July 23, 2019

Daily Market Review – Tuesday, July 23, 2019

Daily Market Review – Tuesday, July 23, 2019

Asia

With expected rate cuts from the FED, the ECB to discuss interest on Thursday and the BoE next week, as well, cash is moving from forex markets to equities. The result – Asian benchmarks this morning are showing optimism after a concerning losing streak. The Nikkei added 0.95%, the Hang Seng 0.19% and Chinese indexes – about a third. Australia and New Zealand rose about a ½% each.

Europe

European equities yesterday showed a smidgen of spunk, the Eurostoxx, CAC and Dax up a 1/4% and the FTSE adding 0.08%. Getlink, the company operating the Eurotunnel, has sided with the hard-Brexit scenario, after posting low H1 profits for 2019. 26% of European/UK trade passes through the tunnel, in the form of 21mn passengers and 17 mn trucks last year alone.

US

US indexes finally had a green day yesterday, the Nasdaq up 0.71% on closing, the Dow – 0.07%. Backwind is being provided by President Trump’s continued pressure on the FED to cut interest rates plus his agreement with Democratic representatives on budget limits and caps. The Chicago Fed’s National Activity index remains in the red for June on expectations of a slight improvement. On the trade-war front, US pork farmers are looking to cash in on China’s swine fever epidemic, which is expected to wipe out about 1/3 of that nation’s pork production in 2019. Meanwhile, China is launching an anti-dumping probe against US propanol exporters. Propanol is used in printer ink, food packaging and in the manufacturing of antibiotics. In Canada, wholesale sales declined by 1.8% in May, erasing the previous month’s advance.

Commodities

WTI overnight crept above resistance at 56.40 and has so far tested it once as support as Britain calls upon its European partners to form a naval mission to safeguard passage through the Strait of Hormuz. Foreign Minister Jeremy Hunt has called Iran’s seizure of a British tanker “an act of state piracy”. The US is also sanctioning a Chinese company for transporting Iranian crude oil, in violation of US -led sanctions; and Haliburton yesterday announced a 59% reduction in earnings-per-share, with operating income halved – all on a 1.85% drop in total revenues. In cryptos, after completing a head-&-shoulders pattern overnight, Bitcoin continues its 2-week retreat from July 10th’s $12,576 high – its longest losing streak since December.

Corporate

China’s STAR exchange overnight saw equities steady after its first day of massive gains for all 25 companies that listed there – some by as much as 500%. Santander, Europe’s largest bank by market cap, yesterday reported an 18% drop in profits for Q2. Moddy’s has downgraded Boeing shares to negative, and Microsoft has announced it will invest $1 bn in Elon Musk’s artificial intelligence company, OpenAI. Later today, Vodaphone holds a general shareholders meeting and, on the earnings front, Coca Cola and VISA are expected to report quarterly earnings today. Finally, the Wall Street Journal reports that Apple is readying to bid for Intel’s 5G smartphone modem chip operations, valued at about a billion USD. Recently, Apple settled a long-term dispute with Qualcomm, its hitherto modem chip supplier of choice.

Economic Calendar

TIME/PLACERELEASE/DATA
08:30 AM GMT – UKBoE’s Financial Policy Committee Meeting Minutes. Industrial Trends Survey – Orders (Jul) at 10:00, and Tory Leadership Contest Results Announcement at 10:45.
12:55 PM GMT – USRedbook Index (Jul 19). Housing Price Index (May) at 13:00, Existing Home Sales (Jun) and Richmond Fed Manufacturing Index at 14:00.
14:00 PM GMT – EUConsumer Confidence – preliminary (Jul)
20:30 PM GMT – OILAPI Weekly Crude Oil Stock (Jul 19)
22:45 PM GMT – NZImports, Exports & Trade Balance (Jun)
00:30 AM GMT (+1) – JapanNikkei Manufacturing PMI (Jul). Leading & Coincidental Economic Indexes (May) at 05:00

For more, visit our Economic Calendar