MARKET WRAPS
Stocks:
Stocks in Europe were lower on Tuesday as investors weighed another batch of corporate earnings as well as the latest news on the Chinese economy.
"Many experts predict that China's major economic industries may face difficulties as the government hesitates to provide substantial stimulus due to concerns about financial leverage," SPI Asset Management said.
"However, there are indications that authorities are beginning to recognize the need for further action, but waiting is the hardest part."
Read China Caixin Manufacturing PMI Slips Into Contraction
U.S. Markets:
Stock futures edged lower Tuesday as Wall Street began August deep in the heart of corporate earnings season, although a generally well-received second-quarter season has been providing support to market sentiment.
Companies due to report their results on Tuesday include Uber, Caterpillar, Pfizer, Sysco and Molson Coors.
On the data front, the JOLTS job openings report for July is due, along with the S&P manufacturing PMI, the ISM manufacturing report and June construction spending.
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Forex:
The strength of the U.S. economy compared with the eurozone is expected to benefit the dollar in August and weigh on EUR/USD, Danske Bank Research said.
Danske Bank agrees on the market pricing with respect to the Federal Reserve's terminal rate--with no further rate rises priced--but it isn't convinced the Fed will cut rates early next year, as pricing currently suggests.
TD Securities said the dollar is likely to benefit from seasonal factors in August and the market should be "highly sensitive" to relative data that favors the U.S. economy in the short-term.
TD favors using any dollar rallies in the next few weeks as a selling opportunity, having lowered its conviction levels on the dollar over the next month after the Fed signalled rates could be at or near their peak in its last meeting.
Read EUR/SGD's Outlook for Next 1-2 Months Still Negative, Charts Show
Bonds:
Eurozone government bond yields were marginally lower in early trading, having largely digested last week's ECB move and a series of end-month economic data.
"Markets will continue to digest key macro data today," Mizuho said.
Read Eurozone Gross Bond Supply to See Sharp Seasonal Fall in August
Energy:
Oil prices paused after closing their best month in more than a year, with the rally built on "signs of tightening in the market together with China stimulus hopes offering some upside to the demand outlook," Saxo said.
Expectations that Saudi Arabia could extend its production cuts in September and Russia could continue reducing oil exports were also boosting prices.
European natural gas prices jumped for a second session, rising 4%, as ample storage levels contended with supply stoppages. Read more .
Metals:
Base metals and gold were lower as an uncertain macroeconomic outlook and a rising dollar pegged back prices. This after Chinese manufacturing data this week indicated that industry is still contracting.
"The spluttering economic recovery has spurred measures from Beijing," ANZ said, adding that moves to support housing and car purchases are signs of positive stimulus.
Elsewhere, Chilean copper producer Codelco, the world's largest producer of the industrial metal, recently lowered its annual production guidance.
Read Investor, Central Bank Demand For Gold Wanes As Interest Rates Start to Peak
DOW JONES NEWSPLUS
EMEA HEADLINES
BP Profit Declines More Steeply Than Peers' as Lower Oil and Gas Prices Bite
LONDON-British oil giant BP said its second-quarter profit dropped almost 70% from its year-ago bonanza, as lower commodity prices and weak refining margins hit results.
The oil major's profit missed market expectations and fell more sharply compared with roughly 50% declines recorded by bigger rivals Exxon Mobil, Shell and Chevron. BP trimmed its quarterly share buyback to $1.5 billion from $1.75 billion announced last quarter while modestly boosting its dividend.
HSBC First-Half Profit Surged to $17 Billion
HSBC's profit more than doubled in the first half, as the London-based banking giant continued to benefit from higher interest rates.
Asia-focused bank said Tuesday that profit rose to $16.97 billion in the first six months of the year, compared with $7.97 billion in the year-earlier period. This follows HSBC's record-smashing first quarter, when profit hit $10.33 billion.
BMW Raises 2023 View Despite Lower 1H Pretax Margin
BMW on Tuesday upgraded its full-year outlook, citing a solid first half and good momentum, but reported a lower pretax earnings margin in the first half.
The German high-end car company said its group pretax earnings margin was 12.6% in the first half of the year compared with 24.5% in the first half of last year. Pretax earnings for the second quarter was stable at 11.3%, BMW said.
Daimler Truck 2Q Profit, Revenue Rose on Pricing, Demand
0704 GMT - Daimler Truck's second-quarter earnings report adds color to previously released figures, including vehicle orders that were 15% below Wall Street consensus, Citi analysts say in a note. The German truck and bus maker's 2Q orders were 10% below Citi's expectation, with the buses and the Asia trucks business driving the miss, analysts say. Trucks Asia orders missed Wall Street consensus by 30% while buses orders came 50% under expectations, Citi says. Daimler says the weaker numbers were because of a 2024 order book that is not yet open, though this reasoning seems to be centered on North America, Citi says. (david.sachs@wsj.com)
Diageo FY 2023 Pretax Profit Rose; Backs Medium-Term Guidance
Diageo on Tuesday reported a rise in pretax profit for fiscal 2023, albeit slightly below market expectations, on strong organic net sales growth and price increases, and backed its guidance.
The alcoholic drinks company made a pretax profit of 4.74 billion pounds ($6.08 billion) for the year ended June 30, compared with GBP4.39 billion the previous year.
Atos in Exclusive Talks to Sell Tech Foundations to EPEI for $2.20 Billion
Atos is in exclusive talks to sell its Tech Foundations business to EP Equity Investments for 2 billion euros ($2.20 billion), including debt, it said Tuesday.
The French information-technology company said the deal is part of its previously announced plan to separate the subsidiary from Eviden, its data business, to improve its capital structure. If approved by shareholders and regulators, Atos would change its name to Eviden and Tech Foundations would continue using the Atos brand as its sole owner, the company said.
Deutsche Post Raises 2023 Outlook Despite Fall in 2Q Earnings, Revenue
DHL owner Deutsche Post on Tuesday raised its guidance for 2023 despite reporting lower ernings and revenue for the second quarter, hurt by a combination of weaker demand and comparisons with last year's record results.
The German logistics group-also known as DHL Group-said it now expects earnings before interest and taxes for the full year to be between 6.2 billion and 7.0 billion euros ($6.82 billion-$7.70 billion), in light of what it called a resilient performance in the first half. It had previously guided for EBIT to be in a range of EUR6.0 billion to EUR7.0 billion.
Uniper to Invest Billions in Green Shift; Swung to 1H Profit After Crisis Year
Uniper said Tuesday that it is implementing a new strategy to become greener, including an investment of more than 8 billion euros ($8.80 billion), and that it swung to profit in the first half of the year after a massive loss in the previous year.
The German energy company was bailed out by the government in December after Russia cut gas deliveries, forcing it to buy gas at high prices on the spot market.
U.K. house prices fall by the most in 14 years
U.K. house prices skidded in July by the most in 14 years, a leading mortgage provider said Tuesday.
Nationwide reported a 0.2% seasonally adjusted change in July to take its home price index down 3.8% year-over-year.
GLOBAL NEWS
Earnings Season Threatens Lofty Stocks
U.S. stocks have stormed higher this year, but some investors say lackluster earnings projections threaten their ascent.
Stocks have rallied as the economy has proved more resilient than expected and investors bet the Federal Reserve could soon conclude its aggressive campaign of raising interest rates, which crushed stocks in 2022. Excitement about artificial-intelligence technology has also sparked a frenzy in markets, boosting megacap tech stocks such as Nvidia and Microsoft. The S&P 500 is up nearly 20% this year, and the tech-heavy Nasdaq Composite has gained 37%.
RBA Extends Rate Pause for Second Month as Inflation Cools
SYDNEY-The Reserve Bank of Australia left its official cash rate on hold Tuesday, extending its policy pause for a second month, but it left the door open to tightening further if inflation remains sticky and the job market stays tight.
The OCR was maintained at 4.10%, with economists largely split on the RBA's verdict ahead of the policy meeting.
'Anti-woke' fallout? BlackRock, Fidelity and other asset managers soften climate-change efforts, report says
The world's largest asset managers remain far off track to meet their commitments to claim net-zero carbon emissions by 2050, according to a global study released by FinanceMap during European hours Tuesday.
It's arguably a softening of the financial fight to slow climate change that happens to coincide with select U.S. states' actions to limit what some claim is "woke" investing, or using a screen on investments that includes environmental, social and governance (ESG) considerations, report authors stressed.
Niger Coup Leaders Detain Ministers, Party Officials
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08-01-23 0547ET
