On 17 July, 2017 – Trading was thin on a mid-summer Monday
Investors stayed on the sidelines as they waited for earnings results.
United States
Stocks were virtually unchanged Monday in listless trading as investors waited for earnings results. The Dow Jones industrials were down 8.02 points and the S&P lost 0.13 point. The Nasdaq however added 1.97 points. Consumer-discretionary shares posted some of the biggest moves. Earnings will be closely watched to see if high valuations are justified in the face of little inflation and recent mixed economic data.
Macy’s and Kohl’s advanced — both stocks have slid in recent months thanks to tough e-commerce competition but have rebounded over the past week. BlackRock and Blue Apron retreated. Blue Apron Holdings tumbled to new lows on Monday in the wake of Amazon.com’s move to register a trademark for a possible rival service. BlackRock was lower after its second-quarter results disappointed.
Netflix added more US and international subscribers than expected in the second quarter as new original shows such as “13 Reasons Why” as well as the latest season of hit political drama “House of Cards” helped attract more viewers. The company said it added 4.14 million subscribers internationally in the quarter ended June 30.
July Empire State manufacturing survey reading declined to 9.8 from June’s 19.8.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.80 to US$1,234.10. Copper futures were up 1.43 percent to US$2.73. WTI spot crude was down 55 US cents to US$45.99. Dated Brent spot crude was down 50 US cents to US$48.41. The US dollar was up against the pound and the Canadian and Australian dollars. The US dollar was down against the euro and Swiss franc. The currency was unchanged against the yen. The Dollar Index was down 0.1 percent. The yields on both the US Treasury 30 year bond and 10 year note were down 2 basis points to 2.90 percent and 2.31 percent respectively.
Europe
Most European stock indices retreated Monday in choppy trading. The FTSE was up 0.3 percent and the SMI added 4.08 points. However, the CAC and DAX declined 0.1 percent and 0.4 percent respectively. Mining stocks were among the best performers following the release of the better than expected Chinese GDP report. Investors were cautious as they waited for US earnings reports. Trading volume was light.
GEA tumbled after cutting its 2017 profit guidance. Weir Group advanced in London after the company upgraded its outlook for the group’s full-year performance, citing an accelerated recovery in the Northern American oil and gas markets. Carillion surged after its joint venture landed a pair of government contracts. AstraZeneca rose after the pharmaceutical firm said chief executive Pascal Soriot will host a call with analysts on second-quarter earnings at the end of the month as planned.
Broadcaster ITV climbed after it appointed the boss of EasyJet, Carolyn McCall, as its new chief executive. Among the miners, Glencore, Anglo American, Antofagasta, BHP Billiton and Rio Tinto all advanced. Getinge sank in Stockholm after its second quarter core earnings fell below estimates. SGS was among the weakest stocks of the day on a broker downgrade. Adecco also retreated after analysts cautioned that the reforms of new French President Emmanuel Macron could have a negative impact on it. Novartis and Roche were higher. Shares of Nestlé finished lower.
June Eurozone harmonized index of consumer prices slowed to a 6-month low. Inflation eased slightly to 1.3 percent in June from 1.4 percent in May.
Asia Pacific
Most Asian stocks rose broadly Monday as weak US retail sales and inflation data served to cool Fed rate increase speculation and data showed the Chinese economy grew more than expected in the second quarter. The Japanese markets were closed for the Marine Day holiday.
Chinese shares tumbled as a series of profit warnings from small-cap companies and the government’s focus on increased regulatory scrutiny overshadowed encouraging gross domestic product data. The Shanghai Composite tumbled 1.4 percent while the Hang Seng added 0.3 percent. Second quarter GDP was up 6.9 percent from the same quarter a year ago. That was unchanged from the previous quarter and exceeded expectations for a 6.8 percent increase. June retail sales jumped an annual 11.0 percent, beating forecasts for 10.6 percent and up from 10.7 percent in May. Industrial output climbed 7.6 percent from last year, topping expectations for an increase of 6.5 percent. Fixed asset investment gained an annual 8.6 percent — unchanged from the previous month and beating forecasts for 8.4 percent.
The S&P/ASX was down 0.2 percent while the All Ordinaries were 0.1 percent lower as banks lost ground, offsetting gains in the material and energy sectors. The big four banks retreated ahead of this week’s APRA announcement of new capital rules for major banks. Insurer Medibank Private tumbled and Insurance Australia Group declined while investment bank Macquarie Group closed marginally higher.
The Kospi added 0.4 percent on improved risk appetite amid diminished prospects of a third interest rate increase from the Federal Reserve this year. The Sensex was up 0.2 percent to hit fresh record closing highs as weak US inflation and retail sales data dimmed prospects of more Fed rate increases this year and Chinese GDP figures topped forecasts.
Looking forward
The Reserve Bank of Australia publishes the minutes from its most recent policy meeting. The UK reports both consumer and producer price indices for June. Germany releases July ZEW survey. In the US, June import and export price indices and June housing market index will be posted along with May Treasury international capital.
Global Stock Markets
*Note — all releases are listed in local time.
Source: Fidelity
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