2 Mins Ago
Credit Suisse shares tumble
ADR shares of Swiss lender Credit Suisse tumbled 21% in premarket trading.
Saudi National Bank said it could not provide more funding, Reuters reported. “We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters Wednesday.
The troubled Swiss bank said earlier this week it had found “material weaknesses” in its financial reporting for 2022 and 2021.
-John Melloy
8 Mins Ago
Several European banking stocks halted after in swift selloff
Several European banking names were halted Wednesday, as a sharp drop in Credit Suisse shares dragged down the sector — along with the broader market.
Shares of Societe Generale, along with Italy’s Monte dei Paschi and UniCredit, have been halted. Credit Suisse, meanwhile, fell 20% after its largest investor said it would not provide further assistance for the embattled bank.
These moves come as traders around the world grapple with the fallout from Silicon Valley Bank’s failure.
“The failure of Silicon Valley Bank has spilled into the European equity market,” wrote Citi strategist Beata Manthey. “While US authorities have stepped in to limit contagion risks, ongoing volatility in bank shares means broader spillovers may still be in play.”
Manthey noted that conditions were already ripe for profit taking in European markets. “However, investors remain net long on European Banks, despite cutting their position from max longs only one month ago. This means positioning could still unwind further.”
— Fred Imbert, Michael Bloom
3 Hours Ago
European equity markets open lower
European equity markets opened lower, with banking stocks still in negative territory following the global Silicon Valley Bank fallout.
The pan-European Stoxx 600 index was down 0.4% toward the start of trade, with most sectors and major bourses trading in the red. Retail stocks led losses with a 1.9% drop, followed by oil and gas stocks, which were down 1.4%. Banking stocks were down 0.5%.
— Hannah Ward-Glenton
3 Hours Ago
BMW lifts margin forecast, expecting higher deliveries as it ramps up electric rollout
German carmaker BMW on Wednesday said it expects an EBIT (earnings before interest and taxes) margin of between 8-10% for its automotive range in 2023, with deliveries set to rise slightly from 2022. Selling prices are targeted to remain at a “stable” level.
The company reaffirmed the full-year 2022 results reported last week, including an EBIT of 10.6 billion euros ($11.4 billion) for its automotive segment, which had an 8.6% margin last year.
BMW is carrying out an extensive rollout of battery-electric vehicles and anticipates it will reach more than 50% BEV share well ahead of 2030. The company’s BEV share is slated to reach 15% in 2023.
— Ruxandra Iordache
9 Hours Ago
China’s industrial output, retail sales rise in January to February period
China’s industrial output rose 2.4% in the January to February period, official data showed.
Retail sales rose 3.55% for the same period, in line with expectations.
China’s fixed asset investment in the first two months of the year saw a rise of 5.5%, higher than expectations from economists polled by Reuters that predicted to see growth of 4.4%.
China’s onshore yuan weakened after the data was released and traded at 6.8822 against the U.S. dollar.
The People’s Bank of China kept the rate on 481 billion yuan of one-year medium-term lending facility loans at 2.75%.
10 Hours Ago
Japanese banks rise following Wall Street banks rebound
Japan financials rose in Wednesday’s morning trade, reversing the direction seen earlier in the week and following Wall Street banks’ rebound.
Tokyo-listed shares of Mitsubishi UFJ Financial Group rose 3.25%, Sumitomo Mitsui Financial Group gained 2.73% and Mizuho Financial Group was also up 2.04%. Nomura Holdings also rose 1.7%.
Technology giant SoftBank Group meanwhile continued to see marginal losses of 0.62%.
7 Hours Ago
Health-care, technology stocks lead Hong Kong rally
Hong Kong’s Hang Seng Index led gains in the Asia-Pacific region as it climbed 2.35% on Wednesday, powered by health-care and technology stocks.
Some of the top gainers on the index were search engine company Baidu, which gained 6.28%, Alibaba Health Information Technology rose 5.59%, and internet company Netease, which saw shares climb 4.02%.
However, the top gainer on the HSI was Orient Overseas (International), which jumped 9.49%. The company is the parent company of container shipping firm Orient Overseas Container Line.
— Lim Hui Jie
12 Hours Ago
Indicators confirm to BofA that U.S. is in downturn and cash beats stocks
Quantitative market indicators watched at Bank of America by a team led by cross-asset and quant strategist Alex Makedon and equity and quant strategist Savita Subramanian confirm that the U.S. economy fell “deeper” into a downturn (from a late economic cycle phase) for a second straight month in February, a report out Tuesday said.
Going back to 1990, similar conditions prevailed seven times, with the downturn lasting an average 12 months (but ranging between six months in 1995-1996 and 19 months during the Global Financial Crisis), BofA said.
What’s more, “Cash IS the alternative now,” BofA said, adding “we see cash as more attractive than equities given our expectation for only 2% to 3% S&P 500 total return this year” compared with a cash yield bear 5% on short-term Treasury bills and the bank’s economists “still expecting a terminal rate of 5.25%-5.5% even after recent developments.”
The best equity investment strategies revolve around those that are based on companies’ cash flow, the team wrote. Those strategies, stressing free cash flow to enterprise value or price to free cash flow ratios, “outperformed the index in previous downturns, especially outside of the zero interest rate policy (ZIRP) era, when cash had little value. These factors remain underowned by active managers and inexpensive vs. history.”
The BofA idea is that stocks offering free cash flow and dividends represent a “bird in hand,” while high P/E, growth stocks are “buy the dream” ideas. Unfortunately for those counting on a revival of leaders from the past, “Long equity duration stocks (`buy the dream’ growth stocks that are most sensitive to funding costs) may have more room to falter,” said BofA.
— Scott Schnipper
12 Hours Ago
Lennar, First Republic among stocks moving after hours
Lennar — The homebuilding stock gained about 3% in extended trading. Lennar beat analysts’ earnings and revenue expectations for the recent quarter, according to Refinitiv. The company posted earnings of $2.06 a share on revenue of $6.49 billion.
First Republic — Shares of the regional bank stock were on the move once again after the bell, last up 8.9%. Other bank names Western Alliance and KeyCorp also rose, gaining about 5% and 3%, respectively.
Read the full list of stocks moving after hours here.
— Samantha Subin
12 Hours Ago
3M — at lowest in 10 years — among 15 new S&P 500 52-week lows on Tuesday
Among the 15 stocks in the S&P 500 that touched fresh 52-week lows on Tuesday was 3M, which fell to its lowest point since Feb. 2013. Once known as Minnesota Mining and Manufacturing, 3M is the only stock in the 15 that’s also in the Dow Jones Industrial Average.
- Dish Network (DISH), lowest since 2009
- Hasbro (HAS), lowest since March 2020
- VF Corp. (VFC), lowest since 2011
- Hormel (HRL), lowest since 2019
- Devon Energy (DVN) , lowest since Jan. 2022
- Centene (CNC), lowest since Oct. 2021
- CVS Health (CVS), lowest since April 2021
- Southwest (LUV), lowest since May 2020
- 3M (MMM), lowest since 2013
- Gen Digital (GEN), lowest since March 2020
- CF Industries (CF), lowest since Feb. 2022
- WestRock (WRK), lowest since August 2020
- Advance Auto Parts (AAP), lowest since May 2020
- Organon (OGN), lowest since spin-off from Merck in June, 2021
- Boston Properties (BXP), lowest since 2009
Three stocks in the S&P 500 touched new 52-week highs on Tuesday:
- Arista Networks (ANET), all-time high back to 2014 IPO
- Cadence Design Systems (CDNS), all-time high back to when ECAD went public in 1987
- GE Healthcare Technologies (GEHC), all-time high back to GE spinoff in Dec. 2022
— Scott Schnipper, Christopher Hayes
13 Hours Ago