The FTSE 100 is the standout performer in Europe today, and the rally is spread across consumer, financial, energy and mining stocks.

Europe

The British equity benchmark has lagged behind its Continental counterparts lately, and the stability in the commodity space helped it outperformer today. 

Norwegian airline shares have slumped this morning after the low-cost airline announced plans to launch a NKr3bn rights issue. The firm will now switch its strategy from ‘growth to profitability’. The airline confirmed it will stick to its plan NKr22bn cost savings plan. Last week, British Airways said they won’t try and buy the Norwegian company, so today’s drastic move of a rights issues wasn’t much of a surprise.

Royal Mail shares solid-off heavily after the company narrowed its full-year operating profit range to be between £500 and £530 million, while the previous guidance was between £500 and £550 million. The company cautioned that addressed letter volumes will fall between 7% and 8%, and firm warned about weak volumes to be expected in 2019 too. Royal Mail confirmed the Christmas period was ‘busy’ as parcel deliveries jumped by 10%, but the UK parcel business was only broadly in line expectations. The stock dropped to an all-time low this morning, and while it holds below the 300p mark, the bearish move is likely to continue.

Crest Nicholson confirmed that full-year pre-tax profit fell by 15%. Revenue edged up by 9%, but operating margins dipped from 20.3% to 16.7% as higher building costs proved to be a problem for the homebuilder. The firm announced a profit warning in October, so a lot of today’s news was already priced-in.

Domino’s Pizza anticipates underlying profit before tax to be at the lower end of the £93.9 million to £98.2 million range. The company experienced integration problems in Norway, and said its investment plans would hit near-term profitability. Quarterly international systems sales dipped by 1.8%, while UK like-for-like sales growth was 4.5%. The stock has rebounded since late December, and if the bullish move continues it might target the 300p region.  

US

The major indices are mixed today as traders are looking ahead to tomorrow’s meeting between US and Chinese trade delegates. Steve Mnuchin, Treasury Secretary, said he is expecting ‘significant progress’ to be made in the trade talks. There has been a lot of toing and froing with regard the trade dispute so some investors are now sitting on their hands.

3M announced that fourth-quarter EPS were $2.31, while analysts were expecting $2.28. The US operation registered a 4.4% increase in sales, while the Asia-Pacific region posted 2% growth. The group issued a downbeat forecast, as they now predict full-year EPS to be between $10.45 and $10.90 cents, while the previous projection was between $10.60 and $11.05. 3M lowered their guidance twice last year.

Pfizer announced solid fourth-quarter figures, but the guidance was a little on the weak side. EPS was 64 cents, which topped the 63 cents that analysts were expecting. Revenue also narrowly exceeded forecasts too as it came in at $13.97, and traders were expecting $13.89. A couple of their big name drugs lost patent protection, and the outlook isn’t as upbeat. The group now foresees full-year EPS of between $2.82 and $2.92, while dealers had predicted $3.04, and the revenue projection was below the consensus estimate too.

Apple will report will report their latest quarterly figures and traders will keep an eye out for the revenue forecast of $84 billion. The smartphone maker trimmed its revenue projection from $92 billion to $84 billion earlier this month due to softer sales in China. The average selling price will be of interest too, and should the price dip, it would suggest the cheaper models are more popular the upper-end phones.

FX

GBP/USD hasn’t moved much today, even though there has been a lot of noise made in Westminster. Traders are a lot more relaxed than MPs and political commentators. Theresa May’s Brexit Plan B is in focus, but the chances of it get backed are low. Sterling is holding up well considering the UK is facing a no deal scenario.

EUR/USD is a touch lower, but volatility has been low as it has been a quiet day in terms of economic updates. Spanish unemployment edged lower to 14.45%, from 14.6% and economists were predicting 14.5%.

Commodities

Gold has reached an 8 month high and the slight dip in the US dollar has assisted the metal. Gold has been in a strong upward trend since mid-November, and if the bullish run continues it might target the $1,326. Any pullbacks might find support in the $1,300 might region.

Oil has rallied today after it was announced the US imposed sanctions on Venezuela. The Latin American country’s oil production has dwindled in recent years, so oil supply shouldn’t be squeezed that much, but nonetheless, dealers are content to snap up the energy.

 

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