Yahoo Finance Wall Street and FTSE lower ahead of central bank meetings
A look at how the major markets are performing on Monday
Wall Street, the FTSE 100 and European stocks were all in the red on Monday afternoon as investors positioned themselves for a big week of data, earnings reports, and central bank decisions.
The US Federal Reserve will meet on Wednesday with investors anticipating a quarter percentage point hike, while the European Central Bank (ECB) will meet on Thursday with analysts also expecting policymakers to announce a 25 basis point rate hike. A decision by the Bank of Japan (BoJ) in the latter part of the week will also be closely monitored.
The Dow Jones (^DJI) rose 0.29% to 35,331.07 points, the S&P 500 (^GSPC) gained 0.46% to 4,557.01 points, while the tech-heavy NASDAQ (^IXIC) climbed 0.41% to 14,089.28.
FTSE 100 and European stocks
Across the pond, the FTSE 100 (^FTSE) fell 0.08% to 7,657.77 points. The CAC 40 (^FCHI) in Paris declined 0.38% to 7,406.10 points, while in Germany the DAX (^GDAXI) lost 0.19% to 7,406.10 points.
“It is widely anticipated that the action taken by these banks is bound to bring significant volatility not only in their respective currencies but also in their equity markets as well,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said.
Asia
In Asia, markets were mixed overnight while the Nikkei 225 (^N225) was the standout performer. It closed up 1.23% to 32,391.26 points, while the Hang Seng (^HSI) in Hong Kong declined 2.45% to 18,607.73. In mainland China, the Shanghai Composite (000001.SS) fell by 0.14% to 3,163.21 points.
Pound
The pound to dollar exchange rate (GBPUSD=X) was trading up at 1.28, meaning £1 will get you $1.28. Meanwhile, the pound to euro exchange rate (GBPEUR=X) was at 1.15.
Oil prices
In commodities, oil prices were down on Monday as investors await interest rate decisions from central banks for indicators on how crude demand could be impacted.
US crude oil, or West Texas Intermediate (CL=F), lost 0.53% to trade at $76.66 (£59.66) a barrel, while Brent crude (BZ=F) fell 0.56% to $80.62 a barrel.
Corporate highlights
Vodafone (VOD.L) said in a trading update that first-quarter (Q1) revenue fell by 4.8%, although organic growth recovered to 3.7%, while full-year guidance has been left unchanged.
Cranswick (CWK.L) reported strong trading for the opening of its new financial year with revenue up 14.7% compared to the same period a year earlier. The group said it also expects performance for the year to be ahead of forecasts.
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Elsewhere, Moneysupermarket.com (MONY.L) said that revenue was up 11% for the first half to £213.8m, while post-tax profit was 22% higher at £41m. The dividend was raised by 3% to 3.2p per share while its full-year performance is now expected to be towards the upper end of forecasts.
Ryanair (RYA.IR) and Philips (PHG) also reported results on Monday. Ryanair said profit after tax came in at €663m for the three months to the end of June, nearly four times higher than in the previous year and above its previous record for the quarter of €397m in 2017.
Philips, meanwhile, said group sales increased to €4.5bn, with 9% comparable sales growth. It said income from operations amounted to €221m, compared to €11m in Q2 2022. The company also lifted its outlook for 2023.
On Tuesday, we will hear from Unilever (ULVR.L), Deutsche Boerse (DB1.DE), Alstom (ALO.VI), Spotify (SPOT), Alphabet, Microsoft, Visa, General Motors, Verizon and Snap (SNAP).
On Wednesday, British American Tobacco (BATS.L), Rio Tinto (RIO.L), Lloyds (LLOY.L), GSK (GSK.L), Just Eat Takeaway (JET.L), Stellantis (STLA), Carrefour (CA.PA), Deutsche Bank (DBK.DE), Airbus, Boeing (OBOE.L), Coca-Cola (KO), and AT&T will all be reporting earnings.
Read more: UK economy 'stalling' over poor demand and high prices
On Thursday, it will be the turn of BT (BT-A.L), Shell (SHEL.L), Barclays (BARC.L), TotalEnergies (TTE.PA), Volkswagen (VOW3.DE), Nestle (NESN.SW), Intel, Ford, and McDonalds. Lastly, more will follow on Friday from AstraZeneca (AZN.L), Standard Chartered (STAN.L), NatWest (NWG.L), IAG (IAG.L), Air France-KLM (AF.PA), Sanofi (SAN.PA), Chevron, and Procter & Gamble (PG).
Economic data
Investors will also be digesting a raft of economic data releases on Monday.
Germany moved into contraction territory in July — with a below 50 reading of 48.3 — as a deepening downturn in manufacturing output coincided with a sustained slowdown in services activity growth, the latest HCOB ‘flash’ PMI® survey compiled by S&P Global showed.
Meanwhile, business expectations towards future activity turned negative for the first time this year, which was reflected in a weakening of job creation from the strong rates seen in the second quarter.
Rates of input cost and output charge inflation continued to slow.
"However, this owed exclusively to an increasing drag from falling manufacturing costs and output prices, with rates of inflation in the service sector picking up slightly from already high levels," the PMI report said.
Eurozone manufacturing PMI data also declined in July to 42.7 from 43.40 points in June while services PMI decreased to 51.10 points in July from 52 points in June of 2023.
Read more: How does inflation impact currency pairs, like the USD/GBP?
The HCOB Eurozone Composite PMI also declined, to 48.9 in July from 49.9 in the previous month.
"The latest rise in output levels was the weakest for six months, largely due to flatlining new orders and sharply reduced backlogs of work. Manufacturing companies meanwhile reported the biggest improvement in suppliers’ delivery times since this index began in January 1992. The normalisation of global supply chains helped to boost vendor performance and bring down cost pressures in July. As a result, manufacturers reduced their output charges for the second month running," S&P Global said.
The headline seasonally adjusted S&P Global/CIPS Flash UK Composite Output Index registered 50.7 in July, down from 52.8 in June and the lowest reading since January.
The index posted above the crucial 50 threshold in each of the past six months, although the latest expansion was only marginal and the weakest over this period.
In the US, business activity slowed to a five-month low in July, dragged down by decelerating service-sector growth, data also showed on Monday afternoon.
S&P Global said the US Composite PMI index fell to a reading of 52 in July from 53.2 in June. It marked the sixth straight month of growth but was restrained by softening conditions in the service sector.
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