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Market Outlook: Spain’s biggest bank struggles

Q2 earnings fall 18 per cent
July 23, 2019

Based on data released this morning Spain’s Santander (also known in amusing UK adverts as the Bank of Antandec) saw second quarter net earnings slump 18 per cent to €1.4 billion from €1.7 billion in Q2 2018. Though net interest income rose 5.6 per cent and non-performing loans shrank again, the bank was hit by a one-off €708 million charge for restructuring costs in Spain linked to the integration of failing Banco Popular. Business conditions in Britain continued to be a challenge for the bank though operations in Brazil and the US were humming along nicely.

Further round the Mediterranean, Italy’s biggest bank, Unicredit, is said to be mulling 10,000 job cuts, Bloomberg reports. Part of a cost-cutting drive – and after failed merger talks – the move is probably too late and doesn’t tackle the overhanging problem loans.

DAX 30

Yesterday’s little bounce from 38 per cent Fibonacci retracement support hasn’t turned momentum bullish.

 

SHORT TERM TRADER: Short at 12530; stop above 12465. Target 11850.

 

POSITION TAKER:  Short at 12385; stop above 12500. Target 11600.

FTSE 100

Another bounce from 7500 which hasn’t turned the MACD bullish. Lib Dems have their first female leader in Jo Swinson today. Got to wait until lunch time to see who will lead the Conservatives.

 

SHORT TERM TRADER:   Short at 7550; stop above 7600. Target 7200.

 

POSITION TAKER:  Short at 7515; stop above 7625. Target 7100.

S&P 500

Another index with signs of divergence with a negative MACD though no longer overbought as we hover just under the record high.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Drifting with barely any bearish momentum and on top of everything else Britain now has to deal with Iran. Foreign secretary Jeremy Hunt, busy with his fight to be the next UK PM, has let relations with one of the Middle East’s most important countries turn sour very quickly.

 

SHORT TERM TRADER:  Long at 1.2525; stop below 1.2385. Target 1.2750.

 

POSITION TAKER:  New little long at 1.2500; stop below 1.2350. Target 1.2775.

EURO/US DOLLAR

Oh dear, this is not exactly what I was expecting.

 

SHORT TERM TRADER:  Long at 1.1240; stop below 1.1180. Target 1.1340.

 

POSITION TAKER:  Square.

GOLD

Ducking its head back under 1440 as the MACD remains steadily bearish.

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

Nicole Elliott is a long-standing member and Fellow of the Society of Technical Analysts and has taken over the IC’s trading coverage.  She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.