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Global Market Report - July 31

Stock markets were mixed on Tuesday as tech stock weakness weighed on sentiment

James Gard 31 July, 2018 | 11:10AM

Global Market Report

Asia

Global tech weakness set the tone for a mixed trading session in the Asia-Pacific region. The Nasdaq was the worst-performing of the US benchmarks and this dragged down Hong Kong’s tech-focused Hang Seng, but losses were around 0.5% on the day. China’s Shanghai Composite Index was modestly higher despite weaker than expected manufacturing data in July as the trade dispute with the United States weighs on activity and sentiment.

Investors hoping that the Bank of Japan would announce any changes to its ultra loose monetary policy were disappointed – although perhaps not surprised. The US dollar gained against the Japanese yen and this helped support the Nikkei and Topix indices in the face of global uncertainty over equities.

Europe

The UK’s FTSE 100 was a touch higher in midmorning trading but gains were held back by another strong performance of the pound ahead of Thursday’s expected interest rate rise. Among the corporate results, shares in BP (BP.) rose modestly after the oil giant more than doubled its profits and raises its dividend for the first time since 2014. The company is rated as a three-star stock by Morningstar analysts, which means that it is fairly valued.

Results from Centrica (CNA) and Just Eat (JE.) were less well received by the market. Just Eat, a recent entrant to the FTSE 100, was one of the biggest fallers today despite raising revenue guidance for 2018 and an increase in customer numbers. Pre-tax profits were a touch lower than the first half of 2017.

Spain’s stock market was the best performing in the eurozone but equity investors lacked appetite for strong moves in either direction. Underwhelming economic growth figures for the eurozone in the second quarter.

North America

Tech bulls are hoping that Apple (AAPL) results will halt the current slide in the sector after Facebook’s (FB) shock share price fall last week. Apple is unlikely to spring any surprises and is more likely to end up on the side of this season’s winners. The company reports after the market closes, so any effect on the Nasdaq will be felt on Wednesday.

The investing community and US media are more excited about tomorrow’s results from Tesla (TSLA) as analysts downgrade revenue estimates and price targets. Given that founder Elon Musk is rarely out of the headlines, this earnings release carries expectations of drama and surprise.

The Federal Reserve begins its two-day meeting today, but is expected to hold rates on Wednesday. Markets are pricing in two more interest rate rises by the Fed before the end of the year and there are only three meetings left – September, November and December.

US consumer confidence figures for July are out today just after the market opens.

 

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Apple Inc271.46 USD0.25
BP PLC469.35 GBX1.32
Centrica PLC80.70 GBX-0.59
Facebook Inc A196.75 USD-2.72
Just Eat PLC785.00 GBX0.15
Tesla Inc359.68 USD1.98

About Author

James Gard  is content editor for Morningstar.co.uk

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