Europe
European shares started the week undoing some of Friday’s relief rally as uncertainty surrounding the downing of Malaysian airliner MH17 and the increasing death toll in Gaza fed into a negative tone.
Details of what happened on Thursday’s crash are still in thin supply. After the initial fallout, investors have been left second-guessing the implications, if any of the MH17 disaster for markets. Reportedly militia in the region are blocking international investigations which have already been slowed by fighting in the Donetsk region where the crash took place.
The German DAX moved through the 9,600 level for the first time in 2 months. German producer prices were flat in June in another sign that some of the heat was coming out of the German economy and the increased sanctions on Russia, one of its biggest trading partners are not helping future prospects.
Tesco (LONDON:TSCO) was a top riser today despite reporting another quarterly decline in earnings on the news the company has ousted CEO Phillip Clarke in favour of Unilever’s Dave Lewis. Investors understand that Tesco’s problem’s preceded Clarke but he’s had four years to turn the ship around and the company’s still losing market share.
The FTSE 100 was being led lower by the house builders after a report from Rightmove showed house prices dropped 0.8% in June. Morrisons (LONDON:MRW) got sold down after poor earnings from Tesco’s probably means industry-wide declines in profits for the quarter. Tobacco stocks lost ground after US rival RJ Reynolds, a unit of Reynolds American (NYSE:RAI) was successfully sued for a cough-inducing $23.6bn.
US
Shares in the United States started out Monday’s session in the red as global geopolitical uncertainty trumped corporate earnings from Allergan (NYSE:AGN) and Halliburton (NYSE:HAL).
On Friday; earnings news especially from Google (NASDAQ:GOOGL) as well as a general relief rally after Thursday’s sell off were enough to send stocks higher, but uncertainty ebbed back into trading again on Monday.
Allergan rallied despite a Valeant Pharmaceuticals (NYSE:VRX) complaint about the company to the SEC after the company reported it would cut 1,500 jobs as part of a restricting to fend of Valeant’s pursuit. Some were expecting the company to announce a share buyback or an acquisition but the job cuts were well received.
Halliburton shares were higher after reporting a 20% rise in second quarter profits, added it’s COO to the board and announced a $6bn buyback. The boom in US oil production has been a boon for the oil services provider.
Six Flags (NYSE:SIX) was one of the biggest early fallers despite reporting record jump in revenue which fell below analyst expectations because of a drop-off in attendance at the company’s theme parks.
FX
EUR/USD declined below 1.35 for the first time since the ECB press conference on June 5. Europe has a lot of trade ties with Russia; talk of further actions against Russia will likely hurt the European economy, as well as causing possible safe-haven flows into the USD.
USD/CAD rallied as the Canadian dollar weakened on reduced global risk appetite despite a rise in oil prices.
The USD/NOK and USD/SEK were the day’s biggest decliners as prices keep back down towards the levels last seen after the June 3 surprise rate cut by Sweden’s Riksbank.
Commodities
Risk-off trading conditions saw Gold and Silver rally back towards levels seen on Thursday after the Malaysian airliner crash. Technically, both markets formed a bearish engulfing candlestick pattern despite the rally late in the week which would theoretically lead to lower prices.
Crude Oil was trading higher with WTI back above $103 after recently testing life below $100 as a supply threat from Russia remerges.
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