Skip Header

On 13 July 2019 - US flat; Europe better, Asia mixed

Anne D Picker

Anne D Picker - Econoday

Trading tentative as market awaits earnings reports, US-China trade news.

US markets

US stocks were nearly flat Monday in quiet trading as markets awaited news, including more quarterly earnings later in the week. The Dow industrials rose 0.1 percent, the S&P was up 0.02 percent, and the NASDAQ edged up 0.2 percent.

Markets also awaited news from US-China trade talks, and looked for progress on a U.S. budget/debt ceiling deal from Washington. Utilities, tech and consumer discretionary shares outperformed, while industrials, financials and energy weakened.

Among shares in focus, Citigroup was nearly unchanged at down 0.1 percent after earnings and revenue surprised on the upside, but investment banking and market revenues missed expectations. Gilead Sciences rose 2.7 percent after saying it would boost its stake in biotech firm Galapagos, which soared 18 percent. On the downside, Symantec dropped 11 percent after a report that its talks to be acquired by Broadcom have collapsed.  Facebook was off 0.1 percent, but well up from its early lows after Treasury Secretary Steven Mnuchin suggested regulators would give the social network’s Libra cryptocurrency a chance.

In economic news, the Empire State manufacturing index mustered a mixed recovery in July to plus 4.3 after plunging to minus 8.6 in June. Yet new orders are still in contraction, but less severely, at minus 1.5 versus June's very deep minus 12.0, as are unfilled orders at minus 5.1 versus minus 15.8.

These data reflect observations at 4:00 PM US ET: Dated Brent spot crude was down 41 cents to US$66.31 while gold rose US$3.50 to $1,415.70. The US dollar rose against most major currencies. The yield on the US Treasury 30-year bond was down 4 basis points at 2.61 percent while the yield on the 10-year note was down 2 basis points at 2.09 percent.

European markets

European equities edged up Monday in quiet trading after mostly upbeat Chinese economic data bolstered market sentiment but a gloomy statement from the German Economics Ministry limited gains.

The German DAX ended off highs but did rise 0.5 percent, the European STOXX 600 was up 0.2 percent, the French CAC rose 0.1 percent, and the UK FTSE 100 rose 0.3 percent.

Outperformers in the Stoxx 600 included autos and basic resources. Underperformers included telecom, banks and personal and household goods. Among shares in focus, Audi was up 1.9 percent on reports of collaboration with Volkswagen, which rose 0.7 percent.

The German Economics Ministry said German industrial activity is sluggish, and recent data point to slower growth in the service sector, due in part to the unsettled global economic environment. Meanwhile, the Swiss combined producer and import price index was surprisingly soft in June. A 0.5 percent monthly decline was the first fall since January and sharp enough to deepen the yearly deflation rate by 0.6 percentage points to 1.4 percent, its lowest mark since April 2016. Earlier, Chinese data showed unexpected strength in retail sales and industrial production, which were regarded as bullish for European companies, especially basic materials, including UK mining shares.

Asia Pacific Markets

Major Asian markets posted mixed results Monday. Chinese shares outperformed after quarterly GDP data printed close to consensus forecasts and monthly data for June beat consensus expectations. The Shanghai Composite index closed up 0.4 percent, while Hong Kong’s Hang Seng advanced 0.3 percent. Australia’s All Ordinaries index was the weakest performer in the region, closing down 0.6 percent, with lower iron ore prices and weak Chinese trade data reported Friday still weighing on investor sentiment.

Chinese GDP grew 6.2 percent on the year in the three months to June, moderating from 6.4 percent in the three months to March and just below the consensus forecast of 6.3 percent. Although GDP growth slowed in the quarter, monthly data also published Tuesday showed stronger year-on-year growth in key activity indicators in June, suggesting that policy measures aimed at offsetting the impact of trade tensions with the United States have provided some support to domestic activity.

Chinese industrial production advanced 6.3 percent on the year in June, strengthening from 5.0 percent in May and above the consensus forecast of 5.2 percent. This acceleration was largely driven by a similar pick-up in year-on-year growth in manufacturing output from 5.0 percent to 6.2 percent, with a smaller fall in auto output and a bigger increase in steel production. Retail sales rose 9.8 percent on the year in June, picking up from 8.6 percent in May and well above the consensus forecast of 8.3 percent. Most categories of spending recorded stronger growth, with auto sales accelerating particularly sharply. Fixed asset investment grew 5.8 percent year-to-date in June, up from 5.6 percent in May and above the consensus forecast of 5.5 percent, with stronger growth in the manufacturing sector and parts of the services sector but weaker growth in the property sector.

India's wholesale price index increased by 2.02 percent on the year in June, down from 2.45 percent in May, mainly reflecting weaker price changes for fuel and manufactured products. This is the lowest level since mid-2017. CPI data published last week, in contrast, showed an increase in headline inflation from 3.05 percent in May to 3.18 percent in June.

Looking forward

On Tuesday, the Reserve Bank of Australia will release minutes of its latest policy council meeting. Fed Chair Jay Powell is scheduled to speak at an event in Paris. In Europe, the UK labor market report is due, along with the German ZEW Survey, and Italian CPI. In the US, retail sales, industrial production, import/export prices, business inventories, and the housing market index are scheduled.

Global Stock Markets

 

Index

15 Jul 2019

Daily Change

% Change Daily

North America

 

 

 

 

United States

Dow

27359.16

27.13

0.1

 

NASDAQ

8258.19

14.04

0.2

 

S&P 500

3014.3

0.53

0.0

Canada

S&P/TSX Comp

16510.82

22.70

0.1

Europe

 

 

 

 

UK

FTSE 100

7531.72

25.75

0.3

France

CAC

5578.21

5.35

0.1

Germany

XETRA DAX

12387.34

64.02

0.5

Italy

MIB

22178.05

-4.65

0.0

Spain

Ibex 35

9323.6

30.40

0.3

Sweden

OMX Stockholm 30

1632.91

7.29

0.4

Switzerland

SMI

9808.58

45.60

0.5

Asia/Pacific

 

 

 

 

Australia

All Ordinaries

6746.2

-42.61

-0.6

Japan

Nikkei 225

*

*

*

 

Topix

*

*

*

Hong Kong

Hang Seng

28554.88

83.26

0.3

S. Korea

Kospi

2082.48

-4.18

-0.2

Singapore

STI

3347.95

-9.39

-0.3

China

Shanghai Comp

2942.18

11.63

0.4

Taiwan

TAIEX

10876.43

52.08

0.5

India

Sensex 30

38896.71

160.48

0.4

*Markets closed

 

 

 

Data Source — Haver Analytics

 

 

 

Note: all releases are listed in local time.

Important Information

Econoday Inc. is a US company that provides financial commentary and indicators to industry professionals. All information provided and views expressed are those of Econoday. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and investors may not get back the amount invested.