Stock markets are trading broadly unchanged today as dealers are cautious on account of Brexit. 

Europe

Westminster will be in focus again this evening as MPs are set to vote on whether the no deal option should be pursued, or dropped. Eurozone stocks are muted as Continental Europe could lose a lot too if the UK leaves the EU without a deal. Philip Hammond delivered his Spring Statement today, and the growth forecast was lowered to 1.2% growth from 1.6%. In a bid to encourage MPs to reach a deal, Mr Hammond promised to spend over £26 billion as a way of boosting the economy.

Inditex, the owner of Zara, released mixed full-year results. Sales rose by 3% to €26.1 billion, and earnings before interest and tax came in at €4.36 billion, which undershot the consensus estimate of €4.43 billion. Online sales jumped by 27%, and digital sales now accounts for 14% of the overall revenue. It is encouraging to see the group is embracing technology as that’s where the growth is going to be in the next few years. Like-for-like sales growth was 4%, and the company expects it to be between 4% and 6% this year. The stock gapped lower today and if it remains below the 200-day moving average at €26.13, its outlook should be negative.

Balfour Beatty shares are slightly higher today after the company reported a 9.7% increase in full-year profit. The group has been undergoing a tough restructuring scheme for a number of years, and it is clearly paying off. Balfour has been more selective in the contracts they take on. The group confirmed that margins in US and UK contracts improved in the second-half on the year – and the company needs to keep moving in this direction. The order book is up 11%. The stock has been pushing higher since December, and if the bullish move continues it might target the 316p area.

Standard Life Aberdeen confirmed that net outflows increased to 24.3% to £40.9 billion last year. Assets under management and administration dipped by 9.3%, and pre-tax profit was largely unchanged. The group’s joint CEO, Martin Gilbert, will be stepping down in order to bring in a simpler management structure.

Morrisons revealed an 8.55% increase in full-year profit to £406 million, largely in line with equity analysts’ forecasts. The group’s same store sales at supermarkets increased by 1.5%, and the wholesale division registered a 3.3% jump. The firm revealed its third special dividend in a year, and this is a clear sign the group’s restructuring programme paid-off.  The prospect of tariffs on EU imported goods in the event of a no deal Brexit is weighing on sentiment a little. 

US

Sentiment is strong the S&P 500 and has retaken the 2,800 mark, and the NASDAQ 100 has hit a level not seen since mid-October. The US markets are driving higher on the recent progress that was made in the US-China trade talks, and the mixed jobs report. The slip in PPI suggests the Fed won’t be hiking rate in the near-term.

The durable goods report showed a 0.4% increase in January, which was a nice surprise, when you consider that economists were expecting a -0.5% decline. The December report was revised to 1.3% from 1.2%. The report that strips out transport was less optimistic, as it showed a 0.1% decline. Headline PPI and core PPI slipped to 1.9% and 2.5% respectively. The cooling of both PPI reports suggests a dip in demand, and we might see cool down in inflation in the near-term.

Boeing shares are now in the red after Canada banned the 737 Max plane from its airspace. The announcement caught traders off guard, and it dented investor confidence.

Aurora Cannabis shares traded higher today after it was reported that activist investor Nelson Peltz has been given a role at the company as a strategic adviser. Mr Peltz’s job will be to help the group strike new partnerships. The stock hit its highest level since October on the back of the news.

FX

EUR/USD has been helped along by the dip in the greenback. The US dollar began to slide in the morning and the slip in PPI and core PPI added to the decline.

GBP/USD has enjoyed a big move to the upside as traders are looking ahead to this evening’s vote in the House of Commons, where MPs will vote whether a no deal Brexit should be kept as on option. It is widely expected that lawmakers will vote to rule out a no deal scenario.

Commodities

Gold’s inverse relationship with the US collar continues and the dip in the US dollar has lifted the metal. The commodity endured a sharp sell-off in mid-February, but it has been in an upward trend since mid-November, and if the move continues it might target the $1,350 region.

Oil is higher today as traders are worried about supply. Sanctions on Venezuela and Iran are hurting supply, and the Saudi’s have suggested that output cuts will last until June. The Energy information Administration report showed that oil stockpiles dropped by 3.86 million barrels, while traders were expecting an increase of 2.65 million barrels.

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