- Arjun Pandit
- 23 Dec, 2022
- New York City
Markets in Asia traded weak on the worries that fast spreading highly infectious Omicron subvariant BF.7 in China may slow the resumption of social mobility.
After the easing of zero-Covid policy, Covid-19 virus has rapidly spread in large cities and local estimates suggest an infection rate of 60% among Chinese citizens.
Despite the social mobility relaxation, vehicle traffic and the number of people using public transport remain low in Shanghai, Beijing and Shenzhen.
The Shanghai Composite index decreased 0.3% to 3,045.87 and the Hang Seng index dropped 0.4% to 19,593.06.
For the week, the Shanghai Composite declined 3.8% and the Hang Seng index rose 0.7%.
Stocks in Tokyo were also under pressure and the yen closed at 132.71 against the U.S. dollar.
Market sentiment was weak after core inflation increased to a new 4-decade high.
Core inflation index in November increased to 3.7% from 3.6% annual pace in October, nearing the high of 4% in December 1981.
Investors sold Japanese stocks and tech stocks led the decliners on the worries that the U.S. Federal Reserve may continue its aggressive rate hike campaign after the latest upward economic growth revision.
Tokyo Electron dropped 3.7% to 39,200.0 yen and Advantest Corp plunged 4.5% to 8,500.0 yen after Micro Technology reported a sharp decline in revenue and swung to a loss in its latest quarter ending in November.
Micron also announced it plans to trim its labor force by 10% and halt bonuses in 2023.
The Nikkei average dropped 1.03% to 26,235.25 and extended losses in the week to 4.69%.
Kansai Electric Power rose 5.3% to 1,257.0 yen after the government announced its plan to maximize the use of nuclear power.
- Barry Adams
- 22 Dec, 2022
- New York City
What is good for Main Street turned out to be too-good for Wall Street.
Major averages dropped as much as 3% after the third quarter's economic growth was revised higher, sending another signal to the Federal Reserve to continue its rate hikes in 2023.
Investors fearing recession or economic slowdown were hoping for the Fed to pause rates at its next meeting on Jan 31 but the latest upward revision of the third quarter GDP contradicts the recession scenario.
Moreover, weekly jobless claims continue to hover near multi-year low, consumer spending remains healthy and holiday shopping is likely to be ahead of lowered expectations.
All these points to strong labor market and resilient consumer and elevated inflation for months to come, despite the recent decline in gasoline prices at the pump stations to the level last seen a year ago.
The S&P 500 index declined 1.8% to 3,822.39 and the Nasdaq Composite index dropped 2.2% to 10,476.12.
Crude oil closed down after 3-day rally and drifted lower.
Crude oil decreased 28 cents to $78.02 a barrel and natural gas futures fell 28 cents to $5.03 a thermal unit.
Lumber prices dropped to $378.30 per one thousand board feet, the low last seen in June 2020.
The yield on 2-year Treasury notes edged higher to 4.27%, 10-year Treasury notes edged lower to 3.67% and 30-year Treasury bonds inched lower to 3.73%.
Q3 GDP Revised Higher
Real third quarter GDP growth was revised higher to 3.2% annual pace from the previous estimate of 2.9% after nonresidential fixed investment and consumer spending accelerated, the U.S. Bureau of Economic Analysis said Thursday.
Current dollar Gross Domestic Product increased at an annual pace of 7.7%, or $475.5 billion, in the third quarter to a level of $25.72 trillion, an upward revision of $25.0 billion from the previous estimate.
Weekly Jobless Claims Drop
Initial claims of jobless benefits rose 2,000 to 216,000 in the week ending December 17 and continuing claims fell 6,000 to 1,672,00 in the week ending December 3, the Dept of Labor said Thursday.
U.S. Stock Movers
AMC Entertainment Holdings Inc plunged 14.5% to $4.51 after the company announced a plan to raise $110 million through a preferred share unit.
The company plans to hold a board meeting to approve a reverse stock split at a 1-to-10 ratio.
The movie theater chain operator said it will use the proceeds to repay debt.
Micron Technology Inc declined 2.8% to $49.75 after the company reported weak quarterly results and announced a plan to trim its workforce by 10% and suspend bonus in 2023.
Revenue in the fiscal first quarter ending in November fell to $4.09 billion from $6.6 billion in the previous quarter and $7.7 billion in the quarter a year ago.
The semiconductor chipmaker swung to a quarterly loss of $195 million from $2.3 billion a year ago and diluted loss per share was 18 cents from a profit of $2.04 a year ago.
The company guided revenue in the fiscal second quarter of 2023 of $3.8 billion with a band of $200 million and gross margin between 5% and 10% and diluted earnings per share range between -$0.79 and $0.10.
CarMax, Inc declined 7.2% to $55.17 after the used-car retailer reported weaker-than-expected results.
Revenue in the third quarter ending in November declined 23.7% to $6.5 billion after combined retail and wholesale used vehicle unit sales fell 28% to 298,807.
Net earnings plunged to $37.6 million from $269.4 million and diluted earnings per share dropped to 24 cents from $1.63 a year ago.
Tesla Inc plunged 9.8% to $124.10 on the demand worries in the U.S. and China and rising production costs and distracted chief executive after his recent purchase of Twitter Inc.
Tesla is offering $7.500 discount for the U.S. delivery of Model 3 and Model Y before the end of December, according to the order form on the company website.
The discount offer also comes with 10,000 miles free supercharging.
European Markets Drop 1%
European markets accelerated declines after rapid rate hike worries resurfaced.
Benchmark indexes opened higher on China optimism and after state controlled media reported a series of government initiatives in speeding up construction projects and accelerating spending in new equipment and systems.
Major indexes turned lower after the U.S. revised third quarter economic growth to 3.2% annual rate from the previous estimate of 2.6% according to the U.S. Bureau of Economic Analysis Thursday.
The sharp upward revision to the economic growth raised the fears of the Fed continuing its campaign of lifting rates and keeping the higher rates longer.
Rate sensitive stocks led the decliners in the region following sharp losses in New York trading.
The DAX index dropped 1.3% to 13,914.07, the CAC-40 index declined 1% to 6,517.97 and the FTSE index dropped 0.4% to 7,469.28.
Ural Oil Drops Below Price Cap $60 Level
Russian benchmark oil dropped below $55 a barrel and lower than the price cap imposed by the G7 member nations, the European Union and Australia since December 5.
The Russian oil price dropped to the level last seen in January 2021 and is trading at more than $24 a barrel discount to Brent crude oil price.
Russian oil flows to China, India and Turkey have also dried up in the recent months according to the data available from Turkey maritime authorities.
The price for immediate month delivery of Brent crude fell $1.36 to $80.83 a barrel and Dutch TTF natural gas dropped 4% to
- Bridgette Randall
- 22 Dec, 2022
- Frankfurt
European markets accelerated declines after rapid rate hike worries resurfaced.
Benchmark indexes opened higher on China optimism and after state controlled media reported a series of government initiatives in speeding up construction projects and accelerating spending in new equipment and systems.
Major indexes turned lower after the U.S. revised third quarter economic growth to 3.2% annual rate from the previous estimate of 2.6% according to the U.S. Bureau of Economic Analysis Thursday.
The sharp upward revision to the economic growth raised the fears of the Fed continuing its campaign of lifting rates and keeping the higher rates longer.
Rate sensitive stocks led the decliners in the region following sharp losses in New York trading.
The DAX index dropped 1.3% to 13,914.07, the CAC-40 index declined 1% to 6,517.97 and the FTSE index dropped 0.4% to 7,469.28.
Ural Oil Drops Below Price Cap $60 Level
Russian benchmark oil dropped below $55 a barrel and lower than the price cap imposed by the G7 member nations, the European Union and Australia since December 5.
The Russian oil price dropped to the level last seen in January 2021 and is trading at more than $24 a barrel discount to Brent crude oil price.
Russian oil flows to China, India and Turkey have also dried up in the recent months according to the data available from Turkey maritime authorities.
The price for immediate month delivery of Brent crude fell $1.36 to $80.83 a barrel and Dutch TTF natural gas dropped 4% to
- Brian Turner
- 22 Dec, 2022
- New York City
Investors sold stocks on Wall Street after third quarter economic growth was revised higher raising the prospects of more rate tightening by the Federal Reserve.
The sharp upward revision to economic growth adjusted for inflation was driven by an acceleration in consumer spending and nonresidential fixed investments and a smaller decrease in private inventory investment.
The S&P 500 index declined 1.8% to 3,807.33 and the Nasdaq Composite index dropped 2.6% to 10,428.73.
Real third quarter GDP growth was revised higher to 3.2% annual pace from the previous estimate of 2.9% after nonresidential fixed investment and consumer spending accelerated, the U.S. BEA said Thursday.
Current dollar GDP increased at an annual pace of 7.7%, or $475.5 billion, in the third quarter to a level of $25.72 trillion, an upward revision of $25.0 billion from the previous estimate.
- Scott Peters
- 22 Dec, 2022
- New York City
AMC Entertainment Holdings Inc plunged 14.5% to $4.51 after the company announced a plan to raise $110 million through a preferred share unit.
The company plans to hold a board meeting to approve a reverse stock split at a 1-to-10 ratio.
The movie theater chain operator said it will use the proceeds to repay debt.
CarMax, Inc declined 7.2% to $55.17 after the used-car retailer reported weaker-than-expected results.
Revenue in the third quarter ending in November declined 23.7% to $6.5 billion after combined retail and wholesale used vehicle unit sales fell 28% to 298,807.
Net earnings plunged to $37.6 million from $269.4 million and diluted earnings per share dropped to 24 cents from $1.63 a year ago.
Micron Technology Inc declined 2.8% to $49.75 after the company reported weak quarterly results and announced a plan to trim its workforce by 10% and suspend bonus in 2023.
Revenue in the fiscal first quarter ending in November fell to $4.09 billion from $6.6 billion in the previous quarter and $7.7 billion in the quarter a year ago.
The semiconductor chipmaker swung to a quarterly loss of $195 million from $2.3 billion a year ago and diluted loss per share was 18 cents from a profit of $2.04 a year ago.
The company guided revenue in the fiscal second quarter of 2023 of $3.8 billion with a band of $200 million and gross margin between 5% and 10% and diluted earnings per share range between -$0.79 and $0.10.
Tesla Inc plunged 9.8% to $124.10 on the demand worries in the U.S. and China and rising production costs and distracted chief executive after his recent purchase of Twitter Inc.
Tesla is offering $7.500 discount for the U.S. delivery of Model 3 and Model Y before the end of December, according to the order form on the company website.
The discount offer also comes with 10,000 miles free supercharging.
Under Armour Inc declined 4.4% to $9.49 and the apparel retailer appointed Marriott International President Stephanie Linnartz to be its next chief executive.
The athletic apparel retailer is struggling to build its e-commerce business and looking to ramp up its online presence and bolster e-commerce sales and social media profile.
Linnartz is expected to assume the chief executive office on Feb 27, who has been with Marriott since 1997.