- Barry Adams
- 06 Feb, 2023
- New York City
U.S. stocks struggled to advance in the face of rising Treasury yields for the second day in a row.
Stocks faced headwinds for the second trading day in a row after bond yields rose 12 basis points after rate worries resurfaced following an unexpected surge in the non-farm payrolls in January.
The U.S. dollar index advanced against a basket of major currencies and rose above 105 and traded near the level seen in early January.
Markets are also awaiting earnings from about 500 companies this week including quarterly results from Chipotle, PepsiCo, Uber and Walt Disney.
Investors are looking to get insights in how companies are navigating a strong dollar, rising input costs and managing labor costs ahead of the possible economic slowdown.
Dell Inc was the latest tech company to announce a layoff and the maker of computers said it plans to lay off about 5% of its staff.
The maker of personal computers is struggling with a sharp fall in PCs and laptops but server sales are holding up better-than previously anticipated.
U.S Indexes In Review
The S&P 500 index fell 0.6% to 4,111.08 and the Nasdaq Composite index declined 1.0% to 11,887.45.
Crude oil gained $1.12 to $74.15 a barrel and natural gas rose 7 cents to $2.48 a thermal unit.
The yield on 2-year Treasury notes inched up to 4.47%, 10-year treasury notes edged higher to 3.67% and 30-year Treasury notes traded up to 3.68%.
U.S. Stock Movers
Dell Technologies Inc declined 3% to $40.99 after the maker of personal computers announced a plan to lay off about 5% its staff.
The company expects to recognize expenses associated with these actions in the fourth fiscal quarter of fiscal 2023, according to a regulatory filing with the Securities and Exchange Commission.
"The steps we’ve taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough. We now have to make additional decisions to prepare for the road ahead," Vice Chairman and Co-chief Operating Officer Jeff Clarke said.
"Unfortunately, with changes like this, some members of our team will be leaving the company," Clarke added.
Energizer Holdings dropped 5.3% to $35.29 after the battery maker reported weaker-than-anticipated quarterly results.
Sales in the fourth quarter or the fiscal first quarter ending in December decreased 9.6% to $765.1 million from $846.3 million a year ago.
Net income dropped to $49 million from $60 million and diluted earnings per share decreased to 68 cents from 83 cents a year ago.
The company reiterated its fiscal 2023 outlook, , with organic revenue expected to increase low single digits, adjusted EBITDA in the range of $585 million to $615 million, and adjusted earnings per share in the range of $3.00 to $3.30.
"We still expect low single digit declines for reported revenues with currency headwinds of approximately $50 million and anticipate negative currency headwinds on pre-tax earnings of approximately $20 million and $0.23 per share, based on current rates," the company said in the earnings release.
ON Semiconductor Corp declined 0.6% to $80.39 after the company said revenue in the fourth quarter increased 14% to record $2.1 billion.
Net income in the period rose to $604.3 million from $425.9 million and diluted earnings per share increased to $1.35 from 96 cents a year ago.
The company also announced a new share repurchase program with authorization to repurchase up to $3 billion of shares of the company's common stock through December 31, 2025.
Euro Area Retail Sales Fell In December
The seasonally adjusted retail sales volume in the Euro Area decreased 2.7% in December after rising 1.2% in November, according to an estimate from Eurostat, the statistical office of the European Union.
The retail sales declined 2.8% on an annual basis in December from a year ago.
For all of 2022, retail sales in the Euro Area barely increased 0.7% and rose 1.1% in the European Union.
German Factory Orders and Sales In Focus
Separately, the Destatis or the Federal Statistics Office of Germany said seasonally and price adjusted factory orders rose 3.2% on a monthly basis in December after falling 4.2% in November.
December orders declined 0.6%, excluding large orders for electric utilities and aircraft and internal combustion engines.
On a yearly basis, December orders declined 10.1% in December.
German factory orders adjusted on a calendar basis in December are slightly ahead of pre-pandemic level by 1.2% from December 2019.
However, sales of manufacturing companies fell 1.7% in December from November and rose 1.9% from a year ago.
European Indexes Trend Lower
European market indexes traded lower after stronger-than-expected U.S. jobs data for December dashed hopes that the U.S. Federal Reserve may pause its rate tightening cycle soon.
The DAX index decreased 0.9% to 15,335.39, the CAC-40 index declined 1.5% and the FTSE 100 index dropped 0.9% to 7,825.82.
The yield on 10-year German Bunds inched up to 2.28%, French bonds increased to 2.73%, UK Gilts to 3.26% and Italian bonds to 4.14%.
Brent crude oil fell 4 cents to $79.89 and the Dutch TTF Spot price inched lower 71 euro cents to Є57.18 per MWh.
The euro declined to $1.07, the British pound edged lower to $1.205 and the Swiss franc eased to 92.75 U.S. cents.
Europe Movers
Aurubis AG declined 4.8% to €96.44 after the German copper smelter reported a sharp fall in earnings.
Revenue in the fiscal first quarter ending in December 2022 declined 7% to Є4.1 billion.
Net income dropped to Є57 million from Є301 million and diluted earnings per share plunged to Є1.31 from Є6.89 a year ago.
Higher energy and other input costs negatively impacted quarterly results.
Diageo Plc declined 0.2% to 3,572.15 pence after the British spirits maker launched a partial offer to increase its stake to 65% from the current stake of 50% in East African Breweries Plc.
The tender offer price is Kenyan Shillings 192.00 per ordinary share and the maximum number of shares subject to the tender offer is 118,394,897.
The tender offer period will run from 6 February 2023 to 17 March 2023, Diageo said in a statement released today.
Weaker Yen Drags Tokyo Stocks
Asian markets also cooled in overnight trading following the Friday's release of U.S. jobs report.
The yen fell 1% after the U.S. dollar advanced in the region's trading on the hopes of a continuation of the tightening cycle by the Federal Reserve after the jobs report signaled tighter-than-expected labor market conditions.
The Nikkei 225 average increased 0.7% to 27,693.65 and the yen weakened to 132.78 against the U.S. dollar.
Rising U.S.-China Tensions Knock China Stocks Lower
Markets in Mainland China and Hong Kong were under pressure after tensions between the U.S. and China rose after the U.S. shot down a Chinese spy-balloon off the coast of North Carolina.
Secretary of State Antony Blinken also canceled his visit to Beijing after the Pentagon's discovery of the alleged spy-balloon.
Chinese authorities said that China came to know that one of its "weather monitoring balloons" had drifted in the U.S. airspace only after it was informed by the United States.
“China is a responsible country. After the United States notified China, we immediately checked and gave feedback, and clearly requested the United States to act calmly, professionally, and handle it in a restrained manner,” China's foreign ministry spokeswoman Mao Ning said.
The Shanghai Composite index decreased 0.7% to 3,238.70 and the Hang Seng index fell 2% to 21,222.16.
Weaker Rupee and Adani Group Worries Overshadow India Stocks
Stocks in Mumbai traded lower after the U.S. dollar rose and U.S.-China tensions rose and Adani Group stocks fell for the third week in a row despite supportive comments from the government and business leaders.
The Sensex index decreased 0.5% 334.98 points to 60,506.90 and the Nifty index dropped 0.5% or 89.45 points to 17,764.60.
- Scott Peters
- 06 Feb, 2023
- New York City
Align Technology, Inc declined 0.2% to $342.58 after the maker of digital scanners and restorative dental accessories announced $250 million accelerated stock repurchase agreement with Citibank N.A.
The latest plan its a part of its $1.0 billion stock repurchase plan announced on May 13, 2021.
Catelent Inc soared 19.5% to $67.0 after Danaher showed an interest in acquiring the pharmaceutical contract manufacturing company, according to Bloomberg News.
Children's Place Inc declined 3.9% to $44.84 after the apparel retailer announced a loss in the fourth quarter based on the preliminary assessment.
Fourth quarter revenue is expected to fall between $454 million and $456 million, a decline between 10.2% and 10.6% from the previous year.
Loss per share for the fourth quarter of 2022 is expected to be in the range of $4.24 to $4.63 and adjusted loss per share is expected to be in the range of $4.02 to $4.41 after excluding approximately $3.6 million of adjustments.
The company previously guided adjusted earnings per diluted share of $0.50 to $0.75.
Dell Technologies Inc declined 3% to $40.99 after the maker of personal computers announced a plan to lay off about 5% its staff.
The company expects to recognize expenses associated with these actions in the fourth fiscal quarter of fiscal 2023, according to a regulatory filing with the Securities and Exchange Commission.
"The steps we’ve taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough. We now have to make additional decisions to prepare for the road ahead," Vice Chairman and Co-chief Operating Officer Jeff Clarke said.
"Unfortunately, with changes like this, some members of our team will be leaving the company," Clarke added.
Energizer Holdings dropped 5.3% to $35.29 after the battery maker reported weaker-than-anticipated quarterly results.
Sales in the fourth quarter or the fiscal first quarter ending in December decreased 9.6% to $765.1 million from $846.3 million a year ago.
Net income dropped to $49 million from $60 million and diluted earnings per share decreased to 68 cents from 83 cents a year ago.
The company reiterated its fiscal 2023 outlook, , with organic revenue expected to increase low single digits, adjusted EBITDA in the range of $585 million to $615 million, and adjusted earnings per share in the range of $3.00 to $3.30.
"We still expect low single digit declines for reported revenues with currency headwinds of approximately $50 million and anticipate negative currency headwinds on pre-tax earnings of approximately $20 million and $0.23 per share, based on current rates," the company said in the earnings release.
ON Semiconductor Corp declined 0.6% to $80.39 after the company said revenue in the fourth quarter increased 14% to record $2.1 billion.
Net income in the period rose to $604.3 million from $425.9 million and diluted earnings per share increased to $1.35 from 96 cents a year ago.
The company also announced a new share repurchase program with authorization to repurchase up to $3 billion of shares of the company's common stock through December 31, 2025.
PayPal Holdings Inc declined 3.7% to $82.36 after Raymond James lowered its rating on the payment processor's stock to "market perform" from "outperform."
Paypal is scheduled to release its latest quarterly earnings later in the week and in November the company reported third quarter revenue increased 11% to $6.85 billion and net income per share rose about 25% to $1.13 from 92 cents a year ago.
T. Mobile US Inc declined 2.2% to $141.97 after the independent research boutique MoffettNathanson downgraded the company's stock to "market perform" from "outperform."
Tyson Foods, Inc declined 5% to $60.77 after the company reported weaker-than-expected quarterly results.
Revenue in the fiscal first quarter increased 2.5% to $13.2 billion.
Net income plunged to $320 million from $1.1 billion and diluted earnings per share fell to 88 cents from $3.07 a year ago.
The company also guided fiscal 2023 revenue in the range of $55 billion and $57 billion and capital expenditure of $2.5 billion.
The company repurchased 4.9 million shares for $313 million the quarter ending in December.
Under Armour Inc declined 3.7% to $12.18 despite positive comments from Baird on the sports apparel retailer's business.
Baird said in a note to clients that the sales are likely to recover towards the year's end on the prospects of the economy avoiding a deep recession.
Under Armour stock has jumped 20.5% in the year so-far.
- Bridgette Randall
- 06 Feb, 2023
- Frankfurt
Aurubis AG declined 4.8% to €96.44 after the German copper smelter reported a sharp fall in earnings.
Revenue in the fiscal first quarter ending in December 2022 declined 7% to Є4.1 billion.
Net income dropped to Є57 million from Є301 million and diluted earnings per share plunged to Є1.31 from Є6.89 a year ago.
Higher energy and other input costs negatively impacted quarterly results.
Banco BPM SpA increased 2.7% to €4.22 after the Italian bank's chief executive Guiseppe Castagna said that the bank is not interested in acquiring the rival Banca Monte dei Paschi di Siena.
Banca Monte dei Paschi di Siena SpA declined 4.7% to €2.37.
Diageo Plc declined 0.2% to 3,572.15 pence after the British spirits maker launched a partial offer to increase its stake to 65% from the current stake of 50% in East African Breweries Plc.
The tender offer price is Kenyan Shillings 192.00 per ordinary share and the maximum number of shares subject to the tender offer is 118,394,897.
The tender offer period will run from 6 February 2023 to 17 March 2023, Diageo said in a statement released today.
Rovio Entertainment Oyj rose 14.5% to €8.74 after the popular Angry Birds mobile game maker headquartered in Finland said it has launched a strategic review and preliminary non-binding talks with potential suitors.
Novartis AG declined 0.5% to 79.15 Swiss francs and the Swiss pharmaceutical drug maker's unit Sandoz said it has won an approval from the U.S. drug regulator FDA has accepted its Biologics License Application for proposed biosimilar denosumab.
“In addition to being an important medicine for cancer of the bone, denosumab is critical in the treatment of osteoporosis and potential prevention of osteoporosis-related fractures that so many women over 50 are at risk of,” said Keren Haruvi, President, Sandoz Inc. and Head of North America.
- Bridgette Randall
- 06 Feb, 2023
- Frankfurt
European markets closed down after the U.S. dollar rebounded to a one-month high and the dollar index advanced.
The rising U.S.-China tensions also hovered the trading session after the U.S. shot down the alleged spy balloon from China.
The Euro Area retail sales declined in December after rising in November and barely increased in full-year 2022.
German factory orders fell in December after excluding major orders and sales dropped in December after domestic and foreign orders eased.
European markets accelerated the decline towards the close after traders reassessed the U.S. Fed's policy and the aggressive rate hike policy in the Euro Area.
Euro Area Retail Sales in December Declined
The seasonally adjusted retail sales volume in the Euro Area decreased 2.7% in December after rising 1.2% in November, according to an estimate from Eurostat, the statistical office of the European Union.
The retail sales declined 2.8% on an annual basis in December from a year ago.
For all of 2022, retail sales in the Euro Area barely increased 0.7% and rose 1.1% in the European Union.
German Factory Orders and Sales In Focus
Separately, the Destatis or the Federal Statistics Office of Germany said seasonally and price adjusted factory orders rose 3.2% on a monthly basis in December after falling 4.2% in November.
December orders declined 0.6%, excluding large orders for electric utilities and aircraft and internal combustion engines.
On a yearly basis, December orders declined 10.1% in December.
German factory orders adjusted on a calendar basis in December are slightly ahead of pre-pandemic level by 1.2% from December 2019.
However, sales of manufacturing companies fell 1.7% in December from November and rose 1.9% from a year ago.
European Indexes Trend Lower
European market indexes traded lower after stronger-than-expected U.S. jobs data for December dashed hopes that the U.S. Federal Reserve may pause its rate tightening cycle soon.
The DAX index decreased 0.9% to 15,335.39, the CAC-40 index declined 1.5% and the FTSE 100 index dropped 0.9% to 7,825.82.
The yield on 10-year German Bunds inched up to 2.28%, French bonds increased to 2.73%, UK Gilts to 3.26% and Italian bonds to 4.14%.
Brent crude oil fell 4 cents to $79.89 and the Dutch TTF Spot price inched lower 71 euro cents to Є57.18 per MWh.
The euro declined to $1.07, the British pound edged lower to $1.205 and the Swiss franc eased to 92.75 U.S. cents.
Europe Movers
Aurubis AG declined 4.8% to €96.44 after the German copper smelter reported a sharp fall in earnings.
Revenue in the fiscal first quarter ending in December 2022 declined 7% to Є4.1 billion.
Net income dropped to Є57 million from Є301 million and diluted earnings per share plunged to Є1.31 from Є6.89 a year ago.
Higher energy and other input costs negatively impacted quarterly results.
Banco BPM SpA increased 2.7% to €4.22 after the Italian bank's chief executive Guiseppe Castagna said that the bank is not interested in acquiring the rival Banca Monte dei Paschi di Siena.
Banca Monte dei Paschi di Siena SpA declined 4.7% to €2.37.
Diageo Plc declined 0.2% to 3,572.15 pence after the British spirits maker launched a partial offer to increase its stake to 65% from the current stake of 50% in East African Breweries Plc.
Rovio Entertainment Oyj rose 14.5% to €8.74 after the popular Angry Birds mobile game maker headquartered in Finland said it has launched a strategic review and preliminary non-binding talks with potential suitors.
Novartis AG declined 0.5% to 79.15 Swiss francs and the Swiss pharmaceutical drug maker's unit Sandoz said it has won an approval from the U.S. drug regulator FDA has accepted its Biologics License Application for proposed biosimilar denosumab.
“In addition to being an important medicine for cancer of the bone, denosumab is critical in the treatment of osteoporosis and potential prevention of osteoporosis-related fractures that so many women over 50 are at risk of,” said Keren Haruvi, President, Sandoz Inc. and Head of North America.
- Barry Adams
- 06 Feb, 2023
- New York City
Benchmark indexes on Wall Street traded lower after Treasury yields rose.
Stocks faced headwinds for the second trading day in a row after bond yields rose 9 basis points in morning trading after rate worries resurfaced following an unexpected surge in non-farm payrolls in January.
The U.S. dollar index advanced against a basket of major currencies and rose above 105 and traded near the level seen in early January.
Dell Inc was the latest tech company to announce a layoff and the maker of computers said it plans to eliminate 6,500 jobs.
The S&P 500 index fell 0.5% to 4,116.13 and the Nasdaq Composite index declined 0.5% to 11,944.48.
Crude oil gained 27 cents to $73.65 a barrel and natural gas fell 2 cents to $2.39 a thermal unit.
The yield on 2-year Treasury notes inched up to 4.41%, 10-year treasury notes edged higher to 3.61% and 30-year Treasury notes traded up to 3.67%.
Euro Area Retail Sales Fell In December
The seasonally adjusted retail sales volume in the Euro Area decreased 2.7% in December after rising 1.2% in November, according to an estimate from Eurostat, the statistical office of the European Union.
The retail sales declined 2.8% on an annual basis in December from a year ago.
For all of 2022, retail sales in the Euro Area barely increased 0.7% and rose 1.1% in the European Union.
German Factory Orders and Sales In Focus
Separately, the Destatis or the Federal Statistics Office of Germany said seasonally and price adjusted factory orders rose 3.2% on a monthly basis in December after falling 4.2% in November.
December orders declined 0.6%, excluding large orders for electric utilities and aircraft and internal combustion engines.
On a yearly basis, December orders declined 10.1% in December.
German factory orders adjusted on a calendar basis in December are slightly ahead of pre-pandemic level by 1.2% from December 2019.
However, sales of manufacturing companies fell 1.7% in December from November and rose 1.9% from a year ago.
European Indexes Trend Lower
European market indexes traded lower after stronger-than-expected U.S. jobs data for December dashed hopes that the U.S. Federal Reserve may pause its rate tightening cycle soon.
The DAX index decreased 0.9% to 15,335.39, the CAC-40 index declined 1.5% and the FTSE 100 index dropped 0.9% to 7,825.82.
The yield on 10-year German Bunds inched up to 2.28%, French bonds increased to 2.73%, UK Gilts to 3.26% and Italian bonds to 4.14%.
Brent crude oil fell 4 cents to $79.89 and the Dutch TTF Spot price inched lower 71 euro cents to Є57.18 per MWh.
The euro declined to $1.07, the British pound edged lower to $1.205 and the Swiss franc eased to 92.75 U.S. cents.
Weaker Yen Drags Tokyo Stocks
Asian markets also cooled in overnight trading following the Friday's release of U.S. jobs report.
The yen fell 1% after the U.S. dollar advanced in the region's trading on the hopes of a continuation of the tightening cycle by the Federal Reserve after the jobs report signaled tighter-than-expected labor market conditions.
The Nikkei 225 average increased 0.7% to 27,693.65 and the yen weakened to 132.78 against the U.S. dollar.
Rising U.S.-China Tensions Knock China Stocks Lower
Markets in Mainland China and Hong Kong were under pressure after tensions between the U.S. and China rose after the U.S. shot down a Chinese spy-balloon off the coast of North Carolina.
Secretary of State Antony Blinken also canceled his visit to Beijing after the Pentagon's discovery of the alleged spy-balloon.
Chinese authorities said that China came to know that one of its "weather monitoring balloons" had drifted in the U.S. airspace only after it was informed by the United States.
“China is a responsible country. After the United States notified China, we immediately checked and gave feedback, and clearly requested the United States to act calmly, professionally, and handle it in a restrained manner,” China's foreign ministry spokeswoman Mao Ning said.
The Shanghai Composite index decreased 0.7% to 3,238.70 and the Hang Seng index fell 2% to 21,222.16.
Weaker Rupee and Adani Group Worries Overshadow India Stocks
Stocks in Mumbai traded lower after the U.S. dollar rose and U.S.-China tensions rose and Adani Group stocks fell for the third week in a row despite supportive comments from the government and business leaders.
The Sensex index decreased 0.5% 334.98 points to 60,506.90 and the Nifty index dropped 0.5% or 89.45 points to 17,764.60.
- Barry Adams
- 03 Feb, 2023
- New York City
Financial markets turned cautious after the U.S. economy added jobs at a surprisingly faster pace.
The pace of addition was last seen nearly two years ago and jobless rate dropped to a five-decade low.
Despite the tight labor market conditions, employment participation rate remained weak and wage growth lagged headline inflation.
Markets lacked momentum from the get go and struggled to hold losses on the worries that the tight labor market conditions may prolong higher rates for longer.
Despite the market weakness on the last day of the week, benchmark indexes added between 1% and 3% for the week.
U.S. Hirings Surged, Jobless Rate Dropped to 53-year Low
The U.S. economy added 517,000 net new jobs in January, the strongest gains since July 2020, the Bureau of Labor Statistics reported Friday.
Net job additions in the non-farm payrolls were not expected to rise above 175,000 according to several economists and surpassed December's 260,000 net gains.
In a widespread job addition, the leisure and hospitality industry led the expansion with an addition of 128,000 followed by 82,000 gains in professional and business services, 58,000 in healthcare, 30,000 in retail trade and 25,000 in construction.
Governments at all levels also added 74,000 net new jobs, partially reflecting the return of 48,000 academic workers at the University of California.
The January report offers critical insight in the labor market as several large tech companies announce substantial layoffs as companies recalibrate business outlook and prepare for economic slowdown.
January job gains were ahead of the monthly average of 385,000 in 2022, reflecting the latest revisions in data for the last two months of 2022.
Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in January.
The unemployment rate has shown little net movement since early 2022 and dropped to the lowest level since 1969.
Labor force participation rate edged higher to 62.4%, but still below the pre-pandemic level of 63.6%.
Wages rose 0.3% in January from the previous month and surged 4.4% from a year ago.
U.S. Indexes In Review
The S&P 500 index decreased 1.1% to 4,136.48 and the Nasdaq Composite index declined 1.6% to 12,006.96.
For the week, the Nasdaq Composite index increased 3.3% and the S&P 500 index advanced 1.6%.
Crude oil inched lower by $2.60 to $73.27 a barrel and natural gas futures for immediate month delivery fell 5 cents to $2.40 a thermal unit.
The yield on 2-year treasury notes inched higher to 4.29%, 10-year treasury notes edged higher to 3.52% and 30-year treasury bonds to 3.62%.
U.S. Movers
Alphabet Inc declined 4% to $103.29 after the parent of Google reported a decline in earnings driven by general weakness in advertising revenue and a larger decline in video ads on its popular YouTube platform.
Alphabet Inc said revenue in the December quarter rose 1% to $76 billion.
Net income plunged 34% to $13.6 billion from $20.6 billion and diluted earnings per share dropped to $1.05 from $1.53 a year ago.
Amazon.com, Inc dropped 6.3% to $112.91 after the online retailer reported a sharp plunge in earnings partly driven by writing down the value of its stake in the electric vehicle maker Rivian Automotive.
Amazon.com said sales in the fourth quarter increased 9% to $149.2 billion and net income fell to $0.3 billion from $14.3 billion and diluted earnings per share fell to 3 cents from $1.39 from a year ago.
North America sales increased 13% from a year ago to $315.9 billion and international sales fell 8% to $118.0 billion, or increased 4% excluding changes in foreign exchange rates.
AWS segment sales increased 29% from a year ago to $80.1 billion.
Net sales in full-year 2022 increased 9% to $514.0 billion from $469.8 billion in 2021.
Net loss was $2.7 billion in 2022 or $0.27 per diluted share, compared to net income of $33.4 billion, or $3.24 per diluted share in 2021.
Apple Inc declined 1.6% to $148.26 after the computing devices maker reported a rare quarterly revenue decline and fell for the first time since 2019.
Apple Inc said revenue in the December quarter fell 5% from the previous year to $117.2 billion.
Net income dropped 13.2% to $30 billion from $34.6 billion and diluted earnings per share fell to $1.88 from $2.10 a year ago.
European Investors Look Beyond Recent Malaise
European markets closed lower on Friday following weaker-than-expected earnings from the U.S. tech companies and strong U.S. jobs report.
The Euro Area private sector activities expanded in January after shrinking for seven months in a row, the latest survey from S&P Global showed on Friday.
The PMI Composite Output Index for January was revised higher in the final estimate to 50.3 from the previous estimate of 50.2, and moved from 49.3 in December.
The rebound in total activities was driven by resurgence in services but manufacturing contracted in the month.
The rebound in activities after seven months raised hopes that the currency block's economy may be able to avoid a recession.
European Indexes Extend Weekly Gains
Benchmark indexes were under pressure in Germany but advanced in France and the UK.
The DAX index decreased 0.2% to 15,476.43, the CAC-40 index increased 1.0% and the FTSE 100 index advanced 1% to 7,901.80.
For the week, the DAX index increased 1.8%, the CAC-40 index rose 1.5% and the FTSE 100 index advanced 1.6%.
The euro edged down to $1.08, the British pound eased to $1.22 and the Swiss franc edged lower to 92.54 U.S. cents.
Crude oil advanced in early trading after the U.S. jobs data showed a sharp jump in payrolls in January raising hopes of stable demand in the world's largest economy.
Brent crude oil declined $2.35 to $79.82 a barrel and the Dutch TTF Spot price increased 0.9% to Є57.80 per MWh.
Europe Movers
TomTom NV increased 4% to €7.26 after the mobility device maker reported narrower loss in its latest quarter.
Revenue in the fourth quarter rose 21% to €139 million and net loss narrowed to €8.8 from €38.8 million a year ago.
For the full-year 2022, revenue increased 5.7% to €536 million and loss expanded 9% to €102.7 million.
The company guided 2023 revenue in the range of €540 million and €580 million.
Sanofi SA declined 1.8% to €85.14 after the French drugmaker estimated 2023 revenue growth in "low single-digit" in constant currency.
Net sales in the fourth quarter increased 7.3% to €10.7 billion and net income rose 29.1% to €1.46 billion and diluted earnings per share rose 28.9% to €1.16.
Ferrari NV declined 1.8% to €242.10 after the Italian sports car maker reported quarterly results.
Shipments in the fourth quarter increased 13% to 3,327 and for the full-year 2022 rose 19% to 13,221.
Revenue in the fourth quarter increased 17% from a year ago to €1.4 billion and net income rose 3% to €221 million.
Diluted earnings per share increased to €1.21 from €1.16 a year ago.
In full-year 2022, revenue increased 19% to €5.1 billion and net income rose 13% to €939 million and diluted earnings per share increased to 13% to 5.09 from €4.50 a year ago.
Julius Baer Gruppe AG increased 2.8% to 63.42 Swiss francs after the Swiss private banking group reported better-than-expected quarterly results.
Assets under management declined 12$ to 424 million Swiss francs and net new inflow was 9 billion Swiss francs in the year 2022.
Operating income declined marginally to 3.9 billion Swiss francs and net profit attributable to shareholders fell 12%, to 950 million Swiss francs.
Earnings per share decreased 10% to 4.56 Swiss francs and the company proposed to pay a dividend of 2.60 Swiss francs despite the fall in earnings.
Nikkei In Tokyo Turns Volatile
Stocks in Japan were volatile after U.S. tech companies generally reported weaker-than-expected earnings.
Benchmark indexes closed at seven-week highs after a business survey showed service sector activities rose at the fastest pace in three months in January.
The Nikkei 225 index increased 0.4% to 27,509.46 and the yen traded down to 131.45 against the U.S. dollar.
For the week, the Nikkei index eked out a gain of 0.5%.
Sony Group soared 6% after the company lifted its operating profit outlook following the strength in the gaming sector.
China Stocks Drop, Service Sector Rebounds
Stocks in Mainland China and Hong Kong despite a survey showed that the private sector expanded for the first time in five months in January.
The Shanghai Composite index fell 0.7% to 3,263.41 and the Hang Seng index declined 1.4% to 21,660.47.
For the week, the Hang Seng fell 2.2% and the Shanghai index decreased 0.2%.
The Chinese renminbi traded near 6.80 against the U.S. dollar.
Chinese electric vehicle maker BYD declined 2.9% after Berkshire Hathaway trimmed its stake for the second time in four months.
Tech stocks led the decliners in Hong Kong trading following the weak results from Google's parent Alphabet, Amazon.com Inc and Apple Inc.
Alibaba Group fell 3% to HK$105.70, JD.com declined 2.6% to HK$233.20 and Meituan decreased 2.2% to HK$172.80.
India Awaits Rate Decision Next Week
Markets in India advanced on the hopes that the global rate increase cycle is nearing an end and the falling oil prices also supported market enthusiasm.
Financial stocks led the charge supported by consumer products ahead of the Reserve Bank of India's rate setting committee meeting next week.
Investors are anticipating a rate hike of 25 basis points before the central bank pauses.
The Sensex index in Mumbai soared 1.5% or 909.64 points to 60,841.88 and the Nifty index advanced 1.4% or 243.65 points to 17,854.05.
For the week, The Sensex and the Nifty indexes rose 2.6%.
The Indian rupee declined to 82.26 against the U.S. dollar.
TotalEnergies SE confirmed that the company has not decided to reevaluate its investment in two companies controlled by Adani Group following recent fraud allegations.
- Bridgette Randall
- 03 Feb, 2023
- Frankfurt
TomTom NV increased 4% to €7.26 after the mobility device maker reported narrower loss in its latest quarter.
Revenue in the fourth quarter rose 21% to €139 million and net loss narrowed to €8.8 from €38.8 million a year ago.
For the full-year 2022, revenue increased 5.7% to €536 million and loss expanded 9% to €102.7 million.
The company guided 2023 revenue in the range of €540 million and €580 million.
Sanofi SA declined 1.8% to €85.14 after the French drugmaker estimated 2023 revenue growth in "low single-digit" in constant currency.
Net sales in the fourth quarter increased 7.3% to €10.7 billion and net income rose 29.1% to €1.46 billion and diluted earnings per share rose 28.9% to €1.16.
Ferrari NV declined 1.8% to €242.10 after the Italian sports car maker reported quarterly results.
Shipments in the fourth quarter increased 13% to 3,327 and for the full-year 2022 rose 19% to 13,221.
Revenue in the fourth quarter increased 17% from a year ago to €1.4 billion and net income rose 3% to €221 million.
Diluted earnings per share increased to €1.21 from €1.16 a year ago.
In full-year 2022, revenue increased 19% to €5.1 billion and net income rose 13% to €939 million and diluted earnings per share increased to 13% to 5.09 from €4.50 a year ago.
The product portfolio in the year included nine internal combustion engine models and three hybrid engine models, which represented 78% and 22% of total shipments, respectively.
The increase in shipments during the year was driven by the Ferrari Portofino M and the SF90 family, as well as the 296 GTB and the 812 Competizione, which were in the ramp up phase.
Deliveries of the Ferrari Monza SP1 and SP2 declined from the previous year.
Sales rose across all regions and EMEA sales rose 8.5%, Americas increased 21.8%, Mainland China, Hong Kong and Taiwan soared 72.6% and Rest of Asia Pacific sales increased 17.1%.
The Company repurchased 123,760 common shares for a total consideration of €26.8 million in January 2023.
Julius Baer Gruppe AG increased 2.8% to 63.42 Swiss francs after the Swiss private banking group reported better-than-expected quarterly results.
Assets under management declined 12$ to 424 million Swiss francs and net new inflow was 9 billion Swiss francs in the year 2022.
Operating income declined marginally to 3.9 billion Swiss francs and net profit attributable to shareholders fell 12%, to 950 million Swiss francs.
Earnings per share decreased 10% to 4.56 Swiss francs and the company proposed to pay a dividend of 2.60 Swiss francs despite the fall in earnings.
- Bridgette Randall
- 03 Feb, 2023
- Frankfurt
European markets closed lower on Friday following weaker-than-expected earnings from the U.S. tech companies and strong U.S. jobs report.
The Euro Area private sector activities expanded in January after shrinking for seven months in a row, the latest survey from S&P Global showed on Friday.
The PMI Composite Output Index for January was revised higher in the final estimate to 50.3 from the previous estimate of 50.2, and moved from 49.3 in December.
The rebound in total activities was driven by resurgence in services but manufacturing contracted in the month.
The rebound in activities after seven months raised hopes that the currency block's economy may be able to avoid a recession.
European Indexes Extend Weekly Gains
Benchmark indexes were under pressure in Germany but advanced in France and the UK.
The DAX index decreased 0.2% to 15,476.43, the CAC-40 index increased 1.0% and the FTSE 100 index advanced 1% to 7,901.80.
For the week, the DAX index increased 1.8%, the CAC-40 index rose 1.5% and the FTSE 100 index advanced 1.6%.
The euro edged down to $1.08, the British pound eased to $1.22 and the Swiss franc edged lower to 92.54 U.S. cents.
Crude oil advanced in early trading after the U.S. jobs data showed a sharp jump in payrolls in January raising hopes of stable demand in the world's largest economy.
Brent crude oil declined $2.35 to $79.82 a barrel and the Dutch TTF Spot price increased 0.9% to Є57.80 per MWh.
Europe Movers
TomTom NV increased 4% to €7.26 after the mobility device maker reported narrower loss in its latest quarter.
Revenue in the fourth quarter rose 21% to €139 million and net loss narrowed to €8.8 from €38.8 million a year ago.
For the full-year 2022, revenue increased 5.7% to €536 million and loss expanded 9% to €102.7 million.
The company guided 2023 revenue in the range of €540 million and €580 million.
Sanofi SA declined 1.8% to €85.14 after the French drugmaker estimated 2023 revenue growth in "low single-digit" in constant currency.
Net sales in the fourth quarter increased 7.3% to €10.7 billion and net income rose 29.1% to €1.46 billion and diluted earnings per share rose 28.9% to €1.16.
Ferrari NV declined 1.8% to €242.10 after the Italian sports car maker reported quarterly results.
Shipments in the fourth quarter increased 13% to 3,327 and for the full-year 2022 rose 19% to 13,221.
Revenue in the fourth quarter increased 17% from a year ago to €1.4 billion and net income rose 3% to €221 million.
Diluted earnings per share increased to €1.21 from €1.16 a year ago.
In full-year 2022, revenue increased 19% to €5.1 billion and net income rose 13% to €939 million and diluted earnings per share increased to 13% to 5.09 from €4.50 a year ago.
Julius Baer Gruppe AG increased 2.8% to 63.42 Swiss francs after the Swiss private banking group reported better-than-expected quarterly results.
Assets under management declined 12$ to 424 million Swiss francs and net new inflow was 9 billion Swiss francs in the year 2022.
Operating income declined marginally to 3.9 billion Swiss francs and net profit attributable to shareholders fell 12%, to 950 million Swiss francs.
Earnings per share decreased 10% to 4.56 Swiss francs and the company proposed to pay a dividend of 2.60 Swiss francs despite the fall in earnings.
- Brian Turner
- 03 Feb, 2023
- New York City
The U.S. economy added 517,000 net new jobs in January, the strongest gains since July 2020, the Bureau of Labor Statistics reported Friday.
Net job additions in the non-farm payrolls were not expected to rise above 175,000 according to several economists and surpassed December's 260,000 net gains.
In a widespread job addition, the leisure and hospitality industry led the expansion with an addition of 128,000 followed by 82,000 gains in professional and business services, 58,000 in healthcare, 30,000 in retail trade and 25,000 in construction.
Governments at all levels also added 74,000 net new jobs, partially reflecting the return of 48,000 academic workers at the University of California.
The January report offers critical insight in the labor market as several large tech companies announce substantial layoffs as companies recalibrate business outlook and prepare for economic slowdown.
January job gains were ahead of the monthly average of 401,000 in 2022.
Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in January.
The unemployment rate has shown little net movement since early 2022 and dropped to the lowest level since 1969.
Labor force participation rate edged higher to 62.4%, but still below the pre-pandemic level of 63.6%.
Wages rose 0.3% in January from the previous month and eased to 4.4% pace from a year ago from 4.6% in December.
In January, average hourly earnings for all employees on private nonfarm payrolls rose 10 cents, or 0.3%, to $33.03, an increase of 4.4% from a year ago.
In January, average hourly earnings of private sector production and nonsupervisory employees rose 7 cents or 0.2% to $28.26.
Jobs gains in November and December were revised higher by a total of 71,000, the report from the Labor Department noted.
The government agency also revised higher total jobs added over 12 months to March by 568,000, based on more complete tax-records and reflecting annual revision.
- Barry Adams
- 03 Feb, 2023
- New York City
Financial markets turned cautious after the U.S. economy added jobs at a surprisingly faster pace.
The pace of addition was last seen nearly two years ago and jobless rate dropped to a five-decade low.
Despite the tight labor market conditions, employment participation rate remained weak, making the Federal Reserve's task harder in balancing economic growth while controlling inflation.
U.S. Hirings Surged, Jobless Rate Dropped to 53-year Low
The U.S. economy added 517,000 net new jobs in January, the strongest gains since July 2020, the Bureau of Labor Statistics reported Friday.
Net job additions in the non-farm payrolls were not expected to rise above 175,000 according to several economists and surpassed December's 260,000 net gains.
In a widespread job addition, the leisure and hospitality industry led the expansion with an addition of 128,000 followed by 82,000 gains in professional and business services, 58,000 in healthcare, 30,000 in retail trade and 25,000 in construction.
Governments at all levels also added 74,000 net new jobs, partially reflecting the return of 48,000 academic workers at the University of California.
The January report offers critical insight in the labor market as several large tech companies announce substantial layoffs as companies recalibrate business outlook and prepare for economic slowdown.
January job gains were ahead of the monthly average of 385,000 in 2022, reflecting the latest revisions in data for the last two months of 2022.
Both the unemployment rate, at 3.4%, and the number of unemployed persons, at 5.7 million, changed little in January.
The unemployment rate has shown little net movement since early 2022 and dropped to the lowest level since 1969.
Labor force participation rate edged higher to 62.4%, but still below the pre-pandemic level of 63.6%.
Wages rose 0.3% in January from the previous month and surged 4.4% from a year ago.
U.S. Indexes In Review
The S&P 500 index decreased 0.2% to 4,173.08 and the Nasdaq Composite index declined 0.1% to 12,190.85.
Crude oil inched lower by $2.0 to $73.91 a barrel and natural gas futures for immediate month delivery fell 10 cents to $2.35 a thermal unit.
The yield on 2-year treasury notes inched higher to 4.27%, 10-year treasury notes edged higher to 3.52% and 30-year treasury bonds to 3.62%.
U.S. Movers
Alphabet Inc declined 4% to $103.29 after the parent of Google reported a decline in earnings driven by general weakness in advertising revenue and a larger decline in video ads on its popular YouTube platform.
Alphabet Inc said revenue in the December quarter rose 1% to $76 billion and net income plunged 34% to $13.6 billion from $20.6 billion and diluted EPS dropped to $1.05 from $1.53 a year ago.
Amazon.com, Inc dropped 6.3% to $112.91 after the online retailer reported a sharp plunge in earnings partly driven by writing down the value of its stake in the electric vehicle maker Rivian Automotive.
Amazon.com said sales in the fourth quarter increased 9% to $149.2 billion and net income fell to $0.3 billion from $14.3 billion and diluted EPS fell to 3 cents from $1.39 from a year ago.
North America sales increased 13% from a year ago to $315.9 billion and international sales fell 8% to $118.0 billion, or increased 4% excluding changes in foreign exchange rates.
AWS segment sales increased 29% from a year ago to $80.1 billion.
Net sales in full-year 2022 increased 9% to $514.0 billion from $469.8 billion in 2021.
Net loss was $2.7 billion in 2022 or $0.27 per diluted share, compared to net income of $33.4 billion, or $3.24 per diluted share in 2021.
Apple Inc declined 1.6% to $148.26 after the computing devices maker reported a rare quarterly revenue decline and fell for the first time since 2019.
Apple Inc said revenue in the December quarter fell 5% from the previous year to $117.2 billion.
Net income dropped 13.2% to $30 billion from $34.6 billion and diluted EPS fell to $1.88 from $2.10 a year ago.
- Scott Peters
- 03 Feb, 2023
- New York City
Alphabet Inc declined 4% to $103.29 after the parent of Google reported a decline in earnings driven by general weakness in advertising revenue and a larger decline in video ads on its popular YouTube platform.
Alphabet Inc said revenue in the December quarter rose 1% to $76 billion and net income plunged 34% to $13.6 billion from $20.6 billion and diluted EPS dropped to $1.05 from $1.53 a year ago.
Amazon.com, Inc dropped 6.3% to $112.91 after the online retailer reported a sharp plunge in earnings partly driven by writing down the value of its stake in the electric vehicle maker Rivian Automotive.
Amazon.com said sales in the fourth quarter increased 9% to $149.2 billion and net income fell to $0.3 billion from $14.3 billion and diluted EPS fell to 3 cents from $1.39 from a year ago.
North America sales increased 13% from a year ago to $315.9 billion and international sales fell 8% to $118.0 billion, or increased 4% excluding changes in foreign exchange rates.
AWS segment sales increased 29% from a year ago to $80.1 billion.
Net sales in full-year 2022 increased 9% to $514.0 billion from $469.8 billion in 2021.
Net loss was $2.7 billion in 2022 or $0.27 per diluted share, compared to net income of $33.4 billion, or $3.24 per diluted share in 2021.
Apple Inc declined 1.6% to $148.26 after the computing devices maker reported a rare quarterly revenue decline and fell for the first time since 2019.
Apple Inc said revenue in the December quarter fell 5% from the previous year to $117.2 billion.
Net income dropped 13.2% to $30 billion from $34.6 billion and diluted EPS fell to $1.88 from $2.10 a year ago.
Ford Motor Company declined 10% to $12.88 after the automaker missed its quarterly earnings and the management struggles to deal with long-term operating inefficiencies and persistent underperformance.
Ford Motor said revenue in the December quarter rose 17% from a year ago to $44 billion.
Net income plunged to $1.3 billion from $12.3 billion and diluted EPS fell to 32 cents from $3.02 a year ago.
Sally Beauty Holdings Inc declined 0.5% to $17.87 after the beauty products retailer reported a drop in earnings because of restructuring charges.
Sally Beauty said December quarter revenue declined 2.4% from the previous year to $957 million.
Net income dropped 27% to $50.3 million from $68.8 million and diluted earnings per share fell to 46 cents from 60 cents a year ago.
Skechers USA Inc fell 5.2% to $46.67 after the footwear retailer forecasted first quarter earnings and sales outlook that missed some investors expectations.
Skechers said the fourth quarter revenue increased 13.5% from a year ago to $1.88 billion.
Net income plunged to $75.5 million from $402.4 million and diluted earnings per share dropped to 48 cents from $2.56 a year ago.
Skechers guided first quarter revenue between $1.80 billion and $1.85 billion and diluted earnings per share between 55 cents and 60 cents a share and full EPS between $2.80 and $3.0.
Starbucks Corporation declined 3.6% to $105.14 after the coffeehouse chain operator reported weaker-than-expected quarterly results as China's "zero-covid" policy impacted sales.
Starbucks said revenue in the December quarter rose 8% from the previous year to $8.7 billion.
Net income increased 4.8% to $855 million from $816 million and diluted earnings per share rose to 74 cents from 69 cents a year ago.
North America and U.S. comparable store sales increased 10%, driven by a 9% increase in average ticket and a 1% increase in comparable transactions.
International comparable store sales fell 13%, driven by a 12% decline in comparable transactions and a 1% decline in average ticket.
China comparable store sales decreased 29%, driven by a 28% decline in comparable transactions and a 1% decline in average ticket.
At the end of 2022, stores in the U.S. and China comprised 61% of the company’s global portfolio, with 15,952 stores in the U.S. and 6,090 stores in China.
Qualcomm Inc fell 0.6% to $135.10 after the chip maker's guidance indicated more struggles for the company reflecting ongoing weakness in the industry.
Qualcomm said revenue in the December quarter declined 12% to $9.5 billion.
Net income fell 34% to $2.2 billion and diluted earnings per share dropped to $1.98 from $2.98 a year ago.
In the December quarter, Qualcomm returned $2.1 billion to stockholders, including $842 million, or 75 cents a share in dividends and $1.3 billion through repurchases of 11 million shares.
Qualcomm guided fiscal second quarter revenue between $8.7 billion and $9.5 billion and diluted earnings per share between $1.53 and $1.73.