Markets Overview:

UK 100 called to open -20pts at 7240, pulling back from another overnight bounce on account of yesterday’s breached support-turned-resistance. Bulls need a break above 7260 to clear overnight highs. Bears require a breach of 7216 overnight lows. Watch levels: Bullish 7265, Bearish 7210.

Calls for a negative open come as markets brace for the next two days of trade talks between the US and China. The US session continued its move to the downside, with the S&P down as much as 2.4% (worst day in 6 weeks). Asian markets followed on the rhythm of Wall Street and continued the sell-off.

Gold ($1287) is still making modest gains on trade talk uncertainty, and USD weakness as investors seek a port in a storm. The low appetite for risk is also affecting Oil ($70.6), as daily lows keep getting tested. GBP also edging lower at $1.30 from last week’s high, joining the UK Index in its downward move.

In corporate news this morning:

ITV says Q1 as expected. BritBox launch in H2. Agrees with Amobee to allow advertising on Hub. Family Share viewing +4%, Online/Hub +16%; Total Ext Revenues -4%, Studios +1%, VOD +22%, Broadcast & Online -7%, Ads -7% as guided (expects H1 -6%). Reiterates FY guidance.

Direct Line Q1 gross written premiums -2.1%, o/w Own Brands -1.9% (Motor -4.2%, Own brand Home +0.6%, Partnership Home -5.7%, Rescue +1.7%, Commercial +1.2%). In force policies -0.7% (Own Brand +0.5%; Motor flat). Tough environment. Motor highly competitive (premiums not keeping pace with claims inflation). Home sightly less challenging, but still competitive. Reiterates FY targets.

Imperial Brands reiterates guidance, H1 overall revenues +2.5%, dividend +10%. Europe and America revenues +4%. Operating profit +38.1%. Net revenues +3.8% (+2.5% excl. FX), however total adj. operating profit -0.2% (-2.3% excl. FX). Tobacco vol. -6.9%, below industry -4.5%.

AstraZeneca Phase II DESTINY-Breast01 trial met primary endpoint; trastuzumab deruxtecan demonstrated clinically-meaningful breast cancer response. Supports regulatory submissions.

Australia’s competition regulator to oppose merger of Vodafone Hutchison Australia (50% owned by Vodafone) and TPG, whose shares fell 14% downunder overnight.

BHP notes media reports concerning group claim in UK in relation to 2015 Samarco dam failure. BHP confirms served with legal proceedings and intends to defend the claim.

Wetherspoons 13 wk like-for-like sales +7.6%, total +8.4%, YTD like-for-like sales +6.8%, total +7.6%. Opened 3 pubs, closed 7; to open another 2 by year-end. Net debt +3%, expected around this level at year-end. Continue to anticipate FY outcome in line with previous expectations."

SIG Q1 weaker than guided, hurt by FX. Trading conditions remain challenging, outlook in many markets uncertain, notably UK. Believes transformation pace can be maintained providing no deterioration in market conditions. Despite Ransomware attack in France, reiterate FY guidance.

Provident keeps up its defensive critique of a takeover by NSF; suggesting transactions could result in an undercapitalised group; says NSF faces headwinds; NSF overly positive on financials.

Morgan Sindall Q1 order book +8%, regeneration and development pipeline +2%. Average daily net cash +GBP12m YoY. On track to deliver FY performance in line with expectations but with more of a weighting towards H1 than in previous years.

In focus today:

Straight out of the gate, investors might want to keep an eye out for UK Halifax House Prices (8.30am) data which could impact UK Index Housebuilders. The Bank of England’s (BoE; 9.30am) Ramsden talks at the Annual European Post Trade Conference could add more volatility to the Sterling.

Across the pond, the weekly US EIA Crude Oil stocks (3.30pm) US could add more volatility to an already shaky oil price impacted by supply concerns and US-China trade talk tensions.

US-China trade talk chatter ahead of meetings in Washington on Thursday and Friday might shake things up even more in an already unsteady global economy. Especially after Trump’s threats.

Quarterly results continue to flow through, with the likes of  Barrick Gold (acquired Randgold Resources earlier this year), CenturyLink, Twenty-First Century Fox and Walt Disney reporting from across the pond. WIll the numbers meet, beat or miss. Will the outlook be more important?

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