-U.K. PMIs plunge: It is one month since the Brexit vote tomorrow, which means data from the U.K. are catching up with the post-vote economy. This morning, a composite Purchasing Managers’ Index estimate published by Markit Economics fell to 47.7 for July, its lowest level since April 2009. The pound fell sharply after the data was released and was trading at $1.3131 at 5:45 a.m. ET. U.K. Chancellor of the Exchequer Philip Hammond said he’s ready to «reset» the country’s fiscal policy later in the year, if needed. Stay up to speed on all the Brexit developments by subscribing to our new newsletter, the Brexit Bulletin.
-Bottom in oil?: Schlumberger Ltd. and Halliburton Co. the world’s two largest providers of oilfield drilling and fracking services, have said that the worst of the two-year-old oil market crash may be over. The first half of the year has seen something of a pick-up in deals, while the backlog of drilling, but not fracked, wells in the U.S. has stopped growing. The one thing that is missing from the picture so far is a recovery in oil prices. A barrel of West Texas Intermediate for September delivery was trading at $44.64 at 5:59 a.m. ET, down almost 3 percent this week.
-Markets lower: The MSCI Asia Pacific Index declined 0.5 percent overnight, with the Topix index slipping 0.9 percent as investors focussed on comments opposing helicopter money by the Bank of Japan’s Haruhiko Kuroda in an interview, recorded in June, which was broadcast on the BBC yesterday. In Europe, the Stoxx 600 Index was 0.4 percent lower at 6:05 a.m. ET, as concerns over the U.K. economy outweighed data published this morning which showed German manufacturing output reached its highest level since early 2014.
-Yuan halts decline: The Chinese yuan, which has dropped 3.3 percent since its 2016 high reached in March, may be about to halt the losses as speculation mounts that the central bank is drawing a line in the sand at 6.7 per dollar. The weakness in the currency has triggered an increase in the amount of cash leaving the country, according to Goldman Sachs Group Inc., who calculate that outflows totalled $49 billion in June, up from $25 billion in May. The one thing that has analysts scratching their heads about the yuan’s decline this year is how well investors, particularly in U.S. stocks, have been able to ignore the slipping currency.
-Trump makes a speech: Republican party presidential nominee Donald Trump make his speech accepting the nomination yesterday at the party’s convention in Cleveland. He painted a dark view of the United States and offered himself as the sole candidate capable of fixing the country’s problems. On the Democratic side of the political divide, speculation is mounting that presumptive presidential nominee Hillary Clinton may announce her choice of running mate as early as today.
-Market movers — Starbucks, Chipotle, Vodafone, Southwest: Shares in Starbucks (SBUX) are slipping premarket after the popular coffee chain reported slower sales growth in the latest quarter. The company’s sales grew 7.3% to $5.2 billion, missing Wall Street expectations. Meanwhile, shares in Chipotle (CMG) swung between gains and losses in extended trading after the company reported that quarterly profits were down 82% from last summer due to high-profile E. coli problems. Shares in Vodafone (VOD) are rising by about 5% in London after the European mobile operator reported better-than-expected quarterly results. Southwest Airlines (LUV) shares were holding steady ahead of the open after the airline canceled 1,150 flights in 24 hours. The trouble was initially caused by a «system outage.» Shares in Southwest dropped by 11% on Thursday.
-Earnings: Many companies are reporting quarterly results on Friday morning, including American Airlines (AAL), General Electric (GE), Honeywell (HON) and Moody’s (MCO).
– Stock market overview: U.S. stock futures are holding steady, just slightly below record-high levels that were set earlier this week. On Thursday, the Dow Jones industrial average broke a nine-day winning streak by declining 0.4%. The S&P 500 also dipped 0.4% and the Nasdaq dropped 0.3%. Looking overseas, European markets were mixed in early trading. A new economic report from IHS Markit has shown a sharp drop in post-Brexit business activity among U.K. service providers and manufacturers. «Output and new orders both fell for the first time since the end of 2012, while service providers’ optimism about the coming 12 months slumped to a seven-and-a-half year low,» the group said in a statement. This raises hopes that the Bank of England will cut interest rates in August. The pound dropped sharply in the wake of the report. In Asia, most markets closed the week with modest losses.
-Jeff Bezos passes Warren Buffett to become third richest person in the world: The Amazon founder is worth $65.1 billion as of Thursday, according to Bloomberg’s Billionaire Index, which puts him just slightly ahead of Buffett’s $65 billion. Bezos moved into third place on the global index, behind Bill Gates and Amancio Ortega, the majority owner of Zara’s parent company Inditex. Bezos backed into his new spot on the list, after his net worth fell $136 million thanks mostly to a 0.2% decline in Amazon (AMZN, Tech30) shares Thursday. But Buffett’s net worth slipped $754 million, according to the index, thanks to a 1.2% slide in shares of Berkshire Hathaway (BRKB). Forbes still has Bezos slightly behind Buffett in its real-time billionaire’s ranking, $64.8 billion to $64.6 billion.