Q2 earnings season begins

Asia

The Australian dollar is up slightly this morning on encouraging Chinese data received earlier, and indexes rose as monetary stimulus from Beijing seems to be taking hold.

Industrial output, up 6.3%, is recovering from a 17-year low, retail sales are up nearly 10%, fixed asset investments increased by 2 ticks to 5.8% in June and GDP rose by 1.6% MoM in the 2nd quarter, compared to the previous 1.4.

The data follows Friday’s improvement in June’s trade surplus to $50.98 bn. In Japan, industrial production in May contracted by 2.1%, compared to -1.8% in May. And New Zealand’s business PMI for June increased to 51.3 – defeating hopes of 53.1.

Europe

As UK housing prices fall 0.2% in June, industrial production throughout the Eurozone rose 0.9% MoM in May. Equities on Friday closed barely in the green, with the FTSE down 0.05% and the CAC up a third. With no major data expected today, currencies remain flat.

US

As the FED’s interest rate decision creeps closer, this week will see addresses by most of the FOMC members. On Friday Secretary of the Treasury, Steve Mnuchin told Congress that the government will be facing a cash shortage in September – this as the NASDAQ hit a record high on Friday, with traders confident of cheap money, since the consensus is still for a rate cut.

Commodities

Despite positive data from China, a 27-year low GDP is posing clouds over oil production, which generated a $1 drop in WTI process over the weekend – this despite a 4-rig drop in Friday’s Baker Hughes count.

Gold trading continues to describe a 1-month pendant, as prices continue to converge upon the 1420 mark. And, Bitcoin continues its 5-day fall from an 18-month high, currently testing support level at 10K. A breakout would next target 8K.

Meanwhile, US lawmakers fearful for the financial sector are proposing a law to prevent technology companies from offering financial services, which would levy a million-dollar-a-day fine for violation.

Facebook shares, oblivious to that and the 5-billion-dollar fine it has already swallowed for privacy breaches, rose nearly 2% on closing Friday.

Meanwhile, the US Securities & Exchange Commission is preparing to proclaim jurisdiction over Facebook’s Libra, should it be deemed comparable to an ETF.

Shares

In other corporate news, as we enter this 2nd-quarter of earnings reports, JP Morgan will be holding a shareholders meeting today ahead of tomorrow’s report, and Johnson & Johnson shares fell Friday 4.5% to a 5-week low as the firm faces accusations of asbestos content in its baby powder – this following its continuing opioid saga.

Citigroup reports today before the New York opening. EPS is expected to fall 4% on revenues that are up a quarter percent. Tomorrow – American Express, Goldman Sachs, J&J and JPMorgan Chase.

Economic Calendar

For more, visit our Economic Calendar