CFD Markets News and Forecasts — 26-07-2018

The main US stock indexes finished trading in different directions: the collapse of Facebook shares caused the sale of technology companies, sending Nasdaq into the negative zone, but the Dow grew amid improvement in sentiment after the US and EU said they would negotiate trade.

Negligible impact on the course of trading also provided data on the United States. As it became known, demand for durable goods produced by US factories recovered in June after two consecutive monthly decreases, which is a sign of momentum in the manufacturing sector. Orders for durable goods increased seasonally by 1.0% compared to May. Economists expected a stronger growth of 3.0%. Recall orders dropped by 0.3% in May and by 1.0% in April.

Meanwhile, the number of Americans applying for unemployment benefits rose from a more than 48.5-year low last week, but continued to point to tightening the labor market. Primary calls for state unemployment benefits increased by 9,000 to 217,000, seasonally adjusted for the week to July 21, the Ministry of Labor said. Economists projected growth to 215,000. The four-week moving average of primary hits, considered as the best measure of labor market trends, fell by 2,750 to 218,000, the lowest since mid-May.

Most of the components of DOW have finished trading in positive territory (20 out of 30). The leader of growth was the shares of The Travelers Companies, Inc. (TRV, + 2.49%). Outsider were shares of McDonald's Corporation (MCD, -1.79%).

Most S & P sectors recorded a decline. The greatest decrease was shown by the technological sector (-1.1%). The industrial goods sector grew most (+ 0.9%).

At closing:

Index

Dow 25,527.07 +112.97 +0.44%

S&P 500 2,837.44 -8.63 -0.30%

Nasdaq 100 7,852.19 -80.05 -1.01%

U.S. stock-index futures fell on Thursday, due to a selloff in Facebook stock, following announcement of disappointing Q2 results/guidance.

Global Stocks:

• We took note of Trump-Juncker meeting

• It's a good sign

(company / ticker / price / change ($/%) / volume)

Exports of goods for June were $141.9 billion, $2.2 billion less than May exports. Imports of goods for June were $210.3 billion, $1.3 billion more than May imports.

Wholesale inventories for June, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $632.5 billion, virtually unchanged from May 2018, and were up 5.1 percent (±3.9 percent) from June 2017. The April 2018 to May 2018 percentage change was revised from up 0.6 percent to up 0.4 percent (±0.2 percent).

Facebook (FB) target lowered to $205 from $242 at JP Morgan; removed from Focus List, maintaining Overweight

Facebook (FB) target lowered to $202 from $242 at Stifel

Facebook (FB) downgraded to Outperform from Strong Buy at Raymond James

Facebook (FB) downgraded to Neutral from Buy at UBS; target lowered to $180 from $212

Facebook (FB) downgraded to Neutral from Buy at Nomura; target lowered to $183 from $228

• Latest data points to ongoing growth

• Private consumption is supported by ongoing labor market gains

• Risks to the growth outlook remain broadly balanced

• Global uncertainty and the threat of protectionism are prominent

• Risk of financial market volatility remains high

*via forexlive

Freeport-McMoRan (FCX) upgraded to Hold from Sell at Deutsche Bank

In the week ending July 21, the advance figure for seasonally adjusted initial claims was 217,000, an increase of 9,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 207,000 to 208,000. The 4-week moving average was 218,000, a decrease of 2,750 from the previous week's revised average. The previous week's average was revised up by 250 from 220,500 to 220,750.

New orders for manufactured durable goods in June increased $2.5 billion or 1.0 percent to $251.9 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.3 percent May decrease. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders increased 1.5 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $1.9 billion or 2.2 percent to $87.7 billion.

Shipments of manufactured durable goods in June, up ten of the last eleven months, increased $4.1 billion or 1.7 percent to $251.6 billion. This followed a 0.2 percent May increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $3.1 billion or 3.8 percent to $85.3 billion.

McDonald's (MCD) reported Q2 FY 2018 earnings of $1.99 per share (versus $1.73 in Q2 FY 2017), beating analysts' consensus estimate of $1.92.

The company's quarterly revenues amounted to $5.354 bln (-11.5% y/y), generally in-line with analysts' consensus estimate of $5.322 bln.

MCD rose to $159.89 (+0.63%) in pre-market trading.

Altria (MO) reported Q2 FY 2018 earnings of $1.01 per share (versus $0.85 in Q2 FY 2017), beating analysts' consensus estimate of $1.00.

The company's quarterly revenues amounted to $4.879 bln (-3.7% y/y), missing analysts' consensus estimate of $5.020 bln.

The company narrowed FY2018 EPS guidance to $3.94-4.03 from $3.90-4.03 versus analysts' consensus estimate of $3.99.

MO fell to $56.15 (-2.94%) in pre-market trading.

At today's meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.

Int'l Paper (IP) reported Q2 FY 2018 earnings of $1.19 per share (versus $0.65 in Q2 FY 2017), beating analysts' consensus estimate of $1.10.

The company's quarterly revenues amounted to $5.833 bln (+8.4% y/y), generally in-line with analysts' consensus estimate of $5.800 bln.

IP rose to $53.50 (+0.87%) in pre-market trading.

Yandex N.V. (YNDX) reported Q2 FY 2018 earnings of RUB15.11 per share (versus RUB12.12 in Q2 FY 2017), missing analysts' consensus estimate of RUB15.36.

The company's quarterly revenues amounted to RUB29.350 bln (+38.8% y/y), beating analysts' consensus estimate of RUB28.857 bln.

YNDX rose to $39.05 (+1.11%) in pre-market trading.

Visa (V) reported Q2 FY 2018 earnings of $1.20 per share (versus $0.86 in Q2 FY 2017), beating analysts' consensus estimate of $1.09.

The company's quarterly revenues amounted to $5.240 bln (+14.8% y/y), beating analysts' consensus estimate of $5.089 bln.

V fell to $142.00 (-0.45%) in pre-market trading.

Ford Motor (F) reported Q2 FY 2018 earnings of $0.27 per share (versus $0.51 in Q2 FY 2017), missing analysts' consensus estimate of $0.30.

The company's quarterly revenues amounted to $35.900 bln (-2.8% y/y), generally in-line with analysts' consensus estimate of $35.631 bln.

The company also issued downside guidance for FY 2018, projecting EPS of $1.30-1.50 versus its prior guidance of $1.45-1.70 and analysts' consensus estimate of $1.51.

F fell to $10.15 (-3.52%) in pre-market trading.

Facebook (FB) reported Q2 FY 2018 earnings of $1.74 per share (versus $1.32 in Q2 FY 2017), beating analysts' consensus estimate of $1.70.

The company's quarterly revenues amounted to $13.231 bln (+41.9% y/y), slightly missing analysts' consensus estimate of $13.346 bln.

The company also projected "high single digit" revenues growth declaration q/q in Q3 and in Q4.

FB fell to $178.14 (-18.1%) in pre-market trading.

Barrick Gold (ABX) reported Q2 FY 2018 earnings of $0.07 per share (versus $0.22 in Q2 FY 2017), missing analysts' consensus estimate of $0.13.

The company's quarterly revenues amounted to $1.712 bln (-20.7% y/y), missing analysts' consensus estimate of $1.743 bln.

ABX fell to $11.50 (-2.71%) in pre-market trading.

The number of employed persons increased by 469,900 people in the second quarter of 2018 compared to the previous quarter (2.49%) and stands at 19,344,100. It is the biggest Quarterly increase in employed persons observed in the historical series EPA. In terms seasonally adjusted, the quarterly variation is 1.00%. Employment has grown in 530,800 people (2.82%) in the last 12 months. - Employment increased this quarter by 12,100 people in the public sector and in 457,800 in the private. In the last 12 months, employment has increased in 416,700 people in the private sector and 114,100 in the public.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1801 (4442)

$1.1780 (2433)

$1.1757 (797)

Price at time of writing this review: $1.1729

Support levels (open interest**, contracts):

$1.1695 (3022)

$1.1667 (3150)

$1.1631 (3257)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 13 is 87241 contracts (according to data from July, 25) with the maximum number of contracts with strike price $1,1850 (5410);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3293 (862)

$1.3266 (707)

$1.3232 (670)

Price at time of writing this review: $1.3194

Support levels (open interest**, contracts):

$1.3136 (2104)

$1.3106 (1736)

$1.3070 (1986)

Comments:

- Overall open interest on the CALL options with the expiration date August, 13 is 23586 contracts, with the maximum number of contracts with strike price $1,3600 (3206);

- Overall open interest on the PUT options with the expiration date August, 13 is 27393 contracts, with the maximum number of contracts with strike price $1,2950 (2245);

- The ratio of PUT/CALL was 1.16 versus 1.14 from the previous trading day according to data from July, 25.

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

The Import Price Index rose 3.2% in the June quarter 2018. This follows a rise in the March quarter 2018 of 2.0%.

The rise was driven by higher prices paid for Petroleum, petroleum products and related materials (+13.7%), reflecting tight worldwide supply due to global production restrictions and capacity constraints.

General industrial machinery rose 3.3%, reflecting rises in metal prices.

These rises were partly offset by falls in Metalliferous ores and metal scrap (-5.6%).

Through the year to the June quarter 2018, the Import Price Index rose 6.0%, driven by Petroleum, petroleum products and related materials (+38.2%) and Inorganic chemicals (+40.8%).

The Export Price Index rose 1.9% in the June quarter 2018. This follows a rise in the March quarter 2018 of 4.9%.

Prices received for many of Australia's mineral fuel commodities rose in the June quarter 2018. Gas, natural and manufactured, rose 10.8%, in response to strong demand for LNG in northern Asia. Export contract prices for LNG are also influenced by the international crude oil price with a two to four month lag.

Petroleum, petroleum products and related materials rose 8.5%, reflecting tight worldwide supply due to global production restrictions and capacity constraints.

Meat and meat preparations rose 3.8%, influenced by strong demand in Asia and the United States.

Coal, coke and briquettes rose 0.9%, reflecting demand from China.

The mood of German consumers develops in mixed ways in July this year. Income expectations and propensity to buy are able to maintain their extremely good level while economic expectations continue their clear downwards trend. GfK forecasts a decrease in consumer climate for August compared to the previous month of 0.1 points, taking it to 10.6 points.

It seems that the escalating trade conflict between the EU and the United States is so far only adversely affecting German consumers' economic expectations, which are suffering renewed significant losses and continuing their downward spiral. In contrast, both income expectations and the propensity to buy have so far remained unaffected by the conflict and maintain their already excellent level in July. Since the propensity to save has risen recently, the overall consumer climate shows a slight fall.