On 28 July, 2015 – European markets rebounded on strong earnings and merger announcements

Global stock markets steadied Tuesday and shares in Europe and the US rebounded from Monday’s heavy losses.
United States
US markets advanced Tuesday as investors were encouraged by strong results from UPS, Ford and other big companies. The Dow Jones industrials were up 1.1%, the S&P gained 1.2% and the Nasdaq added 1.0%.
UPS advanced after the company saw profits jump from a year ago, helped by stronger business overseas. UPS said it earned US$1.23 billion or US$1.35 per share for the three months ended June 30. A year earlier it earned US$454 million or 49 US cents per share. Ford shares gained after the carmaker said profits jumped 44% in the second quarter, helped by higher global sales and higher prices for premium trucks and SUVs. The profit of 47 US cents per share easily beat expectations.
DuPont retreated after the company lowered its full year outlook, citing weaker sales in its farm products business. DuPont also cut its dividend, a rare move for any company. Energy shares rallied with oil and Freeport-McMoRan led raw material producers higher as copper climbed. Baidu declined after forecasting quarterly sales that were below analysts’ targets. Ingersoll-Rand declined after its earnings missed estimates. Eastman Chemical gained after reporting earnings that beat forecasts. Ecolab and Dow Chemical also advanced. Twitter said second quarter revenue grew 61%. The company posted revenue of US$502.4 million for the period ended June 30 compared with US$312.2 million a year earlier.
A report today showed home prices in 20 US cities rose at a slower pace in the year ended May. Separate data showed consumer confidence slumped in July by the most since August 2011 as Americans became less upbeat about prospects for the economy, employment and their finances.
Gold at the afternoon London fixing was down US$3.80 to US$1,096.20. Copper futures were up 2.15% to US$2.40. WTI spot crude was up 33 US cents to US$47.72. Dated Brent spot crude was down 27 US cents to US$53.10. The US dollar was up against the euro and yen. It was virtually unchanged against the Swiss franc. However, it declined against the pound and the Canadian and Australian dollars. The Dollar Index was up 0.2%. The yield on US Treasury 30 year bond was up 3 basis points to 2.96% while the yield on the 10 year note added 4 basis points to 2.25%.
Europe
Stocks rebounded Tuesday after receiving a boost from a number of encouraging corporate financial reports and a slew of M&A announcements. However, investors remained cautious ahead of the Federal Reserve’s announcement. The Fed will conclude its 2-day monetary policy meeting Wednesday and investors will be watching for clues to when the Fed will begin to increase its target rate. The FTSE was up 0.8%, the SMI gained 0.9%, the CAC added 1.0% and the DAX was 1.1% higher on the day.
China remains a concern as the recent sell-off in the country continued after seeing its worst daily performance in more than eight years during the Monday global market day. Investors continued to keep an eye on Greece, as talks in Athens on a third aid package for the country have reached day two. Officials hope to have a deal hammered out by August 11.
The Greek stock market is expected to reopen on Wednesday or Thursday after a one-month shutdown, with restrictions on trading by local investors for a short period of time according to the Greek securities regulator chairman. The Athens Stock Exchange (ASE) has been shut since June 29, after the government shut banks and imposed capital controls to prevent banks from collapsing in the face of mass withdrawals. On Tuesday, Greece gained the European Central Bank’s approval to reopen it.
The Deutsche Börse advanced after it unveiled job cuts and other cost cutting measures to boost its revenues by as much as a third by the end of 2018. Gerresheimer surged after reaching an agreement with Nemera Development to acquire 100% of the share capital of Centor US Holding. Orange gained after maintaining its full year earnings and dividend targets. Kering, whose brands include Gucci, Bottega Veneta and Yves Saint Laurent, advanced after posting first half earnings that beat estimates. Michelin tumbled after the tire maker reported a 9% increase in first half earnings. BP gained despite reporting a loss for its second quarter, hurt by lower prices and litigation settlement charges. Melrose surged on news that Honeywell is buying its Elster business. Hikma Pharmaceuticals was up after it agreed to acquire Roxane Laboratories and Boehringer Ingelheim Roxane from Germany’s Boehringer Ingelheim GmbH for about US$2.65 billion in cash and stock.
UK economic growth accelerated in the second quarter driven by an improvement in services output. The first estimate of gross domestic product grew 0.7% on the quarter and was up 2.6% from the same quarter a year ago.
Asia Pacific
Stocks were mostly lower Tuesday with the Shanghai Composite losing only 1.7% in volatile trading after plunging 8.5% Monday. It was, however, the third straight day of declines. The stabilization in the Chinese market helped other regional benchmarks settle down and trim early declines. The Nikkei closed 0.1% lower as did the Australian indices. The Hang Seng was up 0.6% but had traded between a decline of 0.9% and a gain of 2.4%.
A tentative calm returned to markets elsewhere across the Asia-Pacific region as investors turned their focus to regional earnings, the FOMC rate decision expected on Wednesday and the latest talks between Greece and its international creditors on a third bailout that had begun in Athens on Monday.
In Japan, construction equipment maker Komatsu, which has heavy exposure to the Chinese market, and Hitachi Construction Machinery retreated. A firmer yen weighed on exporters with Sony, Toyota Motor, Panasonic and Nissan Motor declining. Nintendo was down on news the gaming giant plans to foray into the health industry with a sleep monitoring device. Suntory Beverage & Food declined after denying media reports that its parent Suntory Holdings is considering listing its shares as early as 2018. Canon edged up after posting better than expected second quarter earnings. ANA Holdings advanced on a Nikkei report that it will likely report its best first quarter operating profit in seven years for the quarter ended June. Fast Retailing, Kansai Electric Power and Tokyo Electric Power all advanced on the day.
The Kospi was virtually unchanged after the country’s Prime Minister declared a “de facto end” to the outbreak of the Middle East Respiratory Virus. The Sensex retreated 0.4% as investors adopted a cautious stance ahead of the outcome of Federal Reserve’s two-day meeting on Wednesday and expiry of the July series futures and options (F&O) contracts due on Thursday.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Japan reports June retail sales. In the US, July pending home sales index is on tap. The FOMC announces its monetary policy decision.
*Note — all releases are listed in local time.