MARKET WRAPS
Stocks:
European stocks were mostly higher on Thursday, as investors continued to digest the U.S. inflation data and what it means for upcoming Federal Reserve rate decisions.
In terms of U.S. data, CMC Markets said "we are seeing evidence that forward-looking indicators are heading in the right direction with today's March US PPI numbers expected to show a further slowing of price pressures."
"The recent prices paid numbers on the ISM last week showed a reduction in inflation pressures and these should be borne out in a fall to PPI final demand from 4.6% to 3%, while core PPI is expected to slow from 4.4% to 3.4%."
Stocks to Watch
BASF's first-quarter earnings before interest, taxes and special items was driven by the agricultural business, the stronger-than-expected performance of which supported overall earnings of EUR1.93 billion, Citi said.
The preliminary result compares with consensus of EUR1.6 billion and Citi's estimate of EUR1.75 billion.
The German chemical company retained its full-year guidance which now appears relatively conservative as BASF has already achieved around 40% of the lower end of its range in 1Q, Citi said.
"We would expect upgrades to the outlook and consensus, noting the sentiment of recovery in 2H along with the announced EUR500 million cost savings to be achieved by 2024."
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Remy Cointreau should return to sales growth in the last quarter of the fiscal year, helped by uptick in Asia, though its U.S. performance is likely to remain challenged, Citi said ahead of the French cognac maker's update later this month.
The group should report organic growth of 9.1%, according to Citi's forecasts, following a dip the previous quarter as U.S. demand normalized.
Growth is likely to remain negative in that market, but strong trading in Asia will balance this out, Citi said.
Earnings results for 4Q and guidance for the new fiscal year will come in June.
Citi kept a buy rating on the stock.
Stocks on the Move:
LVMH shares rose after the luxury-goods major on Wednesday booked forecast-beating first-quarter sales, spurred by the lifting of sanitary restrictions in China and Asia-Pacific.
Read the analysts' reactions here
U.S. Markets:
Stock futures edged higher, as investors look ahead to the producer-price index with an eye to the Fed's potential path for interest rates.
Earnings season is beginning, with Thursday seeing results from companies including Delta Air Lines and Fastenal, before a wave of banks including JPMorgan Chase, Citigroup and Wells Fargo report results on Friday.
Stocks in the News
Apple is in talks with suppliers about moving production of its MacBook computers to Thailand, a further move to distance itself from China amid tensions with the U.S.
Apple is talking to companies with existing facilities in Thailand about starting to produce MacBooks there, Nikkei reported, citing three unnamed suppliers involved in talks. It currently mainly makes MacBooks in China but has already shifted some production to Vietnam.
The company has been mass-producing the Apple Watch in Thailand for more than a year, Nikkei said.
Follow WSJ markets coverage here
Forex:
EUR/USD rose to a 10-week high of 1.1026, according to FactSet, buoyed after data showed a big drop in U.S. headline annual inflation and sparked heavy selling in the dollar, UniCredit Research said.
The data highlighted the contrast between the outlook for U.S. and eurozone interest rates and the analysts say it could see the euro test and exceed the year-to-date high-at $1.1035, according to Factset.
"Markets remain convinced that there is more room for the ECB than for the Fed to tighten further," it said, adding that a break above this year's peak could see the euro target $1.12.
Read U.S., Eurozone Headline Inflation Expected to Continue Falling
Read Dollar Stays Weak After Drop in US Inflation
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Sterling rose as broad weakness in the dollar following the fall in U.S. inflation offsets data showing that the U.K. economy unexpectedly stagnated in February.
Zero GDP growth during the month was below expectations for a 0.1% expansion in a WSJ poll, though this shouldn't influence the Bank of England's future decisions on whether to raise interest rates further, ING said.
"The soft dollar story is keeping GBP/USD bid near 1.2500," ING said.
Energy:
Oil futures edged lower but held on to most of the gains made following the inflation data.
Expectations of growing tightness in the market are further lifting prices after data showed U.S. inventories rose last week.
"Weakening Russian shipments, OPEC production cuts and retreating U.S. inventories are increasing prospects of a tighter market," ANZ said.
Meanwhile, Energy Secretary Jennifer Granholm said the U.S. could begin refilling its strategic stockpiles later this year, according to reports.
Metals:
Base metals and gold inched higher in Europe and a softer PPI print later Thursday would help put a ceiling over the dollar and boost risk assets and commodity markets, Peak Trading Research said.
DOW JONES NEWSPLUS
EMEA HEADLINES
UK Economy Stagnated in February After Labor Strikes Hit Activity
The U.K. economy stalled in February after public-sector strikes hit activity in the services sector, adding to concerns the economy is struggling amid sky-high inflation and rising interest rates.
The country's gross domestic product held steady on month in February, easing from an upwardly revised 0.4% rise in January, data from the Office for National Statistics showed Thursday.
LVMH Boosted by Rebound in Luxury Spending in China
PARIS-LVMH Moët Hennessy Louis Vuitton SE reported a sharp rise in quarterly sales driven by a rebound in China and strong demand for its clothing, handbags and jewelry in Europe and Japan.
The figures are an early indication that high-end shoppers in China are once again boosting makers of luxury goods now that Beijing has eased Covid-19 restrictions. Persistent disruption in China has been a major headache in recent years for the luxury industry, which had come to rely on spending by Chinese shoppers at home and abroad over the past two decades.
Tesco Sees Flat Retail Profits in FY 2024 After Posting In-Line FY 2023 Results - Update
Tesco PLC on Thursday said that it expects broadly flat retail profits in the year ahead, beating expectations, as it reported results for fiscal 2023 that were largely in line with views.
The British grocer sees retail adjusted operating profit for fiscal 2024 at around the same level as the 2.49 billion pounds ($3.11 billion) it reported for the year ended Feb. 25.
Imperial Brands Sees 1H Profit Around Flat on Year; On Track to Meet Full-Year Guidance
Imperial Brands PLC said Thursday that it is on track to meet 2023 guidance, and that first-half adjusted group operating profit should be roughly flat on year on a constant-currency basis.
The tobacco group said that, excluding the impact of its exit from Russia, first-half group net revenue is seen at a similar level to the prior-year period at constant currency, with strong combustible pricing offset by volume declines as the prior period benefited from Covid-19-related changes in buying patterns. It sees a stronger net revenue performance in the second half, driven by normalization of volume trends.
Givaudan First-Quarter Sales Fell Slightly Amid High Input Costs
Givaudan SA said Thursday that first-quarter sales declined slightly amid high input costs, but that it started the year with good momentum.
The Swiss flavor-and-fragrance company said its sales in the first three months of the year were 1.77 billion Swiss francs ($1.98 billion), compared with CHF1.78 billion a year earlier.
Bang & Olufsen Expects Covid-Related Challenges in China to Ease
Bang & Olufsen AS said Thursday that it saw good demand in its fiscal third quarter and expects challenges in China to ease.
The Danish consumer-electronics company last month lowered its fiscal 2023 guidance, blaming slower-than-expected sales in China after Covid-19 lockdowns ended, leading to a surge of infections and impacting consumer behavior and demand.
German Inflation Eased to Seven-Month Low in March, Confirming Preliminary Estimates
Germany's inflation rate resumed its downward trend in March due to sharply decelerating energy prices, but underlying price pressures remained intense.
Consumer prices increased 7.4% in March compared with the same month a year earlier measured by national standards, confirming preliminary estimates, according to data from the German Federal Statistics Office Destatis released Thursday.
France's Macron Seeks to Calm Trans-Atlantic Uproar Over Taiwan Remarks
PARIS-French President Emmanuel Macron walked a diplomatic tightrope Wednesday, seeking to calm a trans-Atlantic uproar over his recent remarks on Taiwan while also defending his push for Europe to chart its own course on foreign policy.
Flanked by Dutch Prime Minister Mark Rutte, Mr. Macron spoke at a news conference in Amsterdam Wednesday at the end of a two-day visit to the Netherlands that was largely overshadowed by a trip the French president made to China last week.
Saudi Push to Bring Syria Back to Arab Fold Faces Resistance
A Saudi-led push to bring Syria back into the Arab fold is facing resistance from some of its allies, according to Arab officials, in a setback to the kingdom's efforts to lead a broader geopolitical realignment under way in the Middle East.
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04-13-23 0609ET
