World Markets Live - August 4 - CNBC Live Events
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World Markets Live - August 4

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

  • Lee Wild, Interactive Investor’s Head of Equity Strategy comments:
     
    There are always lots of moving parts in RBS results, but even after adjusting for these, underlying profit smashed forecasts for the second quarter. There were also beats on capital ratios at 14.8% versus target of 13%, and costs.

    Its core business is improving, costs are being taken out, and a number of legacy issues have been put to bed. There’s now a clear path to consistent profitability, very likely in 2018, making a return to the dividend list more of a reality.

    It won’t happen until RBS has agreed a massive fine for its part in the US subprime scandal, and passed an appropriate stress test.
     
    RBS is the most sensitive of our big banks to rate moves, but rates are highly unlikely to increase any time soon, so there’ll be no help here for margins.
     
    The shares are not obviously cheap, and management still has an enormous amount to do, more than the other large domestic banks. But these results do show what can be achieved, and go some way to restoring confidence in the business and the investment case.
     
    RBS shares peaked early Friday at a previously stubborn ceiling at around 269p. Break above that and there’s clear air to 280p, the 50% retracement of the decline from February 2015 highs and a significant technical level.
     
  • Since Britain voted to leave the European Union over a year ago, millions of EU citizens living in the U.K. and over a million British expats in other EU states have been living in a prolonged state of insecurity about their future. 
     

    ‘Why would you want to live in Britain?’: UK businesses fret over finding workers post-Brexit

    CNBCSince Britain voted to leave the EU over a year ago, millions of EU citizens in the U.K. have been living in a state of uncertainty about their future.
  • U.S. stock markets are called to open slightly higher on Friday as the latest non farm payrolls number comes into focus.
     
    The number of new jobs in the U.S. is seen growing by 180,000 in July, from 222,000 in June.
     
    The Dow is seen about 28 points higher. That's after its 7th straight record close at the end of Thursday's session.
     
     
  • Audi reports cars sales up 3.5 percent in July to a record of 154,600 cars. However, for the period January to July, sales are down 3.6 percent to 1.06 million cars.
  •  
    A single incident of ransomware (where a computer virus locks a user out of their device until they pay a ransom to a cybercriminal) can cost a company more than $700,000 according to research by Kaspersky Lab.
     
    However, several IT experts tell CNBC that cloud computing may provide a cheaper and better solution to cybersecurity.
     

    How cloud computing could protect firms against ransomware attacks

    Cloud computing may provide the security companies need to protect against cybercrime such as data theft, ransomware and computer hacks.
  • Mihir Kapadia – CEO and Founder of Sun Global Investments, comments on the dollar weakening:

    The US dollar has had a rough year till date, having lost nearly 10% of its value since January. This is largely attributed to doubts over the Trump administration’s ability to achieve healthcare reform, tax cuts and infrastructure spending. Confidence on the US administration’s ability to deliver growth-boosting fiscal policies are rock bottom, while the positive political and economic situation in Europe has further added to the pressure on the US Dollar. There are reduced expectations for tighter monetary policy out of the Federal Reserve, and higher expectations for more tightening out of the European Central Bank.  
     
    However, the weaker dollar probably does not unduly worry the President as it boosts the US’s export competitiveness.
  • Falls among housebuilders on Friday dampened an otherwise strong week for the UK's top share index, with lender Royal Bank of Scotland among top performers after a strong set of results.
     
     
  • South Africa's mineral resources department has withdrawn its plan to impose a moratorium suspending the issuance of new mining and prospecting rights, which had drawn a court challenge by an industry group.

    The department said in a statement that based on various submissions from industry players on its proposed move it would not go ahead with the moratorium.

    Mineral Resources Minister Mosebenzi Zwane said in July he intended to suspend the granting of applications for prospecting and mining rights. South Africa's Chamber of Mines lodged a court application to prevent the moratorium.
  • Toyota and Mazda announced today they were forming a joint venture in the U.S. to produce 300,000 vehicles a year. The car makers are investing $1.6 billion to build the new plant .
     
    The news has been welcomed by President Donald Trump. He's congratulated the announcement on Twitter today.
  • Health insurer Cigna reports a 59 percent rise in quarterly profits. The company posted earnings per share of $3.15 for the second quarter, on net income of $813 million and revenue of $10.32 billion.
     
    The company sees total revenue growth in 2017 of 3 percent to 4 percent and sees full year adjusted operating earnings per share of $9.75 to $10.05.
  • Videogame developer Activision Blizzard reported Q2 earnings after the bell yesterday, with revenue up 4 percent to $1.63 billion and earnings per share of 32 cents.
     
    Eric Ervin, CEO of Reality Shares, told CNBC the company's earnings beat expectations and its management is very optimistic about the online and mobile initiatives being implemented.
     
    Activision announced the biggest quarterly online player community in its history with a record 46 million players, and we have seen the trend is definitely favoring online video gaming in the future
     
    From an eSports perspective, the company has already established itself as a leader in the industry . . . eSports will not only be a major profit driver for the company, but will increase player engagement with its video game franchises over the long-term.
     
    Additionally, Activision is looking to capitalize on advertising within its online and mobile games, which will boost revenues and investor returns in the long run.
     
    Several investment firms, including Credit Suisse and Cowen and Company, have increased price targets for the company. Benchmark gave the company a buy rating.
     
    However, the company's shares are negative in premarket trade.
     
     
     
     
  • President Trump takes to Twitter this morning to praise the economy. He says more regulation reforms are coming.
  • In Europe, the Stoxx 600 index is marginally higher, up 0.12 percent.
     
    The individual European bourses paint a more mixed picture of trade in Friday's session.
     
     
     
  • Germany's foreign minister Sigmar Gabriel says new U.S. sanctions are more than problematic and go against German interests.
  • The latest U.S. nonfarm payrolls data is due in just over an hour and a half.
     
    The Royal Bank of Canada'a FIC team says they expect the payroll to grow firmly
     
    We look for headline and private NFP prints of 220K and 205K for July, respectively. 

    This pace of payroll growth would be more than enough to elicit a sharp decline in the unemployment rate (assuming we got commensurate gains in the Household survey), but we are cognizant that with sentiment on the labor backdrop at 16-year highs (look at the Conference Board’s labor differential sitting at +16.1%), we could see some firming in the labor force beyond normal population growth (i.e., from folks coming back in from the sidelines). 
     
    So we are penciling in just a modest downturn in unemployment, to 4.3% from 4.4% prior.
     
    Michael Hewson, chief market analyst at CMC Markets U.K., says the expectations are for 181,000 jobs to be added.
     
    Despite the apparent resilience in the U.S. labour market, this week’s ISM employment components for both manufacturing and services were weaker than expected, and this could introduce some downside risk to today’s jobs numbers. 
     
    More importantly wages growth has remained stubbornly weak, and has thus far show little signs of pushing upwards.
     
    The unemployment rate is expected to fall further to 4.3% from 4.4%, with attention on the overall correlation with the participation rate likely to be key here.
     
    Hewson says there is speculation of more slack in the labour market than central bankers can measure, and any slip in wage growth will keep hawkish Fed members at bay.
  • Potbelly reports Q2 adjusted earnings per share of 11 cents. Revenue for the second quarter was $108.1 million, versus the IBES view of $109.8 million.
     
    The company says the overall restaurant operating environment remains challenging and it does not expect improvement in industry trends in its outlook for 2017.
  • Trivago reports a Q2 loss of 3.4 million euros. Revenue was 298.3 million euros, a rise of 67 percent. Adjusted EBITDA rose to 3.2 million euros in the second quarter from 2.3 million in the quarter the year before.
  • Balchem reports Q2 adjusted earnings per share of 64 cents on net income of $16.5 million and sales of $147.1 million.
  • How will today's U.S. jobs data affect the Federal Reserve's plans to shrink its balance sheet?
     
    Adrienne Murphy, the chief market analyst at AvaTrade, says the U.S. labour market is far from overheated and stagnant wage growth is preventing inflation growth.
     
    Members believe that the unemployment rate will remain steady in 2017. If the NFP comes in as expected, at 180,000, this will be consistent with the 187,000 average across the year. The Fed’s reasoning suggests that growth of this kind will vastly overshoot the natural rate of unemployment thus pushing the inflation rate close to its 2% target.
     
    This however, is naïve. Unemployment rates have remained low for some time now, without stimulating wage growth. This wage stagnation has kept inflation rates down. The reason for this? The labour participation rate. Many of those able to work are not being pulled into the labour force, The unemployment rate is therefore skewed, as the slack in the labour market remains high.
     
    U.S. stock market future are rising ahead of the data release.
     
     
  • Cincinnati Bell reports a Q2 loss of 1 cent per share. Revenue in the second quarter was $294 million, versus an IBES view of $288 million. The company sees full year revenue of $1.2 billion.
  • U.S. stock market futures are indicating a higher open in Friday's session and are getting stronger. The Nasdaq and S&P 500 are called about 0.1 percent higher, while the Dow Jones is expected to gain about 0.2 percent.
     
    The Dow is heading for its 8th straight session of gains.
     
    This comes ahead of the latest U.S. jobs data, which will reveal wage growth, the jobs total and the unemployment rate for July.
     
     
  • ADP says Pershing Square Capital Market is seeking control of ADP. The company says Pershing wants five seat on its 10-member board.
     
    ADP rejected Pershing's request, which it made on August 1st. Pershing owns 8 percent of ADP, mainly through derivatives.
  • Bill Ackman of Pershing Square Capital Management is seeking control of U.S. firm ADP.
     
    Ackman reportedly asked that ADP extend its deadline for the nomination of new directors. Ackman says ADP CEO Carlos Rodriguez should be replaced, according to ADP.
     
    ADP says it is not in the company's best interests to accede to Pershing's requests.
     
    Shares in ADP are up almost 3 percent in premarket trade.
     
     
  • The dollar index is at multi-month lows. It is near its lowest level since May 2016 and has lost nearly 10 percent of its value since January.
     
    The weakness is attributed to political concerns and doubt President Trump will achieve reforms to healthcare, taxes and infrastructure spending.
     
    The positive political and economic situation in Europe has also added to the pressure on the U.S. dollar.
     
    Jobs data out shortly is in focus, as it will indicate whether the Fed can start to shrink its balance sheet or raise interest rates, which would be dollar positive.
     
     
  •  
    U.S. Cellular reports Q2 earnings per share of 14 cents. Q2 revenue was $963 million, beating the IBES view of $949.4 million. 
  • Lots of U.S. earnings resulted released at the turn of the hour.
     
    Orion Energy Systems reports a Q1 loss per share of 23 cents. The net lose was $6.56 million. Revenue for the first quarter was $12.6 million.
     
    Insurer White Mountains reports Q2 revenue of $31 million. Net income was $3.4 million, or $3.39 per share. Net written premiums rose to $290 million in the second quarter from $261 million the year before.
     
    Twin Disc reports Q4 earnings per share of 10 cents, on net income of $1.16 million and sales of $53.6 million, up from $42.6 million the year before. The company expects to invest between $7 million to $9 million in capital expenditures in the fiscal year 2018.
  • AMC Entertainment reports a Q2 net loss of $176.5 million. The U.S. movie theatre chain reports revenue for the second quarter increased 57.4 percent to $1.2 billion. The loss per share was $1.35.
     
    The company says it is extremely disappointed by the results. It says the industry box office is not expected to strengthen until Q4. The company plans to reduce capex by $100 million the second half and a further $100 million in 2018.
     
    It says it has identified $400 million on non-strategic assets that could be monetized over the next 24 months and plans to initiate a $100 million share buyback programme.
     
    Despite the results, the share price is up 2.7 percent in premarket trade.
     
     
     
     
     
     
  • Oil market is expected to see a downward correction this quarter but Brent prices will move higher in the final quarter of this year, according to a research note from Barclays.

    "Prices have moved higher, due to a perfect combination of a favorable macro environment, a seasonal uptick in consumption, continued inventory drawdowns, and geopolitical unrest," the note said. "Certain factors that supported prices in July are unlikely to last, and we expect a downward correction during this quarter."
     

    Oil could see downward correction in next quarter, Barclays says

    CNBCOil market is expected to see a downward correction this quarter but Brent prices will move higher in the final quarter of this year, according to Barclays.
  • U.S. jobs data is coming in less than 10 minutes.
     
    We will get the July nonfarm payrolls, which is seen rising by 180,000, and July's unemployment rate, seen at 4.3 percent.
     
    We'll also get the June trade gap, which is seen at $44.1 billion.
  • The Dow hit a fresh record high and the dollar extends gains against major currencies after the U.S. nonfarm payroll total added 209,000 jobs in July. It was estimated to rise by 180,000. 
     
    Last month's data revealed that total nonfarm payroll employment increased by a revised 231,000 in June, while the unemployment rate was 4.4 percent.
     
    The unemployment rate is 4.3 percent, matching consensus. The average hourly earnings rose 0.34 percent, or 9 cents to $26.36. Over the year wages are up 2.5 percent.
  • U.S. stock futures jump higher as US nonfarm data beat estimates:
     
     
  • The U.S. dollar is rising after the payrolls data. It is up 0.33 percent against the euro.
     
     
  • Let's take a look at the dollar rates after better-than-expected jobs report:
     
     
  • The dollar index is paring losses. Other currencies, such as the euro and sterling, are falling against the dollar after the latest payrolls data.
     
     
  • “it’s a good number all around. It doesn’t change much,” said John Briggs, head of strategy at NatWest Markets
     
    “There continue to be concerns about inflation,” said Briggs, adding December is still in the forecast for next Fed rate hike unless inflation remains low. “The labor market is still healthy.”
     
    Fed funds futures point to odds for December are at 45 percent, from 41 percent yesterday, he said
     
  • Yields on U.S. Treasuries are rising after the latest jobs data, ticking up by 1 to 2 basis points.
     
     
  • Along with the jobs data, we also got news on the U.S. trade gap.
     
    The U.S. trade deficit for June was $43.64 billion, lower than the consensus expectation of $44.1 billion.
  • Gold prices slump, falling 0.4 percent to session lows after the jobs data.
     
    A stronger dollar weighs on the price of the precious metal.
     
     
  • The VIX volatility index hit a low of 10.03 after the latest U.S. jobs report.
     
    It is down about 3 percent today.
     
     
  • Naeem Aslam, chief market analyst at Think Markets, shares his thoughts on the latest U.S. jobs numbers.
     
    The US Non-farm payroll number was very decent with participation rate ticking higher. The dollar has reacted positively to the US NFP data. It is the average hourly earning which didn’t not change and this is slightly underwhelming. But there is nothing in the data which can lead Janet Yellen to change her language.  
     
    Statistics show a tendency for July payrolls to be slightly underrated, leading to a combined miss of about 12,000 in the past 10 years. The print for July 2016 was a miss as high as 75,000.
  • President Trump is on Twitter taking credit for the expectation-beating July jobs numbers.
     
  • U.S. crude oil exports fell to 786,000 barrels per day in June from 1.023 million bpd in May, according to the U.S. Census.
     
    In Canada, total crude oil exports fell 170,000 bpd to 3.31 million bpd, while imports rose 96,000 to 833,000 bpd in June, according to Statistics Canada data.
     
    During the same month, Canadian crude oil exports to the U.S. fell 140,000 bpd to 3.29 million, while imports from the U.S. fell 62,000 bpd to 360,000 bpd.
     
    Oil prices are flat today.
     
     
  • Some more U.S. earnings out ahead of the bell.
     
    Pulmatrix reports a Q2 net loss of $5.6 million, or 29 cents per share. The company generated no revenue in Q2, down from $300,000 the year before.
     
    The company says the decreased revenue was directly related to the conclusion of a clinical study. The company says it had $11 million in cash and cash equivalents at the end of June, compared to $4.2 million at the end of 2016.
     
    Pope Resources reports a net loss of $127,000 on revenue of $15.9 million. 
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