European equity markets are subdued this morning on the back of a strong finish on Friday.
It seems likes investors are taking a breather, and the lack of volatility in Asia overnight prompted some dealers to sit on their hands this morning. Steven Mnuchin, US treasury secretary, issued a positive statement about US-China trade talks over the weekend, and he claimed the negotiations are ‘close to the final round’ ,and that is adding to global feel good factor.
IWG shares have surged this morning after the company announced plans to sell-off its Japanese business for £320 million. The move comes as the property company announced plans to sell-off assets last month. IWG will enter into a franchise agreement with the Japanese firm, TKP. The announcement comes as Credit Suisse raised its outlook from underperform to outperform, and it raised the price target to 328p, from 200p.
Stagecoach were in focus last week when the Department of Transport (DoT) blocked them from bidding on three rail franchise contracts on account of not meeting the pension requirements. The transport firm are now threatening legal action against the government body, and that underlines how serious they are taking the situation. The bus and train operator might have to improve its proposal in relation to the pension provisions as train revenue is a major source of group sales.
Compass Group shares are in the red after Barclays lowered their rating to equal weight from overweight, but the bank hiked the price target to 1,850p, from 1,770p.
There has been a slight move to the downside in copper and platinum this morning, and that has put pressure on Anglo American, Rio Tinto and BHP Billiton. Copper had a strong session on Friday and now we are seeing a bit of profit taking, and that is driving sentiment in the mining sector this morning.
Continued weakness in the US dollar has helped GBP/USD and EUR/USD today, and volatility is expected to be low as we are not expecting any economic announcements.
Goldman Sachs and Citigroup will be in focus today as both banks are due to release their first-quarter results. The two finance houses occupy different aspects of the banking sector, Goldman Sachs are heavily dependent on investment banking fees and trading revenue, while Citigroup are largely a retail bank. The decline of volatility in the financial markets and the neutral outlook from the Federal Reserve in terms of interest rates, might hang over the companies.
We are expecting the Dow Jones to open 23 points higher at 26,435 and we are calling the S&P 500 up 1 point at 2,908.
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