European stocks looked set for an uncertain morning as markets ready themselves for some big corporate results and wait for the effects of a second Argentinian default in 13 years.
With Astra Zeneca, Lloyds Banking Group and Royal Dutch Shell all reporting earnings, there is plenty to watch out for.
The FTSE was called up along with the French CAC, while the German Dax was seen down.
Argentina officially defaulted on its debt after the group of hedge funds with whom it was negotiating declined a final offer. Argentina had agreed reduced terms with other bond holders after the 2001/2 default, and was obliged to offer any agreement on more favourable terms to all creditors, not merely those involved in the current legal dispute.
In the US, the Federal Reserve has announced it will not be altering interest rates until sometime in 2015.
Investors will also be looking at shares in Banco Espirito Santo after it posted €3.8bn in losses after the end of trading yesterday.
Royal Dutch Shell (RDS), Astrazeneca, BAE Systems and Lloyds Banking Group all released their results this morning.
RDS reported four per cent increases in oil product sales volume compared to the second quarter of 2013, leading to a 33 per cent increase in earnings to $6.1bn. The company indicated that although performance was stronger than a year ago, there was still work to do regarding oil products and North American resources plays.
Astrazenaca lifted its forecast for the full year after revenues and earnings were up. The company showed strong growth in emerging markets, with revenue up 11 per cent and 23 per cent in China compared to the last quarter. Across all theatres, revenue was up four per cent, and three per cent for the half year. Earnings per share came in at $1.30 for the second quarter, up 13 per cent.
Lloyds was forced to take a further £600m hit over the mis-selling of payment protection insurance (PPI). Profits before tax were depleted to £863m, partly due to £1.1bn in legacy conduct issues, but would still have fallen short the £2.1bn made in the first six months of 2013.
BAE Systems released its half-yearly report, showing falls in operating profit, sales and EBITDA compared to the first six months of 2013. It said however that it expects sales to be more heavily weighted towards the end of 2014, when it is scheduled to deliver a number of Eurofighter Typhoons, an advanced military aircraft.
The company also announced it has entered into an agreement for the proposed bolt-on acquisition of Signal Innovations Group, a provider of imaging technologies and analytics to the US intelligence and defence communities.
Data in focus
- 08.55am, Germany, July, unemployment rate
- 10.00am, Eurozone, July, CPI inflation]
- 10.00am, Eurozone, July, unemployment rate