Our analysts have their fingers on the pulse of the world's financial market news.
Wall Street experienced a late rally as a trade war ceasefire declared by the EU and the US boosted market sentiment. The S&P rallied to close at its highest level in almost 6 months as trade war fears de-escalated, tariffs were suspended and as trade negotiations begin to bring tariffs and trade barriers to an end.
This was the best outcome that could have been expected from the meeting. The market was cautious approaching the summit and even further talks were looking doubtful. Yet the EU cutting tariffs and promising to buy “a lot more” soybeans
The euro rallied hard versus the weaker US dollar, with risk easing, demand for the safe haven dollar declined, and investors sought the higher yielding euro. EUR/USD jumped over 0.4% late on Wednesday, passing through $1.17 and is continuing to climb in the Asian session.
ECB meeting to boost
Whether or not the euro bulls can find the strength to pull the common currency out of its recent range ($1.15 - $1.1850), will now depend on what the ECB will say later today. No change in monetary policy is expected and the meeting could be rather uneventful given the unexpected announcement in June regarding the conclusion of QE and the dovish change in
European bourses are looking to extend the gains from the US session, with the Dax a clear and unsurprising winner. With the most to lose in a trade war with the US aimed at automobiles, the easing of trade tensions has put the Dax in line for a 1% rally out of the blocks on the open.
Facebook set for biggest
Facebook reported after the close and failed to live up to the high expectations. Following Alphabet’s beat on all metrics, it was a tough act to follow, which made Facebook’s miss on revenue and some other figures all the more noticeable and concerning, sending the stock 20% lower in after-hours trading.
Whilst Facebook beat on earnings and missed on revenue, it wasn’t just the headline figure that caused the plunging share price, other figures, such as the number of users also missed estimates, as did the average time spent on Facebook. With digital advertising sales also down Facebook is seen paying the price for the Cambridge Analytica Scandal. This combined with news earlier on Wednesday that China removed permission for Facebook to set up a subsidiary in China, plus a less than encouraging outlook has left investors in panic mode
Facebook to drag FAANG’s lower?
Facebook is expected to see its biggest one day sell off when it opens later today. The big question will be whether it will bring down the rest of the FAANG stock? The Nasdaq futures are currently trading over 1% lower despite the Nasdaq hitting a fresh all-time high in trading overnight. Whilst we expect Facebooks results have a short-term impact on FAANG stock, it’s more likely that we will start to see a de-coupling of Facebook from the group.
Facebook is investing a huge amount into staff and technology to address concerns raised through its recent data scandals. This same technology could help it in its mission in China. If and when that does pull off, Facebook will be on a roll again, however, in the meantime, Facebook could fall behind its peers.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please note that 79 % of our retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please note that 71% of our retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money.