14th July 2021 Morning Report

Wednesday 14th July 2021

U.S. equity markets closed marginally lower as investors weighed the strongest inflation reading in over a decade against strong earnings from Wall Street banks. The Dow Jones Industrial Average fell 0.31%, while the S&P 500 and the Nasdaq Composite lost 0.35% and 0.38%, respectively. Consumer prices rose 0.9% month over month in June and 5.4% annually. This was the highest prices growth since August 2008, with core prices (exclude food and energy) increased, also increased 0.9% last month and 4.5% on an annual basis, the largest increase since November 1991. The bond market hardly reacted hot inflation data but came under pressure after the tepid 30 year bond auction. The benchmark 10 year treasury yield closed at 1.42%.

JPMorgan Chase & Co. reported earnings and revenue that exceeded forecasts, boosted by deal making and the release of reserves set aside to protect against COVID 19 related losses. Slowing loan growth was seen as a worry among investors. Deal making and a strong initial public offering market also favoured Goldman Sachs Group Inc. Its investment banking division generated $3.61 billion in revenue, the second highest all time revenue performance.

Other leading overseas markets were mixed. In Europe, Britain’s FTSE 100, Germany’s DAX 30 and France’s CAC 40 all were marginally down by 0.01%. Asian bourses were higher across the board with Hong Kong’s Hang Seng index climbing 1.63% while China’s Shanghai Composite and Japan’s Nikkei 225 advanced 0.53% and 0.52%, respectively. West Texas Intermediate crude oil increased marginally $75.25 a barrel, the highest since October 2018, and gold reached $1,809.40 an ounce.

Morning Report 14 July 2021

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