News / Analysis
Finance Update – Earnings over – Now what?August 10, 2020
Asian markets are mixed as the week begins, the ASX up 1.67% and the Shenzhen down 0.62%. The Nikkei and Hang Seng are both down about a third per cent, the latter as Chinese controlled police arrest Hong Kong’s most important media tycoon, Jimmy Lai Chee-Ying.
China’s trade surplus in July expanded to $62.33bn as its foreign exchange reserves added another $30 bn, bringing the total to $3.154 tn. This morning’s CPIs show consumer inflation up to 2.7% YoY, while producer inflation improved to -2.4%. In Japan, household spending improved to -1.2%.
European indices closed slightly up last week, the Eurostoxx leading with 0.38%.
European data was generally good as the week ended, German Factory Orders up 27.9% MoM in June and the nation’s trade surplus in June doubled to €14.5 bn. Italian Industrial Output was up 8.2% MoM., but France’s trade deficit grew to €7.96 bn.
And, as Reuters reports Britain’s highest COVID infection numbers in a month, the Bank of England maintained its 0.1% interest rate Thursday morning.
US markets were mixed on Friday, the Nasdaq losing 0.87% and the Dow up 0.17%.
The dollar index added 30 cents as jobs data came in much better than expected – Continuing Jobless Claims down to 16.1mn and the initial reading down to 1.186 mn. On Friday, the NFP marked 1.763mn new jobs while earnings increased by 0.2%. Unemployment was down to 10.2%, but consumer credit missed the $10bn mark by $1.15 bn. And Wholesale Inventories came in at -1.4%. In Canada, unemployment fell to 10.9%but participation missed the mark at 64.3%.
President Trump on Friday issued two executive orders – the first putting on 45-day notice all US companies dealing with TikTok owner Bytedance and the second forcing Chinese companies listed on US exchanges to submit to US auditing requirements.
Meanwhile, in the continuing TikTok scandal, Twitter (-1.46%) has offered to buy the firm’s US operations if the Microsoft (-1.79%) deal falls through.
On the earnings front, Aramco (+0.3%) yesterday announced a 73.4% (YoY) drop in net income for the year’s 2nd quarter.
On Thursday, Booking.com (+0.15%) exceeded expectations, booking a $10.81 loss per share on revenues of $630 mn, while Trip Adviser (-2.36%) missed expectations by a cent earning 76 cents per share on revenues of $59 mn. – an 86% drop YoY.
Lufthansa (-1.51%) reported an 80% drop in Q2 revenues losing €-3.12 per share, and Adidas (+2.09%) shareholders lost $1.72 per share as revenues fell 35% to $4.24 bn. GoPro (11.15%) revenues dropped 54% to $134 bn, providing an EPS of -34 cents, while T-Mobile (+6.47%) reported EPS at $1.10 on $11.4 bn sales.
Today, expect earnings from Duke Energy and WPP. American Express and Masko will be paying dividends, and the ING Groep is ex-dividend.
Finally, oil on Friday bounced off $41.30 after the Barker Hughes rig count announced another 4 wells down, bringing the total of active oil rigs down to 176 and Iraq agreed to further output cuts.
|02:00 PM GMT||US||JOLTS Job Openings|
|09:00 PM||NZ||House Prices. Credit Card Sales at 10:45.|
|11:01 PM GMT||UK||BRC Like-for-like retail sales|
|01:30 AM GMT (+1)||Australia||Business Confidence & Conditions|