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Record high for FTSE while Mothercare crashes

Equity markets in Europe are in positive territory this morning as the bullish sentiment in still strong. 

The FTSE 100 and FTSE 250 have hit new all-time highs and we have seen multi-month highs on the DAX and CAC 40. The political mood in Germany is positive as Angela Merkel of the Christian Democratic Union (CDU) sounded optimistic about potentially forming a coalition with the Social Democratic Party (SPD).

Mothercare shares are down 27% after the company issues a profit warning. The company had a poor Christmas period and it now expects full-year profits to be in the region of £1 million to £ 5million, while analyst’s had previously pencilled in profits of around £10 million. Morthercare has been cutting back on the number of stores it owns, but footfall at existing shops and online traffic are in decline. It is worrying that the online side of the business is feeling the pressure too as more and more of general retail is done over the web. The share price has fallen to an all-time low today which sums up the investor sentiment surrounding the company.

Carillion will be presenting a rescue plan to creditors on Wednesday, and this news has pushed the share price higher today. The struggling construction company is hoping to be given breathing space as mounting debts and poor cash flow are putting the company under severe pressure. Carillion has an enormous amount of work in the pipeline but it is in dire need of short-term cash, and its lenders aren’t too keen to lend any more funds.

EUR/USD is weaker on the session as the US dollar is pushing higher, but the disappointing German manufacturing orders added to the euro’s woes. German manufacturing orders fell by 0.4% in November, while traders were expecting a reading of 0.5%. This report has been one of the few weak economic updates from Germany as the country has been posting strong updates lately.  

GBP/USD has been hit by the rally in the greenback too. According to Halifax, average house prices in the UK slipped by 0.6% in December, and economists were expecting an increase of 0.2%. The house price data put pressure on the pound also.

Federal Reserve members Raphael Bostic and John Williams are due to speak at 5.40pm (UK time) and 6.35pm (UK time) respectively.

We are expecting the Dow Jones to open up 40 points at 25,335, and we are calling the S&P 500 down 1 point at 2742.

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