World Markets Live - August 3 - CNBC Live Events

CNBC Live Events

World Markets Live - August 3

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

    Good morning. Here's your morning call from IG:
    Opening Calls – IG – (03.47) 
    FTSE      7,403       +3
    CAC       5,108       +4
    DAX      12,171      -2
    MIB      21,569      +8
    Here are your top news stories at this hour:
    • The Dow tops 22-thousand, with Boeing contributing much of the latest leg upward, and Apple providing the final push. But the cheers die down in Asia, where stocks trade lower. 
    • 'Ready for production hell!' Tesla shares jump, as the electric carmaker doubles its revenues in the latest quarter and CEO Elon Musk says he's ready to meet demand for the Model 3.
    • Solid U.S. results boost second quarter profits at Deutsche Telekom, helping the German telco nudge up its outlook for 2017. 
    • Siemens sees orders slide in the third quarter, missing expectations. Third quarter orders at industrial giant Siemens slide in the third quarter, as sales rise 3 percent but still miss analyst forecasts. 
    The average pay for FTSE 100 CEOs fell 17 percent last year, according to a new study from the High Pay Centre. That decline was mostly driven at the top end, in particular by Sir Martin Sorrell, CEO of WPP, whose pay package dropped from more than 70 million in 2015 down to 48 million pounds last year.
    Also topping the list of highest paid CEOs were Carnival's Arnold Donald, who brought in more than 22 million pounds, followed by Reckitt Benckiser CEO Rakesh Kappor, who earned nearly 17 million pounds. 
    Veon saw a double digit increase in EBITDA for the second quarter. But the telecommunications company posted a wider loss for the period, hit by impairments and a loss at its Italian joint venture. Joining us now is CEO Jean-Yves Charlier:
    Most of the markets we operate in are by definition mobile markets and there is very little on fixed infrastructure. That's what makes these frontier markets exciting for Veon as a group.
    Here are your top headlines at this hour:
    • Solid U.S. results boost second quarter profits at Deutsche Telekom, helping the German telco nudge up its outlook for 2017. 
    • Adidas scores in North America and China, posting double digit gains in those markets, after lifting its 2017 guidance. We'll speak FIRST with the CEO Kasper Rorsted at 12:25 CET. 
    • Siemens sees orders slide more than expected in the third quarter. But its Healthineers unit helps the industrial giant beat bottom line forecasts. 
    • LSE clears the air after its failed merger with Deutsche Boerse, posting a near 20 percent rise in first half profits, pumped up by solid performance from its clearing and index businesses.
    European bourses are expected to open mixed on Thursday morning, as investors monitor further earnings reports and react to the Dow Jones industrial average breaking the 22,000 barrier for the first time in its 121-year history.
    Second quarter sales at Adidas rose 19 percent, boosted by strong performance in China and North America. The German sportswear giant said it doubled its market share in the U.S. sport footwear market to nearly 3 percent, further signs Adidas is taking market share from Nike and Under Armour. 
    Next sales returned to growth in the second quarter. The British clothing retailer said full price sales rose 0.7 percent from last year, driven by strength in its Directory business.

    Next kept its profit guidance unchanged, but narrowly lifted its sales forecast by half a percentage point.
    Spain's all-important services sector expanded at a solid rate in July and firms continued to take on staff, although the pace of growth was slightly weaker than a month earlier, a survey published on Thursday showed.

    Markit's Purchasing Managers' Index (PMI) of service companies stood at 57.6 in July, compared to 58.3 in June, which had been the highest reading in almost two years. That's according to Reuters.
    Activity in Germany's services sector slowed to a 10-month low in July, a survey showed on Thursday, limiting overall private sector growth in Europe's biggest economy at the start of the third quarter.

    Markit's final composite Purchasing Managers' Index (PMI), which tracks the manufacturing and services sectors that account for more than two-thirds of the economy, fell to 54.7 from 56.4 in June.

    The reading remained well above the 50 line that separates growth from contraction but was lower than a preliminary estimate of 55.1 published last month. That's according to Reuters.
    The PMI data showing slowing activity in the euro zone hasn't upset the euro. It remains down against the dollar but hasn't moved much since the data release.
    The Stoxx 600 is down a quarter of a percent, dragged down by the oil & gas, industrials and banking sectors.
    The tech sector is also weaker, down 0.28 percent, as the "Apple effect" fades from markets.
    U.K. services activity gained speed in July. The purchasing managers index for the sector came in at 53.8, a touch higher from June's 53.4 and beating Reuters estimates of 53.6. A reading above 50 points indicates the economy is expanding, rather than contracting.
    Markit/CIPS reports the hiring component of the PMI rose to 53.8 from 52.9 in June. This is its highest reading since January 2016.
    The composite PMI rose to 54.1 in July from 53.8 in June.
    The data boosted sterling, which is now up 0.2 percent to a multi-month high against the dollar. Here's a snapshot of cable at 09:52 a.m. BST.
    Continental posted a decline in second-quarter earnings, hit by higher spending on R&D and production capacity.  But the automotive supplier slightly raised its sales outlook for the year, thanks to growing demand for electric car components.
    Wolfgang Schäfer, CFO of Continental, says order intake increased in the first half and is making them very optimistic for the next few months. 
    A good outlook for us. It is very much driven by the electronic products which we have: driver assistance systems are very much up in the market; electronic parking brakes are booming in our business.
    Schäfer says they are a supplier with very good offerings and products. He says prices have been raised in the past month.
    Continental shares are a little lower today.
    President Trump is getting some rare bipartisan backing as he prepares to order an investigation into Chinese trade practices.
    Senate Democratic leader Chuck Schumer supports going after China, and says the U.S. should skip the investigation and move straight to taking action against Beijing. Trump is expected to issue a presidential memo on the matter within days.
    Elsewhere, President Trump is backing a plan that would cut immigration to America in half over the next decade, using strict new conditions. NBC's Peter Alexander has more on the raging controversy.
    The Saïd business school at the University of Oxford is launching its first major online course. And the subject? Fintech.
    The University says that the rise of artificial intelligence and technologies like blockchain has created the need for executives to get help with the rapidly changing environment.
    The technology behind the programme is being delivered by U.S. firm GetSmarter.
    Peter Tufano, the Dean of Saïd Business School at the University of Oxford, says the time is right to do this.
    The world has changed pretty considerably and we have to keep up with that and help companies get in front of it.
    Tufano says the fintech revolution has been a blessing for consumers and small businesses, as it creates new opportunities to raise capital and make savings.
    Coming up at 12 noon BST, the Bank of England will release its latest monetary policy decision on interest rates and releases its inflation report.
    This after the U.K. services activity gained speed in July. The purchasing managers index for the sector came in at 53.8, a touch higher from June's 53.4, according to Markit.
    The composite index of broader business activity rose to 54.1 in July from 53.8 in June.
    More U.S. earnings released.
    Avon Products reports an adjusted loss per share of 3 cents for the second quarter. The net loss was $45.5 million on revenue of $1.4 billion.
    Cott reports Q2 revenue of $1.014 billion, beating the IBES view of $986 million, but the Q2 share loss was 18 cents per share. The net loss was $22.3 million. The company says it is targeting full year 2019 cash flow of $265 to $270 million.
    Linn Energy reports Q2 earnings per share of $2.43 and revenue of $12.5 million. 
    Travelport Worldwide reports Q2 earnings per share of 28 cents on revenue of $612.1 million, which increased by 1 percent. The company says full year net revenue and earnings guidance is unchanged, but raised its free cash flow guidance.
    The Bank of England announces it will buy £10.1 billion of gilts from September 4th to reinvest the proceeds of August 2017 and September 2017 bonds.
    The MPC also said it forecast two interest rate hikes over the next three years, one more than it had estimated previously. Governor Mark Carney and his fellow rate-setters said the first rate hike would likely take place in the third quarter of 2018.
    The FTSE 100 index has seen a spike, up 0.4 percent higher after the Bank of England rate decision:
    Bank of England governor Mark Carney is giving a prepared speech to a room full of journalists before he takes questions.
    The full text is here:
    Mark Carney is asked by a reporter if the economy has been damaged by Brexit. He directly responds with an affirmative:
    I think it is evident in discussions and surveys of business that uncertainties about our eventual relationship (with Europe) is weighing down on some business investment.
    Bank of England Governor Mark Carney says a smooth transition out of Europe is a "reasonable assumption".
    There is an element of Brexit uncertainty that is affecting wage bargaining.
    Carney says some bigger firms are not increasing pay because they can't predict their own market access as Britain exits its EU membership.
    On the current industrial action being taken out by staff at the Bank of England
    He says the strike over the one percent cap on public pay is "regrettable" but is not affecting the bank's operation.
    He says in the current environment, it is understandable that there is public sector wage restraint.
    Returning to the ever present topic of Brexit, Carney says any reduced access to EU markets is likely to reduce UK growth.
    He says the bigger question is what other agreements come along side that to negate that effect.
    A quick snapshot of today's European markets:
    Shortly after the bell, the Dow traded 4 points higher, with Wal-Mart contributing the most gains. 
    Jim O'Sullivan, Chief U.S. Economist at High Frequency Economics gives his take on that big services miss.
    In short, much weaker than expected, reversing surprising strength in previous months. As usual, there is not much explanation in the report, but the data are no longer signaling a pick-up in growth trends.  
    Levels are not especially low either, however.  
    Combining the two ISM indexes, our estimated economy-weighted composite ISM index fell to 54.2 in Jul from 57.4 in Jun; is now down slightly from last year's 54.5 average.  It puts an 11.6% weight on manufacturing, matching the share in GDP.  
    You know he's loving that.

    Hedge funds lose more than half a billion on wrong-way bet against Tesla

    CNBCTesla was the biggest short among U.S. stocks heading into its strong earnings report Wednesday evening.
    A little bit of a rebound in Europe as trading closes.
    The biggest news of the day was the Bank of England rate freeze decision which also encompassed slight downward revisions to inflation and growth forecasts over a three year outlook.
    In the follow up press conference, governor Mark Carney offered a relatively gloomy assessment of the Brexit impact on the U.K. economy.
    Upbeat results for Adidas and poorer than expected numbers for Siemens providing the biggest corporate stories of the day.
    And with that we will leave the blog for the day. Do join us from 06:00 a.m. London time tomorrow.
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