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Daily Briefing – Wednesday, August 2, 2017

Europe

European indexes all ended in the green on excellent earnings reports and a rising Eurozone GDP (2.1% YoY for Q2. Manufacturing PMIs from the EU and Germany, however, disappointed investors at 58.1 and 56.6 respectively. UK housing prices also performed well, beating expectations at a 2.9% increase YoY in July. That plus BP and Rolls Royce rallies pushed the FTSE up by 0.7%. Hopes are that the ECB will see these numbers as an incentive to begin removing monetary incentives.

 

US

US manufacturing readings were at some divergence yesterday – the Markit reading showing a better-than-expected increase to 53.3 after hitting 9-month lows, and the ISM showing a 1.5 point dip to 56.3. Income growth also is at a 6-month low – a flat zero – but vehicle sales rose slightly.

 

Asia

Asian markets got a boost yesterday from US earnings reports, but in China they ended this morning in the red. Reuters this morning reports that the Trump administration is considering actions against unfair Chinese trade practices.

 

 

Shares

Apple yesterday beat expectations in spite of a lull in sales ahead of the introduction of the iPhone 8. EPS was $1.67 on $45.4 billion revenues. And Sony reflected the shine of a bygone era when it led the video market, showing a tripling of operating profits YoY to $1.43bn. Today, Tesla reports earnings amidst the retirement of the company’s battery chief and expectations of a loss at the bottom line. Earnings per share should be in the minus $2.39 on $2.52 billion sales – up from $1.56 last year.

 

Commodities

The American Petroleum Institute yesterday surprised investors with a 1.78mB build, pressuring prices down again towards $48.7 per barrel. Observers believe that OPEC output rose in July by 210kB per day on Libyan production.

 

Today’s Events

9 AM GMT

EU: Producer Price Index

11 AM GMT

US: Mortgage applications followed at 12:15 by the ADP employment figures

2:30 PM GMT

EIA Crude Oil Stocks.

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