The cooling of trade tensions between the US and China has helped equity markets for a second day. Beijing have made it clear they will not retaliate in the trade dispute, and even though the situation is still tense, traders are taking the opportunity to stagger into no man’s land and pick up stocks. In recent months there has been a lot of too-and-froing between the Beijing and Washington DC, but things have simmered down in the past 24 hours, and some dealers have stepped into the fold. As long as the trading relationship doesn’t deteriorate any further, we could see a positive finish for the week.
Grafton Group (LON:GFTU_u) are firing on all cylinders as its operations in Ireland, the Netherlands, and the UK are all performing well. First-half operating profit and revenue increased by 6% and 2% respectively. The Irish unit saw ‘good growth’ and its outlook is ‘positive’. Home improvements in Ireland and the UK are helping the company. Despite the uncertainty in relation to Brexit, Selco - UK business, is in good shape.
Premier Foods (LON:PFD) confirmed that Alex Whitehouse, the UK managing director, has been appointed as the CEO, Reckitt Benckiser's (LON:RB) previous finance director, Colin Day, has been named as non-executive chairman. Duncan Leggett will act as CFO pending a permanent appointment. The shakeup to management comes as Gavin Darby, the previous CEO, left the group earlier this year. The share price has plodded along in recent years, and today’s announcement has the potential to be turning point for the group, but the new management need to map out a turnaround plan in order to restore investor confidence.
GBP/USD is slightly lower as the fear of a no-deal Brexit hangs over the pound. UK mortgage lending surged to £4.6 billion in July, which topped the £3.7 billion forecast, and the number of mortgage approvals exceeded forecasts too. Despite all the chatter about Brexit, the mortgage market is clearly robust.
EUR/USD is in the red on the back of the firmer US dollar, and the mediocre eurozone CPI data hit the currency pair too. CPI in the euro area held steady at 1%, meeting forecasts, and the core reading remained at 0.9%. The low readings suggest that demand is soft, and that might increase calls for looser monetary policy from the ECB next month.
Dell Technologies (NYSE:DELL) will be in play today after the group posted their second-quarter earnings last night. The group revealed impressive numbers as EPS were $2.15, which smash the $1.47 forecast. Revenue was $23.45 billion, while the consensus estimate was $23.27 billion. The PC division registered a 6% increase in revenue, and the commercial operation saw a 12% rise in revenue. The company is more geared to the commercial side of business so it encouraging to see it is performing well in a core business.
We are expecting the Dow Jones to open 148 points higher at 26,520 and we are calling the S&P 500 up 17 point at 2,941.
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