Daily News Report

Markets in a Flash
• Asian equity markets performed poorly overnight and closed down. The Nikkei 225 finished down 2.86%
• European equity markets are trading higher this morning. The FTSE 100 is up over 1%.
• Oil has risen slightly to $76.79, while Gold is falling back towards the $1200 level.
• The EUR/USD continues to rise and is making new 2 month highs at 1.2988.
• The USD/JPY is falling and at its current level of 86.67 is approaching its yearly lows.
• US equity futures are following to European lead and are pointing to a higher open.
News Focus
As the Q2 earnings season gets fully underway three of the world’s largest companies report. The results seen by these companies will give direction to the market and indicate the condition of the economy.
Google – The Company’s revenues looked good for their Q2 trading. But a fall in the earnings per share figure below analysts’ consensus hurt the share price. This worse than expected earnings figure seems to have been due to Google’s capital expenditure program to set the company up for the future.
Bank of America – The profits produced by the company came in ahead of what most analysts had expected. The figures released are a decline on the same figures from a year earlier. The company posted earnings per share of 28cents compared with 33cent last year.
General Electric – The Company announced today that it had beaten quarterly earnings estimates. This strong performance has been helped by the company’s financial services unit. General Electric reports earnings per share of 30 cents compared with analysts expectations of 27 cents.
Just Released
0830ET – Consumer Price Index
CPI - M/M change
Previous -0.2 % Consensus -0.1 %
Consensus Range -0.2 % to 0.0 % Actual -0.1 %
The consumer price index has come in on consensus. This is the third month in a row when the index has shown a negative figure. This relates to the producer price index figure released yesterday which also showed a negative figure. Falling prices may be another sign that the economy is slowing. This should not have a great impact on the markets as the consensus figure was probably already priced in.
Coming up Today
0955ET – Consumer Sentiment
Previous 76.0 Consensus 75.0
Consensus Range 71.0 to 76.0
The index measures consumer’s financial positions and attitudes toward the economy. The figure has been in a rising trend since its 2010 low in mid April, and consensus believes the figure will continue to grow. A reported figure below consensus or below previous will put bearish forces on the dollar and the US equity markets as it is an indication in a reduction in consumer spending.