In the last stock market session of July, indexes were generally close to their record highs. The CAC40 in Paris finished just below 7,500 points, while its reinvested dividend version, the CAC40 GR, reached a new record of 22,617 points. Bearish trends are not evident at the moment. In summary, the stock markets are still at very high levels, having handled recent central bank rate hikes and July's corporate results exceptionally well.

So, let's take a quick look at the situation on August 1. We start with the July indexes, with a very international Top 5 (excluding markets with highly volatile currencies):

  • MSCI China in China: +9.8%
  • Bel20 in Belgium / +6.6%
  • Hang Seng in Hong Kong: +6.1
  • Italy's FTSE MIB: +5
  • ATHEX in Greece: +4.5%.

Same exercise in 2023, after seven months (still excluding markets with highly volatile currencies):

  • Nasdaq 100 in the United States: +44%, a totally insane progression.
  • ATHEX in Greece: +43.6%, not bad either, thanks in particular to financial stocks.
  • Nikkei 225 in Japan: +27%, the bottled buy bet of the 1st half after the failure of the Chinese recovery. For lack of thrushes in Shanghai, we're eating blackbirds in Tokyo.
  • FTSE MIB in Italy: +25%, thanks to banking and automobiles.
  • DAX in Germany: +18%.

Europe's night owls witnessed a half-surprise: Australia's central bank kept its key rate steady at 4.10%, contrary to the expected 0.25% increase. The decision was due to uncertain economic outlook and a desire to observe the impact of a previous rate hike. Despite this, inflation remains high at 6%. The RBA's communication is notably clearer than other central banks'. While this decision may not be groundbreaking, it shows that central banks prioritize dynamic responses over maintaining interest rates. Next, the Bank of England's decision is awaited, with expectations of a rate hike. Additionally, today's focus includes final PMI indicators and the JOLTS survey on US employment.

The corporate results agenda includes a number of old-economy heavyweights today, notably Merck and Pfizer in the US healthcare sector, and HSBC, BP Plc and Diageo in the UK. Processor manufacturer Advanced Micro Devices will be the permanent fixture for technology stocks, but this will be after the close of Wall Street.

In Asia-Pacific, August began with mixed performances. Tokyo's Nikkei 225 rose by 0.8% due to a weaker yen and slight shifts in monetary policy. However, China's CSI300 and Hong Kong's Hang Seng declined, partly influenced by disappointing consumption stimulus measures and a contraction in the Caixin PMI in July. South Korea's KOSPI gained 1%, while India's SENSEX experienced a slight fall. Australia's ASX200 rose by 0.5% after the RBA maintained the status quo, approaching its 2022 records. In Europe, leading indicators were hesitant, except for Switzerland, which observed a break for the national holiday. The CAC40 in France lost 0.1% and closed at 7,490 points.

Economic highlights of the day

The final July manufacturing PMI indicators will be published throughout the day for the major economies. The JOLTS survey on US employment will complete the picture at 10:00 am. Full agenda here.

The dollar gains to 0.9112 EUR and 0.7811 GBP. The ounce of gold is trading at 1955 USD. Oil is firm, with North Sea Brent at 84.95 USD a barrel and US light crude WTI at 81.25 USD. The yield on 10-year US debt stands at 3.96%. Bitcoin is trading at 28,950 USD.

In corporate news:

  • Western Digital was down 2% in after-hours trading following Monday evening's release of lower-than-expected quarterly sales. The company also expects a larger-than-expected net loss for the current quarter, due to weak demand.
  • Blackrock and financial services group MSCI are under investigation by a US congressional committee for facilitating investments in China.
  • Meta Platforms is preparing to launch several chatbots in September, equipped with artificial intelligence (AI) and capable of having different personalities in order to increase user loyalty.
  • Diamondback Energy lost 1.9% in after-hours trading, as the shale oil and gas producer reported second-quarter earnings below Wall Street expectations on Monday evening.
  • Albemarle, the world's leading lithium producer, is to take a 5% stake in mining group Patriot Battery Metals for C$109 million (€74.95 million), the latter announced.
  • Tapestry, American Eagle Outfitters and GAP - Barclays raises its recommendation from "in-line weighted" to "overweight".
  • Pacwest Bancorp - D.A. Davidson raises its rating from "neutral" to "buy". 

Analyst recommendations:

  • Bath & Body Works: Barclays raised the recommendation to overweight from equal-weight. Price target set to $45.
  • Brown & Brown: Keefe, Bruyette & Woods downgrades to market perform from outperform. Price target up to $76.
  • Chinook Therapeutics: Wells Fargo Securities reduces to equal-weight from overweight. PT set to $40.
  • Domino's Pizza Group: Peel Hunt cut the recommendation to add from buy. PT set to 400 pence
  • Eastman Chemical: Piper Sandler cut to neutral from overweight. Price target set to $96.
  • ImmunoGen:  HC Wainwright & Co raised the target to $26 from $21. Maintains buy rating.
  • Lattice Semiconductor: Benchmark Company raised the target to $105 from $95. Maintains buy rating.
  • Meta Platforms: Phillip Securities upgrades to accumulate from neutral. PT set to $360.
  • ResMed: RBC Capital Markets raised the recommendation to outperform from sector perform. PT set to $284
  • Tapestry: Barclays upgrades to overweight from equal-weight. Price target up 34% to $58.
  • Thermo Fisher Scientific: Accountability Research Corp cut the recommendation to hold from buy. Price target set to $605.
  • Union Pacific: Argus Research raised the target to $260 from $235. Maintains buy rating.