European Equities: Private Sector PMIs and Corporate Earnings in Focus
Wednesday, 4th August
Spain Markit Services PMI JUL
Italy IHS Markit Services PMI JUL
French Markit Services PMI Final JUL
German Markit Services PMI Final JUL
Eurozone Markit Services PMI Final JUL
Eurozone Retail Sales MoM JUN
Thursday, 5th August
German Factory Orders MoM JUN
German Construction PMI JUL
ECB Economic Bulletin
Friday, 6th August
German Industrial Production MoM JUN
It was a mixed day for the European majors on Tuesday.
The DAX30 slipped by 0.09%, while the CAC40 and the EuroStoxx600 ended the day up by 0.72% and by 0.20% respectively.
A quiet day on the economic calendar left the markets in the hands of corporate earnings results and COVID-19 news updates.
While earnings delivered the upside for the CAC40, BMW weighed on the DAX, with supply chain issues overshadowing better than expected earnings.
Through the session, concerns over the continued spread of the Delta variant and its impact on the economic recovery did peg the majors back, however.
Economic data was on the lighter side on Tuesday. Spanish unemployment figures were in focus.
In July, unemployment fell by 197.8k, following a 166.9k drop in June. Economists had forecast a more modest 130k decline.
While the numbers were upbeat, the stats had a muted impact on the European majors, however.
From the U.S
Factory orders were out late in the European session. Following some disappointing ISM Manufacturing PMI data at the start of the week, there was greater interest in the numbers.
In June, U.S factory orders rose by 1.5% following a 2.3% increase in May. Economists had forecast a 0.8% rise.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Tuesday. BMW slid by 5.04% to lead the way down. The downside came in spite of solid earnings results. Daimler fell by 1.08%, with Continental and Volkswagen seeing losses of 0.22% and 0.42% respectively.
It was a mixed day for the banks, however. Deutsche Bank fell by 0.33%, while Commerzbank rose by 0.55%.
From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.88% and by 0.55% respectively. Soc Gen led the way, however, rallying by 6.37% off the back of its earnings results.
It a mixed day for the French auto sector. Stellantis NV rallied by 4.26%, driven by its full year earnings outlook, while Renault ended the day down by 1.39%.
Air France-KLM fell by 2.28%, with Airbus SE falling by 1.71%
On the VIX Index
It was back into the red for the VIX on Tuesday.
Reversing a 6.69% rise from Monday, the VIX fell by 7.30% to end the day at 18.04.
The NASDAQ rose by 0.55%, with the Dow and the S&P500 ending the day up by 0.80% and by 0.82% respectively.
The Day Ahead
It’s a busy day ahead on the economic calendar. Economic data from the Eurozone includes service sector PMIs for Italy and Spain together with Eurozone retail sales figures.
Finalized services and composite PMIs are also due out for France, Germany, and the Eurozone.
Barring marked revisions to prelim figures, the services and composite PMIs and retail sales figures for the Eurozone will be key.
Following impressive retail sales figures from Germany earlier in the week, the markets will be looking for a widespread jump in spending. Reopening of economies and borders should be driving a rebound in consumption to support the economic recovery.
From the U.S, ADP nonfarm employment change and the all-important ISM Non-Manufacturing PMI will also influence later in the day.
Ahead of the European open, service sector PMI numbers from China will set the tone as will movement across the Asian markets. Concerns over China’s regulatory landscape remain, leaving the majors exposed to any slide across the Asian markets.
In the futures markets, at the time of writing, the Dow Mini was down by 45 points.
For a look at all of today’s economic events, check out our economic calendar.