- Rheinmetall (RHM TH) +1.9%
- Germany to Send Leopard Tanks to Ukraine, Coalition Partner Says
- Covivio (F5D TH) +1.5%
- Covivio Raised to Buy at Goldman; PT 71.10 euros
- Brenntag (BNR TH) +1.4%
- Brenntag Is Morgan Stanley’s Top EU Chemicals Distributor Pick
- Amplifon (AXNA TH) +1.3%
- Sonova, Demant Cut and Amplifon, GN Store Upgraded at Jefferies
- BAT (BMT TH) +1.1%
- Siemens Healthineers (SHL TH) -1%
- Nel (D7G TH) -1.1%
- Demant (WDH1 TH) -1.7%
- Sonova, Demant Cut and Amplifon, GN Store Upgraded at Jefferies
- Aroundtown (AT1 TH) -3%
- SocGen cuts stock to sell: APA
- Aixtron (AIXA TH) -4.4%
- Aixtron’s Potential Reflected in Shares, Cut at Deutsche Bank
DAX:
- Brenntag (BNR TH) +1.2%
- Brenntag Is Morgan Stanley’s Top EU Chemicals Distributor Pick
- SAP (SAP TH) -0.7%
- Continental (CON TH) -0.7%
MDAX:
- Rheinmetall (RHM TH) +2.4%
- Germany to Send Leopard Tanks to Ukraine, Coalition Partner Says
- Aroundtown (AT1 TH) -1.7%
- Aixtron (AIXA TH) -3.9%
- Aixtron’s Potential Reflected in Shares, Cut at Deutsche Bank
SDAX:
- Varta (VAR1 TH) +0.9%
- Grand City Properties (GYC TH) -1.4%
- PNE AG (PNE3 TH) -2.5%
>>> Up
* Amplifon Raised to Buy at Jefferies; PT 29.20 euros
* Darktrace Raised to Overweight at Morgan Stanley; PT 410 pence
* GN Store Nord Raised to Hold at Jefferies; PT 170 kroner
* Opap Raised to Buy at Citi; PT 16 euros
* Philip Morris Raised to Buy at Goldman; PT $120
* Renault Raised to Buy at AlphaValue/Baader
* Saipem Raised to Buy at Citi; PT 2 euros
* Viaplay Raised to Buy at Handelsbanken
>>> Down
* Aixtron Cut to Hold at Deutsche Bank; PT 33 euros
* Direct Line Cut to Hold at Berenberg; PT 160 pence
* Dr Martens Cut to Hold at HSBC; PT 140 pence
* Hexagon Cut to Hold at Berenberg
* Sonova Cut to Underperform at Jefferies; PT 200 Swiss francs
>>> Initiation
* Azelis Rated New Equal-Weight at Morgan Stanley
* Brenntag Rated New Overweight at Morgan Stanley
* Daetwyler Rated New Hold at Berenberg; PT 220 Swiss francs
* IMCD Rated New Equal-Weight at Morgan Stanley
* LumenRadio Rated New Buy at SEB Equities; PT 100 kronor
* Petershill Rated New Buy at Berenberg; PT 220 pence
>>> Call
* Brenntag Is Morgan Stanley’s Top EU Chemicals Distributor Pick
* Daetwyler New Hold at Berenberg With Short-Term Headwinds Ahead
* Saipem Raised to Buy at Citi on Positioning for Offshore Growth
* Sonova, Demant Cut and Amplifon, GN Store Upgraded at Jefferies
US and European stock futures fell Wednesday while Asian stocks eked out small gains amid downbeat investor sentiment following mixed corporate earnings. Contracts for the Nasdaq 100 fell 0.8% after a slight decline in the underlying index on Tuesday, with a slowing sales outlook for Microsoft Corp.’s cloud-computing business setting the tone as Asian trading got underway. Futures for the S&P 500 and Euro Stoxx 50 benchmarks also dropped. Japanese stocks rose in concert with a drop in the yen while Australian shares erased morning gains after inflation accelerated to the fastest pace in 32 years. Data in New Zealand also showed consumer price growth holding near a three-decade high, giving traders reason to question global optimism that inflation is peaking. South Korea’s Kospi index surged more than 1% in a catchup move after Lunar New Year holidays. Hong Kong and mainland China markets remain closed. Treasuries broadly held their gains, while a gauge of dollar strength was slightly lower. Oil rose after a drop on Tuesday and gold inched lower after recent gains that pushed the precious metal to the highest level since April. Shares in Adani Group companies fell after US activist investor Hindenburg Research LLC said it was shorting the empire’s stocks and accused firms owned by Asia’s richest man of market manipulation and accounting fraud. The news from Microsoft typified the cautious outlook for corporate profits. The software giant beat earnings estimates, initially sending its shares soaring in after-hours trade before the gains were quickly undone by the warning for its cloud-computing business. Homebuilder D.R. Horton Inc. also beat projections, while 3M Co., the maker of Post-it notes, forecast profit that trailed estimates and Texas Instruments Inc., one of the world’s largest chipmakers, suffered its first sales decline since 2020. Bitcoin fell as much as 2.5% and faced its first two-day drop this year after Microsoft’s outlook dented investor confidence in the cryptocurrency. US After Hours MSFT -1.1% initially traded higher following earnings, but guidance on call a bit light; ISRG -9.5%, FFIV -4.3% also lower on earnings; FOXA +5.9% as Murdoch withdraws proposal for NWS-FOX merger.
Nikkei +0.35% Hang Seng Closed CSI Closed Shanghai Closed Shenzen Closed
Eur$ 1.0906 CNH 6.7712 CNY Closed JPY 130.35 GBP 1.2334 CHF 0.9223 RUB 68.9925 TRY 18.8030 WTI$ 80.34 Gold 1,933 BTC 22,724 -0,80% ETH 1,553 -2,81%
S&P -0,20% Nasdaq -0,34% EuroStoxx -0,16% FTSE -0,02% Dax -0,16% SMI -0,25%
Macro :
- US and Germany Set to Give Ukraine Tanks, Breaking Impasse
- Gloomier UK economy growth prospects leave Jeremy Hunt with black hole in budget
- Handelsbanken Warns of More Pain Ahead for Swedish Households
Keep an eye on :
- ALO FP : Alstom 3Q Sales Beats Estimates
- ARJOB SS : Arjo 4Q Adj. Ebitda Meets Estimates; Realigns US Operations
- ASML NA : ASML 1Q Net Sales Forecast Beats Estimates
- ATO FP : Atos in Exclusive Talks With Mitel for Sale of Unify Business
- BARC LN : Barclays Names Wright, Deasy as Investment Banking Co-Heads
- BATS LN : British American Tobacco Seeks Stay of Enforcement on FDA Ruling
- BNP FP : BNP Paribas Says it Will Cut Loans for Oil Extraction by 80%
- BORR NO : Borr Drilling Prelim 4Q Adjusted Ebitda $50M to $60M
- CAV1V FH : Caverion Says Bain-Led Group Boosts Offer Amid Rival Bid
- EDF FP : France Won’t Force Sale of EDF Minority Shares Until Court Rules
- EGTW SS : Egetis Therapeutics Offers SEK200 million Shares
- EMMN SW : Emmi FY Sales Meets Estimates
- ENEL IM : Enel Debt-Shedding Plan Crimps Growth Scope, Leans on Supply
- FRA GY : Berlin Airport Cancels All Flights on Wednesday Amid Wage Strike
- GAM SW : Asset Manager GAM Postpones Annual Results, Set to Post Loss
- GIVN SW : Givaudan FY Ebitda Misses Estimates
- GJF NO : Gjensidige 4Q Pretax Profit Misses Estimates
- GRE SM : Grenergy Confirms Minority Stake Sale Process for 1.1 GWp
- IWS NO : Integrated Wind Solutions Offering of 10.6m Shares Prices
- IVG IM : Iveco Bus in Pact to Sell up to 500 Electric Buses in Belgium
- JUN3 GY : Jungheinrich to Buy Storage Solutions for About $375M
- LAND SW : Landis + Gyr Sees 2022 Net Revenue +6% to +10%
- LONN SW : Lonza FY Core Ebitda Beats Estimates
- Lottomatica IPO : Lottomatica Says It’s Mulling Potential Listing
- MC FP : Luxury firm LVMH cancels plan for centre at top French university
- NETC DC : Netcompany Sees 2023 Sales at Constant FX +8% to +12%
- PGHN SW : Partners Names Apollo’s Kawai as New Japan Country Head
- RIEN SW : Rieter FY Sales Beats Estimates
- RIEN SW : Rieter Holding Appoints Thomas Oetterli as CEO
- SAP GY : Watch European Software Stocks as Microsoft Flags Slowing Sales
- SONG LN : Bieber Sells Catalog to Blackstone-Backed Hipgnosis (Correct)
- TEF SM : Telefónica to Raise Salaries for Spanish Staff by 7.8% in 2023
- VK FP : Vallourec Gets L-T Pact With Petrobras to Supply OCTG Solutions
Shipping hurt by weak demand for Chinese goods
Carriers are skipping ports in China as international orders fall and supply chain problems persist
Weaker international demand for Chinese goods has led to a rise in shipping cancellations at the country’s biggest ports, putting a damper on the expected economic boost from its emergence from zero-Covid policies.
Industry participants in China point to an increase in “blank sailings”, where carriers miss ports because there is not enough cargo to pick up or they fear delays.
While cancellations are typical within the industry and usually rise during lunar new year, the supply chains data provider Drewry said the rate is “exceptionally elevated” this year, because of a drop in demand in the West. China’s exports have fallen for three consecutive months, weakening a core pillar of its struggling economic model.
The cancellation rate for ships travelling east from Asia across the Pacific or to Europe will reach 31 per cent over the coming weeks, compared with 23 per cent over the same period last year and 16 per cent in 2021, Drewry said.
As well as weak demand there is less to be shipped after hundreds of millions of estimated Covid-19 cases over the past month added to pressure on the country’s supply chains, leading to staff shortages and factory closures.
“What happened to the shipping market as the virus spread everywhere in China . . . is worse than my worst projection,” said Mark Young, chief executive of Shanghai-based Asia Maritime Pacific, which owns a fleet consisting of dozens of ships.
“The market has many empty ships but fewer cargo ready to be shipped,” he added, comparing the situation with the beginning of the Covid-19 pandemic in early 2020.
China’s vast infrastructure linking factories and ports has grappled for three years with a strict zero-Covid regime that required frequent quarantines for personnel and “closed-loop” operations. The policy led to delays and cancellations, but exports largely boomed over that period as demand for goods soared.
Simon Sundboell, founder and chief executive of data provider eeSea, said the nature of the disruption had now changed, from a scenario driven by delays within a “hot market” to one of weaker demand.
“The industry is coming slowly back to normal and you do need to cancel more because of demand lowering,” he said. “Last year, that was down to all these excessive delays.”
One Shanghai-based manufacturer who asked to remain anonymous said the carriers “just aren’t coming into the ports because there’s no volume”. He added that a fall in demand “is resulting in shipping lines reducing the number of vessels in circulation”.
Jan Dieleman, head of Cargill Ocean Transportation, said the coronavirus outbreak was “absolutely” contributing to an increase in blank sailings. The commodity shipping group has not cancelled deliveries but has reduced coal shipments to China in recent months, in part because of seasonal changes in demand.
Young said Asia Maritime Pacific had been forced to cancel a sailing to a port on the Changjiang river to collect steel-related cargo because the factory could not produce it in time. He expects to send another ship to collect it in a month.
Blank sailings have increased globally over the past year on a weakening economic backdrop. In China, the first nationwide outbreak of coronavirus coincided with the build-up to lunar new year. Maersk, the Danish container shipping company, said demand can be “expected to be volatile given the holiday closure in China combined with both the Covid situation and the ongoing inventory correction in US and Europe”.
Anne-Sophie Zerlang Karlsen, head of ocean operations for Asia-Pacific at Maersk, nonetheless suggested that the wider relaxation of Covid-19 measures was “a very positive development that has the potential of lifting the Chinese economy significantly”.
Cargill’s Dieleman said the shipping industry was now relying on a rebound in economic activity. “People think that the first [Covid-19] wave will go,” he said. “There is going to be stimulus from the government. So people start being bullish.”
Generative AI: how will the new era of machine learning affect you?
Systems like ChatGPT can produce content to order, threatening not just jobs but a surge of misinformation
Crypto miners seek financial lifeline with intense battle for bitcoins
Rising cryptocurrency price boosts hopes of an upturn in industry fortunes
Cryptocurrency miners are turning their machines back on as the rallying price of bitcoin offers a vital lifeline to their cash-strapped businesses.
The value of the token has emerged from the doldrums to soar by more than a quarter this year against the dollar, incentivising the owners of huge warehouses of servers for mining to accelerate their use in the battle to secure more bitcoins.
The average hashrate, or the computing power directed towards mining bitcoin, rose to a record 280 exahash — or quintillion — operations per second on January 20, according to data from Hashrate Index, a mining information service.
The upsurge in activity is a sign that the battered sector may be crawling back to life after being buffeted by high energy costs and the slumping price of the cryptocurrency. The activity level has more than doubled from a low point in July, when the crypto market was hit by a credit crisis.
Miners race each other to solve cryptographic puzzles that validate batches of transactions and create new blocks in the blockchain, a ledger of deals. That makes them the guarantors that bitcoin deals are trustworthy in a system that bypasses third parties such as banks and exchanges. The winner is rewarded with new coins.
Many are sat on large quantities of mining equipment and capacity, bought with cheap money in 2021 and early 2022 in anticipation of turning a profit from the rising price of coins. But bitcoin prices slumped 65 per cent last year and energy prices soared, forcing many companies to switch off servers to save money. Others, such as Core Scientific, could not withstand the pressure and filed for bankruptcy.
“The sentiment among miners is better than in a long time,” said Jaran Mellerud, an analyst at Hashrate Index. “For many bankruptcy threatened players, the sudden increase in the bitcoin price is a lifeline.”
The rebound has underpinned investor optimism in listed companies like Marathon Digital Holdings, which has soared 155 per cent this year, and Hut 8, which has climbed 134 per cent.
But miners still face a long haul back from the brink. Turning on their servers is expensive. An algorithm adjusts the “difficulty level” of mining bitcoin when new computers enter or exit the network, to ensure that the token is mined at its regular interval of roughly every 10 minutes.
The influx of miners has raised that level. It now takes miners a record 37tn hashes or guesses before verifying a block, according to BTC.com, so the losers expend ever-larger quantities of energy for nothing.
They are also facing a squeeze from politicians around the world, who see the miners’ computers sucking up large amounts of power, draining local resources or damaging the environment. Others see the profits they make as a taxable asset.
The Canadian provinces British Columbia and Manitoba have barred new connections to their grids for 18 months, while Hydro-Québec, Quebec’s public utility provider, has filed a request to reallocate 270 megawatts of power it had set aside for the mining industry.
In December, the lower house of Kazakhstan, host of the world’s third largest share of mining activity, approved a bill that will impose a corporate tax on miners and curtail their energy usage.
Paraguay, which has an abundance of cheap hydroelectric power, rejected legislation that would have capped the tariffs imposed on miners to 15 per cent.
“Miners are becoming very selective about where they build out their infrastructure,” said Joe Burnett, an analyst at mining advisory firm Blockware Solutions. “A few years ago people were really just focused on cheap power but now it’s become a lot more critical to look at which political jurisdiction is more favourable and isn’t going to shut down our operations.”
Miners say they have become an unfair target. The Bitcoin Mining Council, an industry group, estimated in July that just under 60 per cent of global mining energy use was sustainable, although the Cambridge Centre for Alternative Finance puts the figure at about 37 per cent.
“There is a fake environmental argument being waged against the mining industry,” said Samir Tabar, chief strategist at Bit Digital, a mining company with operations in New York, Texas, Nebraska and Georgia. “It seems that no matter what bitcoin miners do, even if we use 100 per cent renewables, nothing is OK.”
Ercot, the organisation that operates Texas’s power grid, will launch voluntary curtailment programme for large energy consumers like bitcoin miners to reduce their power use during high demand periods, until it develops a permanent regime to deal with shortages.
But that pinch point may provide an unexpected opportunity. Miners with power purchase agreements, which lock in the price they pay for energy, are able to sell power back to the grid. Riot and Hive Blockchain have earned $4.9mn and $3.1mn respectively in December.
“Curtailment is the future of mining,” said Burnett. “If it doesn’t make financial sense to mine, you might as well sell [energy] back to somebody.”
After Hours Summary: MSFT -1.1% initially traded higher following earnings, but guidance on call a bit light; ISRG -9.5%, FFIV -4.3% also lower on earnings; FOXA +5.9% as Murdoch withdraws proposal for NWS-FOX mergerAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: EHTH +21.8%, LRN +14.7%, NAVI +6.1%, MRTN +3.6%, AGYS +1%, FCF +1%, SLGN +0.2%, OGS +0.1% (also increases dividend)
Companies trading higher in after hours in reaction to news: TUSK +7.6% (submits $379 mln claim to FEMA), FOXA +5.9% (Murdoch withdraws proposal for NWS-FOX merger), VRA +4.8% (streamlines corporate structure, eliminates certain roles), NWSA +3% (Murdoch withdraws proposal for NWS-FOX merger), VCSA +3% (approves a 17% workforce reduction plan; also confirms prior guidance for Q4), FOX +2.4% (Murdoch withdraws proposal for NWS-FOX merger), DCPH +2% (presents results from ctDNA Analysis of INTRIGUE Phase 3 study), FTI +1.3% (awarded substantial MSA for subsea services with Petrobras), LBRT +0.9% (increases existing share repurchase authorization to $500 mln), NKLA +0.4% (to collaborate with Fortescue Future re large-scale US green hydrogen facilities)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ISRG -9.5%, NXGN -4.7%, FFIV -4.3%, CNI -3.7% (also approves normal course issuer bid to repurchase up to 32 mln shares; also increases dividend), TRMK -1.2%, MSFT -1.1%, COF -1%, TXN -0.5%
Companies trading lower in after hours in reaction to news: PGEN -14.2% (Phase 1 data for PRGN-2012 AdenoVerse; also commences $75 mln offering), KOPN -5.7% (stock offering), PACB -5.4% (commences $150 mln stock offering), NETI -2.5% (signs two new contracts in NW Europe), HMN -0.3% (provides estimate of damage due to Winter Storm Elliott), AREN -0.2% (files for 505,655 share offering by selling shareholders), EFC -0.1% (files mixed securities shelf offering)
Closing Stock Market SummaryThe major indices started today's session on a lower note, as expected, but what wasn't expected were a lot of aberrant stock prices for a number of NYSE-listed stocks. The aberrations led almost instantly to volatility halts with market participants/observers wondering what was happening. The official explanation turned out to be an "exchange-related issue." That issue, fortunately, got resolved quickly and stocks soon returned to trading in a normal manner.
The NYSE will declare a number of trades as erroneous from this morning and some trades will be busted that traded outside of trading bands, according to CNBC.
After the early volatility, today's trade was largely mixed as investors digested a slew of mixed earnings news. Also, buyers were likely somewhat reluctant to show strong conviction after a big run recently. Entering today, the Nasdaq Composite was up 8.6% for the year and the S&P 500 was up 4.7%.
Considering the big gains recently, along with some disappointing earnings/guidance from the likes of 3M (MMM 115.00, -7.62, -6.2%), Verizon (VZ 40.42, +0.79, +2.0%), Union Pacific (UNP 203.18, -6.95, -3.3%), and General Electric (GE 80.70, +0.93, +1.2%), the stock market held up fairly well today and showed nice resilience to selling efforts.
The S&P 500 was able to maintain its posture above the 4,000 level for most of the session, albeit on very light volume at the NYSE, and the Dow Jones Industrial Average was able to close with a gain of 0.3%.
The Vanguard Mega Cap Growth ETF (MGK) fell 0.3% today versus a 0.1% loss in the S&P 500. Alphabet (GOOG 99.21, -2.00, -2.0%) was among the weakest performers for the mega caps after the U.S. filed an antitrust lawsuit against Google over alleged dominance in digital advertising, according to Bloomberg.
Roughly half of the S&P 500 sectors logged a gain today, but moves were modest in scope in either direction. Industrials (+0.7%) led the outperformers after Lockheed Martin (LMT 449.23, +7.95, +1.8%) and Raytheon Technologies (RTX 99.47, +3.22, +3.4%), which hit a new 52-week high today, reported pleasing quarterly results. To be fair, losses in 3M and Union Pacific weighed on sector gains.
The heavily-weighted communication services (-0.7%) and health care (-0.7%) sectors fell to the bottom of the pack, weighing on index level performance. The energy sector (-0.3%) was also among the worst performers amid falling oil prices ($80.23/bbl, -$1.34, -1.6%).
Separately, Treasury yields pulled back today. The 2-yr note yield fell four basis points to 4.19% and the 10-yr note yield fell six basis points to 3.47%.
- Nasdaq Composite: +8.3% YTD
- Russell 2000: +7.1% YTD
- S&P Midcap 400: +6.2% YTD
- S&P 500: +4.6% YTD
- Dow Jones Industrial Average: +1.8% YTD
Reviewing today's economic data:
- January IHS Markit Manufacturing PMI - Prelim 46.8; Prior 46.2
- January IHS Markit Services PMI - Prelim 46.6; Prior 44.7
Ahead of tomorrow's open, Elevance Health (ELV), AT&T (T), Boeing (BA), Progressive (PGR), Abbott Labs (ABT), and Freeport-McMoRan (FCX) are some of the more influential earnings reporters.
Looking ahead to Wednesday, market participants will receive the following economic data:
- 7:00 ET: Weekly MBA Mortgage Index (prior 27.9%)
- 10:30 ET: Weekly crude oil inventories (prior 8.41 mln)