Daily Solutions – 01 August 2017

JOHANNESBURG – The JSE all share index, which reached a fresh record of 55,367 points on Monday before settling back to close at 55,207, looks likely to make further gains on Tuesday. Chinese stocks continued their rally ahead of the JSE’s opening on Tuesday morning, buoyed by the Caixin manufacturing purchasing managers’ index (PMI) for July coming in at 51.1 points, far higher than the expected 50.4. This helped Hong Kong’s Hang Seng index gain 0.73%, the Shanghai composite index gain 0.41% and the Shenzhen composite index 0.06%. Sydney’s S&P/ASX 200 was 0.81% higher, with BHP Billiton gaining 1% to A$26.11. One the JSE on Monday BHP closed 2.88% higher at R239.62. Much as China had the NBS manufacturing PMI released on Monday and the Caixin manufacturing PMI released on Tuesday, SA has the Absa-sponsored poll of factory managers released on Tuesday at 11am and a similar survey sponsored by Standard Bank released on Thursday. The Absa manufacturing PMI, done by Stellenbosch University’s Bureau of Economic Research, is expected to show factory managers rebounded to the optimistic side of 50 points in July after falling to a pessimistic 46.7 points in June. Trading Economics found the economists’ consensus is for 53.6 points for July. The Standard Bank manufacturing PMI is expected to show a rebound to 50.6 points in July from 49 in June. US MARKETS – The Dow Jones industrial average closed at a record high on Monday as Wall Street cheered on what’s been a strong earnings season. The 30-stock index rose 60.81 points to close at 21,891.12 with Goldman Sachs and Home Depot contributing the most gains. Boeing also contributed gains, with shares rising half a percent after announcing it expects a record number of aircraft orders from India. The announcement came about a week after posted better-thanexpected quarterly results. The S&P 500 closed 0.07 percent lower at 2,470.30 as materials and information technology lagged. The Nasdaq composite underperformed, falling 0.42 percent to end at 6,348.12 as large-cap tech stocks like Facebook and Alphabet pulled back.

US MARKETS – The Dow Jones industrial average closed at a record high on Monday as Wall Street cheered on what’s been a strong earnings season. The 30-stock index rose 60.81 points to close at 21,891.12 with Goldman Sachs and Home Depot contributing the most gains. Boeing also contributed gains, with shares rising half a percent after announcing it expects a record number of aircraft orders from India. The announcement came about a week after posted better-thanexpected quarterly results. The S&P 500 closed 0.07 percent lower at 2,470.30 as materials and information technology lagged. The Nasdaq composite underperformed, falling 0.42 percent to end at 6,348.12 as large-cap tech stocks like Facebook and Alphabet pulled back.

EUROPEAN MARKETS – European markets closed mixed on Monday with auto stocks leading declines after Germany said it was open to class action lawsuits against carmakers. The pan-European Stoxx 600 was 0.13 percent lower with the auto sector the biggest faller amid an emissions cheating scandal. German lawmakers and automaker meet on Wednesday to discuss ways to improve pollution and restore the image of the sector. Volkswagen fell 1.4 percent, BMW slid 0.6 percent and Daimler dropped 1.2 percent. Basic resources stocks – with their heavy exposure to China – were among the top performers on Monday, up by more than 0.4 percent. Chinese stocks surged on Monday after several leading companies forecast strong mid-year earnings and economic data showed growth. Mining giants BHP Billiton and Anglo American rose about 1 percent.

ASIAN MARKETS – Major Asian indexes closed mostly higher on Monday, as regional markets appeared to shrug off heightened geopolitical tensions in the Korean Peninsula and digested the release of China PMI data. Japan’s Nikkei 225 edged down 0.17 percent, or 34.66 points to close at 19,925.18 while South Korea’s Kospi reversed earlier losses to climb 0.07 percent, or 1.72 points, to end at 2,402.71. Hong Kong’s Hang Seng Index rose 1.22 percent to 27,307.91 by 3.17 p.m. HK/SIN after touching 27,321.31 earlier in the session — its highest level since May 2015, according to Reuters. Mainland markets shrugged off the release of slightly lower-than-expected China PMI data to close higher. The Shanghai Composite was up 0.64 percent, or 20.8924 points, to close at 3,274.1328 and the Shenzhen Composite gained 0.574 percent, or 10.7235 points to finish at 1,879.0959.

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Source: Investment Solutions