Market participants expect the release of the data on producer price index on Thursday and inflation on Friday

Stock prices rose due to good quarterly reports

On Monday, all the US stock indices rose

On Monday, all the US stock indices rose. The Dow Jones Industrial Average updated its historic high for the 9th time in a row. No significant economic statistics came out. Stock prices rose due to the positive reports of the meat processing company Tyson Foods (+ 5.7%), as well as the improvement of the general corporate forecast. Currently investors expect the growth of the total profit of companies from the S&P 500 list in Q2, 2017 by 12% and in Q3 by another 9.3%. At the beginning of the earnings season, the forecast of the profit growth for Q2 was only 8%. Today the financial indicators of Walt Disney, Marriott International and other US companies will be published. No significant economic data are expected. The dollar index has slightly corrected down today, for the second consecutive day, after a strong Friday growth on the background of the labor market data. Market participants expect the release of the data on producer price index on Thursday and inflation on Friday.

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Investors negatively reacted to the weak reports of the European companies

On Tuesday, the euro exchange rate has slightly increased for the second day in a row on the background of a slight US dollar weakening.

The quotes of the European companies fell on Monday, despite the weak growth at the beginning of trading. Investors negatively reacted to the weak reports of the Dutch postal company PostNL and the gambling organizer Paddy Power Betfair. Their stocks fell by 5%. Almost 70% of the European companies have already reported for Q2. Out of these, the profit of 60% coincided or exceeded the preliminary forecasts. This morning, weak Chinese foreign trade data for July came out. They contributed to the correction of world metal prices and the decrease in the stocks of the European mining sector. The German foreign trade data were also published, but for June. They were worse than expected and had a negative impact on the German stock index DAX. The stocks of the jewelry company Pandora fell by 8% after the publication of weak quarterly reports. On Tuesday, the euro exchange rate has slightly increased for the second day in a row on the background of a slight US dollar weakening.

The strengthening of the yen had a negative impact on the Japanese exporters’ stocks

On Monday, the Japanese stock index Nikkei fell within the neutral range. The slight strengthening of the yen had a negative impact on the quotes of the Japanese exporters Panasonic Corp (-1.2%), Mazda Motor (-1.3%), Olympus Corp (-2%). Economic statistics turned out to be positive, which contributed to the yen strengthening. The trade balance surged to 518 bln yen in June from minus 115 bln yen in May. The positive current account balance exceeded forecasts.

Corn, wheat and soybean prices grew on the backdrop of the weather worsening in the US

Corn, wheat and soybean prices grew on the background of the weather worsening in the US and a drought. On Thursday, the Department of Agriculture is going to publish a survey of supply and demand for the world grain crops, which may affect their price dynamics. China increased soybean imports in January-July, 2017 by 17%, to 57.9 mln tonnes, compared to the same period in 2016. In July, the soybean import updated the historic high exceeding 10 mln tonnes. France reduced wheat exports outside the EU by 61% to 4.97 mln tonnes in the agricultural season 2016/17, ending on June 30. This was due to the harvest reduction.

Source: Market reports

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