European stock markets are largely lower today. 

Europe

The US markets are closed as the country celebrates Martin Luther King Jr Day, so traders in this part of the world are mostly sitting on the fence. Trading ranges have been low and there hasn’t been much in terms of news flow in Europe to grab traders’ attention. We are unlikely to get an accurate picture of investor confidence until our American counterparts are back in full-swing tomorrow. The IMF now predicts the global economy will grow by 3.3% in 2020, which was a sight downgrade grade from the previous guidance of 3.4%, dealers shrugged-off the news. 

Fever-Tree shares have taken a knock today after the company said that full-year revenue would miss forecasts. Judging by the size of the sell-off in the share price, you would be forgiven for thinking the company was undergoing major issues, but it is performing well overseas, as it is the UK division that is holding the group back. The US, mainland Europe, and the rest of the world posted increases in sales of 33%, 16%, and 32% respectively. While the British operation registered a 1% fall in sales. It is possible the UK market is getting close to high capacity. The group described the Christmas period as subdued and the outlook for the first-half will remain ‘challenging’.

Sirius Mineral have agreed to the £405 million takeover offer from Anglo American. The group was facing funding crisis as it reached a dead-end in terms of financing, and without the Anglo bid it faced the possibility of bankruptcy. No firm likes to feel as if they were snapped up near the low, but then again they cancelled a bond issuance four months ago which was essential to unlock further funding. 

Intu Property said it has held ‘constructive talks’ with shareholders as well as new potential investors about a possible cash call. It was reported in one newspaper over the weekend the company could be seeking to raise £1 billion. Intu’s investor sentiment has been hit hard by its level of debt, and it is thought that the funds raised could be used to bolster the balance sheet. The stock fell to fresh low today but has recovered somewhat, but the company might struggle to attract fresh investment.

Lamprellshares are higher following the news the company has been awarded two contracts from the International Maritime Industries Co. The London-listed firm will build two oil rigs, and keep in mind the inquiries about this potential contract started approximately two years ago. The reasonably positive news from Lamprell was welcomed by traders seeing as the company issued a profit warnings last week.      

BAE Systems shares are one of the best performers on the FTSE 100 today on the back of the news company is expanding through acquisitions. The British group will acquire the GPS division of Collins Aerospace for £1.5 billion, and the unit expected to generate $360 million in revenue this year. BAE Systems will buy the airborne tactical radio business from Raytheon for $275 million.

Sirius Mineral have agreed to the £405 million takeover offer from Anglo American. The group was facing funding crisis as it reached a dead-end in terms of financing, and without the Anglo bid it faced the possibility of bankruptcy. No firm likes to feel as if they were snapped up near the low, but then again they cancelled a bond issuance four months ago which was essential to unlock further funding. 

US

The markets are closed as it is a public in the US. 

FX

It has been a dull day on the markets today and the currency markets are no exception. The fact that many US traders are on holidays has encouraged others to wait on the sidelines. Even with the US on holidays, it has been a slow news day here in Europe. German PPI improved to -0.2% from -0.7%, which is encouraging to see that it is improving, but keep in mind the reading is still negative. The PPI reading might trickle down to a move higher in CPI in the months to come. EUR/USD as well as GBP/USD haven’t moved much today.

Commodities

WTI and Brent crude are higher this afternoon on the back of unrest in Iraq and Libya. The fact there are output issues in two oil producers has been a double whammy for the energy market, but then again oil dealers have seen huge volatility in recent weeks, and if anything, today’s upward move is relatively small when compared with the moves witnessed during the Iranian tensions.   

Gold has crept higher this afternoon as the metal remains in favour with traders. The asset was under pressure early last week as the fear-factor surrounding Iran faded, but it seems to have found a floor in the $1,536 region, and while it remains above that metric it should extend its gains.  A rally from here might run into resistance at the $1,580 mark. 

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