Finance Update – Earnings over – Now what?

Asia – China ignores the world

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 surplusA trade balance that is positive as a result of income (exports on the national level) being greater... 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 inflationThe rise in prices for goods and services, resulting in the deterioration of a currency’s purchasi... up to 2.7% YoY, while producer inflation improved to -2.4%. In Japan, household spending improved to -1.2%.

Europe – the BoE’s lower lip

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 deficitA trade balance that is negative as a result of cost (imports, on the national level) being greater ... 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% interestThe cost of accessing money not owned. rate Thursday morning.

Americas – USD celebrates jobs, then recovers

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.

Corporate – Twitter to take TikTok

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.

Commodities – Oil takes a break

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.

Events