market falling stocks lower bear market

Stocks are tipped to finish lower as worries about global trading relationships and the decline in emerging market economies are hurting market confidence. 

Europe

The FTSE 100 and the DAX have fallen to levels not seen since April, and this underlines how sour sentiment is.

Barratt Developments revealed a 9.23% rise in full-year pre-tax profit to £835.5 million – in line with predictions. Revenue increased by 4.8% and gross margin ticked up by 0.7%. Average selling price and house completions rose by 5% and 1% respectively. The total dividend was increased by 4.7%, and the house builder had has a good start to the year as forward sales are up 11%. Barratt are a little nervous about the pool of available skills. UK house prices have come off the boil and this is likely to be an issue for the company in the next few years. The share price has been drifting lower for 11 months, and if the negative move continues it could retest 480p.

Berkeley Group had a solid start to the new financial year as the company confirmed that trading in the first four months was on par with the full-year figures that were released in June. Berkeley cautioned about mortgage lending and higher transaction costs. The group said it is on track to achieve its target of £1.575 billion pre-tax profit for the two years ending April 2019. Since reaching a record high in June, the share price has been falling, and if the bearish move continues it could target the 3,250p region.

William Hill shares are in demand after the company confirmed it is expending its operation in the US. The British firm already has a partnership with Eldorado Resorts and its plans to expand its business into 13 additional states in the US. Earlier this year, the US supreme court paved the way for legalised betting and since then international companies have been keen to grab a piece of the market. 

US

The Dow Jones and S&P 500 are slightly in the red as trade uncertainties continue. North American Free Trade Agreement (NAFTA) talks picked up today, but Canada’s Justin Trudeau, is holding a firm line, he is claiming that certain Canadian interests must be respected  in order for a deal to be reached. Mr Trudeau has borrowed a phrase from Prime Minister May, and the Canadian premier feels ‘no deal – NAFTA, is better than a bad deal’. The lack of political progress could weigh on investor sentiment.  

The trade deficit widened from $46.3 billion to $50.1 billion in July – it was the largest increase in the deficit in three years. The goods-trade gap with China widened to a record level and this suggests the tit-for-tat tariff spat is likely to continue as President Trump would like to see the trade deficit narrow especially with China. There is talk Mr Trump will announce $200 billion worth of tariffs on Chinese imports, and today’s trade figures add creditability to Trump’s protectionist policies.

There will be tighter regulation across the tech sector, that’s the message from Washington DC today and stocks like Twitter, Facebook, Netflix, and Snap are lower.  

FX

GBP/USD jumped after it was claimed that the UK and German governments have dropped key demands in the Brexit negotiation. It is believed that the Berlin administration are willing to accept a less detailed agreement in a bid to get a deal done. Westminster are allegedly willing to accept a vaguer statement of intent regarding the future relationship. Dealers viewed this as a step in the right direction as it increases the possibility of a deal being struck.

EUR/USD was driven higher by the sell-off in the US dollar in light of the rally in sterling. The single currency was languishing earlier in the session and the middle-of-the road service reports from major eurozone countries like Germany and France didn’t get much of a reaction from traders.

Bitcoin and Ethereum are lower today after it was reported that Goldman Sachs are putting their plans to set up a cryptocurrency trading desk on hold. It is believed the Wall Street titan feels the regulatory environment surrounding cryptocurrencies is unclear. If Ethereum breaks below the $254.00 region, it could pave the way for further losses.

Commodities

Gold has ticked higher this afternoon on account of the sharp decline in the US dollar. The metal remains below the psychologically important $1,200 mark, and the wider downward trend that began in April is still in place. 

WTI and Brent crude oil are lower today a tropical storm in the Gulf of Mexico moved away from oil-producing regions and weakened. Yesterday, the oil market rallied for fear the adverse weather would knock out production as two oil platforms were evacuated, and now the energy market is handing back some of those gains.

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