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Wetherspoons softer over cost warning

European equity markets are higher today as the mood is still cautiously optimistic. 

Traders are continuing to tread lightly as worries about a possible trade war are still doing the rounds. Traders are tip-toeing around this morning as there is talk that President Trump will target China with tariffs. While no new developments have taken place, some bargain hunters are stepping in. 

JD Wetherspoons shares are lower after the company revealed a solid rise in profit, but the company also stated that costs are likely to rise and that weighed on investor sentiment. Profit before tax jumped by 20% on a 3.6% rise in revenue. The interim dividend was left unchanged. The pub chain said it expects costs to tick up in the second-half as higher business rates and the sugar tax will be a factor. The share price has been in an upward trend for two years and today’s dip may see new buyers enter the fold.

Berkeley Group reaffirmed its profit forecasts and stated that the company is in a ‘resilient position’, but the comments about buy-to-let mortgage terms and planning permission policies took away from the financial health of the company. The fact the homebuilder criticised the economic environment suggests it is a little worried about the sector as a whole. The stock is down 4.7% today and has been in decline since January, and if the bearish move continues it could target the 3,600p region.

In the US later today, Tiffany & Co announces its fourth-quarter figures. 

At 12.30pm (UK time) the latest US housing starts and building permits figures are released, with consensus estimates at 1.29 million and 1.32 million respectively.

EUR/USD slipped slightly after the inflation rate in the eurozone fell to 1.1% from 1.3%, against the consensus estimate of 1.2%. This is further proof that demand in the region is fading, and it could prevent the European Central Bank from altering its policy.

We are expecting the Dow Jones to open up 7 points at 24,880 and we are calling the S&P 500 up 4 points at 2,751.

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