US stocks were higher even though European and Asian indices were mostly lower

US stocks were higher even though European and Asian indices were mostly lower

US stock indices advanced Monday thanks to positive earnings. The Dow Jones industrials were up 0.2 percent, the S&P added 0.4 percent and the Nasdaq climbed 0.6 percent. Robust corporate earnings have helped investors brush off trade concerns and tensions associated with China and other countries.

US markets

US stock indices advanced Monday thanks to positive earnings. The Dow Jones industrials were up 0.2 percent, the S&P added 0.4 percent and the Nasdaq climbed 0.6 percent. Robust corporate earnings have helped investors brush off trade concerns and tensions associated with China and other countries.

Berkshire Hathaway advanced after the conglomerate reported a 67 percent surge in quarterly operating profit. Its performance boosted investors’ optimism about a strong earnings season. Facebook lifted the Nasdaq after a report it was planning new services. It was reported that Facebook according to the Wall Street Journal had asked large US banks to share detailed financial information about their customers as part of an effort to offer new services to users.

PepsiCo rose after the company said Ramon Laguarta, a company veteran with experience in international markets, would succeed Indra Nooyi as chief executive officer. Tyson Foods gained after the company beat analysts’ quarterly profit estimates on strong demand for beef. Real estate and telecoms were the only major sectors to end the day in the red. Newell Brands declined after lowering its full-year outlook and noting that tariffs could cost it $100 million.

These data reflect observations at 4:00 PM US ET. Gold was down US$8.20 to US$1,215.00. Copper futures were down 1.4 percent to US$2.73. WTI spot crude was up 35 US cents to US$68.84. Dated Brent spot crude was up 41 US cents to US$73.62. The US dollar was up against all of its major counterparts including the yen, euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.22 percent. The yield on the US Treasury 30 year bond was unchanged at 3.09 percent while the 10 year note was down 1 basis point to 2.94 percent.

European markets

Most share indices retreated Monday. Investor sentiment was negatively impacted by an escalation in trade tensions between the US and China, along with new Brexit concerns. UK International Trade Secretary Liam Fox remarked that the possibility of Britain leaving the European Union without a deal has intensified due to the "intransigence" by EU officials. The FTSE was up 0.1 percent while the CAC slipped 1.80 points and the DAX and SMI were 0.1 percent lower.

Linde was lower after US regulators raised an unexpected hurdle to its planned tie-up with Praxair. Carrefour rose after it entered into a long-term strategic alliance with British grocery store chain Tesco. HSBC Holdings was down after reporting a 5 percent rise in first-half profit before tax. The lender said it remains cautiously optimistic for global growth in the remainder of the year.

John Laing Infrastructure Fund rallied — Dalmore Capital and Equitix Investment Management are set to acquire the company for £1.45 billion. Banco BPM in Milan after its earnings fell short of market expectations due to higher loan loss provisions. Novartis and Nestle advanced in Zurich but Roche fell along with Crédit Suisse and UBS. BP and Royal Dutch Shell advanced after crude prices rose after Saudi crude production registered a surprising dip in July.

German June manufacturers’ orders dropped 4.0 percent on the month after increasing 2.6 percent in May. This was the biggest decline since January 2017, when orders fell 4.8 percent. Both domestic and foreign demand deteriorated on trade tensions.

Asia Pacific Markets

Asian stocks were mixed Monday as investors parsed the mixed US employment report and monitored the intensifying trade tensions between the US and China.

The Shanghai Composite tumbled 1.3 percent after Beijing's latest tariff threats escalated the tit-for-tat Sino-US trade war. The yuan also weakened even though the People’s Bank of China late on Friday raised the reserve requirement on foreign exchange forward positions. The Hang Seng was 0.5 percent higher.

The Nikkei and Topix were down 0.1 percent and 0.6 percent respectively in cautious trade as investors looked forward to a raft of corporate earnings as well as this week's bilateral trade talks between Washington and Tokyo. Taisei tumbled after its quarterly profit fell over 34 percent from last year. Foster Electric plummeted after predicting a net loss of ¥2.5 billion for the year ending March 2019. NTT Data jumped after its April through June profit grew 23 percent.

The S&P/ASX was up 0.6 percent while the All Ordinaries was 0.5 percent higher. BHP Billiton and Rio Tinto rose. Commonwealth Bank of Australia gained ahead of its annual results due on Wednesday. The other three banks also advanced. Galaxy Resources rallied after the company said its agreement with Posco for the sale of certain Argentinean assets was ahead of schedule.

The Kospi slipped 0.1 percent amid selling by foreign and institutional investors. The Sensex was 0.4 percent higher.

Looking forward

Japan posts June household spending. The Reserve Bank of Australia announces its monetary policy decision. Germany releases June industrial production and merchandise trade balance. The US releases June JOLTS and consumer credit.

Global Stock Markets

    End 2018 Daily Percent Change
  Index 2017 Aug 3 Aug 6 Change Daily 2018 Yr/Yr
North America                
United States Dow 24719.22 25462.58 25502.18 39.60 0.2 3.2 15.3
  NASDAQ 6903.39 7812.01 7859.68 47.67 0.6 13.9 23.1
  S&P 500 2673.61 2840.35 2850.40 10.05 0.4 6.6 14.9
Canada S&P/TSX Comp 16209.13 16420.24 * * * * *
                 
Europe                
UK FTSE 100 7687.77 7659.10 7663.78 4.68 0.1 -0.3 1.8
France CAC 5312.56 5478.98 5477.18 -1.80 0.0 3.1 5.2
Germany XETRA DAX 12917.64 12615.76 12598.21 -17.55 -0.1 -2.5 2.8
Italy MIB 21853.34 21586.85 21580.18 -6.67 0.0 -1.2 -2.0
Spain Ibex 35 10043.90 9739.80 9722.70 -17.10 -0.2 -3.2 -8.9
Sweden OMX Stockholm 30 1576.94 1611.95 1608.48 -3.47 -0.2 2.0 2.1
Switzerland SMI 9381.87 9158.00 9149.36 -8.64 -0.1 -2.5 -0.1
                 
Asia/Pacific                
Australia All Ordinaries 6167.29 6326.40 6359.00 32.60 0.5 3.1 9.2
Japan Nikkei 225 22764.94 22525.18 22507.32 -17.86 -0.1 -1.1 12.2
  Topix 1817.56 1742.58 1732.90 -9.68 -0.6 -4.7 5.7
Hong Kong Hang Seng 29919.15 27676.32 27819.56 143.24 0.5 -7.0 0.5
S. Korea Kospi 2467.49 2287.68 2286.50 -1.18 -0.1 -7.3 -4.7
Singapore STI 3402.92 3265.73 3285.34 19.61 0.6 -3.5 -1.1
China Shanghai Comp 3307.17 2740.44 2705.16 -35.28 -1.3 -18.2 -17.5
Taiwan TAIEX 10642.86 11012.43 11024.10 11.67 0.1 3.6 4.2
India Sensex 30 34056.83 37556.16 37691.89 135.73 0.4 10.7 16.8
*Market  closed              

Data Source — Haver Analytics

Bond markets

10-Yr Govt BondsClosing YieldChange Yield (bp)
US 2.94% -1
UK 1.30% -2
Germany 0.39% -2
Japan 0.09% 0
Australia 2.72% 0

Source — Bloomberg

Currencies and commodities

CurrencyAugust 3August 6Change (%)
Japanese yen 111.2200 111.4100 -0.2%
Australian dollar 0.7402 0.7390 -0.2%
Yuan 6.8270 6.8535 -0.4%
Euro 1.1572 1.1554 -0.2%
British pound 1.3003 1.2942 -0.5%
Swiss franc 0.9943 0.9967 -0.2%
Canadian dollar 0.7702 0.7689 -0.2%

Source — Bloomberg 

CommoditiesAugust 6Change
Brent Spot $73.62 0.56%
Gold $1,215.00 ($8.20)
Thompson-Reuters/ Jeffreys Commodity index 199.13 0.38%

Source — Bloomberg 

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