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Stocks rise after MPs say no to ‘no deal’

market relief

market relief

European equity markets are higher this morning after MPs voted in favour of not pursuing a no-deal Brexit and they even ruled it out as a potential political card to play.

Westminster have made it clear they don’t want a no-deal Brexit, and investors are snapping up stocks on the back of that, but just because MPs don’t want to leave without a deal, doesn’t mean that the possibility has been removed.  

Cineworld shares are in demand after the company confirmed that full-year pre-tax profits jumped by 125%, and revenue soared by 259%. The company said the integration of Regal is going well and that the benefits of the takeover are going to be better than expected. The final dividend was upped by 17.6%. The stock gapped higher, and it hit its highest level since October, and if the bullish move continues it might target the 320p area.

Capita’s painful turnaround plan is paying off as the group posted a pre-tax profit of £273 million, compared with a loss of £513 million last year. Cost savings of £70 million were made and its aims to save £175 million this year. The firm announced that it has ‘fixed the basics’, and this projects a positive image, but the road to full recovery is likely to be long. The stock has been broadly pushing higher since November, and if the uptrend continues it could target the 134p region.

DFS had a solid first half, but there have been some signs of weakness in the second half. The furniture company posted a 29.1% jump in six-month revenue, and pro-forma EBITDA increased by 23.8%. The second half started on a softer note as order intake slipped, as the company blamed weak consumer sentiment on account of the uncertainty surrounding Brexit.

EUR/USD is in the red on account of the bounceback in the US dollar. The eurozone posted solid inflation figures this morning. German CPI held steady at 1.7%, meeting forecasts, while French CPI edged up to 1.6%, from 1.4%. It is encouraging to see that demand is firm.

GPB/USD is a little lower this morning after hitting a nine-month high yesterday, on the back of Westminster making it clear it does not want a no-deal Brexit.

Boeing is likely to be in focus today after President Trump ordered the grounding of 737 Max planes yesterday. The announcement came yesterday evening, and it initially sent the stock into the red, though it did manage to finish in positive territory. Some investors are worried airlines might start cancelling orders for that particular aircraft.

We are expecting the Dow Jones to open 73 points higher at 25,775 and we are calling the S&P 500 up 8 points at 2,818.  


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