Stocks are largely higher this afternoon due to the report that China and the US are close to reaching a trade deal.

Europe

Sentiment has been improving for a number of weeks now, and the latest report said that both sides are considering reducing or even removing tariffs on each other’s goods.  The trade stand-off between the two largest economies in the world has weighed on sentiment in recent months, and now it might be near its end. 

Daily Mail and General Trust (DMGT) shares are higher this afternoon after the company announced plans to give shares in Euromoney to shareholders. The move is nearly worth £900 million, will see some DMGT shareholders receive discounted shares in Euromoney and £200 million will be given to shareholders as a part of the transaction too. The publishing house is looking to simplify their business, and Lord Rothermere’s family will increase his stake in the business to 36% from 24%. The stock hit its highest level in over three months today, and if the bullish move continues it might target the 720p region.

Ted Baker shares had a volatile session today after it was revealed that, Ray Kelvin, the founder of the firm resigned as CEO. There were allegations of misconduct levied against Mr Kelvin last year, and an investigation into his behaviour is underway. The fashion house has been under pressure recently due to the tough trading environment, and the management shakeup might add to the existing certainty  

Keller Group confirmed its profit slumped on account of restructuring costs, but the firm hopes it is over the worst of the difficult reorganising scheme. The headcount was reduced, and the group had to endure impairments and goodwill of over £60 million. Profit dropped by 92%, while revenue edged up slightly. Net debt increased by 24.9%, but still undershot analysts’ forecasts. The dividend was raised slightly – which is strange given the restructuring programme and the increased debt level, but the company is ‘confident’ in its outlook.

Rightmove shares are higher today as Barclays raised their price target for the stock to 420p, from 415p.

BA’s owner, IAG, announced that is expects free cash flow to be lower this year as the group intends to increase capital expenditure, and it foresees operating profit to hold steady.

US

Equity markets are a little higher in early trading as dealers are optimistic about the US and China striking a trade deal. There is still a level of caution among traders as it has yet to be finalised, but this has been the most upbeat investors have been about the situation.    

Newmont Mining has knocked back Barrick Gold’s $18 billion takeover approach.  Newmont is already in the process of taking over Goldcorp. The plot thickens, as Newmont has floated the idea of operating a joint venture with Barrack in Nevada. The underlying gold market has been experiencing relatively low volatility in recent years, so the major players are seeking to scale up and lower their costs.

It was reported that Amazon plan to open dozens of grocery store across major US cities. The outlets will be separate from Whole Foods .The online retailer has deep pockets ,and that could put additional pressure on high street brands – who are being hurt by Amazon’s online business. Evercore upped its price target for the stock to $1,925 from $1,800.

FX

GBP/USD is in the red after a broad rally in the greenback, and disappointing UK construction data, hurt the pound. The construction PMI report for February dropped from 50.6 to 49.5 – its lowest reading in nearly one year. The UK construction sector has enjoyed a good run in the past five years, and given the lack of clarity ahead of Brexit, it isn’t much of a surprise the industry cooled down.

EUR/USD is lower due to the rally in the US dollar. The eurozone sentix investor confidence report edged up to -2.2 from -3.7 in February.

Commodities

Gold has fallen again as the firmer US dollar has dented the metal. The recent relative strength of the greenback has put pressure on the commodity .The Fed have moved away from a hawkish position to a more neutral one, but the relative weakness of other currencies has driven up the dollar. Support for gold might be found at $1,276.

Oil has been lifted by the report that the US and China a getting closer to agreeing a trade deal. China is a major consumer of energy and any signs of improvement in relation to trade with the US, should assist their economy.  OPEC are likely to delay their output decision until June, and one OPEC source said the likely move will be to extend the productions cuts. 

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