Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the pre-opening, the European indices were negotiating without major fluctuations. The morning will be dominated by the reaction of investors to the presented results. In short, BBVA and BNP Paribas reported profits higher than estimated, with the French bank achieving the highest results since 2012. Lloyd’s announced a 38% increase in profits, saying that is considering distributing dividends and / or repurchase own shares in order to pay the shareholders. Carrefour increased by 1.30% in its semi-annual operating results. Arcelor Mittal reported a drop of 21% on their profits but still beat analysts’ forecasts.
US markets ended without major fluctuations, with the session to be marked by macro and micro-economic factors. The publication of yesterday’s economic data confirmed the Fed’s optimistic view on the US economy. In the 2nd quarter, the US GDP grew 2.30%, slightly below the estimated 2.60%. Despite this shift, the reading of this data is positive for several reasons. The first is that the most important part of the economy, private consumption grew 2.90% in the 2nd quarter, following the growth of 1.90% in the 1st quarter. Another reason for some optimism is that the US GDP has increased 0.60% in the 1st quarter instead of suffering a bending 0.20% as previously calculated. The negative difference between the reading of the 2nd quarter and the estimate is explained by the fall of 1.60% of the investment, which was affected by the drop in investment in the oil sector as a result of the sharp drop of crude oil last year. There was even a slight decline in inventories, which is usually a passing effect, being offset in the coming months. A note sticking out of calculating GDP is rising inflation associated with the consumption to 1.80% (compared to the previous quarter). In the current situation, the publication of the labor costs index should assume a major importance. At the micro level, successive reports have come to confirm the pattern of this earnings season. The Procter & Gamble and Colgate multinational reported higher earnings than analysts’ estimates but sales suffered a decrease, for the sixth consecutive quarter in the first company and for the forth consecutive quarter on the second one. Conoco Philips was one of the first oil companies to report their quarterly accounts, denouncing what may be the trend on the results of this sector. Conoco Philips lost 0.15 USD per share, while excluding some non-recurring items it has achieved an EPS of 0.07 USD. The company said it will reduce by 10% the investment and sell some assets. In May, this 10% reduction adds to the already previously announced 20%.