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Stocks steady ahead of Trump-Kim meeting

Equity markets are higher today as traders shrugged off the less-than-productive G7 meeting that took place over the weekend. 

Relations between the US and some of its allies have deteriorated as President Trump has threatened to halt trading with countries that do not reduce tariffs on US goods.

Donald Trump is still in the news as he is due to meet the North Korean leader, Kim Jong-un, in Singapore today. The meeting between the two leaders will greatly improve political sentiment in the far east, and is likely to boost investor confidence.

Inmarsat shares are higher again today after the company confirmed it rejected a takeover offer from EchoStar on Friday. At the end of last week the board of Inmarsat announced the takeover bid ‘significantly undervalued’ the business. The stock is up 15% today and if it holds above its 200-day moving average at 490p, it could target 600p.

Rolls Royce shares are in the red this morning as the company is expected to reveal job cuts on Friday. There is speculation the company will announce 4,000 job cuts at the end of the week. The firm has an aggressive restructuring plan whereby it will reduce five departments to three. The engineering firm is determined to scale back management layers. Rolls Royce makes the bulk of its money from after-sales services, and on Friday investors are expecting to hear investment plans for the division. In 2016, the dividend was cut for the first time in over 20 years and dealers will be keen to hear the dividend guidance. The stock has been in decline since August and if the bearish move continues it could target 800p.

JP Morgan raised its price target for Ferguson from 5,985p to 6,080p, and today the stock is trading at 5,954p, up 1.1% on the day.

EUR/USD edged lower on the back of disappointing Italian manufacturing data. In April, Italian manufacturing dropped by 1.2%, while economists were expecting a decline of 0.6%. The underwhelming report ties in with the poor industrial production updates from Germany and France last week.

GBP/USD fell after the UK released a number of poor economic indicators. Industrial output, manufacturing output and the goods trade deficit all came in worse than expected. 

Bitcoin dropped to a two-month low after Coinrail – a South Korean cryptocurrency exchange – confirmed it was hacked over the weekend. This sparked fear across all digital currencies.

We are expecting the Dow Jones to open up 39 points at 25,355 and we are calling the S&P 500 up 2 points at 2,781.

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