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.

  • The Bank of England is set to announce its latest decision on interest rates at 12 noon BST. Analysts polled by Reuters expect the BoE to hold rates at their record low of point-25 percent. 
    But the case for a rate rise appears to have strengthened, with observers pointing to unemployment at a four-decade low and inflation above the BoE's target.
    CNBC’s Gemma Acton says market pricing indicates only 6 percent of the market expects a rate rise today.
    If we do get a rate hike that would be a surprise and that could cause a sterling pop. If there’s no rate hike at this point, I really don’t expect that to imply any sterling weakness.
  • These are the top headlines for the hour:
    • Siemens sees orders slide more than expected in the third quarter. But its Healthineers unit helps the industrial giant beat bottom line forecasts.
    • A mixed picture for European banks, as shares of Unicredit surge on stronger-than-expected profits. But French lender Credit Argicole slides on concerns over one-off items. The CFO tells CNBC the bank is in good shape.
    • Adidas scores in North America and China, posting double digit gains in those markets, after lifting its 2017 guidance.
  • Euro zone July services activity stayed at the same pace as June. The servives PMI was unchanged at 55.4, matching forecasts.
    The composite PMI of services and manufacturing slowed to 55.7 in July from 56.3 in June. This misses estimates of 55.8 points.
  • 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.
  • Lothar Mentel, ‎chief investment officer at Tatton Asset Management, says he wouldn’t bet on the energy sector at the moment as oil prices are too volatile.
    We just want to see broad EPS growth and particularly energy for the last quarter was letting down overall EPS growth. I think that’s coming back a bit now that oil is getting back to $50 a barrel.
  • 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.
  • Turkey's deputy prime minister Simsek says inflation may rise back to double digits in the coming months, adding this is a "serious risk", according to Reuters.
    Simsek says monetary tightening will continue until inflation falls below 7 percent. He adds the government will carry out serious reforms to fight food inflation.
  • Siemens shares are under pressure after it reported a 9 percent slide in orders and missed third-quarter earnings forecast.

    The German group also said it expects to list its medical technology unit Healthineers in the first half of 2018. The IPO is seen valuing the business at up to 40 billion euros. 
    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. Shares are a little lower today.
    CNBC will be speaking to CEO Kasper Rorsted later today. Tune in for that First on CNBC interview at 12:25 CET.
  • Brazilian President Michel Temer has survived a congressional vote that could have triggered a trial leading to his ejection from office. The centre-right politician stands accused of taking bribes from meat-packing firm JBS. He denies any wrongdoing.
    Scuffles broke out on the floor of Brazil's Congress ahead of the vote, while protestors outside the building called for the President's resignation.
    President Temer
    Questions remain over President Temer's future. Recent polling puts his approval rating at 5 percent and he is widely expected to face further corruption charges in coming weeks.
    Jimena Blanco, head of Latin America at Verisk Maplecroft, says the congress vote tells us a lot about support for Temer.
    He survived, but we saw dissent in every single party in his support base, including in the PSDB which is a major partner and has four ministers in his cabinet. Almost half the party voted to have hime face trial.
    Blanco says it is unclear now whether the government has enough support to pass pension reform.
  • 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.
  • The latest U.K. PMI data has lifted sterling against the dollar. The purchasing managers index indicated the economy is continuing to expand and at a faster pace.
  • Over 5 million German diesel cars will be getting new software. Carmakers including BMW, Daimler and Volkswagen have agreed with the government to upgrade software that will filter out harmful emissions. Daimler chairman Dieter Zetsche said the move was needed to restore faith in the industry.
    Meanwhile, a surge in 5-series and motorcycle sales helped BMW beat second-quarter profit expectations.

    This despite seeing weaker demand for luxury cars in the U.S. BMW confirmed its full year guidance for a slight rise in pre-tax profit.  
  • 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.
  • Euro zone retail sales in June rose 0.5 percent month on month and 3.1 percent year on year, according to Eurostat. That beat estimates of 0.1 percent and 2.6 percent respectively.
  • Norway's July housing prices rise 4.8 percent year on year. Seasonally adjusted house prices fell 0.2 percent from June.
  • Japan's Prime Minister Abe apologises to the public over recent scandals. 
    Abe says the economy remains a top priority. He says the economy will achieve exit from deflation by accelerating the virtuous economic cycle.
  • Japan's Prime Minister Shinzo Abe says the government's biggest responsibility is protecting the public from threats like North Korea.
    Abe adds the country must make progress on improving relations with South Korea, China and Russia.
  • Deutsche Telekom reported solid U.S. results, boosting its second quarter profits and helping the German telco nudge up its outlook for 2017. 
    The company says Q2 core profit up 8.9 percent at 5.94 billion euros above the Reuters poll range of 5.63 billion - 5.89 billion. 
    Shares in the firm are up more than 1 percent today, but are down over the past 3 months.
    Meanwhile, during a media call with journalists, the CFO of Deutsche Telecom declined to comment on M&A speculation about T-mobile. The CFO said T-Mobile has all the ingredients for a successful business, and consolidation in the U.S. market is being explored.. The CFO added the company is on track for its mid-term guidance.
  • The euro zone composite PMI of services and manufacturing slowed to 55.7 in July from 56.3 in June and missing an estimate of 55.8 points.
    Barclays researcher Apolline Menut says the PMIs are declining from the six-year high seen in May.
    The composite drop was primarily driven by some consolidation in forward-looking components eg, new orders and future output, receding price pressures on the back of Euro appreciation, and by the manufacturing sector.
    Services sentiment remained stable at 55.4, with buoyant new business and hiring intentions. This echoed the July European Commission survey, which showed some moderation in manufacturing sentiment, while services confidence improved a little.
    Menut says they expect euro zone ecomonic growth to remain solid but slow to 0.5 percent quarter on quarter in the next two quarters.
    The euro is a little weaker against the dollar today, but remains near multi-month highs.
  • The Bank of England will today announce its latest interest rate decision and release its latest inflation report at 12 noon BST. This will be followed by a press conference from BOE Governor Mark Carney.
    The Royal Bank of Canada's FIC team expects the central bank's monetary policy committee to keep the base rate at 0.25 percent. 
    Some hawkish dissent is anticipated with Haldane expected to join Saunders and McCafferty voting instead for a 25 basis points hike. With the median MPC view having become more hawkish in recent weeks, we have now dropped our expectation that there will be more stimulus in Q1 2018 and we now see Bank Rate on hold at 0.25% for the foreseeable future.
    We don’t expect the inflation report to reveal a dramatically different path for CPI inflation versus the May profile. Also, look for the BoE to announce details on the reinvestment of proceeds from bonds in the QE portfolio which mature before the September MPC meeting.
  • The Bank of England is now in focus ahead of its latest rate decision, but we also had business activity data for the U.K. this morning.
    The U.K. services activity index rose to 53.8 in July from 53.4 in June. Samuel Tombs, chief U.K. economist at Pantheon Macroeconomics, says this reading remains consistent with sub-par growth.
    The economy still isn’t strong enough to warrant higher interest rates. The services PMI remained below its 54.3 average of the first half of 2017, and firms’ expectations for future business volumes recovered only marginally following June’s plunge.
    On past form, the weighted average of the manufacturing, construction and services PMIs in July is consistent with quarter-on-quarter growth in GDP of about 0.3%, the same as in Q2.
  • Italian beverage company Campari reports first half sales grew 6.8 percent on an organic basis to 844.7 million euros. This missed the analysts' consensus of 845 million euros.
    Adjusted EBIT was 163.4 million euros. The company says it has reached a deal to sell Paris headquarters for 35.3 million euros.
    The company's CEO says the strength of the euro versus the dollar could have a negative impact in the second half. They CEO adds operating margins will benefit in the second half from the normalisation of investments and costs related to structure.
    Shares in Campari fell sharply after the results and are suspended from trade.
  • Australia charges two men in Sydney with terrorism charges. That's according to Reuters citing the Federal police.
  • U.S. futures predict markets to fall at the open.
    The Dow crossed the 22,000 mark yesterday and the S&P missed a record close by a quarter of a point, but the future values call the markets to come off these current highs.
  • Lots (and lots and lots) of U.S. earnings released at the turn of the hour.
    Aetna reports earnings per share of $3.60 in Q2 on net income of $1.2 billion. Revenue for the quarter was $15.52 billion. Earnings per share beat the estimate of $2.35. The company increases its full-year 2017 earnings projections. 
    Dish Network reports Q2 earnings per share on 9 cents. Revenue was $3.64 billion, missing the IBES estimate of $3.72 billion. The company says it activated around 444,000 new pay-TV subscribers.
    Enterprise Products reports Q2 earnings per share of 30 cents, below the IBES view of 33 cents. Quarterly revenue rose to $6.607 billion from $5.617 billion the year before.
  • Aetna shares are trading 3 percent higher in premarket trade after its reports a big earnings beat for the second quarter.
  • 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.
  • The latest U.K. composite PMI data rose to 54.1 in July from 53.8 in June, driven by gains in the manufacturing and business sectors.
    Royal Bank of Canada’s senior U.K. economist, Sam Hill, says this was still below its long-term average.
    The construction PMI, by contrast, fell by almost three-points but is still above the critical value of 50, indicating at least some expansion in activity.
    The July PMI surveys provide the first opportunity to use our PMI-based GDP indicator to get an estimate of Q3 growth. The indicator suggests that if the level of the PMIs were to hold for the rest of Q3, it would be consistent with real GDP growth of 0.3 percent q/q. That would match the initial estimate of Q2 growth and represent an outturn slightly ahead of our official forecast of 0.2 percent q/q.
    Hill warns the PMI data shows evidence that the slowdown in growth in the first half does not look like a blip
  • Shares in Adidas have come under slight pressure following a positive start to the trading day, after the sportswear maker scored another quarter of bumper growth. 

    It saw a particularly strong performance in China and North America, with sales up more than 25 percent in each of those key markets. Overwhelming demand for sneakers in its core brand helped Adidas take market share from rival Nike. The German group says it expects higher marketing spending to underpin growth in the second half, but has warned that capacity issues for boost running shoes will constrain volumes. 
    Kasper Rorsted, CEO of Adidas, tells CNBC he sees strong growth for its entire range of products. He says it was a stellar quarter.
    We are making progress in a market that’s not very easy. In the end we also took the outlook for the full year up. Where we expected in our old outlook of 13 to 15 percent earnings growth now we are expecting almost 30 percent.
  • Kasper Rorsted, CEO of Adidas, discussed the company's position in the U.S.
    While we are satisfied with some of the progress we are making we are not satisfied with the overall position in the U.S. and we think there is still plenty of opportunity to expand in the U.S.
    He says they are confident they will get to where they want to be. Shares in the company are a little lower today.
  • Bad news for holiday makers.
    British Airways mixed-fleet cabin crew are to go on strike from August 16 to August 30, including the bank holiday period, according to the Unite workers union.
  • 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.
  • Here are the top news ahead of the hour change.
    • It's Decision Day for the BOE! Mark Carney is expected to keep rates on hold, but investors will be looking for clues as to the timing of a future hike.
    • Sterling hits an 11 month high against the greenback ahead of the decision as traders digest stronger than expected PMI data.
    • The health of the consumer also a key issue for the BOE -- Next shares soaring to the top of the Stoxx 600 as it returns to sales growth in the second quarter.
    • A stronger than expected reading of services PMI. July's figure of 53.8 showed an increase on June's 53.4. The increase eased fears of a potential economic slowdown. 
  • Before we get the BOE decision, here's a look at cable. Sterling rose to an 11-month high earlier in the session.
  • The Bank of England's monetary policy committee announces it has decided to hold interest rates at 0.25 percent.
  • The Bank of England policymakers voted 6 to 2 to keep rates at 0.25 percent.
    BOE members McCafferty and Saunders voted to raise the bank rate 25 basis point to 0.5 percent.
  • Sterling has fallen 0.3 percent after the Bank of England rate decision, hitting day's low. Here's a look at the fall:
  • 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:
  • UK 10-year Gilt yield falls 4 basis points after BOE holds rates. Here's a look at UK Gilts across the board:
  • The BOE says the inflation outlook remains broadly similar to that published in May.
    The bank adds inflation will peak at around 3 percent in October this year.
    Again on inflation, the Bank of England sees it sees a small overshoot in 2019 and that inflation will pick up gradually over a 3-year period.
    The forecast in details are as follows:
    • In one year's time at 2.58 percent (May forecast 2.64 percent)
    • In two year's time at 2.19 percent (May forecast 2.20 percent)
    • In three year's time at 2.22 percent (May forecast 2.26 percent)
  • Sterling hits a new nine-month low against the euro after the latest BOE decision.
  • We are seeing some suggestion that the trimming of wage growth is a key factor in the BOE statement. 
    The forecasts look like this:
    • Q4 2017 +2 percent (Same as May forecast)
    • Q4 2018 +3 percent (May 3.5 percent)
    • Q4 2019 +3.25 percent (May 3.75 percent)
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