Stocks are in the red this morning as traders are in risk-off mode.
Equity markets are handing back some of yesterday’s gains and traditional safe-haven assets like gold and bonds are in demand. The memories of the recent sell-off are still fresh in traders’ minds and some investors are tetchy that we are not out of the woods yet.
TUI AG issued a positive trading update as the company performed well in the first three months of the year. Revenue jumped by 8.1% in the first-quarter while the loss dropped by 58% to €24.9 million. The company took a €20 million hit on account of air Berlin’s Niki business going bust. The firm generated cash through the sale of Rui hotels for €38 million. Tui is ‘well positioned’ and is ‘progressing in line’ with expectations. The stock hit an all-time high this morning so the sentiment is clearly bullish, and if the rally continues it could target 1700p.
GBP/USD ticked higher after the UK inflation rate held steady at 3%, and economists were anticipating a decline to 2.9%. The core CPI rate edged up to 2.7% from 2.5%, while the retail price index (RPI) slipped back to 4% from 4.1%. Overall the reports are slightly hawkish and bodes well for sterling.
PepsiCo will release their quarterly figures today.
We are expecting the Dow Jones to open down 161 points at 24,440 and we are calling the S&P 500 down 14 points at 2642.
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