FTSE 100 preview: Downbeat start after Trump comments

FTSE 100 preview: Downbeat start after Trump comments
Written by:
Tsveta van Son
17th July 2019
Updated: 11th March 2020

The FTSE 100 looks set to open lower this morning, pressured by the latest comments by US President Donald Trump over the country’s trade relations with China. On the corporate front, miners will be in focus amid company reports.

FTSE 100 seen lower

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IG’s opening calls suggest that the Footsie will start trading 0.25 percent lower at 7,559 points. The blue-chip index is likely to take cues from the US where shares fell last night as President Trump said that Washington and Beijing had a ‘long way to go’ on trade. Reuters reports that speaking at a Cabinet meeting at the White House, he had said that China was supposed to be buying US farm products and his administration was watching to see if Beijing would do so.

“Looking at this earnings season, the key question is: Will trade uncertainty cause businesses to pull back on spending and investment enough so that it begins to weigh on earnings?” Tom Essaye, founder of the Sevens Report, said in a note, as quoted by CNBC. “If there is evidence that businesses beyond China-focused industrials also are starting to become more conservative, then that will be a big negative for future earnings.” Asian shares have also been subdued this morning.

In the UK, the FTSE 100 rose in the previous session, gaining 45.48 points to end trading 0.60 percent higher at 7,577.20. Burberry (LON:BRBY) was the standout riser, gaining over 14 percent, with investors welcoming the company’s first-quarter update.

Wednesday’s releases

Today’s macroeconomic calendar starts with the UK’s consumer price index (CPI) for June, due out at 09:30 BST. IG reports that the country’s inflation is expected to have climbed two percent year-on-year, and 0.3 percent month-on-month. The eurozone’s inflation data for June will follow at 10:00 BST, while Canada’s CPI for the same month is due out at 13:30 BST. In the US, the nation’s housing starts and building permits for June will also be announced at 13:30 BST.

On the corporate front, FTSE 100 companies reporting today include BHP (LON:BHP), Fresnillo (LON:FRES), Johnson Matthey (LON:JMAT) and Severn Trent (LON:SVT).

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