Just Eat

Consumer confidence at an 18 year high, while US jobless claims hit another multi decade low saw the Dow finally surpass its previous all-time highs from earlier this year, and in the process pull the S&P500 to new records as well.

This rising tide of optimism, despite the fractious back drop of continued scattergun tweeting from President Trump, has had the effect of lifting all boats, pulling Asia markets higher with the Japan Topix hitting a four month high.

Markets in Europe which had until recently diverged from US markets are also set to enjoy a decent week with the DAX hitting its highest levels this month, as well as a second successive weekly gain, while we’ve seen European markets open higher this morning taking their cues from last night’s US session and this morning’s positive Asia session.

Today’s gains have been led by the basic resource stocks and financials which are benefitting from higher commodity prices and rising yields, led by Anglo American, Glencore and Royal Bank of Scotland.

In company news Royal Dutch Shell is said to be in talks to sell $1.3bn of its Gulf Coast assets, while winning an LNG deal to supply a plant in Panama.

The auction process for Sky is due to start today with 21st Century Fox and Comcast both gearing up to set out their stall for the UK broadcaster.

On the downside Just Eat’s share price is down sharply to one year lows on reports that Uber is said to be looking at buying Deliveroo.

Smith’s Group is the latest company to warn of the effects currency swings on its costs, following on from Diageo yesterday, as it reported that profits fell 8%, despite a rise in underlying revenues. The company reported that it would be selling its water bottling business for $40m, while its medical business continued to underperform. 

On the data front we’ve seen evidence in recent months that the current trade tensions have affected economic conditions in Europe with the latest print of French Q2 GDP showing that the French economy slowed sharply in the first half of this year, after a decent rebound in 2017.

Two successive quarters of 0.2% was confirmed this morning, while the latest manufacturing and services flash PMI’s for September showed little evidence that this might improve in Q3, falling back to 52.5 for manufacturing and 54.3 in services.

In Germany it appears to be a similar story for manufacturing with a further softening to 53.7 from 55.7, though services was slightly more resilient, rising to 56.5 from 55.

Just when you think ones estimation of politicians can’t get any lower, events like Salzburg cause one to reassess that view. The hysteria of headlines like “blind Brexit” and “EU ambush” in Salzburg would ordinarily have created a sense of enormous uncertainty around sterling, but by and large, despite some early selling pressure, the pound appears to be taking the negative headlines in its stride, as traders dismiss the events as the usual political theatre that surrounds these events. When all of the hyperbole is stripped away the reality is that we’re no nearer but also no further away from where we were on Monday.

Despite this it is hard not to get the impression that politicians of all persuasions on both sides of the argument care more for their own political narrow narratives than the people they profess to serve. What have we done to deserve such a shower?

US markets look set to pick up where they left off yesterday and open at new record levels later today, following on from yesterday’s decent data, which has seen US yields push up closer to multi year highs, the 2 year yield now at 2.81%, while the 10 year yield at 3.07%.

The latest manufacturing and services PMI are expected to show further improvements with a rise to 55.1, and 54.9 respectively as the US economy continues to benefit from the tax cuts earlier this year.

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