Equity markets in Europe are mixed today as some uncertainly is creeping back into the geopolitical outlook.

Relations between North Korea and the US have deteriorated a little in recent days, and this is encouraging some investors to exit their equity positions.  

Ocado has announced a tie-up with US-based Kroger, continuing its international expansion operation. The deal will give Kroger a 5% stake in Ocado, and in turn the British company will gain exposure to the US market. The two companies are seeking to set up three warehouses, before expanding that to 20. This gives an indication of how aggressive the roll-out plan is. Ocado shares reached a new high this morning, and are up a whopping 42%.

Royal Mail shares are in the red this morning, as the letter delivery operation continues to be weak. The company revealed a 2% rise in revenue and a 1.2% increase in adjusted pre-tax profit. GLS, the continental-focused parcel delivery business, saw a 10% jump in sales, while the British business, UKPIL, saw no growth in revenue. The company warned that transformation costs would be at the upper end of the forecast of £130-£150 million, and this is adding to the poor investor sentiment. The total dividend was boosted by 4%, and the firm’s cash position is comfortable. The stock has been in an upward trend since November 2017, and today’s pullback may entice new buyers.

Burberry revealed solid full-year figures yesterday, and today several investment banks have upped their price targets for the fashion house. Burberry’s share price has been pushing higher since February, and this morning it hit a level not seen since November 2017. Should the bullish move continue, it could retest the 2,000p mark.

The US dollar index has pulled back a little as traders book their profits. The greenback has enjoyed a stellar run recently as the US 10-year government bond yield is north of 3.1% –  a level not seen since 2011. EUR/USD and GBP/USD are being helped by the dip in the greenback, but both currency pairs have yet to snap out of their recent bearish moves.

We are expecting the Dow Jones to open down 40 points at 24,728 and we are calling the S&P 500 down 3 point at 2,719. 

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