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Market Outlook: Auditors’ fines triple last year

Financial Reporting Council slaps £43 million charge on them
July 31, 2019

The soon-to-be obsolete FRC – to be replaced by a new beefed-up regulator imaginatively called the Audit, Reporting and Governance Authority – announced an increase in fines to £43 million from £15 million in 2017, a total 27 cases, up from 11 last year. Director Elizabeth Barrett commented that the size of each fine had increased: ‘’the purpose of the sanctions is to deter bad behaviour and send a message to the market’’. Maybe too little too late. Also, she revealed they had 41 open cases, more than half on auditing issues, yet only 9 have been publicly announced, and that the speed of investigations had lengthened from 77 to 82 months.

High-level trade discussion between US and Chinese officials took place in Shanghai today. In the planning for ages, Treasury Secretary Mnuchin and Trade Representative Lighthizer met Vice Premier Liu He. Yesterday President Trump had further thoughts on the subject, again broadcast via Twitter, suggesting the US had ‘’all the cards’’ and that a deal on trade tariffs might not be achieved until 2020. He continued: ‘’China’s doing very badly, worst year in 27 – was supposed to start buying our agricultural product now – no signs that they are doing so. That’s the problem with China, they just don’t come through’’.

DAX 30

Settling below the neckline of an irregular head & shoulders top – but holding on trend line support taken from this year’s low.

 

SHORT TERM TRADER: Short at 12360 and added to this on yesterday’s close at 12100; stop above 12600. First target 12000, then 11800.

 

POSITION TAKER:  Will probably also got short this week.

FTSE 100

Less overbought as we retreat from its highest level in a year. Euro/Sterling remains weak at nearly £0.9200.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

The MACD remains only marginally bearish as we hover with a hammer candle yesterday at the record high and the top of a large broadening formation. Traders continue pricing in a 75 per cent chance of a 25-basis point cut at today’s final day of the FOMC.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Still oversold as we hold unsteadily at its lowest price since March 2017.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Inching up from this month’s lower levels despite a relentlessly negative MACD.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

The MACD has been bearish all month yet prices continue to consolidate in an irregular right-angled triangle.

                            

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.