Stocks in Europe had a positive session earlier in the day, but the gains were eroded in the afternoon. 

Europe

Chinese markets had a stellar session last night, but the slightly bullish start to the European session should have been a sign that traders weren’t overly optimistic. Concerns about the political standoff between Italy and the EU, along with strained geopolitical tensions encouraged traders to dump stocks.   

Ryanair shares are higher even though the airline posted a 7% fall in first-half profits. The company cut airfares in a bid to overshadow the negative press surrounding mass flight cancelations due to industrial action, and the policy worked, as revenue and passenger numbers jumped by 8% and 6% respectively. The group revealed a €540 million share buyback scheme, and that should keep shareholders onside. The airline needs to get back to the days of treating their customers and staff better, and then we could see firm’s reputation improve. The share price has been falling since August 2017, and while it holds below the 50-day moving average at 1,292p, its outlook could remain bearish.

The feel good factor out of China at the moment has lifted the metals market. Copper made decent gains today, and in turn we have seen a boost to the share price of Anglo American, Rio Tinto, and BHP Billiton.

Provident Financial shares have fallen today after Barclays trimmed their price target for the stock to 753p, from 770p. The stock suffered a severe sell-off last year, and the share price still hasn’t recovered. 

NMC Health shares are in demand today after the company raised its full-year guidance. The group now anticipates core earnings to increase by 3.2% and it anticipates annual revenue to jump by 24%. The firm confirmed it is seeing ‘strong organic growth’. The stock has been broadly moving higher for over three years, and while it holds above 3,000p, its outlook should remain positive.

Gaming companies are under pressure today after it was announced that Philip Hammond, the Chancellor, plans to crack down on offshore betting companies. It is believed that Mr Hammond is planning on raising the remote gaming duty from 15% of ‘gross gambling yield’ to 20-25%. Paddy Power Betfair, William Hill, and GVC Holdings are all lower today.

US

Stocks are largely unchanged on the day as traders remain uncertain of weather another leg lower is in the pipeline. The sell-off in global equities was triggered when US government bond yields rallied amid fear of additional monetary tightening from the Federal Reserve. The 10-year yield is creeping higher, but they are below the recent highs, and dealers are fearful about a spike in yields could spark another equity sell-off. 

Halliburton shares are slightly lower after the company revealed a solid set of third-quarter results, but cautioned that US growth is cooling. Earnings per share were 50 cents, which topped the consensus estimate of 49 cents. Revenue jumped to 13 4% to $6.17 billion, and while traders were expecting $6.13 billion. The international business is performing well, and it is offsetting the pipeline bottlenecks in North America.

Hasbro announced disappointing results as the group confirmed that revenue dropped by 12.4% to $1.57 billion, and the consensus estimate was $1.7 billion. Net income slipped by $263.8 million, and traders were anticipating $282.7 million. The firm cited the collapse of Toys ‘R’ Us and the stronger US dollar for the poor figures.

FX

GBP/USD has fallen back below the 1.3000 level as continued political uncertainty surrounding Brexit and Theresa May hit the pound. There has been chatter of a leadership challenge and this has dented the pound, and seeing as Prime Minister May is caught between a rock and several hard places, traders are losing faith in her, and the pound.

EUR/USD is lower due to the broad move higher in the US dollar. There continues to be talk of additional rate hikes from the Federal Reserve over the next year, and that is helping the greenback.

Commodities

Gold is in the red due to the firmer US dollar. The metal was trading sideways for weeks, and earlier this month it snapped out of the range it was stuck in, and while it holds above $1,214, its outlook should remain positive. A break below $1,200, could pave the way for further losses. 

Oil is lower today after Saudi Arabia confirmed it has ‘no intention’ of turning oil into a political weapon. The oil producing nation stated it does not intend launch a 1973-style oil embargo, and that encouraged traders to sell the energy.

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.