Friday July 15th

15-07-2016

Futures higher after US data

U.S. stock index futures traded higher Friday after better-than-expected retail sales. European shares traded lower following a terror attack in France that killed at least 84 people. Late on Thursday, a man driving a truck mowed down crowds of people in Nice watching a fireworks display to celebrate Bastille Day. French President Francois Hollande says the attack was of a "terrorist nature" and has extended France's "state of emergency" for three months. The U.S. State Department has confirmed two U.S. citizens were killed in the attack. The benchmark French CAC 40 index traded down 0.7 percent on Friday morning, slightly underperforming the pan-European STOXX 600, which fell by 0.5 percent."Of course, everything today in Europe will be of secondary importance to last night's terror incident in Nice. And the related economic concerns are of lesser relevance to the human costs," Emily Nicol, economist at Daiwa Capital Markets, said in a note on Friday. "Indeed, with the French economy having proved to be relatively resilient to the previous Bataclan incident, the economic consequences need not be marked, although demand in the French services sector, not least the tourism sector — the world's biggest — might be adversely affected over the near term," she added. Overnight, China posted second-quarter gross domestic product (GDP) growth of 6.7 percent on the year, beating estimates for 6.6 percent by economists polled by Reuters and matching growth in the first quarter. China's benchmark Shanghai Composite index responded somewhat mutedly and closed flat on the day, posting a weekly gain of around 2.2 percent. In South Korea, the Kospi index closed up 8.49 points, or 0.42 percent, at 2,017.26, gaining 2.76 percent for the week. Japan's benchmark Nikkei 225 posted a weekly gain of 9.20 percent, closing up 111.96 points, or 0.68 percent, at 16,497.85 on Friday. The Topix finished up 5.94 points, or 0.45 percent, at 1,317.10. In Hong Kong, the Hang Seng index traded up 0.23 percent in late afternoon trade, after wavering between gains and losses throughout the session. In the U.S., earnings season was in full swing, with Citigroup, US Bancorp and Wells Fargo set to post second-quarter results on Friday. On Thursday, JPMorgan Chase reported earnings that easily beat expectations, while BlackRock's were in line with forecasts. "If Citigroup comes out and they miss, then it starts to get people a little bit more concerned," Robert Pavlik, chief market strategist at Boston Private Wealth, said. "But I think as we move a little bit more into earnings season, we'll get some of the other banks falling in line." Stocks ended Thursday with new highs in both the S&P 500 and the Dow Jones industrial average. The Dow was up 0.7 percent at 18,506 and the S&P closed at 2,163, up a half percent. If the S&P 500 closes at a new high on Friday, it will be the first full week of new highs for the index since March 1998, according to Standard & Poor's. The deciding factor could be the top-tier economic data due from the U.S. on Friday. These include June inflation, retail sales and industrial production, as well as the University of Michigan consumer sentiment survey for July and May business inventories data. In corporate news, German chemical and drug company, Bayer, had bumped its bid offer to $125 per share for Monsanto. The seed giant is also looking at purchasing BASF's agro-chemicals unit, according to media reports. London-listed shares of BP traded 0.9 percent lower on Friday after the company agreed to a new $5.2 billion charge relating to the 2010 Gulf of Mexico spill. This brings the total cost of the incident for the company to around $61.6 billion. Crude futures turned positive after earlier falling on Friday on concerns that a persistent global glut of crude oil and refined products will impede any price recovery. The morning's losses were capped by slightly better-than-expected Chinese economic data reflecting government efforts to stabilise growth as well as a drop in Chinese domestic production. Brent crude futures were up 18 cents at $47.55 a barrel at 8:06 a.m. ET (1206 GMT). U.S. West Texas Intermediate (WTI) futures were up 17 cents at $45.85 a barrel. Gold edged lower on Friday and was set for its first weekly loss since May on improving global risk sentiment and a steadier dollar. Spot gold eased 0.1 percent to $1,333.50 an ounce. It fell to its lowest since June 30 in the previous session. After six weeks of gains, the longest rally since March 2014, the metal has come under pressure this week, down 2.5 percent so far.