Market update: Germany signalling recovery as manufacturing returns to growth – 24.07.2013

July 24, 2013
|In Global Round Ups
|By Jesmond Mizzi Financial Advisors

Source: Henderson Global Investors

US equities finished mixed on Tuesday (S&P 500 -0.2%, Dow Jones +0.1%, Nasdaq -0.6%). While US house prices continued to advance (+0.7% in May) they missed analyst expectations (+0.8%), and April’s figures were revised lower. Additionally, the Federal Reserve of Richmond’s June manufacturing activity gauge also disappointed, coming in well below market forecasts. Apple reported quarterly earnings and guidance that were largely as expected. Sales for the quarter totalled $35.3billion, while profit was $7.47 per share. Overall, iPhone shipments increased but iPad sales were lower.

Overnight, HSBC’s China initial manufacturing purchasing managers’ index (PMI) reading was disappointing at 47.7 versus expectations of 48.2. Meanwhile, Japanese exports continued to grow in June, up 7.4% year-on-year. The Nikkei shed 0.3% and the Shanghai Composite lost 0.5%.

This morning the FTSE Eurofirst 300 and FTSE 100 are both up 0.6%. European investor sentiment is being lifted by news that Germany’s manufacturing sector has returned to growth. The Markit preliminary composite PMI for July rose to a five-month high of 52.8 (a reading above 50 indicates expansion). French PMIs were also upbeat with the similar gauge for both manufacturing and services sectors moving closer to expansion territory.