While US markets appear content to continue to push higher, after last week’s record highs, markets elsewhere seem slightly less sticky, with markets in Asia much more subdued and cautious against a backdrop of a weekend ripe with concerns over escalating tensions in the Arabian Gulf, and ahead of the G20.
Oil prices have continued to build on their gains from last week on reports that the US is set to increase the scale of economic sanctions against Iran later today, though the escalating rhetoric isn’t exactly helping either.
European markets have opened in an equally cautious fashion with investors adopting a “wait and see” approach ahead of this week’s upcoming G20 meeting, with the underperforming due to weakness in the auto sector.
This weakness in the auto sector is a direct result of Daimler announcing over the weekend its third profits warning this year. Unlike its two previous ones, which were trade related this one appears to be as a result of the continuing fallout over diesel emissions which has seen revenues slide back, as well as pushing up costs. This warning may well have been as a result of the recent decision by the German Federal Motor Transport Authority to issue a recall for 40,000 Mercedes GLK SUV’s due to illegal software functions which were designed to get around emissions regulations.
Mobile phone operators, including Vodafone (LON:) and Telefonica (MC:) who own O2, could come under pressure after it was alleged that the two combined in price fixing attempts in order to squeeze smaller operators.
In France Carrefour (PA:) shares have edged higher after the company announced it was selling control of its Chinese business for around €620m, against a backdrop of falling sales and profitability.
The US dollar has continued its slide from last week, hitting a three month low against a basket of currencies, losing the most ground today against the Australian dollar after RBA chief Philip Lowe admitted that while he expected…