Shares in Donald Trump's media company rise as Wall Street is buoyed
Shares in Donald Trump’s media company have surged to their highest point since mid-June in the opening minutes of trading on Wall Street, as investors bet that the attempted assassination of the former president will boost his chances of re-election.
The share price of Trump Media and Technology Group soared as high as $46.27 on Monday morning in New York – before dropping back to $39. That was a steep 27% increase, although not quite the $50 mark that had been indicated in pre-market trading.
The theory that traders appeared to be following was that the assassination attempt makes Trump’s election more likely in November, and that that would somehow increase earnings significantly from Truth Social, his rival network to X, formerly Twitter.
But it was not just Trump-specific assets that gained ground. US markets also rose more broadly, and the Dow Jones industrial average rose to a new record high.
Bob Savage, head of markets strategy and insights at BNY Mellon, an investment bank, said:
The narrative for the day rests on the “Trump Trade” with many investors assuming the weekend events add to the former president being re-elected. The logic being that the chances of tax cut extensions and higher trade tariffs – leading to even higher US fiscal deficits, even alongside potential growth headwinds and intense political pressure on the Federal Reserve to ease as inflation continues to subside near term. Some also suspect a possible withdrawal of US support for Ukraine would also up fiscal pressures in Europe, who may then have to pick up the funding for the war.
You can continue to follow our live coverage from around the world:
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In our Europe coverage, Estonia PM Kaja Kallas resigns to take up EU foreign policy role
In our coverage of the Israel-Gaza war, Unrwa HQ ‘turned into a battlefield’ in heavy fighting, says agency chief
US stock indices gain after Donald Trump assassination attempt
US stock markets have risen at the opening bell on Monday, in a move some analysts said was related to increased expectations of a presidential election victory by Donald Trump after the attempted assassination on Saturday.
Here are the opening snaps, via Reuters:
S&P 500 UP 23.71 POINTS, OR 0.42%, AT 5,639.06
NASDAQ UP 92.11 POINTS, OR 0.50%, AT 18,490.56
DOW JONES UP 281.17 POINTS, OR 0.70%, AT 40,282.07
The assassination attempt, and Trump’s defiant reaction, have prompted some people to say that a Republican victory is more likely.
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said:
In a Republican administration, you’ll see a lower tax policy, lower regulatory policy... that’s typically good for stocks. We’re seeing some of that in terms of forward looking expectations from investors at this point.
Updated
What will China do to try to hit its 5% annual growth target, given the slowdown revealed today?
Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, a consultancy, said:
President Xi Jinping today delivered a work report at the Third Plenum on deepening reform and promoting modernisation, with details yet to be released. The focus will probably be on promoting high-tech and manufacturing as the path to higher productivity and sustained growth in the longer term.
Measures to encourage private-sector and foreign business investment are likely, but sweeping reforms to create a consumption-driven growth model, such as household residency reform or building a universal welfare system, are unlikely.
The FTSE 100 is down by 0.3% in London. Burberry apart, some of the biggest fallers are miners, who have been hit by concerns over the Chinese economy.
Mining company Antofagasta, whose speciality is copper, fell by 4.1%, while Anglo American fell by 2.1%.
China is struggling to keep up the speed of its economy, as the property industry and consumption slow.
Lynn Son, chief economist for Greater China at ING, an investment bank, said:
The drag from the property market should come as no surprise. The actual drag on GDP growth will likely persist for an extended period of time, as even if prices bottom out, there is still a high level of inventories that need to be digested before new investment takes place.
And that has hit consumption:
A negative wealth effect from falling property and stock prices, as well as low wage growth amid various industries’ cost cutting, is dragging consumption and causing a pivot from big-ticket purchases toward a basic “eat drink and play” theme consumption.
However, there was still demand from industry, which could help the Chinese economy weather the slump in spending:
We continued to see strong growth in hi-tech manufacturing (8.8% YoY) and computer and electronic equipment manufacturing (11.3% YoY), which should remain a major area for growth as China prioritises its transition toward higher end manufacturing and establishing technological self-sufficiency.
Pressure on Beijing to take steps to improve Chinese consumer confidence has intensified after news that weak retail spending dragged down the growth rate of the world’s second biggest economy.
With falling house prices still acting as a drag on activity, official figures showed the Chinese economy expanding at an annual rate of 4.7% in the second quarter – much weaker than the 5.1% expected by the financial markets.
Annual retail sales growth slowed from 3.2% to 2% in the three months ending in June – the weakest in 18 months – and fell slightly in June alone.
You can read the full report here:
We have had some economic updates on industry in Europe and the US.
In Europe, industrial production data published this morning showed that output fell by 0.6% during May – less than the 0.8% expected by economists. Output over the course of the previous year was also revised up slightly, although it was still down by 2.9%.
In the US, the New York Federal Reserve’s manufacturing survey showed activity slowing slightly – although it was better than expected.
Goldman Sachs doubles profits to $3bn
Goldman Sachs made profits of $3bn in the second quarter of 2024, more than double last year thanks to strong bond trading profits.
The Wall Street bank’s revenues were $12.7bn for the second quarter of 2024, 17% higher than the second quarter of 2023, but 10% lower than the bumper first quarter of 2024 when it benefited from a surge in debt issues and some major mergers and acquisitions.
Goldman’s share price is up by nearly a quarter so far in 2024, as investors appear to welcome a return to focusing on the investment banking that made it one of the best known names in US finance. Goldman had made a brief foray into consumer banking.
The bank’s strong share price performance has benefited its bankers, whose shared bonus pot increased by 20% this year.
David Solomon, Goldman’s chief executive, said:
We are pleased with our solid second quarter results and our overall performance in the first half of the year, reflecting strong year-on-year growth in both global banking and markets and asset and wealth management.
Bank of England policymaker says interest rates should be cut
The Bank of England needs to “stop squeezing living standards” and cut interest rates, a senior policymaker has said.
Swati Dhingra, a member of the central bank’s monetary policy committee (MPC), said official borrowing costs should be cut at its next meeting on 1 August to ease pressure on households and businesses.
Dhingra told the Rest is Money podcast:
Now is the time to start normalising [interest rates], so that we can then finally stop squeezing living standards the way we have been to try and get inflation down. We are weighing on living standards and that cost does not need to be paid.
Whether the Bank cuts borrowing costs in August for the first time since the Covid pandemic is thought to be on a knife-edge, with City investors pricing in a 50/50 chance of a cut from the current level of 5.25%.
You can read the full report here:
Updated
Shares in retail technology company Ocado have slumped by 11% after an investment broker downgraded its expectations.
Ocado fell by 11.3% on Monday, making it the biggest faller on the FTSE 250 index. Only Burberry – now down 17% after dispensing with its chief executive – has done worse today.
Ocado uses robots running around grids to try to make supermarket deliveries more efficient and therefore profitable. However, after surging in value during the coronavirus pandemic lockdowns, investors have grown wary of its expected cash needs.
Reuters reports that Bernstein, a US brokerage, has said the company’s shares will “underperform”, compared to a previous rating of “outperform”. It expects the share price to move towards 260p – a stark cut from its previous target of 1000p.
The report suggests that Ocado should “consider its options” to go private in a grocery deal and reduce cash burn. That would be a major blow to the London Stock Exchange, given that Ocado is one of the few prominent UK tech companies.
The broker said:
Liquidity challenge is real and significant with both existing debt refinancing and a need for more cash soon.
UK government's NatWest stake falls below 20%
The UK government’s stake in NatWest has fallen below 20% for the first time since the bank was bailed out during the financial crisis.
NatWest, formerly Royal Bank of Scotland, said that the government now owns 19.97% of its shares, after selling off 81m. The government had owned 38% in May, before a programme of share sales.
Paul Thwaite, NatWest’s chief executive, said:
Returning NatWest Group to full private ownership remains a key ambition and we believe it is in the best interests of both the bank and all our shareholders.
Trump set for paper gain of $2bn as shares in media company surge
Let’s take a closer look at the numbers for Donald Trump’s media company: he could be in line for a paper gain of $2bn thanks to the soaring valuation after the failed assassination attempt over the weekend.
Trump Media and Technology Group’s shares started trading at $57.25 on 26 March, when it merged with a special purpose acquisition company (Spac). It soared on its first day to a high of $79.38 – briefly valuing it at more than $10bn. It has not hit those heights since then.
Spacs became a sensation during the financial market bubble during the coronavirus pandemic lockdowns. A shell company lists on the stock market, raises a load of cash, and then looks for a company to merge with – offering a quicker route to a listing.
Trump’s company – whose stock market ticker bears his initials, DJT – jumped on the Spac bandwagon, and benefited from the “meme stock” craze as many political supporters bought in.
Yet the financial reality facing the company has been quite tricky, as the Truth Social network has struggled to attract the users to justify its lofty valuation. In April the company’s share price dropped as low as $22.55.
It has never recovered to its opening price on 26 March, and by Friday it was at $30.89.
In pre-market trading (which happens off the main stock exchange) the value of DJT shares rose by as much as 70%, although that surge has weakened somewhat in recent minutes. Google Finance suggests the share price is up 53% at $47.29.
DJT was worth $5.87bn at the close on Friday, and Trump himself owns 60%, according to Refinitiv.
If that 53% gain is replicated when US markets open, then the notional value of Trump’s fortune would rise by about $2bn.
However, Trump is prevented from cashing out on his fortune until September, under terms that prevent him selling shares. The US presidential election does not take place until November.
Updated
The reaction to the Trump assassination attempt on traditional financial markets has been fairly muted – especially compared with the Trump Media & Technology Group share price surge.
The US dollar is almost flat against a trade-weighted basket of currencies, while US futures prices suggest US benchmark stock indices will gain about 0.5% when they open later.
US Treasury bond yields have tended to rise when the prospect of Donald Trump winning back the presidency appears to increase. That is on the assumption that his economic policies would increase inflation and add to government debt.
The price of benchmark 10-year Treasury bonds fell in price on Monday. The yield on those bonds (which moves inversely to prices) rose by 0.02 percentage points to 4.206.
Share price of Trump's Truth Social company rises 70% pre-market
The share price of Donald Trump’s media company has surged in pre-market trading after the attempted assassination of the US presidential candidate.
Demand for shares in Trump Media & Technology Group (TMTG), the owner of the X rival Truth Social, appeared to soar on Monday. The share price rose 70% in trading ahead of the opening of New York’s Nasdaq stock exchange.
Traders appear to be speculating that the assassination attempt makes a Trump victory in the November presidential election more likely, and that that would benefit TMTG, despite its financial struggles so far.
Updated
Bitcoin jump linked to Trump assassination attempt by analysts
The price of bitcoin has jumped 10% in a move that some analysts have linked to the attempted assassination of Donald Trump on Saturday.
The price of one bitcoin rose above $63,000 on Monday, and was up 9% over the day, according to Refinitiv.
The cryptocurrency – which tends to be more volatile than many traditional assets – had slumped from above $70,000 in early June to below $54,000 in early July. Its record high was in March, when it hit 73,803.
The theory is that the Trump’s defiance after the assassination attempt makes him more likely to win, and that he will then be more likely to ease regulations on bitcoin, as he has courted crypto advocates, including in a June meeting with crypto “miners” (owners of computers that make the calculations crucial to the decentralised cryptocurrency’s functioning). Many cryptocurrency advocates have links to libertarian politics.
The price of #Bitcoin is up nearly 10%(!) following the attack on Donald #Trump. As the odds of Trump winning the US elections rise, so does Bitcoin, underscoring that it is highly susceptible to shifts in the political landscape. This makes the work of investors harder, as… pic.twitter.com/Z8HLrEMEVw
— jeroen blokland (@jsblokland) July 15, 2024
Rania Gule, market analyst at XS.com, an online trading platform, said that bitcoin had gained after Joe Biden’s poor performance in a debate against Trump earlier this month:
I believe that US political news is driving gains in cryptocurrencies because it is a “speculation-driven” area.
If re-elected, Trump may seek less stringent regulatory policies towards cryptocurrencies, potentially improving regulatory conditions and encouraging more investments.
His policies towards international relations and foreign trade also have a significant impact on the market, as tensions or stability in international relations may lead to fluctuations in cryptocurrency markets.
You can follow more news on US politics as Trump prepares to accept the Republican party’s nomination as US president:
Recruiter Robert Walters warns of slower recovery in jobs market
Recruiter Robert Walters has also warned that it does not expect the jobs market to pick up at least until next year, after a slowdown in hiring across the world.
UK revenues for the London-listed company were down 18%, while Asia Pacific revenues were down 15%.
Toby Fowlston, chief executive, said:
Fee income for the first half of 2024 continued to reflect the rebasing in market conditions relative to the post-pandemic peak. This period of market adjustment is now longer in duration than previously expected, with macroeconomic turbulence and political uncertainty restraining client and candidate confidence in certain geographies.
Our near-term planning now assumes that any material improvement in confidence levels will be gradual, and likely not occur before 2025.
Burberry’s struggles and the surprisingly weak Chinese economic figures are putting luxury and fashion stocks across Europe under pressure.
Watch company Swatch Group also reported a steep fall in sales in the first half of its financial year. JP Morgan analysts said that Swatch has one of the highest exposures to China among its European rivals, according to Reuters. they wrote:
We think the sector will likely come under pressure first thing this morning, and notably Richemont, the most obvious read-across.
Cartier owner Richemont fell 2.6% and Louis Vuitton owner LVMH was down 1.7%.
As might be expected after such a brutal set of news on Monday morning, Burberry’s share price has slumped.
The fashion company is down 11% in early trading.
It has been a pretty torrid year. You can see today’s slump in the very bottom right of the below chart, but it has been one-way traffic for much of 2024. Shares are down 45% for the year.
It looks like those Chinese GDP data may have set the mood for Monday on stock markets, with Europe’s indices falling at the opening bell.
London’s FTSE 100 and Spain’s Ibex are both down 0.4% in early trading, so it doesn’t seem to be a reaction to the football at least.
Here are the opening snaps, via Reuters:
EUROPE’S STOXX 600 DOWN 0.3%
GERMANY’S DAX DOWN 0.2%
BRITAIN’S FTSE 100 DOWN 0.4%
FRANCE’S CAC 40 DOWN 0.5%, SPAIN’S IBEX DOWN 0.4%
EURO STOXX INDEX DOWN 0.4%; EURO ZONE BLUE CHIPS DOWN 0.4%
Burberry replaces boss as loss expected; Chinese retail weakness slows growth
Good morning, and welcome to our live coverage of business, economics and financial markets.
All change at the top of British fashion: Burberry has announced the departure of chief executive Jonathan Akeroyd after it was forced to cancel its dividend after a slump in sales.
Akeroyd has left the FTSE 100 company “with immediate effect by mutual agreement with the board”, Burberry said on Monday morning. Burberry has appointed American Joshua Schulman, a former Michael Kors boss, to replace him.
Gerry Murphy, Burberry’s chair said the performance was “disappointing”. He said:
We moved quickly with our creative transition in a luxury market that is proving more challenging than expected. The weakness we highlighted coming into full year 2025 has deepened and if the current trend persists through our second quarter, we expect to report an operating loss for our first half. In light of current trading, we have decided to suspend dividend payments in respect of full year 2025.
The data published by Burberry in its accompanying trading update do not make for pretty reading for shareholders: comparable store sales are down by 21% to £458m in the 13 weeks to 29 June.
In the Asia Pacific region sales are down by 23%. Revenues across the entire financial year could drop by 30%. Burberry said:
We are operating against a backdrop of slowing luxury demand with all key regions impacted by macroeconomic uncertainty and contributing to the sector slowdown.
Chinese GDP grows by 4.7%, below 5.1% forecast
Buberry’s struggles have been put into context by Chinese GDP figures earlier this morning: growth slowed to 4.7% year-on-year in the second quarter, down from 5.3% in the first quarter and below the 5.1% expected by economists polled by Reuters.
China’s Communist party leaders are meeting for their “third plenum” this week, the forum that takes place about every five years at which they set out their long-term policies on the economy. The government is aiming for 5% growth in 2024, which may be a challenging target if the weakness persists.
The figures were “hampered mainly by weak consumer spending and demand”, said analysts at Deutsche Bank led by Jim Reid. They added:
Other data showed that China’s retail sales slowed to +2.0% y/y in June (v/s +3.4% expected and the worst since December 2022) after advancing +3.7% in May, thus highlighting that the world’s second largest economy is struggling to boost consumption. Adding to the negative sentiment, China’s home prices fell again in June, declining -0.67% on the month with existing home prices declining -0.85%.
The agenda
10am BST: Eurozone industrial production (May; previous: -0.1% month-on-month; consensus: 1%)
1:30pm BST: US New York Fed manufacturing index (July; prev.: -6; cons.: -6)
