Stock markets in Europe are a mixed bag this morning as investors access the political landscape.
The shutdown of the US government hasn’t spooked investors as there was similar muted reaction the last time it happened in 2013, but nor has it given traders a reason to buy into the market. In Germany the SPD have agreed to begin formal talks with Angela Merkel’s CDU. This is a step in the right direction for German politics and traders will be watching it closely, as it could jolt the DAX higher.
Bookmakers are under pressure this morning as there is talk Matt Hancock, the new Culture Minister is looking to cut the maximum stake on fixed-odds betting from £100 to £2. There are concerns this particular type of betting is highly-addictive and Mr Hancock previously described it as a ‘social blight’. Shares in William Hill, Ladbrokes, GVC Holdings and Paddy Power Betfair are lower on the day.
Shares in Ocado are up 12.9% today after the announced a $24 billion-revenue-a-year contract with Sobeys – the second second-largest food retailer in Canada. Ocado will have to increase capital expenditure by £15 million to accommodate the new partnership. The announcement of the Canadian tie-up comes two months after the company revealed its first international partnership with Groupe Casino of France. Ocado tried to obtain international deals for many deals, and now they has secured two big contracts in quick succession, which has boosted investor confidence.
The US dollar is drifting lower this morning, which fits in with the theme of the past few months. The shutdown of the US government isn’t helping the greenback, but at the same time it hasn’t triggered a severe sell-off. The GBP/USD and the EUR/USD are mixed as we are not expecting any major economic announcements from the UK or the eurozone today.
At 1.30pm (UK time) the US will announce the Chicago Fed national activity index, and traders are expecting a reading of 0.44, up from 0.15 in November.
Haliburton will release their quarterly earnings today.
We are expecting the Dow Jones to open down 65 points at 26,006, and we are calling the S&P 500 down 5 points at 2805.
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