Equity markets in Europe are in the red as the negative sentiment in Asia overnight spilled over into this part of the world.
2017 has been a good year for global equities, and it appears that traders are winding down their positions as we approach the end of the year. The FTSE 100 is holding up better than its Continental counterparts due to the weakness in sterling.
Hammerson has agreed to buy Intu Properties for £3.4 billion. The acquisition comes at a time when there is major uncertainty surrounding the British commercial property sector due to Brexit. The move will create an empire of retail and leisure properties. Shares in Hammerson are down 1.8%, while shares in Intu have surged 19.8%.
Saga shares hit an all-time low after the company issued a profit warning. The collapse of Monarch Airlines and a ‘challenging insurance broking’ business were cited for the lowering of the profit guidance. The company’s dividend policy is tipped to remain in line with expectations, which shows the business is still relatively resilient. The stock is down 24.6%.
GBP/USD is weaker again as the political uncertainty surrounding the UK in terms of Brexit talks is playing on traders’ minds. The pound had a positive run in November, and now that the Irish border issue have thrown a spanner in the works, traders are cutting their sterling positons.
EUR/USD is largely unchanged today as it has been a fairly quiet day in terms news flows. German industrial orders grew by 0.5% in October, and traders were expecting a fall of 0.3% - the September report showed a growth rate of 1%. The over past week the euro has been pushed around by the US dollar and the prospect of tax reform in the US is propping it up.
At 1.15pm (UK time) the US will announce the latest ADP employment report, and traders are expecting a reading of 185,000, and that compares with a reading of 235,000 in October.
We are expecting the Dow Jones to open down 65 points at 24,115, and we are calling the S&P 500 down 7 at 2622.
American Eagle Outfitters will announce their third-quarter results today.
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