European stocks suffered minor losses on Wednesday, as a
bigger-than-expected drop in Chinese exports weighed on
Data released earlier showed China's exports fell 7.5% from a
year ago in May, far outpacing the 1% decline expected by
The fall serves as the latest reminder the world's
second-largest economy is contending with a fading recovery,
stoking fresh concerns about global growth.
Read China's Exports Dropped in May, Cooling From Growth in
Previous Two Months
Stocks to Watch
Hugo Boss's profitability potential might be overlooked by the
market, UBS said, initiating coverage on the stock at buy with a
It said the group is still in the foothills of a turnaround
under CEO Daniel Grieder, but is already seeing strong brand
momentum despite a turbulent macro backdrop.
UBS said the gross margin is set to benefit from better store
productivity, offsetting investment costs, and the operating margin
could reach 13.5% by 2025.
"We see the shares as undervalued versus peers."
Read Remy Cointreau May Need to Buy as Cognac Scene Darkens
U.S. Markets: Markets:
Stock futures and Treasury yields edged lower, weighed down by
the China data.
The yield on the benchmark 10-year Treasury note fell to 3.689%,
from 3.699% Tuesday. The two-year yield fell to 4.514%, from
Shares on the Move
Casey's General Stores reported a drop in both revenue and
profit for the most recent quarter. Its shares fell 4.5% in
Coinbase shares have dropped sharply for two straight sessions,
after it and rival Binance were both sued by the SEC. Early trading
on Wednesday pointed to a modest recovery, with Coinbase stock
rising 1.7% ahead of the opening bell.
Shopify stock extended its rise in offhours trading. Shopify
shares had risen more than 6% on Tuesday after the company
completed the sale of its logistics business.
U.S. trade deficit data are due before the opening bell. A
reading on consumer credit is also due, plus earnings from
companies including GameStop and Campbell Soup.
Follow WSJ markets coverage here .
The Turkish lira sank to new lows against the dollar on
Wednesday, as concerns mounted over challenges facing the country's
new finance minister, and a report emerged that state lenders have
stopped selling dollars to defend it.
Citing traders, Bloomberg reported that state lenders were no
longer trying to prop up the lira with costly dollar sales, which
could be a sign of the new incoming finance minister's promise of a
more "rational economic policy."
The report noted that the country's state banks don't comment on
market interventions. Read more here .
Elsewhere, the dollar edged higher as traders are wary of
selling the currency before Tuesday's U.S. inflation data and
despite growing speculation the Fed could pause raising rates next
week, ING said.
"The dollar's resilience probably denotes reluctance to add
dollar shorts ahead of the U.S. CPI risk event on June 13 - which
is still seen as having the potential to tilt the balance to a hike
the following day."
Read Sterling Could Fall as Higher UK Rates May Hit Economy
Irish government bonds have underperformed versus peers over the
past few days, pushing Irish-French yield spreads, especially in
5-10-years sectors, close to the upper end of their past six
months' ranges, J.P.Morgan said.
"This relative underperformance, in our view, is likely to be in
anticipation of the upcoming auction on 8 June," JPM said.
It expects Irish yields to trade modestly, by 5-10 basis points
below French ones, mainly given strong Irish supply technicals, and
finds current valuations quite attractive.
"We recommend investors use the 8 June auction as an opportunity
to add overweight Ireland exposure given the recent
underperformance," JPM said.
Read Greece Likely to Achieve Investment Grade Rating in 2H
Oil prices were lower for a second day with Chinese trade data
showing a slump in exports and imports and as the EIA said U.S.
demand will rise at a slower pace than expected this year.
Base metals were mixed with gold lower, as demand concerns and
macro headwinds continued to weigh and despite bright spots in
commodity data coming from China, ANZ said, with imports in May
"The prospects of new stimulus should support commodities
demand," ANZ added.
The recent uptick in iron-ore prices on hopes for Chinese
stimulus is unlikely to be sustained, according to Citi, which said
effective stimulus measures will be difficult to achieve.
"While the market may continue searching for positive headlines
in the short term, we still hold the view that it's unlikely that
we will see a major turn in steel demand from China in the absence
of a strong recovery in the property sectors," Citi said.
It has kept its 0-3-month price target unchanged at $100/ton and
downgraded its second-quarter target to $110/ton from $115/ton, its
third-quarter target to $100/ton from $105/ton, and its
fourth-quarter target to $90/ton from $105/ton.
DOW JONES NEWSPLUS
Mercedes Teams Up With Green Steelmaker to Slash Emissions
Mercedes-Benz signed a deal with Swedish upstart H2 Green Steel
for the long-term supply of low-emissions steel, underscoring a
broader shift by the industry to reduce greenhouse-gas emissions in
supply chains, according to the companies.
The deal, announced Wednesday, is significant because in
addition to securing supply for Mercedes's European factories over
the coming years, the companies have also agreed to explore
potential steel production in North America. Mercedes has a
manufacturing plant in Tuscaloosa, Ala.
German Industrial Production Rose Less Than Expected in April as
Car Production Weighs
Industrial production in Germany ticked up less than expected in
April, as motor-vehicle manufacturing dipped, adding to concerns
about the country's key manufacturing base.
Industrial output-comprising production in manufacturing, energy
and construction-rose 0.3% in April compared with the previous
month on a price, seasonally and calendar-adjusted basis, from an
upwardly revised 2.1% fall in March, data from the German
statistics office Destatis showed Wednesday.
STMicroelectronics, Sanan Optoelectronics to Form $3.2 Bln China
STMicroelectronics and Sanan Optoelectronics said Wednesday that
they are forming a semiconductor-manufacturing joint venture in
China, with $3.2 billion in total build-out funding.
The European and Chinese semiconductor companies said they have
signed an agreement to create a silicon-carbide-device
manufacturing project in Chongqing, China, to tap into rising
demand for semiconductors for car electrification as well as for
industrial power and energy applications in the country. Production
is expected to start in the fourth quarter of 2025, with full
build-out anticipated in 2028, the companies said.
Inditex Earnings, Sales Rose in 1Q - Update
Spain's Industria de Diseno Textil, owner of Zara clothing
stores, on Wednesday reported higher earnings and sales for the
first quarter of its fiscal year.
The company, known as Inditex, posted net profit of 1.17 billion
euros ($1.25 billion), from EUR766 million in the year-prior
period, on sales which grew to EUR7.61 billion from EUR6.74 billion
in the first quarter of the previous year.
Treasury's $1 Trillion Debt Deluge Threatens Market Calm
Investors are bracing for a flood of more than $1 trillion of
Treasury bills in the wake of the debt-ceiling fight, potentially
sparking a new bout of volatility in financial markets.
Some on Wall Street fear that roughly $850 billion in bond
issuance that was shelved until a debt-ceiling deal was
passed-sales expected between now and the end of September,
according to JPMorgan analysts-will overwhelm buyers, jolting
markets and raising short-term borrowing costs.
China's Exports Dropped in May, Cooling From Growth in Previous
China's exports dropped 7.5% from a year ago in May, drastically
cooling from the robust growth seen the previous two months.
The result compares with the median forecast of a 1.0% decline
by economists polled by The Wall Street Journal, and significantly
slowed from the unexpected 8.5% growth recorded in April, data from
the General Administration of Customs showed Wednesday.
China's EV Juggernaut Is a Warning for the West
China rocked the auto world twice this year. First, its electric
vehicles stunned Western rivals at the Shanghai auto show with
their quality, features and price. Then came reports that in the
first quarter of 2023 it dethroned Japan as the world's largest
How is China in contention to lead the world's most lucrative
and prestigious consumer goods market, one long dominated by
American, European, Japanese and South Korean nameplates? The
answer is a unique combination of industrial policy, protectionism
and homegrown competitive dynamism. Western policy makers and
business leaders are better prepared for the first two than the
McCarthy Opposes Extra Ukraine Spending After Debt Deal
WASHINGTON-House Speaker Kevin McCarthy (R., Calif.) declined to
commit to providing additional financial support for Ukraine,
showing the continued influence of his party's right flank and
moving him into direct conflict with Senate Republicans who want
more military spending beyond what Congress passed last week.
His stance also clouds the broader outlook for spending on
Ukraine. Congress has authorized $113 billion in military, economic
and humanitarian assistance since Russia invaded the country last
year, and Republican and Democratic backers of the effort have
expected that they would have to approve more funding later this
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(END) Dow Jones Newswires
June 07, 2023 05:41 ET (09:41 GMT)
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