Report by Renta 4
European markets opened lower (Eurostoxx futures down 0.02 per cent, S&P down 0.25 per cent, Nasdaq down 0.8 per cent), following a session that started strong but ended weakly in the US and a black day on the Kospi (down 9%), which hit its lowest level since mid-April and triggered the sidecar and trading halt mechanisms at the start of the session. This fall has been driven by a sell-off in semiconductor company shares amid growing fears of excessive investment in artificial intelligence and high leverage.
Meanwhile, oil futures are down today by 1 per cent, continuing yesterday’s fall of around 9 per cent (the biggest daily drop in three months). Against this backdrop, Donald Trump has stated that there is a “good chance” of reaching an agreement with Iran, whilst both sides are reported to have paused their daily attacks as a gesture to give a potential deal another chance. However, Trump has also warned that a failure to bridge the gap between their positions would lead to the resumption of attacks.
Meanwhile, negotiations between Iran and Oman are continuing, following a meeting between officials in Tehran at the weekend, in an attempt to reach an agreement to resume maritime traffic through the Strait of Hormuz. The Omani negotiators are optimistic that they will be able to make an announcement signalling progress in the coming days, although there are no guarantees that this will happen. Such an agreement would pave the way for the Islamic Republic and the United States to bring the war to an end.
Turning to central banks, and ahead of tomorrow’s Fed meeting, the Governor of the Reserve Bank of Australia, Michele Bullock, reiterated today that the central bank remains prepared to raise the official interest rate if necessary, with core inflation still too high even if the recent surge in oil prices is temporary. She also warned of signs suggesting that domestic demand and labour market conditions have begun to moderate, whilst weak productivity growth persists as a structural constraint on the economy.
Today, on the macro front, the focus will be on the US, with the Conference Board’s consumer confidence index expected to show a slight improvement in July (92.3 expected against 91.2 previously), and the Q2 26 unemployment rate in Spain (previously 10.83 per cent).
Yesterday’s key macroeconomic highlight was the IFO business climate survey in Germany, which improved in July for the third consecutive month, driven by the expectations component, although the level remains well below its long-term historical average, indicating that the economy is holding up but not rebounding decisively. For a decisive rebound to occur, the geopolitical situation needs to improve sustainably.
On the corporate front, the publication of international Q2 26 results will continue (with Mercedes, Orange, Air Liquide and EssilorLuxotica standing out in Europe), whilst the Spanish results season will gather pace, with figures due from Merlin Properties, Ferrovial, Grifols, Arteche and Renta 4 Banco.
