(Alliance News) - European stocks were called up on Friday morning, following a weaker performance from US markets and mostly positive company earnings reports.
Here is what you need to know before the European market open on Friday:
----------
MARKETS
----------
CAC 40: called up 43.0 points, 0.5%, at 8,059.65
DAX 40: called up 76.5 points, 0.4%, at 17,993.78
FTSE 100: called up 55.9 points, 0.7%, at 8,134.76
----------
Hang Seng: up 2.0% at 17,630.84
Nikkei 225: up 0.8% at 37,942.92
S&P/ASX 200: down 1.2% at 7,590.20
----------
Dow: closed down 375.12 points, 1.0%, at 38,085.80
S&P 500: closed down 0.5% at 5,048.42
Nasdaq Composite: closed down 0.6% at 15,611.76
----------
EUR: up at USD1.0723 (USD1.0713)
GBP: up at USD1.2499 (USD1.2490)
USD: up at JPY156.04 (JPY155.52)
GOLD: up at USD2,335.00 per ounce (USD2,331.32)
OIL (Brent): up at USD88.02 a barrel (USD86.48)
(changes since previous London equities close)
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ECONOMIC CALENDAR
----------
08:30 EDT Canada manufacturing sales
11:00 EDT Canada budget balance
10:00 CEST eurozone money supply
08:45 CEST France consumer confidence
09:00 CEST Spain unemployment
09:00 CEST Spain retail sales
10:00 CEST Switzerland Swiss National Bank Chair Thomas Jordan speaks
08:30 EDT US personal consumption expenditures index
10:00 EDT US Michigan consumer sentiment index
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TOP ECONOMIC NEWS
----------
The Bank of Japan said Friday it would keep its main interest rate unchanged as expected but hiked its inflation forecasts. It now sees inflation excluding fresh produce to hit 2.8% in the current fiscal year, up from its previous projection of 2.4%, it said. The yen fell to a fresh 34-year low, with a dollar fetching above JPY156. Other major central banks have hiked borrowing costs in recent months but the BoJ only last month lifted its main rate above zero.
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Inflation in Tokyo cooled to below Japan's central bank's 2% target in April, official data showed. The Statistics Bureau of Japan said, on an annual basis, consumer prices in Tokyo increased 1.8% in April, slowing markedly from March's rise of 2.6%. Market consensus as cited by FXStreet had been expecting an unchanged reading. The closely-watched core inflation numbers also slowed from the prior month. Stripping out fresh food, inflation cooled to 1.6% from 2.4%, while market forecasts had predicted 2.2%. Excluding both fresh food and energy, it eased to 1.8% from 2.9%, undershooting forecasts of 2.7%. The inflation print for Tokyo is considered to be a leading indicator of Japan's overall inflation rate, and is typically published weeks ahead of the reading for the whole country.
----------
China's foreign minister urged visiting US Secretary of State Antony Blinken to address rising disagreements or risk a "downward spiral" between the two powers after months of efforts to ease tensions. Blinken, paying his second visit to the rival country in less than a year, voiced hope for progress but said he would directly raise areas of difference, which are expected to include Russia, Taiwan and trade. China in turn has been infuriated by President Joe Biden's pressure on the economic front – which is unlikely to ease during an election year – including a sweeping ban on semiconductor exports and efforts to wrest blockbuster video app TikTok away from its Chinese owners. Saying that China "advocated respect for each other's core interests", Foreign Minister Wang Yi demanded that the US not "trample on China's red line" on sovereignty, security and development. "China's legitimate development rights have been unreasonably suppressed and our core interests are facing challenges," he said.
----------
TikTok parent ByteDance has said it has no intention of selling it, after the US Congress passed a law forcing it to sell the hugely popular video platform or get banned in the US. ByteDance's comment came after the tech business-focused news site The Information reported that the Chinese tech giant was looking at potential scenarios for selling TikTok without the coveted recommendation algorithm that powers it. "Foreign media reports about ByteDance exploring the sale of TikTok are untrue," the company posted on its official account on Toutiao, a social media platform it owns. "ByteDance does not have any plans to sell TikTok."
----------
According to a media report, Israel is considering a limited agreement with the Palestinian Islamist group Hamas in order to secure the release of at least 20 hostages. Israeli media outlet Channel 12 reported that the proposed deal involves female, elderly and sick hostages. In return, Israel would allow displaced persons in the Gaza Strip to return to the north of the coastal region. The proposal was discussed at a meeting of Israel's war cabinet. It will reportedly be forwarded to the mediators shortly. According to the report, Israel wants to use the proposal to circumvent Hamas' demand for a permanent ceasefire. It was initially unclear how long a ceasefire would last under the deal and whether and to what extent Palestinian prisoners would be released from Israeli jails.
----------
The US, Canada and Britain imposed new sanctions on Iran in response to the Iranian attack on Israel. The measures primarily focus on the trade and manufacture of drones, after the major attack by Tehran on Israel with more than 300 drones, cruise missiles and rockets. On Thursday, the US government said the sanctions were imposed on 16 companies, eight individuals, several ships and one aircraft said to be supporting Iran in the procurement of unmanned aerial vehicles. A British government statement said four companies and two individuals were sanctioned for their involvement in Iranian drone production. London also further restricted the export of components that can be used to build drones.
----------
UK consumer confidence improved this month, according to GfK's long-running consumer confidence index. The index increased to minus 19 in April from minus 21 in March. "Headline confidence edged forward in April to minus 19. There was a welcome repeat of the March +2 score for how consumers feel about their personal finances in the next 12 months. While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts," said Joe Staton, client strategy director at GfK.
----------
COMPANY CALENDAR
----------
AbbVie Inc - Q1 Results
Bayer AG - AGM
Central Japan Railway Co - Full Year Results
Charter Communications Inc - Q1 Results
Chevron Corp - Q1 Results
Continental AG - AGM
Denso Corp - Full Year Results
Exxon Mobil Corp - Q1 Results
Hitachi Ltd - Full Year Results
Oriental Land Co Ltd - Full Year Results
Pearson PLC - AGM
Roper Technologies Inc - Q1 Results
Safran SA - Trading Statement
Smurfit Kappa Group PLC - Trading Statement
TotalEnergies SE - Q1 Results
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TOP COMPANY NEWS
----------
Microsoft released its results for the first nine months of its financial year, demonstrating strong growth in both revenue and net income, and putting the company on track for a strong set of annual figures. In the third quarter ended March 31, Microsoft's net income was USD21.94 billion, up 20% from USD18.30 billion a year prior. Revenue for the quarter was USD61.86 billion, a 17% increase on the USD52.86 billion delivered in the first quarter of 2023. The company credits the strong earnings performance to its Microsoft Cloud revenue, which rose 23% year-on-year to USD35.1 billion. Basic earnings per share for the period were USD2.95, up 20% from USD2.46.
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Shares in Alphabet leapt on Thursday night after it paid its first ever dividend and launched a fresh share buy-back alongside strong first quarter results. The owner of Google reported first quarter revenue of USD80.54 billion, up 13% from USD69.79 billion a year prior. Net income jumped to USD23.66 billion from USD15.05 billion with earnings per diluted share up to USD1.89 from USD1.17. Google advertising revenue rose to USD61.66 billion from USD54.55 billion and Google cloud revenue to USD9.57 billion from USD7.45 billion. Alphabet declared a dividend of USD0.20 per share and pledged to pay quarterly cash dividends in the future. The dividend is payable to all class of shares, including Class B shareholders, as well as non-voting Class C shareholders. It also launched a new USD70 billion share buyback. Chief Executive Sundar Pichai said: "Our results in the first quarter reflect strong performance from Search, YouTube and Cloud."
----------
CapitaLand Investment reported little top-line progress in 2024 so far, as growth in its fee business was weighed down by a fall in property investment income. The Singapore-based investor said total revenue was stable in the first quarter, coming in at SGD650 million - or USD478.8 million - a slight decrease from SGD651 million a year before. CLI's operations are comprised of two main business platforms. Firstly, its Fee-Income Related Business, where revenue rose 7.5% on-year to SGD274 million. The rise was led by commercial management, with lodging management and listed funds management also seeing increases. The improvement was partially offset by a 13% drop in private funds management, however. Secondly, CLI generates rental income from a global property portfolio within its Real Estate Investment Business. Quarterly revenue from the REIB fell 3.8% to SGD430 million, amid divestments of assets such as the International Tech Park Pune in India.
----------
Mapletree Industrial Trust reported an improved annual performance, crediting contributions from new projects. The Singapore-listed real estate investment trust said net property income in the financial year ended March 31 edged up 0.6% year-on-year to SGD521.0 million - about USD383.3 million - from SGD518.0 million. Gross revenue rose 1.8%, while property expenses were up 5.6%. "The better performance was mainly driven by revenue contributions from the redevelopment project, Mapletree Hi-Tech Park at Kallang Way, the data centre in Osaka, Japan acquired on 28 September 2023 as well as new leases and renewals across various property clusters," the firm explained. The total distribution to unit holders rose 2.7% to SGD378.3 million from SGD368.2 million, which Mapletree said was mainly due to higher NPI and higher distribution declared by the Mapletree Rosewood Data Centre Trust joint venture. However, the total annual distribution fell 1.0% to 13.43 cents per unit from 13.57 cents, as the number of units increased 3.5%.
----------
T-Mobile US raised guidance for earnings and subscriber numbers after making a "great start to 2024". The Bellevue, Washington-based telecoms provider reported first-quarter net income of USD2.37 billion, up 22% from USD1.94 billion a year prior. Earnings per share climbed by 27% to USD2.00 from USD1.58. But revenue edged down by 0.2% to USD19.59 billion from USD19.63 billion. Chief Executive Mike Sievert said: "T-Mobile had a great start to 2024 with industry-leading growth in service revenues and profitability." T-Mobile reported postpaid net account additions of 218,000, down from 287,000 a year prior, and said it was a "best in industry" performance. For 2024, postpaid net customer additions are expected to be between 5.2 million and 5.6 million, an increase from prior guidance of 5.0 million to 5.5 million. Core adjusted earnings before interest, taxes, depreciation and amortisation is expected to be between USD31.4 billion and USD31.9 billion, an increase from prior guidance of USD31.3 billion to USD31.9 billion.
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Micron is set to receive up to USD6.1 billion in grants from the US government to help build its semiconductor plants in New York and Idaho, President Biden said. The announcement came as he travelled to Syracuse, New York, marking the latest in a series of efforts by Washington to bring semiconductor production back to the country. "We used to have 40% of this market. Over time, we stopped making them," Biden said. Recounting how the Covid-19 pandemic shut down chip factories overseas, triggering a semiconductor shortage and fuelling inflation and long wait times for products, Biden vowed never to let the US "be vulnerable" like that again.
----------
By Emma Curzon, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024, Alliance News
GLOBAL BRIEFING: Yen slumps to new multi-decade low as BoJ stands pat
(Alliance News) - European stocks were called up on Friday morning, following a weaker performance from US markets and mostly positive company earnings reports.
Here is what you need to know before the European market open on Friday:
----------
MARKETS
----------
CAC 40: called up 43.0 points, 0.5%, at 8,059.65
DAX 40: called up 76.5 points, 0.4%, at 17,993.78
FTSE 100: called up 55.9 points, 0.7%, at 8,134.76
----------
Hang Seng: up 2.0% at 17,630.84
Nikkei 225: up 0.8% at 37,942.92
S&P/ASX 200: down 1.2% at 7,590.20
----------
Dow: closed down 375.12 points, 1.0%, at 38,085.80
S&P 500: closed down 0.5% at 5,048.42
Nasdaq Composite: closed down 0.6% at 15,611.76
----------
EUR: up at USD1.0723 (USD1.0713)
GBP: up at USD1.2499 (USD1.2490)
USD: up at JPY156.04 (JPY155.52)
GOLD: up at USD2,335.00 per ounce (USD2,331.32)
OIL (Brent): up at USD88.02 a barrel (USD86.48)
(changes since previous London equities close)
----------
ECONOMIC CALENDAR
----------
08:30 EDT Canada manufacturing sales
11:00 EDT Canada budget balance
10:00 CEST eurozone money supply
08:45 CEST France consumer confidence
09:00 CEST Spain unemployment
09:00 CEST Spain retail sales
10:00 CEST Switzerland Swiss National Bank Chair Thomas Jordan speaks
08:30 EDT US personal consumption expenditures index
10:00 EDT US Michigan consumer sentiment index
----------
TOP ECONOMIC NEWS
----------
The Bank of Japan said Friday it would keep its main interest rate unchanged as expected but hiked its inflation forecasts. It now sees inflation excluding fresh produce to hit 2.8% in the current fiscal year, up from its previous projection of 2.4%, it said. The yen fell to a fresh 34-year low, with a dollar fetching above JPY156. Other major central banks have hiked borrowing costs in recent months but the BoJ only last month lifted its main rate above zero.
----------
Inflation in Tokyo cooled to below Japan's central bank's 2% target in April, official data showed. The Statistics Bureau of Japan said, on an annual basis, consumer prices in Tokyo increased 1.8% in April, slowing markedly from March's rise of 2.6%. Market consensus as cited by FXStreet had been expecting an unchanged reading. The closely-watched core inflation numbers also slowed from the prior month. Stripping out fresh food, inflation cooled to 1.6% from 2.4%, while market forecasts had predicted 2.2%. Excluding both fresh food and energy, it eased to 1.8% from 2.9%, undershooting forecasts of 2.7%. The inflation print for Tokyo is considered to be a leading indicator of Japan's overall inflation rate, and is typically published weeks ahead of the reading for the whole country.
----------
China's foreign minister urged visiting US Secretary of State Antony Blinken to address rising disagreements or risk a "downward spiral" between the two powers after months of efforts to ease tensions. Blinken, paying his second visit to the rival country in less than a year, voiced hope for progress but said he would directly raise areas of difference, which are expected to include Russia, Taiwan and trade. China in turn has been infuriated by President Joe Biden's pressure on the economic front – which is unlikely to ease during an election year – including a sweeping ban on semiconductor exports and efforts to wrest blockbuster video app TikTok away from its Chinese owners. Saying that China "advocated respect for each other's core interests", Foreign Minister Wang Yi demanded that the US not "trample on China's red line" on sovereignty, security and development. "China's legitimate development rights have been unreasonably suppressed and our core interests are facing challenges," he said.
----------
TikTok parent ByteDance has said it has no intention of selling it, after the US Congress passed a law forcing it to sell the hugely popular video platform or get banned in the US. ByteDance's comment came after the tech business-focused news site The Information reported that the Chinese tech giant was looking at potential scenarios for selling TikTok without the coveted recommendation algorithm that powers it. "Foreign media reports about ByteDance exploring the sale of TikTok are untrue," the company posted on its official account on Toutiao, a social media platform it owns. "ByteDance does not have any plans to sell TikTok."
----------
According to a media report, Israel is considering a limited agreement with the Palestinian Islamist group Hamas in order to secure the release of at least 20 hostages. Israeli media outlet Channel 12 reported that the proposed deal involves female, elderly and sick hostages. In return, Israel would allow displaced persons in the Gaza Strip to return to the north of the coastal region. The proposal was discussed at a meeting of Israel's war cabinet. It will reportedly be forwarded to the mediators shortly. According to the report, Israel wants to use the proposal to circumvent Hamas' demand for a permanent ceasefire. It was initially unclear how long a ceasefire would last under the deal and whether and to what extent Palestinian prisoners would be released from Israeli jails.
----------
The US, Canada and Britain imposed new sanctions on Iran in response to the Iranian attack on Israel. The measures primarily focus on the trade and manufacture of drones, after the major attack by Tehran on Israel with more than 300 drones, cruise missiles and rockets. On Thursday, the US government said the sanctions were imposed on 16 companies, eight individuals, several ships and one aircraft said to be supporting Iran in the procurement of unmanned aerial vehicles. A British government statement said four companies and two individuals were sanctioned for their involvement in Iranian drone production. London also further restricted the export of components that can be used to build drones.
----------
UK consumer confidence improved this month, according to GfK's long-running consumer confidence index. The index increased to minus 19 in April from minus 21 in March. "Headline confidence edged forward in April to minus 19. There was a welcome repeat of the March +2 score for how consumers feel about their personal finances in the next 12 months. While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts," said Joe Staton, client strategy director at GfK.
----------
COMPANY CALENDAR
----------
AbbVie Inc - Q1 Results
Bayer AG - AGM
Central Japan Railway Co - Full Year Results
Charter Communications Inc - Q1 Results
Chevron Corp - Q1 Results
Continental AG - AGM
Denso Corp - Full Year Results
Exxon Mobil Corp - Q1 Results
Hitachi Ltd - Full Year Results
Oriental Land Co Ltd - Full Year Results
Pearson PLC - AGM
Roper Technologies Inc - Q1 Results
Safran SA - Trading Statement
Smurfit Kappa Group PLC - Trading Statement
TotalEnergies SE - Q1 Results
----------
TOP COMPANY NEWS
----------
Microsoft released its results for the first nine months of its financial year, demonstrating strong growth in both revenue and net income, and putting the company on track for a strong set of annual figures. In the third quarter ended March 31, Microsoft's net income was USD21.94 billion, up 20% from USD18.30 billion a year prior. Revenue for the quarter was USD61.86 billion, a 17% increase on the USD52.86 billion delivered in the first quarter of 2023. The company credits the strong earnings performance to its Microsoft Cloud revenue, which rose 23% year-on-year to USD35.1 billion. Basic earnings per share for the period were USD2.95, up 20% from USD2.46.
----------
Shares in Alphabet leapt on Thursday night after it paid its first ever dividend and launched a fresh share buy-back alongside strong first quarter results. The owner of Google reported first quarter revenue of USD80.54 billion, up 13% from USD69.79 billion a year prior. Net income jumped to USD23.66 billion from USD15.05 billion with earnings per diluted share up to USD1.89 from USD1.17. Google advertising revenue rose to USD61.66 billion from USD54.55 billion and Google cloud revenue to USD9.57 billion from USD7.45 billion. Alphabet declared a dividend of USD0.20 per share and pledged to pay quarterly cash dividends in the future. The dividend is payable to all class of shares, including Class B shareholders, as well as non-voting Class C shareholders. It also launched a new USD70 billion share buyback. Chief Executive Sundar Pichai said: "Our results in the first quarter reflect strong performance from Search, YouTube and Cloud."
----------
CapitaLand Investment reported little top-line progress in 2024 so far, as growth in its fee business was weighed down by a fall in property investment income. The Singapore-based investor said total revenue was stable in the first quarter, coming in at SGD650 million - or USD478.8 million - a slight decrease from SGD651 million a year before. CLI's operations are comprised of two main business platforms. Firstly, its Fee-Income Related Business, where revenue rose 7.5% on-year to SGD274 million. The rise was led by commercial management, with lodging management and listed funds management also seeing increases. The improvement was partially offset by a 13% drop in private funds management, however. Secondly, CLI generates rental income from a global property portfolio within its Real Estate Investment Business. Quarterly revenue from the REIB fell 3.8% to SGD430 million, amid divestments of assets such as the International Tech Park Pune in India.
----------
Mapletree Industrial Trust reported an improved annual performance, crediting contributions from new projects. The Singapore-listed real estate investment trust said net property income in the financial year ended March 31 edged up 0.6% year-on-year to SGD521.0 million - about USD383.3 million - from SGD518.0 million. Gross revenue rose 1.8%, while property expenses were up 5.6%. "The better performance was mainly driven by revenue contributions from the redevelopment project, Mapletree Hi-Tech Park at Kallang Way, the data centre in Osaka, Japan acquired on 28 September 2023 as well as new leases and renewals across various property clusters," the firm explained. The total distribution to unit holders rose 2.7% to SGD378.3 million from SGD368.2 million, which Mapletree said was mainly due to higher NPI and higher distribution declared by the Mapletree Rosewood Data Centre Trust joint venture. However, the total annual distribution fell 1.0% to 13.43 cents per unit from 13.57 cents, as the number of units increased 3.5%.
----------
T-Mobile US raised guidance for earnings and subscriber numbers after making a "great start to 2024". The Bellevue, Washington-based telecoms provider reported first-quarter net income of USD2.37 billion, up 22% from USD1.94 billion a year prior. Earnings per share climbed by 27% to USD2.00 from USD1.58. But revenue edged down by 0.2% to USD19.59 billion from USD19.63 billion. Chief Executive Mike Sievert said: "T-Mobile had a great start to 2024 with industry-leading growth in service revenues and profitability." T-Mobile reported postpaid net account additions of 218,000, down from 287,000 a year prior, and said it was a "best in industry" performance. For 2024, postpaid net customer additions are expected to be between 5.2 million and 5.6 million, an increase from prior guidance of 5.0 million to 5.5 million. Core adjusted earnings before interest, taxes, depreciation and amortisation is expected to be between USD31.4 billion and USD31.9 billion, an increase from prior guidance of USD31.3 billion to USD31.9 billion.
----------
Micron is set to receive up to USD6.1 billion in grants from the US government to help build its semiconductor plants in New York and Idaho, President Biden said. The announcement came as he travelled to Syracuse, New York, marking the latest in a series of efforts by Washington to bring semiconductor production back to the country. "We used to have 40% of this market. Over time, we stopped making them," Biden said. Recounting how the Covid-19 pandemic shut down chip factories overseas, triggering a semiconductor shortage and fuelling inflation and long wait times for products, Biden vowed never to let the US "be vulnerable" like that again.
----------
By Emma Curzon, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024, Alliance News