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.

  • U.K. prime minister Theresa May's spokesman says the free moment of EU citizens to Britain will end in March 2019.
     
    The spokesman says post-Brexit immigration proposals will be brought forward, and it would be wrong to speculate on these or suggest free movement will continue as it does now.
     
     
    The PM's spokesman says there is broad agreement across government for making Brexit as smooth as possible, adding that precise details on implementation phase are for Brexit negotiations.
     
    The spokesman says May is not looking for an "off-the-shelf" model for the transition, in contrast to what her finance minister said last week.
  • 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.
  • Heineken reporting results as well. The company pulling a first half net profit of 871 million euros on revenue of 10.48 billion. The firm expects "further organic revenue and profit growth" but also warned on the continued negative impact from FX headwinds in 2017.
     
    Source: Heineken USA
     
  • 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.
  • David Bloom, Global Head of FX Strategy, HSBC is live on air.
     
     
    He says hawkishness around the world is working against the dollar to push it lower.
     
    Bloom adds that the markets has been better at understanding the restrictions that the Fed faces when trying to raise rates aback to around the 3 percent mark.
     
    The market gets the Fed right, the Fed gets the Fed wrong.
     
     
    On Asia-Pacific, Bloom says he expects to see the Australia and Kiwi central banks to complain about the strength of their currencies and that will cause a weakening in their respective dollars.
     
  • The listed Swiss National Bank has reported a consolidated first half profit of 1.2 billion Swiss francs.  Notably the bank made a loss in the second quarter of 6.7 billion Swiss Francs.
     
    The SNB made a 300 million Swiss Franc profit on gold holdings.
     
  • China has reported its manufacturing purchasing managers index at 51.4 for July, just short of expectations. China's National Bureau of Statistics attributed the slight slowdown to adverse weather conditions and flooding in parts of the country, adding that imports and exports have grown over the past month.
     
     
    On set, David Bloom says "China is a little bit boring, but sometimes boring is good". He adds that blaming the weather is a strange thing for economists to cite as a reason for missed forecasts.
     
    "I know what the weather was last month, I don't buy it!"
     
    Bloom said at the moment the trend is the hunt for interest rate yield rather than fundamentals and that is helping to drive currencies such as teh South African rand and indian rupee.
  • Tesla CEO Elon Musk says the company's Model 3 has more than half a million advance reservations. He personally handed over keys to the first 30 buyers at a special event on Friday. This sets the stage for Tesla's biggest challenge yet, as it looks to become a mass market electric car maker.
     
    Tesla CEO Elon Musk
     
    Musk described the push to deliver the cars as "production hell".
     
    How do we build a huge number of cars? And frankly we are going to be in production hell, welcome, welcome, welcome to production hell, that is going to be where we are going to be for the next 6 months maybe longer.
     
    On Twitter, Geoff has alluded to the difficulties facing Tesla:
     
  •  
    The problem with the pound is that it is the one currency that is structural and political. It is not cyclical.
     
    HSBC's David Bloom says he forecasts a weaker sterling at a 1.20 level versus the dollar. He adds that falling sterling will be a solution to help the UK's economy re-balance as the country pulls away from Europe and deals with its "massive current account deficit".
     
     
    He says comments from the Bank of England that restrictions on unsecured lending within the U.K. should potentially be followed up with some of the macro-prudential tools at its disposal.
     
  • I'll be back. I'm not sure the Human resource department currently searching for the new boss of Uber will be that delighted with this latest intervention.
     

    Travis Kalanick is telling Uber CEO candidates he is 'Steve Jobs-ing' it, and will return

    CNBCSources with knowledge of Uber's CEO search say the final four candidates under consideration are all men, the Recode reports.
     
  • The German retail sales data for June has blown past expectations. It rose +1.1 percent month-on-month and +1.5 percent year-on-year. The forecast for the monthly rise was just 0.2 percent.
     
    A quick spike for the euro, but an almost full retrenchment within moments.
     
     
     
     
  • President Trump is threatening to end the payments made to insurance companies under Obamacare, if a repeal-and-replace bill is not passed. In a tweet posted on Saturday, the President expressed his willingness to end what he described as government 'bailouts' for insurance firms
     
    His comments came after Republicans' latest attempt to repeal Obamacare failed in the Senate.
     
     
    On set is guest host Stephen Isaacs, Chairman of the Investment Committee, Alvine Capital.   
     
    He says Trump's administration has passed the least amount of legislation in 160 years  in the opening 6-month period. He adds that the focus on Trump alone i understandable but perhaps overblown and the failure of the wider Republican Party is deserving of greater scrutiny.
     
    Isaacs adds that Obamacare repeal should have been easily achieved by the Republicans who are ideologically opposed to it and tax reform will be much harder to pass.
  • Heineken has posted a strong set of numbers in the first half of the year, boosted in part by warm weather in much of Europe. The Dutch brewer's operating profit has beaten expectations, as revenue increased around the world.
     
    Laurence Debroux, CFO at Heineken says the quarterly results are positive and there is a balance between price increase and volume growth from different regions around the world.
     
    Laurence Debroux, CFO, Heineken
     
    Debroux says there are some strong currency headwinds and that is why the margin guidance remains as is. She says she expects to see the euro strengthen against 'pretty much all currencies'.
     
    She says current FX rates if maintained would reduce profit by around 130 million euros.
     
    On whether people are drinking less, Debroux says in Europe we have reached "a little bit of a floor" and that young people are returning to drinking beer. 
     
    She says the craft beer "phenomenon" is putting the drink back in people's consciousness.
     
    On M&A Debroux says the company continues to be opportunistic and keep purchases to markets where Heineken can either be first or second in terms of market share.
  • 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.
  • Rio Tinto Group faces a probe by the U.K’s Serious Fraud Office over its business dealings in Guinea. Miton's Eric Moore remains a fan:
     
    Rio Tinto are kind of like the Saudi Arabia of iron ore. They are the lowest cost producer by miles.
     
     
    ChinaFotoPress | Getty Images
     
  • European markets are now open. The Stoxx 600 is a little higher but still close to the flatline.
     
     
  • Here's how the sectors of the Stoxx 600 are performing at the start of European trade on Monday morning.
     
    Banks and basic resources are the best performing sectors. HSBC posted a five percent rise in first half profit this morning, helping the banking sector.
     
     
    Meanwhile, household goods and travel & leisure are dragging on the broader market.
     
     
  • 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.
  • It is very clear that the global recovery is intact.
     
    Christopher Peel, Chief Investment Officer at Tavistock Partners says he remains upbeat for global equities but does check that by noting the need for caution here in the United Kingdom.
     
    Christopher Peel, Chief Investment Officer at Tavistock Investment
     
    Peel adds that in Europe, valuations look fair although the strengthening of the euro does need to be watched as a possible brake on investment flow.
     
    He adds that while the banking crisis does ebb on, there is good evidence that lending to the real economy is growing within Europe.
     
    He highlights a risk of the great Fed unwind to bond yields and, in turn, the price of stocks.
     
    I see the pressure on bond yields that will ratchet all the way back through the system and what that means for the global economy is yet to be determined.
  • The Stoxx 600 is gaining momentum, rising 0.36 percent since the open. Here's how the individual European markets are performing.
     
    The U.K.'s FTSE 100 is making the most gains among the major bourses, helped by the performance of  U.K. listed shares including HSBC, Anglo American and Rio Tinto, which are among the best performers on the Stoxx 600.
     
     
     
  • German car makers are in focus this morning.
     
    A report from German publication Bild am Sonntag has implicated BMW in the ongoing diesel emissions scandal. Citing confidential documents from 2007, Bild has claimed BMW used two different nodes for diesel engines, one of a higher efficacy for testing, and another with a lower efficacy.
     
    In a statement to CNBC, BMW said its vehicles are not manipulated and comply with all legal requirements
     
     
    Meanwhile, Daimler Financial Services says it's set for another record breaking year after it secured almost one million new first half leasing contracts.
     
    The financial arm of the Mercedes Benz maker reported a 19 percent jump in new business as earnings before interest topped 1 billion euros. Daimler Finance added it expected the trend to continue for the rest of the year.
  • A suicide bomber has attacked an area near the Iraqi embassy compound in Afghanistan's capital city Kabul, according to Reuters citing an Afghan security official. 
     
    Police are investigating the incident. Reuters reports security forces are at the scene.
  •  
    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. 
     
     
  •  
    I think the euro will strengthen further. I don't think we have seen the end of the euro rally yet. Euro/dollar on the short term may stall for a while but I think we get to 1.21 and a half.
    David Sneddon, Global Head of Technical Analysis at Credit Suisse has offered a punchy assessment on the euro.
     
     
    Sneddon says Credit Suisse is sticking by 2.85 percent yield on the U.S. ten-year yield for 2017, though the conviction has slipped a little since the start of 2017.
     
    He says any move higher for U.S. yields is really dependent on whether we see meaningful rises in inflation.
     
  • The IMF says the dollar is overvalued by 10 to 20 percent, based on economic fundamentals.
     
    In its annual assessment of currencies, it said certain advanced economies, such as the United States, have built up concentrated external current account deficits. 
     
    The greenback has enjoyed recent strength, posting its best week against the Swiss franc in more than two years.
     
     
  • Almost an hour into Monday trade and the Stoxx 600 is making a gain, up 0.3 percent.
     
    These are the best and worst performers on the index this morning. HSBC bank is near the top of the index after posting a first half profit of $10.2 billion and announcing a two billion dollar share buyback.
     
    Severn Trent is higher after receiving a re-rating from RBC, which raised the stock to outperform from underperform and a price target of 2650p from 2400p.
     
     
     
  • Spain's current account for May saw a surplus of 2.57 billion euros, according to the Bank of Spain.
  • German economy minister Zypries says U.S. sanctions against Russia which could hit European countries are against international law, Reuters reports citing a newspaper interview.
     
    Zypreis says the European Commission should look into possible countermeasures against the U.S.
  • Italy's June adjusted jobless rate falls to 11.1 percent, better than forecast and down from May's 11.3 percent, according to ISTAT.
  • 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.
  • These are the top news stories for the hour:
     
    • HSBC shares rocket to the top of the Stoxx 600. Europe's biggest bank launches its third share buyback in a year, as its first half pretax profit tops 10 billion dollars. 
    • Cheers to that! Heineken reports a better than expected six percent rise in first half organic revenues, thanks to strong sales in Europe. The beermaker's CFO tells us the early summer weather has helped.
    • 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.
    • Miners lead gains at the open, following their Australian peers higher, after Chinese manufacturing data paints a picture of stable underlying growth.
       
  • The mining sector is the best performer on the Stoxx 600 this morning, with the sector up around 1.5 percent.
     
    This comes after China reported its manufacturing purchasing managers index at 51.4 for July.
     
    This was just short of market expectations of 51.6 and lower than June’s reading of 51.7, but still suggests further expansion. 
     
    China's National Bureau of Statistics attributed the slight slowdown to adverse weather conditions and flooding in parts of the country, adding that imports and exports have grown over the past month.
     
     
  • 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 before the end of 2017 and will take the total of share buybacks in the last 12 months to above five billion dollars.
     
    Laith Khalaf, Senior Analyst, Hargreaves Lansdown, says the bank has had a good start to the year and the market has reacted positively.
     
    Following a spectacular rise in its share price over the last year, HSBC now accounts for around 6% of the UK stock market, so almost anyone in the country with a pension has an interest in how the bank performs.
     
    While it may be listed in the U.K., HSBC is far from a U.K. operation. Three quarters of its profits come from Asia, which shows which side of the world HSBC’s bread is buttered on. This means the key driver of the bank’s performance will be the east, not the west, positioning the bank well to capitalise on the growth of developing Asian economies, though that of course comes with a risk warning attached.
     
     Shares in the bank are up 19 percent in the past 3 months.
     
     
  • 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. 
     
    Abe and Trump at the recent G20 summit
     
    Vice President Mike Pence has said all options are on the table when it comes to tackling the threat posed by North Korea. Speaking in Estonia during an Eastern European tour, the Vice President said China needed to step up. 
     
    Meanwhile, President Trump is threatening to end the payments made to insurance companies under Obamacare, if a repeal-and-replace bill is not passed. In a tweet posted on Saturday, the President expressed his willingness to end what he described as government 'bailouts' for insurance firms.
  • U.K. June mortgage approvals were 64,684, the lowest number since September 2016 and down from 65,109 in May, according to the Bank of England.
     
    Net mortgage lending was £4.1 billion, up from £3.9 billion in May. Consumer lending dipped to £5.6 billion from £5.7 billion.
  • Sterling turns lower against the dollar after the release of U.K. consumer credit and net lending data.
     
     
  • China's Jiangsu Province and Abu Dhabi ports have today announced a $300 million deal to invest in the Khalifa Industrial Zone Abu Dhabi.
     
    The agreement is the latest in a number of recent partnerships between China and Gulf countries aimed at deepening trade ties. It comes after reports that Abu Dhabi Ports is considering an initial public offering.
     
    Mohamed Juma Al Shamisi, CEO of Abu Dhabi Ports, says this is a big deal for the ports. He says the lease agreement is a milestone for Abu Dhabi Ports.
     
    The kinds of industries showcased will be a variety of mid-stream and downstream industries, according to the CEO.
     
    We expect to see the pharmaceutical industry, electronics industries and things related to aluminium, because in our area we have the biggest aluminium smelter in the world, Emirates Aluminium, and they could benefit from the feed stock we are offering.
     
     
  • China's foreign ministry has responded to criticism from President Trump over China's handling of North Korea.
     
    The ministry says resolving the North Korea issue needs the joint efforts of all parties. It says the North Korea nuclear issue did not arise because of China. The ministry adds that the China-U.S. trade relationship is "in essence mutually beneficial and win-win," according to Reuters reports.
     
    This comes after Trump also took to Twitter on Sunday to outline his disappointment in efforts from Beijing:
     
  • Heineken has posted a strong set of numbers in the first half of the year, boosted in part by warm weather in much of Europe. The Dutch brewer's operating profit beat expectations.
     
    Jonny Forsyth, global drinks analyst at Mintel, says the biggest issue for Heineken is people moving away from alcohol and drinkers are tending to drink less overall and favor premium beverages such as craft beet.
     
    You could argue that Heineken have been a little bit slow off the mark (in acquiring craft beers). Okay, they now control the whole of Lagunitas, which is a very strong craft brand, but if you look at their rival AB InBev, they own 10 craft brands in the U.S. alone.
     
    He thinks Heineken should have been more aggressive in their acquisitions.
     
    The beer maker's share price is flat today and up 7.8 percent over 3 months.
     
     
  • Euro area inflation data will be released at 10:00 a.m. BST. 
     
    The Royal Bank of Canada's FIC team predict inflation will remain unchanged at 1.3 percent year-on-year this month.
     
    July marks the beginning of the summer sales season, which normally sees a large seasonal effect in the clothing and footwear category, particularly in Southern Europe.
     
    In July last year clothing prices fell -14% m/m, but with the improving economic backdrop boosting confidence amongst retailers, there is a possibility that we may see less deep discounting this year, which could provide some upward support for the headline rate.
     
    That would also provide some support for core inflation; however, we attributed much of last month’s rise in the core rate to 1.1% to transitory factors and still expect the core rate to fall back this month.
  • Gains on the Stoxx 600 today are tapering. It was up 0.36 percent after the open but is now up around 0.2 percent.
     
    The basic resources sector is leading the market, up around 1.6 percent, due to Chinese PMI data indicating expansion in the manufacturing sector.
     
     
  • 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.
     
     
Powered by ScribbleLive Content Marketing Software Platform