Equity markets in Europe are broadly unchanged this morning after a strong finish in the US last night.
The buying momentum that we saw in Europe yesterday has dissipated, and traders are looking ahead to the Jackson Hole symposium which kicks off tomorrow. Tensions between the US and North Korea are still running high, but with no new developments, investors aren’t worried at the moment.
Shares in WPP dropped by 10.8% today after the company stated that revenue would be lower than initially forecasted. The firm now expects revenue growth to be between 0% and 1%, and the previous guidance was 2%. The advertising giant cited falling demand from its clients as a reason for the reduced revenue forecast. This is the second time the sale forecast has been trimmed this year, and that is a warning sign to traders, as it could be the start of a trend. In 2017, the share price has created a series of lower lows and lower highs, which is a worrying sign.
German manufacturing PMI figures for August came in at 57.4, while traders were expecting a reading of 56.3, and the July number was 56.8 - the report pushed the EUR/USD higher. The President of the European Central Bank, Mario Draghi, didn’t give much away during his speech this morning. Mr Draghi talked about the recovery in the region, but he didn’t drop any clues about what lies ahead for monetary policy. We will have to have wait for his speech at the Jackson Hole symposium.
We are anticipating the Dow Jones to open 30 points lower at 21,869, and we are calling the S&P 500 down 4 at 2448.
It seems odd that the US markets rallied last night on the back of President Trump’s plans for tax reforms, while he couldn’t bring in the healthcare reforms he wanted.
At 3pm the US will reveal the new home sales report for July, and the consensus is for 612,000, and that compares with 610,000 in June.
Lowe’s will announce their second-quarter results today.
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