Bailing out the Holy Spirit, Shanghai Composite Rises
August 4, 2014 8:59 am
Big news out of Portugal over the weekend, as the Portuguese government has moved to take control of Espirito Santo in a €4.9 billion bailout which will see the majority of the lender’s assets moved to a new company called Novo Banco (or New Bank).
What a difference a week can make; on Thursday 24th July the S&P500 closed at a record high of 1,988 – by the close on Friday 1st August it was off by 2.7%, in its biggest weekly drop in over 2 years. However, stronger than forecast GDP growth and signs of hawkish agitation at the Fed helped push two-year bond yields to 0.59%, the highest since May 2011.
In China overnight, Asian markets were little changed but the Shanghai Composite index jumped around 1.8% with investors dismissing a report on the Chinese services industry which showed activity slowed to a six-month low in July, impacted by a softer property market. The non-manufacturing Purchasing Managers’ Index fell from 55 in June to 54.2, where a reading above 50 indicates expansion.
In oil markets, crude-oil futures were stable after dropping sharply last week, with Brent holding up around $105 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $97.98 a barrel, up $0.10. September Brent crude on London’s ICE Futures exchange rose $0.20 to $105.04 a barrel. Nymex crude last week posted its largest one-week percentage decline since the week ending Jan. 3, falling 4.12- Nymex has been down for four of the past six weeks. Brent crude lost 3.28% last week and has been down for five of the past six weeks. Over the weekend, Libya warned of a humanitarian and environmental disaster after eight fuel tanks caught fire amid heavy fighting near Tripoli’s international airport between rival militias.
In FX markets, the US dollar was largely unchanged against the yen and the euro after Friday’s underwhelming US jobs report weighed on the greenback. The dollar was at Y102.66 against Y102.56 late Friday in New York. The euro was at $1.3423 from $1.3429. The Australian dollar firmed against the USD and the yen after Australian retail sales data released Monday came in with a stronger than expected 0.6% rise for June. Earnings releases due today include Avis Budget and Icahn Enterprises.
Big news out of Portugal over the weekend, as the Portuguese government has moved to take control of Espirito Santo in a €4.9 billion bailout which will see the majority of the lender’s assets moved to a new company called Novo Banco (or New Bank).
What a difference a week can make; on Thursday 24th July the S&P500 closed at a record high of 1,988 – by the close on Friday 1st August it was off by 2.7%, in its biggest weekly drop in over 2 years. However, stronger than forecast GDP growth and signs of hawkish agitation at the Fed helped push two-year bond yields to 0.59%, the highest since May 2011.
In China overnight, Asian markets were little changed but the Shanghai Composite index jumped around 1.8% with investors dismissing a report on the Chinese services industry which showed activity slowed to a six-month low in July, impacted by a softer property market. The non-manufacturing Purchasing Managers’ Index fell from 55 in June to 54.2, where a reading above 50 indicates expansion.
In oil markets, crude-oil futures were stable after dropping sharply last week, with Brent holding up around $105 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $97.98 a barrel, up $0.10. September Brent crude on London’s ICE Futures exchange rose $0.20 to $105.04 a barrel. Nymex crude last week posted its largest one-week percentage decline since the week ending Jan. 3, falling 4.12- Nymex has been down for four of the past six weeks. Brent crude lost 3.28% last week and has been down for five of the past six weeks. Over the weekend, Libya warned of a humanitarian and environmental disaster after eight fuel tanks caught fire amid heavy fighting near Tripoli’s international airport between rival militias.
In FX markets, the US dollar was largely unchanged against the yen and the euro after Friday’s underwhelming US jobs report weighed on the greenback. The dollar was at Y102.66 against Y102.56 late Friday in New York. The euro was at $1.3423 from $1.3429. The Australian dollar firmed against the USD and the yen after Australian retail sales data released Monday came in with a stronger than expected 0.6% rise for June. Earnings releases due today include Avis Budget and Icahn Enterprises.
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