Stock markets in Europe are a mixed bag as there is no clear direction in investor sentiment. The markets are lacking a common theme across the board.  

Europe 

Associated British Foods come under a bit of pressure today after sugar division weighed on the performance of the clothing department. Total third-quarter revenue rose by 16%, and Primark registered a 9% jump in sales, but the sugar business saw a 13% fall in revenue. It’s the same old story at Associated British Foods, as Primark is the star performer, while the food division lags. The share price is down 3.7%

Whitbread is also a tale of two companies, as the Premier Inn is growing, while Costa Coffee is enduring a decline in footfall. The group saw like-for-like (LFL) sales increase by 0.3% in the UK. Sales at the Premier Inn rose by 0.5% on a LFL basis, while same-store-sales at Costa Coffee declined by 0.1%. There is speculation the underperforming Costa Coffee could be spun off, as activist Investor Sachem Head Capital Management owns at 3.4% stake, and is pushing for the sale. The stock is up 3.7%.

Estate agent Countrywide Group stated they suffered a ‘disappointing’ fourth-quarter due to a weak performance in London and south east England. Sales and letting revenues for the group are expected to be down 17%, and profits are anticipated to decline by 22%. The share price is down 18.8% today.

Airbus shares received a boost after Emirates placed a provisional order for 20 A380 airplanes, and there is an option for 16 additional planes. The share price of Airbus hit a new all-time high this morning on the back of the announcement, but has since pulled back a small bit.

US

US equities have taken a breather as profit taking sets in. The Dow Jones, S&P 500 and NASDAQ 100 are all slightly lower on the day.

Morgan Stanley posted their latest quarterly figures and traders are reacting positively to the update. Adjusted earnings per share (EPS) were 84 cents, while the consensus was for 77 cents. The revenue came in at $9.5 billion, which was slightly above estimates. Earnings from fixed income, commodities and currencies (FICC) trading was $808 million, but analysts were anticipating $1.05 billion. The bank will incur a cost of $990 million in relation to the changes in the US tax laws. The update from Morgan Stanley was reasonably similar to other banks, as a drop in FICC earnings and a fresh tax bill has been common this reporting season. The share price has been in an upward trend for two years, and the bullish sentiment is likely to stay.

US jobless claims have fell by 21,000 to 220,000 – a level not seen since before the credit crisis. This is further proof the US jobs markets in on the mend. The US housing data was a little on the mixed side. The housing starting in December fell to 1.19 million from 1.29 million in November, while building permits ticketed up to 1.3 million from 1.29 million. It was likely the cold weather slowed down the building rate last month, but the permits figures tell us the demand is high.

FX

EUR/USD is higher on the session due to the weakness in the US dollar. There were no major economic announcements from the eurozone today, and the euro pushed higher as the greenback gave up some of its gains from the past few sessions. Even though the US had respectable jobless claims numbers, the US dollar still slipped post the release.

GBP/USD also enjoyed a positive session as the US dollar slides. The pound has been pushed around by the US dollar today as there was a lack of economic updates from the UK today. The pound has been in a robust upward trend for the past nine months, and yesterday it printed a fresh 18 month high versus the US dollar, so we may see fresh buyers enter he fold.

Commodities

Gold is fractionally higher on the back of the weaker US dollar, but the metal is undergoing low volatility. Gold rallied to a new four month high on Monday, and has slowly retreated since. The upward trend from mid-December is still in place, and while it holds above the $1300 mark, its outlook could remain positive.

WTI and Brent Crude oil are lower on the session as traders continue to take profits on the strong oil market. US oil inventories dropped by 6.86 million barrels and gasoline stockpiles increased by 3.62 million barrels. This added volatility to the oil market. It is worth noting that US oil production rose by 258,000 barrels last week, which is fuelling concerns about ramping up production.

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