The FTSE 100 hit a two-month high today, after a strong performance from BP propelled the market higher, while there was also a rise in consumer, mining and financial stocks.

Europe

Equity markets in Europe have extended their rally today despite the ongoing economic malaise in the eurozone. Equity traders have shrugged-off the so-so economic updates from the currency bloc, as they believe the European Central Bank will adjust their policy should the situation deteriorate. 

BP revealed a 65% rise in underlying replacement cost profit to $3.47 billion, which comfortably topped the $2.63 billion that analysts were expecting. The group still intends to complete $10 billion worth of disinvestments over the next two years. Net debt rose by over $6 billion, and that is likely to have been related to the acquisition of the BHP shale assets. Despite the rising debt level, the fourth-quarter dividend was increased by 2.5%, and an additional $355 million worth of shares were purchased last year. Returns to shareholders should keep investors sweet, but the company’s creeping debt level could catch up with them down the line.

Ocado shares are higher today even though the group’s loss widened to £44.4 million, from £9.8 million last year. Revenue for the period jumped by 12.3%. The firm saw an increase in development costs at its warehouses and IT systems, and that was responsible for the drop in earnings. The group has secured a number of big partnerships in the past couple of years, and the company is in talks with Marks and Spencer too. The underlying business is performing well as total customers and total order volumes ticked up by 11.8% and 12.1% respectively.  

DCC announced that operating profit for the third-quarter was ‘significantly’ ahead of the previous year, and the group said that full-year operating profit will be in line with current market expectations.

US

The Dow Jones and S&P 500 have hit levels not seen since early December. This week is likely to see low volatility the China celebrates the Lunar New Year. The US and China is still stuck in a trade spat, but for now traders are taking the view that no news is good news. Last week, we heard that that President Trump would like to strike a deal with Beijing before the March deadline, but no additional details have been released.

Alphabet shares have slipped after the company posted fourth-quarter figures last night. EPS was $12.77, which easily topped the $10.82 estimate, and revenue came in at $39.28 billion, versus the consensus estimate of $38.93. Despite the solid numbers, the stock dipped in after-hours trading, as operating margin came in at 21%, while traders were expecting 22%. It's also worth bearing in mind that last year’s fourth-quarter operating margin was 23%. The internet giant ramped up capital expenditure by $7.1 billion in the latest quarter, as it jumped by over 90% last year, and that also weighed on sentiment. 

Viacom confirmed that adjusted EPS increased by 8.7% to $1.12, which topped the consensus estimate of $1.03. Revenue for the period edged up slightly to $3.09 billion, but dealers were expecting $3.11 billion. Gross debt dropped by nearly 19%, but the group expects single digit growth in domestic affiliate revenue. The stock is marginally higher today.    

FX

GBP/USD is in the red after the UK services PMI report slipped to 50.1 in January. Economists were expecting 51. The reading was the weakest since September 2016. Given the lack of clarity of surrounding Brexit it is no surprise that activity has tapered off.

EUR/USD has been hit by the underwhelming service reports from the eurozone. Italian services PMI slipped to 49.7 - it is now in contraction territory. The French report dropped to 47.8, which slightly topped the 47.5 expected. The German report showed an improvement in January to 53, up from 51.8 in December.

Commodities

Gold is a little higher today as the metal has recouped some of the ground it lost in the previous two sessions. The commodity has been pushing higher since mid-November, and if the bullish move continues it might target the $1,335 area. 

Oil has drifted lower as traders as cautious about demand in light of yesterday’s disappointing factory order figures from the US. The energy market has enjoyed has experienced relatively low volatility in recent weeks, but if Brent Crude and WTI hold above their respective 50-day moving averages, the outlook should remain positive. 
 

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