It was a mixed month for world equity
markets, with net monthly changes ranging from +3.6% (Greece), +2.9% (Australia), +1.1% (Japan), +1.0% (USA), +0.8% (Brazil), -0.4% (France), -1.5% (Russia), -1.6% (China), -1.7% (Germany), to -2.5% (Spain).
Lets take our regular look at ten of the world equity markets
USA - Dow
The mighty Dow broke a new historic high of 27398, climbing for the sixth month of seven, and settling +264pts (1.0%) to 26864. Note the settlement above the key 10MA at 25569. Monthly price momentum ticked higher for a second month, but remains fractionally negative. A failure to clear the zero threshold in August, or certainly no later than September, would be a serious problem on a mid/long term perspective.
It remains the case we have massive technical/cyclical divergences that extend back to Jan'2018. However, equity bears can't get excited until a monthly settlement back under the key 10MA. For August, that can be seen as within the 25700/600s.
Rate cut'2 can be expected Sept'18th, but that won't significantly help, and if the Chicago PMI data is any indication, the US economy is closer to recession than almost anyone recognises.
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Germany – DAX
The DAX saw a July high of 12656, but settled -209pts (1.7%) to 12189. Monthly price momentum is set to turn positive in August. A rate cut of -10bps to -0.50% can be expected from the ECB in September, but that won't help, not least the German/EU financials.
Japan – Nikkei
Japanese equities climbed for the fifth month of seven, with the Nikkei +245pts (1.1%) to 21521, notably above key price threshold of 21k. The Japanese nation remains in the early phase of demographic collapse, which is the underlying cause of the deflation that the BoJ can't prevent.
China – Shanghai comp'
Chinese equities cooled for the third month of four, settling -46pts (1.6%) to 2932. Monthly price momentum remains fractionally positive, but the market is s/t vulnerable. It would appear that the Chinese are more than content to wait until after the next US election in Nov'2020, before coming to any kind of significant trade agreement.
Brazil – Bovespa
The Brazilian market climbed for a fourth consecutive month, breaking a new historic high of 106650, settling +844pts (0.8%) to 101812. Cyclically extremely high, and it could be argued the July candle is a little spiky, indicative of (at least short term) bullish exhaustion.
Russia - RTSI
The Russian market broke a multi-year high of 1413, but settled -20pts (1.5%) to 1360. For now, still m/t bullish, with soft target of psy'1500. That would be dropped with any monthly settlement back under the 1200 threshold.
France – CAC
French equities broke a multi-year high of 5672, but settled -20pts (0.4%) to 5518. Only bearish if <5200s.
Spain – IBEX
The Spanish market settled -227pts (2.5%) to 8971, which was notably back under the key 10MA. First support around 8500, with secondary of 8286.
Australia – AORD
The Australian market climbed for a seventh consecutive month, breaking a new historic high of 6958, and settling +197pts (2.9%) to 6896. Note first support of the 10MA, which is a long way down in the 6200s.
Greece - Athex
Greek equities climbed for a seventh consecutive month, settling +31pts (3.6%) to 899, the highest monthly close since Nov'2014. Soft target psy'1K, with secondary of the 2014 high of 1379.
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Summary
Five world markets were net higher for July, with five net lower.
Greece and Australia lead the way upward, whilst Germany and Spain struggled.
The USA, Brazil, and Australian markets broke new historic highs.
Nine markets are holding above their respective monthly 10MA, the exception being Spain.
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Looking ahead
A lighter week is ahead, but still with plenty of earnings and econ-data...
Earnings:
M - TSN, ON, SHAK, CAR, MAR
T - CHK, BHC, APRN, REGN, DISCA, DIS, WYNN, WW, SEDG, MTCH
W - CVS, TEVA, CPRI, ROKU, STMP, MRO, SWKS, LYFT
T - CRON, KHC, AMC, ATVI, UBER, DBX, OSTK, TTD
F - USCR, TM
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Econ-data:
M - PMI/ISM serv'
T - JOLTS
W - EIA Pet' report, consumer credit (3pm)
T - Weekly jobs, wholesale trade
F - PPI
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Have a good weekend
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*the next post on this page will likely appear 6pm EDT on Monday.
