News that the Brexit party will stand aside in Conservative held seats lifted the British pound in overnight trading. However a lack of news on trade negotiations saw shares and commodities slide as investor worries rose. The US Memorial Day holiday brought thin trading. Despite the general malaise Asia Pacific futures point to a stronger start to trading today.

Company reporting seasons are drawing to a close. Bloomberg shows the 355 reporters in the Euro Stoxx index so far are beating forecasts of sales and profits, as are the 455 members of the SPX 500. The problem is the absolute levels. European sales are up just 1%, but earnings are slightly in the red. In the US sales increased by almost 4% for the quarter, but earnings are down 1%.

This profitless increase in activity is a concern for investors. The biggest drag came from Energy and Materials stocks. Lower commodity prices this year meant this was factored in. The disappointments in US Technology stocks and European Telco and Consumer Services are a surprise, with major macro implications.

Commbank, Australia’s largest stock, this morning reported a 5% lift in underlying cash profit and a modest improvement in arrears. The good news ends there. Headline profit fell 9.6% for the quarter, and expenses and impaired assets rose. This could see a weaker opening for CBA, and its heavy index weight erase the 8 point overnight gain for the broader market.

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