World Markets Live - July 25 - CNBC Live Events
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CNBC Live Events

World Markets Live - July 25

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

  • On the topic of Brexit, Patrick Thomas, CEO of Covestro, says to watch how negotiations progress.
     
    I think anything that destroys free trade between industry and Europe is a bad idea, and I think people are now realizing the importance of free trade.
     
    A typical automotive company that we deal with in the U.K. and in Europe will move components backwards and forwards many times, six or seven times, during the manufacturing of a system for assembly for a car. Therefore, if you were to have cross border taxation at every step it just wouldn’t work, it just doesn’t figure.
     
    He says  the company has no exposure to the pound and the region is just 2 percent of business, but as a Brit living in Germany he is worried about Brexit.
  • Investors are still reacting to allegations that German automakers Volkswagen, BMW and Daimler had operated a wide-ranging cartel, with Volkswagen trading at the bottom of the DAX.
     
    A VW spokesperson confirmed to CNBC that it will hold an extraordinary supervisory board meeting on Wednesday, following the launch of an EU probe into alleged price-fixing.
     
     
  • Julien Lafargue, VP European equities strategy at J.P. Morgan, says the move in the euro is a headwind for the large European exporters.
     
    We benefited from the lower euro. Now the euro is appreciating, for the exporters it could be a headwind. However, we also have to understand why the euro is going higher and its going higher because the domestic economy is doing better, because confidence has been restored in the Eurozone, and maybe this headwind from a currency perspective will be offset by the stronger domestic economy and global economy.
     
     
     
  • Virgin Money shares are falling sharply in early Tuesday trade. The shares fell as far as 9.4 percent. This in reaction to the bank's H1 results, where the U.K. challenger bank gave a cautious outlook for the short-term. The bank says there are areas of weakness to be navigated and mortgage spread are expected to face pressure.
     
     
     
     
  • Sweden's June producer price index rose 4.8 percent year on year but fell 0.8 percent month on month, according to the country's statistics office. 
  • Half an hour into European trade and the Stoxx 600 is up about 0.3 percent, led by the basic resources and media sectors.
     
    These are the stocks at the top and bottom of the index.
     
  • Here are the top headlines following the European market open:
     
    • European banks see a boost in early trade, following a strong session stateside, leading European equities slightly higher.
    • Well staffed! Randstad shares rise as the Dutch staffing agency reports strong European performance, with double digit sales growth in the second quarter. 
    • AkzoNobel shares slide as the company's second quarter numbers miss expectations and it outlines a new executive structure amid pressure from activist shareholders. 
    • Covestro beats as higher prices boost earnings more than 50 percent. The company's CEO tells CNBC he sees the auto sector driving growth. 
       
  • Investors are awaiting clues from the ECB as to when it will begin to taper, while President Mario Draghi struck a more dovish tone at the central bank's meeting last week. 
     
    Even as corporate leverage has declined over the past few years, a striking 9 percent of European Stoxx 600 firms have weak interest coverage metrics, this according to report from Bank of America Merrill Lynch.
     
    While there's been a notable decline in these so-called 'zombie companies', there are still more of these firms than before the financial crisis.
     
    Barnaby Martin, head of European credit strategy at BofA Merrill Lynch, says they’re talking about zombie companies because Mario Draghi will taper monetary policy next year.
     
    We’ve forgotten that actually monetary policy in Europe is on its way out. So the question becomes can we handle a rapid rise in interest rates?
     
    Not that that’s our base case at BofA, but there’s clearly political pressure for him to move away from this extraordinary era.
     
     
  • Barnaby Martin, head of European credit strategy at BofA Merrill Lynch, says “super-firms” are causing problems in the economy.
     
    There’s new research out which suggests if you work for a super-firm, you’re not going to demand a huge wage increase. This proliferation of super-firms actually works against central banks, because what it means is the wage growth they’re so desperate to see for their inflation narrative isn’t going to come through.
     
    Martin says if it is super-firms driving down wage growth then it is difficult for central banks to do something about it. They'd need to break up monopolistic industries but that would be politically difficult.
  • There is lots of M&A news today:
     
    • Facebook has acquired Source-3, a content rights management startup. Source3 builds technology to detect intellectual property that has been shared online without permission. The New York-based company announced the acquisition on its website, but neither Source3 or Facebook have disclosed terms of the deal.
    • Softbank is reportedly seeking a multi-billion dollar stake in Uber. According to the Wall Street Journal, the Japanese giant has approached the ride-hailing app. SoftBank already has a stake in three Asia based companies with similar business models, including China's Didi Chuxing.
    • U.S. fashion firm Michael Kors has agreed the terms for its acquisition of luxury shoe brand Jimmy Choo. The deal values Jimmy Choo's share capital at around £900 million. Jimmy Choo has struggled since going public, with its profit and sales figures repeatedly falling short of analysts' expectations. Shares in Jimmy Choo have spiked on the news.
     
     
  • Kantar Worldpanel has released data on the U.K. food retail space. 
     
    The market share belonging to budget retailers Aldi and Lidl increased to 12.1 percent in the 12 weeks to July.
     
    Tesco's market share fell to 27.8 percent, while Sainsbury's market share fell to 16 percent. Morrison's share fell to 10.5 percent.
     
    Kantar says U.K. grocery price rises are no longer accelerating.
     
     
  • Here are your top headlines for the next hour:
     
    • European banks see a boost in early trade, following a strong session Stateside, leading European equities slightly higher.
    • Well staffed! Randstad shares rise as the Dutch staffing agency reports strong European performance, with double digit sales growth in the second quarter.
    • AkzoNobel shares slide as the company's second quarter numbers miss expectations and it outlines a new executive structure amid pressure from activist shareholders.
    • Covestro beats as higher prices boost earnings more than 50 percent. The company's CEO tells CNBC he sees the auto sector driving growth.
  • Gerrman business confidence rises in July.
     
    The IFO business climate index rises to 116.0 in July versus consensus of 114.9, hitting a fresh record high.
     
    The IFO index of current conditions rises to 125.4 in July, versus forecasts of 123.8 points.
     
    The expectations index rose to 107.3 in July, again better than forecasts of 106.5 points.
  • The euro spikes against the dollar after the release of the latest IFO German business climate index.
     
     
  • Italy's May industry seasonally adjusted sales rose 1.5 percent month on month, against a fall in April of 0.4 percent, according to ISTAT. Year-on-year it rose 7.6 percent.
     
    Italian industry orders for May rose by a seasonally adjusted 4.3 percent month on month, versus a fall in April of 0.5 percent. Unadjusted, the orders rose 13.7 percent year on year.
  • Speaking in Athens, EU Commissioner for economic and financial affairs Pierre Moscovici says it is positive that Greece is returning to the bond markets.
     
    He says Greece has made significant effort to fix its deficits and is at a turning point. He is confident Greece will successfully conclude its bailout programme and says Greece can return to bond markets with "logical yields." He says Greece must keep up its reform efforts.
  • Norsk Hydro shares are trading lower after it posted a mixed set of quarterly results. The Norwegian aluminium and renewable energy producer reported second quarter underlying EBIT which came in short of analysts' expectations.
     
     
    Eivind Kallevik, the CFO of Norsk Hydro, says the company delivered in line with market expectations. He says underperformance within the world products segment is penalizing the share price.
     
    He says the company is beyond the cost-cutting phase and is trying to improve operational stability and efficiency. He adds that demand is good.
     
    We expect demand to increase in 2017 of roughly 4 to 6 percent, which means we will have a largely balanced market from a global perspective in 2017. Outside China we would be in a deficit situation between production and demand.
     
    He says China is hurting world markets by overproducing compared to their domestic demand.
     
     
  • The euro spiked against the dollar following IFO data that German business confidence rose to a fresh record high in July. The IFO business climate index rises to 116.0 in July versus consensus of 114.9 points.
     
    The IFO says sentiment among German businesses is "euphoric". They say the euro forex rate is no impediment to Germany's economy, as business is going well enough to offset the FX rate.
     
    The IFO says it is not worried about the impact of Brexit on the German economy, nor do they see an impact from Trump on Germany. They say nothing appears to knock the German economy off course at the moment.
     
    In manufacturing the index hit a new record high. Assessments of the current business situation scaled unprecedented heights. Manufacturers once again expressed greater optimism about the short-term future. Capacity utilisation rose significantly by 0.7 percentage points to 86.7 percent.
     
    The Brandenburg gate in Berlin
  • Poland's registered unemployment rate falls to 7.1 percent in June, according to the country's Stats Office. This matched a Reuters forecast.
     
    Earlier, Finland's adjusted jobless rate for June was reported as 8.7 percent, unchanged from the previous month. The number of unemployed Finns in June was 250,000.
  • Shares in Volkswagen, BMW and Daimler have recovered slightly, but remain under pressure from allegations that the automakers had operated a wide-ranging cartel.  
     
     
    A VW spokesperson confirmed to CNBC that it will hold an extraordinary supervisory board meeting on Wednesday, following the launch of an EU probe into alleged price-fixing. The investigation by European Union regulators will focus on whether carmakers used German industry committees to discuss pricing, and whether such talks breached competition rules.
     
    Arndt Ellinghorst, head of the global automotive research at Evercore ISI, says this won’t be as wide-ranging or as punitive as some are making out.
     
    The authorities have been looking into this for years. Daimler says it has been cooperating since 2011. Volkswagen stopped some of their practices in 2016, they reported themselves to the German and European authorities in the middle of 2016. 
     
    So I understand that if you’re a whistle-blower you’ve got to cooperate with the authorities and silence is agreed, but I would say if there was a significant threat to earnings, they would have had to have said something.
     
     
     
  • President Donald Trump's son-in-law Jared Kushner has denied claims that he colluded with Russian officials during last year's presidential campaign.
     
    The senior White House aide says documents he provided to a U.S. Senate panel will show he did not have any part in alleged Russian election meddling. Both Moscow and President Trump have also denied these allegations.
     

    Jared Kushner: I did not collude with Russia, my actions were 'proper'

    Jared Kushner firmly denied collusion with Russia and said that his actions while serving on his father-in-law's campaign were "proper."
     
  • Revenue growth has not come cheap for Alphabet. Shares slid in after-hours trade after Google saw its cost-per-click' drop 23 percent from a year ago -- a much bigger decline than analysts had forecast.

    Felix Wintle, fund manager at Tyndall Investment Management, says the record EU fine of $2.7 billion won’t affect the on-going business.
     
    The fine gets a lot of attention; it’s a huge number. But when you’re Google it’s not such a big number. It’s a one-off item in my view that affected the quarter a bit.
     
     
     
  • U.S. future values predict a mixed open for markets later today.
     
    The Nasdaq is called lower, coming off its recent record high close. In contract, the Dow is called 40 points higher and the S&P called about 2 points up. However, neither gain makes up for the losses the two indexes suffered in yesterday's session.
     
     
  • Finnish steel producer Outokumpu reports Q2 net sales of 1.66 billion euros, less than the 1.73 billion forecast by Reuters. Underlying EBITDA also missed forecasts, totalling 145 million euros, less than the 147 million expected.
  • China's banking sector total assets rose 11.4 percent year on year to 236.54 trillion yuan at the end of June, while total liabilities rose 11.3 percent year on year to 218.39 trillion yuan by the end of June, according to the Chinese regulator.
     
    The country's central bank says it will strictly regulate financial market trading, according to Reuters. The central bank adds it will strengthen regulation of internet finance and strengthen supervision of systemically important financial informations and infrastructure.
  • U.K. inflation expectations for the year ahead are 2.5 percent in July versus 2.6 percent in June.
     
    U.K. inflation expectations for the longer-term are unchanged at 3.1 percent in July, according to data from Citi and Youguv.
  • There are strong stock market gains in Europe this morning. The pan-European Stoxx 600 is up about 0.6 percent.
     
    Leading markets higher are gains in the banks, basic resources and insurance sectors of more than 1 percent. The media sector is up 0.9 percent.
     
    Here's how the individual European bourses are performing this morning. Click or tap on the arrows to switch between charts.
     
     
  • The U.K. food retail sector is showing mixed performance today, with Sainsbury and Tesco shares marginally higher and other retailers' stock prices falling.
     
    Data from Kantar Worldpanel warned the rise in food price inflation is no longer accelerating. It also warned that budget retailers Lidl and Aldi increased their market share at the expense of larger retailers.
     
    Analysis of U.K. food retail from HSBC Global Research finds the industry grew 5 percent in the last four weeks, but 12 week growth slowed to 4 percent.
     
    Growth at Tesco continues to outstrip its Big4 peers despite being held back by lower inflation and mix effects from its own label recovery (both of which are strategic positives).

    Sainsbury's benefited (as Tesco did) from its convenience stores which helped visit frequency. However, we believe Tesco is growing cash sales at 2x the rate of Sainsbury's and improving its competitive position.
     
    Morrisons' market share gap to Aldi is now below 2%, down 100bps over the past year. With Aldi having a much narrower range, its buying power will now be significantly greater on some lines.
     
     
     
     
     
  • India's Vedanta reports quarterly consolidated profits of 22.7 billion rupees, beating forecasts of 16.31 billion rupees. Total income for the quarter was 203.97 billion rupees versus 165.81 billion rupees.
     
  • Mark Zuckerberg recently called out Elon Musk over his criticism of artificial intelligence. In a Facebook live, the social network's CEO said AI is going to improve our lives, and called doomsday scenarios "pretty irresponsible".
     
    Elon Musk responded on Twitter, saying Zuckerberg's understanding of the subject is "limited".
  • U.K. manufacturing order book balance slips to +10 in July from +16 in June. It was forecast to hit +11, according to CBI data.
     
    The export order book balance is +2 in July from +13 in June, its weaker since February.
     
    Output expectations balance is +28 in July, rising from +27 in June. 

    Quarterly new order balance was +14 in July from +25 in April, its weakest since October 2016.
     
    Quarterly output volume balance was +31 in July versus +22 in April, its highest since January 1995 and employment growth is at its strongest in 3 year.
  • Sterling pares gains against the dollar and slips into negative territory on the release of disappointing U.K. industrial data. 
     
     
  • Unity Bancorp reports Q2 earnings per share of 32 cents on net profit of $3.4 million. The company says net interest income increased $1.8 million to $11.2 million the quarter ending June 30.
     
    The lender expects continued improvement in its net interest margin due to rising rates.
  • Copper prices are at a 5 month high today.
     
    The uptrend is seen as a function of solid demand from China and the lower dollar value that the commodity is typically priced in.
     
    Copper futures contracts on the London exchange were up 2.22 percent in Tuesday morning trade at 11.25 a.m.
     
     
    A research report from Citi suggested copper hungry manufacturers in China had recently restored inventories.
     
    The note suggested more inventory clearing needs to happen before Chinese firms seek imports.
     
     
  • He has the pen in hand. Hope its not too big for him.
  • Europe's banks have reached a session high.
     
     
  • United Technologies has reported second quarter sales of $15.3 billion with a continued operations earning per share of $1.80.
     
    The company now anticipates full year EPS of $6.45 - $6.60  and sales to sit between $58.5 and 59.5 billion.
     
    The company's share price has risen almost 6 percent in the last three months  and is around a third of a percent lower in pre-market trade.
     
     
  •   
    Some are calling it a billion dollar fight. Mike Tyson, who might know a thing or two about boxing, is calling it a farce.
     

    Tyson predicts McGregor will 'get killed' by Mayweather

    Evening StandardMike Tyson does not believe Conor McGregor stands a chance against Floyd Mayweather, predicting the MMA fighter "is going to get killed." The pair meet in Las Vegas next month, with the 49-0 pro Mayweather entering the boxing ring with the two-weight MMA star McGregor.
  • The dollar is under pressure as the Fed convenes.
     
     
    But what risk does the Fed really pose to those holding stocks?
     

    Here's why investors shouldn't 'fear the Fed' this week

    CNBCSome strategists say investors ought not to worry about the Fed hitting stocks at this juncture even as it is in the midst of tightening.
  • The European markets are  higher on Tuesday morning as investors monitored earnings and awaited the start of a two-day policy meeting of the Federal Reserve.
     
    Strength among commodity firms and banking stocks supported European shares during mid-morning deals while earnings season also remained front and center for investors.
     
     
    On the data front, German business confidence unexpectedly rose in July, hitting fresh record highs for the third consecutive month. The Munich based Ifo economic institute said its business climate index rose to 116.0, up from 115.2 in June.
     
    "Euphoric"

    Sentiment among German business is euphoric ... Companies' satisfaction with their current business situation reached its highest level since Germany's reunification. 
     
    - Ifo Chief Clemens Fuest
  •  
    Dow futures have jumped on Tuesday, boosted by earnings reports that largely beat Wall Street expectations.
     
     
    Caterpillar and United Technologies both posted bottom line results that topped estimates, sending futures for the 30-stock index higher by 100 points. 
     
    More on this story here:
     

    Dow futures surge 100 points on better-than-expected earnings

    CNBCDow futures jumped on Tuesday, boosted by earnings reports that largely beat Wall Street expectations.
  •  
     That flourishing relationship with France may not be as warm as previously thought.
     
  • The euro is rising strongly versus the dollar again today, helped by "euphoric" sentiment among German firms. 
     
    IFO data suggests a more positive mood than at any time since the fall of the Berlin wall.
     
     
    Sterling also spiking against the U.S. dollar. This today's performance.
     
     
    The Financial times noting that both moves followed Trump's tweet on a UK trade dealbut there is not much analysis yet to back that correlation.
  • U.S. home prices rose +0.4 percent in May from April according to the Federal Housing Finance Agency.
     
    That figure represents a +6.9 percent rise on the same month a year ago.
     
     
    The Case Shiller index, also just released for May, registered a +5.7 percent year-on-year price increase covering 20 metropolitan areas across the U.S.
  • Former manager of the Trump campaign Paul Manafort is to speak with Senate investigators within the next 48 hours, according to NBC citing a source close to Manafort.
     
    Paul Manafort
     
  •  
    Triple-digit gains for the Dow and a new record high for the S&P but earnings fare keeping a cap on the tech heavy Nasdaq.
     
     
  • This is a good clean explanation of a very murky topic.
     

    3 reasons why Tuesday’s Russia vote in Congress is a big deal

    CNBCThe U.S. House of Representatives is expected to pass a bill on Tuesday which will make it harder for President Donald Trump to ease sanctions on Russia without approval from Congress.
  • Unsurprisingly, Caterpillar is at the top of the Dow after ten minutes of trade.
     
    The company is raising its full-year guidance to $5.00 per share, from its previous outlook of $3.75 per share, as "disciplined" costs in the first half of the year allow new room for investment, according to the earnings report.

    "We anticipate making targeted investments in initiatives ... including enhanced digital capabilities and accelerating technology updates to our products," CEO Jim Umpleby said in a statement.

    Caterpillar's results vs. expectations:

    • EPS: $1.49 per share vs. $1.26 per share expected, according to Thomson Reuters.
    • Revenue: $11.33 billion vs. $10.93 billion expected, according to Thomson Reuters.
     

     
     
  •  
     
    Another all time high for the S&P 500.
     
     
  • Are stocks set to fall?
     

    Wall Street bracing for 'significant correction': Survey

    CNBCRespondents to the CNBC Fed Survey have marked down their expectations for Federal Reserve rate increases and for fiscal policy stimulus.
  • The US July consumer confidence index has come in at 121.5  versus an estimate of 116.
     
    The figure had declined markedly in June to 117.
     
    Consumers' assessment of current conditions sits at a 16-year high.
     
    The dollar index has recovered some of its daily losses on that data release but is still lower by 0.29 percent on the day. 
     
     
     
  • Logitech's U.S. listed shares are down 8.4 percent after the company reported a beat on earnings.
     
    Something there that investors don't like.
     
     
  • House panel asks CEOs of Facebook, Alphabet, Amazon, Comcast, Verizon, AT&T to testify in September on internet access rules.
     
    The panel is also inviting the CEO's of Netflix and Charter communications in an effort to reach consensus on net neutrality rules.
     
    Net neutrality is "the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites."
  • Senate Republicans will hold a vote today in their latest push to repeal the Affordable Care Act.

    It is unclear now if party divisions will again stall the effort that the GOP has championed for most of the last decade.

    CNBC's Jacob Pramuk has  been running through what we know about today's procedural vote right now:

    • Senators will decide whether to support a motion to proceed, a procedural step to start debate. The chamber will technically vote on whether to proceed to the Obamacare replacement plan that the House passed in May.
    • It is unclear what form the bill would take if the procedural vote passes. The Senate would make amendments and potentially take up one of multiple repeal plans: some form of a repeal and replacement bill that stalled out amid opposition from skeptical Republicans, or a repeal first, replace later plan originally passed in 2015 that some GOP senators worried would create more instability in insurance markets. Potential pieces of at least one of those plans may require 60 votes, complicating the GOP effort.
    • Congressional Budget Office estimates of both the repeal and replace and the repeal first plans' effects stirred concerns among more moderate Republicans.
    • Only one GOP senator has firmly stated she will vote "no" on the motion. Another said he would support the motion after he was told that Republicans plan to at least take up the 2015 repeal bill. Several other senators appeared to be undecided on Tuesday morning.
  •  
    And that's the markets closed in Europe.
     
     
    The pan-European Stoxx 600 moved 0.47 percent higher with almost all sectors and major bourses in positive territory. 

    Strength among commodity firms and banking stocks supported European shares during afternoon deals while earnings season also remained front and center for investors.
     
    Tomorrow we wil lbe back where earnings will continue. There is also the small matter of the Federal Open Market Committee decision on interest rates following its two-day meeting. 
     
    Join us again from 6:00 a.m. London time.
     
     
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