Bitcoin jumps as traders believe Trump’s chances of winning election have improved, China economy disappoints and Burberry CEO leaves

“Markets were surprisingly calm given the assassination attempt on US presidential candidate Donald Trump,” says Dan Coatsworth, investment analyst at AJ Bell.

“While equities saw a small pullback in parts of the world, there was no panic on the markets as a result of the weekend of violence.

“The polls already implied Trump had a fighting chance of winning the presidential election. The markets are now looking for clues that he has won additional support from the American public.

“One such signal has been sounded in the cryptocurrency market where bitcoin has jumped 5% to $62,831 since the incident. Trump is seen to be pro-crypto and the theory that he is now in a stronger position in the race to the White House has fired up traders looking for assets to benefit if he gets back into power.

“Quite a few of the main European and Asian equity indices pulled back slightly, but futures prices imply a positive opening for US equities today.”

China / Miners

“China’s economic growth continues to disappoint, with the latest GDP figures missing expectations once again. Second quarter GDP expanded by 4.7% versus market forecasts of 5.1%. That is a big miss and is blamed on ongoing weakness in the property sector and consumers not spending as much as hoped.

“Investors are having to become accustomed to China running in second gear, a far cry from a decade ago when GDP growth was in the 7% region and when it was the envy of the world.

“While 4.7% GDP growth is still better than many parts of the world, and certainly streets ahead of what the UK is currently managing, it is seen as failure in the context of China’s bold ambitions to be a superpower.

“Weaker economic activity has negative connotations for commodities demand, which in turn creates a less attractive backdrop for miners producing metals and minerals. That explains why Antofagasta and Anglo American were among the biggest fallers on the FTSE 100 on Monday.”

Burberry

“Losing 70% of its market value in just over a year is embarrassing for Burberry, given it is meant to be one of the world’s shining lights in the luxury goods market.

“When things go wrong, the finger of blame is often pointed at the person leading the business. They are the ones making the final decisions, and if their actions aren’t producing results, they’re shown the door. That’s exactly what’s happened with Burberry as Jonathan Akeroyd is ousted after just two years in the job.

“Some of Burberry’s problems were out of Akeroyd’s control, namely weak consumer spending in China which has historically been a strong sales region for the trench coats-to-scarves seller. There has also been a downturn in the luxury goods market on a broader basis as even the wealthy aren’t immune to the pressures of living in a high interest rate environment.

“But there are still plenty of negative factors that can be linked directly to Akeroyd’s decision-making, such as the decision to take Burberry more upmarket and then heavily discount to shift unsold stock. While shoppers love a bargain, discounting can tarnish a luxury brand as it is perceived to be less desirable.

“Yet another profit warning and the suspension of the dividend illustrate the severity of Burberry’s problems, and swiftly hiring a new chief executive isn’t going to fix everything in an instant.

“The big question now is whether Burberry is going to get back on track on its own, or whether an opportunistic bidder is going to appear while the business is on its knees and take it over.

“It ticks all the right boxes for someone to make a bid – depressed share price, new CEO who hasn’t had time to enact a recovery plan, and disgruntled shareholders who might welcome a generous bid premium to make up for recent losses.”

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