* European shares hit record high, up 0.3%
* Post Fed, corporate earnings in big focus
* Airbus, Danone and Nokia rally after results
* AB Inbev punished after mixed numbers
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EARNINGS NUDGE STOXX UP TO NEW HISTORIC PEAK (0742 GMT)
With the Fed meeting out of the way, investors in European
stocks can now fully focus on the Q2 earning updates, and
soundings there are quite positive.
That lifted the STOXX 600 benchmark to a new record peak,
last up 0.3%, boosted by solid results from heavyweights like
Airbus, Danone, Shell and Nokia.
Disappointments though weren't missing. The most notable
came from AB Inbev, down 6%, which was punished hard after the
world's largest brewer reported a mixed set of numbers.
Nestle raised its guidance but that didn't impress much,
suggesting markets have become more demanding especially with
stocks that - much like the food giant - are at record levels.
Credit Suisse was another weak spot, down 4% after its Q2
earnings fell sharply, dragged down by the Archegos hit.
Here's your opening snapshot:
(Danilo Masoni)
*****
A STEP CLOSER TO FED TAPER, QUELLE SURPRISE! (0706 GMT)
The main reveal from the Fed's statement was that it was
inching closer to a policy normalisation announcement and that
came as no surprise to anyone.
Dovish remarks by Chair Jerome Powell in the news conference
later did the rest, dragging the dollar lower and sending
Treasury yields sliding. Focus will move now to macro data ahead
of the Fed's end-August Jackson Hole summit, where many expect
the taper announcement will come.
The direction of travel is clear and the realisation that
peak monetary stimulus is behind us is keeping equity markets
from deriving too much cheer from the stellar earnings season.
The reaction to Big Tech results has been tepid and in
Europe, the impact of earnings looks negatively skewed -- the
market is punishing misses more than it is rewarding beats.
The string of strong numbers today from the likes of Airbus,
Volkswagen and Nokia corroborate the view that Europe Inc is set
for a record 125% jump in Q2 earnings. Airbus and Nokia are
tipped to open 3-5% higher.
But, overall, futures point to a muted start, even though
the pan-regional STOXX index is firmly anchored near record
highs as investors await the recovery to run its full course.
A discordant note came from Credit Suisse, which posted a
78% profit slide, reflecting the Archegos and Greensill hits.
Elsewhere, a slowdown warning from Facebook could dent risk
appetite on Wall Street ahead of Amazon earnings. In Asia
however, angst over Beijing's regulatory crackdown is easing,
setting Chinese stocks for their biggest daily gain since May.
Thank those returning to buy the dip.
Finally, Samsung -- unsurprisingly -- forecast strong
demand for memory chips in the second half and a recovery in the
mobile market to 2019 levels. Its shares though were
unimpressed.
Key developments that should provide more direction to
markets Thursday:
- Airbus raises forecasts after strong first half
- Volkswagen lifts margin outlook again after record profit
- Nestle raises guidance after coffee drinkers boost its
first half
- Credit Suisse 78% Q2 net profit slide shows Archegos hit
- German unemployment/preliminamry CPI
- BOE consumer credit
- Euro zone sentiment indexes
- U.S. Q2 GDP/initial jobless claims
- Bond auctions: U.S. 4-week t-bills; 7-year notes
- U.S. earnings: Amazon, Alliance Bernstein, Merck, Comcast,
T Rowe Price, MasterCard
(Danilo Masoni)
*****
EUROPE EYES MUTED START POST-FED (0619 GMT)
European shares look set for a muted start this morning with
the Fed meeting proving little surprises and the focus shifting
to a wave of earnings updates.
Numbers from the likes of Airbus, Volkswagen and AB InBev,
just to name a few, were good looking but futures on top country
indices were last trading between a rise and a fall of 0.1%.
In Asia shares managed a modest bounce on Thursday though
the mood was fragile as investors waited to see if Beijing could
stem the recent rout in Chinese shares.
(Danilo Masoni)
*****
