European markets have got off to a weaker start this morning following on from yesterday’s negative session, after a similarly cautious Asia session. Shares in Asia managed to finish the week on a broadly positive note with the Nikkei 225 closing at a five month high, however it appears that European investors are much more cautious ahead of the restart of this weekend’s US, China trade talks.

Despite yesterday’s declines, the over-riding mood remains cautiously upbeat from an economic data point of view, despite the implementation of new quarantine rules by the UK government on travel between France and the Netherlands, which are due to take effect from 4am Saturday morning.

These new measures have had the effect of putting some downward pressure on travel and leisure stocks in early trade this morning, with EasyJet shares, along with IAG, Ryanair and TUI all slipping back.  

It’s also important to remember that for all of the weakness of the last 24 hours that markets here in Europe remain on course for their second successive weekly gain, despite some anxiety about rising infection rates across various parts of Europe, as well as here in the UK.

That anxiety about rising infection rates hasn’t stopped the UK government from embarking on the next stage of its re-opening plan by allowing the reopening of theatres, concert venues and sports arenas. Bowling alleys and other leisure venues where you can socially distance will also be allowed to re-open, along with beauty salons and spas.

In company news, EasyJet shares are lower despite the company confirming the successful conclusion of the sale and leaseback program of 23 aircraft, which has helped generate an extra £608m, on top of the other £1.8bn which the airline has raised since the beginning of the coronavirus pandemic. While the airline has further bolstered its balance sheet with this deal, the new quarantine measures announced by the UK government aren’t going to be conducive to getting people back onto planes anytime soon.

Daimler shares are also slightly lower after the company announced it was paying over $2bn to US regulators to settle issues with respect to diesel emissions, in the wake of the cheating scandal that broke in 2015, and which saw Volkswagen hit with some eye watering penalties.  

Oil prices are also slightly softer, although they still look set to finish the week higher, as gains get tempered over concerns about a weaker demand outlook, particularly around air travel, where future demand expectations have been dialled back.

US markets look set to open broadly unchanged ahead of the latest retail sales numbers for July, which are expected to show another monthly gain, of 2%, albeit below the levels of the previous 2 months. While expectations are for another positive reading there is a concern that optimism levels might be a little on the high side, which does raise the possibility we could see a weaker reading than is currently estimated.    

Fresh from hitting new record highs yesterday Apple shares will also be in focus after the company was accused of monopoly abuse by Epic Games, makers of the Fortnite game, after the app was removed from the App Store. The company has taken out a lawsuit claiming abuse of power against the US tech giant, and it is hard to argue that the company doesn’t have a case.

There is rising disquiet amongst app developers that Apple is abusing its position as a marketplace for innovation by charging up to 30% fees, in an area that is becoming an increasingly important revenue earner for the Cupertino giant.

The increasingly onerous rules the likes of Apple, as well as Google, place on their app stores is generating increasing disquiet amongst the users of its marketplaces, as well as attracting the attention of US and EU regulators.

With Spotify also complaining of Apple’s practices in this area it is hard not to detect a trend that could embolden other brands in respect of Apple’s practices, which in turn could force the company to take steps to offset some of these concerns, before regulators force them to do so.

Dow Jones is expected to open 10 points lower at 27,886

S&P500 is expected to open unchanged at 3,373

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