European equity markets have gotten off to a quiet start this morning. The Chinese economy is cooling, and in the second-quarter, it grew by 6.2% on a yearly basis – meeting forecasts. The retail sales and industrial output reports topped forecasts, and that offered some hope.
The German Economy ministry warned that industrial activity remains sluggish and headwinds from overseas demand are hurting the sector, and the current economic reports point to slower growth in the services sector. The problems in the German manufacturing industry are well known, but the services industry is in rude health, but that might be changing.
Antofagasta (LON:ANTO) shares are higher this morning after the group’s joint venture with Barrick Gold was awarded $5.84 billion in damages. The World Bank’s International Centre for Settlement of Investment Disputes issued the ruling ,and it said that $5.84 should be awarded to Tethyan Copper Company – which is own equally by Barrick Gold and Antofagasta. The government of Pakistan have been involved in a dispute with the mining group for several years, and now the World Bank have issued their ruling. Antofagasta won’t include the payment in their accounts, until the funds are received.
Sports Direct International PLC (LON:SPD) shares have sold-off this morning after the company said it will delay the release of its full-year results. The firm was due to publish the figures this week, and now they might be delayed until possibly 23 August. The retailer said there were complications with the integration of House of Fraser, and in light of tougher auditing rules the group felt it was best to reveal the figures at a later date. Sports Direct cautioned about the ‘future trading performance’ of House of Fraser, and that knocked investor confidence.
Thomas Cook (LON:TCG) has been accused of misleading investors over the rescue package that was offered by Fosun. Sharesoc, who is a group who represents individual investors made accusations against the struggling travel group. The organisation feels that Thomas Cook’s updates in February and May were ‘unduly optimistic’, and the stock is in the red.
GBP/USD and EUR/USD have barely moved this morning as there were no major economic announcements from Europe, and seeing as the economic calendar is light, the afternoon session is likely to see low volatility too.
Citigroup (NYSE:C) will be in focus today as the bank will release its second-quarter figures. Traders will be keeping an eye on the banks net lending margin rate, and the profitability of its lending division. Banks usually earn more money in a higher interest rate environment, and four rate hikes from the Fed in 2018 should have helped the bank, but the recent chatter about lower rates, could play hurt the finance house. Banks are becoming less dependent on the trading revenues these days, and wealth management and investment banking fees will be closely watched.
We are expecting the Dow Jones to open 23 points higher at 27,355 and we are calling the S&P 500 up 3 points at 3,016.