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International Market Update
- European stocks retreated on Tuesday as market participants watched the Covid-19 rise, the prospect of interest rate hikes in the U.S. and the latest purchasing managers’ index (PMI) data for the eurozone. The pan-European Stoxx 600 provisionally closed down 1.1%, with technology stocks leading the losses with a 3.1% drop, while most sectors and major bourses dipped into negative territory. Eurozone economic activity growth unexpectedly surged in November, but a fresh wave of Kovid 19 infections across the eurozone and rising prices clouded the outlook for December.
- The Nasdaq Composite fell for a second straight day as higher interest rates appeared to pressure high-flying tech stocks, while shares of banks and industrials rose in a divided market on Tuesday. The decline in tech and other growth stocks comes as Treasury yields jumped following President Joe Biden’s decision Monday to pick Fed Chairman Jerome Powell for a second term. Higher interest rates are often seen as a negative for high-growth companies, as their future earnings look less attractive as short-term yields rise.
- Asian markets fell this morning as investors continued their bout of weakness, with inflation concerns and expectations of tighter central bank monetary policy taking centre stage. New Zealand’s central bank raised interest rates for the second time in a few months today as rising inflationary pressures and easing coronavirus restrictions supported economic activity. Next on the agenda in Asia is the Bank of Korea, which holds its monetary policy meeting on Thursday.
In International news
HP shares rise after profit jump, CEO says return to office drives demand PC
Shares of HP rose more than 8% in extended trading Tuesday after the computer hardware maker reported better-than-expected quarterly results and a strong forecast for the current quarter. HP The company’s personal systems net revenue was $11.8 billion, up 13% from a year earlier. The focus on the enterprise segment was evident in this segment, where sales in the personal PC business declined 3% year over year, while sales in the commercial PC business increased 25%. However, overall PC sales were down 9%. The company’s printer business reported 4.9 billion in sales, up 1% year over year. Sales in the commercial printing business increased 19% year over year, while sales in the consumer business decreased 6%.
Gap shares plunge 15% after retailer suffers millions in lost sales from delayed product shipments
Gap Inc. shares tumbled Tuesday after the company lowered its full-year outlook. Third-quarter results were lower as Covid-related factory closures led to significant product delays in the quarter. The company’s shares fell about 16% in extended trading after rising about 16% so far this year. Gap reported a net loss of $152 million, or 40 cents a share, after a net profit of $95 million, or 25 cents a share, a year earlier. Excluding special items, profit was 27 cents per share, below the 50 cents analysts had expected, according to Refinitiv. Revenue fell slightly to $3.94 billion from $3.99 billion a year earlier. That missed expectations for $4.44 billion.