Stocks are rallying into the close as dealers are hopeful that the US-China trade relationship will be patched up over the weekend at the G20 meeting. 

Europe

President Trump will meet China’s Xi Jinping tomorrow for crucial trade talks. China has called for a balanced trade deal, but Mr Trump is holding a tough line and he might press ahead with more tariffs if the talks don’t go well.   

Persimmon Bellway, Redrow, Bovis Homes and Berkeley Group shares are all up on the session in light of the comments from Boris Johnson in relation to stamp duty. Mr Johnson, who is leading the Conservative Party leadership race, said that stamp duty would be cut in the event of a no-deal Brexit. Many of the homebuilders enjoyed a positive run between 2014 and 2017/2018, but since then have seen their share price cool. The remarks from the next possible Prime Minister have injected new interest into the house building sector.

Merlin Entertainment shares have soared after the group received an acquisition offer from a group of investors. The consortium consists of Blackstone Group, CPPIB and the family that control Lego. The offer values Merlin at nearly £6 billion.

Costain Group warned that full-year revenue would fall shy of previous forecasts, and that was due to delays in contracts. The firm kept its full-year earnings guidance unchanged, and it said the order book increased by 13.5%. The stock slumped.

International Personal Finance shares dropped sharply after the Polish regulator proposed lowering the cap on non-interest expenses lenders can impose on loans. There is talk the cap will be cut from 30% to 10%, and should that come into effect, it is likely to hurt profit margins.               

US

Stocks are experiencing low volatility as the G20 summit gets underway. Tomorrow’s meeting between Donald Trump and Xi Jinping is on traders’ minds. There were largely positive economic reports from the US today. The core PCE reading is the Fed’s preferred measure of inflation, and the report came in at 1.6%, meeting forecasts. The Chicago PMI reading dropped from 54.2 in May to 49.7 in June, and the reading was the lowest in over three years. The University of Michigan consumer sentiment reading was 98.2, and that was a slight increase on the 97.9 reading in May.   

Constellation Brands shares have jumped today on the back of the group’s strong results. Quarterly comparable EPS was $2.21, which topped the $2.04 forecast. Net sales for the first-quarter ticked up by 2.5% to $2.10, which topped the $2.07 billion forecast. The group lifted its full-year EPS outlook to between $8.65 and $8.95, while the previous guidance was for $8.50-$8.80. 

Nike shares are slightly higher after the company posted mixed numbers last night. Traders were expecting adjusted fourth-quarter EPS to be 66 cents, but it came in at 62 cents.  Revenue was $10.18 billion, and that marginally topped forecasts. The group said that margins came under pressure as it boosted investment in the department which sells products direct to the consumer. This strategy is likely to be short-term loss and a long-term gain as it aims to reduce dependency on wholesalers, and that should help margins down the line. 

Goldman Sachs, JP Morgan, Wells Fargo and Citigroup all passed the Feds’ stress test, and the stocks are all higher today.

FX

EUR/USD was given a boost by the strong core inflation figures from the eurozone. The core CPI reading jumped to 1.1% from 0.8% in May, and that is encouraging to see as it suggests that underlying demand is rising. The headline CPI rate held steady at 1.2%, meeting forecasts.

GBP/USD has been rallied today on the back of respectable growth figures from the UK. The final reading of UK first-quarter GDP showed the economy grew by 1.8%, which met forecasts.    

Bitcoin rebounded today as it has soared over 11% and it is eyeing the $12,000 mark.      

Commodities

Gold has held above the $1,400 mark today as the dust has settled on its recent pullback. The metal underwent a huge rally this month and hit a six year high, and that led to profit taking. If gold, can hold above the $1,400 mark it is likely to continue its wider upward move.

WTI and Brent crude are mixed today but the common theme is low volatility as traders are sitting their hands ahead of the US-China trade meeting tomorrow, and the OPEC meeting that begins on Monday. Global trade woes hang over oil as traders are concerned that demand might drop, but at the same time, it is believed that oil producing nations are keen to extend the productions cuts.    

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