Stocks down on mixed earnings, dollar up slightly
Markets kicked off August on a cautious note as investors responded to the latest corporate updates and news on the health of China’s economy. The dollar posted modest gains.
European stocks declined, with miners falling following weak data on China’s manufacturing and property sectors. BMW AG dragged the autos sector lower, slumping after warning about supply-chain costs. HSBC Holdings Plc led banks higher after announcing a new share repurchase program and earnings that outpaced estimates. BP Plc rose as its dividend and buyback outweighed disappointing results.
US equities futures edged lower after the S&P 500 closed at a 16-month high on Monday, while the Nasdaq 100 notched its longest streak of monthly gains since August 2020.
There are signs of a pause in the bullish mood that has boosted equity markets this year, as traders prepare for major events in the next few days, including a Bank of England interest rates decision on Thursday and US employment figures Friday. The line-up of blockbuster earnings still to come before the week is out includes tech heavyweights Apple Inc. and Amazon.com Inc.
“We’ve had a pretty good year so far, in terms of performance for risk assets, although when we look forward from here, we feel that the drivers for the rally may become a little bit more mixed,” said Karim Chedid, head of EMEA iShares investment strategy at BlackRock International.
“There could be more pain for equities, and we still don’t feel that the trough in earnings has come yet,” Chedid said. “Whilst the macro picture has been stronger than expected, there is no doubt that the tightening from central bank policy is starting to come through.”
The recent buoyant mood on Wall Street has prompted a retreat among bears
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