International Market Overview 17 June 2022

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International Market Update

  • European equities fell sharply on Thursday as restrictive measures by central banks fueled concerns about a possible recession. The pan-European Stoxx 600 closed down about 2.5%, with tech stocks leading the losses with a 4.7% drop. A higher interest rate environment is seen as negative for growth-oriented sectors like tech. The Bank of England raised interest rates for the fifth straight day Thursday in an effort to curb rising inflation. The Monetary Policy Committee voted 6-3 to raise the policy rate by 25 basis points to 1.25%, with the three dissenting members voting for a 50 basis point increase to 1.5%.
  • The Dow Jones Industrial Average fell below the key 30,000 level for the first time since January 2021 on Thursday as investors feared the Federal Reserve’s aggressive approach to curbing inflation could plunge the economy into recession. Data released Thursday pointed to another dramatic slowdown in economic activity. Housing starts fell 14% in May, well below the 2.6% decline expected by economists surveyed by Dow Jones. Home Depot, Intel, Walgreens, JPMorgan, 3M and American Express hit new 52-week lows amid growing recession fears, while tech stocks slipped after rallying Wednesday.
  • Stocks in the Asia-Pacific region struggled to find their bearings today after steep declines on Wall Street. Japan’s Nikkei 225 fell 2.17%, while shares of conglomerate SoftBank Group plunged more than 4%. In Hong Kong, the Hang Seng Index recovered from earlier losses to rise 0.76%, with shares of life insurer AIA up more than 2%. The Bank of Japan said this morning it would maintain its ultra-loose monetary policy.


In International News


Adobe shares fall after missing full-year forecast

Adobe shares fell as much as 5% in extended trading Thursday after the design software maker issued full-year guidance that fell short of analysts’ expectations. Refinitiv said adjusted earnings were $3.35 per share, compared with the $3.31 per share analysts had expected.
Revenue was $4.39 billion versus $4.34 billion expected by analysts. For the full fiscal year, Adobe reduced its guidance. It expected adjusted earnings per share of $13.50 on revenue of $17.65 billion. Analysts polled by Refinitiv had expected adjusted earnings per share of $13.66 and revenue of $17.85 billion. In December, the forecast for fiscal 2022 was for adjusted earnings per share of $13.70 and revenue of $17.90 billion.

Lyft agrees to $25 million settlement for allegedly concealing safety issues before going public

Lyft has reached a $25 million settlement to resolve shareholder allegations that the ride-hailing company concealed safety issues, including sexual assaults by drivers, before its 2019 initial public offering. The tentative cash settlement was filed Thursday in federal court in Oakland, California, and is subject to approval by U.S. District Judge Haywood Gilliam Jr. Lyft denied wrongdoing in the settlement. Shareholders accused Lyft of trying to appear more socially conscious than rival Uber by failing to disclose known problems in its IPO registration statement, and that the company’s stock price fell when the problems became public. Shareholders said dozens of people had filed claims against Lyft for driver sexual misconduct in the months after the IPO.
an “existential risk” to the brand that should have been disclosed.