XM does not provide services to residents of the United States of America.

Stocks flop on feeble earnings reports, oil in the doldrums



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>GLOBAL MARKETS-Stocks flop on feeble earnings reports, oil in the doldrums</title></head><body>

Europe's STOXX down 0.3%, U.S. futures dip on dour earnings

U.S. data due later in week could offer direction

Yen hits seven-week high, rate hike in the balance

Updates prices

By Lawrence White

LONDON, July 24 (Reuters) -Stocks sagged worldwide on Wednesday as earnings from Tesla, Alphabet and European luxury brands disappointed, while oil prices traded near-six week lows as summer demand failed to surge.

The U.S. dollar was broadly steady, with traders watching out for an inflation reading on Friday and a Federal Reserve meeting next week, while the yen surged to a seven-week high ahead of a central bank meeting next week.

The pan-European STOXX 600 index .STOXX slipped 0.34% to 513.72 points as of 1143 GMT. That was led by a 2% slump in the personal and household goods sector .SXQP after the world's biggest luxury group LVMH LVMH.PA reported slower sales growth as Chinese shoppers rein in their spending.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.32%, while Japan's Nikkei .N225 fell 1%.

The dour mood looked set to continue in the United States. Nasdaq futures NQc1 slid 1.1% and S&P 500 futures were 0.7% lower after Tesla TSLA.O reported its lowest profit margin in five years, and big tech stocks also fared poorly.

"The interim results season is kicking off on both sides of the Atlantic and, so far, investors are underwhelmed by what they have seen," said Steve Clayton, head of equity funds, Hargreaves Lansdown.

Shares of Google-parent Alphabet GOOGL.O slipped in after-hours trade even as the firm beat revenue and profit targets.

"Investors queried whether the vast sums being invested into Google's AI capabilities were actually earning a return," Clayton said.


RATE CUT EXPECTATIONS

Subdued stock trading globally was symptomatic of markets looking for direction, with traders digesting a range of themes including the U.S. election, expectations of rate cuts and weak corporate earnings reports.

Oil prices snapped three straight losing sessions on Wednesday thanks to falling U.S. crude inventories and growing supply risks from wildfires in Canada, but still sat near month and-a-half lows amid lacklustre demand.

Brent LCOc1 crude futures for September rose 84 cents, or 1%, to $81.83 a barrel by 1147 GMT. U.S. West Texas Intermediate crude for September CLc1 increased 93 cents, or 1.21%, to $77.89 per barrel.

U.S. GDP data on Thursday and personal consumption expenditure data - the Fed's favoured measure of inflation - on Friday could help investors calibrate their expectations of when interest rates might be cut.

Markets are pricing in 62 basis points of easing this year, with a cut in September priced in at 95%, the CME FedWatch tool showed.

A growing majority of economists in a Reuters poll said the Fed would likely cut rates twice this year, in September and December, as resilient U.S. consumer demand warrants a cautious approach despite easing inflation.

"The U.S. consumer has remained extremely strong ... but you're starting to see a degree of fragility underlying some of the data," said Luke Browne, head of asset allocation for Asia at Manulife Investment Management.


YEN RIDE

The yen JPY=EBS spiked to its highest in seven weeks of 154.1 per dollar after surging nearly 1% on Tuesday, having languished near a 38-year low of 161.96 at the start of the month.

Traders are focused on a Bank of Japan meeting next week, where a 10 basis point hike is priced at a 44% chance. FRX/

Traders suspect Tokyo intervened in the currency market in early July to yank the yen higher, with estimates from BOJ data indicating authorities may have spent roughly 6 trillion yen ($38 billion).

The suspected bouts of intervention have led speculators to unwind popular and profitable carry trades, in which traders borrow the yen at low rates to invest in dollar-priced assets for a higher return.

The yen was higher against other currencies too, touching a more than one-month highs against the pound GBPJPY= and the euro EURJPY= and a two-month high against the Australian dollar AUDJPY=R. AUD/

The dollar index =USD, which measures the U.S. currency against six peers, was little changed at 104.33. The index is down 1.3% this month.


($1 = 155.3600 yen)


World FX rates YTD http://tmsnrt.rs/2egbfVh

Asian stock markets https://tmsnrt.rs/2zpUAr4


Reporting by Lawrence White in London and Ankur Banerjee in Singapore; Editing by Christopher Cushing, Sam Holmes, Edwina Gibbs and Alex Richardson

 
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets
</body></html>

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.