Apple shares open 4.4% higher as its value heads towards $1tn - as it happened

UK and eurozone manufacturing sectors show sluggish progress, while Apple shares jump 4% after stellar results

2.59pm BST

A host of manufacturing surveys for July showed a disappointing outcome for the UK, while eurozone growth was also sluggish.

Over in the US factory growth slipped in July, while a jobs report was better than expected although it came with a warning on the outlook.

2.50pm BST

US factory growth dipped slightly in July, according to the latest manufacturing survey, partly due to falling exports and supply problems.

The IHS Markit US manufacturing PMI came in at 55.3 last month, down from 55.4 and lower than the initial estimate of 55.5. Markit said:

US manufacturing firms signalled a strong improvement in operating conditions in July, despite the headline PMI falling to a five-month low. Weaker rises in output and employment were seen in July, while export sales fell for the second month in a row. Meanwhile, companies reported the greatest deterioration in vendor performance since the series began and a faster rate of input cost inflation. That said, business confidence remained strongly positive, and was supported by hopes of further increases in overall new orders.

The US manufacturing sector continued to expand in July, but shows increasing signs of struggling against headwinds of supply shortages, rising prices and deteriorating exports.

The latest survey showed output rising at a rate roughly equivalent to an annualised 1% pace of expansion, which is the weakest since late last year. While a weakening of new export orders for a second successive month suggested foreign demand has waned compared to earlier in the year, the slowdown can be also in part attributed to increased difficulties in sourcing sufficient quantities of inputs. Suppliers' delivery delays were more widespread than at any time in the survey's history. With producers often scrambling to buy enough raw materials, suppliers enjoyed greater pricing power. Not surprisingly, with tariffs also kicking in, cost pressures spiked higher again.

2.38pm BST

Apple's rise has helped lift technology stocks on Wall Street, pushing the Nasdaq Composite 0.39% higher.

The Dow Jones Industrial Average - which also includes Apple - is marginally higher, up 0.04% while the S&P 500 has opened 0.17% higher.

2.31pm BST

Following its forecast-beating results and upbeat outlook, Apple shares have jumped 4.4% to $198.4. at the start of the day's trading, helping support a US market rattled by renewed concerns about a damaging trade war between the US and China.

The move means Apple is close to becoming the first company to be valued at $1tn. It would need to hit $203.25 to reach that level.

1.39pm BST

Here's IG index on the expected opening for Wall Street:

US Opening Calls:#DOW 25392 -0.10%#SPX 2816 -0.01%#NASDAQ 7250 +0.23%#IGOpeningCall

1.36pm BST

US private sector employers took on more workers than expected in July, according to a new report, partly due to this year's hefty tax cuts.

Ahead of the non-farm payroll numbers on Friday, ADP's employment report showed a 219,000 increase in private sector jobs last month, compared to expectations of a 185,000 rise. Ahu Yildirmaz, co-head of the ADP Research Institute, said:

The labour market is on a roll with no signs of a slowdown in sight. Nearly every industry posted strong gains and small business hiring picked up.

The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending. Tariffs have yet to materially impact jobs, but the multinational companies shed jobs last month, signalling the threat.

12.45pm BST

It's not all good news for Apple despite its upbeat results and its approach towards a $1tn valuation. Samuel Gibbs reports:

Huawei overtook Apple to become the world's second-largest smartphone seller behind Samsung in the second quarter, the first time in seven years that any contender has managed to split the top two.

Multiple market analysts said that Huawei's rise came as the slowdown in China, the world's largest market for smartphones, eased, with growing market share in Europe. Huawei failed in its recent bid to launch in the US after government action against companies deemed a security threat.

Related: Huawei beats Apple to become second-largest smartphone maker

11.31am BST

The FTSE 100 has taken a turn for the worse in the course of the morning.

Trade tensions are uppermost in investors' minds following reports that the US plans to raise the tariffs it plans of $200bn worth of imports from China from the original 10% to 25%. So commodity stocks are among the leading fallers on concerns that any slowdown in China's economy would hit the sector hard.

10.59am BST

So is this the day Apple's market value hits $1tn? All eyes will be on Wall Street's open to see how the better than expected results are received. Will investors push Apple higher or decide to take profits? Neil Wilson, chief market analyst at Markets.com, says:

Apple shares leapt 4% in after-hours trade and are set to open at a record high just shy of the $200 level. Although it would be a bit of a stretch, a push up to the $1tn mark today is a possibility - it's only a matter of time before it achieves a valuation of $1tn. If it does, cue some big profit taking but it would be a moment to savour for Tim Cook.

We need the share price to break $203 to hit $1tn in market cap - a little more than $5 above the after-hours level at $197-$198. Rather like the Dow at 25k, you kind of get the feeling investors will conspire to nudge it over the line. If you're in FAANGs now I don't see why you wouldn't rotate some equity out of more exposed companies like Facebook and Netflix and opt for relative safety in Apple, whose multiples remain well short of FAANG peers. What might weigh today is broader market fears about trade wars with China as the White House sets out fresh tariff plans on $200bn of Chinese goods. Tim Cook was pretty circumspect on trade and tariffs on the call.

10.50am BST

The pound is not getting much help from the prospect of an interest rate rise on Thursday.

Against the dollar it is down 0.05% at $1.3117, while against the euro is has edged up 0.05% to a1.1229.

10.35am BST

The U.K. manufacturing sector still is slowing and underperforming its European peers. After this week's MPC rate rise, it looks set to be a long wait for the next hike. pic.twitter.com/2eP1309k94

10.25am BST

The survey is positive about exports but less so about domestic demand, says Helena Sans, head of manufacturing at Barclays:

A disappointing result for the manufacturing sector in July with PMI at a three-month low, although still firmly in positive territory. Of more concern is the weakest business confidence score for 21 months, indicating that the industry is desperate for a degree of clarity and progress on the Brexit negotiations and a better understanding of what the final outcome will mean for manufacturers.

It looks like a tale of two markets at the moment, with export growth accelerating but domestic demand struggling to keep pace. Aside from the encouraging news for exporters, the only other real bright spot was more job growth, with two full years of consecutive monthly employment increases no mean feat.

10.22am BST

Following the weaker than expected UK manufacturing report, things are unlikely to improve in the immediate future, says ING Bank economist James Smith. But the downbeat survey is unlikely to discourage the Bank of England from raising interest rates on Thursday, he says:

At 54.0, the latest UK manufacturing PMI is the lowest in three months and is a far cry from the levels seen towards the end of 2017. Weaker domestic demand saw new orders fall and the rate of output growth slip to the lowest in 16 months. Interestingly though, demand from abroad hit a six-month high, implying that firms are still reaping the rewards of better global growth, despite the recent moderation in Europe.

But over coming months, life for manufacturers is unlikely to get any easier. The recent escalation in trade tensions is clearly a challenge, but increasingly the biggest headache for businesses is likely to be the threat of a 'no deal' Brexit. This scenario would likely see huge congestion at ports and disruption to supply chains. While we suspect the probability of the UK leaving without an agreement in March next year is relatively low, an agreement may not come until late in the day.

9.43am BST

The prospect of a trade war between the US and China is the biggest worry for UK manufacturers, says Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking:

The dip in the [PMI] reading comes after an eventful month politically. But if manufacturers are not completely ignoring the Brexit uncertainty, they are nevertheless ploughing on regardless.

If anything, the biggest current worry for a sector with so many exporters is the prospect of an all-out trade war between the world's two largest economies. The fear is that UK manufacturers become collateral damage in any tit-for-tat tariffs that are imposed at a time when firms are benefiting from their exposure to the still relatively buoyant global economy.

9.40am BST

The weaker than expected figures could give the Bank of England second thoughts if it really is planning to raise UK interest rates on Thursday, suggests IHS Markit director Rob Dobson:

The financial markets still seem to have an interest rate increase nailed on for August. However, if the combination of weaker growth and a softening of pipeline cost pressures at manufacturers is mirrored in the larger service sector, the Bank of England's decision will be far from unanimous and they may even yet find some cause for pause.

9.37am BST

The figure of 54 for July's UK manufacturing PMI is a three month low, albeit that any number over 50 shows the sector is expanding. Markit said:

The softer growth patch of the UK manufacturing sector continued at the start of the third quarter. July saw slower rates of expansion in both output and new orders, as weaker growth of new work from domestic sources offset a stronger increase in new export orders. Price pressures also remained elevated as a strong increase in average input costs led to the steepest rise in selling prices since February...

July saw the degree of positive sentiment dip to a 21-month low, amid reports of uncertainty regarding both Brexit and the exchange rate.

There was a flatline feel to manufacturing this month, as the sector held its ground, but only just. Overall production slowed, whilst new order growth took a leisurely pace, and it was the unbalanced reliance on export orders that kept the sector afloat with domestic clients keeping their distance.

This general manufacturing malaise was compounded by a scarcity of essential raw materials and vendor delivery times lengthened at a pace not seen for ten months as supply chains stuttered and stumbled to meet contractual obligations.

9.32am BST

Britain's factories have performed slightly worse than forecast in July.

IHS Markit/CIPS's UK manufacturing purchasing managers index came in at 54 last month, less than the 54.2 expected. This was lower than the June figure of 54.3, itself revised down from the initial estimate of 54.4.

9.16am BST

Here's Markit's country by country manufacturing PMIs for July:

9.14am BST

The overall eurozone manufacturing sector was subdued in July, according to IHS Markit, and there could be worse to come.

The final purchasing managers index edged up from 54.9 in June to 55.1 as trade tensions and rising prices dented optimism. The final figure was unchanged from the initial estimate, and follows disappointing second quarter eurozone GDP figures released on Tuesday. Chris Williamson, chief business economist at IHS Markit said:

A marginal uptick in the PMI provides little cause for cheer given it is the second weakest number for more than one-and-a-half years. The past two months have seen the most subdued spell of factory output growth since late-2016. Worse may be to come. Even this reduced rate of output growth continued to outpace order book growth, resulting in the smallest rise in order book backlogs for two years. The clear implication is that manufacturers may have to adjust production down in coming months unless demand revives.

Clues to the current soft patch lie in the export growth trend, which has deteriorated dramatically since the start of the year across all member states to reach a near-two year low, with France and Austria seeing exports fall into decline in July.

9.07am BST

Germany's manufacturing sector recovered from June's 18 month low last month, albeit more slowly than initial estimates.

IHS Markit's purchasing managers index rose from 55.9 in June to 56.9, lower than the initial reading of 57.3.

The beginning of the second half of the year brought a faster rise in manufacturing growth among German manufacturers. Following a dip in overall performance in June, the upturn in output and new orders strengthened. That said, the increase in production continued to outpace that of new orders as firms expanded their efforts to clear backlogs.

Although slightly weaker than June, employment growth continued to grow sharply, with greater production requirements a key factor behind sustained job creation. Panellists also reported stronger optimism towards future output growth, the most robust since April.

9.01am BST

France's factories did better in July than analysts had been expecting.

IHS/Markit's manufacturing purchasing managers index climbed from 52.5 in June to 53.3, compared to an initial reading of 53.1. Output and new orders increased but exports fell back amid global trade tensions.

July saw renewed growth momentum in the French manufacturing sector, with output and new orders rising at sharper rates, moving off their recent lows seen in June.

Stronger client demand encouraged firms to take on additional staff, raise their purchasing activity and boosted hopes of further near-term growth.

8.48am BST

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8.20am BST

With trade tensions on the rise again, investors are in a cautious mood despite Apple's better than expected results.

The FTSE 100 is down 0.44%, while Germany's Dax has edged up 0.21% and France's Cac has climbed 0.35%.

8.04am BST

Commenting on the Nationwide house price index, Jonathan Hopper, managing director of Garrington Property Finders, said:

Two steps forward, one step back - Nationwide's annual rate of price growth has barely shifted from where it was a year ago.

It's tempting to see such a meandering market as the fruit of a cautious consensus. Instead it's a byproduct of the collision of three conflicting forces; pent-up demand, low supply and patchy confidence.

7.59am BST

Signs of strength in the UK housing market. The Press Association reports:

Annual house price growth accelerated in July as the average property value hit a new record high of 217,010, according to an index.

Across the UK, house prices were up by 2.5% annually in July, compared with a 2% annual increase in June, Nationwide Building Society said.

7.44am BST

Here are IG's opening calls for European markets:

European Opening Calls:#FTSE 7740 -0.11%#DAX 12815 +0.07%#CAC 5509 -0.04%#MIB 22189 -0.12%#IBEX 9855 -0.16%

7.41am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Will Apple become the first company in history to be valued at $1tn? The company reported better than expected results after the market closed on Tuesday, helped by strong sales of the higher-cost iPhone X profits jumped 32%, and its shares rose 4% in the after-market, putting it tantalisingly close to the magic $1tn figure. Jasper Lawler, head of research at London Capital Group, said:

Traders breathed a sigh of relief as Apple reported strong earnings after the close, putting a spark back into the Nasdaq...

What was there not to like about these numbers? This was the news that the markets had been hoping for; there had been concerns going into this release that the iPhone X numbers just weren't going to stack up, but that wasn't the case and Apple has managed to pull it out of the bag again, proving why it should be the first trillion-dollar company. The final 7% lift in the share price required to hit that trillion-dollar level shouldn't be so tough achieve after a set of figures like that.

Related: Apple reports new sales record for third quarter as it eases toward $1tn mark

It's also set to be another important day for economic data especially in light of yesterday's disappointing EU Q2 GDP numbers which came in unexpectedly lower than anticipated. For most of this year we've been told that the slowdown that we saw in Q1 was going to be temporary, and likely weather related. The weak Q2 French GDP numbers and yesterday's weaker than expected EU numbers would appear to give the lie to that perception, and more worryingly inflation appears to be showing signs of picking up.

This is likely to be a concern for the European Central Bank especially if we see no evidence that Q3 is gearing to pick up the slack, with today's July manufacturing PMI's taking on a much greater importance in terms of looking for a rebound in economic activity after the weaker readings we've seen so far this year.