Europe

The losses endured today are a continuation of Friday’s falls as dealers lock-in the profits they made from last week. The bullish move of last week was mostly fuelled by the actions of Chinese state bodies – injecting liquidity, imposing shorting bans, and promising to cut import levies, but now that stock markets are left to fend for themselves, they are moving lower.

Intu Properties said they are in talks with Link Real Estate – a Hong Kong listed property company about an equity raise. Intu has been struggling recently as the increase in online shopping has dented footfall at its retail sites. In recent years the firm has sold-off properties to raise cash and pay down debt. If your business is underperforming, the last thing you need is a high debt level as interest repayments are mandatory, unlike dividends – possibly why the group is seeking an equity deal.    

NMC Health shares are in demand today after it was reported that the group has received two preliminary approaches – KKR as well as GK Investment Holdings have expressed interest in acquiring the group. Even though there is only the possibility of an offer being made, the stock has surged on the news. In mid-December, Muddy Water issued a report claiming it has serious doubts over the strength or the firm’s balance sheet. Since then NMC’s share price has dropped in excess of 65%. An independent review of the health firm’s finances is being carried out, but the findings have yet to be released.

Ireland’s general election at the weekend has made for interesting news as it appears the left-wing party, Sinn Féin, have won the popular vote. The vote caught many people by surprise, not least the party themselves – as they didn’t field enough candidates to win a majority. It is seems very likely the left-wing party will be a part of the next Dublin government, so traders are fearful that free enterprising-Ireland, might become less pro-business. Bank of Ireland Group plus AIB Group shares are in the red today.

US

Traders on Wall Street are cautiously optimistic as they are buying the market even though the coronavirus crisis in deepening. US equity markets were in a stronger position going into the crisis, and they didn’t suffer as much when traders were spooked at the end of last month. It is possible the solid jobs report from Friday is playing on traders’ minds. 

Tesla shares are up as the Shanghai factory reopens amid coronavirus crisis. There was also a report doing the rounds that Alphabet, Google’s parent, could possibly be interested in making a bid for the auto-maker. The tech giant has deep pockets and they are keen to derive a higher portion of their income businesses other that advertising. But at the same time, Tesla might not be keen to be taken over now that the business has taken a positive turn, and the outlook is optimistic  

Edgewell Personal Care shares are up more than 25% on strong quarterly results. The group called off the merger with Harry’s Inc too. The figures were very impressive as first-quarter EPS were 55 cents which smashed the 29 cents forecast. Revenue for the three month period was $454 million, topping the $445.9 million forecast. Edgewell now predicts that full-year EPS will be $2.95-$3.15, topping forecasts. The group called-off its planned merger with Harry’s Inc as the Federal Trade Commission were seeking to block the move. 

FX

GBP/USD seems to have found support from the 100-day moving average at 1.2890, and has rebound from the area. Sterling has been largely under pressure from the US dollar since the end of January, and now we seeing a bit of barging hunting. There were major economic reports from the UK or the US today.

EUR/USD is in the red again as the euro’s bearish run continues – it has fallen to a level last seen in early October. Italy posted poor industrial production figures this morning as the update showed a contraction of 2.7%.

USD/CAD is higher on the session despite solid housing data from Canada. Housing starts for January increased to 213,200, while the December report for building permits showed growth of 7.4% - both updates topped forecasts.  

Commodities

Gold has marginally built on the gains it racked up last week. In recent sessions traders have become more risk averse, so we have witnessed a dip in stocks, and an increase in demand for the metal – as it is considered to be lower risk.

WTI as well as Brent crude are in the red as perceptions about China’s demand continues to dominate the headlines for the commodity. The health crisis is getting worse in China as the death toll has exceeded 900, so dealers are fearful the knock-on effect to the economy is going to be huge. Russia are out of joint with the rest of the OPEC+ as they would like more time to consider the proposal of cutting output by 600,000 barrels per day. 

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