Equity Brief Earnings step over low expectations

Stock market snapshot as of [23/7/2019 2:50 PM]

European stock market sentiment builds strongly on Monday’s improvement with the best day for the Germany’s DAX, and the broad STOXX 600 since mid-June
They rose almost 2% and above 1% respectively earlier as the latest batch of earnings topped low expectations
Trading is also garnished by relief for the continent’s most battered sectors. There’s also speculation that reads better for Europe’s beleaguered banks, suggesting certain exemptions to deposit rates that will almost certainly turn more negative in coming months
Wall Street is also on the front foot after a solid session a day before. Again, a reasonable slate of earnings helps, as does sparse news on potential U.S.-China trade talks. Such indications as there are leave the door open for the resumption of high-level face-to-face negotiations in coming months

Corporate News

UBS and Santander underpin the bank sector with better than forecast quarterly net income. Their 1% and 3.3% respective stock price gains helped propel the key European bank index up 1.7% towards the U.S. open. That’s despite the Swiss lender’s crucial wealth business seeing outflows, prompting a warning about the global economy. It’s possible that caution may cap the sector rally into the close. Still, the Spanish group noted Americas as a bright spot, whilst confirming more sluggish going in Europe
Ams, a supplier of sensors to Apple, has its best day since October, rising 10% at one point after pacing profit expectations. Reaction weakened later after the highly-levered Swiss group reaffirmed interest in buying another Apple contractor, Osram, for €3.7bn, even though the German firm said it accepted a €3.4bn private equity offer
Germany’s Daimler and Continental, the latter a rival of auto parts maker Faurecia SA, gave Europe’s auto sector a break from the year’s malaise. China’s BAIC will buy a 5% stake in DAI. The German components group (whose shares are
down 30% this year) failed to surprise on the downside with a lowered outlook. Its French counterpart maintained 2019 guidance
The earnings cheer largely continues on Wall Street with Stanley Black & Decker, UTX, Coca Cola, Biogen and Lockheed Martin. KO: set for a firm session after topping estimates across key metrics; UTX crushed headline estimates, but mostly tilts higher on the latest in a string of guidance upgrades; biotech BIIB: profit surged 72%, enabling a 2019 upgrade; defence firm LMT: backlog ballooned to $137bn, up $3.5bn and it also raises profit expectations
Apple-Intel talks are being reported, as the iPhone maker seeks solutions for a gap in its modem offer (it hasn’t had a new one for years) and the chip maker has been vocal about exiting non-core businesses. INTC and AAPL rise a little, setting a backstop for the day for all three major U.S. index groups to build on

Upcoming corporate highlights

BMO: before market open AMC: after market close NTS: no time specified

Upcoming economic highlights

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.