Last closure
On Monday, July 21, trades in USA have come to the end with decrease, as concern tension in Ukraine could lead to deeper sanctions against Russia kept investors on the sidelines before major earnings reports. Herbalife Inc. sank 11% as hedge-fund manager Bill Ackman vowed to reveal fraud at the company. Yum! Brands Inc. dropped 4.3% and McDonald’s Corp. lost 1.5% after the two halted buying meat products from a Shanghai supplier under investigation. The National Activity Index, from the Chicago Federal Reserve Bank, edged down to +0.12 in June from May's +0.16. A number above zero suggests the U.S. economy is expanding above its historic trend, while negative number points to below-average growth. The three-month moving average, designed to smooth out volatility, decreased to +0.13 last month from +0.28 in May, but marked its fourth consecutive reading above zero. On the day’s result, index Dow Jones has declined by 0.28%, S&P has lowered by 0.23%, Nasdaq has decreased by 0.17%.
European stock exchanges closed with decrease of main indexes, as the U.S. and Europe threatened tougher sanctions on Russia. Commerzbank AG dropped 1.9% after a report that Germany’s financial-markets regulator found high operational risks at the country’s second-biggest lender. German producer prices continued to decline in June, albeit at a slower pace. Producer prices fell 0.7% year-over-year in June, confirming consensus estimates, following the 0.8% drop in May. The latest decline was the smallest since December. Italian industrial turnover fell 1% in May compared to April, the second consecutive month-on-month drop, while orders were down 2.1% after two consecutive months of rises. On the day’s result, British FTSE has declined by 0.31%, CAC 40 (France) has decreased by 0.71%, DAX (Germany) has lowered by 1.11%.
Augusts’ contractual price on Brent oil, grew by $0.44 to $107.68 per barrel.
In Ukraine
Trades on the Ukrainian stock exchange opened by growth, day passed with positive dynamics. Value of the UX index has increased by 2.77% to 1262.22. Share trades capacity on the application market was equal to UAH 5.4 million. Trades capacity on the derivatives market was equal to UAH 5.5 million. Total trades capacity for yesterday — UAH 33.6 million.
All ten shares of an index basket have risen. Leaders of growth were shares of Enakievo Metallurgical Plant (+5.98%) and Azovstal Iron and Steel Works (+5.40%).
The Finance Ministry has proposed that the hryvnia exchange rate be set at UAH 12/$1 in the revised national budget for 2014. When we planned the budget we took a figure of UAH 10.8/$1 until the end of the year. Now we have a figure of UAH 12/$1, Finance Minister Oleksandr Shlapak said. The anti-terrorist operation (ATO) forces have entered three towns in Donetsk Region - Dzerzhynsk, Rubizhne and Soledar.
Premarket
External background at the opening is moderately positive. Avdiivka Coke Plant, one of the largest in Europe (including Russia) and the major manufacturer of coke for metallurgy in Ukraine, was heavily damaged by pro-russian terrorists. The Asian indexes are growing today. Nikkei rose by 0.84%, Hong Kong Hang Seng increasing by 1.33%.
Futures on American indexes are growing today from 0.14% to 0.18%.
Russian indexes as of 10:0 a.m. are rising — RTS increasing by 1.53%, MICEX growing by 1.09%.
Our expectations
We expect opening of the Ukrainian market on neutral territory.
In Europe will be published CBI industrial trends orders in the U.K. (1:00 PM).
In the U.S. will be published consumer price index (3:30 PM) and data on existing home sales (5:00 PM).
ITT Investment group
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