Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
News

Equities motor along, Moderna rises on children’s vaccine hopes

Stocks are in positive territory as the end of the trading session draws near. 

A number of EU countries have suspended the distribution of the AstraZeneca-Oxford coronavirus vaccination due to health concerns. The vaccine in question has been given the support of the World Health Organisation (WHO), as well as the European Medicines Agency (EMA). Equity markets in the eurozone are higher despite the toing and froing over the vaccine.

It would appear the $1.9 trillion stimulus package from the US is still underpinning the rally in global stocks. In the next couple of days, we will hear from the Federal Reserve and Bank of England, but no changes to policies are expected. Monetary policies are tipped to remain very loose for the foreseeable future, and that is also assisting equity markets.       

The Greggs share price has been on a roll recently as optimism for an economic recovery grows, with restrictions set to be eased in the weeks and months ahead. Lockdowns have had a harsh impact on the group. Annual sales came in at £811.3m, down over 30% on the year, as the firm swung to a pre-tax loss of almost £14m – which included government support in the form of business rates relief and the employee retention scheme. The company confirmed that sales have improved in the second half, and in addition to that, sales have been better than expected in 2021. The delivery side of the business, which is carried out by Just Eat, accounted for more than 9% of like-for-like sales in the first 10 weeks of this year. Greggs has a healthy cash position and it can tap into £100 million in credit, so it is in a good position to take advantage of the pent-up demand that should be released when restrictions are relaxed.          

The FCA has kicked off an investigation into NatWest over an allegation of money laundering. Between 2011 and 2016, a client of the bank deposited £365m, the majority of which were cash deposits. The regulator feels that NatWest’s internal anti-money-laundering systems should have flagged up the transactions, hence why the regulatory body has commenced the investigation. A part of the reason why RBS was rebranded to NatWest Group was to distance itself from the bad old days of the government bailout and the Libor-rigging scandal, but it might turn out that the bank has a few more ghosts in the closet.

AstraZeneca has suffered a lot of negative publicity in the past few days, but you wouldn’t know it to look at the share price. A growing number of European countries have halted the distribution of the AstraZeneca-Oxford vaccine, as the respective health authorities are worried the vaccine is connected to patients developing blood clots. It is possible that dealers are shrugging off the news because the WHO as well as the EMA have reiterated their view that the vaccination is safe.

Operations at marketing group 4imprint were hit hard amid the strict restrictions, and on top of that, demand was dented. Full-year revenue dropped by 35% to $560m, while pre-tax profit slumped by nearly 93%. It was a painful 12 months for the group, but the fourth quarter was relatively robust. There is reason to be optimistic after a marked increase in trading momentum in the past three weeks.  

Volkswagen shares are up on the day as the auto-maker is confident it can cut costs as well as raise profit. The German group is bullish with respect to its plans for the electric vehicles market.        

US

The NASDAQ 100 is the outperformer of the major US indices and the tech component of the S&P 500 is helping the index outstrip the Dow Jones. It seems that traders are seeking out relatively cheap tech stocks today, in light of the fact they fell the most in the past month.  

The US released mixed retail sales data as the February report showed a 3% contraction, greatly undershooting the -0.5% that economists were expecting. On the other hand, January’s stellar 5.3% reading was revised up to 7.6%. When you take an average of the two updates, it still paints a positive picture with respect to consumer appetite. Seeing as January’s report was heavily influenced by the $900bn spending programme introduced in late December, it seems likely that future reports will reflect the $1.9trn stimulus package.

Moderna shares are higher this afternoon as the pharma company is carrying out a study of testing its Covid-19 vaccine on children. Moderna’s vaccination for adults has an efficacy rate of more than 94% and it is keen to replicate that success with the drug aimed at children. The drug maker intends to enrol roughly 6,750 children from the US and Canada into the study.

After the close of trading, CrowdStrike will reveal its fourth-quarter results. The Cybersecurity group posted record third-quarter numbers in December. Year-on-year subscription revenue jumped by 87%. Revenue was $232.5 million, ahead of the $213.5 million consensus estimate. EPS was 8 cents, easily beating the breakeven forecast.

Less than a week ago GameStop was trading above $300, and today it is below $200, down over 10% on the session, as it continues to be volatile.

FX

The foreign exchange market has experienced low volatility today. The US dollar index was given a lift higher by the mixed retail sales data, the greenback is still up on the session. In the past two months, the dollar has been in an uptrend and a break above last week’s highs should pave the way for further gains. Tomorrow evening the Federal Reserve will announce its rate decision, no change to policy is anticipated but the commentary in regards to yields will be closely watched. The 10-year yield has cooled but recently it was above the 1.63% mark – a 13 month high - so that sparked chatter about hiking rates.

The CMC JPY Index and the CMC CHF Index are the best performers today so that suggest that dealers are in risk-off mode, but then again, it might be a case of bargain hunting seeing as the Swiss Franc and the Japanese Yen has endured sell offs recently.           

Commodities

Gold briefly hit its highest mark in two weeks. The relatively subdued dollar works in gold’s favour, as the greenback’s strength in recent weeks has been a large factor in gold falling to a nine month low earlier this month. The metal is now in the red, and it likely is see low volatility between now and the Fed meeting tomorrow evening. 

WTI and Brent crude oil are in the red this afternoon as traders are keen to trim their exposure to the oil market seeing as there are mild concerns the eurozone’s economic recovery might be hampered by the pausing of the vaccine distribution. It is worth noting that oil hit a 14 month last week so some traders are quick to use any excuse as book profits.      


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.