Corporate results in focus; euro steady despite eurozone economy slowing

The FTSE charged ahead of its European peers as investors digested a barrage of earnings. Fresnillo led the miners higher as traders cheered a 12% jump in first half revenue and a hike in the interim dividend; BP was also offering support after its equivalent to net income tripled. Meanwhile rising costs at JustEat and Standard Chartered left the stocks out of favour.

The FTSE charged ahead of its European peers as investors digested a barrage of earnings. Fresnillo led the miners higher as traders cheered a 12% jump in first half revenue and a hike in the interim dividend; BP was also offering support after its equivalent to net income tripled. Meanwhile rising costs at JustEat and Standard Chartered left the stocks out of favour.
In addition to a slew of corporate updates, high impacting economic data was in abundance from the eurozone on Tuesday as trade tensions also returned to the spotlight

Eurozone economy slows
Concerns over a slowdown in the eurozone increased on Tuesday following weaker than forecast GDP data. Economic growth in the eurozone slowed to 0.3% quarter on quarter, the slowest pace of growth in 2 years for Q2. Whilst this is just a flash estimate and there is no information on the composition of growth, we can comfortably assume that weaker global trade played a large role in the slowdown. The export led boom of 2017, is not repeating itself this year as trade tensions unsettle business and have resulted in fewer exports. 
Progress in talks between Trump and EU Commission President Jean-Claude Juncker has eased the pressure slightly, in the knowledge that no further tariffs will be placed between the EU and the US whilst talks continue.

The ECB has acknowledged that trade is unlikely to provide the same level of support to the eurozone economy that it did last year. However, inflation increased more than expected, German retail sales remained robust and unemployment across the eurozone ticked lower; the ECB are unlikely to change their current plans on monetary policy on the back of today’s release, as a result the euro has remained resilient.

Wall Street surges on renewed US – Sino Trade talks
News that China and the US are restarting trade talks sent US stocks and the dollar soaring. The US and China have been involved in a tit for tat trade spat for the last few months which has weighed heavily on sentiment across the markets. So far there has yet to be positive conclusion from any of Trump’s trade talks, but that is not preventing optimism flowing back into the markets. 

Eyes on Apple
Apple is due to report after the closing bell. After a string of disappointment from tech stocks earnings so far such as Facebook, Twitter and Netiflix, investors will be looking towards Apple to turn the recent tech stock selloff around. iPhone sales figures, in addition to the top and bottom line numbers will be watched closely.  A surprise to the upside has the potential to send the tech sector rebounding; however, a miss is likely to intensify the already steep sell off in the sector.


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.