World stock indices ticked up on Monday, due to positive earning reporting in the U.S. The profit of Berkshire Hathaway Inc, an investment fund owned by multi-millionaire Warren Buffett, increased 41% for the second quarter. This statement contributed to the company’s quotes growth by 3.1%.
Anadarko, Noble Energy and internet company Groupon submitted good reporting. However, the activity level of market participants was lower in the absence of economic data. The trade turnover on US stock exchanges was 9.7% lower than the monthly average rate. At 14-00 CET Services PMI and Factory Orders are to be released today in the United States. In our opinion, the forecasts seem to be positive. Walt Disney will announce its report after the trade closing. S&P 500 is now 4.9% higher than the level of the year beginning. It is steadily rising without correction of 10% or more since 2011. Its P/E ratio “total price per share/earnings per share” is equal to 17.6. This is the highest level since 2010. Note that 76% of reported companies outperformed their profit forecasts.
European stock indices upped along with the American ones yesterday. Positive data for the second quarter by such companies as Bayerische Motoren Werke AG, Credit Agricole (stocks added 5%), BMW (+3%) and Deutsche Post AG (+2,2%) contributed to this increase. Today at 9-00 CET Retail Sales for June is to be released in the EU. We assume that the preliminary forecasts prove to be positive.
Nikkei is slipping for the forth consecutive day due to weak earnings reports of Japanese corporations. Today Toyota, Sapporo Holdings Ltd and Daikin Industries Ltd. are presenting their reports for the second quarter. Composite PMI and Services PMI for July in Japan performed better than expected yesterday, and in China - worse than expected. Chinese Services PMI tumbled to its low since November 2005. Coincident and Leading Indicators are to be announced in Japan at 5-00 CET tomorrow morning. The forecast is considered to be neutral.
Corn prices rose after the information on the US crop rating, assumed as “good-to-excellent”, reduced more than expected, according to the USDA announcement. Due to the drought, it slipped to 73% from 75% previously, while market participants expected 74%. Let us remind you that the rating of "good-to-excellent" corn crops amounted to 64% last year. Soybean and wheat added in price due to the threat of drought in the US Midwest.
Oil prices increased slightly due to the political tension in North Africa and the Middle East. Its exports from Libya dropped from 500,000 to 450,000 barrels per day. According to forecasts, the US oil reserves for this week are to be reduced by 1 million barrels. For the first time in the past month gasoline reserves may be reduced. Official data, as usual, will be released tomorrow at 14-30 CET.
Strong fluctuations were observed in sugar, coffee and cocoa prices yesterday, due to fire notification in the Brazilian port of Santos. Vietnam predicts that exports of "Robusta coffee" in August can range from 70,000 to 120,000 tons. Earlier it was expected that it will be 85,000 tons. This is 6.3% lower than last year rate. This significant data scattering is explained due to the possible reduced coffee supplies in Vietnam, less than expected. Exports in June were revised downward from 110,000 tons to 108,100 tons.
Gold and Silver went up today, due to weak economic data from China and Asian stock indices fall. The American company USAGOLD Centennial Precious Metals Inc. expects gold prices growth to $1,400 an ounce, due to increased demand in Asia. Gold imports in India for June rose 65%, after the government expanded the list of importer banks.