Market News & Analysis
Equity brief: Trade trepidation and Fed fatigue
Ken Odeluga July 30, 2019 6:30 PM
Stock market snapshot as of [30/7/2019 6:11 PM]
- Some solid if not stellar European heavyweight earnings failed to offset a similarly sized raft of disappointment whilst the session on both sides of the Atlantic was garnished by Trump tweets downplaying the chances of a trade breakthrough
- Sentiment was damped further on The Continent by further data prints pointing to a slowing German economy; several German states reported monthly inflation that missed forecasts, though the Federal-level result for July beat. French growth was similarly lacklustre in the second quarter
- Germany’s DAX and related contracts are seeing their worst day since the end of May with the cash gauge down 2.2%
- The Fed’s preferred inflation series was also quite weak in June. With probability of a 25-basis point rate cut on Wednesday tracking around 100%, positive indications of a move back towards the central bank’s target is a silver-lining that’s already priced in
- Oil at least is a positive story—sort of—with key contracts on course for a seventh rising session in eight, underpinning the U.S. energy sector. The S&P 500’s Energy sub-index rose 0.4% a while ago on a combination of tensions over state-backed actions in the critical Strait of Ormuz and seasonal refinery shutdowns
- A raft of giant European—particularly German—groups also darkened the mood. Lufthansa weighed German markets most, losing 6%, as it remains at the epicentre of European travel sector woes; Chemicals group Bayer was down 3.7% after warning on crop product weakness whilst litigation drags on; Delivery Hero slid, though Britain’s Just Eat fell more, as the German online takeaway app said it wasn’t bidding for its rival after all; FTSE 100 consumer product maker Reckitt slumped 3.2% after missing estimates and reducing guidance; BP was a relative star, topping the UK benchmark with a solid if not spectacular set of earnings, earning the shares a 3% rise
Upcoming corporate highlights
Upcoming economic highlights
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.