MARKET WRAPS
Stocks:
European stocks wavered between minor losses and gains on
Thursday as investors contended with a mixed bag of earnings and a
fresh surge in gas prices.
Holding back shares were worries that Germany's Rhine River
could see water fall below critical levels after weeks of hot, dry
weather, making it impossible for most transport barges to
sail.
Separately, Deustche Bank warned that a standstill at a key
bottleneck on the Rhine, the Kaub, could completely halt shipping
on the river as happened in 2018, when transport to and from the
southern industrial sites had to be interrupted.
U.S. Markets:
Stock futures advanced as investors continued cheering a
softer-than-expected inflation reading, hoping it will slow the
Federal Reserve's place of interest-rate increases.
Investors are awaiting fresh data on prices paid by U.S.
suppliers in July for further signs that inflation may be
stabilizing.
Stocks to Watch:
Disney shares jumped 7.3% in premarket trading after it reported
better-than-expected fiscal third-quarter earnings and subscriber
growth.
Other Stocks Making Moves:
Bumble declined 10% after it forecast for the fiscal
third-quarter revenue missed Wall Street expectations.
Sonos fell 19.5% after it and other audio products posted weak
revenue in the fiscal third quarter and reduced its outlook, citing
the impact of a tougher macroeconomic environment.
Coupang rose 6% after the South Korean e-commerce company
boosted its earnings forecast for 2022.
Forex:
The euro's gains against the dollar are likely to be limited as
the Fed stays committed to raising interest rates and Europe's
energy-supply issues remain a headwind for the single currency, ING
said.
The dollar's slide on Wednesday won't last as Fed officials
reaffirmed their plans to lift rates further, ING said.
Meanwhile, drought conditions and low water levels in Europe's
Rhine River will challenge coal shipments among other cargoes,
keeping European natural gas prices high, ING added.
"This factor remains an outright euro negative." EUR/USD
1.0350-1.0400 could prove the top of the August trading range, ING
said.
The dollar continued to lose ground on Thursday and Ebury said
evidence that U.S. price pressures might have peaked could convince
the Fed to deliver smaller interest-rate rises.
"At the time of writing, markets are now pricing in not much
more than a one-in-three chance of a 75 basis point rate increase
at the Fed's September meeting, down from almost 70% prior the
inflation number."
Energy:
Oil prices turned higher after the IEA said that demand would be
stronger than expected due to increased power generation.
The agency said heatwaves were driving more demand for
electricity to power fans and air conditioning units. With natural
gas prices so high and supplies scarce, power plants--particularly
in Europe--were switching to oil as an alternative fuel source.
Read: European Heatwaves Boost Demand for Oil, IEA Says
European natural gas prices jumped on fears that low water
levels on the Rhine river would pose a fresh bottleneck for
Europe's energy supplies. Benchmark European natural gas prices
rise 7.7% in early trading.
Dry, hot weather is expected to see water levels on the major
European waterway drop to as low as 40cm at one point, making it
impossible for most barges to sail.
"The inability to transport commodities through the Rhine river
threatens to exacerbate Europe's energy crisis," said CBA in a
note. "Not only do LNG cargoes become more sparse, but even coal
transport is adversely affected."
Metals:
Base metals were higher while gold dipped, with investors more
confident about the global economy following the latest U.S.
inflation data.
"Investors are gaining confidence that the Fed finally has
inflation under control," Peak Trading Research said, adding that
risk assets like commodities were now more appealing.
DOW JONES NEWSPLUS
EMEA HEADLINES
European Heat Waves Boost Demand for Oil, IEA Says
Summer heat waves in Europe and scarce supplies of pricey
natural gas are boosting demand for oil as power stations look for
alternative fuels to meet the surging demand for electricity, the
International Energy Agency said.
Unprecedented temperatures across the continent have put an
unexpected strain on the region's power grids, lifting demand for
electricity to power fans and air-conditioning units in what is
typically a quiet period for energy demand.
Siemens Swung to Loss in 3Q on Impairment Charge; Cut EPS Target
for FY 2022
Siemens AG cut the outlook for earnings per share for the full
fiscal year after it swung to a loss in its third quarter due to an
impairment on its investment in Siemens Energy AG.
The German industrial conglomerate said Thursday that its net
loss was 1.66 billion euros ($1.71 billion) for the period ended
June 30, compared with a profit of EUR1.35 billion a year earlier.
Analysts had forecast a loss of EUR532 million, according to
consensus estimates provided by Siemens.
Daimler Truck 2Q Profit, Revenue Rose
Daimler Truck Holding AG on Thursday posted an increase in sales
and net profit in the second quarter and confirmed its previously
given full-year revenue guidance.
The German commercial-vehicles maker said quarterly net profit
was 922 million euros ($949.6 million), compared with EUR601
million a year earlier.
Hapag-Lloyd 2Q Profit Jumped on Higher Shipping Rates
Hapag-Lloyd AG on Thursday reported a jump in second-quarter
profit as it continued to benefit from higher shipping rates.
The German shipping company posted a net profit of 4.48 billion
euros ($4.61 billion), up from EUR1.52 billion a year earlier.
Deutsche Telekom Raises 2022 View After Posting Higher 2Q
Revenue
Deutsche Telekom AG on Thursday raised its guidance for the
second time this year, citing good performance at both its T-Mobile
US Inc. business and outside the U.S.
The German telecommunications company reported a net profit of
1.46 billion euros ($1.50 billion) compared with EUR1.88 billion
during the same period a year earlier. The fall was mainly due to
expenses for the integration of its newly acquired Sprint business
in the U.S., it said.
Thyssenkrupp Beat Analyst Views in Third Quarter, But Was Stung
by Higher Interest Rates
Thyssenkrupp AG on Thursday cut its net profit guidance for
fiscal 2022, blaming high interest rates, but backed its other
targets for the year after its third-quarter results beat analyst
views.
The German industrial company reported adjusted earnings before
interest and taxes of 721 million euros ($742.6 million) for the
three months to June 30, up from EUR266 million a year earlier, as
sales rose 26% to EUR10.95 billion.
Zurich Insurance 1H Operating Profit Jumps Above Views, to
Launch CHF1.8 Bln Share Buyback
Zurich Insurance Group AG said Thursday that first-half
operating profit jumped, beating expectations as it dealt with
turbulent markets, and said it would launch a large share
buyback.
The Swiss insurer's business operating profit rose 25% to $3.39
billion in the six months to the end of June, its highest since
2008, driven by an underlying improvement across all businesses,
Zurich said.
RWE 1H Adjusted Net Income Rose; Backs 2022 Guidance Lift
RWE AG on Thursday said that adjusted net income rose in the
first half and confirmed the outlook lift for the full year on the
back of strong earnings.
The German energy company posted adjusted net income of 1.57
billion euros ($1.61 billion), compared with EUR870 million a year
earlier.
Aegon Raises Guidance, Reports 2Q Loss
Aegon NV on Thursday raised guidance for 2021-2023 free cash
flow and 2022 operating capital, and reported a net loss for the
second quarter.
The Dutch insurance, pensions and asset management company
lifted its cumulative free-cash-flow guidance for 2021-2023 to at
least 2.2 billion euros ($2.27 billion) from the previous forecast
of EUR1.4 billion to EUR1.6 billion. In addition, Aegon raised 2022
operating capital generation guidance to EUR1.4 billion from EUR1.2
billion.
Ukraine Wins Investor Approval to Pause Payments on Foreign
Debts
Investors approved a two-year payment delay on roughly $20
billion of Ukraine's foreign-currency debt, heeding calls from
Washington and other allied governments to grant the embattled
nation a financial reprieve as it burns through cash.
Ukraine asked bondholders last month to push back payments of
interest and principal on a clutch of dollar- and euro-denominated
government bonds, with a combined face value of nearly $20 billion,
by two years. The government's request came as little surprise to
creditors, who had expected that Kyiv would need to restructure its
debts as the war dragged on.
Ukraine Mocks Russia After Explosions at Crimean Air Base
Ukrainian officials seized on explosions that rocked a Russian
military base as a sign of Moscow's vulnerability, as Kyiv steps up
a counteroffensive to reverse Russia's territorial gains.
Kyiv didn't take responsibility for Tuesday's blasts at the
Novofedorivka air force base on the Crimean Peninsula along the
Black Sea coast. But officials and ordinary citizens celebrated,
mocking Russian claims that it was a minor incident caused by an
ammunition explosion and sharing photos on social media of their
visits to the peninsula before Russia annexed it in 2014.
Polio Vaccine Booster to Be Offered to Children in London as
Virus Circulates
British health authorities launched a polio booster vaccination
campaign for children in London on Wednesday after levels of
poliovirus detected in local wastewater showed that the virus is
circulating in the U.K. capital.
The move is a sign that the authorities are concerned about a
potential resurgence of polio in the U.K., which has long been free
of the serious illness that affects mostly children.
GLOBAL NEWS
Fed Likely to Want Further Evidence of Inflation Slowdown
A slowdown in inflation last month, following recent indications
of a robust labor market, complicates the Federal Reserve's
decision on how much to raise interest rates next month.
Data on inflation and economic activity are likely to guide
whether central bank officials lift their benchmark federal-funds
rate by a half-percentage point or three-quarters of a point at
their Sept. 20-21 policy meeting. They have said they want to see
evidence that price pressures and economic growth are cooling
before they moderate their pace of rate increases.
Fed's Inflation Battle Is Far From Won
Markets rallied Wednesday as data showed inflation cooling in
July, but it isn't time for investors to relax just yet: Price
conditions remain uncomfortably hot.
The consumer-price index rose 8.5% from a year earlier, the
Labor Department said Wednesday, slowing from June's 9.1% pace and
a bit below expectations. This was thanks largely to declining
gasoline prices. According to AAA, the national average price for
regular unleaded gasoline is now $4.01 a gallon, down from $4.68 a
month ago. Gasoline futures have declined by even more, suggesting
further retail price cuts ahead.
Lower Gasoline Prices Portend Higher Consumer Confidence, Affect
Inflation
Consumers are likely to travel and spend more because U.S.
national gasoline prices have fallen for weeks, economists said,
delivering an expected boost to the economy.
The average cost of a gallon of regular unleaded gasoline fell
below $4 on Wednesday, according to energy data provider OPIS. That
is well below the record high of $5.02 reached in mid-June but
still about 80 cents a gallon higher than prices were a year
ago.
FBI's Trump Search Stirs Talk, Except by Those Who Conducted
It
The FBI search of former President Donald Trump's Mar-a-Lago
home Monday was unprecedented, prompting days of global news
coverage and commentary on motivations, implications and
ramifications.
Key players no one has heard from: the Justice Department or the
Federal Bureau of Investigation.
John Bolton Was Target of Assassination Plot by Iranian
National
An Iranian national plotted to assassinate at least two former
Trump administration officials, the Department of Justice said, in
what it described as a likely retaliation for the 2020 killing of a
prominent Iranian general.
A criminal complaint unsealed Wednesday said Shahram Poursafi,
45 years old, of Tehran, tried to kill one of former President
Donald Trump's national-security advisers, John Bolton, by offering
to pay an individual in the U.S. $300,000. Agents affiliated with
Mr. Poursafi conducted surveillance on Mr. Bolton.
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(END) Dow Jones Newswires
August 11, 2022 06:02 ET (10:02 GMT)
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