Equity Brief: Trade Trepidation And Fed Fatigue

Equity Brief: Trade Trepidation And Fed Fatigue

Ken Odeluga  | Jul 31, 2019 09:26

Cash Indices % Change

Stock market snapshot as of [30/7/2019 6:11 PM]

  • Some solid if not stellar European heavyweight earnings failed to offset a similarly sized raft of disappointment whilst the session on both sides of the Atlantic was garnished by Trump tweets downplaying the chances of a trade breakthrough
  • Sentiment was damped further on The Continent by further data prints pointing to a slowing German economy; several German states reported monthly inflation that missed forecasts, though the Federal-level result for July beat. French growth was similarly lacklustre in the second quarter
  • Germany’s DAX and related contracts are seeing their worst day since the end of May with the cash gauge down 2.2%
  • The Fed’s preferred inflation series was also quite weak in June. With probability of a 25-basis point rate cut on Wednesday tracking around 100%, positive indications of a move back towards the central bank’s target is a silver-lining that’s already priced in

Corporate News

  • Oil at least is a positive story—sort of—with key contracts on course for a seventh rising session in eight, underpinning the U.S. energy sector. The S&P 500’s Energy sub-index rose 0.4% a while ago on a combination of tensions over state-backed actions in the critical Strait of Ormuz and seasonal refinery shutdowns
  • A raft of giant European—particularly German—groups also darkened the mood. Lufthansa weighed German markets most, losing 6%, as it remains at the epicentre of European travel sector woes; Chemicals group Bayer (DE:BAYGN) was down 3.7% after warning on crop product weakness whilst litigation drags on; Delivery Hero slid, though Britain’s Just Eat (LON:JE) fell more, as the German online takeaway app said it wasn’t bidding for its rival after all; FTSE 100 consumer product maker Reckitt slumped 3.2% after missing estimates and reducing guidance; BP (LON:BP) was a relative star, topping the UK benchmark with a solid if not spectacular set of earnings, earning the shares a 3% rise

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"Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.

Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions."

Original Post

Ken Odeluga

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