The European markets paused for breath at the start of Wednesday’s trading, despite the Dow Jones’ gory close on Tuesday night and a 2.7% slide in Chinese exports in April.
Trade war fears
Having sank a full 1% as it played catch-up yesterday, the FTSE opened unchanged at 7250, its worst price in almost 6-weeks, and nearly 300 points off of the highs struck in late-April. Looking at the day’s economic calendar, there’s not a whole lot UK-specific on the cards, leaving the index vulnerable to the shifting sands of global sentiment as Wednesday progresses. The DAX, meanwhile, was up 0.3% following a better than forecast German industrial production reading, with the CAC nudging 0.1% higher.
Sterling & cross-party talks
Helping prevent another dive into the red for the FTSE was the sorry state of sterling. The pound fell 0.2% against the dollar, forcing cable under $1.305, and 0.3% against the euro, taking it below €1.165, as the latest reports suggest that the cross-party talks aren’t going very well.
With Labour’s trust in the Tories hurt by leaks to the Sunday papers, and Theresa May under pressure to clarify her resignation date, there appears to be too much party politics at play to actually reach a compromise palatable to both sides. This week is meant to be the ‘deadline’ for these talks – talking of cut-off points, David Lidington has claimed July 2nd as the latest government deadline for passing a Brexit deal – so an outcome, positive or negative, could be confirmed in the coming days.
ITV (LON:ITV)
There weren’t too many surprises in ITV’s first quarter results. As forecast, total advertising revenue in the quarter was down 7%, with a particularly pronounced – but a smidge better than estimated – 16% drop-off in what was meant to be Brexit month March. Revenue at ITV studios pushed 1% higher, leading to a 4% fall in total revenue.
For the first half of the year, total advertising revenue is set to slide by 6%, with June the pain-maker, ITV expecting a 20% plunge that month due to tough comparatives with last year’s World Cup-boosted performance. The cost of the risky BBC-collab BritBox will also bite into its H1 showing. Though there wasn’t anything too shocking in the update, the repeated warnings of ‘economic and political uncertainty’ helped send the stock 2% lower, taking ITV to a 5-week nadir of £1.29.
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