Europe
The FTSE 100 has been lifted by the sell-off in the pound. Concerns over a no-deal Brexit has weighed on sterling, and in turn the FTSE 100 has been given a lift. The bullish sentiment that was doing the rounds yesterday, and has continued today. It seems that a lack of negative news has prompted traders to buy into the market.
Ryanair (LON:RYA) shares are a little higher this afternoon after the group said it would close some of its baes and cut certain flights on account of the delay in the delivery of Boeing (NYSE:BA) 737 Max planes. The airline said that summer traffic for 2020 will be below expectations on account of aircraft delays.
Burberry (LON:BRBY) shares soared to an 11 month high today after the company posted strong first-quarter results. The fashion house revealed a 4% jump in same store sales, which exceeded analyst’s estimates of roughly 2%. The firm performed well in the Far East, as Asia Pacific saw a single digit increase in revenue, while mainland China registered mid-teens percentage sales growth. The company is more than half way through its restructuring scheme, and it confirmed its full-year outlook for 2020. Adding to the bullish move on the back of the numbers, JPMorgan Chase increased its price target to 2,000p from 1,850p.
A.G.Barr PLC (LON:BAG) shares sold-off on the back of a profit warning, and the drinks company now predicts that profits will drop on the year, and the fall might be as much as 20%. The group experienced ‘challenges’ with brands like Rubicon and Rockstar, and it described the weather in spring and early summer as ‘disappointing’. In order to regain momentum, AG Barr said there will be some exceptional costs incurred.
US
The major indices are mixed as reporting season sets up a notch. The retail sales report was solid as it showed 0.4% rise in June, and it highlights consumers’ willingness to spend.
Domino’s Pizza Group (LON:DOM) shares have tumbled as second-quarter firm-owned US same store sales grew by 2.1%, while the consensus estimate was 3.15%. Same store sales of franchise stores increased by 3.1%, and that undershot the 4.69% forecast. Total revenue increased by 4.1% to $811.6 million, but traders were expecting $836.6 million. The rise of UberEats and other food delivery apps have eaten into Domino’s slice of the market.
Reporting season for major US banks got underway today when we heard from Goldman Sachs (NYSE:GS), JPMorgan Chase and Wells Fargo (NYSE:WFC). Goldman’s revealed second-quarter EPS of $5.81, which topped the $4.89 consensus estimate. Revenue slipped by 2% to $9.46 billion, and traders were expecting $8.83 billion. The quarterly dividend was upped to $1.25 from 85 cents.
JPMorgan Chase (NYSE:JPM) revealed quarterly EPS of $2.82, topped the $2.50 forecast. Revenue increased by 4% on annual basis to $29.57 billion, which topped the $28.9 billion forecast. The group trimmed the forecast of its net interest income, and that took the shine off the other numbers.
FX
GBP/USD dropped to its lowest level since April 2017 over concerns about Brext. Both Boris Johnson and Jeremy Hunt have called for the removal of the Irish backstop from the withdrawal agreement, and seeing as the EU said the withdrawal agreement won’t be renegotiated, the fears of a no-deal Brexit have risen. It was reported that Boris Johnson might seek to suspend parliament in late October, should he become Prime Minister, in a bid to stop a no deal Brexit being blocked at Westminster, and that weighed on the pound.
EUR/USD has been hurt by the rally in the greenback, but the poor German ZEW reported added to the euro’s woes. The ZEW economic sentiment fell to -24.5, from -21.1 in June, and economists were expecting -22.3, The reading was the lowest since late 2018, and it adds to the negative sentiment that hangs over the currency bloc.
Commodities
Gold is in the red as the US dollar is higher on the session. The metal continues to experience low volatility is trading sideways. Gold has enjoyed an impressive rally since April, and while it holds above the $1,382 mark, the bullish trend is likely to continue.
Oil is slightly higher today as the feelgood factor from yesterday’s economic reports from China is still doing the rounds. Tensions are rising in relation to Iran, and dealers are fearful they could escalate even further.
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