On 04 August, 2015 – European markets slid on mixed earnings reports and continued struggles in Greece

Stocks were mixed globally as investors worried about China’s growth, earnings and a possible Federal Reserve interest rate increase in September.
United States
Stocks moved between small gains and losses on Tuesday as investors were focused on the latest earnings and deal news. Investors also worried about a rise in interest rates. The Dow Jones industrials were down 0.3% while both the S&P and Nasdaq lost 0.2%. Concerns about interest rates came from Atlanta Federal Reserve President Dennis Lockhart (and voting FOMC member) who told the Wall Street Journal that September may be the right time for Fed to lift interest rates.
Allstate slumped after the insurance company reported earnings that missed expectations. The company said its earnings dropped because of more frequent and more severe auto accidents.
The pharmaceutical company Baxalta jumped after its rival Shire agreed to buy the company for about US$30 billion. Apple fell sharply for a second day. Apple’s shares hit their lowest in over six months. The stock was the biggest drag on the three major US indexes. According to traders, there was no clear trigger for Apple’s selloff but worries over a slowdown in China and skepticism over demand for iPhones were contributing to pressure.
American International Group fell after the insurer’s underwriting income fell in almost all of its units. Home and auto insurer Allstate retreated after its profit missed expectations. CVS Health declined after narrowing its earnings forecast. Regeneron and Sprint gained after earnings exceeded forecasts. Baxalta surged after Shire offered to buy the company for about US$30 billion. Netflix jumped on a broker upgrade. Coach advanced after the handbag maker’s new products helped fourth quarter earnings top expectations. Priceline Group gained ahead of its earnings report Wednesday.
Factory orders were up 1.8% in June from the month before, rebounding from two months of declines.
Gold at the afternoon London fixing slipped US$1.25 to US$1,090.65. Copper futures were up 0.1% to US$2.35. WTI spot crude was up 65 US cents to US$45.82. Dated Brent spot crude was up 60 US cents to US$50.12. The US dollar was up against the euro, yen, pound, pound and the Canadian dollar. However, it declined against the Australian dollar. The Dollar Index was up 0.6%. The yield on US Treasury 30 year bond was up 5 basis points to 2.90% while the yield on the 10 year note added 7 basis points to 2.22%.
Europe
Stocks were mostly lower Tuesday thanks to mixed corporate earnings reports and the continued struggles of the Greek stock market. The Greek market dropped by over 16% yesterday after reopening following a five week closure. The Greek market fell by another 1.2% Tuesday with banks hitting their lower limit. The FTSE was virtually unchanged while the CAC slipped 0.2%. Both the DAX and SMI added 0.1%.
BMW dropped after it reaffirmed its full year targets after posting a drop in second quarter profit on slowing China sales. Deutsche Bank declined — US federal prosecutors are investigating billions of dollars of trades the lender made on behalf of Russian clients as recently as this year, Continental climbed after reporting increased profit and sales for the second quarter and first half and raised its earnings forecast for fiscal year 2015 despite a challenging environment. Axel Springer surged after the company reported first half adjusted earnings per share of €1.09 compared to €1.12. AXA retreated after the insurer posted a 2% increase in first half profit, aided by higher life insurance earnings in the US and France.
Crédit Agricole plunged despite reporting a significant increase in second-quarter earnings. The bank has failed to obtain approval from regulators for a planned reorganization. Standard Life tumbled after the Scots insurer reported a 15% drop in its UK profits for the six months to June 30. Shire sank after it offered to acquire Baxalta for US$30 billion. Travis Perkins dropped despite reporting that its adjusted profit before tax for the first half was £167 million while it totaled £162 million pounds in the prior year. Meggitt increased after it said its profit before tax for the first half of the year jumped 18% to £115.8 million from £98.2 million reported a year ago.
Asia Pacific
Stocks here were mostly lower Tuesday even as Chinese shares responded positively to new restrictions on short selling. Seoul shares rebounded on bargain hunting and the Australian market closed firmly in positive territory on upbeat trade and retail sales data while the markets elsewhere followed US stocks lower in reaction to weak US data and a commodities rout.
The Shanghai Composite jumped 3.7% after authorities clamped down on short selling of shares and the official China Securities Journal said that state backed margin lender China Securities Finance Corp has injected 200 billion yuan (US$32.21 billion) since July into five newly launched mutual funds. The Hang Seng was virtually unchanged.
The Nikkei was 0.1% lower as investors remained wary about China’s economic woes. Technology stocks ended mostly lower after Apple shares moved into correction territory during the Monday global market day. TDK, Taiyo Yuden, Advantest and Tokyo Electron retreated. Construction equipment maker Komatsu declined as did Hitachi Construction Machinery. Toyota Motor declined before unveiling its first quarter results after the market close. Uniqlo clothing chain operator Fast Retailing advanced following its newly extended partnership with Walt Disney. Suzuki Motor climbed after activist US fund Third Point disclosed it had acquired a stake in the carmaker.
Both the S&P/ASX and All Ordinaries added 0.3% in response to upbeat trade and retail sales data. Australia’s June trade deficit widened to A$2.93 billion from A$2.68 billion in May. Expectations were for a A$3.0 billion deficit. Retail sales grew 0.7% in June, the biggest increase in four months and up from May’s 0.4% growth. As expected, the Reserve Bank of Australia kept its cash rate at 2.0% where it has been since May.
The Kospi was up 1.0% on bargain hunting after falling sharply the previous day to hit a near five month low. The Sensex retreated 0.4% after the Reserve Bank of India (RBI) left its key policy rates unchanged at 7.25% in a widely expected decision. The India Meteorology Department (IMD) stuck to its deficient monsoon forecast of 88% of the long period average for the year, keeping investors somewhat cautious.
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, China, India, France, Germany and the Eurozone post July composite PMIs. The UK and US report July services PMIs. The Eurozone also reports June retail sales. In the US, June international trade, July ADP private employment and ISM nonmanufacturing survey will be released. Canada also posts June international trade data.
*Note — all releases are listed in local time.