Europe
Stocks are broadly lower as dealers remain nervous about the state of global trading relations. European equities have lost ground as the prospect of a full-blown trade war is weighing on investor confidence.
Ryanair revealed a 20% fall in first-quarter profit to €319 million, but it still exceeded the €305 million that equity analysts were expecting. Higher salaries, lower fares and higher oil costs all contributed to the dip in earnings. The airline predicts only a 1% increase in second-quarter fares, while it previously predicted a 4% increase. The airline reaffirmed its full-year profit target, despite industrial action and flight cancellations damaging its reputation. The stock has been in decline since August, and if the negative move continues it could target the 1,400p region.
Hammerson has disposed of two properties for £164 million. One of the retail parks was in Bristol and the other was in Fife. The sale price of the properties was at a 10% discount to their December valuations, which underlines the state of the sector. Traditional retailers are struggling as online shopping has become more popular. Footfall at retail parks is in decline and this is weighing on the group.
McColl’s shares have sold-off after the company confirmed a 48% drop in first-half profit. The earnings slump was mainly caused by the collapse of the wholesaler Palmer and Harvey. Like-for-like sales fell by 2.7%. The company cautioned about risks in the retail sector, but confirmed its supply chain is now more secure. The share price has been in decline for 11 months, and if the bearish move continues it could target the 175p area.
US
Equity markets are in the red as trade fears are still doing the rounds. Traders are nervous that the strained trading relations could lead to a full-on trade war. The move to the downside hasn’t been too big and dealers will be looking forward to Wednesday’s meeting between President Trump and the president of the EU commission Jean-Claude Juncker.
Halliburton (NYSE:HAL) shares are in the red despite the firm revealing solid second-quarter figures. Revenue jumped by 24% to $6.15 billion, which narrowly exceeded the $6.11 billion that analysts were expecting. Revenue at the US division jumped by 38.4%, while the international operation saw a 6% jump in revenue.
Hasbro shares have jumped today after the company posted second-quarter figures that exceeded forecasts. Adjusted earnings per share was 48 cents, which easily topped the 29 cents analysts were expecting. Revenue slipped by 7% to $904.5 million, but the consensus estimate was $838.1 million.
FX
The US dollar index has recouped its morning’s losses and is now higher on the day. It has been a quiet day on the currency markets. Traders are still mindful of comments from President Trump that he feels China and the European Central Bank are manipulating their currencies. The US president has also been critical of the Federal Reserve, and he would prefer the monetary tightening policy to be put on hold.
GBP/USD and EUR/USD have experienced small trading ranges today on account of the lack of volatility and economic announcements. The push higher in the US dollar has dented sterling and the single currency.
Commodities
Gold is a little weaker today as the greenback has pulled back its earlier losses and has since turned higher. The metal fell to a one-year low last week and we have yet to see any sign of the downward trend coming to an end. It says a lot about gold that it can’t seem to push higher in a risk-off environment. If the metal continues its bearish move, it could target $1,204.
WTI and Brent crude are higher given the heightened tensions between the US and Iran. Mr Trump warned the regime: ‘never ever threaten’ the US. Sanctions are lined up for Iran and the tough talk from Washington has sparked fears about production and supply in the region.
DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.