Good morning! Here’s what you need to know in markets on Wednesday.
1. Lloyds Banking Group said on Wednesday its pre-tax profit for the first half of 2018 jumped by 23% to £3.1 billion, broadly in line with expectations despite another hefty provision for insurance mis-selling. Reuters reports that Britain’s biggest mortgage lender was predicted to book £3.2 billion in pre-tax profit for the period to end-June, according to a bank-compiled average of forecasts.
2. Apple reported strong earnings on Tuesday, beating expectations for both revenue and earnings per share. The beat was partially powered by Apple’s “services” business, which includes iCloud, Apple Music, and the App Store. All told, services revenue rose 31% year over year to $US9.54 billion.
3. BNP Paribas profits beat expectations in the second quarter as international financial services held up results in the face of sluggish trading activity. The Financial Times reports that the Paris-based bank saw net income fall slightly to €2.39 billion ($US2.9 billion/£2.13 billion), compared to the same quarter last year, but above analyst expectations of closer to €2 billion.
4. The United States may announce higher tariff rates on Chinese imports entering the country, a move designed to increase pressure on China to resume trade negotiations.Bloomberg, citing unnamed sources, said the proposed 10% tariffs on $US200 billion-worth of Chinese imports that were announced in July could be increased to 25% within the coming days.
5. US stocks staged a comeback on Tuesday after a three-session losing streak amid optimism for cooling trade tensions between the US and China and after a series of strong earnings reports. Bloomberg reported that representatives of Treasury Secretary Steve Mnuchin and Chinese Vice Premier Liu He are working toward a restart in trade talks, according to two people familiar with the matter.
6. Japanese shares rose on Wednesday, following gains on Wall Street and reports of attempts to renew trade talks between the United States and China. Japan’s Nikkei closed up 0.83%, but the Hong Kong Hang Seng is down 0.29% at the time of writing (7.15 a.m. BST/2.15 a.m. ET), and China’s Shanghai Composite is down 0.94% after weak Chinese manufacturing data.
7. Activity levels across China’s manufacturing sector in July grew at the slowest pace in eight months. New export orders declined for a fourth consecutive month, and at the fastest pace in over two years.
8. British retailer Next reported a 2.8% rise in full-price sales in the second quarter, a better result than it had forecast following exceptionally warm weather that boosted demand for summer ranges. Reuters reports that the company said on Wednesday it was almost certain that some of these sales have been pulled forward from August, so it maintained its sales and profit guidance for the year to January 2019.
9. It’s manufacturing PMI day. IHS Markit will deliver manufacturing sector growth estimates for Spain, Italy, France, Germany, Britain, and the eurozone as a whole in July from 8.15 a.m. BST (3.15 a.m. ET) onwards. Activity is forecast to remain steady or slow slightly across all European markets. Figures for Canada and the US come this afternoon.
10. Crypto bears were back in control during Asian trade, with Bitcoin continuing its slide after falling below $US8,000 overnight.Bitcoin is down 2.5% against the dollar to $US7,542.51 at the time of writing (7.10 a.m. BST/5.10 a.m. ET).
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