World Markets Live - August 2 - CNBC Live Events

CNBC Live Events

World Markets Live - August 2

We’ll be updating you throughout the day with essential breaking news, data alerts, earnings reports and all the major market movements.

    Shares in Apple topped record highs after hours, following a strong third-quarter earnings report. The California company saw its net income rise compared to the previous year, while revenues beat estimates.
    Better than expected iPhone performance helped Apple's results, with sales rising 1.6 percent to just over 41 million units. But lower average selling prices caused revenues from the device to miss estimates.
    by Spriha Srivastava edited by luke.graham 8/2/2017 5:16:00 AM
    The Senate has confirmed Christopher Wray to be FBI director, nearly three months after President Trump fired James Comey. In his confirmation hearing, Wray pledged to remain independent and not bow to pressure from the President. The former Justice Department lawyer, was confirmed by a bipartisan vote of 92-5. 
    Senate Holds Confirmation Hearing For FBI Director Nominee Christopher Wray : News Photo
    BAE Systems H1 sales 9.6 billion sterling vs 8.7 billion sterling a year ago. The company says it is well placed to continue to generate good returns for shareholders. That's according to Reuters.
    German fashion house Hugo Boss reported better-than-expected second-quarter sales and net profit on Wednesday after a restructuring plan to close stores and cut prices bore fruit and demand picked up in China and the United States.

    After a string of profit warnings and the departure of its chief executive, Hugo Boss has been slashing prices in China to bring them closer to European and U.S. levels, making efforts to appeal to younger customers and closing loss-making stores.
    Germany's Commerzbank fell to a bigger-than-expected net loss in the second quarter due to weak markets and restructuring charges, sending its shares down more than 3 percent ahead of the Frankfurt market open on Wednesday.

    The 637 million-euro ($753 million) net loss was bigger than the 584 million euro shortfall expected by analysts polled by Reuters. 

    Commerzbank shares were indicated down 3.3 percent in pre-market trading by 0617 GMT at brokerage Lang & Schwarz.
    ING's second quarter net profit beat expectations thanks to strong growth in lending and deposits. The Netherlands' biggest financial services company also saw provisions for bad loans fall by 25 percent. CEO Ralph Hamers welcomed the figures, despite what he called "aggressive competition in some of our markets."
    RSA Insurance is raising its interim dividend after posting a 15 percent increase in operating profit for the first half of 2017. The company says its restructuring programme is now complete, following the sale of legacy liabilities in the UK. RSA pledged to continue stripping out costs in coming quarters.
    Ryanair has reported an 11 percent pickup in passenger numbers for July. The low-cost carrier transported around 12-point-6 million customers last month, as its load factor rose to 97 percent.  
    B-A-E Systems has beat expectations with an 11 percent rise in first half earnings. However, the aerospace giant has warned its cyber security operations need to be restructured to improve returns. Sticking to its full year target, the group said it was well placed to take advantage of an expected increase in defence budgets. 
    Here are your top stories at this hour:
    • Rio Tinto in the red, despite plans to return 3 billion dollars back to shareholders as the miner increases its sharebuyback and declares a dividend of 110 cents per share.
    • Commerzbank swings to a loss in the second quarter, dragging the shares lower, while SocGen suffers as the French lender sees both profits and revenues decline. The bank's Deputy CEO tells CNBC emerging markets are offsetting weakness elsewhere. 
    • Generali makes gains in the first half, as operating profit rises 4 percent, topping forecasts. CEO Philippe Donnet tells CNBC plans to offload more of the Italian insurer's assets are moving ahead.
    • An Apple a day keeps the bears at bay! 
    • The iphone maker's better than expected earnings boost European suppliers, and set Apple shares up to open at a record high.
    A little under an hour since the start of the European markets and stocks are trading mixed across the board:
    No breakthrough yet in the French-Italian dispute over control of the STX shipyard, but both sides aim to reach a deal by late next month.
    Finance ministers from both countries met for talks, following French President Emmanuel Macron's move to block a takeover by the Italian firm Fincantieri. Italian Finance Minister Pier Carlo Padoan says his country is not prepared to accept the 50-50 split France proposes.
    Marco Elser, head portfolio manager at Lonsin Capital, says he is convinced the two sides will come to an accord before September 27th.
    There’s going to be a solution and I think the solution is a majority stake will go to Fincantieri.
    Elser says there will be several opportunities to acquire assets in France in the future, but says there are more opportunities in Italy for distressed assets as the country did not adapt as quickly as Spain, France and others after the financial crisis.
    German airline Lufthansa reports Q2 net profit soared 69 percent to 740 million euros on revenue of 9.26 billion euros.
    Lufthansa's CFO says trading in July is similar to Q2 and forwards bookings from September onwards look good.
    On the topic of Brexit, the CFO says it looks likely Frankfurt is probably a winner from the U.K.'s exit from the European Union, and Frankfurt's success would help Lufthansa.
    The CFO says he would be interested in acquiring part of Air Berline under the right conditions and says he would be interested in wet leasing more jets from Air Berlin.
    Shares in the airline are up more than 3 percent on the results.
    Rio Tinto shares fell into the red in today's session. That's despite raising its dividend and buyback plans. The miner said it will now return 3 billion dollars to shareholders by the end of the year. This as first half net profit jumped, despite wet weather impacting iron ore and coal production.
    The share price is down almost 2 percent this morning.
    Reuters reports that the market is disappointed with the Rio numbers. Investment group Shore Capital says it would have preferred a higher dividend payout instead of an increased share buyback, and said the H1 revenue was behind what they'd hoped for given stronger commodity prices, according to Reuters.
    Rio Tinto's Iron Ore Parker Point loading facility 
    Standard Chartered reports underlying income of $7.2 billion, up 6 percent year on year. First half earnings per share is 29.2 cents. Underlying expenses was up 5 percent to $4.8 billion. Net profit was $1.2 billion.
    The bank says it is on track to deliver an additional $700 million in cost efficiencies this year and $400 million next year.
    The board has decided not to declare an interim dividend.
    The White House is defending President Trump's intervention in a statement his son Donald Junior issued last month about his 2016 meeting with a Russian lawyer. 
    Meanwhile, U.S. Secretary of State Rex Tillerson (pictured) says Washington is open to talks with North Korea. Tillerson stayed firm on its stance against nuclear weapons, but offered a reassuring message.
    Also, President Trump is close to taking trade action against China. According to a senior White House official, Trump could encourage U.S. Trade Representative Robert Lighthizer, to launch an investigation into what he sees as China's unfair trade practices. Opening such a probe would allow the president to unilaterally impose tariffs or other restrictions to protect U.S. industries. An announcement could come as early as this week.
    The Reserve Bank of India cuts its lending rate by 25 basis points to 6 percent. The reverse repo rate is cut to 5.75 percent. The last rate cut was in October.
    The central bank has lowered rates as inflation concerns eased. Economists had predicted a 25 basis point cut.
    India's central bank has cut its lending rate to 6 percent. The central bank says it lowered the rate on easing inflation concerns.
    The central bank says it will monitor inflation movements to decide if the recent soft inflation reasing are transient or if durable disinflation is on the way. The central bank says some of the upside risks to inflation have either reduced or not materialised. The central bank remains committed to its target of 4 percent headline inflation.
    The Indian rupee gained against the dollar on the rate decision. It is up about 0.5 percent against the dollar today.
    The pan-European Stoxx 600 is negative, down around 0.2 percent. The basic resources and banking sectors are weighing most on the index, as markets reacted negatively to earnings from Rio Tinto, Standard Chartered, SocGen, ING and Commerzbank.
    The banks Standard Chartered and SocGen are near the bottom of the Stoxx 600. Scout24 is the worst performer after JP Morgan downgraded the stock, cutting its rating from overweight to neutral and its target price from 37 euros to 34 euros.
    The banking sector of the Stoxx 600 is down almost 1 percent today.
    Apple shares are in focus today. The stocks are trading up 6 percent to record highs in premarket trade.
    This after the tech giant posted its latest earnings yesterday. The California company saw its net income rise compared to the previous year, while revenues beat estimates. Better than expected iPhone performance helped Apple's results, with sales rising 1.6 percent to just over 41 million units. But lower average selling prices caused revenues from the device to miss estimates.
    This share price rise looks set to boost the Nasdaq at the open today. Market futures predict the Nasdaq to gain 43 points at the open.
    The Dow is also called higher, up around 45 points, while the S&P is called broadly flat.
    U.K. construction PMI for July fell to 51.9 points from 54.8 in June, hitting an 11-month low and missing expectations of a dip to 54.5 points.
    Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, says Brexit uncertainty is depressing commercial construction.
    The decline in the PMI primarily reflected a big drop in the commercial activity index to 47.6—its lowest level since immediately after the referendum—from 52.2 in June. Commercial clients reportedly delayed decisions due to worries about the economic outlook and elevated political uncertainty.
    Meanwhile, the housing activity balance moderated to 54.4, from 57.0, perhaps reflecting some caution among house-builders in response to the recent decline in market-wide buyer demand. 
    Tombs says shortages of raw materials are also holding back construction projects.
    These supply chain issues should be remedied in time. Housebuilding also should continue to grow moderately, supported by the Help to Buy Scheme and shortages of existing homes for sale.
    Nonetheless, the adverse impact of Brexit uncertainty on commercial work likely will grow if, as we expect, exit talks progress slowly.
    Standard Chartered shares remain sharply lower today after posting its latest results. The share price fell as far as 5 percent earlier in the session.

    Credit Suisse says the bank's Q2 results were in line with expectations but are not good enough, with higher costs and mixed revenue.
    Transaction Banking was stronger, driven by Cash Management. This was offset by weak Financial Markets ‒ particularly so in Rates. Corporate Finance and Retail Products were also modestly weaker than our estimates.
    Credit Suisse gave the stock an "underperforming" rating and set a target price of 615 pence.
    While the performance is in line we think the revenue momentum will be a disappointment relative to expectations given recent performance and a very full valuation.
    Carlyle Group reports Q2 earnings per share of 59 cents, beating the IBES share view of 41 cents.
    Revenues for the quarter increased to $908.4 million versus $608 for the year before. Assets under management also rose to $169.8 billion versus $161.9 billion at the end of the previous quarter.
    The company managed to raise over $8 billion in capital and says acceleration is likely in the next half of the year. However, it did record a charge of $6 million related to settlements and other expenses.
    The LinkedIn Workforce report says the hiring streak continues, with high demand in the health care industry. Hiring is up 17.3 percent year on year according to the company.
    Zimbabwe is imposing capital controls.
    The country's central bank governor Mangudya says cash exports are now limited to $2,000, and amounts above that will require central bank approval.
    The Dow Jones Industrial Average is eyeing the 22,000 mark ahead of the U.S. market open.
    The index came within 10 points of reaching this level in yesterday's session, but pulled back to close at 21,963.92 points.
    Future values predict the Dow to open 46 points higher, bringing it past the 22,000 level.


    Apple may have got it over the line, but it was the rise and rise of Boeing that contributed most.

    Dow 22,000: Here are the stocks that got us here

    CNBCThe Dow Jones industrial average broke above 22,000 on Wednesday, just five months after hitting 21,000 for the first time.
    Kathleen Brooks at Cityindex has been looking at how the earnings season has gone so far. She says virtually every sector has exceeded expectations:
    Technology matters

    Overall, the biggest surprise for the S&P 500 was the technology sector, which beat expectations even though only 27 out of 50 companies have reported. This was led by some stellar results for Apple last night, which could stem the decline in the share price, which has been wobbly since peaking in May. Although earnings growth for the tech sector is, so far, 17%, it’s sales growth that really matters and so far that is running above 10%, which is likely to give investors reason to cheer. If the tech sector can do well then it may also help to lift the entire US index, since this sector is the largest in the S&P 500, making up 22.2% of the entire index.

    Financials and healthcare pay catch up

    Aside from technology, the other sectors to watch include financials, which makes up 14.5% of the index, and healthcare, which makes up 14.3% of the index. Luckily for S&P 500, both of these sectors have also been top performers, with the majority of financial firms having beaten expectations for both sales and earnings. On the growth front, sales growth of 5.15% last quarter was below the average out of all of the sectors, however, the 10% increase in earnings growth was above the average of 8%. Healthcare had more moderate progress, but still reported growth in positive territory, and managed to beat expectations.

    Why outliers may not matter for the S&P 500

    The outliers include oil and gas and consumer services, which failed to beat expectations on earnings. On the growth front, consumer goods and telecommunications have so far failed to report positive sales growth, while consumer services and utilities failed to report positive earnings growth. However, these sectors make up such a small section of the S&P 500 that they don’t have a major bearing on the overall index. In fact, considering how large some of the S&P 500 companies are becoming (here’s looking at Apple), in the next few years it would not be surprising if some of the smaller sectors fall out of the index, and the S&P 500 could turn into the S&P 50.
    So how does Q2 compare with Q1? While it’s always a bit dangerous to make this comparison without all of the S&P 500 members having reported earnings yet, the trend appears to be for positive growth across most sectors, although the rates of growth for both sales and earnings are lower than they were in Q2, as you can see in chart 1 below.

    The pan-European Stoxx 600 has steadily edged down 0.29 percent during Wednesday, with most sectors and major bourses in negative territory.
    Basic Resources led the losses amid earnings news. Rio Tinto reported a more than doubling of its first-half profit on Wednesday and rewarded shareholders with a record interim dividend. However, underlying earnings missed analyst forecasts and its shares dipped more than 2.5 percent.
    Banking stocks were also lower on Wednesday after mixed results from European lenders. Societe Generale said net profit slumped 28 percent in the three months through June, as the Paris-based lender was hit by litigation costs and stubbornly low-interest rates.
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