Markets Overview

Asia saw a mix with the Greater Chinese markets making scant moves either way following yesterday’s strong gains.  The new mortgage reference rate (LPR) was set at 4.25% slightly below the recent 4.31% in the market.   Most of the rest of the major indices advance.   S. Korea had a solid day with Japan approving some additional tech products for export to the country.  This eases recent trade tensions between the two nations.  Most sectors gained.  IT and healthcare led exceeding advances 0.5%.  Financials and utilities gave minimal ground.

Europe has spent most of the morning up small but is currently flat.  Italy has been lagging as the political situation remains troubled.  (It feels like that has been the case since the fall of the Roman Empire.)  Sectors are split.  Healthcare, food/beverages and personal goods lead with gains of c. 0.5%.  Off by about the same mark are telcos, autos and basic resources.

Corporate Headlines

• CK Asset +0.8% following yesterday’s agreed bid for Greene King -0.6% at 850p per share.  Green surged about 50% yesterday on the news.
• BHP’s +0.15% H1 revenues are a touch light.  The company also warned of the implications due to the ongoing trade negotiations.  It pledges a record final dividend of $3.9b.
• Elan Animal Health is purchasing Bayer’s +0.1% animal health unit for $ 7.6b.
• Pandora’s +10.0% Q2 results are a positive surprise.  Both revenues and EBIT are slightly better than anticipated.   While issues remain, the company appears to be making headway on costs.
• U.K. home builder Persimmon +1.0% also is providing some encouraging results.  H1 is largely seen to be inline.  The highlight is summer activity was more active than usual boosting prospects for H2.

On Our Side of the Pond

• After yesterday’s close, Baidu provided strong revenues for Q2 and in its Q3 outlook.
• A whistle blower alleges Disney has been misreporting theme park related revenue and been in touch with the SEC.   The company says the claims are false.
• Home Depot’s Q2 sales are below consensus and the company is cutting its FY sales outlook.
• Keep an eye on the tech sector.  A number of state attorney generals are banding together to investigate antitrust issues at large companies in the sector.
• The White House denied a Wall Street Journal report it is contemplating a reduction to payroll taxes.

Markets & Macro