On 20 July, 2016 – Most stock indices advanced Wednesday

Positive earnings result helped to boost investor demand for risk assets.
United States
Both the Dow Jones industrials and the S&P recorded fresh record closing highs thanks to upbeat corporate earnings. The Dow was up 0.2 percent, the S&P added 0.4 percent and the Nasdaq closed 1.1 percent higher. The technology sector gained the most while the healthcare sector also logged a solid advance. Meanwhile, utilities and consumer staples, both considered safe havens, posted the biggest declines.
Microsoft rallied after it said it returned to a profit in its fiscal fourth quarter after reporting a loss a year earlier. Its earnings topped expectations, and the company credited momentum in its cloud-computing business. Microsoft’s surge helped the technology sector rise much more than the rest of the market. Intuitive Surgical gained after the company’s revenue and earnings per share topped analysts’ expectations. Shares of Intuitive, a maker of robot-assisted surgical systems, also advanced.
Intel reported a 2.6 percent increase in quarterly revenue, boosted by strong sales of its microchips that power data centers and Internet-connected devices. The company said its net income declined to $1.33 billion or 27 cents per share, in the second quarter ended July 2, from $2.71 billion or 55 cents per share a year earlier. Profit for the quarter was hit by a one-time charge of $1.41 billion related to its plan to cut 12,000 jobs. Net revenue rose to $13.53 billion from $13.20 billion.
American Express reported a 37 percent increase in quarterly profit, driven by higher spending by its customers and lower expenses due to a sale of its loan portfolio. Net income attributable to common shareholders rose to $2.02 billion or $2.10 per share for the second quarter ended June 30 from $1.47 billion or $1.42 per share a year earlier. Total revenue net of interest expense declined 1 percent to $8.24 billion.
EBay reported a 5.7 percent increase in quarterly revenue as its efforts to revamp its online marketplace start to pay off. The company’s net income rose to $435 million or 38 cents per share in the second quarter ended June 30 from $83 million or 7 cents per share a year earlier. Revenue rose to $2.23 billion from $2.11 billion.
These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was down US$15.00 to US$1,315.90. Copper futures were down 0.8 percent to US$2.25. WTI spot crude was up 29 US cents to US$44.94. Dated Brent spot crude was up 34 US cents to US$47.00. The US dollar was up against the yen, Swiss franc and the Canadian and Australian dollars. However, it declined against the pound and was virtually unchanged against the euro. The Dollar Index was virtually unchanged. The yields on both the US Treasury 30 year bond and 10 year note were up 3 basis points to 2.30 percent and 1.58 percent respectively.
Europe
Stocks advanced Wednesday thanks to solid financial reports from companies like SAP, Lonza and ASML Holding, along with Microsoft and Morgan Stanley in the US. However, mining stocks lagged behind following some disappointing production updates. The FTSE was up 0.5 percent, the DAX gained 1.6 percent and the CAC and SMI both added 1.1 percent.
According to the Bank of England, UK businesses do not expect any major impact from the “Brexit” in the near term, though uncertainty has risen significantly. The report — Agents’ summary of business conditions — said that a majority of firms spoken with do not expect a near-term impact on their investment or staff hiring plans. However, about a third of the contacts thought there would be some negative impact on those plans over the next 12 months.
SAP climbed after reporting better-than-expected quarterly operating profit and affirming its full-year guidance. Infineon Technologies advanced after Microsoft’s quarterly earnings topped expectations. Bayer was lower after Monsanto rejected a second takeover bid from the German company, calling the $64 billion cash offer financially inadequate. Volkswagen advanced after the company announced that operating results before special items for the first six months of 2016 totaled €7.5 billion.
In London, Johnson Matthey gained after announcing a solid set of quarterly results and reaffirming its fiscal 2017 guidance. BHP Billiton retreated after falling short of its full-year iron ore production targets. Anglo American declined after the miner cut its annual target for copper output and also trimmed its target for Brazilian iron ore. Fresnillo was down despite raising its full-year gold production forecast. Insurance company Admiral advanced after a broker upgrade. The upgrade also helped to lift shares in Legal & General as well.
The UK ILO unemployment rate fell to the lowest level in more than 10 years in the three months to May, reflecting strength in the labor market ahead of the ‘Brexit’ vote. The unemployment rate slipped to 4.9 percent in the three months to May from 5.0 percent for the previous three months.
Asia Pacific
Shares in the Asia Pacific were mixed — another fall in oil prices overnight and the IMF’s modest downgrade of its forecasts for global growth on Tuesday kept investors on edge.
The Shanghai Composite was 0.3 percent lower as investors pondered the possibility of further policy stimulus in light of mixed readings on the economic front. The Hang Seng however, added 1.0 percent.
The Nikkei retreated 0.2 percent as the yen fluctuated after touching a one-month low against the US dollar overnight. Losses remained capped, however, amid expectations the Bank of Japan would ease its monetary policy at its July 28 to 29 meeting. Nintendo and Bank of Kyoto, the fifth-biggest Nintendo investor, both tumbled on reports of delay for Pokemon GO’s introduction in Japan. JFE Holdings and Mitsui Mining & Smelting declined. Mitsubishi UFJ Financial also was lower. McDonald’s Japan soared on a Wall Street Journal report it will sponsor Pokemon GO in Japan.
The S&P/ASX and All Ordinaries were up 0.7 percent and 0.6 percent respectively. The big four banks and investment bank Macquarie Group advanced along with insurer QBE. Retailers Wesfarmers and Woolworths rose about 1.4 percent each to extend recent gains. Healthcare stocks such as Ramsay Health Care and Sirtex Medical jumped after the Australian dollar fell more than 1 percent on Tuesday. BHP Billiton tumbled after falling short of its full-year iron ore production targets. South32, Rio Tinto and Fortescue Metals Group dropped after iron ore prices fell for a fifth session in a row.
The Kospi slipped 0.1 percent with financials, steelmakers and telecom stocks pacing declines. The Sensex added 0.5 percent amid increased buying by foreign investors, as monsoon rains covered the whole county and Bihar Chief Minister and Janata Dal (United) chief Nitish Kumar pledged his support for the Goods and Services Tax (GST) Bill.
Looking forward
UK releases June retail sales and May public sector finances. The European Central Bank publishes its monetary policy decision. In the US, July Philadelphia Fed business outlook survey and May FHFA house price index will be posted along with the weekly jobless claims, Fed balance sheet and money supply.
Global Stock Markets

*Note — all releases are listed in local time.

Source: Fidelity

Fidelity disclaimer:

The objective of this page is to present users with objective news, information, data and guidance on personal finance topics drawn from a diverse collection of sources including affiliated and non-affiliated financial services publications. Content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or investment by any Fidelity entity or any third-party.

Jesmond Mizzi Financial Advisors Disclaimer:

This article, does not intend to give investment advice and the contents therein should not be construed as such. Jesmond Mizzi Financial Advisors Limited is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]