US stocks finished yesterday’s session on a mixed note with the S&P500 still within touching distance of its record highs in February, as it slowly and incrementally edged its way higher, with the Nasdaq once again helping support market resilience in what is increasingly becoming subdued holiday ranges.

Asia stocks underwent a similarly mixed session after the US reopened its front against Chinese telecoms giant Huawei as the administration tightened its restrictions on doing business with the company, cutting off access to chipsets that use US technology.

Coming on the heels of the US President’s executive order on Friday over TikTok investors are going to have to get used to the idea that tensions between the US and China are only likely to heighten, with investors scrambling to identify who might be next in the US cross hairs, ahead of the November election. It might also be prudent if investors looked to areas where the Chinese might look to retaliate, with respect to US business in China.

Markets here in Europe have picked up on this cautious theme, opening lower after some decent gains yesterday. While the overriding narrative appears to be one of caution and fairly low volume, in the absence of anything substantially new, markets appear to be chopping around aimlessly looking for the next significant catalyst.  

The rebound in commodity prices, irrespective of the sobering economic outlook, has also helped support markets in recent weeks, with the FTSE350 mining index managing to claw back its losses for this year, helped by the rise in iron ore, copper, platinum as well as gold and silver prices, which are all up strongly from their March and April lows.

This recovery has been led by the likes of mining giants BHP, Rio Tinto and Antofagasta shares, even though the likes of Glencore have struggled.

BHP’s latest full year numbers showed how the business has managed to ride out the recent turmoil in global markets and the global economy. Attributable profits fell by 4% to $7.9bn, largely as a result of $1.1bn in costs related to recent events around the pandemic. Management still decided to pay a dividend of $0.55c a share, though the annual payout was 10% down on last year.

The company also said that it was looking at options to exit its thermal coal business, concentrating its efforts on higher quality coals, as well as get rid of oil and gas assets, that are past their prime, so to speak.

In another blow to the retail sector Marks and Spencer has announced that it plans to reduce the number of roles in the business by 7,000 over the next three months, as it announced an update on trading for the year to date.

Not unexpectedly, performance has been down on the previous year, though the food business has performed well, with total food sales up 2.5% in the last 13 weeks. In clothing and home, total revenue was down 38.5%, in the last 13 weeks, though the online business has performed well, helping the business to perform slightly above expectations. In the last 8 weeks online sales represented 41% of total sales in that area of the business.  

The majority of the job reductions are expected to be on a voluntary or early retirement basis, with departures expected to come from across the business. The costs of these changes will be reflected in the half year results due on 4th November.  

In welcome news for the construction industry Persimmon announced first half pre-tax profits of £292.4m, which came in ahead of market expectations. Revenues were in line with expectations coming in at £1.19bn, with management proposing an interim dividend of 40p a share, after cancelling the payout back in April.

More importantly, business since July has seen a significant pickup in activity, no doubt helped by the Chancellors stamp duty holiday, with average weekly private sales up 49%, and a forward order book of £2.5bn. Average selling prices were also higher by £8,100 per property.

The challenges presented by the pandemic have also made themselves felt with government outsourcer Capita’s latest numbers, which has seen the company swing to a first half loss of £28.5m.

A 9% decline in revenues to £1.68bn is a setback to the company which under the stewardship of CEO Jon Lewis had hoped to be well on the road to executing the next stage of the turnaround plan, outlined two years ago when he took over the ailing business at the end of 2017. More worryingly the setbacks presented by the pandemic has meant that the expectations for a return to sustainable cashflow has been delayed by 1-2 years, sending the shares sharply lower in early trade. Despite the challenges facing the business the company said it expects to be able to comply with its covenants, as well as looking to accelerate its disposal plans.   

The volatility in oil markets this year has also taken its toll on engineering and oilfield services company Wood Group which has seen like or like revenues fall 11.5% in its latest H1 numbers to just over $4bn. This has seen operating profits fall to $66m, a decline of 52.5%.  

The pound is holding up well ahead of the resumption of trade talks between the EU and UK, which are set to get underway in earnest again tomorrow, with some initial discussions this evening.  

US markets look set to pick up on this modestly negative tone with a similarly weaker open, ahead of the latest building permits and housing starts numbers for July.

As it becomes increasingly apparent that air travel is unlikely to experience a v-shaped rebound it is being reported that Boeing is looking to make further reductions to its work force, beyond the 10% number it outlined in April. The main reductions are expected to be in its civil aviation and services operations.

Oracle shares are also set to be in focus after reports that the company was said to be looking into its options with respect to a possible bid for TikTok’s US, Canadian and Australian operations, in competition with Microsoft.

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination. CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information. CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.