Macroeconomics will also be on the agenda, with the July manufacturing and services PMIs from several economies, including Japan, the Eurozone and the US. The latest figures for Chinese industrial activity show a slow down in July, due to a combination of negative factors such as rising raw material prices, maintenance operations, but also exogenous causes such as the catastrophic floods that have hit the east of the country. However, activity did not contract as the July manufacturing PMI came in above the 50-point threshold, at 50.4 points precisely (versus a consensus of 50.8 points).

The month of July ended with good performances on Wall Street, fueled by investors' insatiable appetite for technology stocks, which is still going strong. The Nasdaq100 rose by 2.78% in July. US stock performed much better than their peers, as illustrated below:

Index performance since January 1 - source: MarketScreener

And US markets are starting August on a good note. Following the trend on Asian and European markets, all three indices are up in pre-market trading as investors’ worries over China's regulatory crackdown ease. Beijing called for greater co-operation with Washington yesterday, highlighting the country’s efforts to improve transparency.

This month, the economic recovery should keep markets’ momentum going, although some volatility may come due to the spread of the Delta variant and the pace of inflation.

 

Today's economic highlights:

The final July manufacturing PMIs will be released today for the major economies. In the US, they are coming along with the ISM and construction spending This morning the Japanese manufacturing PMI is announced at 53 points, more dynamic than expected. The final July U.K. manufacturing purchasing managers index survey, released today, shows activity stabilized in July. The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) remained flat at 60.4 in July, in line with expectations.

The dollar is trading at EUR 0.8411. The ounce of gold is back down at USD 1808. WTI is trading at USD 72.95, while Brent is at USD 74.52. U.S. debt offers a 10-year yield of 1.22%. Bitcoin is down to USD 39560.

 

On markets:

* Square, the digital payments company led by Twitter boss Jack Dorsey, will acquire Australian deferred payment specialist Afterpay for about $29 billion, creating a global online transaction giant. In pre-market trading, Square is down 4.2%.

* Ferrari announced Monday that it was maintaining its key financial targets for 2021 despite a threefold increase in gross operating income in the second quarter.

* Parker-Hannifin announced the purchase of British rival Meggitt for 6.3 billion pounds, with the U.S. group pledging to maintain a strong U.K. presence for the defense and aerospace company.

* Zoom has agreed to pay $85 million and to strengthen its security to stop proceedings following the "zoombing" cases, i.e. hackers entering a meeting to disrupt it.

* Pfizer and Moderna have raised the price of their coronavirus vaccines in the latest European Union supply contracts, the Financial Times reported Sunday.

 

Analyst recommendations:

  • AptarGroup: William Blair & Co cut the recommendation to market perform from outperform.
  • ConvaTec Group Plc: Stifel cut the recommendation to hold from buy. PT up 1.3% to 240 pence
  • DiscoverIE: Jefferies downgrades to hold from buy. PT up 4.3 % to 1,085 pence
  • LKQ: Raymond James upgrades to outperform from market perform. PT up 18 % to $60
  • Reckitt Benckiser: Bernstein raised the recommendation to market perform. PT down 2.2 % to 5,400 pence
  • Telephone and Data Systems Inc: J.P. Morgan cut the recommendation to underweight from neutral. PT up 2.9% to $23
  • Unite Group: Barclays upgrades to overweight from underweight. PT up 0.8% to 1,250 pence
  • U.S. Cellular: J.P. Morgan downgrades to underweight from neutral. PT down 1% to $36
  • Infinity Pharma: J.P. Morgan upgrades to overweight from neutral. PT jumps 183% to $6
  • WisdomTree: Keefe, Bruyette & Woods upgrades to outperform from market perform. PT up 29% to $8