Closing Report 27.07.2021

Beijing’s decision to regulate private tutoring shakes markets

AMERICAN MARKETS MID DAY

The New York Stock Exchange began a formal decline on Tuesday morning in a market that was largely cautious ahead of a particularly busy earnings calendar. The technology index suffered in particular from the decline of more than 1% in Apple shares, before the publication in the evening of the quarterly results of the manufacturer of iPad, iPhone and iMac. The wait for the end of the Fed meeting, which starts today but will not end until tomorrow, also seems to be limiting movements on Wall Street. Analysts are expecting strong releases from the tech giants in the coming weeks, good news that could lift hi-tech stocks by more than 10% by the end of the year. Tesla is down more than 2% after doing better than expected in the second quarter, on the back of record demand. GE is up 0.8% after reporting strong quarterly results and raising its annual targets.

EUROPEAN MARKETS CLOSING

Dassault Systèmes (+1.32% to 44.96 euros) reported second quarter 2021 IFRS earnings per share of 14 cents, up 118%.  IFRS operating profit was up 111.1%, while reported non-IFRS was up 30.6% to €373.8m and 39.7%. Worldline fell 8.91% to 77.28 euros, landing in last place on the CAC 40 index. The payment specialist was punished for reporting a weaker-than-expected operating performance despite revenues in line with expectations. Gross operating profit (GOS) rose by just under 6% to €531 million, compared with the €547 million expected.

ASIAN PACIFIC MARKETS CLOSING

Analysts say fears of further travel restrictions in major consumer countries in response to the spread of the Delta variant of the coronavirus are limiting the rise in oil prices. The United States on Monday maintained restrictions on international travel, despite requests for reciprocity from the European Union.

COMMODITIES & FOREX MARKETS

As the Fed meeting approaches, investors are playing it safe and looking to government bonds, with yields falling: the 10-year Treasury yield is down two basis points to 1.2611%, as is its German equivalent, at -0.431%.

Controversial Nile Dam: Ethiopia has completed the second phase of filling

Ethiopia has reached the end of the second phase of filling its controversial mega-dam on the Nile. The dam, which is supposed to be Africa’s largest hydroelectric facility when completed, has been the source of a diplomatic row between Ethiopia and the downstream countries of Egypt and Sudan. Discussions under the aegis of the African Union (AU) have not allowed the three countries to reach a tripartite agreement on the filling of the dam and the modalities of operation of the water reservoirs. In July 2020, Ethiopia announced that it had met its target of storing 4.9 billion cubic metres of water and planned a second phase of 13.5 billion cubic metres. There is now enough water to put the first two turbines of the dam into operation, the Ethiopian official told AFP, without giving a precise date for the start of electricity production. According to a 2018 World Bank report, « about 70% of the Ethiopian population lives without electricity ».