market relief

Stock markets are still squarely in the red this morning even though we are seeing a recovery. 

. After another horrendous session in New York last night and Asia overnight equity markets in Europe are feeling the pain. The sheers size of the sell-offs has sent traders running for the exit. This morning there is some short covering and bargain going on, but the real acid test will be if this short-term move higher can be sustained. Markets don’t move in straight lines so this could be the calm before the next storm.

BP posted a strong set of results as a jump in production and firmer oil prices helped the company’s bottom line. Fourth-quarter earnings came in at $2.1 billion, while analysts were expecting $1.9 billion, and last year’s figure was $400 million. Production increased by 12%, and is now at its highest level since 2010. The downstream business which cover activities like refining had a ‘very strong’ period. The oil company took a hit of $900 million in relation to the changes to the US tax law, but in the long run it will be beneficial to the company. The stock is down 1.3% today as the general sell-off weighed on the stock.  

Stagecoach shares are down 8.6% at 133p after Morgan Stanley lowered its price target to 205p from 210p. The move by the bank follows a report from yesterday the government could take over the running of the train line from London to Edinburgh after the transport company ‘got its numbers wrong’. Like with many companies bidding for government contracts, Stagecoach were too competitive in their proposal and now it has come back to bite them. The share price has been in decline since 2015, and if the negative move continues it could target 115p.

EUR/USD and GBP/USD are higher this morning as the US dollar has been hit by profit taking after reaching a level not seen over one week last night. The greenback been broadly moving higher since late January and the prospect of four interest rate hikes from the Fed this year is assisting the US dollar.

At 3pm (UK time) the US will announce the job openings and labour turnover summary (JOLTS) for December and the consensus is for 5.9 million, and that compares with 5.88 million in November.

We are expecting the Dow Jones to open down 555 points at 23,790 and we are calling the S&P 500 down 39 points at 2609.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.