Global Market Weekly Report

US Market Weekly Snapshot

U.S. stocks closed lower on Friday following disappointing results from Twitter Inc., Exxon Mobil and Intel. The Dow Jones Industrial Average fell 0.30% to end at 25,451.06.The S&P 500 index ended the day losing 18.62 points to 2,818.82 with seven of its eleven sectors lower as the technology sector sank 2%. On Tuesday S&P 500 rose to 2820.4 level, its highest since February. The Nasdaq 100 fell by 1.40% to close at 7296.78.

For the week, the DJIA added 1.6%, the S&P 500 rose 0.6%.Both the DJIA and the S&P posted their fourth straight weekly gains, the longest such streak since January.

About Earnings Report, Google Parent Company Alphabet smashed Market expectations while Facebook, Exxon Mobil and Chevron missed expectations. Chevron’s stock still rose after the oil major announced it would begin buying back $3 billion of its stock from shareholders each year.

Consumers and Government spending powered the economy to a 4.1% rate of GDP growth in the second quarter, the fastest pace of growth in almost four years although it was slightly below the 4.2% rate predicted by analysts.

The 10-year US government bond yield was down 1.3 basis points to 2.962%, on Friday trimming its weeklong climb to 6.7 basis points, its biggest such move since May 18. The 30-year US bond yield was down1.2 basis point to 3.089% on Friday trimming its weeklong rise to 5.8 basis points.

 

European & Asian Pacific Weekly Market Snapshot

European stocks on Friday finished with their strongest weekly gain in more than four months  with Carrefour’s shares surging 12.01% as the French retailer  reported better-than-expected earnings that have helped push regional equities to a six-week high. The Stoxx Europe 600 index closed up 0.4% at 392.08, its highest finish since June 14, according to FactSet data. Germany’s DAX 30 closed with a gain of 0.4% at 12,860.40, and France’s CAC 40 rose 0.6% to 5,511.76.The CAC and the DAX 40 also marked their best weeks since early March by bulking up 2.1% and 2.4%, respectively. The FTSE 100 gained 0.50% to close at 7701.31 led by the telecom and basic materials sectors. These moves came after European Commission President Jean-Claude Juncker and U.S. President Donald Trump said they would work on tamping down trade-related tensions between the U.S. and the European Union. The two said they’ll move toward “zero tariffs” and “zero subsidies on non-auto industrial goods,”

On Friday the French Government released its GDP growth rate of 0.2% for the second quarter. For the week, London’s blue-chip benchmark picked up 0.3%, a third consecutive weekly advance according to MarketWatch. The FTSE 100 constituent BP reached an agreement to buy most of another FTSE 100 constituent BHP Billiton’s U.S. shale assets for $10.5 billion. Shares of oil producer BP have the third-heaviest weighting on the FTSE 100, at 5.6%, according to FactSet data. BHP Billiton stocks jump more than 2% after the deal.

Asia-Pacific stock markets were mixed on Friday. Further declines in Chinese and Hong Kong stocks were joined by modest drops in Southeast Asian benchmarks, while more-robust gains persisted in Japan, Australia and New Zealand. Australia’s ASX 200 rose by 0.89% amid strength in commodities and consumer-discretionary names. Chinese Shanghai Composite fell by 0.3%.and Hong Kong’s Hang Seng rose by 0.08%. Japan’s Nikkei225   gained 0.5% despite Nomura   plunging almost 6% after it reported disappointing quarterly profits. South Korea’s Kospi was up 0.2% even as Samsung Electronics scratched back from early losses to close flat.

 

WEEKLY FOREX UPDATE

The ICE U.S. Dollar Index which measures the greenback against six major rivals, was down 0.11% on Friday to close the week at 94.673.The Euro rose against the US dollar to close at $1.16575 recovering some of its previous day losses. The Pound was traded flat on Friday to close at $1.31050. The US Dollar was also traded flat against the Yen to close the week at ¥110.97. The closing price of the GBP/JPY was 145.420 on Friday. The US GDP report on Friday also influenced the Euro which gained 0.11% from late Thursday trading. The Euro declined against US Dollar after Thursday’s European Central Bank meeting that left investors looking for additional clarity on the central bank’s path to policy normalization disappointed. The Yuan weakened to a 13-month low this week to trade at 6.8369 per dollar as expectations of further policy easing piled pressure on the fragile currency, which has fallen steadily since April and suffered its worst month on record in June. The Yen firmed against the euro and dollar in advance of Bank of Japan’s two-day policy meeting that begins on Monday in the wake of reports last week that policy-makers may to make its massive stimulus program more sustainable. The Australian Dollar was closed on Friday at 0.74020 per US dollar.

 

WEEKLY CRYPTOCURRENCY UPDATE

Bitcoin pared some of its Thursday losses to close at $8189 on Friday after the Securities and Exchange Commission in New York voted against the proposal for a bitcoin exchange-traded fund on Thursday. Bitcoin touched the level of $8452 on Tuesday. Ethereum  also recovered some of its losses of  previous trading sessions to close on 457.99 on Friday. Ripple also gained 1.81% from previous day to close the week at $0.4477.

 

WEEKLY COMMODITY MARKET UPDATE

Crude Oil remained in the positive territory for most of the week .Crude Oil futures settled lower on Friday, ending a three-day winning streak in light trade after Russia’s energy minister Alexander Novak indicated that a coalition of producers could pump more crude oil than agreed by the end of the year. September Brent crude futures fell 0.3%, to $74.29 a barrel on ICE Europe. Brent crude prices hung on to a 1.7% weekly rise. The US benchmark, September West Texas Intermediate crude dropped 1.3%, to $68.69 a barrel, paring its weekly gain to 0.6%. It marked the first weekly gains for both contracts in four weeks. Oil was buoyed earlier this week after top crude exporter Saudi Arabia halted shipments via a Red Sea trade route due to attacks on two of its tankers by Houthi rebels. An estimated 4.8 million barrels a day of crude oil and refined products flowed through the Babal-Mandeb strait in 2016 toward Europe, the U.S. and Asia, according to the U.S. Energy Information Administration.

Gold was mostly traded flat on Friday to close the week at 1221.68 level. This week gold remained mostly in negative territory. Gold for August delivery fell 0.2%, to end at $1,223 an ounce, leaving it near the lowest for a most-active contract since July of 2017.

This week remained mixed for Silver Futures. September silver slipped by 0.2 cent , or less than 0.1%, at $15.493 an ounce. The commodity, however, has fallen for seven straight weeks, matching a similar weekly skid in November of 2012, according to WSJ Market Data Group.

 

The Week Ahead(30thJuly-3rd August)

 

JAPAN

Evacuations were ordered in western Japan on Saturday as Typhoon Jongdari barreled toward the central Tokai region where it was expected to make landfall overnight and proceed towards the western Japan. The Bank of Japan will hold a policy review two-days meeting beginning from Monday .According to Market sources no changes are expected on BOJ policy at next week’s meeting. However, there is a possibility that the BOJ will make an announcement that it has begun discussions to provide suitable ranges for a target yield curve after the coming meeting.

US

  • Within the next few days, the U.S. is expected to release a final list of another $16 billion of Chinese goods that will subject to a 25 percent tariff, and China is expected to retaliate in return according to CNBC report.
  • About a quarter of S&P 500 companies report in what will be the last big week for second-quarter earnings. Caterpillar, Procter and Gamble, DowDuPont, Pfizer and Tesla are among the names report, but Apple will be the most watched company which will report its earnings on Tuesday.
  • The Federal Reserve’s two-day meeting beginning from Tuesday is one of the important economic events but little is expected from the meeting. The next interest rate hike is not expected until September, and the Federal Reserve is unlikely to give much in the way of new guidance about policy.
  • July’s employment report will be releasing on Friday, with 195,000 jobs are expected, while the Unemployment rate is expected to fall to 3.9% according to Thomas Reuters. The key number to watch –average hourly earnings-is expected to continue its slow creep higher ,rising 0.3% or 2.7% on an annual basis.

EUROPE

 The Bank Of England’s Governor Mark Carney is expected to raise UK interest rates by a quarter point to 0.75% on Thursday.

  • In Europe more than 70 companies on the pan-European STOXX 600 will report their earnings in the upcoming week. It is a particular big week for the region’s banks, which have underperformed in the broader index with a 10% fall so far in this year. The big names on list include BNP Paribas, Lloyds and RBS.

 

  1. EARNINGS CALENDAR

Monday–     Caterpillar

Tuesday–     Apple, Proctor and Gamble, Pfizer, Samsung Electronics and Honda Motors

Wednesday-Tesla, Arcelor Mittal, Volkswagen, BNP Paribas

Thursday–    Barclays, DowDuPont, Siemens, CBS

Friday–        Toyota Motors

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