Good morning. BOE Day, looser entry rules for Britain and a busy morning of earnings releases. Here’s what’s moving markets.
Bienvenue
The next round of loosening in U.K. entry requirements will allow fully vaccinated arrivals from France to skip quarantine. India, the U.A.E., Qatar and Bahrain join France on the amber list, easing entry. The update, effective Sunday, also green-lists European countries including Germany, Austria and Norway, waiving quarantines even for the un-vaccinated. Here’s a good overview of Britain’s color codes. Meanwhile, Germany’s health minister is planning to introduce sweeping measures next month that could considerably restrict the lives of people who do not get a coronavirus vaccine.
BOE Day
The Bank of England’s monetary policy decisions are due at noon in London. While no change to the 0.1% bank rate is on the cards, officials may move a step closer to tightening monetary policy, unwinding 900 billion pounds government bond purchases while also opening the possibility that borrowing costs could be pushed below zero. Most economists expect the bank to lower the level of interest rates needed before QE starts to unwind. At the moment, the bank has suggested that rates need to move to 1.5% before they sell bonds. Opening the possibility of negative rates might allow the BOE to act before rates rise to that level.
Uber Losses
Uber posted a wider-than-expected loss for the second quarter after spending heavily to lure back drivers, raising fresh doubts about the reliability of its labor model in the longer term. CEO Dara Khosrowshahi also said Uber will consider selling Didi shares or other holdings, which are valued at nearly $15 billion. Many ride-hailing drivers had quit earlier in the pandemic when demand evaporated and over concerns for their own health. In recent months, vaccines have brought riders back, but the return of workers hasn’t kept pace. Shares declined about 4% in extended U.S. trading hours.
Back Up
Tencent has resumed signing up users for its WeChat messaging app, days after suspending registrations for unspecified technical upgrades. The app -- a fixture in daily Chinese life for everything from hailing a cab to ordering meals and paying utilities bills -- plays a central role in funneling traffic to and showcasing Tencent’s businesses. Earlier this week, a series of state media pronouncements have stoked fears Beijing will next train its broad campaign of regulatory crackdowns on the gaming sector and its most dominant player, Tencent.
Coming Up…
European stocks are looking steady following a mixed day in Asia. It’s another packed day for earnings in Europe, with Adidas, Continental, Bayer, Lufthansa, Merck, Mondi, Novo Nordisk, Rolls-Royce, Siemens and WPP among the biggest names. Elsewhere, Nintendo reports 1Q results in Japan, while in the U.S., the prospect of booster shots will be on investors' minds when Covid vaccine maker Moderna reports. Duke Energy is among the other large firms reporting on a quieter day for U.S. names. The BOE rate decision will be closely watched, with economists expecting no change to rates despite rising inflation.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
And finally, here's what Cormac Mullen is interested in this morning
For the moment at least, the doubling of Robinhood's share price this week looks like an isolated incident and not a return to the retail madness that started the year. A gauge of speculative volume in the U.S. stock market -- the 10-day moving average of call options traded -- is on a downward trend and about 30% below its January peak. The 10-day average of shares traded on all U.S. exchanges -- a measure that also spiked during this year's retail fervor -- has fallen to the lowest since November, according to data compiled by Bloomberg. Of course that's something you might expect in the dog days of summer. But the decline in both equity and option volumes over the past two months could also be taken as further evidence of investor reluctance to chase stocks higher -- remember the S&P 500 is up about 5% to fresh records over that period. The rise in U.S. equities this year is not the most-hated rally in history -- that honor likely goes to the post-financial crisis one. But it looks to have a shot at joining the least-trusted ones.
Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo.
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— With assistance by Cormac Mullen, and Gearoid Reidy
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August 05, 2021 at 12:32PM
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Stock Markets Today: UK entry rules, Uber earnings, BOE decisions - Bloomberg
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