Investment market update
This bulletin provides you with an overview of the latest market news from around the world – world markets, key headlines, stocks and market data.
UK equities are expected to open slightly higher this morning, ahead of a parliamentary vote in Greece which could unlock a third bailout and mixed results in Asia overnight.
Asian stocks struggled to keep their gains overnight as a renewed slide in Chinese equities overshadowed upbeat data from the world’s second largest economy.
US stocks capped the longest rally since January amid optimism overseas crises have eased, while Treasuries rose and the dollar fell as weak retail sales data fuelled the case for keeping interest rates on hold for longer.
UK stocks posted their best five-day rally since January as Sky Plc and supermarkets advanced.
Greek Prime Minister Alexis Tsipras started his pitch for a bailout that’s sparked a revolt in his own party and is struggling to get off the ground as international officials ask new questions about the country’s finances. As Tsipras went on national television to argue for a deal that he only agreed to with “a knife on my neck,” European officials are at a loss on how to put together a bridging loan that will keep Greece from defaulting on the European Central Bank and its own citizens next week. One person familiar with the matter said that Greece’s finances seem to get worse with every meeting and governments are now reluctant to help out with even short-term funds.
Bank of England Governor Mark Carney and policy maker David Miles flagged the prospect of earlier-than-anticipated UK rate increases as the economy improves. In testimony to lawmakers, Carney said the time for the benchmark interest rate to rise from a record low is “moving closer.” Hours later, Monetary Policy Committee member Miles said “the time to start normalization is soon; that is not something to shrink from.” Both cited improvements in the economy, particularly the strength of the labour market. Accelerating wage growth has already seen MPC members Martin Weale and Ian McCafferty respond by indicating that policy tightening will be needed soon. Data on Wednesday forecast to show a jump in earnings in the past three months may reinforce their view. “Wages are beginning to grow, interest rates are at historically low levels, and so households should begin to manage their finances with the assumption that there should be an upward adjustment in interest rates,” Carney said. Both he and Miles said any rate increases should be gradual.
Sky climbed 4.1% after Deutsche Bank AG recommended buying the shares, saying online video will help boost growth.
Taylor Wimpey Plc and Persimmon Plc paced a drop among homebuilders, falling 1.5% each after Bank of England Governor Mark Carney said the time for an interest-rate increase is moving closer.
Johnson & Johnson dropped 0.5% after the drug maker posted a drop in revenue. Micron Technology Inc. jumped 11% with China’s Tsinghua Unigroup Ltd. reportedly planning to offer $23 billion for the Boise, Idaho-based chipmaker.
Shares in JP Morgan Chase rose 1.4% after the bank reported a 5.2% rise in second-quarter earnings to $6.3bn.
Wells Fargo also rose by 0.9% after it reported second quarter earnings of $5.7bn, unchanged from a year earlier.