Market moving daily news roundup – events & news likely to move markets 31st July 2019
Company performance, economic and political events but especially market sentiment will always influence market movement, good or bad.
This post is ongoing…
Market moving news roundup, 31st July 2019
Summary
Asian markets fall
Asian markets see red. China’s manufacturing activity contracted in July. Japan’s NIKKEI index falls to close at: 21521. Samsung Electronics profits fall. Airbus report strong sales. Aston Martin reports big losses, shares slide. Next Plc Q2 full price sales up +4.0% on last year. Nationwide Building Society suggests UK housing market remains sluggish.
U.S. – China trade talks end
U.S. – China trade talks end without an agreement, talks scheduled to resume in early September in Washington. Trump’s tweets of yesterday probably didn’t help. Both sides, however, made independent statements saying the talks were constructive.
Federal Reserve rate cut decision due
All eyes now move to the Fed as interest rate cut talk comes back into focus. Is pressure from Trump likely to influence the Fed’s decision or will Fed likely cut rates because of global economic slowdown concerns, U.S. economic slowdown worries, a pre-emptive strike or for inflationary reasons? Fed rate decision due at 19:00 BST today (31st July 2019).
EU GDP
EU GDP growth slows. Metro bank shares fall. Computacenter’s shares up after trading update. Taylor Wimpy reports latest accounts but shares fall, special dividend announced for 2020. Intu shares plunge after it reported a £830m loss. Sterling steadies.
Apple back at $1 trillion valuation but Google has more cash
Apple is now worth $1 trillion again after shares climbed following third quarter results, but Alphabet (Google parent company) has more cash reserves.
U.S. labour costs slow – The Employment Cost Index rose 0.6% in the second quarter, which is the smallest rise since the fourth quarter of 2017. More good news for the Fed.
Lloyds PPI claims
Lloyds Banking Group Plc closed down 3.25% today, after setting aside yet more money to cover PPI claims.
Fed rate cut announced
The FOMC concluded its two day meeting with a 0.25% interest rate cut, pretty much as expected. The Fed chair spoke of inflationary pressures and implications of global developments.
The rate cut is seen as more of an insurance policy, not against what’s wrong with the economy now, but what could go wrong in the future.
Trump tweets his disdain with the Fed’s the decision.
Fed said
The Federal Reserve also left the door open for future cuts, saying it will, ‘act as appropriate to sustain the expansion’, as it continues to evaluate the incoming data.
The Fed also said, ‘it was part of an ongoing move to adjust to economic conditions though no guarantee of future cuts’. Fed Chairman Powell also said the rate move was a ‘midcycle adjustment,’ possibly hinting more cuts are not a guarantee.
Take from these points what you will. Door left ajar?
Dow falls
Markets took Fed chair Jerome Powell’s comments to be less dovish, prompting a sell-off on Wall Street. The Dow briefly dropped by around 470 points.
The Dow closed down at: 26864 – with futures falling further.
This is the first rate cut since December 2008 – since the financial crisis came to visit, eleven years ago.
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