market relief

Stock markets in Europe have been edging lower for the past hour, but some of the equity benchmarks are still showing gains on the session. 

There was confusion this morning as trading on the London Stock Exchange was delayed by one hour. The rest of Europe started out strong thanks to a positive finish in Asia, but now the buyers are running out of steam.

Auto Trader revealed a strong set of full-year figures, but they came in a whisker below analysts’ estimates. Revenue rose by 7% to £330.1 million, and the consensus estimate was £331 million. Profit before tax jumped by 10% to £210.8 million, while the forecast was £211.35 million. The company confirmed there were fewer cars for sale in the market, and they foresee a dip in activity. Auto Trader issued a cautious outlook and cited economic uncertainty for the slide in private listings. The stock has been broadly pushing higher since November 2017, and if the bullish move continues it could target 400p.

Kier Group revealed it is entering into a joint venture with Homes England and Cross Keys Homes to build 5,400 homes over the next 10 years. Kier Group owns the lion’s share of the venture as it holds a 69% stake in the deal, but only holds 50% of the voting rights. Homes England is a government body, and the aim of the project is to boost housing in areas that are in need of it most, as well as to tackle affordability issues. Hopefully Kier Group will have learned from the collapse of Carillion, and not spread itself too thin just to win the contract. Shares are lower on the day.

Trading on the London Stock Exchange started at 9am this morning due to an issue with pricing data, and no further details were given. Shares in the group hit a record high, before turning lower.

GBP/USD is taking advantage of the dip in the US dollar. The UK released mixed housing data – according to Halifax, the three-month average price until May grew by 1.9%, down from 2.2% last year. On the bright side, the average price in May jumped by 1.5%, a big improvement from the 3.1% decline in April.

EUR/USD is also being helped by the sell-off in the greenback. In the first quarter the eurozone grew by 2.5% on an annual basis, meeting estimates.

At 1.30pm (UK time) the US jobless claims report is released and the consensus estimate is 225,000.

Traders will be keeping an eye on Allergan this afternoon, after it was claimed that Carl Icahn has built a small stake in the company. Appaloosa Management owns a 1% stake in the drug maker, and has been calling for a management shake-up.    

We are expecting the Dow Jones to open up 34 points at 25,180, and we are calling the S&P 500 up 2 points at 2,774.

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