- Barry Adams
- 19 Jan, 2023
- New York City
Market sentiment on Wall Street swung to pessimism for the second day in a row and rate path worries dominated.
With central bankers in the U.S. and Europe reiterating the need to bring down inflation to 2%, investors took a dim view of corporate earnings growth.
The fresh batch of economic data from the labor market signaled tight conditions but the housing market is reeling under record home prices and rising mortgage rates.
Investors also feared that the Federal Reserve ,in its relentless focus on taming inflation may over tighten and raise rates to restrictive levels forcing the economy into a slowdown or a full-blown recession.
Despite seven rate hikes in 2022, inflation is still way above the central bank's target rate of 2%.
At the time of the last rate hike in December, the Federal Reserve said terminal rates are likely to be near 5.25% but investors are divided if rates may need to go higher.
S&P 500 and Nasdaq Extend Weekly Losses
Benchmark indexes traded down and investors focused on rate path and terminal rates after the latest economic data sent mixed signals.
Low jobless claims showed tight labor market conditions but weakening housing starts and completions also signaled difficult market conditions for home buyers and builders.
The S&P 500 index fell 0.8% to 3,898.85 and the Nasdaq Composite index dropped 1% to 10,852.27.
Crude Oil Hovered Near December High
Energy investors bid up crude oil prices on the hopes that China's reopening will lift demand.
Reports from the International Energy Association controlled by western nations and OPEC controlled by oil producers in the Middle East indicated that demand for oil is expected to rise at least 2% amid shrinking supply from Russia in international markets.
Crude oil rose 91 cents to $80.39 and natural gas edged down 11 cents to $3.19 a thermal unit.
U.S. Treasury Yields Trend Lower
U.S. Treasury yields retained downward bias on the hopes that the recent inflation-cooling data is likely to slow down the future rate hikes.
The yield on 2-year Treasury notes edged higher to 4.13%, 10-year Treasury notes to 3.39% and 30-year Treasury bonds to 3.57%.
U.S. Stock Movers
KeyCorp declined 4.7% to $16.41 after the regional bank reported a sharp fall in earnings on stable revenue in its latest quarter.
KeyCorp said revenue in December quarter fell 2.5% to $1.89 billion and net income dropped 41% to $356 million or diluted earnings per share fell to 38 cents from 64 cents a year ago.
Charles Schwab dropped 6.9% to $75.73 after the financial services provider reported quarterly results in-line with expectations.
Stock was under pressure after negative comments and double-downgrade from Bank of America on the worries that the rising interest rate environment is a double-edged sword for the online broker.
Charles Schwab Corp said fourth quarter revenue increased 17% to $5.5 billion and net income rose 25% to $1.96 billion and diluted earnings per share increased to 97 cents from 76 cents a year ago.
Building Permits Declined in December and In 2022
Home building permits in December declined 1.6% to 1.33 million annual rate and fell 29.9% from a year ago, the U.S. Census Bureau reported Thursday.
Housing starts fell 1.4% from November to 1.38 million and plunged 21.8% from a year ago after mortgage rates surged to 15-year high and home prices stayed elevated across the nation.
In 2022, U.S. building permits for private residential construction fell 5% from a year ago to 1.65 million, starts declined 3% to 1.55 million and completions dropped 3.8% to 1.39 million.
Weekly Jobless Claims Show Tight Labor Market Conditions
Initial claims for jobless benefits declined 15,000 to 190,000 last week and the four-week moving average fell 6,500 to 206,000, the U.S. Department of Labor reported Thursday.
On an unadjusted basis for seasonal factors, the claims declined 53,582 to 285,575 largely on the account of holiday calendar and other seasonal factors.
European Indexes Drop After Hawkish Comments From Central Bankers
European markets fell more than 1% after six-days of gains after hawkish comments from the central bankers dented market sentiment.
European Central Bank President Lagarde reiterated the central bank's commitment in lowering rates to 2% "in a timely manner" at a gathering of business executives in Davos, Switzerland.
European policymaker and Dutch central bank governor Klaas Knot also reiterated ECB's commitment in raising rates in 50 basis points increment and keeping the hawkish stance intact.
Tough talks from two central bankers shifted investors attention from economic growth to the implications of rising rates on the region's economy.
European Indexes Halt Weekly Advance
The DAX index declined 1.4% to 14,962.49, the CAC-40 index fell 1.6% to 6,967.94 and the FTSE 100 index declined 0.9% to 6,967.94.
Rate Path Expectations Lift Euro and Pound
The euro traded near $1.078, the British pound edged higher to $1.23 and the Swiss franc edged lower to 91.63 U.S. cents.
Europe Bond Yields Drift Lower
The yield on 10-year German Bunds inched lower to 2.04%, French bonds to 2.46% UK Gilts to 3.30% and Italian bonds to 3.77%.
Oil Prices Stay Elevated On China Recovery Hopes
Brent crude oil price edged higher 70 cents to $85.71 a barrel and the Dutch TTF natural gas futures contract price for immediate month delivery declined 4% to 59.08 per MWh.
Europe Stock Movers
Informa plc increased 0.4% to 662.74 pence after the event management and academic publishing company said revenue and adjusted earnings are expected to increase in 2022.
In its annual trading update released Thursday, the company estimated 2022 revenue of £2.38 billion, adjusted operating profit of £530 million and free cash flow of £440 million.
Melrose Industries PLC decreased 2.2% to 146.49 pence and the company said GKN divisions operating performance is in-line with management expectations.
The aerospace industry focused holding company revenues rose more than expected 6% and operating profit surged 21% from a year ago.
On September 8, 2022 Melrose announced its plan to separate its GKN Automotive and GKN Powder Metallurgy businesses from the Melrose Group by way of a demerger of shares in a new holding company to Melrose shareholders.
Japan Reports Record Trade Deficit
Asian markets diverged amid the weakening global sentiment and reacted to local news.
Japan's trade deficit widened in December on higher energy and raw materials prices and weaker yen, the Finance Ministry said in a report released Thursday.
In full-year 2022 international trade deficit soared to ¥19.97 trillion or $155 billion, surpassing the previous high of ¥12.82 trillion in 2014.
The annual deficit was the largest since record keeping began in 1979 and weaker yen played a crucial role in widening the deficit.
In December, imports soared 39.2% to a record ¥118.16 trillion and exports jumped 18.2% to record ¥98.19 trillion.
Japan recorded a trade deficit for the 17th month in a row in December and posted a second annual deficit in a row in 2022.
Stocks in Japan were under pressure ahead of the inflation report on Friday. Automakers led the losers with Toyota Motor, Honda Motor and Mitsubishi Motor falling between 2% and 4.5%.
J Front Retailing jumped 3% after inbound tourists in Japan surged in 2022.
Japan's Tourists Arrivals Surge In 2022
Total international arrivals in 2022 soared more than 15-fold from a year ago to 3.83 million, the Japan National Tourism Organization reported Thursday.
Tax-free sales increased to ¥17.5 billion in November and jumped five-fold from the previous year, the Japan Department Stores Association said on Wednesday.
The Nikkei 225 average fell 1.4% to 26,405.23 and the yen weakened to 128.30 against the U.S. dollar.
China Stocks Lack Momentum
Stocks in China closed mixed and investors took a cautious view in the absence of domestic economic or corporate news.
The Shanghai Composite index increased 0.5% to 3,240.28 and the Hang Seng Index declined 0.1% to 21,650.98.
India's Domestic Air Traffic Jumped In 2022
Stocks in Mumbai rested after two-days of advance and investors weighed the prospect of U.S. recession against the weakening of oil price in international trading and the dollar edged lower.
Domestic passenger air traffic surged nearly 47% to 12.3 crore or 123 million in full-year 2022 from 8.4 crore or 84 million in 2021, the aviation regulator DGCA said in a statement today.
The Sensex index decreased 0.3% or 187.31 to 60,858.43 and the Nifty index fell 0.3% or 57.50 to 18,107.85.
Adani Enterprises fell as much as 4% after the company set floor price of ₹3,112 a share with a 10% discount for retail investors for its $2.5 billion secondary offering.
Coal India advanced 2% after the coal ministry set an annual production target of one billion tons in the next financial year.
Hindustan Unilever said December quarter revenue increased 16.4% to ₹15,707 crore and net income rose 7.9% to ₹2,481 crore.
- Scott Peters
- 19 Jan, 2023
- New York City
Charles Schwab dropped 6.9% to $75.73 after the financial services provider reported quarterly results in-line with expectations.
Stock was under pressure after negative comments and double-downgrade from Bank of America on the worries that the rising interest rate environment is a double-edged sword for the online broker.
Charles Schwab Corp said fourth quarter revenue increased 17% to $5.5 billion and net income rose 25% to $1.96 billion and diluted earnings per share increased to 97 cents from 76 cents a year ago.
Fastenal Company decreased 1.4% to $46.80 despite the industrial products distributor reporting better-than-expected quarterly results.
Fastenal Company said revenue in the December quarter increased 10.7% to $1.70 billion and earnings rose 6.2% to $245.2 million and diluted EPS advanced to 43 cents from 40 cents a year ago.
KeyCorp declined 4.7% to $16.41 after the regional bank reported a sharp fall in earnings on stable revenue in its latest quarter.
KeyCorp said revenue in December quarter fell 2.5% to $1.89 billion and net income dropped 41% to $356 million or diluted earnings per share fell to 38 cents from 64 cents a year ago.
Netflix Inc declined 3.2% to $315.78 in regular trading and gained 6% to $335.85 in after-hours trading after the company reported fourth quarter results.
Revenue increased 1.9% to $7.85 billion from $7.7 billion a year ago and net income plunged to $55 million from $607 million and diluted earnings per share fell to 12 cents from $1.33 a year ago.
Founder Reed Hastings is stepping down from the co-CEO role and will assume Executive Chairman position on the board.
The streaming services provider added 7.6 million net new subscribers in the fourth quarter, substantially ahead of 4.5 million estimates by analysts on the Wall Street.
Procter & Gamble & Co fell 2.1% to $142.42 after the consumer products maker said profit fell after higher prices impacted sales volume.
P&G said revenue in the December quarter declined 1% to $20.7 billion and net income fell 7% to $3.9 billion and diluted earnings per share dropped to $1.59 from $1.77 a year ago.
PPG Industries, Inc decreased 3.2% to $123.60 after the paint and chemicals company reported weak quarterly results after higher prices negatively impacted operating and net income.
PPG said revenue in December quarter increased 2% to $4.5 billion and net income declined 4% to $329 million and diluted earnings per share fell to $1.39 from $1.43 a year ago.
WNS (Holdings) Limited was nearly unchanged at $83.37 after the India-based business services provider reported flat earnings on rising cost of providing outsourcing services.
WNS said revenue in the December quarter increased 8% to $306.9 million and net income edged slightly up to $34.7 million or diluted earnings per share rose to 69 cents from 68 cents a year ago.
- Bridgette Randall
- 19 Jan, 2023
- Frankfurt
European markets fell more than 1% after six-days of gains after hawkish comments from the central bankers dented market sentiment.
European Central Bank President Lagarde reiterated the central bank's commitment in lowering rates to 2% "in a timely manner" at a gathering of business executives in Davos, Switzerland.
European policymaker and Dutch central bank governor Klaas Knot also reiterated ECB's commitment in raising rates in 50 basis points increment and keeping the hawkish stance intact.
Tough talks from two central bankers shifted investors attention from economic growth to the implications of rising rates on the region's economy.
European Indexes Halt Weekly Advance
The DAX index declined 1.4% to 14,962.49, the CAC-40 index fell 1.6% to 6,967.94 and the FTSE 100 index declined 0.9% to 6,967.94.
Rate Path Expectations Lift Euro and Pound
The euro traded near $1.078, the British pound edged higher to $1.23 and the Swiss franc edged lower to 91.63 U.S. cents.
Europe Bond Yields Drift Lower
The yield on 10-year German Bunds inched lower to 2.04%, French bonds to 2.46% UK Gilts to 3.30% and Italian bonds to 3.77%.
Oil Prices Stay Elevated On China Recovery Hopes
Brent crude oil price edged higher 70 cents to $85.71 a barrel and the Dutch TTF natural gas futures contract price for immediate month delivery declined 4% to 59.08 per MWh.
Europe Stock Movers
Informa plc increased 0.4% to 662.74 pence after the event management and academic publishing company said revenue and adjusted earnings are expected to increase in 2022.
In its annual trading update released Thursday, the company estimated 2022 revenue of £2.38 billion, adjusted operating profit of £530 million and free cash flow of £440 million.
Melrose Industries PLC decreased 2.2% to 146.49 pence and the company said GKN divisions operating performance is in-line with management expectations.
The aerospace industry focused holding company revenues rose more than expected 6% and operating profit surged 21% from a year ago.
On September 8, 2022 Melrose announced its plan to separate its GKN Automotive and GKN Powder Metallurgy businesses from the Melrose Group by way of a demerger of shares in a new holding company to Melrose shareholders.
- Brian Turner
- 19 Jan, 2023
- New York City
Housing starts suffered another month after elevated home prices and rising rates impacted affordability and market activities.
Home building permits in December declined 1.6% to 1.33 million annual rate and fell 29.9% from a year ago, the U.S. Census Bureau reported Thursday.
Housing starts fell 1.4% from November to 1.38 million and plunged 21.8% from a year ago after mortgage rates surged to 15-year high and home prices stayed elevated across the nation.
In 2022, U.S. building permits for private residential construction fell 5% from a year ago to 1.65 million, starts declined 3% to 1.55 million and completions dropped 3.8% to 1.39 million.
In December, housing completions rate rose 6.4% to 1.4 million from 1.32 million a year ago.
Housing starts rate in December decreased 21.8% to 1.38 million from 1.78 million rate in the month in the previous year.
Housing permits in December declined 29.9% to 1.33 million rate from 1.89 million rate in the month in the previous year.
Multi-family home construction, which represents one third of total residential construction, in December dropped 19% from November and declined 16% from a year ago.
- Barry Adams
- 19 Jan, 2023
- New York City
Stocks traded lower for the second day in a row after the latest jobs data supported Fed's aggressive rate hike stance.
Overall jobs market remains healthy and conditions are tight for finding new staff for large and small companies, despite large layoffs announced from leading tech companies.
The latest weekly jobless claims data confirmed the tight labor market conditions, but higher demand for labor services is still not bringing more people to the labor market because wages are lagging inflation and most service jobs are near the low end of the pay scale.
Higher inflation may force people back into the labor market, but for now older workers are staying away from rejoining the labor force.
S&P 500 and Nasdaq Extend Weekly Losses
Benchmark indexes traded down and investors focused on rate path and terminal rates after the latest economic data sent mixed signals.
Low jobless claims showed tight labor market conditions but weakening housing starts and completions also signaled difficult market conditions for home buyers and builders.
The S&P 500 index fell 0.9% to 3,895.72 and the Nasdaq Composite index dropped 1.1% to 10,837.77.
Crude Oil Hovered Near December High
Energy investors bid up crude oil prices on the hopes that China's reopening will lift demand.
Reports from the International Energy Association controlled by western nations and OPEC controlled by oil producers in the Middle East indicated that demand for oil is expected to rise at least 2% amid shrinking supply from Russia in international markets.
Crude oil rose 39 cents to $79.87 and natural gas edged up 2 cents to $3.33 a thermal unit.
Treasury Yields Trend Lower
U.S. Treasury yields retained downward bias on the hopes that the recent inflation-cooling data is likely to slow down the future rate hikes.
The yield on 2-year Treasury notes edged higher to 4.22%, 10-year Treasury notes to 3.40% and 30-year Treasury bonds to 3.58%.
U.S. Stock Movers
KeyCorp declined 4.7% to $16.41 after the regional bank reported a sharp fall in earnings on stable revenue in its latest quarter.
KeyCorp said revenue in December quarter fell 2.5% to $1.89 billion and net income dropped 41% to $356 million or diluted earnings per share fell to 38 cents from 64 cents a year ago.
Charles Schwab dropped 6.9% to $75.73 after the financial services provider reported quarterly results in-line with expectations.
Stock was under pressure after negative comments and double-downgrade from Bank of America on the worries that the rising interest rate environment is a double-edged sword for the online broker.
Charles Schwab Corp said fourth quarter revenue increased 17% to $5.5 billion and net income rose 25% to $1.96 billion and diluted earnings per share increased to 97 cents from 76 cents a year ago.
Building Permits Declined in December and In 2022
Home building permits in December declined 1.6% to 1.33 million annual rate and fell 29.9% from a year ago, the U.S. Census Bureau reported Thursday.
Housing starts fell 1.4% from November to 1.38 million and plunged 21.8% from a year ago after mortgage rates surged to 15-year high and home prices stayed elevated across the nation.
In 2022, U.S. building permits for private residential construction fell 5% from a year ago to 1.65 million, starts declined 3% to 1.55 million and completions dropped 3.8% to 1.39 million.
Weekly Jobless Claims Show Tight Labor Market Conditions
Initial claims for jobless benefits declined 15,000 to 190,000 last week and the four-week moving average fell 6,500 to 206,000, the U.S. Department of Labor reported Thursday.
On an unadjusted basis for seasonal factors, the claims declined 53,582 to 285,575 largely on the account of holiday calendar and other seasonal factors.
European Markets
European markets fell more than 1% after six-days of gains after hawkish comments from the central bankers dented market sentiment.
European Central Bank President Lagarde reiterated the central bank's commitment in lowering rates to 2% "in a timely manner" at a gathering of business executives in Davos, Switzerland.
European policymaker and Dutch central bank governor Klaas Knot also reiterated ECB's commitment in raising rates in 50 basis points increment and keeping the hawkish stance intact.
Tough talks from two central bankers shifted investors attention from economic growth to the implications of rising rates on the region's economy.
The DAX index declined 1.4% to 14,962.49, the CAC-40 index fell 1.6% to 6,967.94 and the FTSE 100 index declined 0.9% to 6,967.94.
The euro traded near $1.078, the British pound edged higher to $1.23 and the Swiss franc edged lower to 91.63 U.S. cents.
The yield on 10-year German Bunds inched lower to 2.04%, French bonds to 2.46% UK Gilts to 3.30% and Italian bonds to 3.77%.
Brent crude oil price edged higher 70 cents to $85.71 a barrel and the Dutch TTF natural gas futures contract price for immediate month delivery declined 4% to 59.08 per MWh.
Japan Reports Record Trade Deficit
Asian markets diverged amid the weakening global sentiment and reacted to local news.
Japan's trade deficit widened in December on higher energy and raw materials prices and weaker yen, the Finance Ministry said in a report released Thursday.
In full-year 2022 international trade deficit soared to ¥19.97 trillion or $155 billion, surpassing the previous high of ¥12.82 trillion in 2014.
The annual deficit was the largest since record keeping began in 1979 and weaker yen played a crucial role in widening the deficit.
In December, imports soared 39.2% to a record ¥118.16 trillion and exports jumped 18.2% to record ¥98.19 trillion.
Japan recorded a trade deficit for the 17th month in a row in December and posted a second annual deficit in a row in 2022.
Stocks in Japan were under pressure ahead of the inflation report on Friday. Automakers led the losers with Toyota Motor, Honda Motor and Mitsubishi Motor falling between 2% and 4.5%.
J Front Retailing jumped 3% after inbound tourists in Japan surged in 2022.
Japan's Tourists Arrivals Surge In 2022
Total international arrivals in 2022 soared more than 15-fold from a year ago to 3.83 million, the Japan National Tourism Organization reported Thursday.
Tax-free sales increased to ¥17.5 billion in November and jumped five-fold from the previous year, the Japan Department Stores Association said on Wednesday.
The Nikkei 225 average fell 1.4% to 26,405.23 and the yen weakened to 128.30 against the U.S. dollar.
China Stocks Lack Momentum
Stocks in China closed mixed and investors took a cautious view in the absence of domestic economic or corporate news.
The Shanghai Composite index increased 0.5% to 3,240.28 and the Hang Seng Index declined 0.1% to 21,650.98.
India's Domestic Air Traffic Jumped In 2022
Stocks in Mumbai rested after two-days of advance and investors weighed the prospect of U.S. recession against the weakening of oil price in international trading and the dollar edged lower.
Domestic passenger air traffic surged nearly 47% to 12.3 crore or 123 million in full-year 2022 from 8.4 crore or 84 million in 2021, the aviation regulator DGCA said in a statement today.
The Sensex index decreased 0.3% or 187.31 to 60,858.43 and the Nifty index fell 0.3% or 57.50 to 18,107.85.
Adani Enterprises fell as much as 4% after the company set floor price of ₹3,112 a share with a 10% discount for retail investors for its $2.5 billion secondary offering.
Coal India advanced 2% after the coal ministry set an annual production target of one billion tons in the next financial year.
Hindustan Unilever said December quarter revenue increased 16.4% to ₹15,707 crore and net income rose 7.9% to ₹2,481 crore.
- Arjun Pandit
- 19 Jan, 2023
- Mumbai
Asian markets diverged amid the weakening global sentiment and reacted to local news.
Japan's trade deficit widened in December on higher energy and raw materials prices and weaker yen, the Finance Ministry said in a report released Thursday.
In full-year 2022 international trade deficit soared to ¥19.97 trillion or $155 billion, surpassing the previous high ¥12.82 trillion in 2014.
The annual deficit was the largest since record keeping began in 1979 and weaker yen played a crucial role in widening the deficit.
In December, imports soared 39.2% to a record ¥118.16 trillion and exports jumped 18.2% to record ¥98.19 trillion.
Japan recorded a trade deficit for the 17th month in a row in December and posted a second annual deficit in a row in 2022.
Stocks in Japan were under pressure ahead of the inflation report on Friday. Automakers led the losers with Toyota Motor, Honda Motor and Mitsubishi Motor falling between 2% and 4.5%.
J Front Retailing jumped 3% after inbound tourists in Japan surged in 2022.
Japan's Tourists Arrivals Surge In 2022
Total international arrivals in 2022 soared more than 15-fold from a year ago to 3.83 million, the Japan National Tourism Organization reported Thursday.
Tax-free sales increased to ¥17.5 billion in November and jumped five-fold from the previous year, the Japan Department Stores Association said on Wednesday.
The Nikkei 225 average fell 1.4% to 26,405.23 and the yen weakened to 128.30 against the U.S. dollar.
China Stocks Lack Momentum
Stocks in China closed mixed and investors took a cautious view in the absence of domestic economic or corporate news.
The Shanghai Composite index increased 0.5% to 3,240.28 and the Hang Seng Index declined 0.1% to 21,650.98.
India's Domestic Air Traffic Jumped In 2022
Stocks in Mumbai rested after two-days of advance and investors weighed the prospect of U.S. recession against the weakening of oil price in international trading and the dollar edged lower.
Domestic passenger air traffic surged nearly 47% to 12.3 crore or 123 million in full-year 2022 from 8.4 crore or 84 million in 2021, the aviation regulator DGCA said in a statement today.
The Sensex index decreased 0.3% or 187.31 to 60,858.43 and the Nifty index fell 0.3% or 57.50 to 18,107.85.
Adani Enterprises fell as much as 4% after the company set floor price of ₹3,112 a share with a 10% discount for retail investors for its $2.5 billion secondary offering.
Coal India advanced 2% after the coal ministry set an annual production target of one billion tons in the next financial year.
Hindustan Unilever said December quarter revenue increased 16.4% to ₹15,707 crore and net income rose 7.9% to ₹2,481 crore.