- Barry Adams
- 19 Sep, 2022
- New York City
Stocks on Wall Street managed to rise above the morning doldrums and benchmark indexes eked out gains at close.
The Federal Reserve Bank's policy committee is set to announce its rate decision this Wednesday and investors are expecting a rate hike between 50 and 75 basis points.
The yield on 2-year Treasury notes rose to 3.95%, 10-year Treasury notes jumped to 3.49% and 30-year bonds increased to 3.51%.
The 10-year Treasury yield closed at a 11-year high.
U.S. interest rates are expected to rise for the foreseeable future as the consumer price inflation is running above 8% and the inflation has stayed ahead of the Fed's target rate of 2% for nearly 24 months.
Moreover, 13 central banks are scheduled to announce their rate decision this week as interest rates are expected to rise around the world.
Last Friday, Russia lowered its key lending rate by 50 basis points, matching expectations.
The People's Bank of China lowered its reverse repo rate for 14-day lending to 2.15% from 2.25% on Monday.
The central bank lowered its key lending rate to provide more liquidity in the financial system and spurred banks to increase lending in the housing, steel, and construction related industries.
Wall Street Advances
On Wall Street, stocks were in a holding pattern ahead of the Fed's decision on Wednesday and investors await more insights from policymakers.
The S&P 500 index advanced 0.7% or 26.56 points to 3,899.80 and the Nasdaq Composite index increased 0.8% or 86.62 points to 11,535.02.
Future price of the immediate-month delivery of crude oil edged up 33 cents to $85.56 a barrel and natural gas inched up 13 cents to $7.89 a thermal unit.
More than 400 stocks hit their 52-week lows including Ciena Corp, Church & Dwight, Fidelity National Information Services, GAMCO, Garmin, Korn Ferry, Microsoft, PerkinElmer, Teradata and WeWork.
Autozone Inc declined 2.4% to 2,114.2 after the specialty retailer said same store sales in the fiscal fourth quarter ending on August 27 increased 6.2%.
Revenues in the quarter increased 8.9% to $5.4 billion from $4.9 billion a year ago and the retailer repurchased its own stock worth $1 billion in the quarter.
Ralph Lauren Corp increased 2.4% to $95.72 after the company reiterated its fiscal 2023 outlook issued on August 9th.
Wix.com Ltd jumped 13% to $83.27 after activist investor Starboard Value controls 9% stake in the web site development company.
Mixed Closing On European Bourses
Benchmark indexes in Europe traded mixed on the first day of the week after falling 3% in the previous week.
Investors are bracing for rate decisions from at least 13 central banks this week including policy insights from the U.S., Switzerland, China, Japan and the U.K.
U.S. rates are expected to rise for the foreseeable future as the consumer price inflation is running above 8% and the inflation has stayed ahead of the Fed's target rate of 2% for nearly 24 months.
The Bank of England, The Swiss National Bank and The Bank of Japan are set to release their rate decisions on Thursday.
Bond yields rose across the eurozone and Europe.
The yield on 10-year bonds of Germany rose to 1.79%, the U.K. inched up to 3.16%, France advanced to 2.33%, Italy increased to 4.07% but Switzerland edged down to 1.1%.
The DAX index inched up 0.5% to 12,803.24, the CAC-40 index fell 0.3% to 6,059.70 and the FTSE 100 index dropped 0.6% to 7,236.68.
The dollar rose against all European currencies ahead of the key U.S. rate decision on Wednesday.
The euro traded down to $0.99 and the British pound fell to a nearly a 4-decade low to $1.137.
Brent crude oil edged up 5 cents to $91.37 a barrel and TTF natural gas prices dropped to a 2-month low of 175.06 euros a megawatt hours.
Stocks on European bourses generally traded sideways but with a downward bias.
Porsche IPO Seeks 75 Billion Valuation
Volkswagen AG gained 2.4% to 201.40 euros and the automaker is planning to raise as much as 9.5 billion euro through the initial public offering of its sports car division Porsche Automobil.
Porsche Auto is expected to fetch a valuation between 70 billion and 75 billion euros.
Bundesbank Estimates Recession Ahead
The German economy is anticipated to slow down considerably and slip into a recession in the first quarter 2023, according to the monthly report released by the Bundesbank Monday.
The bank noted that the economic outlook is "extremely uncertain" as energy intensive businesses suffer from a sky-high oil and natural gas prices and slowing consumer spending.
On the consumer inflation front, prices are expected to rise at a faster pace with the expiry of the government subsidy in the purchase of transportation fuel and price cap on utilities on September 1.
Portugal's PPI Eases
Portugal's producer price inflation eased for the second month in a row.
Prices rose at a slower annual pace of 22.4% in August after rising 24.6% in July, Statistics Portugal reported Monday.
Energy prices surged 49.7% and intermediate goods prices increased 20.4%.
On a monthly basis, prices fell 1%, reversing the increase of 0.6% in July.
- Barry Adams
- 19 Sep, 2022
- New York City
Stocks on Wall Street struggled to stay above the flat-line ahead of interest rate decisions from at least 13 central banks this week.
The S&P 500 index inched up 0.5% to 3,893.17 and the Nasdaq Composite index added 0.6% to 11,518.69.
Of the 11 sectors, health, energy and real estate sectors declined and the remaining sectors traded higher.
American Airlines, Delta Air and United Airlines gained between 2% and 3% after crude oil prices edged lower and on the expectations of a better-than-expected summer air travel traffic.
Autozone Inc declined 2.4% to 2,114.2 after the specialty retailer said same store sales in the fiscal fourth quarter ending on August 27 increased 6.2%.
Revenues in the quarter increased 8.9% to $5.4 billion from $4.9 billion a year ago.
Net income in the quarter jumped to $810.0 million from $785.8 million a year ago and diluted earnings per share rose to $40.51 from $35.72.
In the quarter, the retailer repurchased $1 billion of its own stock at an average price of $2,111 a share and for the fiscal year repurchased 2.2 million shares for $4.4 billion, at an average price of $1,964 a share.
At year end, the company had $1.1 billion remaining under its current share repurchase authorization.
Coinbase Global Inc plunged 8.8% to $67.52 after the popular cryptocurrency bitcoin declined to $19,039, the lowest since June 19.
Gamco Investors Inc plunged 12.1% to $17.56 after the company controlled by Mario Gabelli filed a voluntary delisting petition with the New York Stock Exchange.
Gamco has also filed an application with the OTC Markets Group for a quote-listing of its common stock.
Homebuilders were in focus after sentiment in the industry dropped for the ninth month in a row.
Homebuilder sentiment dropped to the lowest level since May 2014, except in the spring of 2020, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index released today.
The index declined 3 points to 46, any reading below 50 indicates negative or a decline.
The number of builders reducing home prices jumped to 24% from 19% in August.
Lennar Corp gained 2.5% to $77.64, Toll Brothers Inc added 1.3% to $44.24, PulteGroup added 2.5% to $40.34 and DR Horton Inc advanced 1.8% to $72.42.
Ralph Lauren Corp increased 2.4% to $95.72 after the company reiterated its fiscal 2023 outlook issued on August 9th.
"Over the next three years, from a base of Fiscal 2022 through Fiscal 2025, the Company expects an acceleration in revenue growth to a compound annual growth rate of mid- to high-single digits in constant currency.
Operating profit growth is expected to exceed the rate of top-line growth as a result of continued operating margin expansion. Operating margin is expected to expand to at least 15% by Fiscal 2025 in constant currency, " added the company in its investor update released Monday.
Theravance Biopharma Inc increased 2.7% to $10.35 after the company announced to buyback its shares in a tender offer of $95 million followed by a $60 million open market purchases to be completed by the end of 2023.
The company also agreed to acquire the entire stake of 9.6 million shares held by GSK for $9.75 a share.
Wix.com Ltd jumped 13% to $83.27 after activist investor Starboard Value controls 9% stake in the web site development company.
- Bridgette Randall
- 19 Sep, 2022
- Frankfurt
Benchmark indexes in Europe traded mixed on the first day of the week after falling 3% in the previous week.
Investors are bracing for rate decisions from at least 13 central banks this week including policy insights from the U.S., Switzerland, China, Japan and the U.K.
U.S. rates are expected to rise for the foreseeable future as the consumer price inflation is running above 8% and the inflation has stayed ahead of the Fed's target rate of 2% for nearly 24 months.
Last Friday, Russia lowered its key lending rate by 50 basis points, matching expectations.
The People's Bank of China lowered its reverse repo rate for 14-day lending to 2.15% from 2.25% on Monday.
The central bank lowered its key lending rate to provide more liquidity in the financial system and spurred banks to increase lending in the housing, steel, and construction related industries.
The Bank of England, The Swiss National Bank and The Bank of Japan are set to release their rate decisions on Thursday.
Bond yields rose across the eurozone and Europe.
The yield on 10-year bonds of Germany rose to 1.79%, the U.K. inched up to 3.16%, France advanced to 2.33%, Italy increased to 4.07% but Switzerland edged down to 1.1%.
The DAX index inched up 0.5% to 12,803.24, the CAC-40 index fell 0.3% to 6,059.70 and the FTSE 100 index dropped 0.6% to 7,236.68.
The dollar rose against all European currencies ahead of the key U.S. rate decision on Wednesday.
The euro traded down to $0.99 and the British pound fell to a nearly a 4-decade low to $1.137.
Brent crude oil edged up 5 cents to $91.37 a barrel and TTF natural gas prices dropped to a 2-month low of 175.06 euros a megawatt hours.
Stocks on European bourses generally traded sideways but with a downward bias.
Porsche IPO Seeks 75 Billion Valuation
Volkswagen AG gained 2.4% to 201.40 euros and the automaker is planning to raise as much as 9.5 billion euro through the initial public offering of its sports car division Porsche Automobil.
Porsche Auto is expected to fetch a valuation between 70 billion and 75 billion euros.
Bundesbank Estimates Recession Ahead
The German economy is anticipated to slow down considerably and slip into a recession in the first quarter 2023, according to the monthly report released by the Bundesbank Monday.
The bank noted that the economic outlook is "extremely uncertain" as energy intensive businesses suffer from a sky-high oil and natural gas prices and slowing consumer spending.
On the consumer inflation front, prices are expected to rise at a faster pace with the expiry of the government subsidy in the purchase of transportation fuel and price cap on utilities on September 1.
Portugal's PPI Eases
Portugal's producer price inflation eased for the second month in a row.
Prices rose at a slower annual pace of 22.4% in August after rising 24.6% in July, Statistics Portugal reported Monday.
Energy prices surged 49.7% and intermediate goods prices increased 20.4%.
On a monthly basis, prices fell 1%, reversing the increase of 0.6% in July.
- Barry Adams
- 19 Sep, 2022
- New York City
Benchmark indexes hugged the flat-line ahead of rate decision this week after a week of sharp sell-off.
The U.S. Federal Reserve Bank's policy committee is set to announce its rate decision this Wednesday and investors are expecting a rate hike between 50 and 75 basis points.
The yield on 2-year Treasury notes rose to 3.96%, 10-year Treasury notes jumped to 3.49% and 30-year bonds increased to 3.5%.
The 10-year Treasury yield is now trading at a 11-year high.
U.S. rates are expected to rise for the foreseeable future as the consumer price inflation is running above 8% and the inflation has stayed ahead of the Fed's target rate of 2% for nearly 24 months.
Moreover, 13 central banks are scheduled to announce their rate decision this week as interest rates are expected to rise around the world.
Last Friday, Russia lowered its key lending rate by 50 basis points, matching expectations.
The People's Bank of China lowered its reverse repo rate for 14-day lending to 2.15% from 2.25% on Monday.
The central bank lowered its key lending rate to provide more liquidity in the financial system and spurred banks to increase lending in the housing, steel, and construction related industries.
The Bank of England and the Bank of Japan are set to release their rate decisions on Thursday.
On Wall Street, stocks were in a holding pattern ahead of the Fed's decision on Wednesday and investors await more insights from policymakers.
The S&P 500 index fell 1.46 to 3,871.0 and the Nasdaq Composite index declined 0.3% or 31.0 points to 11,417.40.
Future price of the immediate-month delivery of crude oil eased 50 cents to $84.72 a barrel and natural gas was nearly unchanged at $7.74 a thermal unit.
In Europe, indexes traded mixed on the first day of the week after falling 3% in the previous week.
The DAX index inched up 0.3% to 12,776.28, the CAC-40 index fell 0.3% to 6,059.70 and the FTSE 100 index dropped 0.6% to 7,236.68.
The dollar rose against all European currencies ahead of the key rate decision on Wednesday.
The euro traded down to $0.99 and the British pound fell to a nearly a 4-decade low to $1.137.
Stocks on European bourses generally traded sideways but with a downward bias.
Volkswagen AG gained 2.4% to 201.40 euros and the automaker is planning to raise as much as 9.5 billion euro through the initial public offering of its sports car division Porsche Automobil.
Porsche Auto is expected to fetch valuation between 70 billion and 75 billion euros.
- Barry Adams
- 16 Sep, 2022
- New York City
Stocks on Wall Street extended weekly losses after the bellwether transportation index declined adding to the list of investor worries.
Nervous investors sold after FedEx withdrew its annual earnings guidance and cited weakening demand for shipments in Asia and delivery difficulties in Europe.
The FedEx earnings and warning on the economy sparked a wave of global selloff after the World Bank also forecasted the arrivals of recession in 2023.
The FedEx earnings warning stoked anxieties of more warnings to follow from other transportation, logistics and retail companies.
The World Bank in its latest report said that the global economic slowdown is accelerating at the fastest pace since the early seventies and several recession indicators are flashing warning signals.
The multilateral bank also said that the global economy is likely to sink into a recession in 2023 as central banks around the world lift interest rates to tame inflation.
In addition, the U.S. dominated institution also cited that despite the higher interest rates, inflation is likely to stay elevated on the persistent supply chain problems.
The S&P 500 index declined 0.7% to 3,873.33 and the Nasdaq Composite index dropped 0.9% to 11,448.40.
For the week, the S&P 500 index declined 4.2% and the Nasdaq Composite index dropped 5.2%.
All eleven sectors logged losses after investors were rattled by an earnings warning from FedEx, another dive in energy prices and bond yields trading near 15-year highs.
Exxon Mobil, Chevron, Schlumberger, Hess Corp and Marathon Oil dropped between 2% and 5%.
Of the eleven sectors only consumer staples and real estate sectors closed up marginally, at close.
Can We Tame Inflation and Avert a Recession?
Investors are increasingly accepting the scenario that high inflation can not be tackled without the high interest rates and the longer the Fed takes in lifting rates to or above 5% the longer the economic slowdown or even a recession will last.
Crude Oil futures increased 33 cents to $85.38 and natural gas fell to 52 cents to $7.79 a thermal unit.
Bond Yields Advance Ahead of Fed Meeting Next Week
The bond yields continue to trade higher with 2-year Treasury notes trading near 15-year high and ahead of 30-year Treasury bonds indicating that the bond market is forecasting a recession or an economic slowdown in the coming quarters.
The yield on 2-year Treasury notes hovered near 3.89%, 10-year notes traded at 3.46% and 30-year bonds at 3.52%.
European Markets Head Lower
Benchmark indexes in Europe extended losses and bond yields rose on the persistent worries of economic slowdown and deepening energy crisis.
The DAX index fell 1.3% to 12,788.31, the CAC-40 index dropped 0.9% to 6,104.77 and the FTSE 100 index fell 0.3% to 7,259.25.
For the week, the DAX fell 2.7%, the CAC-40 declined 2.3%, and the FTSE 100 index dropped 1.7%.
The euro edged up 0.2% to $1,0007 as investors brace for higher rates in the U.S. next week.
Pound at 37-year Low
The U.K. pound declined to a 37-year low of $1.14 as latest economic data point to economic slowdown and weakening activities.
Retail sales in the U.K. dropped 1.6% on a monthly basis in August, the largest monthly decline so far in the year after a 0.4% rise in July, the Office for National Statistics reported Friday.
Eurozone August Inflation Reaffirmed
The Eurozone inflation was unrevised in the final estimate at 9.1% in August according to the Eurostat report released on Friday.
The inflation[s previous estimate was released on August 31 and the rate accelerated from 8.9% in July.
Russia Cuts Rate Again
The Central Bank of Russia lowered its key lending rate by 50 basis points to 7.5%, matching the expectations.
The central bank lowered the rate for the sixth time in a row but guided 2022 inflation to range between 11.0% and 13.0% before cooling down to between 5.0% and 7.0% in 2023.
- Barry Adams
- 16 Sep, 2022
- New York City
Stocks on Wall Street extended weekly losses to 5% after another round of decline on Friday.
The S&P 500 index declined 1.4% to 3,846.36 and the Nasdaq Composite index dropped 1.7% to 11,352.38.
All eleven sectors logged losses after investors were rattled by an earnings warning from FedEx, another dive in energy prices and bond yields trading near 15-year highs.
Exxon Mobil, Chevron, Schlumberger, Hess Corp and Marathon Oil dropped between 2% and 5%.
FedEx Corporation plunged 22.4% to $159.41 after the parcel delivery company guided lower revenues and earnings per share in the fiscal year 2023 first quarter ending in August.
The company guided revenue of $23.2 billion, operating income of $1.19 billion and earnings per share $3.30.
First quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter, the company noted in its guidance release.
FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts.
FedEx Ground revenue was approximately $300 million below company forecasts.
The news sent other stocks in the transportation sector lower and rang alarm bells of the weakening global economic conditions and sank global market indexes.
United Parcel Service plunged 4.9% to $175.93 and XPO Logistics Inc declined 6.9% to $46.06.
Expeditors International plunged 4.4% to $92.65.
Extra Space Storage, Inc declined 2.3% to $182.36 after the company agreed to acquire its rival Storage Express for $590 million.
Storage Express owns and operates 107 storage properties across Indiana, Ohio, Illinois and Kentucky.
NCR Corp plunged 22.4% to $22.22 after the company said it plans to split into two separate companies - ATM machine network and digital commerce.
The split is expected to be tax-free and completed by the end of 2023.
The ATM business is a cash-generative business to serve its existing network of customer base of banks and retailers.
Digital commerce company is a growth-focused operation focused on retail, hospitality and digital banks.
Uber Technologies Inc fell 4.3% to $31.73 after the company confirmed that it is investigating a cybersecurity breach claimed by a hacker.
AstraZeneca plc rose as much as 1.8% to $58.72 after the pharmaceutical company won an approval from the European Union for its Covid-19 antibody cocktail.
- Bridgette Randall
- 16 Sep, 2022
- Frankfurt
Benchmark indexes in Europe extended losses and bond yields rose on the persistent worries of economic slowdown and deepening energy crisis.
The World Bank in its latest report said that the global economic slowdown is accelerating at the fastest pace since the early seventies and several recession indicators are flashing warning signals.
The multilateral bank also said that the global economy is expected to sink into a recession in 2023 as central banks around the world lift interest rates.
In addition, the U.S. dominated institution also cited that despite the higher interest rates inflation is likely to stay elevated on the persistent supply chain problems.
The mood also soured in financial markets after FedEx said its global shipments declined in the last two months at a pace higher-than-expected and the global parcel delivery company also withdrew its fiscal 2023 earnings outlook.
The DAX index fell 1.3% to 12,788.31, the CAC-40 index dropped 0.9% to 6,104.77 and the FTSE 100 index fell 0.3% to 7,259.25.
For the week, the DAX fell 2.7%, the CAC-40 declined 2.3%, and the FTSE 100 index dropped 1.7%.
The euro edged up 0.2% to $1,0007 as investors brace for higher rates in the U.S. next week.
Pound at 37-year Low
The U.K. pound declined to a 37-year low of $1.14 as latest economic data point to economic slowdown and weakening activities.
Retail sales in the U.K. dropped 1.6% on a monthly basis in August, the largest monthly decline so far in the year after a 0.4% rise in July, the Office for National Statistics reported Friday.
Eurozone August Inflation Reaffirmed
The Eurozone inflation was unrevised in the final estimate at 9.1% in August according to the Eurostat report released on Friday.
The inflation[s previous estimate was released on August 31 and the rate accelerated from 8.9% in July.
Italy Trade Deficit Narrows In July
Italy's trade deficit narrowed in July after exports rose at a faster pace than imports, the statistics office Istat said Friday.
On a monthly basis, Italy's exports rose 4.1% in July reversing from the 1.9% decline in the previous month and imports advanced 3.4% the month from the 2.6% rise in the previous month.
Trade deficit in July declined to 361 million euros from 2.5 billion euros in June.
In July, exports rose 18.0% and imports surged 44.0% from a year ago.
import prices rose 0.9% on a monthly basis and surged 20.6% from a year ago.
In July, imports increased to 58.2 billion euros from 40.4 billion euros and exports rose to 57.81 billion euros from 48.98 billion euros, resulting in a trade deficit of 361 million euros compared to a trade surplus of 8.6 billion euros a year ago.
So far in 2022, Italy has recorded a trade deficit of about 7 billion euros compared to a surplus of 38 billion in euros in the similar period in 2021.
Russia Cuts Rate Again
The Central Bank of Russia lowered its key lending rate by 50 basis points to 7.5%, matching the expectations.
The central bank lowered the rate for the sixth time in a row but guided 2022 inflation to range between 11.0% and 13.0% before cooling down to between 5.0% and 7.0% in 2023.
- Barry Adams
- 16 Sep, 2022
- New York City
Stocks on Wall Street traded sharply lower on the worries of global economic slowdown and rate increases yet to come.
The World Bank in its latest report said that the global economic slowdown is accelerating at the fastest pace since the early seventies and several recession indicators are flashing warning signals.
The multilateral bank also said that the global economy is expected to plunge into a recession in 2023 as central banks around the world lift interest rates.
In addition, the U.S. dominated institution also cited that despite the higher interest rates inflation is likely to stay elevated on the persistent supply chain problems.
The mood also soured in financial markets after FedEx said its global shipments declined in the last two months at a pace higher-than-expected and the global parcel delivery company also withdrew its fiscal 2023 earnings outlook.
Can We Tame Inflation and Avert a Recession?
Investors are increasingly accepting the scenario that high inflation can not be tackled without the high interest rates and the longer the Fed takes in lifting rates to or above 5% the longer the economic slowdown or even a recession will last.
Why Wall Street Opened Lower
The two separate reports put investors on alert and stock market indexes closed down in Asia and extended weekly losses in Europe.
Stocks on Wall Street extended weekly losses and two popular indexes are set to close down between 4% and 6% for the week.
The S&P 500 index declined 1.1% to 3,854.06 and the Nasdaq Composite index dropped to 1.5% 11,381.79.
Crude Oil futures increased $1.10 to $86.04 and natural gas fell to 35 cents to $7.96 a thermal unit.
Bond Yields Advance Ahead of Fed Meeting Next Week
The bond yields continue to trade higher with 2-year Treasury notes trading near 15-year high and ahead of 30-year Treasury bonds indicating that the bond market is forecasting a recession or an economic slowdown in the coming quarters.
The yield on 2-year Treasury notes hovered near 3.89%, 10-year notes traded at 3.42% and 30-year bonds at 3.48%.
European Markets Head Lower
In Europe, benchmark indexes also extended losses and bond yields rose on the persistent worries of economic slowdown and deepening energy crisis.
The DAX index fell 1.3% to 12,788.31, the CAC-40 index dropped 0.9% to 6,104.77 and the FTSE 100 index fell 0.3% to 7,259.25.
Pound at 37-year Low
The U.K. pound declined to a 37-year low of $1.14 as latest economic data point to economic slowdown and weakening activities.
Retail sales in the U.K. dropped 1.6% on a monthly basis in August, the largest monthly decline so far in the year after a 0.4% rise in July, the Office for National Statistics reported Friday.
Eurozone August Inflation Reaffirmed
The Eurozone inflation was unrevised in the final estimate at 9.1% in August according to the Eurostat report released on Friday.
The inflation[s previous estimate was released on August 31 and the rate accelerated from 8.9% in July.
Russia Cuts Rate Again
The Central Bank of Russia lowered its key lending rate by 50 basis points to 7.5%, matching the expectations.
The central bank lowered the rate for the sixth time in a row but guided 2022 inflation to range between 11.0% and 13.0% before cooling down to between 5.0% and 7.0% in 2023.
- Barry Adams
- 15 Sep, 2022
- New York City
Stocks on Wall Street lacked direction and struggled to stay above the flat-line and accelerated declines in the final hour of trading.
Benchmark indexes fell more than 1% as investors digest conflicting trends in the economy.
Economy is slowing down as the housing market faces surging mortgage rates but labor market conditions remain tight and consumer spending is holding up despite high inflation.
However, global markets remain defensive as nervous investors digest the implications of higher rates and economic slowdown.
Economic slowdown worries spilled over energy markets and crude oil prices eased in New York and in European trading.
Weakening economic backdrop and stubborn inflation has also lifted bond yields around the world.
The S&P 500 index fell 1.1% to 3,901.35 and the Nasdaq Composite index declined 1.4% to 11,552.37.
Oil complex traded lower after energy prices eased from one-week highs.
Bond Market Route Continues
The yield on 10-year U.S. Treasury bonds are above 3.45% and approaching the peak of 3.5% reached in June, 2-year notes are now at 3.86%, a 15-year high and 30-year bond at 3.47%.
In addition, the bond yields in Germany are at 1.7%, a 8-year high, as the deepening energy crisis shows no sign of easing. Yields in Greece and Italy are above 4%, prompting worries of another sovereign debt crisis in the eurozone.
Crude Oil Searches Bottom
Global market sentiment has been weakening on the extended coronavirus lockdowns and housing market problems in China, natural gas crisis in Europe, and escalating interest rates in the U.S.
Moreover, shifting of Russia's oil supply to Asia and a conflict between Armenia and Azerbaijan has kept the supply worries in front and center.
WTI crude oil price declined $3.30 to $86.12 a barrel and Brent crude price declined $3.30 to $90.31.
Natural gas price dropped 81 cents to $8.29 a thermal unit and the TTF gas price in Europe fell 1.6% to
- Barry Adams
- 15 Sep, 2022
- New York City
Adobe plunged 17% to $309.13 after the company announced a deal to acquire cloud-based software design company Figma Inc for $20 billion in cash and stock.
Bed Bath & Beyond increased 0.4% to $8.79 after the company said it plans to close 150 of its namesake stores of which over 50 are scheduled to be closed by the end of 2020.
The struggling retailer said it has secured more than $500 million in new secured financing and it plans to cut 20% of its supply chain and corporate staff.
Danaher Corp jumped 3% but closed up nearly unchanged at $281.91 after the medical technology and industrial products maker said it plans to separate its environment and science applications division as a separate company in the last quarter of 2023.
FedEx withdrew its fiscal 2023 earnings guidance released on June 23 after disappointing fiscal first quarter revenues and shipments.
The company also lowered its fiscal 2023 capital spending plan to to $6.3 billion from the previous estimate of $6.8 billion.
The company reaffirmed its previously announced plan to repurchase $1.5 billion of its common stock in fiscal 2023 of which $1.0 billion is expected in the fiscal second quarter.
The parcel delivery company said it plans to cut costs, delay hiring and close 90 offices and five corporate sites.
FedEx fell 15% to close at $204.87.
- Bridgette Randall
- 15 Sep, 2022
- Frankfurt
European markets struggled to advance after two days of losses as the energy crisis remains in the spotlight and investors digest mixed U.S. economic data.
Benchmark indexes in Germany and France declined after governments raised the spectre of energy rationing in the coming weeks as natural prices remain sky-high and supplies are tight.
Germany's wholesale price inflation eased to 18.9% after rising 19.5% in July, Destatis reported Thursday.
The wholesale price inflation has declined for the fourth month in a row.
On a monthly basis, wholesale prices inched up 0.1% after falling 0.4% in July.
Consumer price inflation in France slowed to 5.9% in August from 6.1% in July, France's statistics office Insee reported Thursday.
Consumer price inflation in August was estimated at 5.8% in the preliminary estimate released on August 31.
U.K.'s consumer confidence slipped in the negative territory for the first time since June 2020.
Greece's jobless rate declined to 12.4% in the second quarter from 13.8% in the first quarter, a survey from the Hellenic Statistical Authority showed Thursday.
The unemployment rate declined from 15.8% a year ago.
The DAX index declined 50.55 or 0.4% to 12,974.77, the CAC-40 index fell 1.2% or 75.66 to 6,146.75 and the FTSE 100 index added 0.1% or 4.77 to 7,282.07.
Banks in Germany led the gainers on the back of rising interest rates.
Commerzbank added 3.5% and Deutsche Bank advanced 2.5%.
In Madrid trading, Bankinter, Sabadell and Caixabank gained more than 5% on the hopes that Spain may revise a tax that is deemed to violate the European Central Bank's directive.
Eurozone Swings to Trade Deficit
The euro area trade balance swung to a merchandise trade deficit of
- Brian Turner
- 15 Sep, 2022
- New York City
Initial weekly jobless claims declined 5,000 to 213,000 in the week ending on September 10, the U.S. Department of Labor said Thursday.
The initial claims were the lowest since the last week in May highlighting the tight labor market conditions.
Initial claims plunged 40% from 363,000 a year ago in the similar period.
Seasonally unadjusted claims declined 16,934 from the previous week to 155,961.
- Brian Turner
- 15 Sep, 2022
- New York City
Retail sales in August rose 0.3% from July, when sales fell 0.4% after a revision, the U.S. Census Bureau and Commerce Department said Thursday.
Advance estimates of U.S. retail and food services sales for August adjusted for seasonal factors and calendar were $683.3 billion, an increase of 0.3% from the previous month, and 9.1% higher from a year ago.
July retail sales were revised lower from flat to a decline of 0.4%.
Retail sales data are not adjusted for inflation and falling gasoline prices helped consumers to make other purchases.
Gasoline stations sales declined 4.2%, furniture store sales fell 1.3%, and sales at non-store retailers decreased 0.7%.
Sales of motor vehicles and parts rose 2.8% from the previous month and 6.7% from a year ago and food and beverages increased 0.5% and 7.2% respectively.
Excluding gasoline stations, sales increased 0.8%.
Core retail sales which exclude automobiles, gasoline, building materials and food services, were flat.
The September 2022 Advance Monthly Retail report is scheduled for release on October 14, 2022 at 8:30 a.m. EDT.
- Brian Turner
- 15 Sep, 2022
- New York City
Industrial production in August declined 0.2% from July but rose 3.7% from a year ago, the Federal Reserve Board reported Thursday.
Manufacturing output edged up 0.1% after rising 0.6% in July.
The index for mining was unchanged, and the index for utilities decreased 2.3%.
Capacity utilization declined 0.2 percentage point in August to 80.0%.
- Barry Adams
- 15 Sep, 2022
- New York City
Stocks on Wall Street lacked direction and struggled to stay above the flat-line as investors digest conflicting trends in the economy.
Economy is slowing down as the housing market faces surging mortgage rates but labor market conditions remain tight and consumer spending is holding up despite high inflation.
However, global markets remain defensive as nervous investors digest the implications of higher rates and economic slowdown.
Economic slowdown worries spilled over energy markets and crude oil prices eased in New York and in European trading.
Weakening economic backdrop and stubborn inflation has also lifted bond yields around the world.
The S&P 500 index rose 0.2% to 3,954.50 and the Nasdaq Composite index gained 0.24% to 11,743.87.
Financials led the early gains in the session with banks and brokerage companies leading the gainers.
Oil complex traded lower after energy prices eased from one-week highs.
Adobe Inc plunged 10% after the software company said it agreed to acquire design software platform developer Figma for $20 billion.
Weekly Jobless Claims Lowest Since May
Initial weekly jobless claims declined 5,000 to 213,000 in the week ending on September 10, the U.S. Department of Labor said Thursday.
The initial claims were the lowest since the last week in May highlighting the tight labor market conditions.
Initial claims plunged 40% from 363,000 a year ago in the similar period.
Seasonally unadjusted claims declined 16,934 from the previous week to 155,961.
Retail Sales In August Rise 0.3%
Retail sales in August rose 0.3% from July, when sales fell 0.4% after a revision, the U.S. Census Bureau and Commerce Department said Thursday.
July retail sales were revised lower from flat to a decline of 0.4%.
Retail sales data are not adjusted for inflation and falling gasoline prices helped consumers to make other purchases.
Gasoline stations sales declined 4.2%, furniture store sales fell 1.3%, and sales at non-store retailers decreased 0.7%.
Excluding gasoline stations, sales increased 0.8%.
Core retail sales which exclude automobiles, gasoline, building materials and food services, were flat.
Industrial Production Falls
Industrial production in August declined 0.2% from July but rose 3.7% from a year ago, the Federal Reserve Board reported Thursday.
Manufacturing output edged up 0.1% after rising 0.6% in July.
The index for mining was unchanged, and the index for utilities decreased 2.3%.
Capacity utilization declined 0.2 percentage point in August to 80.0%.
Bond Market Route Continues
The yield on 10-year U.S. Treasury bonds are above 3.45% and approaching the peak of 3.5% reached in June and 2-year notes are now at 3.8%, a 15-year high.
In addition, the bond yields in Germany are at 1.7%, a 8-year high, as the deepening energy crisis shows no sign of easing. Yields in Greece and Italy are above 4%, prompting worries of another sovereign debt crisis in the eurozone.
Crude Oil Searches Bottom
Global market sentiment has been weakening on the extended coronavirus lockdowns and housing market problems in China, natural gas crisis in Europe, and escalating interest rates in the U.S.
Moreover, shifting of Russia's oil supply to Asia and a conflict between Armenia and Azerbaijan has kept the supply worries in front and center.
WTI crude oil price eased $1.20 to $87.22 a barrel and Brent crude price declined $1.40 to $92.71.
Surging energy costs also negatively impacted trade balance for the eurozone.
Railroad Strike Averted for Now
Railroad stocks traded higher after President Joe Biden announced a preliminary agreement for a better pay and working conditions for railroad workers.
The agreement is likely to avert the strike for now and disruptions in services.
In corporate news, Adobe dropped nearly 10% after the company announced a deal to acquire cloud-based software design company Figma Inc for $20 billion in cash and stock.
Danaher Corp jumped 3% after the medical technology and industrial products maker said it plans to separate its environment and science applications division as a separate company in the last quarter of 2023.