Gold is trading higher and looks too be on track for its best week in nearly five months, as the U.S. dollar continues to pull back. U.S. gold futures higher by 0.57% to $1,779.08 per ounce, having gained almost 2.1% this week. Gold however is still poised for a fourth consecutive monthly drop, its worst run of monthly losses since November 2020.
“Although bullion saw a sell-off below $1,700 (earlier this month), it is significant that long-term support at $1,675/80 was tested and held. Gold has been trying to form a bottom since,” Halley said. (Reuters).
Spot silver higher by 0.2% to $20.02 per ounce, but is set for a monthly loss. Platinum rose 0.9% to $896.15.
Oil prices are higher as we look to OPEC+ meeting next week 3rd August. Sources said the group will consider keeping oil output unchanged for September, with two OPEC+ sources saying a modest increase would be discussed. Analysts, however, said it would be difficult for OPEC+ to boost supply, given that many producers are already struggling to meet production quotas.
Global equities are up on expectations U.S. monetary tightening would not be as hawkish as initially expected after disappointing growth figures.
“It certainly feels like we are back in trade-off mode again, where sentiment is shifting between recessionary risks in H2 and a fundamentally undersupplied (oil) market,” said Stephen Innes, managing partner at SPI Asset Management.
Magna International Inc: The Canadian auto parts maker reported a lower-than-expected quarterly profit, hit by higher commodity and energy costs worsened by Russia’s invasion of Ukraine. Magna, which operates six plants in Russia that employed 2,500 people, said its facilities remain substantially idled and production is not expected to resume before 2024. The Aurora, Canada-based manufacturer flagged reduced earnings on lower sales at facilities in Russia and recorded non-cash impairment charges of $376 million for the second quarter ended June 30, related to its investment in Russia. The company, which makes parts such as body structures, chassis and powertrain for customers including Ford Motor and Volkswagen, expects the ongoing cost pressures to continue through the year. Magna’s quarterly net sales rose 3.6% to $9.36 billion, helped by an increase in prices and higher global light vehicle production. Excluding items, it reported a profit of 83 cents per share, compared to analysts’ estimates of 94 cents per share, according to Refinitiv data.
ECONOMIC EVENTS (EST)
0830 GDP mm for May: Expected -0.2%; Prior 0.3%
1100 Budget balance for April: Prior -C$25.75 bln
1100 Budget, year-to-date for April: Prior -C$95.57 bln
COMPANIES REPORTING
July 29:
Canfor Corp: Expected Q2 earnings of C$2.70 per share
Enbridge Inc: Expected Q2 earnings of 71 Canadian cents per share
Imperial Oil Ltd: Expected Q2 earnings of C$2.54 per share
Magna International Inc: Expected Q2 earnings of 93 cents per share
CORPORATE EVENTS (EST)
0800 Magna International Inc: Q2 earnings conference call
0800 Sleep Country Canada Holdings Inc: Q2 earnings conference call
0800 TMX Group Ltd: Q2 earnings conference call
0830 Fairfax Financial Holdings Ltd: Q2 earnings conference call
0830 MEG Energy Corp: Q2 earnings conference call
0830 TFI International Inc: Q2 earnings conference call
0900 Dundee Precious Metals Inc: Q2 earnings conference call
0900 Enbridge Inc: Q2 earnings conference call
0900 Yamana Gold Inc: Q2 earnings conference call
1000 ARC Resources Ltd: Q2 earnings conference call
1000 Intact Financial Corp: Q2 earnings conference call
1100 Canfor Corp: Q2 earnings conference call
1100 Imperial Oil Ltd: Q2 earnings conference call
1130 Eldorado Gold Corp: Q2 earnings conference call
EX-DIVIDENDS
Bank of Montreal: Amount C$1.39
Emera Inc: Amount C$0.66
• Amazon.com Inc: The e-commerce giant on Thursday said it expects a jump in third-quarter revenue, as the retailer collects bigger fees from Prime loyalty subscriptions and as consumer demand remained high in spite of rising inflation. In a press release, Chief Executive Andy Jassy said the company is “seeing revenue accelerate as we continue to make Prime even better for members, both investing in faster shipping speeds, and adding unique benefits such as free delivery from Grubhub for a year.” Still, sales growth has slowed year-over-year in some of the retailer’s business segments. In North America, the company’s largest market, net sales climbed 10% in the just-ended second quarter, compared with a 22% gain in the same period a year ago. Its international unit saw an outright decline of 12%.
• Apple Inc: The tech giant on Thursday said parts shortages are easing and that demand for iPhones is unceasing despite consumers tightening other spending, helping it top Wall Street expectations and forecast faster sales growth ahead. Though macroeconomic indicators around the world are turning negative, Chief Financial Officer Luca Maestri told Reuters there had been no slowdown in demand for iPhones, the company’s biggest source of revenue. Phone sales in the fiscal third quarter rose 3% to $40.7 billion, when Wall Street had braced for a 3% decline. By contrast, the overall global smartphone market dropped 9% during the just-ended quarter, according to Canalys data. Separately, the company should brace for a weakening of demand in China as shoppers curb spending in an anemic economy, some analysts warned, after the iPhone maker said demand had rebounded in mid-June after COVID-19 lockdowns hampered sales.
• Chevron Corp: The oil major posted its biggest quarterly earnings ever, built on strong fuel margins and high prices for natural gas and oil, and boosted its expectations for share buybacks in the coming months. It posted second-quarter net profit of $11.6 billion, or $5.95 per diluted share, more than triple the $3.1 billion, or $1.60 per share, in the same period last year. The company’s average sales price for a barrel of crude oil and natural gas liquids was $89 in the quarter, compared with $54 a barrel a year earlier. Chevron increased the top end of its annual share repurchase guidance range to $15 billion from $10 billion. Analysts from large financial firms were not expecting an expansion of the buyback program this soon after it raised its guidance in May to the top end of its $5 billion-$10 billion range.
• Continental Resources Inc: The U.S. shale producer Continental Resources Inc beat second-quarter profit expectations on Thursday, on the back of higher oil prices. Continental also said it was still evaluating a take-private offer in June from billionaire-founder Harold Hamm’s family trust, which valued the company at over $25 billion. The proposal and the quarterly profit jump both come at a time of soaring energy prices on tight supply as demand rose to pre-pandemic levels and as Western countries-imposed sanctions on Russia following its invasion of Ukraine. Analysts also see the take-private attempt as an indication of Hamm’s clear frustration at how public producers are expected to forego raising crude output in favor of higher shareholder payouts, even as oil prices have risen beyond $100 a barrel.
• Exxon Mobil Corp: The top U.S. oil producer posted its biggest quarterly profit ever on the back of soaring energy prices and as it kept a tight rein on spending. The company reported second-quarter net income of $17.9 billion, or $4.21 per share, an almost four-fold increase over the $4.69 billion, or $1.10 per share, it earned in the same period last year. Exxon’s results also beat its best quarter of 2008, when Brent crude oil prices peaked at $147 per barrel, and its best-ever quarter reached in 2012, when the company earned $15.9 billion, largely due to asset sales in Japan and tax-related items. It kept its capital investments at $9.5 billion in the first half of the year, in line with full-year guidance. The profit included a $300 million booked identified item associated with the sale of the Barnett Shale upstream asset.
• Intel Corp: The chipmaker slashed its annual sales and profit forecasts on Thursday after missing estimates for second-quarter results as demand for its chips used in personal computers cools, sending shares down. The company also forecast current-quarter results well below expectations, blaming the “sudden and rapid decline” in economic activity and execution issues. Intel now expects fiscal 2022 revenue between $65 billion and $68 billion, compared with its earlier forecast of $76 billion. It also forecast adjusted profit of $2.30 per share, down from a prior outlook of $3.60 per share.
• Petroleo Brasileiro SA: The Brazilian company smashed second quarter profit and margin estimates, boosted by divestments and higher margins in its fuel and natural gas businesses, the company said on Thursday. reported a net income of 54.33 billion reais. That represented a 26.8% increase from the same period last year and was well above the Refinitiv consensus estimate of 38 billion reais. Earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for certain non-recurring factors, came in at 98.26 billion reais, up 58.6% in annual terms and well above the Refinitiv estimate of 83.2 billion reais. The company approved a record dividend payout of 87.8 billion reais, Brazil’s state-run oil company said on Thursday, a move that will boost the government’s coffers heading into a tense election.
• Procter & Gamble Co: The company beat quarterly sales estimates , helped by higher prices of its detergents and homecare products. Major consumer goods companies have so far seen little resistance to price hikes they have implemented in order to cushion the blow of surging transportation and commodity costs, with the products they make usually among the last to see a slowdown in demand during economic downturns. The Tide detergent maker said net sales rose 3% to $19.52 billion in the fourth quarter ended June 30, compared with analysts’ estimates of $19.41 billion, according to IBES data from Refinitiv. However, the company forecast average fiscal 2023 earnings per share of $5.93, below analysts’ estimates of a $6.02, with the company blaming about $3.3 billion of headwinds from a stronger dollar and higher commodity and freight costs.
• Roku Inc: The company posted a wider-than-expected quarterly loss on Thursday and withdrew its revenue growth rate estimate for the year as the current economic turmoil squeezes its ad business, sending the streaming platform’s shares down. Roku’s total net revenue rose more than 18% to $764.4 million for the second quarter ended June 30, but failed to match analysts’ estimates of $805.2 million, according to Refinitiv IBES data. It also reported a loss of 82 cents per share, wider than the 69-cent per-share loss that analysts had expected. The company projected current-quarter revenue to grow 3% to $700 million, lower than the $901.7 million estimated by analysts.
• Vale SA: The Brazilian miner said on Thursday its second-quarter net income fell 18.9% from the previous year, hit mainly by a sharp decline in iron ore prices and escalating costs, but results still topped analysts’ estimates. Vale, one of the world’s largest iron ore miners, posted net income of $6.15 billion, above expectations of $2.837 billion, according to a Refinitiv forecast. Recurring net income, however, fell 49.8% from the year before. Vale is the latest global miner to be weighed down by higher costs tied to inflation and lower commodity prices. The company flagged that its iron ore, nickel and copper units had been affected by price increases in fuel and freight expenses, among others.
ECONOMIC EVENTS (EST)
0830 Personal income mm for June: Expected 0.5%; Prior 0.5%
0830 Personal consumption real mm for June: Prior -0.4%
0830 Consumption, adjusted mm for June: Expected 0.9%; Prior 0.2%
0830 Core PCE price index mm for June: Expected 0.5%; Prior 0.3%
0830 Core PCE price index yy for June: Expected 4.7%; Prior 4.7%
0830 PCE price index mm for June: Prior 0.6%
0830 PCE price index yy for June: Prior 6.3%
0830 Employment wages qq for Q2 : Prior 1.2%
0830 Employment benefits qq for Q2 : Prior 1.8%
0830 Employment costs for Q2 : Expected 1.2%; Prior 1.4%
0945 Chicago PMI for July: Expected 55.0; Prior 56.0
1000 U Mich Sentiment Final for July: Expected 51.1; Prior 51.1
1000 U Mich Conditions Final for July: Prior 57.1
1000 U Mich Expectations Final for July: Prior 47.3
1000 U Mich 1-year inflation final for July: Prior 5.2%
1000 U Mich 5-year inflation final for July: Prior 2.8%
COMPANIES REPORTING RESULTS
Abbvie Inc: Expected Q2 earnings of $3.31 per share
Cboe Global Markets Inc: Expected Q2 earnings of $1.69 per share
Charter Communications Inc: Expected Q2 earnings of $6.89 per share
LyondellBasell Industries NV: Expected Q2 earnings of $4.67 per share
Mettler-Toledo International Inc: Expected Q2 earnings of $9.67 per share
Weyerhaeuser Co: Expected Q2 earnings of 98 cents per share
WW Grainger Inc: Expected Q2 earnings of $6.65 per share
EX-DIVIDENDS
AES Corp: Amount $0.15
Ally Financial Inc: Amount $0.30
Aon PLC: Amount $0.56
Blackstone Inc: Amount $1.27
Caseys General Stores Inc: Amount $0.38
Citigroup Inc: Amount $0.51
East West Bancorp Inc: Amount $0.40
Hasbro Inc: Amount $0.70
Kinder Morgan Inc: Amount $0.27
Levi Strauss & Co: Amount $0.12
NRG Energy Inc: Amount $0.35
Omega Healthcare Investors Inc: Amount $0.67
ONEOK Inc: Amount $0.93
Pinnacle West Capital Corp: Amount $0.85
Public Storage: Amount $13.1
Realty Income Corp: Amount $0.24
Synchrony Financial: Amount $0.23
Texas Instruments Inc: Amount $1.15
EUROPE, ASIA CHATER
MARKET VIEW (04:30 GMT)
S&P 500 Index Mini Futures: 4,098.75; up 0.62%; 25.25 points
DJIA Mini Futures: 32,513.00; up 0.07%; 23 points
Nikkei: 27,768.60; down 0.17%; 46.88 points
MSCI Asia, Ex-JP: 522.91; down 0.27%; 1.39 points
EUR/USD: $1.0213; up 0.15%; 0.0015 point
GBP/USD: $1.2190; up 0.16%; 0.0019 point
USD/JPY: 133.41 yen; down 0.66%; 0.88 point
Spot Gold: $1,761.35; up 0.33%; $5.86
U.S. Crude: $96.74; up 0.33%; $0.32
Brent Crude: $107.04; down 0.09%; $0.10
10-Yr U.S. Treasury Yield: 2.6704%; down 0.009 point
10-Yr Bund Yield: 0.8095%; up 0.01 point
Asian stocks turned lower, with investors focusing on a U.S. recession after data showed its economy shrinking for a second straight quarter rather than a possible slowdown in the pace of rate hikes.
Oil prices were steady to higher in Asia trade, lifted by supply concerns as attention turns to the next meeting between OPEC and its allies, though fears of recession capped gains.
COMPANIES & NEWS
Cosmetics group L’Oreal bucked a declining trend for the luxury and fashion industry in China with sales growing in the second quarter despite COVID-19 lockdowns, as the make-up market rebounds.
• Shell Plc: The oil major said it will set up a joint venture with China’s Shenergy Group to build a hydrogen refuelling network in Shanghai, the first of its kind for the European energy major in Asia. The joint venture plans to build six to 10 hydrogen refuelling stations in Shanghai and the surrounding Yangzte River Delta in the next five years and up to 30 stations by 2030. These 30 stations could supply hydrogen fuel to about 3,000 trucks or buses every day, Shell said in a statement. The new entity will source low-emission industrial by-product hydrogen from the local chemical plants in the near term and seek to produce and supply green hydrogen – sourced from renewables like solar and wind power – in the long run, Shell added.
ECONOMIC EVENTS (GMT)
0530 France Consumer Spending mm for June: Expected -0.6%; Prior 0.7%
0530 France GDP Preliminary QQ for Q2: Expected 0.2%; Prior -0.2%
0530 France GDP yy Preliminary for Q2: Prior 4.5%
0600 Germany Import Prices mm for June: Expected 0.8%; Prior 0.9%
0600 Germany Import Prices yy for June: Expected 29.9%; Prior 30.6%
0600 Sweden Unemployment Rate for June: Prior 8.5%
0600 Sweden Unemployment Rate SA for June: Prior 7.8%
0600 Sweden Total Employment for June: Prior 5.175 mln
0630 Switzerland Retail Sales yy for June: Prior -1.6%
0645 France CPI (EU Norm) Preliminary yy for July: Expected 6.7%; Prior 6.5%
0645 France CPI (EU Norm) Preliminary mm for July: Expected 0.3%; Prior 0.9%
0645 France CPI Preliminary yy NSA for July: Expected 6.0%; Prior 5.8%
0645 France CPI Preliminary MM NSA for July: Expected 0.3%; Prior 0.7%
0700 Spain Estimated GDP QQ for Q2: Expected 0.4%; Prior 0.2%
0700 Spain Estimated GDP yy for Q2: Expected 5.5%; Prior 6.3%
0700 Spain HICP Flash yy for July: Expected 10.4%; Prior 10.0%
0700 Spain CPI yy Flash NSA for July: Expected 10.6%; Prior 10.2%
0700 Spain HICP Flash mm for July: Expected -0.8%; Prior 1.9%
0700 Spain CPI mm Flash NSA for July: Expected -0.25%; Prior 1.90%
0700 Spain CPI Flash NSA for July: Prior 110.267
0700 Switzerland KOF Indicator for July: Expected 95.2; Prior 96.9
0700 Switzerland Official Reserves Assets for June: Prior 9,98,729.28 mln CHF
0700 Austria GDP Growth QQ Preliminary for Q2: Prior 1.5%
0700 Austria PPI mm for June: Prior 0.4%
0700 Austria PPI yy for June: Prior 20.9%
0755 Germany Unemployment Change SA for July: Expected 15,000; Prior 1,33,000
0755 Germany Unemployment Total NSA for July: Prior 2.363 mln
0755 Germany Unemployment Rate SA for July: Expected 5.4%; Prior 5.3%
0755 Germany Unemployment Total SA for July: Prior 2.417 mln
0800 Germany GDP Flash QQ SA for Q2: Expected 0.1%; Prior 0.2%
0800 Germany GDP Flash yy NSA for Q2: Expected 1.8%; Prior 4.0%
0800 Germany GDP Flash yy SA for Q2: Expected 1.7%; Prior 3.8%
0800 Italy GDP Preliminary QQ for Q2: Expected 0.3%; Prior 0.1%
0800 Italy GDP Preliminary yy for Q2: Expected 3.7%; prior 6.2%
0800 Spain Current Account Balance for May: Prior -0.48 bln EUR
0830 United Kingdom BOE Consumer Credit for June: Expected 1.000 bln; Prior 0.844 bln GBP
0830 United Kingdom Mortgage Lending for June: Expected 5.400 bln; Prior 7.426 bln GBP
0830 United Kingdom Mortgage Approvals for June: Expected 65,000; Prior 66,163
0830 United Kingdom M4 Money Supply for June: Prior 0.5%
0830 United Kingdom Broad Money for June: Prior 30,48,812 mln GBP
0830 Portugal CPI Flash mm for July: Prior 0.8%
0830 Portugal CPI Flash yy for July: Prior 8.7%
0830 Portugal GDP QQ Preliminary for Q2: Prior 2.6%
0830 Portugal GDP yy Preliminary for Q2: Prior 11.9%
0900 Euro Zone HICP Flash yy for July: Expected 8.6%; Prior 8.6%
0900 Euro Zone HICP-X Food and Energy Flash yy for July: Expected 4.7%; Prior 4.6%
0900 Euro Zone HICP-X Food, Energy, Alcohol and Tobacco Flash yy for July: Expected 3.8%; Prior 3.7%
0900 Euro Zone HICP-X Food, Energy, Alcohol and Tobacco Flash mm for July: Prior 0.20%
0900 Euro Zone CPI NSA for July: Prior 117.00
0900 Euro Zone GDP Flash Preliminary yy for Q2: Expected 3.4%; Prior 5.4%
0900 Euro Zone GDP Flash Preliminary QQ for Q2: Expected 0.2%; Prior 0.6%
0900 Italy Consumer Price Preliminary mm for July: Expected 0.6%; Prior 1.2%
0900 Italy Consumer Price Preliminary yy for July: Expected 8.1%; Prior 8.0%
0900 Italy CPI (EU Norm) Preliminary mm for July: Expected -0.9%; Prior 1.2%
0900 Italy CPI (EU Norm) Preliminary yy for July: Expected 8.8%; Prior 8.5%
0900 Italy CPI NSA for July: Prior 112.5
1000 Portugal Unemployment Rate for June: Prior 6.10%