World Markets Live - July 20 - CNBC Live Events

CNBC Live Events

World Markets Live - July 20

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

  • The European Central Bank says it is leaving its interest rates on hold as expected.
    The ECB says confirms that net asset purchases are kepy unchanged at 60 billion euros per month.
    It says the governing council expects the key ECB interest rates to remain at their present levels for an extended period of time and well past the horizon of the net asset purchases. It says net purchases are made alongside reinvestment of the principal payments from maturing securities purchased through the programme.
    The euro recovered to session highs during Mario Draghi's press conference.
  • Good morning and welcome to the World Markets Live blog. Your headlines are as follows:
    • Showtime for the ECB. Investors want to know whether Mario Draghi will signal when the bank could pull back on its bond buying programme, but he is expected to tread carefullly to avoid a market fallout.
    • Flashback to the dotcom heyday. Record closes for U.S. stock indices, including the S and P tech index, finally topping its high, 17 years later.
    • Strong signals. T-Mobile's quarterly numbers blow past estimates, as the wireless carrier gobbles up market share from its bigger rivals.
    • Raise your right hand. Donald Trump Junior, Jared Kushner and former campaign manager Paul Manafort, all called to testify, about alleged campaign ties to Russia.
  • ABB net income coming in at $525 million for the second quarter on a revenue of $8.45 billion.
    The Swiss firm reporting an earnings miss despite a rise in orders.
    Over the last 12 months ABB has seen its stock price rise 20 percent.
    SAP also announcing second quarter results.
    The German cloud computing infrastructure specialist reporting a revenue of 5.78 billion euros. That a rise of 10.4 percent on last year but still a miss on forecasts.
    The company also raising forecasts.
    SAP trades 26 forward on earnings
  • The European Central Bank will meet for the first time since Draghi's hawkish comments in Sintra.
    But was the ECB President really hinting at tapering?  He suggested that the ECB should adjust its monetary policy to the economic recovery, but warned that inflation in Europe remains muted. He also said global uncertainties are high, and quantitative easing needs to remain persistent.
    A majority of analysts don't expect a change in ECB monetary policy this month. According to RBC, discussions on tapering will start in September. They say the ECB will try to avoid any involuntary tightening of financial conditions, and that a withdrawal from stimulus will be voluntary and targeted.
    Analysts at UBS believe the ECB will start tapering in 2018, without committing to a timeline now.
    CNBC of course is setting up to cover all the coverage from later today.
    The euro sign is alive! Annette is delivering hits from the ECB headquarters in Frankfurt.
  • Vasileios Gkionakis, Managing Director and Co-Head of Strategy Research at Unicredit is on set with Steve and Karen.
    Gkionakis says the euro dollar trade at 1.15 is not too optimistic and the pair is now moving to equilibrium. He expects the pair at 1.14 by year end but sees upside risks.
    He also notes that the trade weighted euro has only risen one percent since Draghi's speech and recent shifts in euro-dollar pair are largely function of dollar weakness.
  • Last night the S&P 500 rose 0.5 percent and hit intraday and closing records, with energy rising more than 1 percent to lead advancers. Vertex Pharmaceuticals led the index higher, rising 21 percent.
    The Nasdaq composite advanced 0.6 percent and also notched record highs. The Dow Jones industrial average rose 65 points to notch a record close.
    Later today the earnings season remains in full swing in the U.S.
    Earnings before the Bell : Abbott Labs, Philip Morris, SAP, Travelers, Unilever, Union Pacific, Alliance Data, Bank of NY Mellon, BB&T, Blackstone, Danaher, Genuine Parts, KeyCorp
    Earnings after the Bell: eBay, Microsoft, Visa, Capital One, E-Trade, Intuitive Surgical, Skyworks Solutions
  • The BOJ is keeping monetary policy steady, while cutting inflation forecasts for the next two years.
    The central bank now expects to reach its 2 percent target by March 2020, later than previously projected. The move could signal the BOJ is going to scale back its stimulus program later than other major central banks.
    For more on this, click through to this:

    Bank of Japan keeps monetary policy steady, cuts inflation expectations

    CNBCSome experts said they expected the BOJ to lower its inflation forecast in a continued battle with stubbornly weak price growth.
  • The French advertising group, Publicis, has reported growth in underlying sales of 0.8 percent to 2.52 billion euros.
    Forecasters had expected a contraction.
    The first half net profit has come in at 387 million euros.
    Publicis shares over 12 months look like this:
    The price over earnings ratio for the company sits at 16.
  • President Trump has called on Republican Senators to get back to work on a plan to repeal and replace Obamacare, before leaving DC for their August holiday.
    This as a new report from the CBO showed 32 million Americans would lose health insurance if the plan is repealed without a replacement.
    Trump's back is against the wall on his healthcare plan but he is putting on pressure to get a deal done.
  • Danske Bank has reported earnings, garnering a net interest income of 11.4 billion Danish crowns. The company says it expects full year net interest income to be higher than in 2016.
    Jacob Aarup-Andersen, the CFO of Danske Bank is on set to discuss the company's earnings.
    He says the company enjoyed a particularly strong first quarter and the second quarter has, to an extent, maintained their momentum.
    Aarup-Andersen says he is reluctant to comment on the ECB but he does see rates remaining low for the "next couple of years". 
    Banks like us we are very sensitive to the short end of the (yield) curve and looking their we haven't seen any changes.
    Aarup-Andersen says the banks clients have very strong financial health and for any loan book to turn sour it would need significantly higher rates.
  • The Swedish construction firm Skanska has reported first half revenues of 79.1 billion Swedish crowns giving earnings per share of 7.35.
    Joining us on the phone from Stockholm is Johan Karlström, the CEO of Skanska.
    Last week Skanska issued a profit warning after revealing around £33 million in writedowns at its UK unit. 

    The Stockholm-based construction giant said the UK writedowns were due to “lower-than-anticipated production rates, projects being delayed with estimated penalties and multiple customer-driven changes, which have caused cost overruns”.
    Karlstrom says the warning relates to just a few projects and its UK division will be profitable going forward.
  • As we enter the second hour of Squawk Box Europe, a reminder of our top headlines:
    • Showtime for the ECB. Investors want to know whether Mario Draghi will signal when the bank could pull back on its bond buying programme, but he is expected to tread carefullly to avoid a market fallout.
    • Cloud costs weigh on SAP earnings in the second quarter, as profit falls shy of expectations, but the firm raises its full-year outlook, and announces a share buyback.
    • Strong signals. T-Mobile's quarterly numbers blow past estimates, as the wireless carrier gobbles up market share from its bigger rivals.
    • A mixed bag at ABB, as the Swiss engineering company posted weaker-than-expected second quarter profit, despite strong performance in its robotics arm.
  • Unilever has reported second quarter earnings posting a rise in underlying sales growth of 3 percent  in the second quarter.
    The company typically targets a figure of 4 percent but is noting the struggles of the wider industry.
    The first half earning per share figure is 1.09 euros on a turnover of 27.73 billion euros.
    We will hear from the Unilever CEO Paul Polman in around 40 minutes time.
  • Reinhard Cluse, Chief Economist for Europe at UBS is today's guest host for TV.
    On the ECB meeting today, Cluse says he expects Draghi to prepare the markets for a tapering decision in September  and that tapering is likely to begin in January 2018.
    He says Draghi will do his utmost to be clear and avoid rattling markets as the central bank leader is very concerned about a sudden rise in the euro and bond yields.
    What might we see from the ECB today appears to be a scenario of playing for time:
  • easyJet has reported a trading statement which reveals a fiscal third quarter revenue of £1.39 billion, up 16 percent.
    The firm said it carried 22.3 million passengers across the quarter, a rise of 10.8 percent.
    Revenue per seat, a key metric for the sector, rose 2.2 percent.
  • Givaudan has beat expectations, posting a 4.5 percent rise in first half net profit. 
    The Swiss fragrance and flavor maker said it continues to pass on price increases, to compensate for cost inflation of raw materials.
    Gilles Andrier, CEO of Givaudan says his firm is adapting to the world's greater desire for natural flavors.
    Gilles Andrier, CEO of Givaudan says emerging markets have actually been flat compared to last year but in mature markets growth has been strong.
    He notes that Africa is an exception to this where sales have been strong.
    Andrier says the firm has restrained costs in order to hit profit targets.
  • European futures suggest a positive open for markets in just under 30 minutes.
    Earnings this morning appear to be supporting stock prices on average. 
  • The Bank of Japan Governer Kuroda is giving a press conference following his bank's earlier decision to keep monetary policy steady but lower inflation forecasts.
    The central bank now expects to reach its 2 percent target by March 2020, later than previously projected. The move could signal the BOJ is going to scale back its stimulus program later than other major central banks.
    In the conference, Governor Kuroda has said economic growth in 2019 will slow slightly because of a schedule sales tax hike and capital expenditure levels.
    Kuroda also said there is a risk to prices and the Japanese economy is tilted to the downside.
  • Fairly flat and cautious trading around dollar/yen as the Bank of Japan Governor Kuroda speaks at a press conference:
    Kuroda says central banks in U.S., Europe have also pushed back their inflation forecasts. 
  • Unilever says its full year sales forecast is on track as it raised its margin expectations.
    This after reporting second quarter earnings broadly in line with analyst forecasts.
    Moments ago, Gemma spoke to the CEO about the numbers and the company's portfolio expansion.

    Polman said topline growth of 3 percent was a very strong result, driven largely emerging markets.
    The CEO added that volume has fallen in the sector and believes Unilever is ahead of its competitors. He says the volume component should rise again over the next 6 months.
    On portfolio optimization he says all companies have different strategies.
    We have been very fortunate with recent acquisitions over the last 6 months. Dollar Shave Club would be a very good example with growth in the double digits. 
  • European markets are now open for trading. The pan-European Stoxx 600 has opened slightly higher, up above 0.12 percent:
  • Major European indexes are trading slightly higher as a flurry of earnings this morning drive stocks:
  • Unilever says its full year sales forecast is on track as it raised its margin expectations. This after reporting second quarter earnings broadly in line with analyst forecasts. Gemma spoke to the CEO Paul Polman about the bid from Kraft Heinz, which has shaken up the company's strategy
  • Only financials in the red as we look at the sectors breakdown. Oil & Gas performing strongly despite almost no movement in crude prices this morning.
  • ABB posted second quarter earnings that fell short of analyst estimates. 

    The Swiss industrial company reported quarterly revenues of 8.45 billion dollars, missing  forecasts. ABB is struggling with an order backlog, which now totals 23-point-6 billion dollars
  • Rising costs in SAP's cloud services business depressed its quarterly operating profit, which came in below expectations. However, the German software firm's revenue for the second quarter rose 10-point-4 percent, beating forecasts. SAP expects to meet its full year targets. 
  • Deutsche Telekom subsidiary T-Mobile reported record low customer attrition, helping the wireless carrier beat second quarter earnings forecasts. It added a net amount of 1.3 million clients, far exceeding estimates. T-Mobile said it was considering a quarterly dividend, adding that it was mulling various strategic options. It expressed an interest in speaking with Sprint over a potential merger.
  • Publicis Groupe results for the second quarter have been boosted by improved performance in its North American business. The advertising giant rallied with a rise of 0.8 percent in underlying sales. Net profit rose 1.6 percent in the first half. The improvement comes after a broad reorganization of its business.  
  • Time to talk strategy.
    Nick Davidson, Senior Equities Portfolio Manager at AllianceBernstein is now on set with UBS's Reinhard Cluse and the presentation team.
    Davidson says he likes companies with competitive advantages that have not been priced in and industries that are obviously improving.
    Davidson: French companies are worth looking at.
    Davidson says European equities continue to look good  but no asset class looks cheap today.
    He adds that he likes France and the key point for investors that politics has gone from risk to opportunity.
    When we look at a lot of French companies they have already done a lot of good work to cut costs and that has been somewhat masked by the political disruption.
    Davidson highlights Peugeot, Airbus and Michelin as firms who have all tightened their businesses and have global access to markets.
  • Let's take a look at the best and the worst performing stocks this morning:
  • EasyJet shares are trading lower, after the airline said it was expecting to see continued unit revenue pressure. Easter creatd a bump in the quarter...without it unit revenue would have been negative again.  
    Easyjet though raising its profit outlook, after filling more seats and controlling costs in its third quarter. The British low-cost airline also reported improved costs per seat, and increased revenue per seat. Easyjet's report comes after the carrier lost its chief executive earlier this week, and grapples with the potential impact of Britain's exit from the EU.
  • Consensus can be very positive. Momentum is an extremely powerful tool in investing.
    Nick Davidson, Senior Equities Portfolio Manager at AllianceBernstein says he isn't too worried about joining the swollen ranks of those who back Europe's future.
    On stock picks Alliance Bernstein likes Nokia and Phillips Lighting and the firm owns stock in both companies.
    Davidson says Nokia is a 'best in class' firm that is in a position to improve its own position.
    He says the bear case for Phillips Lighting is overdone and that the stock price does not currently reflect that.
    Stock performance since the IPO.
  • Here are your top stories at this hour:
    • Showtime for the ECB. Investors want to know whether Mario Draghi will signal when the bank could pull back on its bond buying programme, but he is expected to tread carefullly to avoid a market fallout.
    • ABB the only stock in the red on the SMI, after the Swiss engineering company posted weaker-than-expected second quarter profit, despite strong performance in its robotics arm.
    • Tapping in! Deutsche Telekom shares get a super-charged boost after US subsidiary T-Mobile reports a record low customer attrition
    • Easyjet shares reverse course, falling towards the bottom of the Stoxx 600
  • Sterling falls below $1.30 ahead of retail sales numbers, down 0.3 percent on day:
  • Twenty First Century Fox has written to the U.K. government over its plans to buy Sky,
    The firm promises to work with regulatory bodies if the deal is referred on plurality concerns.
    The letter, signed by Lachlan and James Murdoch, says the UK's creative industry will be strengthened by the deal.
  • Shares in Easyjet continue to slip  as ongoing revenue pressure weighs, despite the carrier lifting its profit outlook on a better than expected third quarter.
  • The European Court of Justice is assessing whether to allow a class action lawsuit against Facebook.
    Austrian privacy activist Max Schrems and 25-thousand other global users are suing. Schrems wants 500 euros in damages for each user, alleging privacy violations through Facebook's use of personal data and user tracking.
    Facebook says it looks forward to presenting its case, noting Schrems' claims have been rejected twice before.
    Facebook says it is "looking forward" to going to court.
  • Greek government bond yields rise after IFR reports six banks hired to manage new debt sale. A source told IFR that Greece has mandated Bank of America Merril Lynch, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs and HSBC for a five-year trade. That's according to IFR.
  • President Trump has demanded senators stay in Washington through their August recess, until they reach a deal on a health care overhaul. Trump gathered GOP senators for lunch after the latest bill to repeal and replace Obamacare collapsed earlier this week.
    This comes as a new report estimates 32 million Americans would lose health insurance, if senators repeal Obamacare without a replacement.
    Mary Jo Jacobi, Former US Assistant Secretary of Commerce says Trump and Obama both made mistakes by letting the House of Congress and Senate put a healthcare plan together without outside input.
    Jacobi says Trump is a Republican and mid-term elections will see senators recognize his continued solid support among the base.
  • Here are your top news stories at this hour:
    • Can he avoid a taper tantrum? Mario Draghi walks a tightrope, as the ECB president looks to signal a shift away from easy money without roiling markets
    • Engineering giant ABB underperforms the rest of the Swiss market, after posting weaker-than-expected second quarter profit, despite a strong performance in its robotics division.
    • Investors dial into Deutsche Telekom, after its U.S. subsidiary T-Mobile blows past estimates, adding more than a million customers in the latest quarter. 
    • The CEO of Unilever tells CNBC he is not worried about deals competitors like Reckitt Benckiser are striking, as the maker of Dove Soap and Hellman's mayonnaise celebrates improved margins in the first half. 
  • A little over an hour since the start of the European markets and stocks continue to trade higher as investors eye ECB meeting and digest a flurry of earnings:
  • Britain has told Turkish authorities it will lift the ban on electronics in aircraft cabins in flights from Turkey, the state run Anadolu news agency said on Thursday, citing diplomatic sources.

    The sources said that Alan Duncan, Britain's minister for Europe and Foreign Minister Boris Johnson both called Turkish Foreign Minister Mevlut Cavusoglu to tell him the ban was being lifted, Anadolu reported.

    Major airlines flying from Turkey to Britain include Turkish Airlines and British Airways, which is owned by International Consolidated Airlines Group. That's according to Reuters.
  • UK government to make a statement to Parliament on Thursday on the proposed Fox-Sky merger, that's according to the Labour party.
  • Steve Clayton, Fund Manager of the HL Select funds commented on Unilever’s half year results. Unilever is the largest position in the funds, approaching a 5% weight.
    Volume growth is still hard to come by, in today’s world of lacklustre economic growth, but Unilever’s strength in emerging markets is allowing it to push revenues forward through pricing gains. Overall, these numbers look to be ahead of where analysts thought the group would be due to strong margin expansion. 3% underlying sales growth in the first half should pick up further in the second half as the results of recent acquisitions kick in. Meanwhile, after coming under intense pressure following the Kraft Heinz bid approach, Unilever’s redoubled efforts to raise margins are paying off. Cost savings of over a billion euros were achieved in the half year, with another €5bn planned in the medium term. Unilever look well set to hit their target of a 20% margin by 2020.
    Kraft Heinz may have gone away, but Unilever know they cannot relax and investors expect them to raise their game. The Connected 4 Growth programme is designed to drive margins forward, whilst their €5bn buy-back programme should keep EPS moving ahead of underlying profit growth. The dividend increase of 10% shows the company’s confidence in its future prospects. Unilever has a well-established track record of delivering compounding growth in earnings over the long run, and an acute focus on upping the ante in the near term.
  • UK retail sales for June up 0.6 percent month-on-month, up 2.9 percent year-on-year. Sterling jumps back above $1.30 after data:
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