European stocks advanced again on Tuesday for a fifth session of
gains, as miners rallied after strong results from BHP Group.
However, the ongoing energy crisis kept gains in check. Germany
continues to suffer low water levels on the Rhine and now the
country has set a gas levy for consumers, which could keep German
inflation higher for longer and cause more headaches for the
European Central Bank, ING said.
Stocks to Watch:
The luxury-goods industry looks to be enjoying acceleration
across major markets in the current quarter, according to analysts
at Bank of America.
In the U.S., the sector looks unaffected by the pressures on
wider consumer-goods consumption thanks to its skew to
higher-income customers, according to BofA demand data, while
normalization in China following Covid-19 pandemic lockdowns has
continued into July. In Europe, tourism is driving the
"The lack of slowdown presents further upside for the sector,"
BofA said, highlighting heavyweights LVMH, Richemont and Hermes, as
well as smaller Italian groups Prada and Moncler and Swatch.
The U.K. has recorded two consecutive quarters of a goods trade
deficit with the U.S. for first time since 1998, driven by a strong
dollar and rising fuel imports, analysis from Ebury showed.
The deficit reached GBP3.1 billion in the first quarter, the
largest-ever negative goods gap with the U.S., and GBP700 million
in the second quarter.
"Evidently, the devalued pound against the dollar this year has
bumped up the value of imports from the U.S.," Ebury said.
"As inflationary pressures continue to build in the U.K. ahead
of the October energy price cap hike, the combination of growing
imports from the States and a strengthening USD will add further to
that volatile cocktail."
Stock futures dipped ahead of results from major retailers that
could offer clues about consumer behavior during a period of
Investors are eyeing a week of key retail earnings with Walmart
and Home Depot set to post results later on Tuesday.
On Wednesday, the FOMC will publish the minutes from its policy
meeting in July, with the minutes closely read for signals on the
Fed's next move.
The euro could fall further in coming days as Europe's energy
crisis and a strong dollar weigh, ING said.
"The trade-weighted euro is a whisker away from the lows of the
year and a slightly stronger dollar over the next 48 hours could
easily see EUR/USD retesting parity."
The dollar could rise further in the near-term, supported by the
energy shock, uncertainty over whether the PBOC will engineer
another mini-devaluation in the renminbi and improved U.S. economic
data, ING said.
The energy independence of the U.S. leaves the dollar relatively
insulated to rising energy prices, ING added.
Data on industrial production later Tuesday and retail sales on
Wednesday should ease recession fears, ING said. "106.95/107.00
looks like the near-term target for the DXY Dollar Index."
Sterling was little moved after the latest U.K. employment data
as investors look ahead to Wednesday's key inflation print.
"The employment reading indicates a robust jobs market and will
provide the Bank of England further reason to continue on its
current trajectory for a higher interest rate environment," Silicon
Valley Bank said.
The U.K. unemployment rate was little changed at 3.8% in the
three months to June while the number of people in employment
increased 160,000 over the quarter and average earnings excluding
bonuses rose 4.7% following 4.4% growth in the previous
DZ Bank has lowered its forecast for the 10-year German Bund
yield as it considers a recession in Europe unavoidable due to the
It now expects the 10-year Bund yield to hover around 0.90% over
the next three months, down from a previous forecast of 1.75%.
However, uncertainties suggest this is unlikely to be a calm
"Thus the volatility we have witnessed in recent months is
likely to continue," DZ Bank said, adding that long-term bond
yields remain in the grip of a slowing eurozone economy and
stubbornly high inflation.
The prospect of a slowdown of economic activity makes UBS Asset
Management "rather cautious" in its positioning in government
bonds, considering selloffs as an entry opportunity.
"Risk assets have not yet priced in the extent of this economic
slowdown, " UBS AM said, staying underweight stocks and using
selloffs in bonds as an opportunity to increase exposure to
sovereign fixed income.
It sees balanced risks to developed-market sovereign yields
outside the U.S., and sees Treasurys remaining the world's
pre-eminent haven and top source of risk-free yield.
Crude futures were more than 1.5% lower, extending Monday's
hefty losses, on the prospects of a revival of the Iran nuclear
deal and the subsequent resumption of Iranian oil exports.
DNB Markets said that could see Iran increase production by 1
million barrels a day within 9 months from current levels of 2.5
Metals prices edged lower, hurt by a strong dollar that spiked
on Monday after China had cut rates to add some stimulus to its
"The macro mood feels heavier this morning," Peak Trading
Research said, noting that the Chinese yuan, the number one
importer currency, had fallen after the PBOC rate cuts.
DOW JONES NEWSPLUS
UK Unemployment Rate Increased Modestly in Three Months to
The unemployment rate in the U.K. rose slightly in the three
months to June, although the country's labor market remained
The U.K.'s unemployment rate stood at 3.8% in the three months
through June, up from 3.7% in the preceding three-month period,
according to data from the Office for National Statistics published
Philips Appoints Roy Jakobs as CEO
Royal Philips NV said Tuesday that it has appointed Roy Jakobs
as chief executive officer with effect from Oct. 15.
The Dutch health-technology company said current CEO Frans van
Houten, who is serving his third term, will act as the company's
advisor and support the transition until April 30.
H&M Returns to Alibaba's E-Commerce Platform After 16-Month
H&M is back on sale at an e-commerce platform run by Alibaba
Group Holding Ltd., 16 months after the Swedish fashion brand was
taken down from the site following its decision to stop sourcing
from China's Xinjiang region.
Hennes & Mauritz AB has reopened its official store on
Tmall, Alibaba's flagship shopping platform, but continues to be
absent from many other websites run by Chinese companies, including
Baidu Maps and consumer-review website Dianping.com.
Pandora Backs Guidance Despite 2Q Hit From China Lockdowns
Danish jeweler Pandora AS on Tuesday backed its 2022 growth
guidance despite recording second-quarter earnings that were
weighed by lockdowns in China and a tough comparison in the U.S.
due to last year's stimulus cheques.
Covid-19 lockdowns in China dragged down group organic growth by
four percentage points versus 2021 while U.S. sales dropped 12% on
year, but key European markets delivered double-digit organic
growth, it said.
Iran Says Some Issues Still Pending as Deadline for Nuclear Deal
Iran on Monday said there were several issues with the
nuclear-deal draft text that the U.S. needs to address before
Tehran can agree to it, leaving the fate of the nuclear agreement's
revival still uncertain.
The European Union had set Monday as the deadline for Iran, the
U.S. and the other countries in the 2015 deal to say whether they
would accept the deal or not, according to diplomats. The EU last
week circulated what it called a "final text" on reviving the
accord and sent the draft following four days of talks in Vienna,
saying the 16 months of negotiations were now over.
Aramco's Actions Undercut Its Rosy Predictions
The world's largest energy company says it is bullish on the
future of oil-but its actions don't look quite so certain.
Saudi Aramco posted record quarterly results, earning profits of
$48 billion in the second quarter because of higher prices and
refining margins, low inventories and "geopolitical events." The
producer realized an average price of $113.20 a barrel of crude,
compared with $67.90 in the same quarter last year.
Explosions Hit Russian Ammunition Depot in Crimea
Russian authorities reported explosions at an ammunition depot
in Crimea on Tuesday morning, a week after blasts at a Russian air
base on the peninsula appeared to destroy several warplanes.
The new explosions took place at a temporary ammunition dump at
a former farm near the village of Maiske in northern Crimea, a
local official told Russia state news agency TASS. Local
authorities are evacuating Maiske.
William Ruto Declared Winner of Kenyan Presidential Election
NAIROBI, Kenya-William Ruto, who ran on a promise to boost the
economic prospects of Kenya's working class, was declared winner of
the East African country's presidential race, which descended into
chaos moments before the national electoral commission announced
the results on Monday.
Mr. Ruto, Kenya's vice president for the past decade, defeated
his former ally, longtime opposition leader Raila Odinga, the scion
of a Kenyan political dynasty, 50.5% to 48.9%. Two other candidates
received the remainder of the votes.
U.K. Approves Covid-19 Booster Shot Aimed at Omicron
The U.K. became the first country to approve Moderna Inc.'s
Omicron-targeting Covid-19 vaccine as a booster shot, paving the
way for the variant shot to play a role in a planned fall
vaccination campaign to shore up immune defenses against the
The so-called bivalent vaccine is directed against both the
original strain of SARS-CoV-2, the virus that causes Covid-19, and
the first Omicron variant, also known as BA.1, which drove large
waves of infection over the winter.
There Is No Preset Path for Australian Rate Rises, RBA Says
SYDNEY-The Reserve Bank of Australia is staying flexible on the
size and pace of future interest-rate rises, underlining in the
minutes of its Aug. 2 board meeting the need to respond to a
shifting inflation outlook and labor data.
The minutes, published Tuesday, repeated the RBA's warning that
the path to reining in inflation while maintaining economic growth
Warren Buffett's Berkshire Hathaway Keeps Spending Through
Warren Buffett's Berkshire Hathaway Inc. scooped up millions
more shares of Apple Inc. and doubled down on its energy
investments, while the stock market swooned in the second
The moves were made public in Berkshire's 13F filing, which was
released after the stock market closed Monday. Regulations require
institutional investors managing more than $100 million to file the
form, which lays out firms' equity holdings as of the end of the
most recent quarter, as well as the size and market value of their
Freight Demand Is Moderating Heading Toward the Fourth
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(END) Dow Jones Newswires
August 16, 2022 05:32 ET (09:32 GMT)
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