Wall Street and FTSE lower ahead of central bank meetings
The United States Federal Reserve is scheduled to convene on Wednesday, and investors are eagerly awaiting a modest increase of twenty-five basis points. Image: Liu Jie/Xinhua via Getty
The stock markets on Wall Street, the FTSE 100, and in Europe experienced declines on Monday afternoon as investors prepared for a significant week ahead filled with data releases, earnings announcements, and central bank determinations.
Investors are eagerly awaiting the upcoming meeting of the US Federal Reserve, which is scheduled for Wednesday. It is anticipated that there will be a modest increase of 0.25% in interest rates. Similarly, market analysts are expecting the European Central Bank (ECB) to announce a 0.25% hike in rates during its meeting on Thursday. Additionally, the Bank of Japan (BoJ) is set to make its decision later in the week, and this will be closely observed by market participants.
The Dow Jones index increased by 0.29% to reach 35,331.07 points, the S&P 500 index saw a gain of 0.46% to reach 4,557.01 points, and the NASDAQ index, which focuses on technology stocks, experienced a climb of 0.41% to reach 14,089.28 points.
FTSE 100 & European Stocks: Market Insights
In the UK, the FTSE 100 (^FTSE) dropped by 0.08% to reach 7,657.77 points. Over in Paris, the CAC 40 (^FCHI) experienced a 0.38% decline, settling at 7,406.10 points. Meanwhile, in Germany, the DAX (^GDAXI) saw a 0.19% loss, ending up at 7,406.10 points.
Naeem Aslam, the chief investment officer at Zaye Capital Markets, expressed the belief that the measures implemented by these banks are expected to lead to notable fluctuations not just in their currencies, but also in their stock markets.
Asia's markets experienced a varied performance in the past night, with the Nikkei 225 emerging as the top achiever. It concluded the session with a remarkable 1.23% increase, reaching a total of 32,391.26 points. Conversely, the Hang Seng in Hong Kong witnessed a decline of 2.45%, settling at 18,607.73 points. Mainland China's Shanghai Composite also experienced a slight dip, falling by 0.14% to a value of 3,163.21 points.
The value of the British currency against the US dollar, symbolized as GBPUSD=X, was on the rise and stood at 1.28. This signifies that one British pound can be exchanged for 1.28 US dollars. At the same time, the rate at which the British pound can be exchanged for the euro, symbolized as GBPEUR=X, was 1.15.
In the world of commodities, the prices of oil experienced a decline on Monday as investors eagerly anticipate the decisions regarding interest rates by central banks. These decisions will serve as vital indicators, providing insights into how the demand for crude oil might be influenced.
Crude oil from the United States, also known as West Texas Intermediate (CL=F), experienced a decline of 0.53% and is now being bought and sold at $76.66 (£59.66) per barrel. On the other hand, Brent crude (BZ=F) also witnessed a decrease of 0.56% and is currently priced at $80.62 per barrel.
Vodafone has reported a decrease in revenue of 4.8% during the first quarter. However, there was a positive improvement in organic growth, which reached 3.7%. The company has decided to maintain its original guidance for the full year.
Cranswick (CWK.L) announced excellent business performance at the beginning of its new financial year, with a 14.7% increase in revenue compared to the same timeframe last year. Additionally, the company anticipates surpassing initial predictions for the year's performance.
Discover the latest buzz: Ryanair, Vodafone, and Ocado are the talk of the town.
In other news, Moneysupermarket.com (MONY.L) announced that their revenue increased by 11% during the first half of the year, reaching £213.8m. Additionally, their post-tax profit rose by 22%, totaling £41m. To add to the positive results, the company increased their dividend by 3% to 3.2p per share. Furthermore, Moneysupermarket.com's full-year performance is anticipated to be at the higher end of expectations.
On Monday, both Ryanair (RYA.IR) and Philips (PHG) released their financial results. Ryanair stated that their after-tax profit reached €663m during the three months ending in June, which is nearly four times higher compared to the previous year. This achievement also surpassed their previous record for the same quarter in 2017, when they earned €397m.
Meanwhile, Philips reported that its total sales rose to €4.5bn, experiencing a comparable sales growth of 9%. They stated that their income from operations reached €221m for the quarter, whereas it was €11m in the same period last year. Additionally, the company revised its forecast for 2023, indicating positive expectations.
This upcoming Tuesday, we'll be getting updates from Unilever, Deutsche Boerse, Alstom, Spotify, Alphabet, Microsoft, Visa, General Motors, Verizon, and Snap.
This Wednesday, there will be earnings reports from various companies such as British American Tobacco (BATS.L), Rio Tinto (RIO.L), Lloyds (LLOY.L), GSK (GSK.L), Just Eat Takeaway (JET.L), Stellantis (STLA), Carrefour (CA.PA), Deutsche Bank (DBK.DE), Airbus, Boeing (OBOE.L), Coca-Cola (KO), and AT&T.
Discover more: UK economy 'grinding to a halt' due to weak consumer demand and exorbitant prices.
Thursday will feature announcements from BT, Shell, Barclays, TotalEnergies, Volkswagen, Nestle, Intel, Ford, and McDonalds. Additionally, AstraZeneca, Standard Chartered, NatWest, IAG, Air France-KLM, Sanofi, Chevron, and Procter & Gamble will provide updates on Friday.
Investors will also be processing a wide range of economic data releases on Monday.
According to the most recent HCOB 'flash' PMI® survey conducted by S&P Global, Germany experienced a decline in July, falling below a reading of 50 at 48.3. This decline can be attributed to a worsening manufacturing sector combined with a significant slowdown in the growth of services activity.
In the meantime, businesses' anticipations regarding future operations took a turn for the worse for the first time in this year, resulting in a decline in the rate of job creation compared to the strong levels observed in the previous quarter.
The increase in input expenses and the rise in prices for products or services being sold showed a gradual decrease.
According to the PMI report, the reason for this was solely due to a greater decline in manufacturing costs and prices, while inflation rates in the service industry slightly rose from their already elevated levels.
The manufacturing Purchasing Managers' Index (PMI) for the Eurozone experienced a drop in July, falling from 43.40 points in June to 42.7. Similarly, the services PMI decreased from 52 points in June to 51.10 points in July of the same year.
Learn more: What is the effect of inflation on currency pairs such as the USD/GBP?
The HCOB Eurozone Composite PMI went down as well, dropping to 48.9 in July from 49.9 in the preceding month.
In the United Kingdom, the PMI data indicated that the country's economy was experiencing a slowdown, as there was decreased demand and elevated prices that were negatively impacting business activity in the UK.
According to S&P Global, there was a slight increase in production levels, but it was the slowest growth seen in the past six months. This was mainly because there was no significant increase in new orders, and the amount of unfinished work decreased significantly. However, manufacturing companies did report that suppliers were delivering their materials in a more timely manner, which is the best performance in this aspect since January 1992. This improvement in the supply chain globally has helped manufacturers to be more efficient and reduce costs. As a result, they have been able to lower their prices for the second consecutive month.
The latest seasonally adjusted data from the S&P Global/CIPS Flash UK Composite Output Index showed a decrease to 50.7 in July. This is a drop from the previous month's reading of 52.8 and marks the lowest level since January.
The indicator indicated above the important 50 level in all of the previous six months, although the most recent growth was only minimal and the least strong during this time frame.
Business in the United States experienced a decline in July, reaching its lowest point in five months. The decrease was primarily driven by a slowdown in the growth of the service sector, as indicated by the data revealed on Monday afternoon.
According to S&P Global, the US Composite PMI index dropped to a score of 52 in July, compared to 53.2 in June. This signifies continued growth for the sixth consecutive month, although it was hindered by a weakening service sector.
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