Earnings Driver
CMC Markets | Aug 03, 2017 09:46
Originally published by CMC Markets
A continuing focus on corporate earnings announcements may see another lower volume trading day in the Asia Pacific region. US markets were buoyed by a strong result from Apple (NASDAQ:AAPL) announced after the previous close. Resource shares may face pressure after copper slid and Rio Tinto (AX:RIO) missed forecast profits.
While the usual monthly macro data continues to offer mixed messages corporate reports are painting a stronger picture. Three-quarters of S&P 500 companies have unveiled quarterly earnings that on aggregate show a lift of around 6% for sales and 11% for profits. This supports the record highs for US markets. Rio fell in London and New York after lifting profit by “only” 93%. Local investors may jump on any weakness after the company announced its largest interim dividend ever.
In Australia major reports due include Downer Edi (AX:DOW) and Seven Group Holdings (AX:SVW). Suncorp (AX:SUN) has already released a report that shows a slightly disappointing 3.6% lift in profit. However ambitious targets and a strong general insurance result could bring buying support.
Today’s major economic release is the Caixin read on China services activity. Speculation that this week’s stronger yuan fixings reflect a policy shift is likely unfounded given US dollar weakness, although it will continue to draw attention.
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