It’s been a slow start to the trading week in Europe after a rather mixed Asia session saw Chinese Q2 GDP slow slightly from Q1.
This wasn’t really too much of a surprise given concerns over the impact of rising trade tensions as well as Chinese attempts to let the air out of a an overinflated property market have acted as a brake on economic activity. A sharp slowdown on industrial production as well as another record low in fixed asset investment of 6% is raising concerns that an escalation in trade tensions could well see economic activity slow further in Q3.
Most attention appears to be on Helsinki Finland and the meeting between President Putin of Russia and the US President against a rising backdrop of nervousness after the US President variously described the EU, Russia as well as China, as foes when it comes to trade.
On the company front Deutsche Bank (DE:DBKGn) surprised the market with an early as well as a fairly positive preliminary Q2 update which showed that it expected revenues to come in at €6.6bn, with profits of €1.15bn for the first half of this year. An acceleration in headcount reductions has also been interpreted by the markets that management are finally looking to grasp the nettle with the removal of 1,700 to bring total staff down to 95,400.
These numbers appear to have helped boost its peers with Barclays (LON:BARC) the best performer on the FTSE100, with Standard Chartered (LON:STAN) also slightly higher.
In the tech sector the share price volatility has continued for Micro Focus after Credit Suisse (SIX:CSGN) cut it to “underperform” suggesting that the company might do struggle in terms of revenue stability in light of its recent sale of its SUSE unit.
Hargreaves Lansdown (LON:HRGV) shares have also taken a dive on reports that the FCA might ban exit fees on investment platforms, in order to help boost competition in the sector.
The pound appears to be putting the political turmoil of recent days behind it, edging higher after the latest Lloyds (LON:LLOY) Bank Business for Britain report showed that business confidence edged up to a two year high, based on the outlook for sales, orders and profits.
US markets look set to open slightly higher ahead of some key economic and earnings announcements later today.
The recent US tax cuts appear to have added some extra fuel to the US economy in recent months, with retail sales for June expected to show a fifth successive monthly gain, albeit with a slight slowdown to 0.4% from the impressive 0.9% gain in May.
On the earnings front we’ll be getting the latest Q2 updates from Bank of America (NYSE:BAC) and Blackrock (NYSE:BLK) in the wake of Fridays blow out JP Morgan numbers.
It’s also set to be a big day for Netflix (NASDAQ:NFLX) as it gets set to reports its latest Q2 numbers, with revenues expected to rise 41% to $3.94bn and earnings per share expected to come in at $0.79c a share. The share price is already up over 100% this year already while subscribers have continued to grow quarter on quarter. At its last update the company hit 125m subscribers and investors will be looking for this trend to continue.
Dow Jones is expected to open 48 points higher at 25,067
S&P500 is expected to open 3.2 points higher at 2,804.5
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