Markets remain concerned about the potential outcome from the US-China trade negotiations as both sides have announced considerable additional tariffs. Traders are looking for any sign of hope for a deal, however, and the markets responded overnight to what are seen as positive comments by Donald Trump.
The S&P 500 closed up 0.8% which in turn saw Asian markets respond in kind. The Hang Seng was up 0.9% while the Shanghai Composite closed up almost 2% on the back of optimism from US comments. The FTSE opened down marginally at 0.2% off.
To compound things, however, the US administration is now threatening to sign an executive order that will ban US companies from using any telecoms equipment manufactured by Huawei. This will be a major blow to the Chinese firm, but is just the latest chapter in what seems to be an increasingly unresolvable set of talks between the two countries which has wider implications for the global economy.
The question now will be how the lack of progress is received domestically – both economies are not looking as healthy as they were a year ago, and while a tariff war plays well with hardline nationalists, it may create new pressures as companies start losing exports. The US liquefied natural gas industry, for example, is already feeling the pinch.
TUI outlook boosts shares despite travel travails
Tui (LON:TUIT) saw its shares trading up in early action on the London market. TUI is operating in a tough market at the moment, with Brexit just one of its challenges. The ongoing technical issues surrounding Boeing’s 737 MAX airliners has grounded some 10% of TUI’s own fleet and hit profits. But the travel operator stuck to its forecasts and reported an underlying loss of EUR 300 million. It is also grappling with lower margins but is reporting increased interest in holidays in the eastern Mediterranean, including Turkey.
Oil market lacks direction, IEA warns of supply concerns
The oil market is in an interesting situation as some traders focus on the potential slow down in the Chinese economy while others are concerned about the more immediate impact that tensions between the US and Iran will have. The IEA has just announced that the current supply surplus could potentially flip quickly into a deficit particularly if supplies from Libya, Iran and Venezuela are compromised further.
Experian benefits from strong US economy
Higher tax and interest charges have sent Experian's net profit south, but at an underlying level this is a sturdy result from the data specialist.
Sales growth has beaten the company's own expectations after a stellar fourth-quarter performance that demonstrates just how much it's benefiting from the strong US economy.
Today's results show that Experian sourced more than two-thirds of its annual operating earnings from the US, where the unemployment rate has fallen to just 3.6%, its lowest level since 1969.
The booming US economy is giving company executives more money to spend on digital transformation strategies that hinge on the kind of sophisticated data analysis that Experian can provide.
Experian (LON:EXPN) has guided for more solid sales growth in the current year, though with its share price having had an outstanding run of late, investors are proving much harder to please.
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