US and China leaders come together at G20 summit; European indices pause; UK activity amongst manufacturers falls to lowest levels in six years

2 July 2019

US and China leaders come together at G20 summit; European indices pause; UK activity amongst manufacturers falls to lowest levels in six years

The Weekly Note is brought to you by the ALPHA: r² discretionary service team.

Market news

Equity markets are lacking decisive direction this week, continuing on from a mixed performance last week. European indices are pausing today after yesterday’s rally which was related to a truce between the US and China. Rhetoric from both sides has acknowledged the ceasefire on tariffs but reiterated that there are still many obstacles to overcome.
 
As respective leaders came together at the G20 summit, Beijing noted that it only agreed to restart talks on the basis of respect and said that pressurizing tactics should not be the way forward. Trump, meanwhile, repeated that any deal has to be more beneficial to the US.
 
At the World Economic Forum, Premier Li, China’s head of government, admitted that there are downward pressures on the economy. Li stated that there will be cuts in banks’ reserve requirement ratios and potentially a reduction in funding costs for small firms, but that monetary policy will remain prudent.
 
In the UK, activity amongst manufacturers has fallen to its lowest level in six years, signalling an end to the temporary boost from Brexit stockpiling. June’s construction Purchasing Managers’ Index (PMI) from Markit Economics also disappointed, posting 43.1 versus a forecast of 49.2 this morning, the sharpest contraction in 10 years. The spate of underwhelming economic data has increased fears of negative UK growth in Q2. The services sector PMI reading is due tomorrow.
 
UK house prices rose 0.1% month-on-month in June, according to the Nationwide Building Society, meaning annual growth has slowed to 0.5%. Nationwide attributed the sluggish growth to low levels of consumer confidence and new buyer inquiries.
 
Yields on 10-year Italian government bonds have remained under 1.9% this week, touching the lowest level since May last year and extending the trend of the last month amid expectations of more European Central Bank stimulus and optimism around Italy’s budget.
 
Finally, oil prices have climbed over the past week due to tighter supply expectations, amid a decline in US stockpiles and Washington’s sanctions on Iran.

 

The Weekly Note has a new look!

Subscribe today and email [email protected] to register your interest, and receive the full Weekly Note in your inbox every Tuesday.

 

Walker Crips
Old Change House
128 Queen Victoria Street
London EC4V 4BJ

020 3100 8000
www.wcgplc.co.uk
[email protected]

 

Important information

This publication is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this document constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips.

Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Registered office: Old Change House, 128 Queen Victoria Street, London, EC4V 4BJ. Registered in England number 4774117.

US and China leaders come together at G20 summit; European indices pause; UK activity amongst manufacturers falls to lowest levels in six years

Important note

No news or research content is a recommendation to deal. It is important to remember that the value of investments and the income from them can go down as well as up, so you could get back less than you invest. If you have any doubts about the suitability of any investment for your circumstances, you should contact your financial advisor.

Walker Crips Investment Management Limited (WCIM) is a member of the London Stock Exchange and is Authorised and Regulated by the Financial Conduct Authority (FCA).

This website is solely for information and private circulation and does not constitute an offer to buy or sell shares in any company mentioned herein. References to Walker Crips refer to Walker Crips Investment Management Limited and/or other companies within Walker Crips Group plc. It is important to remember that the value of investments and the income from them can go down as well as up and investors may not realise the value of the initial investment. Recommendations may or may not be suitable for all recipients of this publication and if you have any doubts you should seek advice from your investment advisor. WCIM cannot accept responsibility for any losses which may be incurred by anyone acting on such recommendations. The value in sterling terms of foreign investments may rise or fall in response to currency fluctuations.

It must be noted that information concerning past performance is not a guide to future performance. In line with the FCA rules on conflicts of interest, investors should be aware that Walker Crips may have actual or potential conflicts of interest that could affect the objectivity and independence of their research. Where such conflicts exist it is Walker Crips’ policy to disclose them publicly. Principals and Associates of WCIM may have held a long term position in some of the stocks or shares mentioned herein. Consequently, in line with FCA Rules on conflicts of interest, WCIM research in these areas cannot be classified as impartial within the FCA’s definition and should not be relied upon as independent or objective. Prices and factual details are deemed to be correct at the time of publication but may change subsequently. The publication has been prepared with all reasonable care and is not knowingly misleading in whole or in part. Expressions of opinion are subject to change without notice.

Investors are strongly advised to consult with their own Broker / Account Executive to discuss risk levels and whether a particular investment is suitable for their financial circumstances.

Opinions expressed by individuals within this website does not necessarily represent the views of the Company.

Please indicate that you agree with the statement below to continue

If you do not agree with the above statement and have questions about our service and products please contact us on 020 3100 8000.

Display disclaimer

Investors should be aware that past performance is not a reliable indicator of future results and that the price of shares and other investments, may fall as well as rise and the amount realised may be less than the original sum invested.


Walker Crips Group plc (Old Change House, 128 Queen Victoria Street, London EC4V 4BJ), registered in England, registered number 1432059, incorporates the following companies which are authorised and regulated by the Financial Conduct Authority: Walker Crips Investment Management Limited registered in England number 4774117 member of the London Stock Exchange, Walker Crips Wealth Management Limited registered in England number 3790291, Ebor Trustees Limited registered in England number 3514268, Barker Poland Asset Management LLP registered in England and Wales number OC341149.