market relief

European equities are in the red as trade tensions persist. 

Global trading relations are still strained, and while the discontent continues, stocks are likely to remain under pressure.

Ryanair confirmed that first-quarter profit slipped by 20% to €319 million, still higher than equity analysts were expecting at €305 million. The airline cited higher wages, lower fares and firmer oil costs as the reason for a drop in earnings. The firm now foresees a 1% increase in second-quarter fares, lower than the previous guidance for a 4% rise. Industrial action has hurt the image of the company, and that will continue to hang over the airline. Despite the staffing issues, Ryanair reaffirmed its full-year forecast of between €1.25 billion and €1.35 billion. The stock has been drifting lower since August, and if the negative move continues it could target the 1,400p region. 

Hammerson has sold two retail parks in Bristol and Fife for £164 million. The properties were sold off at a 10% discount to their December valuations, which sums up the uncertainty in the retail sector. Footfall at retail parks has dropped due to the rise in online shopping, and high street retailers have been hit by higher business rates and employment costs. The stock has been in decline since January 2015, and if the adverse move continues it could target 500p.

McColl’s shares are in the red after the company revealed a 48% fall in first-half profit. The profit slump was largely caused by the collapse of the wholesaler Palmer and Harvey. Like-for-like sales slipped by 2.7%. The company statement talked about the challenges in the sector, but confirmed its supply chain is now more secure. The stock has been in decline for 11 months, and if the bearish move continues it could target the 175p area.

EUR/USD and GBP/USD are higher on account of the dip in the US dollar index. The greenback sold off last week after President Trump accused China and the European Central Bank of manipulating their currencies.

We are expecting the Dow Jones to open down 23 points at 25,035 and we are calling the S&P 500 down 3 points at 2,798.

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