Good morning,
Stocks took a slight dip Friday morning. The Stoxx Europe 600 was down 0.2%, and the S&P 500 opened 0.1% lower. LinkedIn is getting hammered, falling 9% Friday morning. The month began on a rough note, with the Grecian crisis in full swing and China well into its swoon. Those crises have abated — but almost everyone feels the calm is temporary. Greece still faces a mountain of debt and China’s markets and economy are far from healed. A bright spot for China: The Olympic committee chose Beijing to host the 2022 winter games, the first time a city has hosted both summer and winter events. In other news, investigators say it will take a long time before they can verify the airplane part found in the Indian Ocean is, indeed, the remains of Malaysia Flight 370; it will take even longer to determine why the plane crashed.
Exxon, Chevron drop after earnings fall short. Exxon Mobil reported a 52% profit drop for the second quarter, driving the stock down 4.5% Friday morning. Earnings were $1 a share, down from the expected $1.11 a share. Chevron took a 30% revenue hit and earnings of 30 cents a share, and its stock fell about 4.5% Friday as well. Expectations were low for the oil giants, but they fell short of even those. Royal Dutch Shell is laying off 6,500 people and said in its earnings report Thursday that it expects the slowdown to extend two years. Also reporting today: Seagate Technology, CBOE Holdings, Tyco International, and more. Estimize, Wall Street Journal
Commodities slammed in July. Oil was poised to record the worst month of the year, down 20% in July. “Copper, considered a bellwether for global economic activity, was facing a 9 percent monthly loss as it stumbled to $5,238 an tonne. Gold was down over 7 percent on the month at $1,081.95 an ounce as it chalked up its longest run of week-on-week falls in 16 years.” MarketWatch, Reuters
Inflation steady in the EuroZone in June. Eurostat reports that inflation was up 0.2% on an annualized basis. Energy prices fell 5.6% while food, alcohol, and tobacco rose 0.9%. Unemployment was unchanged at 11.1%. European stock markets were narrowly changed. BBC
LinkedIn joins Twitter, Facebook in the earnings call curse. The professional networking site beat expectations on both profits and revenues. The stock initially surged 12%. But once the CFO began talking, the stock took a licking. The reason: decelerating growth. Look for LinkedIn to open down nearly 7%. Stocktwits
China ends worst month since 2009. Despite miraculously halving their losses in the last 20 minutes of trading, Chinese stocks still had their worst month in six years, with both Shanghai and Shenzhen losing over 14% this July. Year-to-date Shanghai is up 13.3%, while Shenzhen is up almost 50%. On Friday, Shanghai shed 1.1% and Shenzhen dipped 0.82%. Meanwhile in Hong Kong, the Hang Seng index managed to climb 0.56%, ending the month at 24,636.28 while over in Japan, the Nikkei Average edged up 0.3% to 20,585.24.
The hunt for “malicious short-sellers” goes beyond the mainland. In the latest twist in the malicious short-seller saga, the China Securities Regulator Commission is now requesting trading records from Singapore and Hong Kong. Reuters
The Swiss central bank lost $51.8 billion and now the franc is getting slammed. Highlighting the perils of having a safe-haven currency, the Swiss National Bank reported the loss for the first half of the year, largely thanks to massive devaluations in its currency positions against the swissie. The Swiss Franc tanked 0.4% on the news. WSJ (paywall), Business Insider
IMF steps back from Grecian bailout. Continuing their hard stance on reforming Greece’s debt, the International Monetary Fund has disqualified Greece from receiving a third bailout, citing the nation’s “high debt levels and poor record of implementing reforms.” They will re-enter talks however once Greece has “agreed on a comprehensive set of reforms” while EU leaders “agreed on debt relief.” Financial Times (paywall)
The boys are back in town. Great news! After quitting (or in Clarkson’s case, losing) their jobs following “the fracas,” Top Gear presenters Jeremy Clarkson, Richard Hammond, and James May are now heading to Amazon’s new streaming service. BBC News
Photo: Ian Burt