Data Weighs On U.S. Stocks; Bitcoin And Gold Glow

Europe

It was been a lacklustre session in Europe today as the US-Iran, and the US-China tensions continue to circulate. The G20 summit is at the forefront of traders’ minds and the meeting between Donald Trump and Xi Jinping is likely to determine the next major move in equities. Some traders are sitting on their hands until the meeting between the two leaders is out of the way.

Carpetright (LON:CPRC) shares are in demand today as things appear to be on the up for the troubled retailer. The statutory loss before tax was £24.8 million, which was an improvement on last year’s loss of £69.8 million. The company confirmed that 80 stores were closed as a part of the company voluntary arrangement, and 23 shops were retained in a nil rent basis. UK like-for-like sales in first eight weeks of the new financial year grew by 8.5%, and the firm said the turnaround was on track. Today’s update shows the company is slowly but surely heading in the right direction. Consumer confidence is fragile so Carpetright will have its work cut out for it, but at least it has become leaner.

BT (LON:BT) are looking to sell-off their Spanish division. The telecoms giant has previously considered tying it in with its operations in Latin America, but now it is looking at disposing of the business. The group appears to be trimming its international exposure, as it is spinning-off its Irish operation.

Petrofac (LON:PFC) issued a mediocre trading update. The firm said engineering and construction revenue for the full-year will be in the region of $4.5 billion, but margins will be at the lower end of the guidance. Year-to-date new order intake has been $1.7 billion, and the trading has been in line with the previous guidance. The company said the new order intake reflects the recent challenges in Iraq and Saudi Arabia. The Serious Fraud Office (SFO) began investigating the company in 2017 in relation to its practices. The probe by the SFO has damaged the firm’s reputation, and that has contributed to it missing out on $10 billion worth of contracts.

US

The Dow Jones and S&P 500 are in the red in light of the disappointing US economic reports. The CB consumer confidence report for June dropped to 121.5, from 134.1 in May, and economists were expecting a reading of 131.1. The new homes sales report for May showed a 7.8% decline, and the April update was revised from 6.9% to -3.7%. The announcements are a little concerning, and some investors will view the updates as a justification for the Fed to use dovish language.

Lennar (NYSE:LEN) had a solid second-quarter as EPS jumped by 38% on a yearly basis to $1.30, which easily topped the consensus estimate of $1.14. Revenue for the period jumped by 1.9% to $5.56 billion, exceeding forecasts. Gross margins were 20.1%, which compares with the 16.8% achieved in the same period last year, and the group expects an improvement in margins in the next two quarters.

AbbVie (NYSE:ABBV) launched a takeover bid for Allergan (NYSE:AGN) for approximately $63 billion. Humira is the arthritis drug that is owned by AbbVie, and it has been the company’s cash-cow, and now they are looking to diversify their portfolio of products. Allergan shares soared, while AbbVie shares have sold-off.

FX

GBP/USD came under increased pressure after the Confederation of British Industry (CBI) realised sales report came in at -42, its lowest reading in 10 years. The announcement sparked fears that UK consumers are holding back on spending, and there has been some evidence of falling consumer sentiment. It is worth remembering that last June was a strong month for consumer spending as the weather was warm, and it just followed the Royal Wedding.

EUR/USD is in the red thanks to the slight rebound in the US dollar. There wasn’t much in the way of economic announcements from the eurozone today, so the move has been dollar driven.

USD/CAD is a little lower this afternoon as the firm Canadian wholesale report weighed on the currency pair. The report showed a 1.7% increase, which topped the 0.2% forecast, and it was an improvement on the 1.4% reading in March.

Cryptocurrencies are back in fashion thanks to the recent announcement from Facebook (NASDAQ:FB) that it is launching its own digital currency. Bitcoin has topped the $11,000 mark, while Ethereum is holding above $300.

Commodities

Gold’s impressive rally continues and the metal briefly hit a level not seen since May 2013.The yellow metal has rallied over 9% in June, which is impressive to say the least. It is unusual that gold has enjoyed an upward move on a day when the US dollar and global stocks haven’t; moved that much.

Oil has had a subdued session as geopolitics hangs over the energy market. The US-Iran standoff is likely to squeeze supply, but on the other hand, the trade spat between the US and China could hurt demand.

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