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EUROPEAN MIDDAY BRIEFING:Stocks Inch Higher as -2-

07/16/2021 | 06:20am EDT

SYDNEY-Rio Tinto PLC said pandemic-related restrictions are affecting its mining operations from Australia to Mongolia, slowing iron-ore shipments, raising production costs and delaying projects.

The disruptions come as governments around the world grapple with the impact of higher commodity prices as the global economy bounces back from Covid-19 and spending on infrastructure rises. Several countries in South America and Europe have recently raised interest rates to counter inflation concerns.

Richemont Books Big 1Q Sales Rise; Shakes Up Management Structure

Compagnie Financiere Richemont SA said Friday that sales jumped in the first quarter of the fiscal year, driven by jewelry and watch sales and a strong performance in the Americas, and that it is implementing a change to the group management structure.

Sales at the Swiss luxury-goods group rose 129% on year at constant exchange rates to 4.4 billion euros ($5.20 billion) in the period to end-June. The figure is 18% higher than in the same period of 2019, a sequential acceleration from the 10% rise over two years seen in the last quarter of fiscal 2021.

Eurozone Exports Fell Again in May

Eurozone exports fell in May for the fifth consecutive month, signaling that international goods trading remained on a weak footing despite the easing of most coronavirus-related restrictions.

The European Union's statistics agency said Friday that the currency area's exports fell by 1.5% in May compared with April, while imports increased by 0.7%, both adjusted for seasonal variations. The seasonally adjusted trade surplus was 9.4 billion euros ($11.1 billion) compared with EUR13.4 billion in April.

EU New Car Sales Rose in June, But Pace of Growth Slowed

Passenger-car registrations in the European Union continued their ascent in June, although the pace of growth has been more modest than in previous months, the European Automobile Manufacturers Association, or ACEA, said Friday.

New car registrations--a reflection of sales--rose 10% year-on-year to 1.05 million units in June, with growth of 25% from January to June to 5.4 million units.

Puma Raises 2021 Forecasts as 2Q Sales Double

Puma SE on Friday raised its revenue and earnings guidance for the full year, as strong second-quarter sales led the German sporting-goods company to swing to an operating profit.

Sales almost doubled in the quarter to 1.59 billion euros ($1.88 billion) from EUR831 million in the same period last year, driven by strong sell-throughs and performance in North America, Puma said.

Burberry 1Q Comparable Sales and Retail Revenue Rose, Full-Year Guidance Largely Unchanged

Burberry Group PLC said Friday that comparable sales rose in the first quarter, together with a sharp rise in retail revenue, and that it has broadly maintained its full-year guidance, but cautioned of some foreign-exchange headwinds.

Handelsbanken Posts 2Q Net Profit Beat Amid Higher Fees, Loan Loss Reversals

Svenska Handelsbanken on Friday posted a forecast-beating second-quarter net profit as fees and net interest income rose while the bank booked loan loss reversals.

Handelsbanken said its previously announced cost-cutting program is proceeding according to plan, and so far, measures corresponding to 1.3 billion Swedish kronor ($150.2 million) have been decided on or initiated since the third quarter of 2020. The measures have so far delivered positive profit effects of SEK400 million, it said.

Swedbank Second Quarter Net Profit Beats Amid Loan Loss Reversals

Swedbank AB on Friday reported a forecast-beating second-quarter net profit amid higher commission income and loan loss reversals.

Quarterly net profit rose to 5.56 billion Swedish kronor ($642.5 million) from SEK4.85 billion, while net interest income slipped 4.6% to SEK6.57 billion.

Growth Blowback for Wind Turbines

Wind-turbine manufacturers have big plans to supply the booming green-energy market. But burgeoning demand doesn't guarantee continued profitability in the near term.

Late Wednesday night, Siemens Gamesa Renewable Energy, the leading manufacturer of offshore wind turbines, issued a profit warning. On Friday morning, shares were down 16% since the announcement. Management said group earnings margins would be flat or slightly negative and revenues would be at the low end of forecasts. Only last quarter, recently appointed chief executive Andreas Nauen outlined his turnaround plan for the offshore division where the problems are centered.

Floods in Germany, Belgium Leave at Least 100 Dead as Rescuers Race to Find Survivors

BERLIN-Rescuers in Germany and neighboring countries were racing to find survivors from the region's worst flooding this century, as the death toll rose to over 100 with hundreds still missing following days of torrential rainfall that some politicians and scientists linked to climate change.

German authorities used helicopters and drones to locate survivors who fled to roofs and high ground without being able to collect any of their belongings when the homes were engulfed by flash floods that turned streets into rivers, swept away cars and crushed houses.

London Borough of Hackney Struggles With Recovery Months After Ransomware Attack

A London borough council hit by ransomware last October is still struggling to recover, highlighting the arduous monthslong work that some badly hit victim organizations deal with after an attack.

Staff members at the Hackney London Borough Council still have months of technical recovery time ahead as they repair systems and employees catch up on a backlog of work, said Rob Miller, a strategic director at the council. It could be up to a year before the technology used to issue payments for residents' housing benefits is back to normal, he said.

Biden Says He Expects to Give Update on Europe Travel Ban Soon

President Biden said he expected to give an update on whether his administration would lift a ban on travel from Germany and other parts of Europe in the coming days, following an evaluation from his Covid-19 advisers.

German Chancellor Angela Merkel raised the subject during a bilateral meeting with Mr. Biden Thursday, he said.

GLOBAL NEWS

Limited Auto Supplies Cloud Broader June Retail Sales Gains

U.S. shoppers likely boosted spending at many retailers in June, but weak auto sales linked to supply disruptions could have restrained revenue gains as the economy more broadly reopened.

Sovereign-Wealth Funds Invest More at Home as Covid-19 Hits Economies

Sovereign-wealth funds, which are among the world's biggest stock-market players, are unleashing more of their firepower at home, as governments lean on them to reboot pandemic-stricken economies.

The funds made about $12.7 billion in new investments directly into companies and projects in their domestic economies in 2020, more than triple the amount in 2019, according to the International Forum of Sovereign Wealth Funds, or IFSWF. So far this year, sovereign-wealth funds have invested some $4 billion at home, about the same as in all of 2019.

Yield Premium on Riskier Corporate Bonds Nears All-Time Low

The extra return investors demand to hold lower-rated corporate bonds over ultrasafe Treasurys has fallen within striking distance of all-time lows, a sign of investors' appetite for riskier assets and the changing composition of bond indexes.

As of Wednesday, the average extra yield, or spread, of bonds in the Bloomberg Barclays U.S. high-yield corporate bond index was 2.75 percentage points. Earlier this month, the spread fell as low as 2.62 percentage points, the lowest since June 2007 and just a shade higher than the all-time low of 2.33 percentage points set in May of that year.

Infrastructure Talks Stall Over Expanded IRS Powers

WASHINGTON-Disagreements over expanding the Internal Revenue Service have snarled lawmakers' efforts to firm up their roughly $1 trillion bipartisan infrastructure agreement before an initial vote next week gauging the deal's support.

In an hourslong meeting Thursday afternoon with White House officials, Republicans and Democrats who have spent weeks negotiating the deal again grappled with how to pay for it. Lawmakers and aides said the group may abandon an effort to raise revenue through enhanced enforcement at the IRS after some Republicans said they were concerned about granting the tax agency new power.

BOJ to Offer Banks Zero-Rate Loans to Help Firms Tackle Climate Change

The Bank of Japan said Friday that it will provide zero-rate loans to commercial banks to help companies finance projects to mitigate climate change.

The BOJ's move adds to the global debate over whether central banks should broaden their mandate beyond their traditional goal of price stability. Japan's central bank said climate change needs to be addressed because of its significant economic and financial impact.

Palladium Prices to Peak This Year as Auto Makers Switch Back to Cheaper Platinum -- Analysis

Palladium's yearslong rally could finally come to an end this year as car makers revert to using the now cheaper alternative platinum, UBS said.

Palladium futures have soared from around $200 a troy ounce in 2009 to a high of $2,981 an ounce this year. The metal has risen every year since 2015 as it became the primary metal car makers used in their autocatalysts, which filter out harmful emissions from car exhausts.

Biden Says Situation in Hong Kong Deteriorating

WASHINGTON-President Biden said the situation in Hong Kong is "deteriorating" as the administration prepares to issue an advisory to businesses that he said would lay out what may happen as China furthers its crackdown on the territory.

(MORE TO FOLLOW) Dow Jones Newswires

07-16-21 0619ET

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.04% 79.914 Delayed Quote.0.70%
BANK OF JAPAN -2.68% 29000 End-of-day quote.17.27%
BARCLAYS PLC 0.01% 181.66 Delayed Quote.24.57%
BRITISH POUND / JAPANESE YEN (GBP/JPY) -0.03% 151.024 Delayed Quote.7.26%
BURBERRY GROUP PLC 0.73% 1797.5 Delayed Quote.0.45%
CANADIAN DOLLAR / JAPANESE YEN (CAD/JPY) 0.07% 86.145 Delayed Quote.6.64%
COMPAGNIE FINANCIÈRE RICHEMONT SA 1.53% 99.48 Delayed Quote.24.23%
DJ INDUSTRIAL -0.48% 34584.88 Delayed Quote.13.54%
EURO / JAPANESE YEN (EUR/JPY) 0.02% 128.97 Delayed Quote.2.45%
INDIAN RUPEE / JAPANESE YEN (INR/JPY) 0.14% 1.49354 Delayed Quote.5.55%
NEW ZEALAND DOLLAR / JAPANESE YEN (NZD/JPY) -0.22% 77.38 Delayed Quote.4.64%
PALLADIUM 0.00% 2016.5 Delayed Quote.-17.16%
PUMA SE -0.59% 100.75 Delayed Quote.9.18%
RIO TINTO PLC -3.60% 4829.5 Delayed Quote.-11.71%
SIEMENS AG -0.17% 149.52 Delayed Quote.27.23%
SIEMENS GAMESA RENEWABLE ENERGY, S.A. -1.60% 22.12 Delayed Quote.-33.15%
SVENSKA HANDELSBANKEN AB 0.02% 95.26 Delayed Quote.15.33%
SWEDBANK AB 0.70% 170.58 Delayed Quote.18.36%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.02% 109.92 Delayed Quote.6.30%
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