Spreadex Market Update

FTSE falls back under 7700 as trade war fears hurt commodities



It was another tricky start on Wednesday, despite last night’s well-received update by Apple, as investors await July’s manufacturing PMIs and, more importantly, the evening’s Fed statement.

The FTSE slipped 60 points after the bell, plunging back under 7700 as it once again faced a tough morning of earnings updates and a trade war-fearing commodity sector. Though it announced a $2.2 billion dividend, a 26% surge in interim pre-tax profit to $6.7 billion and a 3% rise in revenue to $19.9 billion, this wasn’t enough for Rio Tinto to avoid the sector’s wider decline. With copper falling nearly 2% following news that the Trump administration is set to raise pending tariffs on $200 billion in Chinese goods from 10% to 25%, the mining giant plunged 3.5%, greater than the also notable losses seen by BHP Billiton, Anglo American and Glencore.

It appeared investors were disappointed that Next only posted a 2.8% rise in second quarter sales on Wednesday. While a fair whack ahead of expectations, that number was still well short of Q1’s 6% growth despite the UK’s prolonged heatwave, and crucially failed to lead to any revisions to the firm’s profit guidance, sending the retailer nearly 6% lower.

Things were a bit more cheery at Lloyds. Though the bank set aside another £460 million for PPI mis-selling claims, the fact that saga is coming to an end, alongside a 23% jump in pre-tax profit to £3.1 billion, kept investors onside, with the stock rising more than 2%.

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