US Labor Data, Earnings Plus ECB Dominate Worldwide Market Action- Nikkei Asian Review

  By Kuala Lumpur Newsroom
Nikkei Markets
  KUALA LUMPUR (Jul 21) — Significant international events and markets news:

KEY EVENTS:

*12:30 GMT: Canada June consumer price inflation

*12:30 GMT: Canada May retail sales

US STOCKS:

The main U.S. share indexes were generally even Thursday with the Dow Jones industrial average down 0.13% at 21611.78 points, the Standard and Poor’s 500 index losing 0.02% to 2473.45 points but the Nasdaq composite added 0.08% to 6390.00 points. The share-price fall of Home Depot dragged the Dow down but the Nasdaq bucked the trend to match its best winning streak since February 2015. Economic news was generally good but a few earnings misses offset its effect. Ahead of the market open weekly jobless claims fell – suggesting a healthy labor market. The European Central Bank left interest rates unchanged but President Mario Draghi wasn’t definitive about bond buying. Philip Morris International shares fell 1.5% after the cigarette maker lowered guidance and revenues and delivered an earnings miss. The share price of Travelers fell 1.9% after the insurance company posted a lower profit on higher catastrophe and weather-related losses. The share price of Lowe’s Companies dropped 5.6%, falling in tandem with Home Depot, on news that Sears Holdings will sell Kenmore-branded appliances through Amazon.com. Qualcomm Inc. shares fell 5% after the chipmaker’s quarterly earnings met forecasts late Wednesday. European stock prices were mixed.

DOLLAR INDEX:

The dollar index was last down 0.59% at 94.08. The dollar fell to its lowest in nearly two years against the euro Thursday after European Central Bank chief Mario Draghi said policymakers would discuss possible changes to its bond-buying. Draghi didn’t say when. The euro climbed as high as $1.1655 against the U.S. unit after Draghi spoke. The dollar remained weaker on the collapse late Monday of a Republican overhaul of the U.S. health care system. Weak economic data have lowered expectations for another interest-rate increase from the Federal Reserve later this year. The dollar fell about 0.3% against the yen to 111.63 yen. The Bank of Japan kept monetary policy steady Thursday but again pushed back the timing for achieving its inflation target. Meanwhile, the yield on U.S. 10 Year Treasury notes fell 0.013% to 2.258%.

ASIA MARKETS:

Nikkei 225 futures were last down 0.15% at 20060 suggesting a weaker opening at Tokyo on Friday. The Nikkei ended 0.6% higher at 20144.59 points. Market capitalization of the Tokyo Stock Exchange’s first section hit 601 trillion yen – its highest since August 2015. The Bank of Japan said it would maintain policy – as expected – and pushed back, again, the timing for achieving its 2% inflation target. Data showed Japan’s exports rose for a seventh consecutive month in June led by shipments of motor vehicles and electronics. Elsewhere in Asia Hong Kong stocks finished higher for a ninth consecutive session Thursday as shares in technology stocks saw price rises. Tencent Holdings’ shares finished at a record. The China gaming and social media company has added about 11% since July 7 when it announced it would launch its popular smartphone game in Europe and the U.S. The Hang Seng index ended up 0.3%, or 68.05 points, at 26740.21 – its highest since June 2015. Mainland China share prices rose for a third consecutive day Thursday. The Shanghai Composite Index added 0.4% to 3244.86 points.

CRUDE OIL:

Oil prices fell Thursday as market participants waited for an important meeting of the world’s biggest producers next week. The August contract for West Texas Intermediate crude, which expired at the settlement, fell $0.33, or 0.7%, to $46.79 a barrel on the New York Mercantile Exchange. The new front-month contract, September WTI, ended down $0.40 at $46.92. September Brent fell $0.40, or 0.8%, to $49.30 a barrel on ICE Futures Europe. More U.S. production is a threat to the Organization of the Petroleum Exporting Countries’ agreement to reduce output worldwide. Output growth from Libya and Nigeria, OPEC members which aren’t part of the group’s production-cut agreement, is another big worry. OPEC oil ministers will meet to monitor compliance Monday in St. Petersburg, Russia.

TOP NEWS:

*Murdochs face further delay in Fox bid for Sky as MPs push for more scrutiny

Fox faces another delay in its £11.7bn pursuit of full control of Sky, after the Culture Secretary said she would not make a crucial decision on referring the takeover to competition watchdogs before Parliament takes its summer break. Karen Bradley told MPs she was still minded to refer the bid to the Competition and Markets Authority over the extra clout it would give the Murdoch family in the British media. – The Telegraph

*Federal Trade Commission probing allegations of Amazon’s deceptive discounting

As part of its review of Amazon’s agreement to buy Whole Foods, the FTC is looking into allegations that Amazon misleads customers about its pricing discounts, according to a source close to the probe. The FTC is probing a complaint brought by the advocacy group Consumer Watchdog, which looked at some 1,000 products on Amazon’s website in June and found that Amazon put reference prices, or list prices, on about 46 percent of them. – Reuters

*Microsoft Sales, Profit Beat Estimates as Cloud Growth Marches On

Microsoft Corp.’s turnaround plan got back on track in the latest quarter, buoyed by rising sales of internet-based software and services. Profit in the fiscal fourth quarter exceeded analysts’ estimates and adjusted sales rose 9 percent as demand almost doubled for Azure cloud services, which let companies store and run their applications in Microsoft data centers. A tax-rate benefit added 23 cents a share to earnings, Microsoft said. – Bloomberg News

*Visa beats profit estimates, raises earnings forecast

Visa Inc., the world’s largest payments network operator, Thursday reported a better-than-expected quarterly profit and raised its full-year earnings forecast, as more people made payments using its network. Visa, which generates revenue by facilitating credit- and debit-card transactions, has benefited from a strengthening U.S. economy as well as results from Visa Europe, which it bought last June. – Reuters

*Snap under pressure as Wall Street eyes share lock-up expirations

A potential flood of newly available Snap shares is weighing on Wall Street’s already shaky support for the owner of the Snapchat social media app. Snap’s shares fell as much as 1.7 percent Thursday as analysts focused on the expiry of lock-up periods starting at the end of July, when insiders and employees will be allowed to sell shares for the first time since a $3.4 billion initial public offer in March. – Reuters

*Lenovo earmarks US$1.2 billion for AI research and development

Lenovo Group, the Chinese computer giant, is upping its ante on artificial intelligence, earmarking at least US$1.2 billion to beef up research and development on the technology as it predicts drastic changes to personal computers and consumer electronic devices over the next three to four years. Yang Yuanqing, chairman and chief executive of the world’s largest personal computer supplier, said Thursday any PC, mobile phone or other electronic device would not survive unless they are based on intelligent systems that make them “smarter.” – South China Morning Post

*Beijing Wants AI to Be Made in China by 2030

If Beijing has its way, the future of artificial intelligence will be made in China. The country laid out a development plan Thursday to become the world leader in AI by 2030, aiming to surpass its rivals technologically and build a domestic industry worth almost $150 billion. Released by the State Council, the policy is a statement of intent from the top rungs of China’s government: The world’s second-largest economy will be investing heavily to ensure its companies, government and military leap to the front of the pack in a technology many think will one day form the basis of computing. – The New York Times
  – By Kuala Lumpur Newsroom; kleditorial@nikkeinewsrise.com; +60320267363
– Edited by Glen Nicol Perkinson
– Send Feedback to feedback@nikkeinewsrise.com
– Copyright (c) 2017 Nikkei NewsRise Asia Pte Ltd.

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