Summary:
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Further gains seen for US indices
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Empire Fed manufacturing index: +4.3 vs +2.0 exp
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Citi beats on both earnings and revenue
Equities have made a pretty solid start to the week despite the drop in Chinese GDP that was announced overnight. All the US benchmarks are trading higher ahead of the North American cash session, with S&P500 futures pushing up to new all-time highs above the 3020 mark.
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US stocks have continued their ascent at the start of the week with new record highs seen for the S&P500. The breakout above 2960 remains valid and while the MACD lines are converging the market remains in a clear uptrend for now. Source: xStation
The economic calendar is pretty light today with the only data out of note since the Chinese figures being the Empire Fed manufacturing index. This reading for July came in above forecasts, with a print of +4.3 in excess of the 2.0 consensus forecast and marking a pleasing bounce back from the -8.6 seen last time out. The contraction in manufacturing readings in recent months has caused some concern but the recovery in the latest New York state figures is a welcome recovery after the June reading showed the lowest level since October 2016.
The NY Empire State manufacturing index bounced back into positive territory for the current month, after June’s figure was the lowest level in over 30 months. Source: Bloomberg
Citigroup has kicked off earnings season in earnest this lunchtime with the firm the first major bank to report their Q2 results. On the whole there’s quite a lot to like about the update with the figures beating the street on both the top and bottom line. If Citi’s performance serves as a harbinger of things to come, then the pretty pessimistic forecasts going into this set of corporate earnings could be overly negative and allow for several upside surprises. The bank earned an adjusted $1.83 per share on revenues of $18.8B, against $1.63 and $18.5B for the same period last year. According to Bloomberg, analysts on average expected Citi to post $1.80 per share on $18.5B revenue. The increase in revenue has been attributed in part to a $350M pre-tax gain on its investment in electronic trading platform Tradeweb, which recently went public. The stock is called to begin higher by just under 1%, above the 72 mark and at its highest level of the year.
Citi has been outpacing its peers in the banking sector year-to-date, rising nearly 40% in 2019. The market is expected to start at its highest level since last October this afternoon. Source: xStation
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