Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In the beginning of the session, European equities negotiated slightly higher, after the US stock market have reversed their downward trend and Asian stocks have also ended in positive range. The European markets consolidate after strong selling pressure after a devaluation of the Yuan of 1.90%. Today, the Chinese Central Bank have fixed a Yuan only marginally lower, thus giving a signal that wants a devaluation of its currency but in a thoughtful way. In business terms, Nestlé reported, relative to the 1st half, sales below expectations due to the collection of one of its products in India, while the second largest German utility company, RWE, also showed a lower semi-annual result than expected. Also German, ThyssenKrupp reported a significant increase in quarterly profit, aided by units of elevators and steel in Europe, beating analysts’ forecasts. On the other hand, the technological sector should capture the attention, after last night Cisco Systems have submitted their results, reporting a growth of 3.20% in net profit for the 4th quarter, while revenues increased 3.90%. In addition, the company expects an increase in their income between 2% and 4% and earnings per share between 0.55 USD and 0.57 USD. Cisco shares rose 3.87% in the aftermarket. Today’s publication of the minutes of the last meeting of the ECB should not raise great interest, since in this last event, July 16, there were no changes to the current monetary policy. Regarding economic indicators, it should be known inflation in Germany and France.
The US market reversed the negative trend of the first hour, finishing in moderately positive territory. The financial and telecommunications sectors were the most penalized before a sense of concern about the growth of the second largest economy in the world. Analysts at Goldman Sachs report that the depreciation movement of the Chinese currency in recent days is not strong enough to override last year’s appreciation of the Yuan, thus not having an immediate effect on the growth rate of the economy, making the impact on US economic growth also small, since a 1% decline in China’s annual economic growth would have a negative effect of 0.06% in US GDP. In the accounts for the 2nd quarter revealed by some companies, such as Caterpillar and 3M, appeared already mirrored this impact. In business terms, and with regard to yesterday’s session, the retailer Macy’s shares fell 5%, after the company reduced its future earnings prospects. Oil prices rose slightly on the day that the International Energy Agency said the world oil demand is growing at the fastest pace in five years, supported by economic recovery and the low crude oil prices, which compensates for the increase in supply. In its monthly report, the agency said that the demand will grow 1.6 million barrels a day this year, 260,000 barrels more than estimated in its latest report, which means “the largest increase in five years”. Today’s macroeconomic calendar contains the publication of retail sales. According to the estimates of economists, retail sales should have increased 0.60% in July from the previous month, before a recovery in sales in the automotive sector and other sectors which in June showed a correction. Excluding auto sales, its foreseen a monthly rise of 0.50%. As usual, it will also be published, the weekly claims for unemployment benefits.