Happy Monday. Good Luck out there this week.
Global Spotlight
So Much for a Trade Truce. Our Third-Quarter Forecast published in mid-June said, “While there is a small window for a truce between U.S. President Donald Trump and Chinese President Xi Jinping, there is a stronger likelihood that the White House will follow through on its threat to impose tariffs on remaining Chinese imports.”
Hong Kong Watch. We’ll be watching to see if a citywide strike in Hong Kong on Aug. 5 shows any signs of the protest leaders being able to broaden their support base.
One Is the Loneliest Number. A Tory defeat in a by-election this week left British Prime Minister Boris Johnson with a majority of only one in the House of Commons, meaning Johnson could be just one vote away from losing a no-confidence vote as no-deal Brexit concerns grow closer to the Oct. 31 deadline.
High-Stakes Bickering in Rome. As frictions between Italy’s governing parties, the right-wing League and the populist Five Star Movement, escalate, two events next week could deepen the political crisis.
Is the U.S. Ready to Make a Deal With the Taliban? The eighth round of negotiations with the Taliban kick off in Doha, Qatar, this weekend and it’s no secret that the Trump White House is anxious to extricate the United States from its 18-year war in Afghanistan so it can focus on other burning issues, like Iran and its great power competition with China and Russia.
New Delhi Tries to Keep a Lid on Trade Tensions. Indian Commerce Minister Piyush Goyal may meet with U.S. Trade Representative Robert Lighthizer next week to defuse long-simmering trade tensions pertaining to market access, data localization and e-commerce.
A Narrowing Race in Argentina. Recent opinion polls in Argentina suggest that conservative President Mauricio Macri, who is seeking reelection in October, is starting to catch up with the main opposition candidate, the center-left Alberto Fernandez.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S.
releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- Second quarter earnings are expected to increase 2.7% from 18Q2. Excluding the energy sector, the earnings growth estimate is 3.4%.
- Of the 380 companies in the S&P 500 that have reported earnings to date for 19Q2, 73.9% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 76%.
- 19Q2 revenue is expected to increase 4.5% from 18Q2. Excluding the energy sector, the growth estimate is 4.9%.
- 59.0% of companies have reported 19Q2 revenue above analyst expectations. This compares to a long-term average of 60% and an average over the past four quarters of 63%.
- For 19Q3, there have been 37 negative EPS preannouncements issued by S&P 500 corporations compared to 17 positive, which results in an N/P ratio of 2.2 for the S&P 500 Index.
- The forward four-quarter (19Q3 –20Q2) P/E ratio for the S&P 500 is 17.1.
- During the week of August. 5, 61 S&P 500 companies are expected to report quarterly earnings.
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