edged up to 4.39% and Italian bonds increased to 4.14%.
The euro edged higher to $1.21, the British pound to $1.31 and the U.S. dollar fetched 85.90 Swiss cents
Crude oil prices rose for the third week in a row but natural gas prices eased more than 10% in European trading.
Brent crude decreased $0.20 to $81.27 a barrel and the Dutch TTF natural gas increased €1.52 to €28.13 per MWh.
Europe Stock Movers
Ericsson declined 9..9% to 52.73 kronor after the Swedish multinational company in the second quarter swung to a net loss of 0.6 billion kronor compared to a profit of 4.7 billion a year ago.
Nokia Oyj plunged 10% to €3.54 after the Finnish telecom company lowered its annual earnings outlook.
SBB AB plunged 11% to 5.34 kronor after the Swedish property company reported a wider-than-expected quarterly loss.
Ashmore Group plc declined 6% to 203.80 pence after the UK-based asset management company reported a 3% decline in asset management.
Zoo Digital Group Plc plunged 33% to 70.0 pence after the cloud services provider said revenue in the fiscal first quarter is likely to be lower than in the comparable period a year ago.
- Barry Adams
- 13 Jul, 2023
- New York City
Stocks advanced on the hopes that inflation is inching closer to the Fed's target level stoking expectation that the Federal Reserve may back off from its hawkish stance.
Two inflation reports in as many days lifted market sentiment and the yield on Treasuries edged lower after wholesale and consumer price inflation continued their downward path.
The S&P 500 and the Nasdaq Composite indexes closed at their 2023's highs and extended weekly gains after the producer price index eased.
The measure of the wholesale price index decreased 0.1% in June. following an upwardly revised 0.4% increase in May, the U.S. Bureau of Labor Statistics reported Thursday.
Core wholesale price inflation, which strips out volatile food and energy prices, also declined 0.1% in June.
On a year basis, producer price index rose at a slower pace of 0.1% in June after rising 0.9% in May,
In overseas economic news, the UK's GDP in May shrank less than expected and inflation in France eased in June.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
In other economic news, the UK economy contracted less than expected in May.
Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday.
China's exports declined 12.4% to $285.3 billion in June, worse than the 7.5% fall in May, General Administration of Customs reported Thursday.
Imports fell 6.9% in the month to $214.7 billion.
Exports to the U.S. declined 23.7% to $42.7 billion, to the EU fell 12.9% and to the ASEAN region dropped 16.9% to $43.3 billion from a year ago. But exports to Russia soared 90.9% from a year ago.
Exports to the U.S. fell for the eleventh month in a row on the ongoing political tensions between two largest economies oof the world.
In the first half, exports declined 3.2% from a year ago in 2022.
China's trade surplus declined to $70.6 billion in June from $65.7 billion in May.
U.S. Indexes & Yields
The S&P 500 index futures traded higher 0.9% to 4,510.07 and the Nasdaq Composite edged higher 1.5% to 14,138.57.
The yield on 2-year Treasury notes decreased to 4.62%, 10-year Treasury notes inched lower to 3.73% and 30-year Treasury bonds edged down to 3.90%.
Crude oil decreased $1.39 to $77.14 a barrel and natural gas prices decreased 6 cents to $2.55 a thermal unit.
Stock Movers
Delta Air Lines rose 3.5% to $49.75 after the international air carrier reported record quarterly earnings and sales and also lifted its 2023 earnings estimate.
MillerKnoll Inc increased 1.1% to $16.65 after the furniture maker reported better-than-expected earnings.
The company reported earnings of 41 cents a share and revenue of $957 million.
PepsiCo increased 1.1% to $185.22 after the food and beverage company reported better-than-expected revenue of $22.32 billion and adjusted net income of $1.96 a share.
European Markets Extend Weekly Gains
European markets extended weekly gains and investors reviewed industrial output data in the Euro Area.
Major averages in Frankfurt, Paris and London advanced on hopes that the European Central Bank may be nearing its rate hike cycle following the easing of inflation.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
In other economic news, the UK economy contracted less than expected in May.
Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday.
Euro Area Industrial Output Slowed In May
Industrial production in the Euro Area eased to 0.2% increase in May from 1.0% rise in April, Eurostat reported Thursday.
On a yearly basis, industrial production declined 2.2% in May after rising 0.2% in April.
Capital goods production increased 1.0% in May following a 14.7% surge in April, and intermediate goods output rose 0.5%, rebounding from a 0.9% decline in the previous month.
Durable goods output rose 0.5% compared to a decline of 2.8% in the previous month and non-durable consumer goods output rebounded 0.3% from a decline of 3.6%.
Europe Indexes & Yields
The DAX index increased 0.7% to 16,141.09, the CAC-40 index advanced 0.5% to 7,369.80 and the FTSE 100 index advanced 0.3% to 7,440.21.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded lower to 2.99%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.13%.
The euro edged higher to $1.117, the British pound to $1.304 and the U.S. dollar fetched 90.04 Swiss cents
Brent crude increased $1.57 to $81.68 a barrel and the Dutch TTF natural gas increased €0.03 to €26.61 per MWh.
Europe Stock Movers
Enel SpA rose 1.4% to €6.32 after the Italian energy generator and electricity grid operator said its subsidiary Enel Green Power SpA has agreed to sell 50% stake in its two subsidiaries Enel Green Power Australia Pty Ltd and Enel Green Power Australia Trust.
The company agreed to sell stakes to Inpex Corporation for €400 million.
Homebuilders in London traded lower after Barratt Developments after the company warned of a challenging market environment and further slowdown in demand.
Barratt Developments PLC dropped 2.5% to 407.70 pence, Persimmons declined Persimmon Plc declined 0.6% to 1,044 pence and Taylor Wimpey Plc declined 1.7% to 103.10 pence.
Casino Guichard Perrachon SA declined 5.2% to €3.15 after the estimated comparable sales in the second quarter fell 6.6% because of price cuts reflecting a tough market environment.
- Scott Peters
- 13 Jul, 2023
- New York City
Delta Air Lines rose 3.5% to $49.75 after the international air carrier reported record quarterly earnings and sales and also lifted its 2023 earnings estimate.
Revenue in the June quarter increased 13% to $15.6 billion from $13.8 billion and net income soared to $1.8 billion from $735 million and diluted earnings per share advanced to $2.84 from $1.15 a year ago.
MillerKnoll Inc increased 1.1% to $16.65 after the furniture maker reported better-than-expected earnings.
Revenue in the June quarter declined 13% to $956.7 million from $1.1 billion and net income declined to $0.1 million from $23.2 million and diluted earnings per share dropped to zero from 28 cents a year ago.
PepsiCo increased 1.1% to $185.22 after the food and beverage company reported better-than-expected revenue of $22.32 billion and adjusted net income of $1.96 a share.
Revenue in the second quarter increased 10.4% to $22.3 billion from $20.2 billion and net income rose to $2.7 billion from $1.4 billion and diluted earnings per share advanced to $1.99 from $1.03 a year ago.
Walt Disney Co increased 0.2% to $90.35 and the company agreed to extend CEO Bob Iger's contract by two more years to 2026.
The company is likely to acquire the remaining 34% stake in Hulu from Comcast as early as next year.
Chief executive Bob Iger said in an interview with CNBC that the company is "better off having Hulu."
Denbury Inc declined 0.6% to $87.20 after the company agreed to be acquired in an all-stock deal of $4.5 billion from ExxonMobil.
The company agreed to be acquired for $89.45 a share.
Cirrus Logic, Inc declined 1.8% to $81.32 after the company said in a regulatory filing that it plans to reduce its global workforce by 5%.
Viasat Inc plunged 28.5% to $30.85 after the company reported malfunction with its recently deployed Viasat-3 Americas satellite.
Amazon.com, Inc increased 2.2% to $133.77 after the company reported record Prime Day sales of $12.7 billion.
Progressive Corp declined 12.4% to $133.77 after the automobile insurance company reported net premium in the quarter increased 14% to $14.7 billion from $12.4 billion and combined ratio increased to 100.4 from 95.6 a yar ago.
The company swung to a profit of $345.4 million from a loss of $542.9 million and total pretax realized gain on securities increased to $126.9 million from a loss of $1.17 billion a year ago.
- Brian Turner
- 13 Jul, 2023
- New York City
The producer price index decreased 0.1% in June. following an upwardly revised 0.4% increase in May, the U.S. Bureau of Labor Statistics reported Thursday.
Core wholesale price inflation, which strips out volatile food and energy prices, also declined 0.1% in June.
On a year basis, producer price index rose at a slower pace of 0.1% in June after rising 0.9% in May,
In overseas economic news, the UK's GDP in May shrank less than expected and inflation in France eased in June.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
- Barry Adams
- 13 Jul, 2023
- New York City
Stocks traded higher on Wall Street after wholesale inflation declined following the weakness in consumer inflation.
Two inflation reports in as many days lifted market sentiment and the yield on Treasuries edged lower.
Market indexes edged higher and extended weekly gains after the producer price index decreased 0.1% in June. following an upwardly revised 0.4% increase in May, the U.S. Bureau of Labor Statistics reported Thursday.
Core wholesale price inflation, which strips out volatile food and energy prices, also declined 0.1% in June.
On a year basis, producer price index rose at a slower pace of 0.1% in June after rising 0.9% in May,
In overseas economic news, the UK's GDP in May shrank less than expected and inflation in France eased in June.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
In other economic news, the UK economy contracted less than expected in May.
Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday.
China's exports declined 12.4% to $285.3 billion in June, worse than the 7.5% fall in May, General Administration of Customs reported Thursday.
Imports fell 6.9% in the month to $214.7 billion.
Exports to the U.S. declined 23.7% to $42.7 billion, to the EU fell 12.9% and to the ASEAN region dropped 16.9% to $43.3 billion from a year ago. But exports to Russia soared 90.9% from a year ago.
Exports to the U.S. fell for the eleventh month in a row on the ongoing political tensions between two largest economies oof the world.
In the first half, exports declined 3.2% from a year ago in 2022.
China's trade surplus declined to $70.6 billion in June from $65.7 billion in May.
U.S. Indexes & Yields
The S&P 500 index futures traded higher 0.02% to 4,444.97 and the Nasdaq Composite edged higher 0.3% to 13,729.69.
The yield on 2-year Treasury notes decreased to 4.67%, 10-year Treasury notes inched lower to 3.83% and 30-year Treasury bonds edged down to 3.94%.
Crude oil decreased $0.33 to $75.41 a barrel and natural gas prices decreased 1 cents to $2.64 a thermal unit.
Stock Movers
Delta Air Lines rose 3.5% to $49.75 after the international air carrier reported record quarterly earnings and sales and also lifted its 2023 earnings estimate.
MillerKnoll Inc increased 1.1% to $16.65 after the furniture maker reported better-than-expected earnings.
The company reported earnings of 41 cents a share and revenue of $957 million.
PepsiCo increased 1.1% to $185.22 after the food and beverage company reported better-than-expected revenue of $22.32 billion and adjusted net income of $1.96 a share.
- Inga Muller
- 13 Jul, 2023
- Frankfurt
European markets extended weekly gains on the hopes of peaking interest rates after inflation rates eased in France and in the U.S.
The DAX index increased 0.5% to 16,110.39, the CAC-40 index advanced 0.7% to 7,383.67 and the FTSE 100 index advanced 0.4% to 7,445.35.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded lower to 2.99%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.13%.
Enel SpA rose 1.4% to €6.32 after the Italian energy generator and electricity grid operator said its subsidiary Enel Green Power SpA has agreed to sell 50% stake in its two subsidiaries Enel Green Power Australia Pty Ltd and Enel Green Power Australia Trust.
The company agreed to sell stakes to Inpex Corporation for €400 million.
Homebuilders in London traded lower after Barratt Developments after the company warned of a challenging market environment and further slowdown in demand.
Barratt Developments PLC dropped 2.5% to 407.70 pence, Persimmons declined Persimmon Plc declined 0.6% to 1,044 pence and Taylor Wimpey Plc declined 1.7% to 103.10 pence.
Casino Guichard Perrachon SA declined 5.2% to €3.15 after the estimated comparable sales in the second quarter fell 6.6% because of price cuts reflecting a tough market environment.
Kenmare Resources plc declined 1.0% to 433.50 pence after the company lowered its full-year production estimate.
BASF SE declined 0.6% to €46.44 after the German chemical maker lowered its full-year earnings outlook.
The company said second quarter earnings dropped to €499 million from €2.03 billion in the quarter a year ago.
- Bridgette Randall
- 13 Jul, 2023
- Frankfurt
European markets extended weekly gains and investors reviewed industrial output data in the Euro Area.
Major averages in Frankfurt, Paris and London advanced on hopes that the European Central Bank may be nearing its rate hike cycle following the easing of inflation.
The annual retail price inflation eased to 4.5% in June from 5.1% May, but remained well above the central bank's target rate of 2%, France's statistical agency INSEE reported Thursday.
The ongoing decline in petroleum products by 17.2% compared to 9.7% in April, drove energy prices by 3% compared to 2% in May.
In other economic news, the UK economy contracted less than expected in May.
Real GDP declined 0.1% in May, reversing 0.2% rise in April, the Office for National Statistics reported Thursday.
Euro Area Industrial Output Slowed In May
Industrial production in the Euro Area eased to 0.2% increase in May from 1.0% rise in April, Eurostat reported Thursday.
On a yearly basis, industrial production declined 2.2% in May after rising 0.2% in April.
Capital goods production increased 1.0% in May following a 14.7% surge in April, and intermediate goods output rose 0.5%, rebounding from a 0.9% decline in the previous month.
Durable goods output rose 0.5% compared to a decline of 2.8% in the previous month and non-durable consumer goods output rebounded 0.3% from a decline of 3.6%.
Europe Indexes & Yields
The DAX index increased 0.5% to 16,110.39, the CAC-40 index advanced 0.7% to 7,383.67 and the FTSE 100 index advanced 0.4% to 7,445.35.
The yield on 10-year German Bunds inched higher to 2.45%, French bonds traded lower to 2.99%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.13%.
The euro edged higher to $1.117, the British pound to $1.304 and the U.S. dollar fetched 90.04 Swiss cents
Brent crude increased $0.06 to $80.18 a barrel and the Dutch TTF natural gas increased €0.03 to €26.67 per MWh.
Europe Stock Movers
Enel SpA rose 1.4% to €6.32 after the Italian energy generator and electricity grid operator said its subsidiary Enel Green Power SpA has agreed to sell 50% stake in its two subsidiaries Enel Green Power Australia Pty Ltd and Enel Green Power Australia Trust.
The company agreed to sell stakes to Inpex Corporation for €400 million.
Homebuilders in London traded lower after Barratt Developments after the company warned of a challenging market environment and further slowdown in demand.
Barratt Developments PLC dropped 2.5% to 407.70 pence, Persimmons declined Persimmon Plc declined 0.6% to 1,044 pence and Taylor Wimpey Plc declined 1.7% to 103.10 pence.
Casino Guichard Perrachon SA declined 5.2% to €3.15 after the estimated comparable sales in the second quarter fell 6.6% because of price cuts reflecting a tough market environment.
- Brian Turner
- 07 Jul, 2023
- New York City
Nonfarm payrolls for June increased 209,000 and fell sharply from the downwardly revised 306,000 in May, the U.S. Bureau of Labor Statistics reported Friday.
Jobless rate remained unchanged at 3.6% in the month.
Labor market conditions are still tight and wage growth is moderating, but still inconsistent with the Federal Reserve's goal of 2% inflation.
Both the unemployment rate at 3.6% and number of unemployed at 6.0 million, were little changed in the month. The unemployment rate had ranged between 3.4% and 3.7% since March 2022.
Total nonfarm payroll employment increased by 209,000 in June, as employment in government, health care, social assistance, and construction continued to expand.
Nonfarm employment has grown by an average of 278,000 per month over the first six months of 2023, lower than the monthly average of 399,000 in 2022.
Employment in government increased by 60,000, in healthcare by 41,000, social assistance by 24,000, construction by 23,000, professional business services and leisure and hospitality each by 21,000.
However, employment in retail trade declined by 11,000 and transportation and warehousing by 7,000.
In June, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.4%, to $33.58.
Over the past 12 months, average hourly earnings have increased by 4.4%, a measure closely watched by economists for the sign of wage inflation.
The average work week for all private nonfarm payrolls edged up 0.1 hour to 34.4 hours in June.
On Thursday, The JOLT report showed employee quit rate declined to the pre-pandemic level in May, suggesting the supply and demand are in better balance than before.
The official report followed the ADP report released on Thursday that showed private sector employment surged in June by a whopping 497,000 where half the gains were driven by increases in the leisure & hospitality sector.
Financial markets are on high alert for indications that the Federal Reserve may increase at a faster pace after pausing in June.
- Barry Adams
- 07 Jul, 2023
- New York City
Stocks lacked direction and market indexes turned volatile after the release of nonfarm payrolls for June.
Non-farm payrolls for June increased 209,000 and fell sharply from the downwardly revised 306,000 in May, the U.S. Bureau of Labor Statistics reported Friday.
Jobless rate remained unchanged at 3.6% in the month.
Labor market conditions are still tight and wage growth is moderating, but still inconsistent with the Federal Reserve's target rate of 2%.
The JOLT report showed yesterday employee quit rate declined to the pre-pandemic level in May, suggesting the supply and demand are in better balance than before.
The official report followed the ADP report that showed private sector employment surged in June where half the gains were driven by increases in the leisure & hospitality sector.
Financial markets are on high alert for indications that the Federal Reserve may increase at a faster pace after pausing in June.
The latest FOMC policy meeting minutes showed that several committee members noted that most of the impact of the 500 basis points of increase in rates have already been felt in the economy.
Yet, consumer price inflation is significantly above the central bank's target rate of 2%.
Ten interest rate hikes in the last one years and the regional banking turmoil has failed to slow down the U.S. economy because of consumer spending supported by above average growth in real disposable personal income and excess savings.
World markets have been on hold on the worries of rising prospects of higher interest rates and what it means for local economies.
The Nikkei index in Tokyo declined 1.2%, the Hang Seng index in Hong Kong fell 0.9%, the KOSPI index in Seoul decreased 1.1% and the Sensex index in Mumbai dropped 0.8%.
U.S. Indexes & Yields
The S&P 500 index futures traded higher 0.02% to 4,444.97 and the Nasdaq Composite edged higher 0.3% to 13,729.69.
The yield on 2-year Treasury notes increased to 5.01%, 10-year Treasury notes inched higher to 4.06% and 30-year Treasury bonds edged up to 4.01%.
Crude oil increased $0.30 to $71.98 a barrel and natural gas prices increased 4 cents to $2.65 a thermal unit.
Stock Movers
Levi Strauss & Company dropped 6.6% to $13.28 after the denim maker tightened its annual earnings outlook.
Adjusted earnings in the fiscal second quarter was 4 cents and revenue was $1.34 billion, meeting the estimate of 3 cents a share and $1.34 billion in revenues.
The denim maker revised its adjusted earnings outlook for the full-year between $1.10 and $1.20 a share from the previous estimate between $1.30 and $1.40 a share.
Biogen Inc gained 0.4% to $286.12 after the company and its Japan-based partner Eisai Co Ltd won an approval from the U.S. FDA for its Alzheimer's treatment, Leqembi.
Despite the approval, Eisai dropped as much as 8% before recovering to close down 4.5% in Tokyo trading.
- Bridgette Randall
- 07 Jul, 2023
- Frankfurt
European markets traded in a tight range with a downward bias and investors awaited the release of the U.S. non-farm payrolls data.
UK home prices fell at the fastest pace in 12 years in June and German industrial production declined in May.
The DAX index increased 0.1% to 15,553.88, the CAC-40 index advanced 0.3% to 7,104.15 and the FTSE 100 index decreased 0.2% to 7,263.07.
The yield on 10-year German Bunds inched higher to 2.65%, French bonds traded lower to 3.20%, the UK gilts edged up to 4.69% and Italian bonds increased to 4.39%.
UK homebuilders dropped for the second day in a row after the release of home price data from Halifax.
Barratt Developments PLC declined 0.6% to 398.70 pence, Persimmon Plc dropped 0.3% to 965.40 pence and Taylor Wimpey Plc fell 0.1% to 99.56 pence.
Barratt extended this year's loss to 3.8%, Persimmon fell 24% and Taylor Wimpey to 4.9%.
Coca-cola HBC AG increased 4.7% to 2,362.0 pence after the company revised its 2023 earnings outlook.
Clariant AG increased 3.8% to CHF 13.08 despite the Swiss chemical company reporting weak sales in the second quarter and lowering its 2023 outlook.
Airbus SE increased 1.4% to Є131.24 after the aircraft manufacturer said orders in June jumped, driven by record demand for planes from India.
- Bridgette Randall
- 07 Jul, 2023
- Frankfurt
In lackluster trading, European markets looked down on the worries that global economic growth may face additional headwinds in the face of higher rates.
Economies of Germany, France and Switzerland are heavily dependent on exports to the U.S. and China and higher U.S. rates are expected to dip the U.S. economy into a shallow recession in the third quarter.
The euro was on the defensive and bond yields continued to advance on the prospect of the return of aggressive rate hikes in the U.S. and the Euro Area.
Closer to home, German industrial production declined more than expected in May.
German industrial production in May declined 0.2% after rising 0.3% in April, according to data released by the Federal Statistical Office or Destatis.
Industrial production, which includes manufacturing, mining and power generation activities, increased at a slower pace of 0.7% in May after rising 1.7% in April.
In addition, UK home prices fell at the fastest pace in twelve years in June, according to data released by Lloyds Bank subsidiary Halifax.
Home prices fell 2.6% in June, the largest annual decline since June 2011, following a 1.1% fall in May.
Elevated home prices and surging interest rates have kept buyers away from the market.
Italian retail sales increased 0.7% in May from the previous month after rising at 0.2% in April, the National Institute of Statistics ISTAT reported Friday. Retail sales rose at the fastest pace in four months.
On an annual basis, retail sales rose 3.0% in May after rising at 3.2% in April and the increase in sales was supported by a 1.1% rise in non-food goods.
Investors are awaiting the release of the U.S. non-farm payrolls data and economists are expecting jobs to expand by 239,000 in June following the surprise surge of 339,000 in May.
Europe Indexes & Yields
The DAX index increased 0.1% to 15,553.88, the CAC-40 index advanced 0.3% to 7,104.15 and the FTSE 100 index decreased 0.2% to 7,263.07.
The yield on 10-year German Bunds inched higher to 2.65%, French bonds traded lower to 3.20%, the UK gilts edged up to 4.69% and Italian bonds increased to 4.39%.
The euro edged higher to $1.087, the British pound to $1.274 and the U.S. dollar fetched 89.56 Swiss cents
Brent crude increased $0.46 to $76.97 a barrel and the Dutch TTF natural gas increased €0.25 to €32.60 per MWh.
Europe Stock Movers
UK homebuilders dropped for the second day in a row after the release of home price data from Halifax.
Barratt Developments PLC declined 0.6% to 398.70 pence, Persimmon Plc dropped 0.3% to 965.40 pence and Taylor Wimpey Plc fell 0.1% to 99.56 pence.
Barratt extended this year's loss to 3.8%, Persimmon fell 24% and Taylor Wimpey to 4.9%.
Coca-cola HBC AG increased 4.7% to 2,362.0 pence after the company revised its 2023 earnings outlook.
Clariant AG increased 3.8% to CHF 13.08 despite the Swiss chemical company reporting weak sales in the second quarter and lowering its 2023 outlook.
Airbus SE increased 1.4% to Є131.24 after the aircraft manufacturer said orders in June jumped, driven by record demand for planes from India.
- Barry Adams
- 06 Jul, 2023
- New York City
Market averages turned sharply lower after a hotter-than-expected private sector payrolls report put investors on alert.
The S&P 500 and the Nasdaq Composite index declined more than 1% after the private sector added 497,000 net new jobs in the month.
Travel and hospitality sector drove the hirings in June but gains were widespread including in education, transportation and construction.
The number of job openings declined by 496,000 in June to 9.8 million, according to the Job Openings and Labor Turnover Survey released by the U.S. Bureau of Labor Statistics.
Job opening fell below 10 million level, but sharply above the pandemic level of 7 million, indicating that labor market conditions remain tight.
Investors are now looking ahead to the release of non-farm payrolls data on Friday. The broader survey is expected to provide deeper insights into the labor market.
But odds are rising that the Fed may increase rates by 50 basis points and not 25 basis points as most market watchers are anticipating.
The rate hike fears dragged interest rate sensitive stocks of home builders, steel makes, semiconductor chip makers and regional banks.
The plight of banks and regional banks got dire on the worries that higher rates would increase losses in Treasury securities held-to-maturity, which may force banks to seek support from investors or the Federal Reserve Bank.
Mortgage rates also advanced following the rise in Treasury yields.
Mortgage rate on widely used 30-year fixed mortgages increased to 7.22%, according to Mortgage News Daily.
For a home buyer with a $300,00 mortgage, the monthly payment of principal and interest increased to $2,040 from $1,980 a week ago.
In other economic news, U.S. trade goods and services deficit declined to $69 billion in May from the revised $74.0 billion in May, the U.S. Census Bureau reported Thursday.
Exports in May declined 0.8% from the previous month to $247.1 billion and imports fell 2.3% to $316.1 billion.
Private Sector Hirings Surged In June
Private sector employment in June accelerated more than expected after the travel & leisure industry continued to hire at a brisk pace, the latest survey from ADP showed Thursday.
The ADP data tracks private sector jobs market and the surveys are subject to significant revisions and are often volatile.
Total new hires in the private sector increased to 497,000 from the downwardly revised 267,000 in May,
May payroll additions were previously estimated at 278,000.
Leisure and hospitality sector added 232,000 net new jobs in June, driving the overall hiring in the month.
"Consumer-facing service industries had a strong June, aligning to push job creation higher than expected," said ADP chief economist Nela Richardson.
"But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge," added Richardson.
Construction, transportation and trade and education also reported notable job gains but employment in the manufacturing and information sector saw declines.
Medium and small size businesses added staff in the month and large businesses shed employees.
Small employers added 299,000, medium establishments expanded by 183,000 but large companies eliminated 8,000 jobs.
Wage gains in June slowed to 6.4% after rising at 6.6% in May.
Investors are awaiting payrolls data from the U.S. Labor Department on Friday, and non-farm payrolls, which includes private sector and government hirings, are expected to increase 235,000 after rising by 339,000 in May.
Jobless rate is expected to inch lower to 3.6% from 3.7% in the previous month.
U.S. Indexes & Yields
The S&P 500 index traded down 1.4% to 4,385.92 and the Nasdaq Composite edged lower 1.6% to 13,580.48.
The yield on 2-year Treasury notes increased, the level not seen since 2007, to 5.05%, 10-year Treasury notes inched higher to 4.03% and 30-year Treasury bonds edged up to 4.0%.
Crude oil decreased $0.28 to $72.07 a barrel and natural gas prices decreased 3 cents to $2.61 a thermal unit.
Gold prices dropped to a four-month low and traded at $1,911 an ounce after the latest employment data showed that a tight labor market will force the Federal Reserve to raise rates faster than previously anticipated, raising the opportunity costs to hold the yellow metal.
U.S. Stock Movers
JetBlue Airways Corporation declined 6.8% to $8.70 after the company said it would end its partnership with American Airlines in the Northeast and focus on Spirit Air following the judge's order to salvage its $3.8 billion deal with Spirit Air.
American Airlines declined 2.7% to $17.82 and Spirit Airlines Inc increased 0.1% to $17.68.
Meta Platforms Inc declined 0.9% to $291.85 but rose as much as 2% earlier in trading after the company said its new social media platform Threads attracted more than ten million users on the first day of its launch.
Regional banks and home builders were under pressure on the worries that the Federal Reserve may lift rates at a faster rate of 50 basis points at its next policy meeting.
Higher rates will expand losses in Treasury notes and bonds held by banks.
PacWest Bancorp declined 6.5% to $7.87, First Republic Bank gained 11% to 92 cents and Fifth Third Bancorp fell 2.5% to $25.92.
PulteGroup declined 2.8% to $74.93, Toll Brothers fell 1.7% to $76.37, NVR Inc dropped 2.7% to $6,069.50 and Lennar Corp dropped 2.7% to 120.48.
Semiconductor stocks traded down after tech stocks led decliners in today's session.
Nvidia Corp declined 0.9% to $419.25, AMD fell 0.6% to $113.25, Intel decreased 1.9% to 31.93 and Qualcomm Inc fell 2.4% to $114.31.
European Markets Plunged 2% After FOMC Minutes
European markets traded lower after investors reviewed the retail sales data and factory orders update.
Market averages in Paris, London and Frankfurt declined and bond yields advanced after investors reviewed the latest minutes of the policy meeting on June 14.
Eurozone retail sales were unchanged in May and declined from a year ago after households faced twin pressures of rising prices and rates.
Squeezed households budgets also kept consumers focused on basic items and away from luxury goods.
Euro and Pound Under Pressure, Bond Yields Rise After FOMC Minutes
The U.S. dollar edged higher against major currencies worldwide after the release of the latest Federal Reserve's minutes of meeting.
At the last policy meeting ending on June 14, policymakers decided to hold interest rates after lifting rates by 5.0% over the last 15 months.
All participants agreed that the rate pause may be appropriate in determining the U.S. economy's progress and provide more time to assess the impact of rate increases on the U.S. economy.
There was a general consensus that despite the cooling of goods inflation following the easing of supply chain constraints, the recent declines in inflation is less than expected.
In addition, all participants agreed that more rate increases in the remainder of the year may be appropriate in bringing down inflation rate to the central bank's 2% goal.
The expectations of higher interest rates nudged the U.S. dollar higher and the central bank is expected to raise rates by at least 50 basis points in two increments before the year's end.
The yields of U.S. Treasuries rose and the yields on Indian and European bonds edged higher.
German Factory Orders Surged In May
German factory orders rose 6.4% in May from the upwardly revised 0.2% in April, the Federal Statistics Office or Destatis reported Wednesday.
New orders surged the most since June 2020 after large ticket items and new orders for vehicles increased 8.6% and other transport equipment soared 137%.
Eurozone Retail Sales Unchanged In May
Retail sales in the eurozone remained unchanged on a monthly basis for the second month in a row in May after falling in February and March, the statistical office of the European Union reported Wednesday.
Household budgets have been hit hard twice, first by rising prices and second by higher borrowing costs.
Food, beverages and tobacco sales declined for the fourth consecutive month and declined 0.5% in May after falling 0.3% in April.
Sales of automotive fuels declined for a second month in a row and fell 0.3% in May after falling 2.4% in April.
However, nonfood items sales increased 0.1% in May after rising 0.3% in April.
On a yearly basis, retail sales declined 2.9% in May and fell for the eighth month in a row.
Europe Indexes & Yields
The DAX index dropped 2.5% to 15,528.54, the CAC-40 index declined 3.1% to 7,082.29 and the FTSE 100 index decreased 2.2% to 7,280.50.
The yield on 10-year German Bunds inched higher to 2.63%, French bonds traded higher to 3.18%, the UK gilts edged up to 4.66% and Italian bonds increased to 4.39%.
The euro edged higher to $1.088, the British pound to $1.277 and the U.S. dollar fetched 89.55 Swiss cents
Brent crude decreased $0.10 to $76.75 a barrel and the Dutch TTF natural gas decreased €2.03 to €32.35 per MWh.
Europe Stock Movers
Norwegian Air Shuttle ASA rose 2.7% to 90 euro cents after the deep discount airline said passenger traffic rose in June from the previous month and from a year ago.
Brenntag SE declined 0.7% to €69.54 and the company plans to release findings of its strategic review later in the year.
Curry Plc declined 9.5% to 48.36 pence after the British electronics retail chain reported lower sales and a decline in comparable sales in the financial year ending on April 29.
Revenue in fiscal year declined 6% to £9.5 billion and comparable sales from a year ago fell 7%.
The company swung to a loss of (£481) million from a profit of £71 million and diluted earnings per share was (43.6) pence from 6.3 pence a year ago.
Avation Plc declined 6.5% to 114.55 pence after the commercial passenger aircraft leasing company said revenue in the fiscal year ending in June was about $90 million.
Hunting Plc soared 21.7% to 242.50 pence after the oil field servicing company reported profit in the first quarter jumped more than threefold.
Man Group Plc increased 1.5% to 221.40 pence after the UK-based hedge fund manager acquired a controlling interest in the US-based private credit manager Varagon Capital Partners for $183 million.
- Brian Turner
- 06 Jul, 2023
- New York City
Private sector employment in June accelerated more than expected after the travel & leisure industry continued to hire at a brisk pace, the latest survey from ADP showed Thursday.
The ADP data tracks private sector jobs market and the surveys are subject to significant revisions and are often volatile.
Total new hires in the private sector increased to 497,000 from the downwardly revised 267,000 in May,
May payroll additions were previously estimated at 278,000.
Leisure and hospitality sector added 232,000 net new jobs in June, driving the overall hiring in the month.
"Consumer-facing service industries had a strong June, aligning to push job creation higher than expected," said ADP chief economist Nela Richardson.
"But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge," added Richardson.
Construction, transportation and trade and education also reported notable job gains but employment in the manufacturing and information sector saw declines.
Medium and small size businesses added staff in the month and large businesses shed employees.
Small employers added 299,000, medium establishments expanded by 183,000 but large companies eliminated 8,000 jobs.
Wage gains in June slowed to 6.4% after rising at 6.6% in May.
Investors are awaiting payrolls data from the U.S. Labor Department on Friday, and non-farm payrolls, which includes private sector and government hirings, are expected to increase 235,000 after rising by 339,000 in May.
Jobless rate is expected to inch lower to 3.6% from 3.7% in the previous month.
- Barry Adams
- 06 Jul, 2023
- New York City
Market averages turned sharply lower after a hotter-than-expected private sector payrolls report put investors on alert.
The S&P 500 index traded down 0.8% to 4,4410.12 and the Nasdaq Composite edged lower 0.9% to 13,669.03.
JetBlue Airways Corporation declined 6.8% to $8.70 after the company said it would end its partnership with American Airlines in the Northeast and focus on Spirit Air following the judge's order to salvage its $3.8 billion deal with Spirit Air.
American Airlines declined 2.7% to $17.82 and Spirit Airlines Inc increased 0.1% to $17.68.
Meta Platforms Inc declined 0.9% to $291.85 but rose as much as 2% earlier in trading after the company said its new social media platform Threads attracted more than ten million users on the first day of its launch.
Regional banks and home builders were under pressure on the worries that the Federal Reserve may lift rates at a faster rate of 50 basis points at its next policy meeting.
Higher rates will expand losses in Treasury notes and bonds held by banks.
PacWest Bancorp declined 6.5% to $7.87, First Republic Bank gained 11% to 92 cents and Fifth Third Bancorp fell 2.5% to $25.92.
PulteGroup declined 2.8% to $74.93, Toll Brothers fell 1.7% to $76.37, NVR Inc dropped 2.7% to $6,069.50 and Lennar Corp dropped 2.7% to 120.48.
Semiconductor stocks traded down after tech stocks led decliners in today's session.
Nvidia Corp declined 0.9% to $419.25, AMD fell 0.6% to $113.25, Intel decreased 1.9% to 31.93 and Qualcomm Inc fell 2.4% to $114.31.