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  • Barry Adams
  • 08 Sep, 2022
  • New York City

Stocks on Wall Street see-sawed after the Fed Chairman Powell offered another forceful reiteration of his commitment in fighting high inflation and not back off from rate hikes till the inflation hovers near target rate of 2%. 

The S&P 500 index was nearly unchanged at 3,978.11 and the Nasdaq Composite index dropped 0.4% to 11,749.75. 

American Eagle Outfitters Inc dropped 10.2% to $10.14 after the apparel retailer's second quarter results fell short of expectations. 

Revenues in the fiscal year 2022 second quarter ending in July were flat at $1.2 billion. 

From a year ago,  consolidated store revenue declined 2% and total digital revenue declined 6% and compared to pre-pandemic first quarter 2019, store revenue increased 1% and digital revenue increased 60%.

Gross margin declined to 30.9% from 42.1% a year ago largely on higher markdowns and rising freight costs. 

In the quarter, the apparel retailer swing to a loss of $42.5 million from a profit of $121.5 million a year ago. 

Asana Inc soared 24.5% to $23.66 after the company's latest quarterly results exceeded analysts expectations. 

The communication software company said revenues in the second quarter ending in July surged 51% to $134.9 million. 

Net loss in the quarter rose to $113.0 million or 59 cents a diluted share from $64.8 million or 40 cents a diluted share a year ago.  

The company guided third quarter revenues in the range of $138.5 million and $139.5 million, an increase between 38% and 39%. 

Dave & Buster's Entertainment Inc fell 10.3% to $39.47 after the restaurant operator reported better-than-expected revenues and comparable same store sales but net income fell more than estimated. 

Total revenue in the second quarter ending in July increased 24% to record $468.4 million. 

During the quarter, net income totaled $29.1 million or 59 cents a diluted share from $52.8 million or $1.07 a year ago.

Net income was $32.4 million or 90 cents per diluted share in the pre-pandemic second quarter of 2019.

Comparable sales in the second quarter at Dave & Buster's brand stores rose 9.6% compared to second quarter 2019. 

GameStop Corp jumped 7.4% to $25.84 after the video game retailer sales revenues in the second quarter ending in July edged slightly lower to $1.13 billion from $1.18 billion a year ago. 

Inventory at the end of the second quarter increased to $734.8 million from $596.4 million a year ago. 

Net loss in the quarter expanded to $108.7 million from $61.7 million a year ago. 

Stock jumped in today's trading after the company also announced a partnership with crypto exchange FTX. 

The company is looking to diversify its business away from hardware retail and expand to the NFT marketplace, but the change has come at a significant expense. 

At the end of the quarter, cash and cash equivalents had declined to $908.9 billion from $1.7 billion a year ago. 

McCormick & Company dropped 8.2% to $78.0 after the company offered a gloomy outlook. 

The flavor company said preliminary revenues in the third quarter ending in August increased 3% from a year ago. 

Operating income in the quarter declined to $223 million from $265 million a year ago and earnings per share of 79 cents is estimated to match the results a year ago. 

The company lowered its full-year fiscal 2022 revenues to increase 2% from the previous estimate between 3% and 5% and earnings per share in the range between $2.64 and $2.69 compared to $2.80 a year ago. 

Regeneron Pharmaceuticals Inc soared 19% to $709.90 after the company said its eye treatment drug Eylea performed well in two key trials for patients with diabetic macular edema and wet age-related macular degeneration. 

The following results were noted in the note released Thursday. 

91% and 89% of diabetic DME patients were rapidly initiated and maintained on 12- and 16-week dosing intervals (without need for regimen modification) through week 48, respectively.  

79% and 77% of wAMD patients were rapidly initiated and maintained on 12- and 16-week dosing intervals (without need for regimen modification) through week 48, respectively. 

  • Barry Adams
  • 08 Sep, 2022
  • New York City

Weekly initial jobless claims adjusted for seasonality declined 6,000 to 222,000 for the week ending on September 3, the Department of Labor reported Thursday. 

Jobless claims were revised lower 4,000 to 228,000 in the previous week. 

  • Bridgette Randall
  • 08 Sep, 2022
  • Frankfurt

The European Central Bank lifted its key lending rate 75 basis points following the 50 basis points increase in July. 

The widely expected rate hike lifted the main refinancing rate to 1.25%. marginal lending facility to 1.5% and the deposit facility to 0.75%. 

The central bank will also continue its asset purchase program, using the proceeds from maturing securities, and buy government bonds "as long as necessary." 

Policymakers also guided rates to rise over the next policy meetings as long as high inflation persists. 

Despite the hawkish comments from central bankers, many investors are skeptical that the policymakers will follow through and succeed in taming high inflation. 

The revised rates will be implements from September 14, 

At a press conference held after the rate-decision, ECB president Lagarde said that rates are still not high enough to tame inflation near the target rate of 2%. 

The ECB lowered its growth projection and revised higher inflation estimates but cautioned that the economy is holding up because a record number of people have jobs and people are traveling again and spending money on services. 

But businesses are suffering from persistent supply chain problems and record high energy prices and the economic outlook "for the coming months is worsening."

Moreover, the government programs to support the economic reopening after the pandemic have ended and the weakening global demand is also weighing on the economy. 

As a result, businesses and consumer confidence is weak amid uncertain outlook.  

Taking this into account the ECB revised higher inflation estimates to average 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024 while growth projection was revised lower to 3.1% in 2022, 0.9% in 2023 and 1.9% in 2024. 

The DAX index dropped 1.1% to 12,789.54, the CAC-40 index declined 0.4% to 6,084, and the FTSE 100 index was nearly unchanged at 7,242.61. 

  • Barry Adams
  • 08 Sep, 2022
  • New York City

Stocks traded briefly lower Thursday after hawkish comments from the Fed Chair Powell and the ECB President Lagarde. 

Fed Chairman Jerome Powell reiterated the central bank's commitment in fighting high inflation and warned that a smaller increase or a pause in rate hikes are not likely anytime soon. 

 

  • Scott Peters
  • 07 Sep, 2022
  • New York City

GitLab Inc advanced 8.2% to $51.25 after the software developer reported smaller-than-expected loss in its latest quarter.  

Total revenues in the quarter ending in July increased 74% to $101 million from $58 million a year ago. 

The company added largest number of new base customers in the second quarter fiscal year 2023.  

Net loss in the quarter increased to $61.4 million or 40 cents from $40.7 million or 75 cents a year ago. 

The company guided third quarter revenues in the fiscal year 2023 in the range between $105 million and $106 million and full-year fiscal 2023 between $411 million and $414 million. 

Customers with more than $5,000 average revenue run rate increased 61% to 5,864 and with more than $100,000 jumped 55% to 593. 

  • Brian Turner
  • 07 Sep, 2022
  • New York City

U.S. trade deficit declined $10.2 billion or 12.6% to $70.6 billion in July, the Bureau of Economic Analysis reported Wednesday. 

Total exports rose 0.2% to record $259.3 billion driven by higher service exports offsetting a decline in merchandise shipments. 

Total imports fell 2.9% to $329.9 billion after a decline in imports of industrial supplies and consumer goods offset an increase in shipments of automotive vehicles and parts. 

The deficit with China fell to $33 billion, a decline of $3.9 billion after exports rose to $12.8 billion and imports eased to $45.8 billion. 

In the second quarter 2022, the United States recorded trade surplus and deficits in goods and services with the following countries and regions. 

 

Trade Surplus - Second Quarter 2022

South and Central America - $31.4 billion

The Netherlands - $11.5 billion 

Singapore - $9.6 billion

Brazil - $9.4 billion 

Australia - $6.8 billion 

Hong Kong - $6.5 billion 

U.K. - $4.3 billion 

Belgium - $2.5 billion

Switzerland - $1.8 billion 

 

Trade Deficit - Second Quarter 2022

China - $100.8 billion 

European Union - $37.4 billion 

Mexico - $33.3 billion

Vietnam - $32.7 billion 

Canada - $20.9 billion 

Germany - $18.2 billion 

Japan - $15.2 billion 

India - $14.8 billion 

Taiwan - $11.8 billion 

Italy - $11.0 billion 

South Korea - $9.9 billion 

Malaysia - $8.8 billion 

Ireland - $4.6 billion 

France - $3.9 billion 

Israel - $2.5 billion 

Saudi Arabia - $2.2 billion 

 

  • Barry Adams
  • 07 Sep, 2022
  • New York City

Stocks on Wall Street advanced after crude oil prices plunged nearly 6% easing pressure on high inflation. 

For today, investors set aside the worries of a larger rate hike later in the month after crude oil prices plunged. 

The sharp fall in the oil stoked the optimism on Wall Street investors bid up recently beaten down tech stocks. 

However, central banks are set to lift rates this month with the focus on the U.S. Federal Reserve and the European Central Bank.  

The European Central Bank is set to lift its key lending rate by as much as 75 basis points on Thursday and the U.S. Federal Reserve is expected to match the hike at its next two-day policy meeting ending on Sep 21.

Two days ago, as expected the Reserve Bank of Australia hiked its key lending rate by 50 basis points to 2.35%. 

The latest hike follows three increases of similar size in the previous three months and 25 basis points increase in May, lifting the rates to the levels last seen in January 2015. 

The Bank of Canada lifted its overnight lending rate by 75 basis points to 3.25%, meeting the market expectations. 

The latest rate hike is the fifth consecutive increase in a row, lifting the lending rates to a high not seen since 2008. 

Crude oil prices declined in New York and in international markets on the falling demand worries and rising dollar. 

The oil price fell to the lowest level since Russia's invasion of Ukraine on February 24 on the worries that the economic slowdown may dampen the demand. 

Only a day ago in a nod to the decline in oil demand, the OPEC+ announced to cut its production target by 100,000 barrels a day. 

Futures of West Texas Intermediate crude oil declined 5.7% to $81.88 a barrel and natural gas eased 31 cents to $7.82 a thermal unit. 

The yields on 2-year notes fell to 3.41%, 10-year Treasury notes eased to 3.27% and 30-year bond fell to 3.42%. 

The S&P 500 index increased 1.8% to 3,979.83 and the Nasdaq Composite index advanced 2.2% to 11,791.90. 

 

Elevated U.S. Trade Deficit Eases In July 

U.S. trade deficit declined $10.2 billion to $70.7 billion in July, the Bureau of Economic Analysis reported Wednesday. 

Total exports rose 0.2% to record $259.3 billion driven by higher service exports offsetting a decline in merchandise shipments. 

Total imports fell 2.9% to $329.9 billion after a decline in imports of industrial supplies and consumer goods offset an increase in shipments of automotive vehicles and parts. 

The deficit with China fell to $33 billion, a decline of $3.9 billion after exports rose to $12.8 billion and imports eased to $45.8 billion. 

 

European Markets Anticipate Rate Hike On Thursday

European markets advanced and energy prices in the region fell for the third day in a row. 

Investors are bracing another round of rate hike as central banks in the U.S., Europe and Asia target inflation in a coordinated fashion. 

The European Central Bank is set to lift its key lending rate by as much as 75 basis points and the U.S. Federal Reserve is expected to match the hike at its next two-day policy meeting ending on Sep 21.

The National Bank of Poland lifted its key lending rate by 25 basis points to 6.75%, marching the market expectations. 

The DAX index increased 0.4% to 12,915.97, the CAC-40 index rose 0.02% to 6,105.92, and the FTSE 100 index fell 0.9% to 7,237.83. 

Brent crude oil prices fell 4.9% to $88.26 a barrel and TTF gas prices plunged 11.4% to 213.81 euros a megawatt a hour.  

The U.S. dollar continued to rise and the euro dropped to $0.994 and the British pound eased to $1.147, the lowest in 37 years as investors anticipate inflation to accelerate and economic conditions to weaken. 

Rising current account deficit and dropping investor confidence has hammered the pound 15% against the U.S. dollar this year.   

The British pound is set to test its record low of $1.02 reached in February 1985. 

 

Eurozone GDP Growth Revised Higher 

The euro area economic growth was faster than previously estimated, according to the latest revision from Eurostat released Wednesday. 

Preliminary estimate was released on Aug 17. 

GDP growth in the second quarter was revised higher to 0.8% from 0.6% on a sequential basis. The economy expanded at a 4.1% from the previous estimate of 3.9% from a year ago. 

The  eurozone economy in the first quarter rose 0.7% from the previous quarter and jumped 5.4% from a year ago. 

German industrial production fell 0.3% in July after rising 0.8% in June, Destatis reported Wednesday. 

Industrial production declined 1.1% after easing 0.1% in June on an annual basis, 

In stock trading, resource stocks led the decliners after Brent crude oil prices fell 4.9% and natural gas prices dropped 11%. 

Glencore, Anglo American, Antofagasta and BHP Group dropped between 2% and 3%. 

 

Asian Markets Turn Lower On Recession Worries 

Asian markets in Wednesday's trading turned lower on recession worries despite the falling energy prices for the third day in a row.  

Indexes in China closed marginally down after export growth slowed to 7.1% in August from 18% in July, General Administration of Customs in Beijing said Wednesday. 

Import growth fell to 0.3% in August from 2.3% in July. 

The Shanghai Stock Exchange Composite Index inched up 2.85 to 3,246,29 and the Hang Seng Index fell 0.8% to 19,044.30. 

In Tokyo, investors focused on the rapid decline in yen for the third day in a row. The yen dropped 1% to 144,32, prompting Finance Minister Shunichi Suzuki to caution that the government will be ready to act, if needed. 

The Nikkei 225 Index fell 0.7% to 27,430.30 and the broader Topix declined 0.6% to 1,915.65.

With weak markets in Asia and Europe, popular indexes in India eased in the final hour of trading on Wednesday. 

The Sensex closed down 168.08 points or 0.28% to 59,028.91 and the Nifty index declined 31.20 points or 0.18% to 17,624.40

The KOSPI Index in Seoul, Korea declined 1.4% to 2,376.46 after the won dropped to a 13-year low of 1,377 against a dollar. 

Semiconductor makers and steel companies led the decliners in Seoul trading. 

In Sydney, Australia, the ASX 200 Index plunged 1.4% to 6,729.30 after energy and commodities prices eased. 

The Australian dollar dropped to a two-year low to $1.477 despite the Reserve Bank of Australian lifting its key lending rate by 50 basis points this week. 

 

  • Arjun Pandit
  • 07 Sep, 2022
  • Mumbai

Asian markets in Wednesday's trading turned lower on recession worries despite the falling energy prices for the third day in a row.  

Indexes in China closed marginally down after export growth slowed to 7.1% in August from 18% in July, General Administration of Customs in Beijing said Wednesday. 

Import growth fell to 0.3% in August from 2.3% in July. 

The Shanghai Stock Exchange Composite Index inched up 2.85 to 3,246,29 and the Hang Seng Index fell 0.8% to 19,044.30. 

In Tokyo, investors focused on the rapid decline in yen for the third day in a row. The yen dropped 1% to 144,32, prompting Finance Minister Shunichi Suzuki to caution that the government will be ready to act, if needed. 

The Nikkei 225 Index fell 0.7% to 27,430.30 and the broader Topix declined 0.6% to 1,915.65.

With weak markets in Asia and Europe, popular indexes in India eased in the final hour of trading on Wednesday. 

The Sensex closed down 168.08 points or 0.28% to 59,028.91 and the Nifty index declined 31.20 points or 0.18% to 17,624.40

The KOSPI Index in Seoul, Korea declined 1.4% to 2,376.46 after the won dropped to a 13-year low of 1,377 against a dollar. 

Semiconductor makers and steel companies led the decliners in Seoul trading. 

In Sydney, Australia, the ASX 200 Index plunged 1.4% to 6,729.30 after energy and commodities prices eased. 

The Australian dollar dropped to a two-year low to $1.477 despite the Reserve Bank of Australian lifting its key lending rate by 50 basis points this week. 

  • Bridgette Randall
  • 07 Sep, 2022
  • Frankfurt

European markets advanced and energy prices in the region fell for the third day in a row. 

Investors are bracing another round of rate hike as central banks in the U.S., Europe and Asia target inflation in a coordinated fashion. 

The European Central Bank is set to lift its key lending rate by as much as 75 basis points and the U.S. Federal Reserve is expected to match the hike at its next two-day policy meeting ending on Sep 21.

The DAX index increased 0.4% to 12,915.97, the CAC-40 index rose 0.02% to 6,105.92, and the FTSE 100 index fell 0.9% to 7,237.83. 

Brent crude oil prices fell 4.9% to $88.26 a barrel and TTF gas prices plunged 11.4% to 213.81 euros a megawatt a hour.  

The U.S. dollar continued to rise and the euro dropped to $0.994 and the British pound eased to $1.147, the lowest in 37 years as investors anticipate inflation to accelerate and economic conditions to weaken. 

Rising current account deficit and dropping investor confidence has hammered the pound 15% against the U.S. dollar this year.   

The British pound is set to test its record low of $1.02 reached in February 1985. 

In stock trading, resource stocks led the decliners after Brent crude oil prices fell 4.9% and natural gas prices dropped 11%. 

Glencore, Anglo American, Antofagasta and BHP Group dropped between 2% and 3%. 

Repsol SA declined 4% to 12.93 euros and the Spanish petrochemicals company said it has agreed to sell 25% stake in its upstream business for $4.8 billion to an energy investment company EIG Global Energy Partners. 

Siemens Energy SA declined 3.3% to 13.67 euros after the company and Russia traded blames linked to the Nord Stream 1 pipeline maintenance. 

Russia blamed Siemens Energy for the lack of maintenance and Siemens denied the allegations. 

Uniper SE plunged as much as 5% before recovering to close down 0.5% to 4.71 euros after the German utility company said natural gas prices could go higher. 

SGL Carbon SE gained 12% to 7.40 euros after the company revised higher fiscal year revenues to 1.2 billion euros from 1.1 billion euros on account of better performance in its carbon fibers unit. 

The company also revised higher its operating earnings in the range between 170 million and 190 million euros from the previous range between 130 million and 150 million euros. 

James Fisher & Sons declined 6.2% to 286 pence after the marine engineering services provider reported a decline in first-half profit. 

Revenues in the first-half ending in June increased 2% to 238.4 million pounds and net income plunged 28% to 2 million pounds from 13.6 million pounds a year ago. 

However, the company said second-half is expected to be "materially stronger" than the first and the full-year underlying operating profit "is expected to be broadly in-line with 2021."

Barratt Developments PLC declined 1.2% to 417.0 pence after the home builder said home completions recovered to the pre-pandemic level.  

Barratt said revenues in the fiscal year ending in June rose 9.5% to 5.27 billion pounds and completed homes increased 3.9% to 17,908. 

Profit-before-tax declined 21% to 642.3 million pounds and basic earnings per share dropped 22% to 50.6 pence from 64.9 pence a year ago. 

  • Bridgette Randall
  • 07 Sep, 2022
  • Frankfurt

European markets advanced and energy prices in the region fell for the third day in a row. 

Investors are bracing another round of rate hike as central banks in the U.S., Europe and Asia target inflation in a coordinated fashion. 

The European Central Bank is set to lift its key lending rate by as much as 75 basis points and the U.S. Federal Reserve is expected to match the hike at its next two-day policy meeting ending on Sep 21.

The National Bank of Poland lifted its key lending rate by 25 basis points to 6.75%, marching the market expectations. 

Two days ago, the Reserve Bank of Australia hiked its key lending rate by 50 basis points to 2.35% as expected. 

The latest hike follows three increases of similar size in the previous three months and 25 basis points increase in May, lifting the rates to the levels last seen in January 2015. 

The Bank of Canada lifted its overnight lending rate by 75 basis points to 3.25% meeting the market expectations. 

The latest rate hike is the fifth consecutive increase in a row, lifting the lending rates to a high not seen since 2008. 

The DAX index increased 0.4% to 12,915.97, the CAC-40 index rose 0.02% to 6,105.92, and the FTSE 100 index fell 0.9% to 7,237.83. 

Brent crude oil prices fell 4.9% to $88.26 a barrel and TTF gas prices plunged 11.4% to 213.81 euros a megawatt a hour.  

The U.S. dollar continued to rise and the euro dropped to $0.994 and the British pound eased to $1.147, the lowest in 37 years as investors anticipate inflation to accelerate and economic conditions to weaken. 

Rising current account deficit and dropping investor confidence has hammered the pound 15% against the U.S. dollar this year.   

The British pound is set to test its record low of $1.02 reached in February 1985. 

 

Eurozone GDP Growth Revised Higher 

The euro area economic growth was faster than previously estimated, according to the latest revision from Eurostat released Wednesday. 

Preliminary estimate was released on Aug 17. 

GDP growth in the second quarter was revised higher to 0.8% from 0.6% on a sequential basis. The economy expanded at a 4.1% from the previous estimate of 3.9% from a year ago. 

The  eurozone economy in the first quarter rose 0.7% from the previous quarter and jumped 5.4% from a year ago. 

German industrial production fell 0.3% in July after rising 0.8% in June, Destatis reported Wednesday. 

Industrial production declined 1.1% after easing 0.1% in June on an annual basis, 

In stock trading, resource stocks led the decliners after Brent crude oil prices fell 4.9% and natural gas prices dropped 11%. 

Glencore, Anglo American, Antofagasta and BHP Group dropped between 2% and 3%. 

  • Barry Adams
  • 07 Sep, 2022
  • New York City

Stocks accelerated gains after three weeks of losses as investors surmised the economy is strong enough to handle rising interest rates. 

Crude oil prices declined in New York and in international markets on the falling demand worries and rising dollar. 

The oil price fell to the lowest level since Russia's invasion of Ukraine on February 24. 

Futures of West Texas Intermediate crude oil declined 3% to $84.21 a barrel and natural gas eased 20 cents to $7.92 a thermal unit. 

The yields on 2-year notes fell to 3.47%, 10-year Treasury notes eased to 3.28% and 30-year bond fell to 3.44%. 

The S&P 500 index increased 1.1% to 3,951.89 and the Nasdaq Composite index advanced 1.2% to 11,690.87. 

Baxter International soared 5.7% to $57.79 after the company made a presentation to investors at the Wells Fargo Healthcare Conference 2022 in Boston, Massachusetts. 

On July 28, the company reported second quarter revenues rose 21% to $3.75 billion and net income declined to $252 million or 50 cents a share from $298 million or 59 cents a a year ago. 

Baxter had also estimated full-year 2022 earnings per share in the range of $1.82 and $1.92 and revenues to increase in "the high teens."

Coupa Software Inc soared 15.6% to $64.52 after the company's latest quarterly results exceeded market expectations. The company also guided a stronger full-year outlook. 

Dexcom, Inc rose 5.5% to $86.57 after the company made a presentation to investors at a healthcare conference organized by Wells Fargo in Boston, MA. 

On July 28, the company said second quarter revenues increased 11% to $696 million and tightened its annual revenues range to between $2.86 billion and $2.91 billion. 

Net income in the second quarter was $50.9 million or 12 cents a diluted share compared to $78.4 million or $0.19 a diluted share a year ago. 

Gitlab Inc advanced 8.2% to $51.25 after the software developer reported smaller-than-expected loss in its latest quarter.  

Total revenues in the quarter ending in July increased to $101 million from $58 million a year ago. 

Net loss in the quarter increased to $61.4 million or 40 cents from $40.7 million or 75 cents a year ago. 

The company guided third quarter revenues in the fiscal year 2023 in the range between $105 million and $106 million and full-year fiscal 2023 between $411 million and $414 million. 

Ross Stores increased 5.5% to $91.49 in active trading and a week ago the discounted retail chain operator guided third quarter earnings per share between 72 cents and 83 cents. 

Starbucks Corporation rose 3.3% to $87.30 ahead of the coffee chain retailer's investor day on September 13, 

The company recently appointed Laxman Narasimhan as its next chief executive from October 1, 2022 and will work closely with Howard Schultz, interim CEO, before assuming full-responsibilities and joining the Board on April 1, 2023.

Previously, Indian-born Narasimhan served as chief executive officer of Anglo-Dutch consumer goods company Reckitt Benckiser Inc for three years.  

Twitter Inc increased 5.5% to $40.86 after a Delaware court disallowed Elon Musk's request to postpone the trial involving his decision to abandon a $44 billion deal to acquire the company. 

However, the court permitted Musk to add claims against the social media platform company filed by a whistleblower.  

United Airlines Holdings Inc added 3.3% to $37.79 after the company revised higher its third quarter revenues outlook on stronger Summer travel demand. 

Third quarter revenues are estimated to increase 12% above the same quarter in 2019 from its previous estimate of 11% increase from the pre-pandemic levels. 

 

  • Barry Adams
  • 07 Sep, 2022
  • New York City

Stocks on Wall Street advanced in morning trading as investors await the next round of rate hikes across the globe. 

The European Central Bank is set to lift its key lending rate by as much as 75 basis points and the U.S. Federal Reserve is expected to match the hike at its next two-day policy meeting ending on Sep 21.

Two days ago, the Reserve Bank of Australia hiked its key lending rate by 50 basis points to 2.35% as expected. 

The latest hike follows three increases of similar size in the previous three months and 25 basis points increase in May, lifting the rates to the levels last seen in January 2015. 

The Bank of Canada lifted its overnight lending rate by 75 basis points to 3.25% meeting the market expectations. 

The latest rate hike is the fifth consecutive increase in a row, lifting the lending rates to a high not seen since 2008. 

Crude oil prices declined in New York and in international markets on the falling demand worries and rising dollar. 

The oil price fell to the lowest level since Russia's invasion of Ukraine on February 24. 

Futures of West Texas Intermediate crude oil declined 3% to $84.21 a barrel and natural gas eased 20 cents to $7.92 a thermal unit. 

The yields on 2-year notes fell to 3.47%, 10-year Treasury notes eased to 3.28% and 30-year bond fell to 3.44%. 

 

Elevated U.S. Trade Deficit Eases In July 

U.S. trade deficit declined $10.2 billion to $70.7 billion in July, the Bureau of Economic Analysis reported Wednesday. 

Total exports rose 0.2% to record $259.3 billion driven by higher service exports offsetting a decline in merchandise shipments. 

Total imports fell 2.9% to $329.9 billion after a decline in imports of industrial supplies and consumer goods offset an increase in shipments of automotive vehicles and parts. 

The deficit with China fell to $33 billion, a decline of $3.9 billion after exports rose to $12.8 billion and imports eased to $45.8 billion. 

 

European Markets Trade Higher Ahead of Rate Decision 

European markets advanced and energy prices in the region fell for the third day in a row. 

Investors are bracing another round of rate hike as central banks in the U.S., Europe and Asia target inflation in a coordinated fashion. 

The National Bank of Poland lifted its key lending rate by 25 basis points to 6.75%, marching the market expectations. 

The DAX index increased 0.6% to 12,942.11, the CAC-40 index rose 0.2% to 6,115.93, and the FTSE 100 index fell 0.9% to 7,237.83. 

Brent crude oil prices fell 4% to $89.06 a barrel and TTF gas prices plunged 11.4% to 212.41 euros a megawatt a hour.  

The U.S. dollar continued to rise and the euro dropped to $0.994 and the British pound eased to $1.147, the lowest in 37 years as investors anticipate inflation to accelerate and economic conditions to weaken. 

Rising current account deficit and dropping investor confidence has hammered the pound 15% against the U.S. dollar this year.   

The British pound is set to test its record low of $1.02 reached in February 1985. 

  • Barry Adams
  • 06 Sep, 2022
  • New York City

Stocks on Wall Street lacked direction as investors debated the health of the U.S. economy and the future rate hikes. 

The service sector expanded at a faster pace in August following the jobs report that met investors expectations on Friday. 

The back-to-back two reports highlighted the strength in the economy and also raised the prospects of a larger rate hike at the next meeting of the policymakers. 

The PMI service index of services increased to 56.9 in August from 56.7 in July, the  ISM reported Tuesday. The service index accelerated for the third month in a row after hitting the low 55.3 this year.  

Crude oil prices eased on the expected decline in demand after China imposed tighter restrictions in several cities impacting as many as 30 million people. 

Yesterday, OPEC+ announced 100,000 barrels a day supply cut as demand softens in China and rising supply from Iran and Venezuela. 

The S&P 500 index decreased 0.4% to 3,908.13 and the Nasdaq Composite index declined 0.7% to 11,544,93. 

Futures of crude oil declined 11 cents to $86.83 a barrel and natural gas edged down 74 cents to $8.02 a thermal unit. 

The yield on 10-year Treasury notes rose 6 points to 3.34%, 30-year bonds increased to 3.492%, and 2-year notes advanced to 3.50%.

 

European Markets Rebound, Germany's Factory Orders Fall 

European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures. 

The DAX index gained 0.3% to 12,794.51, the CAC-40 index fell 0.5% to 6,064.11, and the FTSE 100 index fell 0.2% to 7,275.83. 

Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.  

Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday. 

The June orders were revised to an increase of 0.3%. 

The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14. 

The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy. 

With low approval among her party members and even lower vote of confidence from voters, Truss faces challenges on multiple fronts and most political analysts anticipate the country to head to general polls in late 2023 or early 2024.  

The pound is expected to continue its slide and sink to a parity with the U.S. dollar. 

Brent crude oil fell 3.3% to $92.59 a barrel and TTF natural gas prices fell 2.5% to 239.47 euros a megawatt hour.    

BP Plc, Shell, BT, National Grid and Pershing Square Holdings fell between 1% and 2%. 

Ashtead Group declined 2.4% to 4,207.o pence despite the industrial equipment rental company posting higher fiscal first quarter revenues and earnings. 

Revenues in the fiscal first quarter 2022 ending in July rose 25% to $2.26 billion and pre-tax net income soared 28% to $527 million. 

Berkeley Group Holdings Plc gained 3.3% to 3,573.0 pence after the company issued a positive outlook for the current financial year. 

In Frankfurt trading, Volkswagen AG rose 6.2% to 194.83 euros after the company said it plans to spin off its sportscar division Porsche AG in a public offering in the next 30 to 60 days. 

 

Asian Markets Struggle to Adjust to Dollar Strength 

Asian markets gave up early losses and closed down after the energy crisis in Europe deepened and ahead of the rate decision in the currency union on Thursday. 

The Nikkei 225 Index closed marginally higher at 27,626.51 and the yen fell 1.8% to a 24-year low of 142.82 against the U.S. dollar. 

The Sensex index in India closed marginally lower after a volatile session. 

The Sensex closed down 48.99 points to 59,196.99 and the Nifty index eased 10.20 points to 17,655.60.

The rupee edged down to 79.81 against the U.S. dollar. 

The benchmark ASX 200 Index fell 0.4% to 6,826.50, while the broader All Ordinaries Index closed 0.3% lower at 7,055.90 after the Reserve Bank of Australia hiked key lending rate by 50 basis points to 2.35% as expected. 

The latest hike follows three increases of similar size in the previous three months and 25 basis points increase in May, lifting the rates to the levels last seen in January 2015. 

The Shanghai Composite Index gained 1.4% to 3,243.45 after China's central bank officials and ministers promised additional stimulus measures to follow the package released five months ago.  

 

China Takes Steps to Support Yuan and Economic Growth 

China announced a slew of stimulus measures to revive the flagging economic growth and arrest the falling yuan.

At a press conference on Monday, officials from ministries, People's Bank of China and National Development and Reform Commission highlighted details of the plan in the third quarter. 

The one trillion yuan or $145 billion plan will focus on more infrastructure spending.  

The People's Bank of China, after the press conference, lowered the foreign currency reserve ratio by 2 percentage points. 

China's yuan closed down to a new two-year low of 6.955 against the U.S. dollar and the currency has fallen for the sixth month in a row.  

 

  • Bridgette Randall
  • 06 Sep, 2022
  • Frankfurt

European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures. 

The DAX index gained 0.8% to 12,871.41, the CAC-40 index fell 0.2% to 6,104.61, and the FTSE 100 index rose 0.2% to 7,300.43. 

Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.  

Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday. 

The June orders were revised to an increase of 0.3%. 

The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14. 

The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy. 

The pound is expected to continue its slide and sink to a parity with the U.S. dollar. 

In London stock trading, Taylor Wimpey, Persimmon, Berkley Group, JD Sports Fashion and Hargreaves Lansdown gained between 3% and 5%. 

Resource stocks led the decliners after copper, crude oil and natural gas prices eased after rallying for two days in a row. 

Brent crude oil fell 3.3% to $92.59 a barrel and TTF natural gas prices fell 2.5% to 239.47 euros a megawatt hour.    

BP Plc, Shell, BT, National Grid and Pershing Square Holdings fell between 1% and 2%. 

Ashtead Group declined 2.4% to 4,207.o pence despite the industrial equipment rental company posting higher fiscal first quarter revenues and earnings. 

Revenues in the fiscal first quarter 2022 ending in July rose 25% to $2.26 billion and pre-tax net income soared 28% to $527 million. 

Berkeley Group Holdings Plc gained 3.3% to 3,573.0 pence after the company issued a positive outlook for the current financial year. 

"Berkeley is on track to meet its profit guidance and deliver a pre-tax profit for the current financial year ending 30 April 2023 of

  • Bridgette Randall
  • 06 Sep, 2022
  • Frankfurt

European markets looked beyond weak German factory orders data and gained after energy prices eased and China announced stimulus measures. 

The DAX index gained 0.8% to 12,871.41, the CAC-40 index fell 0.2% to 6,104.61, and the FTSE 100 index rose 0.2% to 7,300.43. 

Germany's factory orders declined at a faster pace in July on the weak domestic and the eurozone demand.  

Factory orders fell 1.1% from the previous month in July Destatis reported Tuesday. 

The June orders were revised to an increase of 0.3%. 

The British pound edged up a fraction and traded near $1.15 after briefly falling near $1.14. 

The incoming prime minister Liz Truss has inherited a weak economy, elevated energy prices, sky-high inflation and general voter apathy. 

With low approval among her party members and even lower vote of confidence from voters, Truss faces challenges on multiple fronts and most political analysts anticipate the country to head to general polls in late 2023 or early 2024.  

The pound is expected to continue its slide and sink to a parity with the U.S. dollar.