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Charting the Markets: 05 July

FTSE 100, DAX 40 and S&P 500 on a negative footing. EUR/USD, GBP/USD and USD/JPY all drop back in morning trading And Brent crude oil and natural gas prices rise while wheat prices drop like a stone.

Jeremy Naylor | Analyst, London | Publication date: Wednesday 05 July 2023

 

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead 6/7/23: JOLTS; Australia trade balance; Curry’s; Levi’s

US jobs-related data including the JOLTS will be key ahead of the NFP report on Friday. Australia’s trade surplus is expected to narrow.

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Wednesday 05 July 2023 

Watch out for what electronics retailer Curry’s and denim clothing giant Levi’s say about margins in a tough economic environment.

 

 

 

 

[MongiIG]

Early Morning Call: JPY rises against major currencies

The APAC region and Hong Kong's Hang Seng recorded a second day of heavy losses.

 Jeremy Naylor | Analyst, London | Publication date: Thursday 06 July 2023 

FOMC

The minutes of the last Federal Open Market Committee (FOMC) meeting where the US left rates on hold showed a split vote, with some still wanting to push rates up, but the final decision to hold was to buy time and assess the need for further rate hikes.

The USD climbed on the news, and equity markets around the world fell. Overnight in the Asia Pacific (APAC) region, Hong Kong's Hang Seng recorded a second day of heavy losses. More economic data today, including the monthly US jobs report, automatic data processing (ADP) private payrolls, and Friday's non-farm jobs numbers, could all help determine the Federal Reserve's (Fed) rate trajectory.

The Reserve Bank of Australia

After Tuesday's decision to keep rates unchanged, the Reserve Bank of Australia (RBA) is expected to hike by 25 basis points. This is according to economists polled by Reuters. More than 90% of respondents, that's 23 out of 25, believe the RBA will increase its official cash rate to 4.35% at its next meeting on August 1. Also in Australia, the trade surplus unexpectedly rose in May to A$11.8 billion. Exports increased by 4.4%, while imports rose by a soft 2.5% a year earlier.

Levi's

Levi's has to fight battles on two fronts: on the production side, costs have been escalating with the cost of cotton, labour, and transport. Swollen inventories have also forced the group to ramp up discounts and promotions.

Oil overview

Oil prices rose on Wednesday. WTI briefly passed the $72 mark and hovered around that level after weekly inventories showed a larger than expected fall in crude stocks. Crude oil inventories fell by 4.4 million barrels last week, according to the API. An oil analyst anticipated a smaller drop of 1.8 million barrels. Gasoline and distillate stocks rose by 1.6 million and 600,000 barrels, respectively.

UK banks

Today, the big UK banks are in front of regulators at the Financial Conduct Authority (FCA), facing accusations of "profiteering" for not adequately passing through recent rate rises. The Bank of England's hefty interest rate increases have seen high-street banks such as NatWest, Barclays, HSBC, and Lloyds increase mortgage costs steeply, but savers have seen their rates rise less fast. Chancellor Jeremy Hunt has backed the FCA's request to meet the banks, saying "Increased interest rates must also be passed on to savers."

Currys

Elsewhere on the equity market, British electrical retailer Currys reported a 38% fall in full-year profit, hurt by the weak performance of its Nordics business, and said it would not pay a final dividend.

Levi Strauss

Levi Strauss is set to report earnings before the market opens. The street expects the denim maker to post earnings of 3 cents per share on revenue of $1.34 billion. That is to be compared to Earnings per Share (EPS) of 29 cents and revenue of $1.47 billion in the same quarter a year ago. Levi Strauss has seen its stock decline by nearly 21% over the past three months.

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 06 July

Hawkish Fed minutes put pressure on Dow, Nasdaq 100 and CAC40.EUR/USD, EUR/GBP and EUR/JPY slide despite strong German factory orders. And WTI and silver rise but gold slips post hawkish Fed minutes and appreciating dollar.

Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 06 July 2023

 

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead 7/7/23: NFP; German industrial production; UK Halifax house prices

The US jobs report will be the biggest risk event on Friday. A number that is hotter than expected could suggest the US labour market is strong enough to withstand another rate hike by the Fed.

 Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Thursday 06 July 2023 

German industrial production figures come at a time when the US vs China chip tit-for-tat puts the spotlight on global trade. Plus, Halifax house price data could point to further weakness in the UK housing market.

 

 

 

[MongiIG]

China inflation data weighs on APAC currencies

In China, consumer price index was flat in June year-on-year, after a 0.2% gain recorded in May, missing expectations of a 0.2% rise.

 Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 10 July 2023 

US overview

The US dollar showed modest gains on Monday, but remained lower than where it was on Friday before the release on June non-farm payrolls (NFPs). The US economy added 209,000 jobs last month, missing market expectations for the first time in 15 months. May job creations were also downwardly revised to 306,000.

GBP/USD tested the 14-month high set in June, while USD/JPY fell as low as ¥142.

China

In China, consumer price index (CPI) was flat in June year-on-year (YoY), after a 0.2% gain recorded in May, missing expectations of a 0.2% rise. This was the slowest pace since February 2021. Producer price index fell at the fastest pace since December 2015. The index fell for a ninth straight month, by 5.4% YoY.

This latest data added to the case that the People's Bank of China (PBoC) measures have so far been insufficient. Beijing has set a target for a consumer inflation of about 3% this year. Economists see it more around 1%. Does it mean further cuts from the PBoC should be expected? The market anticipates only another 10-basis point cut this year and believes that support is more likely to come through fiscal measures.

Central banks

There is more to come later this week. A couple of central banks are set to decide on rates, both on Wednesday.

New Zealand is up first. After hiking by 25-basis points at its last meeting and taking the official cash rate (OCR) to its highest in nearly 15 years, the Reserve Bank of New Zealand (RBNZ) is very likely to stay put this month, keeping the OCR at 5.5%. After its last decision the bank said it was seeing borrowing costs peaking at that level.

The situation is different in Canada, where the Bank of Canada (BoC) unexpectedly hiked by 25-basis points in June, for the second time only this year. On Wednesday, the bank is seen to add another quarter of a percentage point to its overnight rate, taking it to 5%.

Concerns about inflation have increased in recent weeks. If headline inflation has been almost constantly falling since June last year, core inflation appears to be stickier. Core CPI has also been falling, but at a slower rate that the main index.

UK retail sales

In the UK, the BRC retail sales monitor is expected to rise by 3.7% in June, the same pace as the previous month, as consumers continue to rein in spending on non-essential goods.

Also on Tuesday, unemployment rate is seen remaining at 3.8%.

On Thursday, a shock could come with monthly GDP. The British economy is expected to have contracted by 0.4% in May month-on-month (MoM). This would take the three-month average to -0.1%. We are nowhere near talking about recession yet, but it is a scenario that economists are keeping in mind, as many see rates rising a further 150 basis points this year.

Corporate news

On the corporate front, there is not much to expect over the next three days. It will all change on Thursday with PepsiCo and Delta Airlines' quarterly reports, followed on Friday by the first set of US banks earnings. JPMorgan Chase, Wells Fargo and Citigroup are due to report.

They will be followed next week by Bank of America, Goldman Sachs and Morgan Stanley.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 10 July

European stocks indices to open lower on sluggish Chinese economy. EUR/USD and GBP/USD stall while USD/JPY slips at start of week. And gold, crude oil and natural gas prices move higher.

Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 10 July 2023

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead to 11/7/23: US CPI; UK retail sales; Australia consumer confidence; ZEW

Ahead of the key US inflation reading on Tuesday, watch out for potential market moving events including UK retail sales, and consumer confidence figures out of Australian and Germany.

 

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 10 July 2023

 

 

 

 

 

[MongiIG]

UK wages growth hits record high, add to BOE’s inflation concerns

Wages in the UK rose at a record pace, fueling fears of a wage price spiral that will inevitably lead the BoE to raise rates further.

 Jeremy Naylor | Analyst, London | Publication date: Tuesday 11 July 2023 

UK economy

Wages in the UK rose at a record pace, fueling fears of a wage price spiral that will inevitably lead the Bank of England (BoE) to raise rates further. Just a day after BoE Gov. Andrew Bailey said inflation will start to fall measurably Average weekly wages, excluding bonuses, rose 7.3% as staff demanded more pay to keep pace with consumer price inflation, which has been running in double digits for much of the last year.

Meanwhile, the unemployment rate unexpectedly rose to 4% in June from 3.8% the prior month. Economists forecast the unemployment rate to remain at 3.8%.

Inflation

Food inflation is still weighing on shoppers' ability to spend on nonessential items. The British Retail Consortium (BRC) retail sales monitor rose by 4.2% year-on-year (YoY) on a like-for-like basis. It is higher than the 3.7% increase recorded in May but much lower than inflation. In other words, an increase in spending but a drop in the volume of goods purchased the survey shows that so far, consumers remain resilient.

Bank of England

Over the second quarter, food spending was up 9.8%. But the threat of further Bank of England (BOE) rate hikes and the prospect of a slower-than-expected economic recovery mean consumers remain cautious. Non-food spending only grew by 0.3% in the period. On Thursday, a shock could come with the monthly gross domestic product (GDP) data. The British economy is expected to have contracted by 0.4% in May month-over-month (MoM).

This would take the three-month average to -0.1%. We are nowhere near talking about a recession yet, but it is a scenario that economists keep in mind, as many see rates rising a further 150 basis points this year.

The Federal Reserve

The Federal Reserve (Fed) might still need to raise interest rates further, but the tightening cycle is coming to an end. Yesterday, several Fed officials expressed their views. For San Francisco Fed President Mary Daly, the Fed is nearing "the last part" of its hiking cycle. For Fed Vice Chair for Supervision Michael Barr, "I'll just say for myself, I think we're close." Of course, not all Fed members agree. Cleveland Fed President Loretta Mester told reporters yesterday that "if it was just me alone, I would have moved the rates up, but I understood the rationale for not moving in June."

Australia inflation

In Australia, consumer sentiment improved in July. The Westpac consumer sentiment index rose 2.7% in July to 81.3, the biggest gain since April. It reflects an improvement on the consumer inflation front and the fact that the Reserve Bank (RBA) held rates at 4.1% at its last meeting. However, the index remains well below 100, which means that pessimists still outnumber optimists for the 17th month running. Australian business conditions also improved. National Automotive Board (NAB) business confidence rose to 0 in June from -4 in May.

Major banks

Major banks are to undergo a major overhaul in the way they are assessed for their operational risks. If it goes through, it will be one of the biggest regulatory overhauls since the financial crisis.

The top US banking regulator, Michael Barr, says he wants the big banks to start using a standardised approach for estimating credit, operational, and trading risks rather than relying on their own estimates. The Fed's annual stress tests should be reassessed to better capture the dangers faced and to better align Wall Street with international standards known as Basel III.

It may set up a clash over the amount of capital required to cover increased risks, as the banks have long fought against higher capital requirements. The announcement comes just days before the largest banks begin posting their second-quarter results, starting on Friday with JPMorgan, Citigroup , and Wells Fargo.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 11 July

Dow, Nasdaq 100 and Nikkei struggle to maintain bullish momentum. EUR/USD nears April highs while EUR/GBP and EUR/JPY continue their descents. And Brent crude oil and silver probe key resistance while wheat remains under pressure.

Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 11 July 2023

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead to 12/7/23: US CPI; BoC and RBNZ rate decision

US CPI figures will give traders a hint of whether or not inflation is easing enough to cool the US central bank’s hawkish stance on rates.

Plus, the Bank of Canada is likely to raise rates, while the Reserve Bank of New Zealand is seen keeping rates on hold.

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Tuesday 11 July 2023

 

 

 

 

 

[MongiIG]

The dollar weakens ahead of the US CPI

The dollar continues to weaken ahead of the US consumer price index later today. It now trades at its lowest level since May 8 against the euro.

 Jeremy Naylor | Analyst, London | Publication date: Wednesday 12 July 2023 

The Reserve Bank of New Zealand

The Reserve Bank of New Zealand (RBNZ) has decided to keep its official cash rate at 5.5%. This decision was widely expected. After the previous RBNZ meeting, its Governor Adrian Orr said the bank was seeing borrowing costs peak at that level. The RBNZ was one of the first banks to withdraw its pandemic-era stimulus and, since October 2021, has hiked rates by a total of 525 basis points.

Now the RBNZ committee says that "the optical character recognition (OCR) will need to remain at a restrictive level for the foreseeable future". Even though inflation has come down in recent months, New Zealand is still dealing with 6.7% inflation.

Minutes from the latest monetary policy committee meeting said it expects inflation to decline to within the central bank's 1% to 3% target by the second half of 2024. Like everywhere else, the fight against inflation has a cost. The New Zealand economy is currently in a technical recession.

The Bank of Canada

This afternoon, the Bank of Canada is seen to have added another quarter of a percentage point to its overnight rate, taking it to 5%. Concerns about inflation have increased in recent weeks. If headline inflation has been almost constantly falling since June last year, core inflation appears to be stickier. The core consumer price index (CPI) has also been falling, but at a slower rate than the main index. The USD continues to weaken ahead of the US consumer price index later today. It now trades at its lowest level since May 8 against the EUR.

Cable

Cable is also rising for a sixth day, closing in on $1.30, a level last seen in April last year. Headline consumer price index (CPI) is expected to decelerate to 3.1% in June YoY, down from 4% in May. Core CPI growth is also expected to slow to 5% after a 5.3% print in May. Since March, the headline CPI figure has been below core inflation.

Nvidia

Energy prices have substantially fallen, but broad-based inflation seems more stubborn. Following last year's abortive attempt by NVIDIA Corp to buy rival chip maker Arm, the latter is now wanting to bring Nvidia in as an anchor investor. That's according to the FT, which says the tactic is to pump prime interest in Arm's spinoff later this year from parent Softbank.

Softbank

SoftBank wants to list Arm in an initial public offering (IPO) in New York, possibly as early as September. Nvidia, which is the world's most valuable semiconductor company, was forced last year to abandon its planned $66 billion acquisition of Arm after the deal was challenged by regulators. SoftBank bought Arm for $32 billion in 2016, a valuation that Softbank aims to double on the sale of the business.

Many private tech companies and their advisers are watching closely to see if Arm can succeed in launching its IPO in 2023 after a year-long slump in new listings.

Oil overview

Oil prices were broadly flat overnight during the Asia Pacific region (APAC) session but rose to a 10-week high yesterday afternoon after the Environmental Impact Assessment (ElA) cut its 2023 US crude oil production forecast. The ElA also added that the oil market should remain tight in the second half of 2023, citing strong demand from China combined with the supply cuts announced recently by Saudi Arabia and Russia. The ElA now expects Brent to average $78 a barrel in July and us to average $80 a barrel after a year-long slump in new listings.

Oil prices

Oil prices were broadly flat overnight during the Asia Pacific region (APAC) session but rose to a 10-week high yesterday afternoon after the ElA cut its 2023 US crude oil production forecast. The ElA also added that the oil market should remain tight in the second half of 2023, citing strong demand from China combined with the supply cuts announced recently by Saudi Arabia and Russia. The ElA now expects Brent to average $78 a barrel in July and up to $80 a barrel in the fourth quarter of 2023.

OPEC

Yesterday, the Organization of the Petroleum Exporting Countries (OPEC) Secretary General Haitham Al Ghais said the organisation was seeing global demand for all forms of energy rise by 23% through 2045 and added that limiting or stopping funding new oil projects was unrealistic and unwise. He also acknowledged the need for technology to tackle continued fossil fuel emissions: "We will require innovative solutions such as carbon capture, utilisation, and storage, and hydrogen projects in addition to a circular carbon economy."

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 12 July

Stock indices remain bid ahead of U.S. CPI release. WTI, gold and natural gas remain bid ahead of U.S. inflation publication. And Dollar weakens ahead of US CPI, driving EUR/USD and GBP/USD higher and weighing on USD/CAD.

Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 12 July 2023

 

 

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead to 13/7/23: China trade; US PPI; Delta; PepsiCo

US producer price data will be in focus after CPI showed that consumer prices rose by less than economists had forecast in June. Then, China releases trade figures.

Plus, keep an eye out for earnings from Delta Airlines, Conagra Brands, and PepsiCo.

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Wednesday 12 July 2023

 

 

 

 

[MongiIG]

Dollar falls after US CPI data

The USD weakened further on Wednesday with the release of the US consumer price index. Headline CPI growth slowed to top 3% year-over-year (YoY), lower than the 3.1% expected.

 Jeremy Naylor | Analyst, London | Publication date: Thursday 13 July 2023 

The US dollar

The USD index is closing down on the highly psychological level of 100, a level it hasn't touched since 18 April 2022, some 15 months ago the USD weakened further on Wednesday with the release of the US consumer price index (CPI).

Headline CPI growth slowed to top 3% year-over-year (YoY), lower than the 3.1% expected. We have to go back to February 2021 to find a lower consumer price index (CPI). Core CPI rose by 4.8% YoY, also missing estimates of 5%.

The next test for the USD is expected to be the producer price index, which is expected to rise by 0.4% in June compared to a year ago. Core PPI, though, is expected to rise by 2.6% after rising by 2.8% in May. The weak dollar supported US equity markets on Wednesday. It was also good news for Gold, which is now trading at a two-and-a-half-month high.

China overview

Even though China's trade surplus widened in June, this shouldn't hide the fact that this is another sign the world's second-largest economy is dwindling. China's trade missed forecasts for both imports and exports. Imports fell 6.8% in June compared to a year ago.

Economists anticipated a smaller drop of 4.1%. Exports also fell by 12.8%, more than the 10% expected. To find a higher drop, we have to go back to February 2020, when China's exports came virtually to a halt.

China's export slump comes as sluggish overseas economies struggle with inflation and rising interest rates and buy fewer goods from Chinese factories. Chinese factory activity has been shrinking in recent months, and policymakers are now reckoning with the prospect of prolonged slower growth in the world's second-largest economy of around 3% annually, according to economists' forecasts. That is less than half the rates typical throughout recent decades and gives the impression of an economy in recession.

The UK Economy

The UK economy shrank by 0.1% in May compared to April; this is better than the -0.3% economists had anticipated. Industrial production fell by 2.6% in May compared to last year, in line with expectations.

Walt Disney

Over in the US, Walt Disney shares and all sessions on the IG platform were up late on Wednesday. After the bell, The Walt Disney Company said it would extend CEO Bob Iger's deal by two years, taking his tenure through 2026. Iger told CNBC in February that he had no intention to stay longer than two years in his post, which would have taken him through 2024.

Iger had a successful 15 years at the company as CEO, starting in 2005, during which the company expanded in many directions, including the acquisition of Pixar for $7.4 billion, Marvel for $4 billion, and possibly the most lucrative deal in the purchase of Lucasfilm from George Lucas to acquire the Star Wars multimedia franchise and Indiana Jones series.

Iger returned to Disney in November, retaking the job from Bob Chapek, who was appointed CEO in early 2020. Iger planned to prepare his next successor during his new stint as CEO.

Delta Air Lines

Investors and traders are now looking west as the US earnings season is about to start. Before US banks open tomorrow, a few stocks are due to report today. Delta Air Lines is one of them.

Over the past three months, the stock has risen some 53%, benefiting from high demand for travel following the pandemic. But there is still a long way to go to get Delta Air Lines's share of pre-pandemic levels Since February 2020, Delta's stock has been down about 15.5%. Will this upcoming report give the stock another boost?

PepsiCo

The street expects earnings of $2.35 per share, up 64% YOY. Revenue is forecast to rise by 11.9% YoY to $15.46 billion. For the full fiscal year, analysts are currently forecasting Earnings per share (EPS) of $6.13 on revenue of $56.86 billion PepsiCo is also due to report Q2 earnings before the opening bell.

The street expects the group to post adjusted earnings of $1.96 per share, which would be a 5.4% increase on the same quarter a year ago. Revenue is expected to rise by 7.4% YoY to $21.72 billion. Investors also await any potential update on the full-year forecast. PepsiCo currently expects to post revenue of $90.97 billion, up 5.3%, and EPS of $7.96 billion, up 7.8%.

US crude oil

US Crude stocks rose much more than expected last week, according to the enviromental impact assessment (EIA) crude inventories rose by 5.9 million barrels last week as net crude imports rose by 600,000 barrels per day. U.S. gasoline stocks were virtually unchanged, falling by just 3,000 barrels, while distillate stockpiles rose by 4.8 million barrels.

[MongiIG]

Charting the Markets: 13 July

Dow, Nikkei 225 and CAC40 rise after US CPI data. EUR/USD trades in 15-month highs, USD/JPY in six-week lows while EUR/GBP stabilises. And Brent crude oil remains bid while wheat and orange juice prices struggle.

Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 13 July 2023

 

 

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead to 14/7/23: JPMorgan; Wells Fargo; Citigroup; Eurozone and US trade data

Wall Street banks earnings from JPMorgan Chase, Wells Fargo, and Citigroup are expected to report higher profits, despite a drag on dealmaking.

Eurozone and US trade data come a day after data showed US consumer prices registered their smallest annual rise in more than two years in June.

 

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Thursday 13 July 2023

 

 

 

 

 

 

[MongiIG]

DXY crashes through psychological 100 support

This after weak US PPI data, which sent EUR/USD and GBP/USD to near 18-month highs.

 

Jeremy Naylor | Analyst, London | Publication date: Friday 14 July 2023

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 14 July

Equity rally loses some steam as U.S. earnings season kicks off in earnest. Strong rallies in EUR/USD, GBP/USD and swift decline in USD/JPY are likely to pause. And Gold, WTI and wheat prices continue to move higher.

Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 14 July 2023

 

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Risk event for the week starting 17 July: UK inflation

With US inflation showing signs of easing, will FX traders be waiting to hit the sell key on the pound with UK inflation on Wednesday?

IGTV’s Jeremy Naylor caught up with Zain Vawda from Daily FX with a look at EUR/GBP. There’s the expectation of a retracement then another chance to short EUR/GBP.

 

Jeremy Naylor | Analyst, London | Publication date: Friday 14 July 2023

 

 

 

 

[MongiIG]

China's GDP misses expectations

In China, GDP expanded 6.3% in the second quarter, accelerating from 4.5% in the first three months of the year, but the rate was below the forecast for growth of 7.3%.

 Jeremy Naylor | Analyst, London | Publication date: Monday 17 July 2023 

European indices

European indices started the week in the red, in the wake of the US equity market on Friday and Asia Pacific region (APAC) overnight. After recording its worst weekly performance in 2023, the USD Basket remained below 100 on Monday.

China overview

In China, the gross domestic product (GDP) expanded 6.3% in the second quarter, accelerating from 4.5% in the first three months of the year, but the rate was below the forecast for growth of 7.3%. This was the quickest pace since the second quarter of 2021, but the COVID-19 restriction last year provided a very favourable base effect. Also released this morning, industrial production rose more than expected by 4.4% in June year-on-year (YoY), and retail sales narrowly missed consensus, rising 3.1% in June year-on-year (YoY).

Equity market

Elsewhere on the equity market, Czech billionaire Daniel Křetínský is poised to win the battle for control of Casino after a group of investors led by billionaire Xavier Niel dropped out of the running to bail out the French food retailer.

Microsoft

Microsoft proposed $69 billion purchase of Activision Blizzard is back on, at least on the US side. On Friday, a US judge rejected final calls to block Microsoft from taking over Activision Blizzard, but in the UK, the Competition and Markets Authority (CMA) is wanting time to consider the proposals from Microsoft to restructure its cloud gaming business.

Back in April, the CMA said that combining the maker of Xbox consoles with the creator of hit games including Call of Duty and Diablo would give it "the ability to undermine new and innovative competitors." The CMA has now pushed back its July 18 deadline for blocking the deal until August 29 after receiving a "detailed and complex submission from Microsoft."

Major banks

After last Friday, which saw JP Morgan Chase, Wells Fargo , and Citigroup Inc all beat earnings and revenue estimates, and other financial giants are set to report this week. Tomorrow, Bank of America is forecast to post earnings of 84 cents per share on revenue of $25.02 billion.

On Wednesday, Goldman Sachs's earnings per share (EPS) was seen at $3.46 per share and revenue at $10.66 billion. Other than banks, we are expecting big names to report in the coming days.

Tesla

Starting on Wednesday with Tesla . The street expects earnings of 79 cents per share on revenue of $24.29 billion. In the same quarter a year ago, the electric car maker posted EPS of almost 76 cents and revenue of just under $17 billion. This illustrates very well the shift in strategy Elon Musk put in place at the beginning of the year. To be able to compete with cheaper Chinese EV makers, Musk said Tesla needed to prioritise sales over profits.

Stocks

Also expected on Wednesday: Netflix Halliburton, and IBM. Followed on Thursday by American Airlines and Johnson and Johnson, and on Friday by American Express and Schlumberger. All these stocks are session stocks on the IG platform.

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 17 July

European stocks open lower as China Q2 GDP disappoints. EUR/USD, GBP/USD rallies and drop in USD/JPY take a breather. And gold, WTI and copper prices all slip back.

Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 17 July 2023

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Day Ahead 18/3/23: Goldman Sachs; BoA; Morgan Stanley earnings; RBA minutes

Brace for a deluge of US bank earnings including Goldman Sachs, Bank of America and Morgan Stanley. The RBA minutes will be key, along with earnings from Ocado.

 

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 17 July 2023

 

 

 

 

 

[MongiIG]

The GBP edges lower after UK inflation data

The British Pound fell as the consumer price index rose less than expected by 7.9% in June YoY.

 Jeremy Naylor | Analyst, London | Publication date: Wednesday 19 July 2023

U.S. retail sales

The USD was up on Wednesday morning, from the 15-month low against a basket of currencies it hit on Tuesday after core retail sales saw strong gains in June. Headline U.S. retail sales rose less than expected in June, with a 0.2% increase during the month. Data for May was also revised higher to show sales gaining 0.5% instead of 0.3% as previously reported. The GBP fell as the consumer price index rose less than expected by 7.9% in June year-on-year (YoY).

Rio Tinto

Rio Tinto, as the world's second-largest miner behind BHP, can be considered a bellwether for the global economy, and looking at the group's operational report, prospects aren't so great. The world's biggest iron ore producer shipped 79.1 million metric tons down slightly from a year earlier and short of an estimate of 81 million metric tonnes. It, however, said it was on track for full-year shipments in the upper half of its forecast range of 320 million to 335 million metric tons. Prices of iron ore have eased over the second quarter.

ASML

At the same time, the miner warned of rising operational costs, so we could expect a real squeeze on margins. ASML posted a second-quarter net profit of €1.9 billion, beating analysts' expectations, who had seen a net profit of €1.82 billion. Revenue came in at €6.74 billion, compared with €5.4 billion a year ago. ASML raised its full-year sales growth forecast to 30%, up from a previous forecast of 25%.

Goldman Sachs

Over in the US, Goldman Sachs is due to report quarterly earnings before the market opens. While it is fairly normal for analysts to differ, we have rarely had such a spread in earnings expectations. Some expect earnings as low as 33 cents; others see the Earnings per share (EPS) reaching $4.99.

The market agrees on one thing; Goldman Sachs is not different from its peers. It has to deal with a drop in investment banking fees and a slowdown in stock and bond trading. But what could explain this unusual spread of analysts' expectations is whether the investment bank will tidy up its books. Goldman Sachs could take a write-down on GreenSky which was acquired last year for £2.2 billion, the home improvement lending business is already for sale. Last week, Semafor said there's a chance Goldman's will take a $2 billion write-down.

Tesla

Tesla is scheduled to release its quarterly report tonight after market close. The street expects earnings of 79 cents per share on revenue of $24.29 billion. In the same quarter a year ago, the electric car maker posted EPS of almost 76 cents and revenue of just under $17 billion.

This illustrates very well the shift in strategy Elon Musk put in place at the beginning of the year. To be able to compete with cheaper Chinese EV makers, Musk said Tesla needed to prioritise sales over profits.

Netflix

Also expected after the market closes is Netflix. This quarter could mark a turning point in the group's history, as we will see whether the big strategy shift is bearing fruit. Netflix customers are no longer able to share passwords, and every household now must have its own. Margins could be affected by the number of people who decide to switch to the ad-tier offer.

For the April-June period, Netflix is expected to post earnings of $2.84 per share, which would be lower than the $3.20 posted for the same quarter a year ago. Revenue is forecast to reach a new record of $8.27 billion.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 19 July

Stock indices continue to rise on solid U.S. earnings and weaker UK CPI. Sharp losses for GBP/USD following inflation print, while USD/JPY rises, and EUR/USD holds steady.

Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 19 July 2023

 

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead to 20/7/23: American Airlines; easyJet; Johnson & Johnson; German PPI

Travel and health related numbers from American Airlines, easjyJet, and Johnson & Johnson could steer the investor mood music on Thursday.

Plus, German producer price data may add to signs inflation pressures are finally starting to ease.

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Wednesday 19 July 2023 

 

 

 

 

 

 

[MongiIG]

DJIA continues to rise

US equity markets recorded another day of gains on Wednesday, with the Dow Jones Industrial Average setting a new 15-month high.

 Jeremy Naylor | Analyst, London | Publication date: Thursday 20 July 2023 

US equity markets

US equity markets recorded another day of gains on Wednesday, with the Dow Jones Industrial Average setting a new 15-month high. Overnight in Asia, it was a mixed session.

Australian unemployment

In Australia, the unemployment rate stood at 3.5% in June, below market expectations of 3.6%. Full-time employment climbed by 39.300, while part-time employment decreased by 6.700 thousand. The balance of 32.600 easily surpassed market forecasts of 15,000. This persisting strength of the labour market lifted the AUD.

BHP Group

BHP Group said overnight that its iron ore production from Western Australia reached 72.7 million metric tonnes, a touch lower than the 73 million metric tonnes anticipated. Like Rio Tinto on Tuesday, BHP warns of rising costs.

In the UK, easyJet returned to profit in Q3 with a profit before tax of £203 million. The airline said that revenue per seat rose 23% year-on-year (YoY). Dunelm and Premier Foods also released trading statements.

Netflix

Netflix shares fell as much as 9% in extended trading on Wednesday. Even though earnings per share came in at $3.29, better than the $2.834 anticipated, and even though the streaming giant added 5.9 million subscribers between April and June, investors were a lot more interested in the top line.

Revenue rose to $8.19 billion but missed expectations of $8.27 billion. Revenue forecasts were also disappointing. Netflix forecast that third-quarter revenue would hit $8.5 billion. Wall Street had been forecasting $8.7 billion.

Tesla

Tesla shares fell almost 5% in extended trading but not at the release of earnings. These were better than expected for both earnings and sales. Earnings came in at 91 cents per share on revenue of $24.93 billion. The Street had anticipated earnings per share (EPS) of 79 cents and revenue of $24.29 billion. There was hardly any reaction at that point on the stock.

It was only later, when Elon Musk commented on Tesla's past quarter, that its share tumbled. Musk said he would cut prices again, even after Tesla's margins had already been squeezed. IBM, Alcoa, and United Airlines also reported on Wednesday evening.

Later on Thursday, the market awaits quarterly earnings from American Airlines and Johnson & Johnson.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Charting the Markets: 20 July

Dow makes progress and Nasdaq 100 edges lower, but Nikkei 225 comes under pressure .EUR/USD consolidates as EUR/GBP and AUD/USD rally. And Brent crude oil consolidates while Chicago wheat and orange juice rally.

Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Thursday 20 July 2023

 

 

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.

[MongiIG]

Look Ahead to 21/7/23: UK consumer confidence and retail sales; American Express; Schlumberger

Disappointing UK retail sales could lead to more volatility for cable. Japan releases inflation figures. Plus, American Express and Schlumberger hand in their Q2 earnings report cards.

Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Thursday 20 July 2023

 

 

 

 

[MongiIG]

British consumer confidence drops. "Reality has started to bite." - GFK

In a context of high inflation and rising interest rates, British consumers turned more pessimistic last month, according to market research firm GfK.

 Jeremy Naylor | Analyst, London | Publication date: Friday 21 July 2023

GFK

In a context of high inflation and rising interest rates, British consumers turned more pessimistic last month, according to market research firm GfK. Consumer confidence fell to -30 this month from -24 in June, the first decline since January and below economists' estimates of -26. This was the biggest month-on-month fall since April last year.

In the Gfk Statement, its client strategy director, Joe Staton, said that "Reality has started to bite and, as people continue to struggle to make ends meet, consumers will pull back from spending." Gf's monthly survey showed a decline in all measures of consumer sentiment compared to the previous month.

One of them, how consumers view the economy in the coming 12 months, fell sharply to -33 from -25. Inflation may have eased more than expected in June, falling to 7.9%, but it nonetheless remains the fastest pace of price growth among the world's richest economies.

UK retail sales

UK retail sales for June have come in better than expected, up by 0.7% month-over-month (MoM), when the market expected a 0.2% rise. There were increases across all the main sectors (food, non-food, and non-store retailing) except automotive fuel, which was slightly lower. Food store sales volumes bounced back with 0.7% growth in June 2023, following a fall of 0.4% in May 2023.

Japanese Inflation

In Japan, inflation remained above the Bank of Japan’s (BOJ) 2% target for the 15th straight month in June. Headline consumer price index (CPI) rose 3.3% in June year-over-year (YoY), after rising 3.5% the previous month. Core CPI, which excludes fresh food costs, rose 3.3% in June from a year earlier, accelerating from a 3.2% gain in May. Excluding both fresh food and fuel costs, the index rose 4.2% in June from a year earlier, slower than a 4.3% gain in May. This version of the index, favoured by the BOJ, slowed for the first time since January 2022.

American Express

American Express all sessions on the IG platform, is scheduled to report its quarterly earnings before market open. The street expects earnings of $2.81 per share on revenue of $15.41 billion. Schlumberger is also set to report at lunchtime.

Oil services group

The oil services group is set to post earnings of 71 cents per share on revenue of $8.2 billion. Over the past 12 months, the stock has risen by a staggering 77%, way more than its rivals: Halliburton rose 32% over the period, and Baker Hughes rose 29%.

 

 

This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.