Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European markets ended today’s session low. Producers of raw materials and the automotive sector have been among the worst performers at a time when fears over trade tensions between the US and China are returning. Investors’ attention today focused on the companies that presented their quarterly results as well as the Central Bank meeting. In the banking sector, Société Génerale announced that its second-quarter net income increased by 9.30% to 1160 M. €, surpassing forecasts. However, its shares fell by 2.25%. Continental also declined on the day it reported quarterly net income growth and confirmed its outlook for the year. On the other hand, BMW fell 0.53%. the company reported that its quarterly profit after tax fell due to high research and development costs, exchange rate effects and high commodity prices. Siemens reported quarterly results slightly down on the previous year to € 1210 M., due to the high tax burden, with revenues falling short of expectations. Stocks fell 4.96%. As expected, the Central Bank of England decided to raise core interest rates from 0.50% to 0.75%, despite the uncertainty surrounding Brexit and what that might mean for the British economy.
The US market was trading in different directions, with the Dow Jones and S&P500 being pressured by worries about the US-China trade war. Following Trump’s announcement that it could increase tariffs on 200,000 M.USD of goods imported from China from 10% to 25%, US Trade Representative Robert Lighthizer said that Donald Trump has determined this rise because Beijing refused to comply with US requirements and imposed retaliatory measures on US assets. Beijing has already responded to the new threat by saying that China is ready to intensify the trade war. Despite this, the Nasdaq was trading higher. Apple’s shares were up more than 2%, reflecting the results reported on Tuesday after the market closed. Tesla also gained ground (about 9%), after presenting its results yesterday after the closing of the session. The producer of electric vehicles reported a quarterly loss higher than expected, but revenues hit a record: loss per share was USD 3.06, compared to losses of USD 2.90 expected, while revenues amounted to 4000 M.USD, above 3970 M.USD envisaged. The company points to a production volume of Model 3 of six thousand vehicles per week already at the end of this month. In terms of economic indicators, the number of weekly applications for unemployment benefits stood at 218 000, compared to the expected 220 000. In June, orders to industry showed a 0.70% increase, in line with expectations, but above the previous 0.40%, while orders for durable goods registered a variation of 0.80%, lower than the 1% observed in May. If we exclude transport orders, this indicator increased by 0.20%, after 0.40% in the previous month.