The European markets started the morning in reverse, the comedown after a few sessions of trade talk optimism.
Following a slightly disappointing statement from the US Trade Representative on Wednesday afternoon, which claimed the superpowers had discussed the ‘needed structural changes in China’, the Chinese Commerce Industry issued a comment claiming the ‘extensive, deep and detailed’ 3 day talks had ‘laid the foundations’ for the trade war to be resolved. The right kind of noise, then, but not exactly the definitive signs of actual progress the markets were hoping for given their movements in the last few days.
Add onto that lower than forecast inflation readings from China overnight, and Europe returned to a more familiar red environment after the bell. The DAX and CAC were down around 1% apiece, taking them back under 10800 and 4800 respectively, while the FTSE tumbled from Wednesday’s 5 week peak, slipping 0.8% to near 6860.
Sentiment in the UK was also harmed by the latest bloody dispatches from the retail sector frontline. John Lewis may have to axe its staff bonus for the first time in decades, M&S (LON:MKS) suffered a far worse than expected 2.2% drop in Q3 like-for-likes, Debenhams (LON:DEB) saw comparable sales plunge 5.7%, Halfords was forced to issue a profit warning, and Card Factory (LON:CARDC) bemoaned a ‘challenging’ holiday period. Only Tesco (LON:TSCO) appeared to avoid a Grinch-pleasing Xmas, beating estimates with a 2.6% jump in UK and Ireland like-for-likes over the festive season.
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