Stocks are sliding again today as traders are still spooked by the latest scandal surrounding Donald Trump.
The row between Mr Trump and the FBI is still on traders’ minds and while this is hanging over the market I can’t see sentiment changing anytime soon.
Traders will be reluctant to open up new long positions while there is talk of Trump being impeached. I would classify today as a risk-off session as traders appear to be in wait-and-see mode. There are bargains to be had out there but dealers would be taking on excessive risk by buying in now.
Burberry is trading higher today even though the firm announced a fall in profits, but the rise in dividend of 5% and the £300 million share buyback scheme kept shareholders sweet.
Shares in Royal Mail Group are in positive territory this morning as the company announced a 25.5% jump in profits and a 5% increase in dividend. The fall in the volume of letters was offset by the increased volume in parcels.
The GBP/USD broke through the $1.30 level after UK retail sales surged by 2.3% in April. The positive run of UK economic data coupled with the political uncertainty in the US could see the $1.30 mark as a base to go long from.
In the US, we are expecting the US the Dow Jones to open 20 points higher at 20,626, and we are calling the S&P 500 4 points higher at 2361. Jobless claims and the Philly Fed manufacturing report at 1.30pm will be the economic highlights of the US session today. The consensus is for a slight increase in the jobless claims report and a small decline in the Philly Fed manufacturing report. Be mindful that given the latest Trump scandal, investors are on tenterhooks, and even the slightest sign of economic weakness could trigger a fresh bout of selling. Gap and Ralph Lauren will reveal their quarterly figures alter today.
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