World Markets Live - July 31 - CNBC Live Events

CNBC Live Events

World Markets Live - July 31

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

    Good morning all and here are your headlines:
    • HSBC boosts investors' returns on the back of a beefed-up balance sheet. Europe's biggest bank launches its third share buyback in a year, as its first half pre-tax profit tops $10 billion
    • The time for talk is over! The US calls on China to impose sanctions on North Korea, as President Trump and Japanese prime minister Shinzo Abe agree on "concrete action" following Pyongyang's latest missile test. 
    • Russia retaliates! President Vladimir Putin says Moscow will expel nearly 800 American diplomats in response to fresh U.S. sanctions on his country. 
    • Elon Musk rolls out his mass market car, handing over keys to the Tesla Model 3 to its first 30 buyers in a highly publicized event. 
    HSBC has posted a five percent rise in first half profit to 10 point 2 billion dollars, beating expectations.
    Europe's biggest bank also announced a two billion dollar share buyback. The third such move in a year should be completed by the end of 2017 and will take the total of share buybacks in the last 12 months to above $5 billion.
    It is intended to offset the impact of the lender's dividend payouts. 
    HSBC's capital position looks relatively robust with a Common Equity Tier 1 ratio of 14.7 percent.
    Eric Moore, Manager at the Miton Income Fund says HSBC is undertaking a changing of the guard towards a new strategy which focuses largely on China.
    The big thing for them is being at the forefront of the development of onshore Chinese financial services.
    Moore says PPI provisions continues to be a "thug on the balance sheet" but there is an end in sight for banks in that regard.
    President Trump and Japanese Prime Minister Shinzo Abe spoke about the security threat from North Korea for nearly an hour over the phone, following the most recent missile launch.
    Speaking to reporters after the call, Abe said he "completely agreed" with Trump that additional steps needed to be taken against the isolated country. 
    Trump also took to Twitter to outline his disappointment in efforts from Beijing:
    On set, John Raines, Head of Political Risk at IHS Markit says Trump's tweets are offering a fairly clear threat to China about how trade could be affected if China doesn't deal with neighboring North Korea.
    He adds that in terms of military pressure that the U.S. can exert on North Korea, options are limited.
    Eric Moore, manager at Miton Income Fund is on set and offering his take on the U.K. banking sector.
    He says the PPI saga goes on and there is a mixed picture across the sector. He picks Lloyds as ahead of the pack.
    Lloyds put up there interim dividend by 18 percent which is not at all bad. They are further along the road to normalization than other UK banks.
    Eric Moore, Manager, Miton Income Fund
    Moore says Barclays is offering a flat dividend that doesn't get him excited but he postulates that if you believe the bank has finished restructuring and doesn't need any more capital, then there could be an investment case.
    It could then be generating earnings of 30 pence with a dividend of 15 which then gives a yield of 7 percent. The question is do we all die waiting for it?
    On RBS, he says the bank is not likely to offer a dividend yield for at least a year or two and therefore the investment case remains weak.
    These are some of the stocks moving markets this morning:
    HSBC has posted a five percent rise in first half profit to $10.2 billion, beating expectations. Europe's biggest bank also announced a two billion dollar share buyback. The third such move in a year should be completed before the end of 2017 and will take the total of share buybacks in the last 12 months to above five billion dollars. It is intended to offset the dilutive impact of the lender's dividend payouts.

    Drug-maker Sanofi has raised its full year earnings outlook. It now predicts that its 2017 EPS will be broadly stable, whereas it had been anticipating a slight year-on-year decline. Sanofi upgraded its guidance after posting second quarter earnings broadly in-line with analysts' expectations.
    The Swiss National Bank posted a first half net profit of 1.2 billion Swiss francs. FX related losses of 11.8 billion Swiss francs wiped out nearly all the central bank's earnings from bonds and shares it holds.
    Airport retailer Dufry has reported its highest organic growth in 5 years, boosted by a strong performance in Britain and Latin America during the second quarter. The Swiss firm also says it's considering spinning off its North American unit.
    If the central banks just stop buying then they will run bonds into maturity and then unless budget deficits fall then that debt will have to be refinanced at going market rate and that supply and demand will probably send bond yields higher.
    - Christopher Peel, Chief Investment Officer, Tavistock Investments
    On equity allocation, Peel says investors have been underweight Japan and that could be the next area of investment. 
    Japan's Panasonic reports Q1 net income of 48.76 billion yen versus 29.17 billion the year before.
    Revenue was 1.87 trillion yen, up from 1.77 trillion the previous year. The company sees full year net income of 160 billion yen.
    Islamic State claims responsibility for a suicide bomb attack in Kabul, that's according to Reuters citing the Islamic State's news outlet Amaq.
    Euro zone July inflation is estimated at 1.3 percent, unchanged from June and matching expectations, according to Eurostat.
    Meanwhile, the euro zone June unemployment rate falls to 9.1 percent from 9.2 percent in May. This is the lowest rate since February 2009. The jobless numbers fell 148,000 last month.
    The euro spikes against the dollar after the latest unemployment and inflation data, although the currency remains negative against the dollar.
    A Kremlin spokesman says the reduction in the U.S. diplomatic presence will include both local staff and U.S. diplomats. The overall number of U.S. diplomatic staff in Russia is about 1,200.
    The spokesman says there was no point in waiting until Trump signed the sanctions legislation before reducing the number of diplomats.
    The spokesman says the way out of the current situation is through political will to repair relations.
    They add that Russia is ready to continue ties with the U.S. in areas where it's in Russia's interests. However, if the U.S. retaliates to the reduction in diplomatic staff, Russia will take counter measures.
    Here is the latest euro zone news for the hour:
    • The European Union commission says it approves of public support for construction of the the Frankfurt-Hahn airport in Germany. It approves support of up to 25.3 million euros.
    • Germany's transport ministry says it is open to a class action lawsuit regarding the emission scandal. The foreign ministry says it is too early to discuss the question of car incentives in response to the emissions scandal.
    • Earlier today, Germany's economy minister Brigitte Zypries said U.S. sanctions against Russia that may affect European companies are against international law. She called for the EU commission to look into possible countermeasures against the U.S.
    • The euro zone unemployment rate fell to 9.1 percent in June from 9.2 percent in May, the lowest rate since February 2009. The number of jobless fell 148,000.
    Diamond Offshore Drilling reports second quarter earnings per share of 12 cents, way under expectations of 24 cents per share.
    The company reports total revenue increased to $399.2 million compared to $388.7 million the year before. The company says Q2 results were impacted by impairment charges and related taxes of $46 million. The company total contracted backlog is valued at $2.9 billion.
    Roper Technologies raises its full year adjusted earnings per share range to $9.12 to $9.30, from a previous range of $8.98 to $9.28.
    The company reports Q2 earning per share of $1.74 on net income of $179.6 million. Sales came to $1.13 billion.
    U.S. stock index futures pointed to a slightly higher open on Monday as investors keep their focus on earnings reports.

    Dow futures rose 41 points, while S&P and Nasdaq 100 futures climbed 2 points and 9.5 points, respectively.

    French drug maker Sanofi and HSBC released their latest figures before the bell. HSBC, Europe's largest bank, announced a 5 percent rise in pretax profits in the first half of 2017 as well as the third share buyback in a year. Pandora Media, Alexandria Real Estate and Itau Unibanco are due to report after the bell.
    Snap shares are sliding today, down 2.8 percent since the start of Monday trade.
    The shares are sliding as a "lock-in" period for investors who took part in its IPO in March expires today. These investors are now able to sell their shares.
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