Data published late yesterday by the British Retail Consortium showed that in July total retail sales grew by just 0.3 per cent, versus a 1.6 per cent increase this time last year, and the weakest reading since the series began in 1995. In the 3 months to July nominal retail sales fell by 1.3 per cent, again a record low figure. Non-food sales fell by 4.1 per cent, and department store sales by 3.9 per cent using Barclaycard data. Online non-food sales grew by just 3.7 per cent as against a 7.5 per cent gain in July 2018. What did manage to attract increased spending were restaurants (up 10.1 per cent) and cinemas (up 14.8 per cent).
A study published yesterday by the UK’s Institute for Fiscal Studies spelt out clearly exactly what it takes to be in the top 10 and top 1 per cent in this country. To get into the top 10 one needs an income of just over £50K; in the top 1 per cent: £162K, and the tip-top 0.1 per cent £650K – before tax. The individuals are overwhelmingly male, pale, aged 45-55, and live in London or the South East. Because many have income in the shape of dividends, company profits, or interest their tax rates tend to be lower than taxes levied on salaries. The median UK taxpayer earns £22K.
DAX 30
The MACD at its most negative this year as we slump below this year’s trend line support though remaining above long term trend line support which lies around 11000.
SHORT TERM TRADER: Looking to re-sell on any bounce, ideally between 12000 and 12200.
POSITION TAKER: Short at 11835; stop well above 12200. First target 11000
FTSE 100
Momentum more bearish than it’s been all year as two months of gains are wiped out in 5 short days. No need to remind readers that market risks are asymmetrical.
SHORT TERM TRADER: Smash and grab: took profits at target 7100 all in the space of a day. Now looking to re-sell.
POSITION TAKER: Short at 7570; stop above 7430. Target 7000.
S&P 500
The little broadening top chart pattern has succeeded in wiping out a Fibonacci 78 per cent of June and July’s gains. Classic ‘buy the rumour sell the fact’ (of a Fed rate cut). For the first time in decades US Treasury secretary Mnuchin ‘has today determined that China is a Currency Manipulator. As a result, [it] will engage with the IMF to eliminate the unfair competitive advantage created by China’s latest actions’.
SHORT: Took half my profits at my target 2875, and will run the other half to 2700; stop above 2920.
POSITION TAKER: Another smash and grab trade where I took profits at target 2800 within a day. A reminder as to why weekly closes are more important than daily ones.
BRITISH POUND/US DOLLAR
Mercifully quiet as the commodity channel index tries to turn the corner. The Express reports that the EU faces reality and admits that nations have 48 hours to come up with a plan for ‘full no-deal Brexit preparation’.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Momentum is trying to turn bullish after Monday’s bounce. Note that foreign currency reserves have risen for a second consecutive week at the Swiss National Bank hinting at currency intervention to keep a lid on a Swiss franc strengthening against the euro.
SHORT TERM TRADER: New small long at 1.1165; stop below 1.1060. Target 1.1340.
POSITION TAKER: Square.
GOLD
Overbought again as safe-haven investments are back in vogue.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
