European aggregates strengthened on the back of clear demand advantage. The biggest winner was the London FTSE100, which rose 1.24% after a positive consumer inflation reading (2.6% y/y).
The buying advantage also showed up in Milan, where the FTSE MiB gained just under 1% in a bullish session. French investors were clearly enthusiastic about the CAC40 components, which rose 0.89%.
Indices in Zurich (SMI: +0.12%), Frankfurt (DAX: +0.65%) and the pan‑European STOXX (+0.58%) also trended green. The lack of prospects for a quick Middle East agreement translates into the market‑priced path of rates, illustrated by the rise in the 10‑year bond yield: since early June the yield rose from 2.85% to 3.18%.
PGE (+7.37%), Pepco (+4.31%), Tauron (+9.54%)
Mixed sentiment was observed on the Warsaw floor. The broad WIG continues to climb toward a historic record (+0.38%).
Thanks to energy and retail companies such as PGE (+7.37%), Pepco (+4.31%), Tauron (+9.54%) and KGHM (+2.63%), national blue‑chips represented by the WIG20 strengthened noticeably (+0.60%).
After a flat session, the sWIG80 (+0.21%) closed below the line, grouping smaller domestic entities. The second line of companies, represented by the mWIG40, failed to break the line after a weak opening and closed 0.42% lower.
Wall Street and the Giants’ Results
Wednesday proved an opportunity to reduce Treasury positions, which translated into higher bond yields. The benchmark 10‑year rose 6 basis points and trades at 5.713%. On Wall Street investors chose companies, including those from the semiconductor subsector.
The index of the 100 largest tech companies, Nasdaq100, fell 0.54%, and the broad market represented by the S&P500 fell 0.14%. We also saw a sell‑off in smaller stocks represented by the Russell2000, which weakened 0.92%.
Alphabet beat market expectations both in revenue (119.8 bn USD, up 24% y/y) and earnings per share, which were 2.26 USD.
The strongest point of the report was again the cloud, whose sales rose 82% y/y to 24.8 bn USD, and the portfolio of contracted services reached 514 bn USD. Solid results also came from other business lines: search revenue rose 17%, and YouTube advertising rose 13%.
Investor enthusiasm was, however, limited by the scale of spending.
Quarterly CAPEX rose to nearly 45 bn USD, bringing free cash flow below zero. Tesla showed mixed results with a slight revenue miss of 28.2 bn USD versus expected 28.3 bn USD.
Car deliveries rose 25% y/y in Q2, but massive AI investment outlays brought free cash flow below zero.
Investor attention was drawn to announcements of the start of Optimus production and further expansion of the Robotaxi service, confirming a gradual shift of the company’s strategy toward autonomy and robotics.
ServiceNow also exceeded expectations, reporting revenue of almost 4 bn USD versus expected 3.93 bn USD and adjusted earnings per share of 0.90 USD (expected 0.86 USD).
Morning looks at Asian markets bring an optimistic picture, with strengthening indices. The South Korean KOSPI (+3.68%) is clearly strengthening, but Chinese indices are also rising: Shanghai Composite +0.69% and Hang Seng +1.20%.
Japanese investors are taking on risk: the Nikkei rises 0.46%. Forty minutes before European trading opens, the Indian Sensex is down 0.22%.
Brent Nears 96 USD a Barrel (+2%)
The morning brings further appreciation of oil contracts: Brent is near 96 USD a barrel (+2%). It also brings a slight cooling (-0.09%) in gold, which had strengthened during the last two sessions. The futures market for European and U.S. indices radiates red, indicating a potentially weak cash market opening.
