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(Bloomberg) -- Stocks in Asia looked set to kick off the week on the backfoot following declines in the U.S. Friday. Oil gained amid tensions in the Persian Gulf.Futures dropped in Japan, Hong Kong and Australia late Friday after U.S. markets closed lower. Traders rushed away from bets the Federal Reserve will slash rates by a half-point this month, a day after clamoring for them, supporting Treasury yields and the dollar. Oil rose 1% in early Monday trading ahead of an emergency meeting by U.K. officials to discuss the security of shipping in the Persian Gulf after Iran seized a British oil tanker in the Strait of Hormuz last week.This week sees the earnings season ramp up and a blackout period for Fed speakers prior to next week’s policy decision. On the trade front, some Chinese companies are applying for tariff exemptions as they make inquiries about buying U.S. agricultural products, more than a week after President Donald Trump complained that China hasn’t increased its purchases of American farm products.“The start of earnings season has been very positive, but the price action on the major indexes has not been,” said Edward Moya, a strategist at Oanda Corp. “It appears markets are waiting to break and this could be the week that happens.”Meantime, protests in Hong Kong heated up as an otherwise peaceful protest march of over 100,000 people turned tense late Sunday. In Japan, Shinzo Abe won a majority in the country’s upper-house elections, but won’t get the two-thirds of seats needed to revise the country’s pacifist constitution.Here are some key events coming up:Earnings season rolls on with companies including: Amazon.com, Alphabet, Unilever, Caterpillar, Coca-Cola, McDonald’s and Boeing.China holds the opening ceremony of its technology board in Shanghai. About two dozen local start-ups are making their debut on the Nasdaq-style exchange.U.K. Prime Minister Theresa May’s successor is announced on Tuesday, with Boris Johnson expected to become the new Conservative leader and PM.Thursday brings the European Central Bank policy decision. Economists widely expect officials to signal their readiness to cut interest rates and potentially broaden stimulus. Some see the chance of an immediate rate cut. ECB President Mario Draghi holds a briefing afterward.These are the main moves in markets:StocksFutures on the S&P 500 were flat as of 7:42 a.m. in Tokyo. The underlying gauge fell 0.6% on Friday.Futures on Japan’s Nikkei 225 slipped 0.6%.Hang Seng futures dipped 0.5%.Futures on Austraila’s S&P/ASX 200 Index lost 0.4%.CurrenciesThe yen was flat at 107.77 per dollar.The offshore yuan rose 0.1% to 6.8780 per dollar.The euro bought $1.1218, little changed.BondsThe yield on 10-year Treasuries rose about three basis points to 2.06% on Friday.Australia’s 10-year yield was steady at 1.35%.CommoditiesWest Texas Intermediate crude climbed 1% to $56.17 a barrel.Gold was down 0.1% to $1,424.38 an ounce.To contact the reporter on this story: Adam Haigh in Sydney at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Cormac MullenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
It’s hard not to focus on the communication faux-pas from the New York Fed, but it seems too important to avoid. I flagged NY Fed president, John Williams, speech in yesterday’s ‘Daily Fix’ as a potential volatility event, suggesting the risk of guiding the market to 50bp was a low probability; but it was a risk.
Global equities firm as rate cut hopes are stoked but traders are cautioned not to expect too much from the FOMC.
Global stocks rose on Friday as investors firmed up bets on a U.S. interest rate cut at the end of July after a speech by a top Federal Reserve official further cemented expectations for one, fuelling appetite for risky assets and capping the dollar. European shares opened higher across the board, but had given up gains by midday in London. In oil markets, crude surged after the United States said its navy had destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, raising concerns about supply disruptions out of the region.
The Trade war, Brexit and economic data keep the majors in the spotlight through the day. There’s also the earnings calendar to consider…
A gauge of global stocks declined after early gains dissipated on Friday as expectations for a strongly dovish U.S. Federal Reserve at its next meeting were dialled back, pushing the dollar higher. On Wall Street, a climb in major indexes fizzled late in the session after the Wall Street Journal reported the Fed is likely to cut rates by 25 basis points when it meets later this month, after comments by a Fed official on Thursday raised expectations a larger cut may be on the cards.
Stocks in major Asia Pacific markets made strong gains on Friday, as comments from a U.S. Federal Reserve official led to rising expectations the central bank could ease monetary policy more than expected.
(Bloomberg) -- U.S. stocks rebounded and the dollar fell after Federal Reserve Bank of New York President John Williams highlighted the need for swift action should policy makers conclude the economy is in trouble.Consumer and financial stocks led gains in the S&P 500 Index, while Treasury 10-year yields dropped. A positive outlook from Apple Inc. supplier’s Taiwan Semiconductor Manufacturing Co.’s lifted chipmakers. The NYSE FANG+ Index slid on Netflix Inc.’s surprise loss of U.S. customers. A report that Iran made a “substantial” offer on its nuclear program in return for fewer sanctions gave a lift to equities that was later tempered by news that the U.S. shot down an Iranian drone. In after-hours trading, Microsoft Corp. and cybersecurity company CrowdStrike Holdings Inc. rallied after sales topped estimates.The futures market edged closer to the idea of a half-point U.S. rate cut this month, with fed funds now pricing in about 42 basis points of easing. Fed Vice Chairman Richard Clarida told Fox Business Network that policy makers shouldn’t wait for the economy to turn down to act. Cutting rates could help cushion some of the blow from uncertainty about trade that’s likely to prove persistent, according to Fed Bank of St. Louis President James Bullard.“We’re in a trade war, you’re seeing the impact on corporate earnings, you’re seeing the central banks forced to scramble to react to that,” Bob Michele, CIO and head of global fixed income at JPMorgan Asset Management, said in a Bloomberg TV interview.Elsewhere, oil slid to the lowest in almost a month as pessimism about a trade truce between the U.S. and China continued to dog markets, while the resumption of Russian pipeline flows fed worries about a supply glut. The pound climbed as the British Parliament backed measures to prevent the next prime minister suspending the legislature to pursue a no-deal Brexit.These are the main moves in markets:StocksThe S&P 500 rose 0.4% to 2,995.11 as of 4 p.m. New York time.The Stoxx Europe 600 Index decreased 0.2%.The MSCI Asia Pacific Index fell 0.6%.CurrenciesThe Bloomberg Dollar Spot Index dipped 0.5%.The euro gained 0.5% to $1.1276.The British pound climbed 1% to $1.2554.The Japanese yen added 0.6% to 107.26 per dollar.BondsThe yield on 10-year Treasuries dipped two basis points to 2.03%.Germany’s 10-year yield declined two basis points to -0.31%.Britain’s 10-year yield was unchanged at 0.759%.CommoditiesThe Bloomberg Commodity Index dipped 0.8%.West Texas Intermediate crude declined 2.6% to $55.30 a barrel.\--With assistance from Nancy Moran, Sophie Caronello, Todd White, Yakob Peterseil, Cecile Gutscher, Tom Keene, Nejra Cehic, Adam Haigh and Vildana Hajric.To contact the reporter on this story: Rita Nazareth in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The pace of companies moving production out of China is accelerating, according to the Nikkei Asian review.
Global shares slipped on Thursday on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets. MSCI world equity index, which tracks shares in 47 countries, fell 0.2% to its lowest in nine days, after the start of the earnings season brought bad signs.
Global shares slipped on Thursday on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets. MSCI world equity index, which tracks shares in 47 countries, fell 0.2% to their lowest in nine days, while the Euro STOXX 600 slipped 0.5% to its lowest in almost three weeks.
Opponents of a hard Brexit in parliament may try again to assert their influence today by backing a bill that would require the assembly to get regular updates on the situation in Northern Ireland - a device whose main goal is to stop any future PM from suspending parliament to usher in a no-deal Brexit. If the vote does go ahead today, the big question is whether any cabinet members - among them finance minister Philip Hammond - will join that effort. Before that, the UK's official forecasting body is due to give a series of predictions on the UK economy, including what would happen to it in the event of a no-deal Brexit: according to the Times, the body will conclude that such an outcome would take a massive three percent chunk out of GDP.
European stocks pared early losses on Thursday afternoon, as investors digested fresh corporate results and kept an eye on global trade developments.
A gauge of global stocks advanced on Thursday, erasing declines on a late rally after comments from a U.S. Federal Reserve policymaker heightened expectations for a rate cut, while oil prices dropped on forecasts of rising output. In a speech read as a strong argument in favor of quick and aggressive action by the Fed to cut rates this month, New York Fed President John Williams said policymakers need to add stimulus early to deal with too-low inflation when rates are near zero. "In all the Fed speak we’ve had... it seems like the ones that are more interested in cutting are more visible," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.
A gauge of global stocks advanced on Thursday, erasing declines on a late rally after comments from a U.S. Federal Reserve policymaker heightened expectations for a rate cut, while oil prices dropped on forecasts of rising output. In a speech read as a strong argument in favour of quick and aggressive action by the Fed to cut rates this month, New York Fed President John Williams said policymakers need to add stimulus early to deal with too-low inflation when rates are near zero. "In all the Fed speak we’ve had... it seems like the ones that are more interested in cutting are more visible," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.
Stocks in Japan were the biggest losers among major markets in the region on Thursday, with the other Asian bourses following suit, amid a renewed threat to trade.
It’s been more than two weeks since U.S. President Donald Trump and Chinese President Xi Jinping agreed to resume trade talks between the two economic powerhouses. However, conditions haven’t improved much.
U.S. President Donald Trump said Tuesday that Washington and Beijing have a long way to go on trade, adding that America could place tariffs on an additional $325 billion worth of Chinese goods if needed.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.U.S. stocks fell from a record high as President Donald Trump said he could impose more tariffs on China, reminding investors that the trade spat remains unresolved. Treasuries dropped and the dollar rose.The S&P 500 Index halted a five-day rally, with energy producers joining an oil sell-off and technology giants facing an antitrust showdown with Congress. Goldman Sachs Group Inc. jumped on better-than-estimated results in its trading unit, and JPMorgan Chase & Co. rebounded from losses triggered by a disappointing lending outlook. Benchmark 10-year yields climbed on solid data, then pared their surge after Federal Reserve Chairman Jerome Powell said the central bank “will act as appropriate” amid increased uncertainties.Investors remained locked into the notion of a Fed rate cut this month even after strong retail sales, factory output and housing data. While Powell’s remarks resembled his July 10-11 testimony to U.S. lawmakers, they continued to support the case for monetary easing amid risks stemming from Trump’s trade policies and slower global growth.“Trade’s a big, big issue,” said Dave Campbell, a principal at San Francisco-based BOS, which manages about $4.5 billion. “There’s a lot of uncertainties -- all of these are weighing on people’s minds right now.”Elsewhere, Bitcoin slid below $10,000 just three weeks after surging above it for the first time in more than a year as U.S. legislators expressed deep skepticism about the viability of cryptocurrencies. The euro slipped as investor confidence in Germany’s economic outlook fell. The pound slumped as the market once again reckoned with no-deal Brexit risk after the contenders to be U.K. prime minister toughened their rhetoric.Here are some key events coming up:Bank of America Corp. and Taiwan Semiconductor are among companies due to report results this week.Monetary policy decisions are due in Indonesia, South Korea and South Africa on Thursday.These are the main moves in markets:StocksThe S&P 500 dipped 0.3% to 3,004.04 as of 4 p.m. New York time.The Stoxx Europe 600 Index added 0.4%.The MSCI Asia Pacific Index decreased 0.2%.CurrenciesThe Bloomberg Dollar Spot Index increased 0.4%.The euro declined 0.4% to $1.1209.The British pound decreased 0.9% to $1.2408.The Japanese yen dipped 0.3% to 108.28 per dollar.BondsThe yield on 10-year Treasuries gained three basis points to 2.11%.Germany’s 10-year yield climbed one basis point to -0.24%.Britain’s 10-year yield increased two basis points to 0.821%.CommoditiesThe Bloomberg Commodity Index slid 1.1%.West Texas Intermediate crude sank to $57.62 a barrel.\--With assistance from Adam Haigh, Samuel Potter, Laura Curtis and Yakob Peterseil.To contact the reporters on this story: Rita Nazareth in New York at email@example.com;Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Germany's Ursula von der Leyen will learn from a European Parliament vote this evening whether she will become the first woman to head the European Commission, the executive body that shapes EU policy on everything from trade to eurozone fiscal matters. Beset by challenges ranging from Brexit to trade, the last thing the EU wants is a rejection of von der Leyen that would force it back to more horsetrading on the bloc's top jobs. The dynamic of the UK Conservative Party leadership campaign was always going to force an escalation of Brexit rhetoric - and sure enough last night's closing debate saw both candidates harden their language on any future deal with the EU.
Due to the uncertainty caused by the US-China trade dispute, and the possibility that trade tensions may escalate again, some investors are sitting on the sidelines, hoping the People’s Bank of China steps in to introduce more fiscal stimulus in the months ahead to steady the economy and to prevent it from slowing too quickly.
(Bloomberg) -- Signs of stabilization for China’s economy provided just what the stock market needed to be steady as investors dive into the earnings season. Among tech companies, SAP, ASML and Ericsson are scheduled to report this week, which might signal what’s next for the shares of Europe’s best-performing industry this year.The region’s technology sector is up 26% in 2019, keeping up with the Nasdaq 100, while the Philadelphia Semiconductor Index SOX has soared more than 30%. The SX8P has been bouncing near the 500-point level after recently hitting a one-year high following a truce in the U.S.-China trade dispute.The big question remains what impact the commerce wrangle will have on earnings. We’ve already seen numerous warnings from the semiconductor complex, with IQE, Siltronic and Broadcom setting alarm bells ringing at the end of June. Amid escalating tension between Japan and South Korea, Samsung saw its quarterly profit fall by more than half.Uncertainty stemming from the trade war and the potential drag on the global economy has prompted analysts at Evercore and DA Davidson to warn that a recovery in demand for the chip sector might not materialize until 2020. Bloomberg Intelligence analysts also highlight that the sector’s valuation against its growth picture isn’t a perfect match. Indeed, it’s the most expensive industry group in Europe with an estimated price-to-earnings ratio near 23 times for 2019.All this means the second-quarter earnings season will be a key test as to whether we’re getting closer to the bottom of the cycle. To be sure, there have been some upbeat signs recently, such as the previously mentioned truce, and the U.S. saying that it will grant licenses to Huawei suppliers. Elsewhere, Asian bellwether TSMC, which supplies Apple, saw quarterly sales beat expectations, while Chinese car sales rose for the first time in a year in June, a potential positive for chip makers exposed to autos, such as Infineon and Melexis.Analysts at Liberum highlight signs of improvement in areas such as servers, smartphones and cryptocurrency, as well as semiconductor companies reporting “green shoots” of recovery more broadly. They’re overweight on ASML and Ericsson.Meanwhile, Deutsche Bank analysts expect a significant step-up in inquiries for both Ericsson and Nokia regarding 5G infrastructure, driven by the need for continuity of supply, as well as ongoing security concerns. That said, they don’t think this will improve financials for either company for two years, though sentiment is still positive around margins in the home region.Looking at Ericsson’s and Nokia’s share price, the initial U.S. ban on sales to Huawei has only had a small effect so far. Any update on the matter will be scrutinized, especially after Nokia’s earnings shocker in April.In the meantime, Euro Stoxx 50 futures are trading 0.1% lower ahead of the open.SECTORS IN FOCUS TODAY:Watch miners and steelmakers sectors on Tuesday after iron ore prices jumped following the latest output data from Rio Tinto and on signs of healthy demand from steel mills. Watch the pound and U.K. stocks a difficult meeting was held between the chief negotiators of Brexit. While the EU is reportedly weighing up concessions it could offer to the U.K. to prevent a no-deal Brexit, the pound is at the weakest level ever for this time of year and, if history is anything to go by, it’s going to get worse in August.Watch trade-sensitive sectors after U.S. Treasury Secretary Steven Mnuchin U.S. trade chief Robert Lighthizer may travel to Beijing to hold trade negotiations. Meanwhile, the World Trade Organization is expected to give the U.S. the green light to slap new tariffs on Europe in the ongoing battle about illegal aircraft subsidies.Watch banks, as JPMorgan and Goldman Sachs will report earnings, after Citigroup kicked off the season on Monday with a mixed set of results.COMMENT:“Although the U.K. economy has surprised most commentators in its strength since the 2016 referendum and there is the promise of a fiscal dividend should Brexit be smoothly achieved, and while U.K. equities look cheap, a ‘radical overhaul’ will scare international investors into a rush for the exit,” Kames Capital CIO Stephen Jones writes in a note. “This is not the time to go strongly overweight U.K. assets – equities, Gilts or Sterling.”COMPANY NEWS AND M&A:CRH to Sell Europe Distribution for Ent. Value EU1.64B CashBayer’s Monsanto Called Reprehensible as Roundup Verdict CutRio’s Copper Flagship Faces $1.9 Billion Cost Blowout, Delay (1)Aroundtown Offering Prices 84m Shares at EU7.15/ShareAMS Ends Talks to Buy Osram in Boost for Private Equity SuitorsAtlantia Board Looked Through Genoa Bridge Collapse Report: FTSalini Impregilo Presents New Offer for Astaldi (1)Telenor Second Quarter Ebitda Misses Lowest EstimateBorregaard 2Q Op. Revenue Matches Ests., Adj. Ebita Beats (1)Schibsted Second Quarter Ebitda NOK1.06 BlnBillerudKorsnas Second Quarter Adjusted Ebitda Misses EstimatesSchmolz + Bickenbach Cuts FY Profit Views on Trade Conflicts (1)Partners Group AuM EU79.8b; Reconfirms 2019 Gross Client DemandNOTES FROM THE SELL SIDE:The rising probability the U.K. could face a no-deal Brexit prompts JPMorgan to cut Lloyds Banking Group to neutral from overweight given the pressure this could put on the bank’s earnings and revenue.Italian utilities have the highest returns and the lowest risk perception, however, unpriced risk is high now after regulatory risk is discounted in U.K. and Spain, Citi says, cutting Enel to neutral while raising A2A to neutral.Baader Helvea cuts Bossard to hold, removing the only buy rating among analysts tracked by Bloomberg, with the broker now applying a more negative growth/margin scenario.Liberum raised ITV to buy from hold with unchanged 145p price target, following drop in shares that leaves the stock 40% below the broker’s discounted cash flow valuation.TECHNICAL OUTLOOK for Stoxx 600 index:Resistance at 397.9 (May 2018 high); 403.7 (2018 high)Support at 385.7 (76.4% Fibo); 380.8 (50-DMA)RSI: 56.8TECHNICAL OUTLOOK for Euro Stoxx 50 index:Resistance at 3,520 (76.4% Fibo); 3,596 (May 2018 high)Support at 3,413 (50-DMA); 3,403 (61.8% Fibo)RSI: 60.1MAIN RESEARCH AND RATING CHANGES:UPGRADES:A2A upgraded to neutral at CitiAston Martin upgraded to hold at Jefferies; PT 10 PoundsElekta upgraded to hold at Jefferies; PT 126 KronorITV upgraded to buy at LiberumTelenor upgraded to hold at DNB Markets; Price Target 183 KronerDOWNGRADES:Coloplast cut to sell at DNB Markets; Price Target 700 KronerEnel downgraded to neutral at CitiGetinge downgraded to sell at SEB Equities; PT 120 KronorLloyds downgraded to neutral at JPMorgan; PT 70 PencePandox downgraded to hold at DNB Markets; PT 200 KronorINITIATIONS:Glenveagh rated new buy at Berenberg; PT 1.15 EurosGreen REIT rated new buy at Berenberg; PT 2 EurosHibernia REIT rated new buy at Berenberg; PT 1.70 EurosI-RES rated new buy at Berenberg; PT 2.10 EurosJohnson Service rated new overweight at Barclays; PT 2.05 PoundsMARKETS:MSCI Asia Pacific up 0.3%, Nikkei 225 down 0.6% S&P 500 little changed, Dow up 0.1%, Nasdaq up 0.2%Euro up 0.02% at $1.126Dollar Index up 0.01% at 96.94Yen down 0.08% at 108Brent up 0.1% at $66.6/bbl, WTI little changed at $59.6/bblLME 3m Copper up 0.3% at $5999/MTGold spot up 0.1% at $1415.3/ozUS 10Yr yield little changed at 2.09% ECONOMIC DATA (All times CET):10am: (IT) May Trade Balance EU, prior 1b10am: (IT) May Trade Balance Total, prior 2.89b10:30am: (UK) June Claimant Count Rate, prior 3.1%10:30am: (UK) June Jobless Claims Change, prior 23,20010:30am: (UK) May Average Weekly Earnings 3M/YoY, est. 3.1%, prior 3.1%10:30am: (UK) May Weekly Earnings ex Bonus 3M/YoY, est. 3.5%, prior 3.4%10:30am: (UK) May ILO Unemployment Rate 3Mths, est. 3.8%, prior 3.8%10:30am: (UK) May Employment Change 3M/3M, est. 45,000, prior 32,00011am: (EC) May Trade Balance SA, est. 17.8b, prior 15.3b11am: (EC) May Trade Balance NSA, prior 15.7b11am: (GE) July ZEW Survey Current Situation, est. 5, prior 7.811am: (GE) July ZEW Survey Expectations, est. -22, prior -21.111am: (EC) July ZEW Survey Expectations, prior -20.211am: (IT) June CPI FOI Index Ex Tobacco, prior 102.711am: (IT) June CPI EU Harmonized YoY, est. 0.8%, prior 0.8%* For a wrap on developments in Europe’s equity capital markets, click here.To contact the reporters on this story: Michael Msika in London at firstname.lastname@example.org;Kit Rees in London at email@example.comTo contact the editors responsible for this story: Blaise Robinson at firstname.lastname@example.org, Jon MenonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.