Before an hour
Europe stocks fall
European stocks were down sharply early Wednesday, with the benchmark Stoxx 600 index falling 1.4% and all sectors and major bourses lower.
Auto stocks fell 2.3% and mining stocks fell 2.25%. France’s CAC 40 lost 1.54%, while Britain’s FTSE 100 and Germany’s DAX fell 1.4% and 1.3%, respectively.
See grafic…
Stoxx 600 index.
7 hours ago
New Zealand raises official interest rate to 5.5% as expected
The Reserve Bank of New Zealand raised interest rates by 25 basis points to 5.5% on Wednesday. This is the twelfth straight rate hike since October 2021 and is in line with expectations of economists polled by Portal.
The New Zealand dollar gained 0.96% against the greenback to trade at 0.6185.
“As the bank has revised down its near-term forecasts for both headline inflation and the output gap, we believe there is a good chance that its rate-hike cycle is now over,” Capital Economics’ Abhijit Surya said in a statement after the RBNZ had published their interest rate decision.
— Lim Hui Jie and Clement Tan
7 hours ago
Alibaba’s Hong Kong shares fall after reports of layoffs at its cloud division
Alibaba’s shares in Hong Kong fell as much as 2.7% at the market open. The Chinese e-commerce giant is among the top losers in the Hang Seng Index today.
CNBC reported Tuesday that the company is shedding 7% of the workforce at its cloud computing division as the unit prepares for an IPO.
The Chinese tech giant will offer severance packages to those affected through the move, the source told CNBC, adding that Alibaba has started notifying employees about the layoffs and will help those affected move internally to other positions when they wish so.
— Lim Hui Jie, Arjun Kharpal
8 hours ago
The mood among Japanese manufacturers will turn positive for the first time in 2023
Business sentiment among Japanese manufacturers has turned positive for the first time this year, Portal’ Tankan survey for May showed.
The Portal Tankan survey is similar to the Bank of Japan’s quarterly Tankan survey, with the BOJ’s Tankan survey used to formulate Japan’s monetary policy.
The sentiment index for major manufacturers was +6, up from -3 in April. A reading above 0 represents positive sentiment, while a number below 0 represents unfavorable sentiment.
Separately, sentiment in Japan’s service sector hit a five-month high, with Portal’ Tankan poll returning +25, the highest collective reading since February 2020.
— Lim Hui Jie
11 hours ago
How lower tax returns — and no more stimulus payments — are affecting earnings results
Tax refunds this spring were lower than last spring and the effects are beginning to show in company quarterly results.
According to the Internal Revenue Service, the average tax refund for the week ended May 12 was $2,812, down 7.3% from the same period last year. This decrease is related to the removal of certain tax credits after the end of the pandemic-era relief. Retailers are seeing the impact: Foot Locker cited “lower income tax refunds” as a factor in the drop in sales.
With Intuit and H&R Block, however, the impact is slightly different. Both point out that fewer people are filing taxes now that there are no more stimulus payments — and that’s bad news for companies that offer tax preparation software.
In fact, total returns received from the IRS were about $142.6 million, down 1.2% year over year.
-Darla Mercado, Robert Hum
11 hours ago
Copper is on course for its worst month since 2022
Copper is down 6.07% in May, facing its worst month since June 2022, when it shed 13.64%. The metal is down 4.09% year to date.
LME zinc hit a low of $2,346 per tonne during Tuesday’s main trading session, hitting its lowest level since October 7, 2020.
See grafic…
copper prices
— Hakyung Kim, Gina Francolla
11 hours ago
Stocks showing the biggest movements in after-hours trading
Check out the companies making headlines in extended trading.
Palo Alto Networks — Shares rose 3.5% after the company’s earnings and sales beat estimates in the fiscal third quarter. The cybersecurity company reported adjusted earnings per share of $1.10 and revenue of $1.72 billion. Analysts polled by Refinitiv had estimated earnings of 93 cents per share and revenue of $1.71 billion. The company’s earnings guidance for the fourth fiscal quarter also beat expectations.
Urban Outfitters – The apparel retailer’s stock rose 6%. Urban Outfitters posted earnings of 56 cents per share for the first quarter. According to Refinitiv, analysts had expected earnings per share of 35 cents. Revenue also beat expectations, with the company reporting $1.11 billion versus consensus estimates of $1.09 billion.
Toll Brothers – Shares rose more than 3% after the company’s earnings and sales beat analysts’ estimates for the fiscal second quarter. The company said the surge in demand that started in January continued into the third quarter.
The full list can be found here.
– Hakyung Kim
11 hours ago