Markit Composite PMI Declines...Q2 Economic Peak Theory Spreads
Twitter, Facebook, Snap Surge
Major Drops in Chinese Regulation-Related Stocks
[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange rose again, buoyed by strong corporate earnings. The Dow Jones Industrial Average surpassed 35,000 for the first time in history. Shares of SNS companies surged due to robust earnings, while Chinese-related stocks plunged uncontrollably amid regulatory pressures from Chinese authorities.
On the 23rd (local time), the Dow Jones Industrial Average closed at 35,061.55, up 238.20 points (0.68%), the S&P 500 rose 152.39 points (1.04%) to 4,411.79, and the Nasdaq increased 152.39 points (1.04%) to 14,836.99.
The stocks leading the market that day were social networking services (SNS).
The day before, Twitter announced that its Q2 revenue reached $1.19 billion, a 74% increase compared to the same period last year, marking the largest revenue growth since 2014, which led to a 3% rise in its stock price.
Snap also reported Q2 revenue of $982 million, a 116% increase year-over-year, causing its shares to soar by 23%. Facebook, the SNS leader, surged 5%.
Alphabet, Google's parent company, continued its strong performance with its stock price rising more than 3%.
Chinese authorities' announcement of regulations on overseas listings of education-related companies caused New Oriental Education, listed on the US stock market, to plummet 54%. TAL Education experienced a steep decline of 70%.
Chinese ride-sharing app Didi Chuxing also saw a 20% drop.
The July Manufacturing Purchasing Managers' Index (PMI) released by IHS Markit was 63.1, surpassing the previous month's market expectation of 61.8 and the prior 62.1, setting a record high.
On the other hand, the Services PMI slowed to 59.8 from the previous month's confirmed 64.6. The index fell to its lowest level in five months and missed market expectations.
Due to the sluggish service sector, the composite PMI, which combines manufacturing and services, also slowed to 59.7 from 63.7 the previous month, suggesting a possible peak in the economy in Q2. Since the service sector accounts for two-thirds of the US economy, its impact on the economy is greater than that of manufacturing.
Amid the weak indicators, the 10-year US Treasury yield rose early in the morning to 1.31% before falling back to the 1.27% range.
West Texas Intermediate (WTI) crude oil prices closed at $72.07 per barrel, up 16 cents (0.2%) from the previous day.
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