Stock markets in Europe are largely in positive territory heading into the close of business. 

Europe

Global trade remains at the forefront of traders’ minds, after President Trump said that talks with China were back underway as of yesterday. The US has sent another warning to the EU in relation to trade, and it ear-marked an additional $4 billion worth of EU goods that could face tariffs, and the threat stems from subsidies to the aircraft industry. Donald Trump has maintained a tough stance in relation to China, and some investors fear he will turn up the heat on the EU once the Chinese situation is sorted out. 

Costain Group shares are in demand as bargain hunters swoop in, and take advantage of the fact the stock suffered a severe drop on Friday. At the back end of last week, the group lowered its full-year revenue guidance on account of some contracts being delayed. In the same update, the company posted a 13.5% jump in the size of the order book, and it said that trading was largely in line with expectations.

Funding Circle warned that revenue growth will be below expectations, and that rocked the share price. The frim now anticipates revenue growth of 20%, while the previous forecast was for 40%. The group specialises in lending to small businesses, and the group cited uncertainty surrounding Brexit for the reason in the reduction of the revenue forecast. The firm confirmed that loans under management and new loans jumped by 37% and 14% respectively, so the group is in good shape nonetheless.

Croda International shares have fallen today after the group was hit by two broker ratings. UBS downgraded the stock to neutral from buy, but lifted the price target to 5,500p from 5,300p. While Citigroup, cut its price target to 5,520p from 5,521p.

UBS also downgraded its outlook on Intercontinental Hotels to sell from neutral, but it lifted the price target to 4,700p from 4,500p.   

US

The major indices are fractional higher today after a stellar session yesterday – on the back of the slight improvement in US-China trade negotiations at the G20 meeting over the weekend. The lack of major macroeconomic news has left some traders sitting on their hands.      

Delta Air Line shares are a little higher today after the company lifted its outlook ahead of the quarterly figures that will be released next week. The group expects adjusted June quarterly revenue to increase by between 8% and 8.5%. The EPS outlook is now for between $2.25 and $2.35, which is a mid-price of $2.30, while the mid-price of the previous forecast was $2.20.    

FX

GBP/USD was in the red earlier, but it has managed to claw back those losses and now it is largely flat on the day. The UK construction PMI reading fell from 48.6 in May to 43.1 in June – its lowest reading since April 2009. The construction industry isn’t a massive component of the economy, but the report is still worrying.   

EUR/USD is essentially flat on the session. The eruozone PPI rate slumped to 1.6% in May, from 2.6% in April, and economists were expecting 1.7%.The announcement failed to have much of an impact on the currency pair, but the poor PPI reading could be a sign that inflation might slip in the months to come.   

Commodities

Gold is slightly higher today after the metal recouped some of yesterday’s losses. The metal has been in a bullish trend since late April, and in late June it reached a six year high. If gold can hold above the recent lows of the $1,381 region, the bullish move should continue.

Volatility in the oil market continues as OPEC and its allies have agreed to extend the existing production cuts until March 2020, and that isn’t exactly as surprise, as Saudi Arabia and Russia talked about a nine month extension a few days ago. WTI and Crude have actually dropped today as dealers are worried about future demand levels. The US and China made a small bit of headway in trade talks in Japan, but the recent poor manufacturing figures from China and Europe have reignited concerns about the health of the global economy.   

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