This week, the reporting season reaches its first peak. Thus, the financial statements of Logitech, Kering and Apple are on the agenda on Tuesday, followed by Deutsche Bank, Facebook and Pfizer on Wednesday and Samsung, Credit Suisse, Sanofi and Merck & Co on Thursday.
The earnings season dominated financial markets already last week and sent US stock markets on Friday to record gains. Thus, the Dow Jones gained +0.7% and finished with a closing price of 35’061.55 points for the first time ever above the 35’000 mark. The S&P 500 climbed +1% to 4411.70 points and the Nasdaq Composite also advanced +1% to 14’836.99 points. An analysis from the data service provider Factset shows that of the roughly 110 S&P 500 companies that presented their figures by Thursday, more than 85% exceeded market expectations.
In Asia, stock exchanges start the new week inconsistently. The Nikkei gains about +1%, but the Hang Seng (-2.9%) and the Shanghai Composite (-2.1%) record significant losses. This, after China's antitrust authority has imposed another fine for anti-competitive behavior against the Chinese streaming service Tencent, and tightened restrictions against private education companies listed in Hong Kong.
The Purchasing Managers' Index (PMI) from the London-based research firm IHS Markit signaled a slight slowdown in business activity for the US private sector, which includes services and manufacturing. The PMI fell from 63.1 points in June to 62.1 points. Analysts had expected an even sharper decline to 61.8. According to IHS Markit chief economist Chris Williamson, the second monthly decline suggests that the pace of economic growth has slowed, though the slowdown follows an unprecedented surge in growth.
Private sector companies in the euro area have made a good start to the third quarter, according to the latest survey results. The composite index for the services and industrial sectors compiled by IHS Markit rose to 60.6 in July from 59.5 points in June, reaching its best level in 21 years! While the services PMI improved from 58.3 to 60.4 points, or the highest level in 15 years, the situation in the industrial sector deteriorated from 63.4 to 62.6 points on the back of supply chain bottlenecks. In the outlook, the majority of companies in both sectors expressed concern about the consequences of a further spread of the delta variant.
According to Bloomberg, there is disagreement on the new forward guidance in the ECB's top monetary policy body. German Bundesbank President Jens Weidmann and Belgian central bank chief Pierre Wunsch have spoken out against the new guidance regarding the inflation target, the report said. According to the two council members, the newly formulated guidance could be perceived by capital markets as committing to a relaxed monetary policy for too long.
Russia's central bank must continue to tighten interest rates to fend off mounting inflationary pressures. The Bank of Russia tightened the key interest rate by +1 percentage point to 6.5% on Friday - the biggest rate hike since 2014. The central bank also indicated the possibility of further rate hikes.
|10:00||GE||Ifo Business Climate (July)||101.8|
|16:00||US||New Home Sales (June, m/m)||-5.9%|
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Source: LGT Bank (Switzerland) Ltd.
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