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FTSE 100 lags as Europe hits new six month highs, Qualcomm soars

The FTSE 100 is underperforming the rest of Europe as the mining sector is holding the London equity benchmark back. 


The DAX and the CAC 40 have hit fresh six month highs as traders latched onto the stronger-than-expected growth figures from China. The Chinese economy grew by 6.4% in the first-quarter, topping the 6.3% forecast. Industrial production, retail sales and fixed asset investment all improved on the month, but the figures might not be as good as initially thought. State-owned investment compensated for lower private investment, and big ticket retail sales items like cars declined.   

Mediclinic shares are in demand today after the company said that underlying earnings are tipped to decline by 3.5%, and that compares with the 4.8% fall that equity analysts had estimated. The firm is experiencing revenue growth in all regions, but it cited tougher regulations in Switzerland as a reason for lower earnings. The stock has been in a steady decline since July 2016, and it fell to an all-time low in January, but it if breaks above the 340p area, it might push higher. 

Bunzl shares slumped today after the company posted a slowdown in first-quarter sales. In the first three months, the firm registered a 4% increase in sales, but when you remove currency movements, it only grew by 2.5%. The US operation posted minimal sales growth, and the firm cautioned about ‘mixed’ macroeconomic conditions. The stock gapped lower this morning, but if it holds above the 2,150p region, the wider upward trend might remain intact.   

BHP Billiton lowered its iron ore production forecast to between 265 million tonnes and 270 million tonnes, and the previous forecast was for between 273 million tonnes and 283 million tonnes. The possibility that Vale’s Brucutu iron ore mine will restart production has weighed on BHP sentiment too.

Pendragon shares are in the red after the new management announced an operational review of the business after the latest quarter showed that margins are under pressure. The group cited a challenging car market for the decline in performance. UK new car registrations declined by 3% last month, and uncertainty surrounding Brexit is playing is weighing consumer sentiment.


The NASDAQ 100 has reached a record high as the tech boom continues. The S&P 500 is a touch higher, while the Dow Jones is being dragged lower by healthcare and pharma stocks. It hasn’t been an exciting day in terms of macroeconomic news, but the trade deficit narrowed.  President Trump will be happy with the update. The reduction in the trade gap was partially down to a surge in aircraft sales, and in light of the Boeing disaster, the numbers might look different next month.

Qualcomm shares have rallied again on the back of yesterdays’ news that the company has settled a long-running disagreement with Apple. The move will see Qualcomm chips being used in iPhones again. Apple made a one-off payment to Qualcomm but the size of the payment was undisclosed. 

Netflix shares are a little lower after the company reported solid quarterly figures last night, but the guidance was soft. EPS came in at 76 cents, which comfortably topped the 57 cent forecast, revenue jumped by 22.2% to $4.52 billion, and the consensus estimate was $4.50 billion. Domestic and international subscriber additions exceeded forecasts. The streaming service predicts second-quarter EPS of 55 cents, while analysts were expecting 99 cents. 

Morgan Stanley announced solid quarterly results. EPS were $1.39, which easily topped the $1.17 forecast, revenue was $10.3 billion, and the consensus estimate was $9.94 billion. The bank’s wealth management division was a major contributor to the earnings, and it is encouraging to see that the bank is focusing its attention away from trading.

Pepsico shares hit an all-time high after the firm declared solid results. EPS and revenue for the quarter, and the company’s decision to focus on healthier snacks is paying off. The group maintained its outlook too.


EUR/USD is higher on the session thanks to the weaker US dollar. Eurozone CPI and core CPI came in at 1.4% and 0.8% respectively, and both met forecasts. The cost of living in the eurozone has been slipping, and that is a worry, as it suggests that demand is weakening.

GBP/USD is in the red even though UK inflation held steady at 1.9%, while economists were expecting it to tick up to 2%, the core reading also remained unchanged at 1.8%, while traders were predicting 1.9%.


Gold is in the red again as the metal’s sell-off continues. For the past two months the commodity has been be pushing lower, and if it takes out yesterday’s low it might pave the way for further losses. A break above the $1,310 region, might be a sign the recent bearish move is over.

Oil saw a jump in volatility in the wake of the Energy Information Administration report being announced. Oil inventories dropped by 1.39 million barrels, while the consensus estimate was for a build of 1.71 million barrels. Gasoline inventories decline by 1.17 million barrels, while traders were expecting a 2.1 million barrel decline.


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