European equity markets were set to open higher on Tuesday as investors braced for key central bank decisions this week. Odds that the Bank of England would cut interest rates on Thursday are rising, although it remains a close call. Meanwhile, the Federal Reserve is widely expected to hold rates steady, while the Bank Japan could deliver another rate hike.
Summary for 30. 07.2024
- Bond, currency and stock markets traded cautiously ahead of central bank meetings in the U.S. and Japan and a slew of major corporate earnings reports.
- The S&P 500 steadied after a two-week downturn and futures ticked 0.4% lower early in the Asia session with the focus on two-day policy meetings in Washington and Tokyo that wrap up with interest rate decisions on Wednesday.
- Futures on the Dow Jones Industrial Average dipped 16 points, or 0.04%. S&P 500 futures slid 0.05%, and Nasdaq 100 futures fell 0.03%.
- The pan-European Stoxx 600 index was 0.24% higher at 8:05 a.m. in London, with most sectors in the green
- In extended trading, CrowdStrike shares fell more than 5%. CNBC reported that Delta Air Lines hired attorney David Boies to seek damages from CrowdStrike and Microsoft after an outage this month led to thousands of flight cancellations.
- Japan’s Nikkei, which dropped nearly 6% last week, was 0.7% lower in morning trade. MSCI’s broadest index of Asia-Pacific shares outside Japan also fell 0.7%.
- The UK’s 10-year Gilt yield fell to the 4% level, the lowest since early April, on expectations of monetary policy easing and optimism for political stability following the Labour Party’s overwhelming election victory.
- Shares of Standard Chartered jumped 5.5% after the U.K. bank announced its biggest-ever share buyback, of $1.5 billion, and raised its outlook in half-year results.
- Brent crude futures fell to around $78.8 per barrel on Tuesday, reaching its lowest level since early June, weighed down by persistent demand concerns from top consumer China.
- British oil giant BP posted underlying replacement cost profit, used as a proxy for net profit, of $2.8 billion for the second quarter. That beat analyst expectations of $2.6 billion, according to an LSEG-compiled consensus. The energy firm announced it had increased its dividend by 10% and extended its share repurchasing program.
- McDonald’s reported its first drop in sales worldwide in 13 quarters, citing weakness in China’s economy.
- Companies including Unilever, Visa and Aston Martin also noted weakness in China, and analysts have warned that demand in the Asian giant is unlikely to reverse while a protracted property downturn and job insecurity weigh on consumers.
- EV battery firm LG Energy Solution, which supplies Tesla and Hyundai Motor, forecast revenue would fall more than 20% this year due to a sharper-than-expected slowdown in global EV demand.
- Quarterly results from Merck, Pfizer, PayPal, Procter & Gamble and JetBlue before the bell Tuesday could dictate market sentiment during the session. Investors will also watch closely for numbers from Microsoft, Advanced Micro Devices and Starbucks after the closing bell.
- More than 40% of the S&P 500 companies have reported their results with 79% posting earnings that exceeded Wall Street expectations, according to LSEG. That compares to five-year average earnings beat rate of 77%.
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