Equity markets are largely lower going into the close as trade tensions still hang over investor confidence. 

Europe

Dealers are turning their attention back to the trade standoff between the US and China, and the G20 meeting at the end of the week will be in focus as President Trump with meet with China’s Xi Jinping. The excitement of Mario Draghi’s statement and the Fed’s meeting last week, has been replaced by worries about global trade. Wang Shouwen, Chinese vice commerce minister, said the US should drop its ‘inappropriate’ actions against Chinese tech firms. The comment from the Chinese government official was a subtle reminder that a lot of work needs to be done to overcome their differences.   

Daimler shares are in the red after the company issued its third profit warning this year. The firm expects earnings on the year to be flat, while it previously predicted that profit would grow on the year. The lowering of the profit guidance was in relation to the company’s diesel vehicles, and the German Federal Motor Transport Authority announced a recall of thousands of Mercedes vehicles. It turns out the vehicles had software which was designed to give inaccurate fuel emission results.

Nanoco shares have rebounded today after the stock slumped to an all-time low on Friday. At the back end of last week, the group confirmed that a large US client decided not to extend it contract, and that rocked investor confidence.  It now transpires the unnamed US client was Apple, and the tech giant decided to stop working on a next-generation iPhone camera as costs were too high. 

Admiral Group shares received a boost today after Barclays upgraded the stock from underweight to overweight, and it upped the price target to 2,300p from 2,041p.

Carrefour revealed plans to dispose 80% of its stake in the Chinese business, Suning.com. The French group might seek to sell-off the reaming stake in the business in the next two years. The decision was taken on the back of poor like-for-like sales in China, and the move should free up capital and resources to focus on other areas of the business. 

US

It was quiet day in New York as the major indices are slightly higher as dealers’ countdown to the G20 meeting later this week. There has been an absence of major macroeconomic news today and that has brought about low volatility. Stocks have managed to build slightly on the gains that were made last week, so traders are clearly cautiously optimistic about the G20 summit.

Caesars Entertainment shares jumped today as it was reported the company agreed to be acquired by Eldorado Resorts for $17.3 billion. Eldorado are seeking to ramp up their position in the industry in a bid to try and compete with the likes of Wynn Resorts and Las Vegas Sands

Jefferies upgraded their outlook for Deere to ‘buy’ from ‘hold’ and the bank believes that ‘tighter global crop supply’ should bring about higher demand for farming machinery. Earlier this month, R.W. Baird, lifted its outlook on the tractor-manufacturer for a similar reason. 

FX

EUR/USD has been given a boost by the continued weakness in the US dollar. The German Ifo business sentiment index in June was 97.4, which was a slight decline from 97.9 in May, but it slightly exceeded economists’ forecasts of 97.2. Other than the German report, it was a quiet day in the eurozone in terms of economic news.

GBP/USD slipped as traders are still a little nervous due to the lack of political clarity in relation to Brexit. Boris Johnson is still in the lead over Jeremey Hunt in the leadership race for the Conservative Party.  The EY ITEM Club predicts that UK consumer spending in 2019 will grow at its slowest pace in six years, and the report is hanging over the pound too.

Bitcoin’s rally continues as the cryptocurrency market is still benefitting from the announcement that Facebook unveiled its own digital currency, Libra.       

Commodities

Its déjà vu for gold as the metal has been boosted by the weakened US dollar. The inverse relationship between gold and the greenback continues to play out, and the commodity is riding the bullish wave. If gold holds above the $1,400 mark, it might target the $1,433 area.

Oil slipped back today as dealers are worried that strained geopolitical relations will end up eroding demand for the energy. Oil has been at the centre of the US-Iran standoff, and tensions are still simmering away. If the US and China don’t patch things up at the G20, it is possible that China’s demand for oil will dwindle.     

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