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International Market Update
- European stock markets closed lower Tuesday as investors were unsettled by fears of an impending recession.
The pan-European Stoxx 600 closed down 1.1%, with the retail and travel sectors falling 3% each to lead the losses, while most other sectors fell into negative territory. Technology stocks slipped 2.5 percent after a profit warning from U.S. social media company Snap and news of layoffs at European startups Klarna and Gorillas. On the data front in Europe, the flash Purchasing Managers’ Index (PMI) for the eurozone came in at 55.8 in May, slightly above estimates.
- The Nasdaq Composite fell Tuesday as fears spread to other tech names on Snap’s dire warning, while the Dow Jones Industrial Average recovered from day lows by the close. The blue-chip stock index received a boost from UnitedHealth Group, which rose 1.1% before the close. Dow components McDonald’s, Verizon and IBM all gained more than 2%. The 10-year Treasury yield suddenly fell as investors fearing a recession rushed into bonds, driving up their prices. The yield on 10-year Treasury bonds fell as low as about 2.73% on Tuesday, down from more than 3% earlier in the year.
- Stocks in the Asia-Pacific region rose slightly this morning after New Zealand’s central bank announced another 50 basis point rate hike. “A larger and earlier increase in the [official cash rate] reduces the risk of persistent inflation while providing greater policy flexibility in the face of a highly uncertain global economic environment,” the RBNZ said in a statement announcing the rate hike. Meanwhile, in Hong Kong, shares of Chinese technology stocks listed on two exchanges fell.
In International News
Stellantis CEO warns of shortage of batteries for electric vehicles
Stellantis CEO Carlos Tavares said he expects a shortage of batteries and raw materials needed to make electric vehicles in the coming years as the global auto industry shifts to electric vehicles to meet expected increases in consumer demand and government regulations. Tavares said he expects a shortage of batteries for electric vehicles in 2024-2025, followed by a shortage of raw materials for the vehicles, which will slow the availability and adoption of electric vehicles in 2027-2028. “The speed at which we are trying to move for the right reason, which is to solve the global warming problem, is so fast that the supply chain and production capacity do not have time to adapt,” he told the media
on Tuesday after the company announced a new $2.5 billion electric car battery factory in Indiana.
Nordstrom raises full-year outlook as first-quarter sales beat expectations
Nordstrom on Tuesday reported first-quarter sales that beat analysts’ expectations and raised its full-year outlook as shoppers visited the company’s department stores to refresh their closets with designer brands and shoes. Nordstrom now expects fiscal 2022 sales, including credit card sales, to rise 6% to 8%, up from a previous range of 5% to 7%. The company forecasts earnings per share, excluding share repurchases, in a range of $3.38 to $3.68, compared with a previous range of $3.15 to $3.50. On an adjusted basis, the company expects earnings between $3.20 and $3.50 per share. The company’s shares rose about 9% in after-hours trading.