U.S. Markets closed

Global Markets: Stocks rise as earning expectations beat China growth fears

People look at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018. REUTERS/Aly Song

By Tommy Wilkes

LONDON (Reuters) - European stock markets inched higher on Monday as expectations for a flurry of bumper corporate earnings and merger speculation outweighed fears about the escalating trade conflict between Beijing and Washington.

Data showing China's economy and factory production growth had slowed hurt Asian markets at the start of the week, as investors fret an escalating trade battle between China and the United States may soon start to hurt the real economy.

But European shares mostly opened higher, although the gains were marginal. Germany's DAX was the biggest riser, up half a percent before giving up most of those gains. France's CAC 40 rose 0.16 percent and the pan-European STOXX 600 0.23 percent.

Basic resources and autos were among the worst-performing sectors. Both rely on solid Chinese growth, but merger speculation concerning industrials helped outweigh the Chinese data.

The MSCI world equity index, which tracks shares in 47 countries, was flat on the day.

"The [Chinese] numbers were not way out of line and slower activity numbers were kind of priced in," said Ian Williams, a strategist at Peel Hunt.

"Despite all the noise around China and Trump, you are going to get a real indication of macroeconomic health much more from company management. I suspect that’s what the focus will be for the next two to three weeks."

U.S. banks kicked off the earnings season on Friday and this week sees dozens of European companies report their second-quarter numbers.

JP Morgan equity strategist Mislav Matejka said earnings results in both the U.S. and Europe would likely be strong, beating expectations by a good 4-5 percent.

After strong profits from industrial and energy firms underpinned gains on Wall Street on Friday, the S&P 500 e-mini futures rose 0.1 percent on Monday.

The data out of China showed its economy grew 6.7 percent in the second quarter of 2018, cooling from the 6.8 percent growth registered in each of the previous three quarters.

The gross domestic product figures were in line with market expectations, but the new data also showed slower-than-expected growth in China's industrial output, pointing to slowing momentum and prompting some analysts to call for stronger government measures to support growth.

Taken together, the data show an economy continuing to slow under the influence of a multi-year crackdown on excessive financial risk, even as trade war headwinds gather.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.36 percent.

"I would be incredulous if China's GDP growth could continue at the level it's been historically," said Jim McCafferty, head of equity research, Asia ex-Japan at Nomura. "So I think there's always been an anticipation of some gradual slowdown, but the slowdown of the growth rate is probably less than the market really wants to believe."

Moves in currency markets were muted, with most major currencies stuck in a holding pattern.

Both the dollar and the yen, which tend to outperform when trade war worries flare as investors rush to buy assets perceived to be safer, were down on the day, suggesting investors were not too worried about the Chinese data.

China's yuan weakened past the key 6.7 to the dollar level following Monday's data release, but later recovered. In the offshore market, it rose 0.2 percent in early European trading to 6.6989 yuan per dollar.

In commodity markets U.S. crude fell 0.76 percent at $70.47 a barrel, pushed lower by easing concerns about supply disruptions and Libyan ports reopening. Brent crude fell 0.36 percent at $75.06 per barrel.

Gold prices recovered from a seven-month low on a weaker dollar.


(Additional reporting by Andrew Galbraith in Shanghai and Helen Reid in London)

  • Why Marijuana Stocks Canopy Growth, Cronos Group, and Tilray Crushed It Today
    Business
    Motley Fool

    Why Marijuana Stocks Canopy Growth, Cronos Group, and Tilray Crushed It Today

    The three Canadian marijuana stocks that currently trade on major U.S. stock exchanges enjoyed big gains on Monday. Shares of Canopy Growth (NYSE: CGC) were up 14% as of 3:48 p.m. EDT, while Cronos Group (NASDAQ: CRON) and Tilray (NASDAQ: TLRY) jumped 18.9% and 12.1%, respectively. Two of the three marijuana growers reported new developments earlier in the day.

  • These are the bad things about early retirement that no one talks about
    News
    MarketWatch

    These are the bad things about early retirement that no one talks about

    For all the glamour of living an early retirement lifestyle, there are plenty of negatives I’ve come to discover since I permanently left my job in 2012. As a result, you’re repeatedly forced to will yourself into action.

  • Brits Are All Making the Same Joke About the New Royal Baby
    News
    Time

    Brits Are All Making the Same Joke About the New Royal Baby

    Meghan Markle, the Duchess of Sussex, is expecting her first child with Prince Harry. The news, announced Monday morning by Kensington Palace, has already been greeted by hundreds of messages of congratulations for the royal couple on social media. The U.K. is set to leave the European Union on March 29, exactly two years after Prime Minister Theresa May started the formal process for doing so by invoking Article 50 of the Lisbon Treaty.

  • Sears bankruptcy could make these 5 big companies multi-million-dollar losers
    Finance
    Yahoo Finance

    Sears bankruptcy could make these 5 big companies multi-million-dollar losers

    Being an unsecured creditor of Sears (SHLD) right now is not a good place to be. The 125-year old former retail icon filed for chapter 11 bankruptcy protection early on Monday, crippled from years of losses and mounting debt. Sears plans to close about

  • Walmart Set to Pay $65 Million Over Making Cashiers Stand
    Finance
    Fortune

    Walmart Set to Pay $65 Million Over Making Cashiers Stand

    Walmart could soon pay $65 million in a 9-year-old class action lawsuit over its lack of seating for cashiers. Nisha Brown brought the suit in 2009, according to the Los Angeles Times, and 100,000 current and former California Walmart cashiers are eligible to receive part of the payout. Walmart, however, has maintained that the nature of the work as a cashier does not permit cashiers to sit down.

  • Why New Age Beverage Corp. Stock Popped Today
    Business
    Motley Fool

    Why New Age Beverage Corp. Stock Popped Today

    Shares of New Age Beverage Corp. (NASDAQ: NBEV) were climbing again today, riding a surge on marijuana stocks as growers like Tilray, Cronos Group, and Canopy Growth all jumped by double digits. Along with the bullish sentiment in the industry, a number of other factors seemed to be driving New Age shares higher, including the recent hiring of a new CFO, the upcoming legalization of recreational marijuana in Canada on Wednesday, and the market's reaction to its launch last week of a new line of beverages infused with cannabidiol (CBD). On Friday, New Age named Gregory Gould as its new CFO, a notable move as Gould brings experience from the pharmaceutical industry, which should help the beverage company as it moves into CBD products.

  • Alphabet Earnings: Mark Your Calendar
    Business
    Motley Fool

    Alphabet Earnings: Mark Your Calendar

    As companies line up to report their latest quarterly results, one company investors should watch this time around is Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). As one of the biggest publicly traded companies in the world, the parent company of Google isn't the hot stock it was in recent years. Alphabet shares have gained just 10% over the past 12 months, significantly underperforming peers like Apple and Microsoft that have seen their stocks rise about 40% over the same time frame.

  • Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon
    World
    Bloomberg

    Saudi Arabia Breaks 45-Year Taboo With Veiled Threat to Use Oil as a Weapon

    While few think that Saudi Arabia is prepared to follow through, even the suggestion of using oil as a weapon undermines Riyadh’s long-standing effort to project itself as a force for economic stability. The anxieties were exacerbated by an opinion piece penned by Turki Al Dakhil, who heads the state-owned Arabiya news network and is close to the Royal Court, in which he openly talked about using oil as a weapon.

  • KMI, EPD, ETE, and OKE: Key Midstream Rating Updates
    Business
    Market Realist

    KMI, EPD, ETE, and OKE: Key Midstream Rating Updates

    MLPs Fell Last Week, Outperformed the Broader Markets (Continued from Prior Part) Credit Suisse updated its ratings Credit Suisse updated its ratings on several MLP and midstream stocks last week. Credit Suisse started coverage on Plains All American

  • Many U.S. mall owners say good riddance to Sears
    Finance
    Reuters

    Many U.S. mall owners say good riddance to Sears

    The real estate investment trusts that own the malls and shopping centers where many Sears stores are anchor tenants have waited years for the retailer's demise to renovate the sites and boost rent, although redevelopment costs may strain some plans. Most large U.S. malls are controlled by REITs. In recent years, the REITs have cut their exposure to Sears Holdings Corp, which filed for Chapter 11 bankruptcy on Monday.

  • Marijuana stocks to watch: Canopy Growth is the cannabis business’s $4 billion gorilla
    Business
    MarketWatch

    Marijuana stocks to watch: Canopy Growth is the cannabis business’s $4 billion gorilla

    The following article is part of a package of stories that MarketWatch is publishing to mark the start of full legalization of cannabis for adult use in Canada on Wednesday. Smith Falls, Ontario–based Canopy Growth Corp. made headlines and drove cannabis stocks to new heights over the summer when it announced that Corona brewer Constellation Brands Inc. was going to invest an additional $4 billion in the company. Billed by both companies as a strategic partnership, the additional $4 billion investment adds to the 9.9% stake that Constellation bought in October of last year and sets the company up to either be bought outright by Constellation — via warrants that could increase its stake to more than 50% — or continue to work with the beverage company to create a range of consumer-focused cannabis products that may one day appear in markets in dozens of countries.

  • Finance
    Bloomberg

    Tesla Skeptic Surprised by How Much He Enjoyed the Model 3

    In a broader note about positive electric-car momentum, Jonas said he observed workers at Tesla’s lone auto plant in Fremont, California, who were “extremely busy cranking out Model 3s” for delivery in the U.S. He also drove the dual-motor performance version of the vehicle, which he sees as having better value-for-performance than the Model S sedan. “Frankly, our enjoyment of the high-spec version of the Model 3 took us by surprise,” Jonas said, adding that it’s “hard to say how much this matters.

  • Finance
    TheStreet.com

    Monday Madness: Is Nvidia a Hit or Miss?

    TheStreet's Julie Iannuzzi covered Jim Cramer's investing boot camp. Nvidia (NVDA - Get Report) has long been a favorite of TheStreet's founder and Action Alerts Plus Portfolio Manager Jim Cramer, but he told a packed audience Saturday at his Boot Camp for Investors in New York why his charitable trust recently sold out of the stock.

  • Harris, L3 merging to form $34M defense giant
    Business
    Yahoo Finance Video

    Harris, L3 merging to form $34M defense giant

    Harris Corporation and L3 Technologies are joining together in a ‘merger of equals’ to create a $34M defense giant. Yahoo Finance’s Alexis Christoforous, Brian Cheung, Ethan Wolff-Mann and Melody Hahm dig into what it means for the defense industry.

  • Analysts’ Targets on Ford Stock Drop as Market Sell-Off Continues
    Business
    Market Realist

    Analysts’ Targets on Ford Stock Drop as Market Sell-Off Continues

    According to Reuters, ~19.0% of the 21 analysts covering Ford Motor Company (F) stock gave it a “buy” recommendation on October 11. On October 11, Ford’s consensus 12-month target price was $10.59. This target price reflected an ~20.2% upside potential from its market price of $8.81.

  • After years of wasting time in meetings, 3 former Googlers decided to do things differently at their new startup
    Business
    Business Insider

    After years of wasting time in meetings, 3 former Googlers decided to do things differently at their new startup

    The executives of the startup Beeswax, all former Google execs, say they've learned how to keep meetings streamlined and efficient. The three founders of the ad-tech startup Beeswax seem to get that. "We're all thoughtful about not having a proliferation of meetings, because one thing we all felt in our previous careers is that there can be lots of redundant meetings," Shamim Samadi, Beeswax's chief product officer, told Business Insider.

  • As Cannabis D-Day Approaches, Winners and Losers Set to Emerge
    Business
    Bloomberg

    As Cannabis D-Day Approaches, Winners and Losers Set to Emerge

    After Canada legalizes recreational marijuana on Oct. 17, it will only take a quarter or two for clear winners and losers to emerge, according to investors and analysts who follow the sector. “These have all been concept stocks and they’re going to actually have to be real companies in another few months, which I think a lot of guys are terrified about,” said Greg Taylor, who manages the Purpose Marijuana Opportunities Fund. Taylor prefers CannTrust Holdings Inc., Hexo Corp. and Organigram Holdings Inc., which he says trade at a “more realistic valuation” than some of their bigger peers.

  • Business
    Benzinga

    Netflix Q3 Earnings Preview: A Subscriber Numbers Story

    Netflix's earnings reports are always high-profile given the stock's strong gains over the years, Sweeney said on Bloomberg TV Friday. Netflix guided for the addition of 5 million net subscribers in the quarter, and this figure is reasonable to match if not beat, Sweeney said. Netflix is spending more than $8 billion in programming this year, a number that's "dramatically" higher than last year and expected to move even higher in 2019, Sweeney said.

  • This Is the Average American's Salary. How Does Yours Compare?
    Business
    Motley Fool

    This Is the Average American's Salary. How Does Yours Compare?

    In an age of oversharing, many of us are remarkably tight-lipped when it comes to talking salary. But in reality, knowing where you stand can help you determine whether you're in a good place or whether you should be taking steps to boost your earnings

  • Bank of America's lagging loan growth overshadows profit gains
    Business
    Reuters

    Bank of America's lagging loan growth overshadows profit gains

    The No. 2 U.S. bank's profit rose 35 percent, helped by cost controls, but investors focused on the underlying businesses. "It was definitely a surprise when some of the other banks had better-than-expected loan growth," said R.J. Grant, head of trading at Keefe, Bruyette & Woods. Bank of America's total loan book grew 0.3 percent to $930 billion during the third quarter compared with the year-ago period.

  • 2 Hot Marijuana Stocks Listing Soon on U.S. Exchanges -- Are They Buys?
    Business
    Motley Fool

    2 Hot Marijuana Stocks Listing Soon on U.S. Exchanges -- Are They Buys?

    Two marijuana stocks that are currently listed on Canadian stock exchanges soon plan also to list on U.S. stock exchanges. Aurora Cannabis (NASDAQOTH: ACBFF) (TSX: ACB) expects to trade on the New York Stock Exchange (NYSE) by the end of October and Aleafia Health (NASDAQOTH: ALEAF) should soon trade on the Nasdaq stock exchange. Are these hot marijuana stocks that are coming soon to U.S. stock exchanges smart picks to buy now?

  • If You're Retired, Consider Buying These 3 Stocks
    Business
    Motley Fool

    If You're Retired, Consider Buying These 3 Stocks

    Magellan Midstream Partners, L.P. (NYSE: MMP), PPL Corporation (NYSE: PPL), and ExxonMobil Corporation (NYSE: XOM) are all high yielding dividend payers with long histories of increasing their dividends on a regular basis. Magellan has long been one of the most conservative midstream partnerships, focusing on self-funding as much of its growth as it can to avoid dilutive unit sales -- a model which peer and industry bellwether Enterprise Products Partners L.P. is starting to mimic. This conservative approach, however, doesn't mean the company is skimping on growth.

  • Here’s How Prince Harry and Meghan Markle’s Baby Will Change the Line Of Succession
    News
    Time

    Here’s How Prince Harry and Meghan Markle’s Baby Will Change the Line Of Succession

    Prince Harry and Meghan Markle are expecting a baby in spring 2019, Kensington Palace announced Monday morning. Harry and Meghan married in May, becoming the Duke and Duchess of Sussex. Now, the question is where the new arrival will fit into the line of succession of the British royal family.

  • Warren Buffett predicted the fall of Eddie Lampert and Sears over 10 years ago (SHLD, BRK.A, BRK.B)
    Finance
    Business Insider

    Warren Buffett predicted the fall of Eddie Lampert and Sears over 10 years ago (SHLD, BRK.A, BRK.B)

    Sears filed for Chapter 11 bankruptcy early Monday, the culmination of a downward spiral. CEO Eddie Lampert, once called the "next Warren Buffett," will also step down. Incidentally, Buffett predicted the retailer's and Lampert's downfall in 2005.