Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China Markets Panic, Tesla Beats, Coffee Soars, Apple Due - What's Moving Markets

EconomyJul 27, 2021 06:52
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- Panic selling hits Chinese stock and bond markets as foreign investors are rumored to head for the exits. Tesla (NASDAQ:TSLA) reports record sales and profits, while Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) all report after the bell. The Federal Reserve starts a two-day meeting and coffee futures hit another multi-year high after fresh forecasts of frost in Brazil. Here's what you need to know in financial markets on Tuesday, 27th July.

1. Panic on the streets of Shanghai, Shenzhen, Hong Kong…

Panic selling gripped Chinese stock and bond markets as investors rushed for the exits in response to an ever-wider regulatory clampdown on technology companies.

Hong Kong’s Hang Seng index fell 4.4% and its technology index fell 6.7% to its lowest in over a year, triggering forced selling in mainland markets too: The FTSE China A50 fell 4.0% and the Shanghai Shenzhen CSI 300 fell 3.5% to its lowest since October.

Newswire reports suggested that the ‘National Team’ of state-controlled banks and brokerages, which often steps in to stabilize the market during its bouts of volatility, had been conspicuous by its absence.

In contrast to Monday’s selling, there was little concrete news driving Tuesday’s activity, but rather rumors of widespread sales of Chinese assets by U.S. and other foreign investors. That also drove the offshore yuan down as much as 0.6% and further undermined a local bond market that is already under some stress.

2. Tesla beats records, delays truck launches

Tesla (NASDAQ:TSLA) stock rose over 2% in premarket trading after the electric vehicle maker reported a record quarterly profit to match the record delivery numbers it had already posted.

The company’s improved operating performance caught the eye, with the historic reliance on sales of carbon credits dwindling in importance (they accounted for only 3% of group revenue, compared to 7% a year ago). Earnings per share of $1.45 were more than 50% above expectations. The company generated enough profit to absorb a $23 million impairment on its {{1057391|Bitcoin} holding without much ado.

However, the update wasn’t free from blemishes: the company again delayed the launch of its Semi truck, and gave no word as to when its Cybertruck pickup would hit the market. CEO Elon Musk, who is currently on trial for allegedly defrauding shareholders with the acquisition of Solar City five years ago, also said he wouldn’t take part in future earnings calls.

3. Stocks set to open lower; durable goods and consumer confidence data due

U.S. stock markets are set to open lower later, in an admittedly faint echo of developments in Asia. Trading is expected to stay moderate as the Federal Reserve begins its two-day policy meeting, which some expect to provide clearer evidence of a shift toward withdrawing some stimulus over the second half of the year.

By 6:15 AM ET (1015 GMT), Dow Jones futures were down 148 points, or 0.4%, while S&P 500 futures were down 0.3% and Nasdaq 100 futures were down 0.1%.

Apple, Alphabet and Microsoft are all due to report after the close, another reason why trading may be subdued this session. General Electric (NYSE:GE), United Parcel Service and 3M have already gotten the ball rolling. 

Durable goods orders for June, along with the regular updates on national home prices and the monthly Conference Board consumer confidence survey may all draw attention in the early part of the day.

4. Wake up and smell the seven-year high

Coffee futures continued their rocket-like ascent on Monday after new weather forecasts of another cold snap around key growing areas in Brazil, the world’s biggest producer.

Arabica coffee futures in the U.S. rose another 10% to their highest in nearly seven years after Brazil’s food supply agency Conab said last week’s frosts had hit up to 150,000 to 200,000 hectares (494,210 acres) over 11% of Brazil’s arabica crop area.

Analysts quoted by Reuters said the extent of the actual damage to the 2022 crop was still unclear, and their estimates of the actual shortfall were in a wide range of between 5.5 and 9 million bags. Last week, the estimate was only 2-3 million.

Futures have consolidated down by some 0.6% in the overnight session. Robusta coffee futures in London, meanwhile, rose another 1.8% to a four-year high. Starbucks is due to report earnings after the close.

5. Oil drifts amid reports of higher Covid-19 cases, fuel shortages 

Crude oil prices drifted overnight after a mixed set of news on fuel demand and the progress of the pandemic.

By 6:15 AM ET, U.S. crude futures were up 3 cents, or less than 0.1% at $71.94 a barrel, while Brent futures were up 0.2% at $73.86 a barrel, ahead of the release of American Petroleum Institute inventory data at 4:30 PM ET.

Bloomberg reported on Monday that American Airlines (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV) were both experiencing shortages of jet fuel, in what looks like further evidence of demand rebounding ahead of supply.  There was also better news from Europe, where the U.K. and the Netherlands again reported sharp declines in new cases of Covid-19, while the infection curves in Spain and Portugal flattened further.

However, cases continue to rise in France, Germany and Italy, and they hit their highest since March in the U.S. at over 88,000 on Monday.

China Markets Panic, Tesla Beats, Coffee Soars, Apple Due - What's Moving Markets
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email