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European markets cautious despite new Wall Street record - business live European markets cautious despite new Wall Street record - business live
(35 minutes later)
It’s not a particularly busy day for company news, but two businesses at least will be wishing they were not in the headlines.
There is yet another problem for Ryanair, which has been sending out compensation cheques with no signatures. Unsurprisingly, these have bounced.
And Superdrug is the latest business to be targeted by hackers:
European markets are drifting rather aimlessly at the moment, lost in a summer lull despite Wall Street’s new records, the US-China trade talks and the political developments in the US.
The FTSE 100 is virtually flat, down just 0.07%, while both Germany’s Dax and France’s Cac have edged into positive territory.
Meanwhile the dollar, which was hit on Tuesday by Donald Trump slamming the Federal Reserve for its policy of raising interest rates, seems to be steadying.
So the pound is down 0.18% at $1.2875 while the euro has dipped 0.1% to $1.1563 after earlier hitting two week highs.
The expected dip in US markets looks like the right reaction to the latest Trump travails, says Paul Donovan at UBS:The expected dip in US markets looks like the right reaction to the latest Trump travails, says Paul Donovan at UBS:
US President Trump faces either double trouble (Cohen and Manafort) or a witch hunt, depending on your perspective. Does this matter for markets? It might matter if the president’s political capital with Congress was undermined, affecting policy. However, the president does not have that much political capital with Congress, and is not asking Congress to pass laws they do not want to pass. It might matter if markets think the politics will change the midterm election results (or the risks around those results), and thus policy. However, Republicans may successfully try to separate themselves from Trump. Trump supporters may be motivated to turn out and vote. This impact on midterms is not certain. It might matter if trade policy is used to distract attention from the domestic politics. The US president has considerable authority over trade, and taxing US consumers via trade tariffs can be made to serve the “Make America Great Again” slogan. Overall, the muted market reaction seems appropriate.US President Trump faces either double trouble (Cohen and Manafort) or a witch hunt, depending on your perspective. Does this matter for markets? It might matter if the president’s political capital with Congress was undermined, affecting policy. However, the president does not have that much political capital with Congress, and is not asking Congress to pass laws they do not want to pass. It might matter if markets think the politics will change the midterm election results (or the risks around those results), and thus policy. However, Republicans may successfully try to separate themselves from Trump. Trump supporters may be motivated to turn out and vote. This impact on midterms is not certain. It might matter if trade policy is used to distract attention from the domestic politics. The US president has considerable authority over trade, and taxing US consumers via trade tariffs can be made to serve the “Make America Great Again” slogan. Overall, the muted market reaction seems appropriate.
US markets are set to open lower but this will not prevent the record bull market run. Michael Hewson, chief market analyst at CMC Markets UK, says:US markets are set to open lower but this will not prevent the record bull market run. Michael Hewson, chief market analyst at CMC Markets UK, says:
The divergence in US markets continued overnight with a marginal new record high for the S&P 500, as well as new records for the Russell 2000 and the Dow Jones transportation index, before slipping back into the close, but still on course for the longest bull market run in history.The divergence in US markets continued overnight with a marginal new record high for the S&P 500, as well as new records for the Russell 2000 and the Dow Jones transportation index, before slipping back into the close, but still on course for the longest bull market run in history.
This failure to push on higher, as buying momentum stalled, along with the news that President Trump’s former lawyer, Michael Cohen, pleaded guilty to violating campaign finance laws by arranging hush payments to two women Trump was alleged to have had affairs with, could well see investors look to take some profits today after a fairly mixed session in Asia and a lower open in Europe.This failure to push on higher, as buying momentum stalled, along with the news that President Trump’s former lawyer, Michael Cohen, pleaded guilty to violating campaign finance laws by arranging hush payments to two women Trump was alleged to have had affairs with, could well see investors look to take some profits today after a fairly mixed session in Asia and a lower open in Europe.
Cohen’s plea, which puts the President under the spotlight even more, and opens him up to charges of criminal conduct, has raised concerns that he might be vulnerable to impeachment in the coming months. While this is unlikely in the short term, any shift in the balance of power after the mid-terms in November, could increase that prospect if the Republicans lose their majorities.Cohen’s plea, which puts the President under the spotlight even more, and opens him up to charges of criminal conduct, has raised concerns that he might be vulnerable to impeachment in the coming months. While this is unlikely in the short term, any shift in the balance of power after the mid-terms in November, could increase that prospect if the Republicans lose their majorities.
Meanwhile Trump may have played down the prospects of early progress in the US-China trade talks, but a spokesman from China’s foreign ministry said it hoped there would be a good outcome.Meanwhile Trump may have played down the prospects of early progress in the US-China trade talks, but a spokesman from China’s foreign ministry said it hoped there would be a good outcome.
Despite the record breaking run on Wall Street, European markets have opened lower as investors take note of the latest political developments in the US which could cause problems for president Trump.Despite the record breaking run on Wall Street, European markets have opened lower as investors take note of the latest political developments in the US which could cause problems for president Trump.
The FTSE 100 is currently down 0.24%, Germany’s Dax is down 0.23%, France’s Cac is off 0.08%, while Italy’s FTSE MIB is 0.33% lower.The FTSE 100 is currently down 0.24%, Germany’s Dax is down 0.23%, France’s Cac is off 0.08%, while Italy’s FTSE MIB is 0.33% lower.
The previous record bull market for the US ran from October 1990 to March 2000 and encompassed the dotcom boom - and ended with that bubble bursting. Laith Khalaf, senior analyst at Hargreaves Lansdown, says:The previous record bull market for the US ran from October 1990 to March 2000 and encompassed the dotcom boom - and ended with that bubble bursting. Laith Khalaf, senior analyst at Hargreaves Lansdown, says:
The US market has now been on a rampant charge since March 2009 with only a few blips along the way.The US market has now been on a rampant charge since March 2009 with only a few blips along the way.
Many question whether this exceptional period for the US stock market is going to end in tears, though the very fact this issue is so widely raised suggests we are not in the throes of the irrational exuberance of the late 1990s.Many question whether this exceptional period for the US stock market is going to end in tears, though the very fact this issue is so widely raised suggests we are not in the throes of the irrational exuberance of the late 1990s.
European indices set for weaker open. #Trump under pressure after #Manafort and #Cohen cases. #FTSE called 30 lowerEuropean indices set for weaker open. #Trump under pressure after #Manafort and #Cohen cases. #FTSE called 30 lower
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
US markets continue to hit new highs, with the S&P 500 reaching a record intra-day high of 2873.23. It also equaled its longest ever bull market run of 3,452 days, helped by strong corporate earnings - not least from technology stocks - and hopes that a trade war between China and the US can be avoided. Talks are due this week between representatives of the two sides, even if President Trump has played down the prospects of any imminent success.US markets continue to hit new highs, with the S&P 500 reaching a record intra-day high of 2873.23. It also equaled its longest ever bull market run of 3,452 days, helped by strong corporate earnings - not least from technology stocks - and hopes that a trade war between China and the US can be avoided. Talks are due this week between representatives of the two sides, even if President Trump has played down the prospects of any imminent success.
But European markets are set to open lower as political risks in the US appear to be growing. Jasper Lawler, head of research at London Capital Group, said:But European markets are set to open lower as political risks in the US appear to be growing. Jasper Lawler, head of research at London Capital Group, said:
August has been a remarkable month so far for US equities. Apple became the first trillion-dollar company, the S&P reached a remarkable milestone, touching a fresh intraday high and today this current bull run will break a record for its duration.August has been a remarkable month so far for US equities. Apple became the first trillion-dollar company, the S&P reached a remarkable milestone, touching a fresh intraday high and today this current bull run will break a record for its duration.
Yet despite the numerous records and positive close on Wall Street, Asian markets and European futures moved lower, tracing US futures lower, in response to heightened US political risk. In a catastrophic day for President Trump, his personal lawyer Michael Cohen pleaded guilty, possibly implicating the US President on legal issues and Trump campaign chairman Paul Manafort was also convicted; events which have understandably unnerved investors. The overriding fear here is that something could come out linked to Trump. US domestic political issues are in danger of overshadowing the revival of the US- Chinese trade talks.Yet despite the numerous records and positive close on Wall Street, Asian markets and European futures moved lower, tracing US futures lower, in response to heightened US political risk. In a catastrophic day for President Trump, his personal lawyer Michael Cohen pleaded guilty, possibly implicating the US President on legal issues and Trump campaign chairman Paul Manafort was also convicted; events which have understandably unnerved investors. The overriding fear here is that something could come out linked to Trump. US domestic political issues are in danger of overshadowing the revival of the US- Chinese trade talks.
The opening calls for Europe show:The opening calls for Europe show:
European Opening Calls:#FTSE 7548 -0.24%#DAX 12361 -0.19%#CAC 5400 -0.17%#MIB 20690 -0.45%#IBEX 9523 -0.27%European Opening Calls:#FTSE 7548 -0.24%#DAX 12361 -0.19%#CAC 5400 -0.17%#MIB 20690 -0.45%#IBEX 9523 -0.27%