A global sell-off halted a 5-month rally in US, Asian and European equities

Friday, August 01, 2014

China’s manufacturing PMI jumped to 51.7 in July, beating expectations of 51.4. Furthermore, HSBC China manufacturing PMI was also reported at 51.7 against estimates of 52.0. However, Asian equity markets reversed and retreated lower on Friday, tracking a large selloff in US equities which dampened market sentiment and raised renewed concerns about the strength of the US economy. The Dow Jones Industrial Average fell sharply by more than 300 points yesterday.

Dow Jones Index

DJI Index (Dow Jones Industrial  2014-08-01 09-14-50

The Hang Seng Index gave back part of recent gains after plunging more than 200 points (-0.9%) towards 24,500.  The Nikkei also retreated by 0.6%, holding above the 15,500 area. This morning, European equity markets opened lower, extending yesterday’s sharp losses as risk appetite remains limited.  

Hang Seng Index

HSI Index (Hong Kong Hang Seng I 2014-08-01 09-15-06

It seems that the ongoing tensions in Middle East slightly eased following a report from Israeli officials that Israel accepted the US/UN proposal for a 72-hour cease-fire staring early Friday morning. (CNN report).    

Company news: Exxon Mobil reported a stronger-than-expected quarterly profit Q2 as higher prices for its crude and natural gas offset a 6% drop in production. AXA’s first half profit jumped 22% following improved income from the life insurance area.

Energy: Brent front month futures held near $106 per barrel as abundant oil supplies in the US and Europe continued to add pressure to crude oil prices. Brent posted its worst monthly performance since April 2013. The WTI front month contract remained under pressure trading below $98 per barrel, falling for a fifth consecutive session after reaching a high at $102 per barrel on Monday.  

WTI Front Month

CLU4 Comdty (WTI CRUDE FUTURE  S 2014-08-01 09-14-16

 

Events for today:

 

0230

JP

Jul

Manufacturing PMI

0245

CN

Jul

Manufacturing PMI

0245

CN

Jul

HSBC Manufacturing PMI

0855

DE

Jul

Manufacturing PMI

0900

EZ

Jul

Manufacturing PMI

0930

UK

Jul

Manufacturing PMI

1330

US

Jul

NF Payrolls & Unemployment

1330

US

Jun

PCE & Personal Income

1455

US

Jul

Michigan Survey (Prelim)

1500

US

Jul

ISM Manufacturing

1500

US

Jun

Construction Spending

 

All times UK Local Time

 

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