Equity markets in Europe are a mixed bag this morning.
Volatility is likely to be low as traders are waiting to hear from Jerome Powell of the Federal Reserve at lunchtime. European stocks has been broadly pushing higher over the past two weeks and it seems they are taking a breather now ahead of Mr Powell’s update.
Sky shares are up 19% at 1315p after Comcast launched a takeover bid of 1250p per share, valuing the company at £22.1 billion. Rupert Murdoch already owns 39% of Sky, and is trying to acquire the remaining stake in the company. Mr Murdoch’s bid stands at 1075p per share. The UK regulator has expressed concerns about the possibility of the Murdochs controlling too much of the British media. Shares in Sky hit their highest level since 2000, which highlights the current bullish sentiment.
Standard Chartered posted a 175% jump in annual underlying profits to $3.01 billion, which was marginally ahead of the $2.97 billion expected by analysts. The bank returned to paying a dividend, its first in two years. The final dividend was 11 cents, which is a step in the right direction, but keep in mind the final dividend for 2015 was 63.5 cents. The modest dividend is a signal of the company’s financial strength. The share price hit is highest level since August 2015, and if the positive run continues it could target 900p.
EUR/USD is slightly higher this morning, after higher-than-expected Spanish inflation had little impact on the currency pair. The CPI rate in Spain jumped to 1.2% in February, up from 0.7% in January, with traders expecting a reading of 0.9%. It is very encouraging to see such a jump in inflation, as it suggests that demand is strong.
At 1.30pm (UK time) Jerome Powell, the new Chair of the Federal Reserve will testify before the House Financial Services Committee in Washington DC. This will be Mr Powell’s first update as the head of the Fed, and traders will be listening out for possible clues about what direction the US central bank might head in.
We are expecting the Dow Jones to open up 12 points at 25,721 and we are calling the S&P 500 down 2 points at 2777.
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