Global stock markets have started the new week fairly solidly as investors ready for the start of the second-quarter U.S. corporate earnings season and Federal Reserve chair Janet Yellen’s testimony to Congress.
KEEPING SCORE: In Europe, Germany’s DAX was up 0.3 percent at 12,431 while the CAC 40 in France rose 0.1 percent to 5,151. The FTSE 100 index of leading British shares was 0.1 percent lower at 7,346. U.S. stocks were poised for a steady opening with Dow futures and the broader S&P 500 futures up 0.1 percent.
EARNINGS: Companies including Pepsi Co. and Delta Air Lines, Inc. are due to release earnings this week as U.S. companies begin their second-quarter reporting season. The market expects earnings per share growth of about 7 percent from companies in the S&P 500.
ANALYST TAKE: “The big question as we head into U.S. earnings season later this week is whether all this optimism about future stock market gains is based in reality or expectation, with JP Morgan and Citigroup in the banking sector the first of the big names out of the gate on Friday,” said Michael Hewson, chief market analyst at CMC Markets.
FED WATCH: Yellen testifies Wednesday and Thursday before U.S. lawmakers. Investors are looking for signs of how the Fed might react to the latest jobs and inflation data. “We expect she will once again encourage expectations for the start of balance sheet normalization in September, followed by another rate hike in December — dependent on the data, of course,” said Jim O’Sullivan of High-Frequency Economics.
ASIA’S DAY: Tokyo’s Nikkei index gained 0.8 percent to 20,080.98 and Hong Kong’s Hang Seng added 0.7 percent to 25,501.41. The Shanghai Composite Index declined 0.2 percent to 3,212.63 and Sydney’s S&P-ASX 200 advanced 0.4 percent to 5,724.40. India’s Sensex rose 0.9 percent to 31,631.98 and Seoul’s Kospi added 0.1 percent to 2,382.10.
SHIPPING MERGER: Shares in China’s biggest shipping company, state-owned COSCO Cosco Shipping Holdings Co., surged 4.7 percent Monday after it agreed to buy rival Orient Overseas (International) Ltd. for $6.3 billion, creating a new Asian container giant. Orient Overseas shares jumped 19.5 percent. The acquisition follows a wave of consolidation in global shipping that has produced a handful of huge global competitors. Orient Overseas is controlled by the family of former Hong Kong Chief Executive Tung Chee-Hwa.
ENERGY: Benchmark U.S. crude fell 48 cents to $43.75 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, shed 51 cents to $46.20 in London.
CURRENCY: The euro fell 0.1 percent to $1.1389 while the dollar rose 0.2 percent to 114.14 yen.