Global Market Report - August 1

World commodity stocks were under pressure today after weaker Chinese manufacturing data

Morningstar 03/08/2561

Global Market Report

Asia

Markets in the Asia-Pacific region were softer on Wednesday, led by a near 2% fall in China’s Shanghai Composite Index after weaker than expected manufacturing data.

Amid the ongoing trade war rhetoric, it is not surprising that China’s Caixin PMI dropped back to 50.8 from 51 in June, signifying that the manufacturing sector is still expanding, but very modestly.

Hong Kong’s Hang Seng fell by nearly 1% despite signs of a reversal in the Nasdaq’s recent weakness.

Japan was the exception is Asia Pacific, gaining nearly 1% on a softer yen and a strong share price performance from the likes of Sony (6758).

Europe

Stocks in Europe failed to gain any momentum on Wednesday morning, with Germany’s Dax and Spain’s Ibex among the worst performing markets.

In the UK, chunky falls for Next (NXT) and the mining giants reversed some of the FTSE 100’s recent gains.

Investors in UK bank shares were cheered by a rise in profits at Lloyds Banking Group (LLOY) and a 7% increase in the interim dividend. However, another hit on PPI claims for Lloyds is a reminder that the bad days are still haunting the FTSE 100’s biggest listed banks.

The company has a four-star rating Morningstar analysts, with a fair value estimate of 76p a share, against a current price of around 64p.

North America

Apple (AAPL)’s after-hours earnings release brought to a close a dramatic earnings season that saw Facebook shares crushed.

Apple joined the ranks of the tech winners such as Google parent company Alphabet (GOOGL) and Amazon (AMZN), which have already reported. The company, which reported a rise in the value of each new iPhone sold even as sales disappointed, is planning new models later this year and is within reach of the trillion dollar valuation.

The tech-focused Nasdaq index managed a day on day gain yesterday after days of turmoil following the Facebook results. Despite the recent daily losses, the index made a marginal gain for the month.

Corporate earnings give way today to the Federal Reserve announcement on interest rates. While rates are expected to stay on hold, the Fed is expected to signal that the third of this year’s increases is due at the next meeting in September.

Nevertheless, there is always drama when Tesla (TSLA) founder Elon Musk comes into contact with the analyst community. The results are out after the market close.

 

 

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