As concerns for potential trade wars mount, the stock market trends down with some talk of mergers. June was a busy month!
Trade war concerns and small declines; the markets in June
Stock markets in June trended lower as we saw a decline of around 2.5% in the FTSE 100. This is on the back of growing concerns over trade wars between the US and China (amongst other countries) and Brexit. However the US president continues to send out mixed signals, with his speeches and tweets ranging from taking a hard line to a somewhat softer approach.
Companies where take-over rumours have circulated include; TalkTalk Telecom, RSA and Aviva. Inmarsat confirmed an approach from US group EchoStar, which in turn led to a French company briefly expressing interest only to withdraw it the following day. EchoStar has until 6 July to make a firm offer. There was also a suggestion that Kroger might one day consider taking on the whole of Ocado after recently announcing a tie-up and stake in the company. Finally the changing landscape of betting in the US could attract interest for William Hill which has been expanding its operations in the region.
The rising trend in the oil price showed signs of running out of steam, as OPEC increased production to satisfy demand.
Having recently taken a back seat in terms of investor interest, Gold dropped to a year to date low, mostly as a result of a stronger dollar. The two tend to have an inverse relationship.
Although UK interest rates remained unchanged it was noted that the Bank of England chief economist, along with two other members, voted for an increase. This was interpreted as increasing the chances of a rise in August.
One story that has been rumbling on for some time is the pressure on the UK high street and there was more evidence of this in a trading update from Whitbread. With less people visiting the high street, coffee sales at its Costa operation had fallen like-for-like according to their report.
With volumes in the market somewhat lower, the summer lull appears to have started, despite expectations for increased volatility. World Cup excitement has been building since our wins against Tunisia and Panama but surely the highlight of the month was the 5 – 0 thrashing of Australia. Before you all look at your World Cup charts this was cricket, a sport in which we have a genuine chance of winning the World Cup next year.
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