Things to look out for in this day ahead are earnings from Tencent, Cisco and Lift - as well as the RBNZ rate decision, UK second quarter GDP and US CPI.
Tencent shares have had a tough couple of days since US President Donald Trump issued an executive order to ban its messaging app WeChat in the United States- and now it reports its Q2 results.
Tencent is in all the right places to have done very well in the pandemic- computer games, social media and video streaming - although ad revenues could have dropped because of the pandemic and no live sports etc. Before the intervention from Trump the shares had rallied 44% this year to be worth more than Facebook- let’s see if they can regain the crown after these results.
Networking giant Cisco reports its Q2 results as does number two US ride-hailing app Lyft. Lyft doesn’t have the safety net of a food delivery service - so the reaction to results could be a lot less cheerful than Uber had the other week.
The RBNZ will almost definitely hold interest rates steady at 0.25% in its policy meeting. The decision comes a day after New Zealand reported its first homegrown coronavirus case in over 100 days. I suspect they won’t want to sound too hawkish in case NZ ends up with the kind of 2nd wave Australia is dealing with.
Arguably the biggest datapoint of the day is UK second quarter GDP- which is expected to crash an unprecedented -20.2% over the quarter and -22.4% versus the same quarter last year. The number is a bit exaggerated because the government is in essence paying people not to work- which will hopefully pay dividends later through less layoffs than in other countries.
The US dollar has been building a recovery this week and gold prices dived the most in 3-month yesterday- so US inflation data could be a market mover. US CPI for July is expected at 0.8%, up from 0.6% in July but core prices that exclude food and energy are forecast to drop to 1.1% from 1.2%.