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 Good morning. Here's what you need to know. - Markets in Asia were mixed in overnight trading. The Japanese Nikkei 225 rose 1.3%, the Hong Kong Hang Seng advanced 1.2%, and the Shanghai Composite fell 0.3%. European markets are trading higher with the exception of Spain and Italy, down 0.2% and 0.1%, respectively. In the United States, futures point to a negative open.
- The French economy expanded 0.5% in the second quarter, or 0.3% year over year, beating consensus forecasts for a 0.2% rise. The growth follows two consecutive quarters of contraction. Consumer spending, up 0.4%, was driven partly by higher energy costs due to bad weather. "At this stage, it is not yet clear whether the French economy has momentum to continue a recovery beyond the second quarter," says Morgan Stanley economist Olivier Bizimana. "Given that growth in 2Q has been partly supported by exceptional factors, we think some payback is likely this quarter. In addition, although the most recent business cycle indicators have improved somewhat, they still point to weak economic conditions in 3Q."
- The German economy expanded 0.7% in the second quarter after flat growth in Q1, beating estimates for a 0.6% advance. "Details are not released with the first estimate of quarterly growth rates," say Deutsche Bank economists Oliver Rakau and Stefan Schneider. "However, the press release suggests that growth was broad based with consumption (public and private), investment (especially due to a weather related bounce-back of construction) as well as exports contributing to growth in Q2. The only surprise is the (likely small) growth contribution from net trade as monthly nominal trade data (deflated by export and import prices) would have suggested that it was negative."
- On the back of strong numbers out of France and Germany, Eurozone GDP rose 0.3% in Q2 following a 0.3% contraction in Q1, beating expectations for a smaller, 0.2% gain. This is the first positive reading for euro area-wide GDP in 18 months. Spain and Italy continued to contract in Q2, but the Portuguese economy expanded 1.1%.
- The release of the minutes from the Bank of England's August meeting revealed an unexpected split on the Monetary Policy Committee (MPC) over new Governor Mark Carney's recently-introduced forward guidance policy. One MPC member voted against it on the grounds that it would raise medium-term inflation expectations. The British pound sterling is strengthening on the news.
- The U.K. reported the strongest increase in employment on record in the three months to June, with 69,000 workers added to the ranks of the employed. Economists had predicted only a 34,000 gain. Jobless claims fell by roughly 29,200 in July, again better than the drop of roughly 15,400 predicted by economists. The unemployment rate was unchanged at 7.8%.
- Macy's reports second quarter earnings before the opening bell. The department store retailer is expected to post earnings of $0.79 per share, up from $0.67 the year before, and revenues of $6.28 billion, up from $6.12 billion last year. Other retailers reporting this week include Kohl's, Wal-Mart, and Nordstrom.
- After tweeting about having a large position in Apple shares, activist investor Carl Icahn told Reuters in an interview that "Apple has the ability to do a $150 billion buyback now by borrowing funds at 3 percent. If Apple does this now and earnings increase at only 10 percent, the stock - even keeping the same multiple currently - should trade at $700 a share."
- 43 are dead in Egypt after security forces bulldozed two protest camps set up by supporters of ousted president Mohamed Morsi. According to an AFP correspondent, many appeared to have died from gunshot wounds.
- June producer prices data, due out at 8:30 AM ET, comprise the only economic release in the United States today. Prices are expected to have advanced 0.3% in July from the month before (0.2% excluding food and energy), bringing the annual inflation rate to 2.4% (1.3%) from 2.5% (1.7%). In June, prices rose 0.8% (0.2%). Follow the data LIVE on Business Insider >
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