July 4, 2019

Daily Market Review – Thursday, July 4, 2019

Daily Market Review – Thursday, July 4, 2019

Asia

Asia this morning experienced another day of falling Chinese equities, including 0.18% in Hong Kong, and a 0.17% rise in the Nikkei as the Yen gets a 0.01% supercharge…. Foreign investment in Japanese stocks increased in the last week of June by 58bn Yen, after the previous month’s 313bn Yen contraction. Following yesterday’s excellent trade data, last night retail sales in Australia increased by 0.1% in May MoM – half the expected. And, amidst the White House’s announcement last night that US-China talks would resume next week, China has decided to blame Western governments for continuing demonstrations in Hong Kong. Both the UK’s Jeremy Hunt and Boris Johnson have expressed support for protesters and warned China not to flaunt the 1997 “handover” agreements. Hong Kong police have meanwhile begun arresting demonstrators.

Europe

The Eurozone’s service and composite PMIs yesterday climbed in June to 53.6 and 52.2, respectively primarily on German and Italian movements. France’s PMIs also rose, but as much as expected, and the UK’s service figure lost 0.8 of a point. The Bank of England’s deputy governor Jon Cunliffe said on Wednesday that the risk of a no-deal Brexit are increasing.

US

Ahead of today’s Independence Day market hiatus, US equities yesterday lodged a fair increase – 0.67% for the S&P, 0.75% for the Nasdaq 100 putting indexes at record closing highs. US data yesterday failed to live up to expectations – continuing jobless claims falling by less than 10k and the trade deficit growing by another $4bn. Service and composite PMIs rose, based on Markit data, but fell nearly 2 points, based on the ISM. Factory orders also contracted by another 0.7%. And this morning, Reuters reports that a Chinese importer has purchased rice from the US for the first time in history, this following last week’s purchase of half a million tonnes of soybeans – the largest order since March of last year and the first since the US-China trade war began. While in the White House, President Trump has again accused the Chinese and Europeans of currency manipulation. Trump is a strong advocator of the FED lowering interest rates in order to lower the value of the US dollar to make it more competitive.

Commodities

WTI lost a dollar overnight after the EIA reported a less-dramatic-than-expected 1 million barrel drawdown of inventories at Cushing Oklahoma – a third of what was hoped for. Despite the OPEC+ decision to extend supply cuts, US production remains high – though gently down-sloping as US demand begins to fall. And – despite the UK Financial Conduct Authority’s attempt to ban crypto products, claiming they are too volatile for retail investors – bitcoin overnight resumed its upward march, stopping just short of the $12k resistance level as investors cautiously take profits.

Shares

Boeing has pledged a hundred million dollars in carefully spread out payments for the aid of those victimized by the 737Max crashes. The list price of a single 737 MAX is about $92 million…

Economic Calendar

Today’s Top Economic Events
TIME/PLACE RELEASE/DATA
09:00 AM GMT – EU Retail Sales (May)
22:30 PM GMT – Australia AiG Performance of Construction Index (Jun)
23:30 PM GMT – Japan Overall Household Spending (May), Foreign Reserves (Jun) at 23:50, and Coincident & Leading Economic Index (May) at 05:00 (+1)
    For more, visit our Economic Calendar