Stocks in Europe are in positive territory as optimism is seeping into the markets. 

Europe

Despite the sluggish start equities got off to today, the sentiment turned positive, and now they are firmly in positive territory.

 

Carmakers like Volkswagen, Daimler and BMW are underpinning the rally in the DAX. Yesterday Volkswagen announced plans to invest €40 billion in electric vehicle technology. It wouldn’t be a surprise if others in the sector follow suit. Today, the VDA, the German Association of the Automotive Industry claimed that it will enjoy record output in 2018.

 

Shares in easyJet are up 5.6% after the airline revealed a 9.7% rise in passengers to 80.2 million – a record high. Revenues were up 8.1% and pre-tax profits jumped by 3% - when you exclude the adverse currency movements. The share price has been pushing higher over the past 13 months, and if it clears the 200-week moving average at 1430p, it could target 1600p. 

 

Compass Group shares have been hit today even though the company posted an impressive set of full-year figures. Profits before tax rose by 18.1% and revenues jumped by 15.1%. The dividend was increased by 5.7%. The figures were good, but the stock still gapped lower, and it has been in a bearish move since June, and it could target 1425p.

 

US

The Dow Jones, S&P 500 and NASDAQ 100 have hit all-time highs as the bullish sentiment returns to the American markets. The turnaround in global equity markets could put the US indices back into the habit of producing record highs on a regular basis.  

 

Lowes had a strong third-quarter as earnings per share (EPS) was $1.05 and revenue was $16.77 billion, while analysts were expecting $1.02 and $16.59 billion. The same store sales for the period was an increase of 5.7%, and the home improvement retailer saw had hurricane-related sales of $200 million. Home Depot posted a 7.7% rise in same-store sales recently so traders may have had high hopes for Lowes. The share price of Lowes is down 1.03%, but it has been broadly trading higher since early 2016, so it could target $90.

 

US existing home sales for October was 5.48 million, up from 5.39 million in September, and it topped the estimate of 5.42 million. The US housing market is strong even though the Federal Reserve is tightening monetary policy, and the markets are expecting another rate hike next month.

 

FX

GBP/USD is up on the day and it was helped along by the much stronger than-expected industrial order expectations figures from the Confederation of Business Industry. The November report came in at 17 and that was a major improvement on October’s reading of -2, and the consensus was 3.  The talk that Theresa May is willing to pay a higher ‘divorce bill’ to the EU in exchange for trade talks starting next week is adding to the bullish sentiment of the pound.

 

EUR/USD is largely unchanged on the session, and given the US dollar is broadly lower today – it still highlights the relative weakness of the single currency. It was a quiet day in terms of economic data from the eurozone, and the trading range has been tight. 

 

Commodities

Gold is a touch higher today after the recovered some of the losses in incurred yesterday, when it was dragged lower by sell-off in silver. The dip in the US dollar is adding to the bounce back today. The metal has been grinding higher since late October, and even though it hasn’t made any great strides higher, it has been making a series of higher lows – which fits in with the move throughout 2017.

 

WTI and Brent Crude oil are higher today as traders are nervous about the OPEC meeting next week, whereby the production cut could be extended beyond the end March 2018. Adding to the uncertainty about oil supply, the political situation in Iraq is volatile, and oil production fell last month when fighting broke out Iraqi and Kurdish forces. The oil market has been in a steady upward trend since June, and the bullish move is still in place.

 

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