Global markets continue to be fixated on the US-China trade dispute, as many investors and traders start to trickle back from their summer holidays. The threatened tariff regimes are being introduced now. Latest economic numbers from China indicate a mixed picture, boosting the CSI by 1.3% Monday.
Asian manufacturing is looking worse than six months ago, with Chinese and other regional manufacturing / factory numbers revealing a slide over the summer. Some of this may be seasonal, but the trade war is going to start to hurt some US and Asian companies.
Sterling volatility expected ahead of big week for Westminster
The UK market remains focused on the ongoing drama in Westminster, with further broadsides being fired by both sides over the weekend, and the PM threatening rebel Tory MPs with de-selection if they vote against the government this week. MPs return to Westminster tomorrow, so expect some pronounced volatility in the GBP over the course of the week.
NMC shares up on rumours of Chinese acquisition
The FTSE has opened up slightly this morning, led by NMC Health, TUI and Micro Focus International (LON:MCRO). NMC is enjoying attention from investors amid reports that Chinese group Fosun is considering a 40% stake in the UAE-headquartered healthcare provider. The firm is also believed to be mulling a $200 million share buyback.
TUI has been in the doldrums since it issued a profits warning and was forced to ground its Boeing (NYSE:BA) 737 MAX jets back in March. The shares have stayed relatively rangebound amid ongoing concerns over the impact of Brexit on the travel sector.
There has been regular buying in Micro Focus stock this morning as the software firm embarks on a strategic review. Investors like the sound of last week’s report of “a significant pipeline of business opportunity” from CEO Stephen Murdoch. It seems as if some traders think the stock has now been oversold.
Fed data mid-week will provide insight on US economy
In the US, the market is closed for Labor Day. Investors are going to be awaiting a release of economic data from the Fed on Wednesday: despite modest growth in July/August, the market is becoming concerned that the US economy is starting to run out of puff against some major headwinds. For example, last week the HIS Markit purchasing managers index went into contraction (i.e. below 50) for the first time since 2009. US markets and the dollar could respond badly to bad news this week.
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