Themes for the day ahead are ongoing sell-off in US tech stocks and the first debate on the Brexit-inspired ‘internal markets bill’ in the UK parliament.
There is also industrial production data from Japan and the EU, inflation data from India and earnings from US home-builder Lennar.
Tech stocks just had their worst week since March, with Apple leading the losses down -6.9%. For those waiting for a pullback to buy tech at better prices, here you have it- but of course there’s always the question of whether the pullback has further to go. The Apple product launch is on Wednesday so I will touch on that tomorrow.
As a reminder, the Internal Market Bill addresses the Northern Ireland Protocol – formerly known as the Irish backstop, which caused so many issues in the Brexit deal passing in the first place – and is back causing problems again.
If it became law it would give UK ministers powers to “disapply" rules in the Brexit deal relating to Ireland from 1 January, if the UK and EU are unable to strike a trade deal. The EU says the planned changes must be scrapped or they risk jeopardising the UK-EU trade talks but the UK government is pressing ahead with it anyway.
Japanese industrial production is expected to have dropped a hefty -16.1% year-over-year in July. For the Eurozone we’re looking at an even worse -18.3% and down from the -12.3% in June. Indian CPI is forecast to remain above the central bank’s target range in August.
US homebuilder Lennar is expected to show earnings of $1.55 per share compared to $1.59 from the same quarter last year. Sales are set to decrease by 9% to $5.33 billion. But given the mini housing boom going on in the US, where house prices just averaged over $300,000 for the first time ever- guidance should be better.
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