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WHAT HAPPENED OVERNIGHT:
· S&P +0.24%: cautiously extended run of record highs on more earnings beats ahead of FOMC.
· Megacap Tech shares continued to dominate earnings in the US, this time round TSLA (+2.3%) led after second-quarter results beat analysts’ estimate ahead of Apple, Amazon, Alphabet and Facebook reporting’s later this week.
· US 10yr<1.27%; treasuries ended Monday mixed with the curve steeper. FOMC kicks off today and should provide a litmus test for equities recent run. DXY<92.62 eased amid a record low real yield on US 10yr. Gold<$1795, Brent<$74.85 remains range bound. .
· Seven of the main 11 S&P 500 industry groups advanced. Energy stocks climbed the most, despite weakness in crude prices, Nasdaq unch, Russell 2k (+0.3%).
· Asia’s mixed, NKY+0.4% but region is still reeling from Beijing’s Tech clamp down HSCEI -3.4% adding to yesterday’s 5% drop. Elsewhere equity futures trading steady despite concerns around which sector CPCC might target next.
· China -0.6%, HK -2.4% and Tencent -6.3% following more clamp down on subsidiaries.
· Australia +0.5%; Energy (+1.6%) and Materials (+1.3%) leading whilst tech lags. RIO +1.7% & FMG +1.6% & BHP +2.8% indicates +1% SA open.
What else of interest?
· Tencent holding Meituan slid a record 16.3% on Tuesday in Hong Kong, on top of a 14% plummet the previous day. The Tencent Holdings Ltd.-backed company, already the target of an antitrust probe with uncertain outcomes, was caught up in a broader selloff of internet stocks after China ordered swathes of its $100 billion private education sector to go non-profit. Meituan has shed more than $58 billion of its market value over two frenetic trading sessions, after Beijing unveiled sweeping reforms against private-sector companies that darkened the outlook for the world’s biggest food delivery giant.
· KIO – another bumper payout, H1 hEPS 7278c (vs guided midpoint 7241c), interim div 7270c (vs sbge 5939c) ie 100% of earnings (vs sbge c80%). Parent AGL almost certain to announce special themselves at interim (sbge 143c + 95c spec) - following AMS yday.
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SOUTH AFRICAN NEWS:
Expect JSE AllShare -0.5%
· From SA close, S&P +0.3%, (futs +0.1), gold -$6 ($1795), plat -$6 ($1060), pall -$43 ($2673), copper +0.4% ($4.58/lb), Brent crude +1.3% ($74.83), Dalian iron -0.9% (201=spot $/t), Singapore iron -0.7% ($198), Dalian coking coal -0.7%, Steel Rebar -1.1%, BHP parity +1%, USDZAR -0.2% (14.85), Tencent -6.3% (HKD460).
Also due today:
· KIO H1
TODAYS KEY DATA POINTS:
Gobal Macro data – today
· 10:00AM: EC Money Supply
Global data – week ahead
· Wed (July 28): FOMC
· Thur (July 29): US Initial Jobless Claims, US GDP, Fra PPI, Ger Unemployment, Ger CPI
· Fri (July 30): Fra GDP
· Monday (Aug 2): US Manuf PMI,
· Tues (Aug 3): US MBA Mortg App, US Durable Goods, EC PPI
· Wed (Aug 4): US Serv PMI, Fra, Ger & EC Markit Serv PMI
· Thur (Aug 5): US Initial Jobless Claims, EC CPI, Ger Unemployment
· Fri (Aug 6): US Unemployment, Fra Current Acc
SA – next week
· Wed (July 28): None
· Thur (July 29): Money Supply, PPI, ACL H1, MIX Q1
· Fri (July 30): Trade Balance
· Monday (Aug 2): Absa PMI, Naamsa Vehicle Sales
· Tues (Aug 3):
· Wed (Aug 4): Sbg PMI
· Thur (Aug 5): Electric Consumption
· Fri (Aug 6): Net Reserves
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