On 01 August, 2017 – Global stocks rallied Tuesday on favorable earnings and economic data

The US dollar stabilized against the yen and euro
United States
US shares advanced Tuesday with the Dow Jones industrials recording its fifth straight record closing high. The Dow was up 0.3 percent while the S&P and Nasdaq were up 0.2 percent. The Dow approached the 22,000 level but failed to break through. The US dollar regained some of the ground it lost over the last several days.
Banks including JPMorgan Chase, Bank of America and Citigroup all advanced. Apple was higher prior to its earnings release after markets in the US close. Pfizer earnings were higher than expected. Archer Daniels Midland earnings jumped 39 percent in underlying second quarter earnings. Under Armour tumbled after the sportswear maker reported its second straight quarter of losses and launched a major restructuring plan that will slice its 2017 operating profit by half. Ford and General Motors declined after they reported lower monthly sales. Royal Caribbean Cruises and Archer Daniels Midland advanced.
Apple reported a 7.2 percent rise in quarterly revenue, buoyed by better-than-expected sales of its iPhones ahead of the smartphone’s 10th-anniversary edition launch later this year. The company forecast total revenue of between $49 billion and $52 billion for the current quarter. The company’s net income rose to $8.72 billion in the three months ended July 1, from $7.80 billion a year earlier. Revenue rose to $45.41 billion from $42.36 billion in the quarter.
July ISM manufacturing index slid to a still high 56.3 from 57.8 in June. Construction spending in June dropped 1.3 percent. Personal income was unchanged in June and spending crept up just 0.1 percent on the month.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$3.40 to US$1,270.95. Copper futures were down 0.5 percent to US$2.88. WTI spot crude was down 97 US cents to US$49.20. Dated Brent spot crude was down 91 US cents to US$51.81. The US dollar was up against the yen, euro and the Canadian and Australian dollars. The currency declined against the pound and the Swiss franc. The Dollar Index was up 0.2 percent. The yield on US Treasury 30 year bond was down 3 basis points to 2.86 percent while the yield on the 10 year note was down 4 basis points to 2.25 percent.
Europe
European shares rose Tuesday thanks to encouraging corporate earnings, rising oil prices and upbeat economic data. Both the FTSE and CAC added 0.7 percent while the DAX was 1.1 percent higher. The SMI was closed for a holiday.
Royal DSM NV advanced after the Dutch chemicals and pharmaceuticals firm lifted its 2017 targets after reporting a 21 percent rise in second-quarter net profit. BP was higher after the company reported a replacement cost profit in its second quarter, compared to hefty loss a year ago. Rolls-Royce gained after the aircraft engine maker swung to a first-half net profit despite multiple headwinds. Taylor Wimpey was higher after announcing a special dividend. Intertek Group and insurer Direct Line gained thanks to impressive first-half results.
BNP Paribas gained after the real estate arm of the French bank said it is acquiring UK property services group Strutt & Parker for an undisclosed amount. Royal Dutch Shell and Total were up after crude oil futures surged to settle above the key psychological level of $50 a barrel overnight. Infineon Technologies were higher after the chipmaker reported stronger-than-expected third-quarter earnings and affirmed its full-year outlook. Lender CYBG rallied on strong third-quarter results. Fresnillo declined even though first-half pretax profit rose 52 percent to $387.4 million.
Flash second quarter euro area gross domestic product was up 0.6 percent from the first quarter and 2.1 percent from the same quarter a year ago. No sector breakdown is available with the flash release. In the UK, Nationwide house price index was up 2.9 percent on the year. The UK manufacturing PMI climbed from 54.2 in June to 55.1 in July. The euro area manufacturing PMI eased to 56.6 from 57.4 in June.
Asia Pacific
Asian shares were broadly higher Tuesday as stable oil prices, improved corporate earnings in Japan and a better than anticipated China Caixin manufacturing PMI helped investors shrug off geopolitical tensions and policy uncertainty in the United States.
The Shanghai Composite gained 0.6 percent after the latest manufacturing PMI survey from Caixin edged up to 51.1 from 50.4 in June. Both output and new orders rose at the fastest rates for five months, helped by a solid upturn in new export sales. The Hang Seng was up 0.8 percent. Other regional manufacturing surveys painted a mixed picture, with activity in Japan, Australia and Taiwan expanding while manufacturing sectors in India, South Korea, Malaysia and Indonesia contracting.
The Nikkei was up 0.3 percent and the Topix added 0.6 percent after Nitto Denko, Japan Airlines and Mitsui Sumitomo Financial Group posted strong earnings This helped offset concerns over a sinking US dollar, which hovered near a six-week low against the yen amid rising geopolitical tensions and political uncertainty over healthcare and tax reform in the United States.
The S&P/ASX was up 0.9 percent and the All Ordinaries were up 0.8 percent after the Reserve Bank of Australia kept its policy interest rate at 1.5 percent. The Board said an appreciating Australian dollar would result in a slower pick-up in economic activity and inflation than currently forecast. Buoyant commodity prices and upbeat readings on manufacturing activity and consumer confidence also boosted investor sentiment. The big banks advanced. BHP Billion and Fortescue Metals Group gained after iron ore prices rose to almost $74 a ton. Gold miners Newcrest, Evolution and Regis Resources also were higher. Energy majors Santos, Woodside Petroleum and Origin Energy gained after crude oil prices rose above $50 a barrel overnight. Treasury Wine Estate jumped after the wine supplier reiterated its second-half earnings guidance and said growth prospects in China remain intact.
The Kospi was up 0.8 percent after exports jumped 20 percent in July from a year earlier on brisk overseas sales of semiconductors. The Sensex was up 0.2 percent.
Looking forward
The Reserve Bank of India announces its monetary policy decision. UK construction PMI for July will be released. The Eurozone June PPI will be reported. In the US, The US Treasury will announce its quarterly refunding. ADP private employment for July will be released.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

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