Europe
The bullish mood in Europe continues, and the picture appears to have become clearer in regards to European politics. Christine Lagard of the IMF, has been nominated as head of the European Central Bank, and equity traders reacted well as she is deemed to be dovish in terms of monetary policy. It seems odd that a non-central banker is being put forward as head of one of the largest central banks in the world at a time when the eurozone still has major problems in terms of debt and unemployment.
Purplebricks (LON:PURP) shares are in demand after the firm posted mediocre full-year figures. Annual revenue jumped by 55%, but the operating loss increased from £27.8 million last year to £52.3 million. A sizeable increase in administration costs and marketing expenses, caused the loss to widen. The group announced plans to exit the US market as part of the wider strategic review. Earlier this year the company said it would exit the Australian business. Purplebricks is going to focus on its UK and Canadian business, as a way of getting back to basics.
Sainsbury's (LON:SBRY) trimmed the price of more than 1,000 goods in a bid to stay competitive, but in the latest quarter, total sales excluding fuel slipped by 1.2%. Lidl and Aldi have disrupted the UK supermarket sector, and the old guard are struggling to hold their positions. The ‘retail markets remains highly competitive’ and in the era of promotions, it is the customers who wins, while the shareholder loses.
Funding Circle (LON:FCH) shares have bounced back today after a major drop in share price it suffered yesterday. Now the dust has settled, traders are snapping up the stock as it is relatively cheap. The group cut its revenue growth forecast from 40% to 20%, which isn’t great, but it still anticipates to produce a sizeable jump in revenue, so perhaps some dealers feel yesterday’s move was overdone.
Flutter Entertainment (LON:FLTRF) shares have rallied this afternoon as there is market chatter about a possible buyout.
JD Sports (LON:JD) issued a positive trading statement. The group said it expects full-year pre-tax profit to be ‘at least equal’ to the current market expectations. The fashion house said that UK and international sales on a like-for-like basis has been ‘encouraging’, and it is continuing its expansion plans.
US
The S&P 500 has posted another intra-day record high as the bullish run continues. The US revealed a broadly set of economic reports. The ADPemployment report was 102,000 which undershot the 140,000 consensus estimate, and the May report was revised higher to 41,000 from 27,000. T
he ISM non-manufacturing report was 55.1, while economists were expecting 55.9. The factory orders showed a 0.7% decline in May, and the previous reading was revised from -0.8% to -1.2%. The underwhelming economic indicators are being view as reasons why the Fed should cut rate later this year.
Tesla (NASDAQ:TSLA) shares have rallied today after the company confirmed that it delivered 95,200 vehicles in the second-quarter, which was a record level, and the consensus estimate was 91,000. In the first-quarter of this year the company produced in the region of 77,000 vehicles, and the second-quarter production was 87,048, so even though are on the up, the company is likely is find it tough to achieve its annual production target, which is between 360,000 and 400,000.
FX
EUR/USD is slightly higher today on the back of the broadly positive services PMI reports from the eurozone, and the dip in the greenback has helped too. The Spanish, Italian, and German services PMI reports were 53.6, 50.5 and 55.8 respectively, and all topped forecasts.
GBP/USD is a little on the weak side as the UK services PMI report was underwhelming. The reading for June was 50.2, while economists were expecting 51, and the May update was 51. The services sector is by far the largest industry in the UK and the fact it barley grew last month is a little worrying.
Commodities
Gold hasn’t moved much today but as it is well off the lows of the week, the wider bullish move is likely to continue. The metal has been driving higher since April, and last month it hit a six year high, and a break above the $1,439 region, might bring $1,485 into play.
WTI and Brent crude initially drove lower on the back of the Energy Information Administration report, but now appears to be rebounding. US oil stockpiles dropped by 1.08 million barrels, but traders were expecting a draw of 2.96 million barrels.
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