Stocks are set to finish the day on a positive note as traders have shrugged off the concerns about the state of the global economy.

Europe

The Japanese market ended the session over 2% higher, and that put European markets at ease. The ECB’s Olli Rehn said that monetary policy is likely to stay supportive for ‘quite some time’ and that helped investor confidence too.

Ferguson shares sold-off sharply today after the company issued underwhelming figures. The group announced a 7.7% rise in first-half profit, which undershot equity analysts’ forecasts. Adding insult to injury, the company said it now predicts that full-year profit will be at the lower end of estimates. Organic revenue for the first six months increased by 6.5%, but the group cautioned that growth in the second-half is likely to cool down.

Ocado Group shares hit another all-time high after the group announced that it struck a deal with Coles of Australia. The online grocer is planning on building a fulfilment centre in Melbourne and Sydney, with operations expected to be underway within four years. This is the fifth joint venture that Ocado have forged in the last 18 months, and their business model is clearly popular around the globe. The stock has been enjoying a bullish run recently and it if it continues it might target the 1,400p area.

AG Barr revealed a refreshing set of numbers as full-year revenue and underlying pre-tax increased by 5.6% and 2.5% respectively. High demand for Irn-Bru helped the carbonates division post an 8.9% rise in revenue. Gross margins were squeezed a little and they fell by 43 basis points to 43.9%. AG Barr reiterated that 99% of their soft drinks are exempt from the so-called sugar tax. The stock has been in an upward trend since June 2016, and if the bullish move continues it might retest the 814p region.

Wirecard shares soared after an external legal firm concluded that there was no material impact on the financial reports. The stock has been under pressure recently because of the allegations of fraud, and today the report said there were no ‘findings of roundtripping or corruption’. 

US

Stock markets are higher this afternoon as the US 10-year yield has risen and that has left traders fell fearful about a recession in the wake of the recent inverted yield curve. The positive sentiment has returned to Wall Street after the muted finish last night. 

The economic indicators from the US were disappointing. Building permits slipped from 1.34 million to 1.29 million, and the housing starts figure dropped to 1.16 million from 1.23 million. The Case Schiller house price report showed that prices grew by 3.6% on an annual basis in January, which undershot the 4.3% forecast. The Conference Board consumer confidence report dropped back to 124.1, and dealers were expecting 132.1. All the updates point to a slowing economy, which is worrying as traders are already on edge about a recession in light of the recent inverted yield curve.

Bed Bath & Beyond shares have jumped today after a group of activists investors are pushing to replace the board of directors, and then the consortium would like to sell-off underperforming assets. The investors feel the firm has fallen behind some of its competitors as online sales have become a more important component part of the business.  

McDonalds announced plans to buy Dynamic Yield for more than $300 million. The acquisition will help the fast food giant with its digital drive-thru menu – allowing them to change depending on the weather or the state of traffic. The size of the deal stood out, as it was the largest acquisition the fast food frim carried out in two decades. The move is a continuation of the focus on technology in the business.

FX

EUR/USDedged lower through the session, and the comments from Mr Rehn, added to the decline. The German GfK consumer climate report edged lower to 10.4 in March, down from 10.7 in February. Today’s update was the joint lowest reading in three months. Consumer sentiment has been slipping since 2018 and it is the latest disappointing economic announcement from Germany.

GBP/USD is higher after the Democratic Unionist Party declared that they are prepared for a long Brexit delay, rather than vote for the Prime Minister’s withdrawal agreement. The British Bankers Association confirmed the numbers of mortgages in February fell to 35,300, down from 39,600 in January, and economists were expecting 39,400. It is hardly a surprise that appetite cooled given the political uncertainty surrounding Brexit. UK house prices have been slowing down, and some individuals are holding off on making big investments while the uncertainty persists.

Commodities

Gold has drifted lower on the back of the slight tick up in the US dollar. The metal hit its highest level in nearly one month yesterday, and the stronger greenback encouraged some profit taking today. The metal’s wider upward trend is still intact, and if the positive run continues, it might target the $1,346 area.

Oil is higher after it was announced that OPEC and its allies will hold its next joint ministerial monitor meeting next month in Saudi Arabia, and the dealers are expecting supply cuts to remain in place. At 8:30pm (UK time) the American Petroleum Institute will release its latest inventory report, and consensus forecast is for a 2.4 million barrel decline.

 

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