The FTSE 100 is firmly in the red as mining stocks are weighing on the index. A sell-off in iron ore prices in China has prompted a decline in major mining stocks like Rio Tinto (LON:RIO), BHP Billiton (LON:BHPB), and Glencore (LON:GLEN), and seeing as the London equity benchmark has a relatively large portion of natural resources stocks in its makeup, the British market is underperforming its Continental counterparts.
Brazil’s Vale (NYSE:VALE) won approval to restart iron ore production, and that triggered the drop in iron ore prices.
ITV (LON:ITV) shares are higher today as the company had a downbeat first-half, but it was better-than-expected. Advertising revenue slipped by 5%, while Credit Suisse (SIX:CSGN) was anticipating a decline of 6%. Total external revenue dropped by 7% and adjusted earnings fell by 13%. The likes of ITV have suffered in terms of advertising as companies are choosing to advertise on more modern mediums like Google (NASDAQ:GOOGL) and Facebook (NASDAQ:FB), and TV advertising has suffered as a result. The group was identified an additional cost savings of £5 million for 2019, and £15 million has been outlined for between 2020 and 2022. In light of the changing nature of the adverting industry, the group needs to keep costs down, and harness more advertising income from its online unit.
Deutsche Bank (DE:DBKGn) shares are in the red after the bank registered a second-quarter loss of €3.15 billion, which exceeded the €1.7 billion loss forecast. The woes of Deutsche have been well known, and it says a lot when the figures undershot the already poor forecasts. In the period, the investment banking divisions and the private & commercial banking units registered pre-tax losses of €907 million and €241 million respectively. The asset management division had a pre-tax profit of €90 million. Recently, the bank revealed an aggressive cost cutting plan which will entail cutting 18,000 jobs, and that includes existing its global equities business, and deep cuts to the fixed income department. Many banks are scaling back their trading operations, and focusing on lower risk services like private banking and asset management, and as we have seen today, Deutsche Bank have a lot of work to do in those areas.
Aston Martin (LON:AML) shares have slumped this morning after the luxury car manufacturer lowered its full-year sales guidance. The group now expects annual wholesales figures to be between 6,300 and 6,500, while the old guidance was for 7,100 and 7,300. The firm has earmarked £300 million for capital expenditure, while it previously intended to spend between £320 million and £340 million. The lowering of the capital expenditure guidance ties in with the reduction of the sales forecast. The super-rich tend to weather economic uncertainty reasonably well, and it is worrying if Aston Martin feel the need to trim their outlook.
EUR/USD is in the red this morning as there were some downbeat economic reports from the currency bloc. The flash German manufacturing PMI report dropped to 43.1 in July, and the sector has been in contraction territory all throughout 2019. The flash French manufacturing PMI reading was 50.0 – which equates to zero growth in July. The services reports for both countries showed a slower rate of expansion too.
Texas Instruments (NASDAQ:TXN) will be in focus today after the company posted well received figures after the close last night. EPS and revenue was $1.29 and $3.67 billion respectively, which the consensus was $1.22 and $3.6 billion respectively. Given the slowdown in demand for microchips in recent months, it is possible that expectations were low going into the announcement, and therefore the forecasts were relative easy to beat.
We are expecting the Dow Jones to open 64 points lower at 27,285 and we are calling the S&P 500 down 8 points at 2,997.
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