Traders are a little more hopeful about the US-China trade talks after President Trump tweeted he will meet Liu He, China’s Vice Premier, tomorrow.

Europe

In a continuation of the back and forth on the trade front, Mr Trump tweeted China ‘wants to make a deal, but do I?’. The fact Mr Trump will meet with Liu He sends a positive message, which is why we have seen an uptick in sentiment. The gulf between the two sides is wide, but a willingness to sit down and negotiate has injected some hope into the markets.   

Dunelm shares are in the red as the company posted respectable first-quarter figures, but Morgan Staley believe the company is set for slower growth, hence why the stock is in the red. In the three month period, like-for-like sales increased by 6.4%, while total revenue ticked up by 5.8%. The online division continues to power ahead as sales soared by 34.7%. Dunelm plans to transfer all traffic to new website in advance of Christmas, but the group is flexible about the transition scheme. The company continues to churn out decent sales figures in a downbeat consumer climate, which is why the stock is up over 30% year-to-date.

LVMH confirmed that third-quarter sales jumped 17% to €13.3 billion, topping forecasts. The unrest in Hong Kong tempered traders’ expectations. The Luxury goods maker saw a solid sales growth in the three month period, and given that consumer sentiment is cooling globally, the LVMH revenue figures are all the more impressive. It underlines the spending power of the mega-rich, as they are usually fare better when economies slip down a gear.              

Galliford Try revealed it was awarded a £340 million contract, which will last five years. The group has undergone a restructuring programme in a bid to get back to basics. The company is going to focus on fewer, but more profitable contracts, so today’s news has helped the stock price. 

US

The mood on Wall Street has picked up in the wake of the tweet about US-China trade from Mr Trump. The talks have been long-waited and they kick-off today, but it now seems like tomorrow will be the main event.  

US CPI held steady 1.7%, but economists were expecting an increase to 1.8%. The core reading remained at 2.4%, meeting forecasts. Demand is clearing holding up, which bodes well for the US economy. The minutes from last month’s Fed meeting were posted last night, and some central bankers were concerned traders were factoring in overly aggressive loosening of monetary policy. While demand remains robust, the Fed are likely to hold fire on rates.         

Bed Bath & Beyond shares have rallied on the back of the news that Mark Tritton will take over as president and CEO early next month. Mr Tritton, who recently headed up the merchandising team at Target has high expectations to live up to given the surge of the share price. Recently Target’s share price hit an all-time high, which is in stark contrast with the bearish trend that Bed Bath & Beyond’s shares have been in for years, so traders are anticipating an overhaul of the DIY group. Mr Tritton was a real asset to Nordstrom as well as Target, and dealers are banking on his previous success stories to be repeated at Bed Bath & Beyond.

Delta Air Lines posted largely positive quarterly figures. EPS was $2.32, which topped the $2.26 forecast, while revenue ticked up by 5% to $12.56 billion, but the consensus estimate was $12.6 billion. The group essentially issued a bullish outlook by confirming its plans to hire 12,000 people through 2020. Despite the positive numbers, the stock is lower.

FX

A broad dip in the US dollar has lifted EUR/USD as well as GBP/USD. The solid inflation figures from the US nudged the greenback off the lows of the session.

German exports declined by 1.8% in August, which is concerning as the country is a major exporter, so it is clear that demand elsewhere is dropping off. There was more poor news in the eurozone as French industrial output dropped my 0.9%. Problems persist in the eurozone, and the euro can’t rely on a softer dollar forever.

Prime Minister Johnson was in discussions with his Irish counterpart, Leo Varadkar. Brexit was the focus of the discussion. Mr Johnson was ‘cautiously optimistic’ ahead the discussions, but nothing new was really achieved.

Commodities

The risk-on sentiment of traders has put some pressure on gold, hence why the metal is back below the $1,500 mark. Volatility has been low in the past week, but the broader upward trend is still intact. In recent months, there has been a strong inverse relationship between gold and the greenback, so if the metal can’t push higher today, it is a little concerning.        

Oil is higher this afternoon after OPEC’s head, Mohammad Barkindo, said all option are on the table for as for the production plans for 2020. The OPEC meeting will be in December, and, already traders are wondering if the group of oil exporters will keep output constrained.

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