News

FTSE 100 outperforms, Boeing reveals new CEO

The FTSE 100 is enjoying a broad based rally as consumer, industrial, mining as well as health care stocks are higher this afternoon. 

Europe

Market movements are low as some traders are tapering off their activity as Christmas is getting closer. Continental equity markets are largely showing small losses. Volatility has been low despite the news that China will lower tariffs on more than 850 US products come January. It is almost as if traders are indifferent to the positive US-China news.  

NMC Health is in better health today after the company announced it is launching an independent review of its financial situation. The decision was motivated by the desire to show off to the market that the group has nothing to hide. The stock has come under enormous pressure recently as a report was doing the rounds that the firm’s financial health is unsound. The update suggested the group’s financial statements were not a fair and accurate representation of the company’s position.  NMC have always maintained that the report was inaccurate. The announcement about the independent review has boosted sentiment as the move projects an air of confidence.    

There is talk that Aviva could come under pressure from activist investors. Maurice Tulloch, the firm’s CEO intends to operate the general insurance and life assurance business separately, while his predecessor wanted the divisions to be run as one unit. An article in a newspaper over the weekend said it was a possibility that activist investors might seek to break-up the company.

AA announced that Kevin Dangerfield will start as CFO in January. Mr Dangerfield will take over from Mark Strickland – the interim CFO.   

US

The news that Beijing will reduce their levies on more than 850 US imports next month has lifted the mood on Wall Street. The Dow Jones and S&P 500 are showing modest gains on the back of the news. Traders shrugged-off the poor durable goods report. The headline reading showed a 2% fall in November, which was nowhere near the 1.5% increase that economists were expecting. The report that strips out transport came in at 0.0%, and the consensus estimate was 0.2%. 

Boeing confirmed that Dennis Muilenburg has resigned from the company amid the 737 Max crisis. David Calhoun has been named as CEO as well as president. The industrial giant is trying to put the 737 Max catastrophes behind it, and the removal of Muilenburg is a part of that strategy, but the group will find it tough to shake off the reputation of the two disasters. The stock is higher on account of the news. 

JD.com said it is considering doing an IPO for its logistics division, and the move could potentially raise up to $10 billion. Last month the e-commerce giant posted strong quarterly figures. In the three month period, net revenue jumped by more than 28%, topping forecasts. The firm has entered new businesses like supermarkets and convenience stores, so it is possible they are contemplating an IPO of the logistics unit to fund other aspects of the organisation.

Blackrock is branching out into China as it has announced a wealth management joint venture in the country. It was reported the finance house will be teaming up with the China Construction Bank as well as Singapore’s Temasek Holdings.  

FX

GBP/USD has sold-off as the profit taking on the pound continues. Sterling enjoyed a very bullish run between early September and the election night. Dealers have been dumping the pound lately as they have been unwinding their long-positions. Sterling is now below the 1.3000 mark, which is a sizeable pullback from the 1.3500 area – post exit poll, but keep in mind it was sub 1.2000 three months ago.    

EUR/USD is in the red on the back of a broad move higher in the US dollar. The single currency has been broadly moving higher against the greenback since late November, but it has struggled to takeout the 1.1179 – 1.1200 area. On the other side of the coin, the currency pair has found support in the 1.0980 – 1.1000 zone.   

Commodities

Gold has been edging higher since late November and as of today it has made a decent break above the $1,480 mark – a region it has struggled to clear recently. Lately, the metal has been trading in a small range, but while it holds above the 50-day moving average at $1,477 the bullish move should continue, and it might retest the $1,500 area.

The oil market, like other markets has been quiet today. WTI plus Brent crude hit three month highs recently on account the US-China trade deal, so the latest news that Beijing will trim tariffs on US imports in 2020 should bode well for the oil market. China is the largest importer of oil in the world so while it’s trading relationship with the US is on more stable ground, it is likely to equate to increased demand. 

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