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Stocks off sessions lows as sentiments slightly improves

European equity markets are off the lows of the session as the selling pressure that overflowed from the Asian session waned. 


The FTSE 100 is outperforming the major eurozone indices like the DAX and the IBEX 35 as the weakness in the pound is making the internationally exposed British market more attractive to investors.

Whitbread shares are up 7.3% after it was reported that Sachem Head Capital Management declared their 3.4% stake in the company. This announcement has pulled up the rest of the consumer goods sector – which is the largest gainer on the London market.

A bounce back in the price of copper is firming up the share pricing of mining companies like Glencore and Antofagasta. Copper took a dive yesterday as fears about over-supply persisted as a London Metal Exchange (LME) registered warehouse reported an increase in inventories.    

Sky shares are higher after it was reported on CNBC that Disney want to own all of Sky. 21st Century Fox are considering off-loading some of their assets to Disney, and it seems that Disney are keen on Sky – 21st Century Fox own a 39% stake in Sky.

Hammerson stated it is interested in buying Intu Properties for £3.4 billion. The move would create a Real estate investment trust (REIT) that would boast several shopping and retail centres under its banner. The attempted takeover over comes at a time when there are question marks hanging over the state of the British commercial property market – as Brexit makes the outcome uncertain.  Shares in Hammerson are down 5.9%, while shares in Intu Properties are up 13.6%.

Saga share have fallen by 21.8% after the warned that profits will be lower this year as the collapse of Monarch airlines and a ‘challenging insurance broking’ business will hurt the bottom line. Despite the turbulence, the company expects to maintain its dividend policy – which is somewhat reassuring.   



The Dow Jones, S&P 500 are broadly unchanged, while the NASDAQ 100 is up 0.25%. Tech stocks have underperformed lately, so now it appears they are playing catch up. Volatility is low across the board, and the volatility index (VIX) is down 0.8%.

Home Depot shares are down 1.66% despite the company announced a $15 billion share buyback. The stock hit an all-time high on Friday, so a bit a profit taking is understandable.

The ADP employment report for November showed that 190,000 jobs were added. The consensus was for 185,000 to have been added, and 235,000 were added in October. It was a respectable figure, and it puts the market is an optimistic mood for the US non-farm payrolls report on Friday.



EUR/USD is being dragged lower by the rally in the US dollar. The greenback is gaining ground as traders are hopeful the US government will pass the pro-business tax proposals. Next week the Federal Reserve will meet and they are widely expected to raise interest rates, and traders don’t want to be short the US dollar going into that meeting.

GBP/USD is still suffering because of the lack of certainty surrounding Brexit. The Irish border issue is proving to be a tricky hurdle for Prime Minister May as she wants to progress onto trade talks, but Mrs May needs to keep Northern Ireland’s Democratic Unionist Party (DUP) on side – as they are keeping the Conservatives in power.  



Gold is weaker for a second day as the strength of the US dollar is putting pressure on the metal. The Fed meeting next week is also playing on dealers’ minds are since a rate hike is very much anticipated, traders don’t want to call the feds bluff. Gold is near a two-month low, and a break below $1261, could see the metal target $1244.

WTI and Brent Crude were in decline throughout the session, but the sell-off was accelerated buy the latest energy information administration figures. The report showed a 5.61 barrel drop in US oil stockpiles, but gasoline inventories jumped by 6.78 million barrels – and it was this report that triggered the decline.


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