Monday July 25th

25-07-2016

Earnings bonanza to hit Wall Street in the busiest week of reporting season

U.S. stock index futures indicated a flat open on Monday, after closing higher for a fourth consecutive week on Friday. The coming week is the busiest of the second-quarter earnings season, with key names including Apple and Facebook in the technology sector, Caterpillar in the industrial sector and Exxon Mobil and Chevron in the energy industry. Companies posting numbers on Monday include Kimberly-Clark, Sprint, Gilead Sciences and Texas Instruments. There are no major U.S. economic data due out on Monday, with new home sales out on Tuesday and durable goods orders and the Federal Reserve interest-rate decision on Wednesday. "The Fed is overwhelmingly expected to keep the Federal Funds Rate unchanged at 0.25-0.50 percent," Emily Nicol, economist at Daiwa Capital Markets, said in a note on Monday. "Likely of more interest will be the post-meeting press statement, which will be watched closely for the Committee's assessment of post-UK-referendum risks and therefore any hints about the likely timing for future rate increases," she added. In corporate news, Verizon and Yahoo are close to striking a $5 billion acquisition deal, Recode reported, citing sources close to the situation. The news is expected on Monday. The broader Topix index closed down 2.15 points, or 0.16 percent, at 1,325.36. The benchmark Nikkei 225 index closed flat at 16,620.29. Other Asian markets also traded modestly, with little movement seen in benchmark indexes in the region. Australia's ASX 200 closed up 35.41 points, or 0.64 percent, at 5,533.60, with a 0.55 percent increase in the heavily-weighted financials sub-index. In South Korea, the Kospi closed up 1.98 points, or 0.1 percent, at 2,012.32. Hong Kong's Hang Seng index was down 0.19 percent. Chinese mainland markets closed mostly up, with the Shanghai composite gaining 3.98 points, or 0.13 percent, to 3,016.80, while the Shenzhen composite finished near flat at 2,019.81. Oil prices fell on Monday, holding near two-month lows amid worries that a global glut of crude and refined products would weigh on markets for some time. Brent crude futures were trading at $45.45 a barrel at 0956 GMT, down 24 cents from their previous close, while U.S. crude was down 25 cents at $43.94 a barrel. Gold fell on Monday, extending a second straight week of losses, as a recovery in risk appetite supported stock markets near nine-month highs ahead of central bank meetings this week in the United States and Japan. The world's major economies pledged at a G20 meeting this weekend, dominated by last month's British vote to leave the European Union, to use all policy tools available to boost growth. That lifted both shares and the dollar, weighing on gold. Spot gold was down 0.5 percent at $1,314.87 an ounce at 0935 GMT, while U.S. gold futures for August delivery were down $8.60 an ounce at $1,314.80. Gold eased for a second week last week, by 1.2 percent, after rallying to its highest in more than two years in early July in the wake of the Brexit vote, which drove up demand for the metal as a haven from risk.