July 27, 2018, by Lorcan Roche Kelly
President Donald Trump, speaking at a steel mill in Granite City, Illinois, yesterday predicted that this morning’s GDP data due at 8:30 a.m. Eastern Time will show the country’s economy is in “terrific shape.” This time, economists are in agreement with the president as a Bloomberg survey shows a median estimate of 4.2 percent annualized growth in the second quarter. Earlier today, French GDP numbers showed a sluggish 0.2 percent expansion in the second quarter.
It would be something of an understatement to say it has been a mixed week for tech earnings. Investors in the sector got some relief yesterday when Amazon.com Inc.’s earnings showed record second-quarter profits, pushing shares 3.2 percent higher in extended trading. Facebook Inc.’s 19 percent slump yesterday continues to be the dominant story for so-called FAANG stocks. Twitter Inc. rounds off the week of tech results after the bell today, with monthly active users the key metric investors will be watching.
British Prime Minister Theresa May is running out of Brexit options after the European Union rejected a key part of her plan to manage the country’s exit from the bloc. Chief EU negotiator Michel Barnier suggested that one way to get over the impasse would be for the U.K. to remain in the customs union, something members of May’s Conservative Party would be unlikely to accept. With just 12 weeks to go until the divorce deal is meant to be signed, time is running very short.
Markets drift higher
Overnight, the MSCI Asia Pacific Index rose 0.4 percent while Japan’s Topix index closed 0.6 percent higher as easing global trade tensions continued to lift sentiment. In Europe, the Stoxx 600 Index was up 0.3 percent at 5:45 a.m. as positive results from BT Group Plc helped the telecom sector. S&P 500 futures were pointing to a gain at the open, the 10-year Treasury yield was at 2.973 percent and gold was lower.
West Texas Intermediate crude is headed for a fourth-weekly loss, with a barrel for September delivery trading at $69.40. Fears continued to linger that global demand for the commodity will fall amid the standoff between China and the U.S. Investors have plenty of earnings to digest from the sector today with Exxon Mobil Corp., Chevron Corp., Phillips 66, and Weatherford International Plc all reporting.