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Trade tensions rise, Countrywide slump after profit warning

Equity markets are lower this morning as President Trump plans to restrict Chinese investment in the US. 

The new restrictions are tipped to be revealed at the end of the week, and will be aimed at Chinese firms looking to invest in ‘industrially significant technology’ in the US. These measures would add to the heightened trade tensions between the two countries.

Countrywide shares slumped this morning after the company issued a profit warning. The estate agent warned that first-half profit would be £20 million lower compared with the same period last year. The firm also confirmed that the dip in earnings would not be recouped in the second-half of the year.  Countrywide plans to cut its debt by 50% through additional equity finance. On the bright side, there has been a 9% increase in properties available since the end of last year. The share price has been in decline for three years, and if the negative move continues it could target 50p.  

Porvair shares are in demand after the firm revealed a respectable set of first-half figures. Revenue and pre-tax profit increased by 7% and 8% respectively. The interim dividend was upped by 7%. The company confirmed it has a healthy order book, and activity levels are robust. The share price has been broadly moving higher since September 2017, and if it can hold 488p, it might retest the 550p area.

Gavin Darby, the CEO of Premier Foods, has come under pressure from Oasis Management, a major shareholder in the food company. Poor financial performance, a lack of strategy and missed financial targets were cited by Oasis management as reasons to oust Mr Darby from the top job. Premier Foods is due to hold its annual general meeting next month, and Oasis management are urging other shareholders to revolt against Mr Darby. 

EUR/USD is largely unchanged even though Germany revealed disappointing business confidence figures. The German Ifo business confidence report for June slipped to 101.8, from 102.3. Confidence is likely to be subdued given the heightened trade tensions. 

Chevron and Exxon will be in focus later today as the oil price has pulled back from the major rally on Friday in the wake of the Opec announcement.

We are expecting the Dow Jones to open down 140 points at 24,440 and we are calling the S&P 500 down 14 points at 2,740.

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