European stock markets are in the red this morning after US equities entered correction territory last night.
Now that China’s tariffs on some US goods have come into effect, traders are worried about a trade war. The S&P 500 closed more than 10% below the record high last night, and this is weighing on global sentiment.
Shares in Sky are up 0.5% after 21st Century Fox stated Sky News could be sold to Disney. 21st Century Fox owns a 39% stake in Sky, and it is hoping to acquire the remaining 61%. The Competition and Markets Authority (CMA) has some concerns about the takeover attempt. At the same time, 21st Century Fox, which is controlled by the Murdoch family, is in the process of selling some of their assets to Disney. To appease the CMA, the Murdoch family are also suggesting that Disney acquire Sky News, or another option would be that Sky News could be ring-fenced from the rest of the Murdoch’s assets, should the takeover go ahead. The share price hit a record high last month and if it holds above 1,300p, the positive run is likely to continue.
Weakness in the US dollar on account of trade war uncertainty is helping EUR/USD and GBP/USD. The eurozone is continuing to come off the boil as the manufacturing report for the region dropped to its lowest level since August. The currency bloc has been undergoing a slide in the growth rate recently, and it could encourage the European Central Bank to keep their policy loose. The British manufacturing sector also slipped back to an eight-month low, but the UK economy as a whole has been broadly performing well, and talk of an interest rate hike from the Bank of England next month is still doing the rounds.
We are expecting the Dow Jones to open down 9 points at 23,635 and we are calling the S&P 500 up 4 points at 2585.
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