European equity markets are subdued this morning as the dust has settled in the wake of yesterday’s severe sell-off. 

Trade tensions between the US and China are still running high, and that is why some dealers are cautious about buying back into the market. Trade discussions will continue this week and investors are likely to remain on edge. The surprise increase in Chinese imports overnight has given a little boost to Anglo American and Rio Tinto this morning.

JD Wetherspoon shares are in the red after the company revealed its third-quarter trading update, and even though the numbers were largely positive, there were concerns about costs. In the 13 week period, like-for-like sales increased by 7.6% and total sales jumped by 8.4%. The group continues to review its operation, as it closed seven pubs, and opened three new pubs, and it intends to open two establishments this year. Investors are concerned about higher operational costs, and that weighed on the share price this morning.  The stock hit a record-high last month, so a pullback isn’t a surprise.

ITV shares have lost a little ground today after the group confirmed that first-quarter revenue dropped by 4%, and to make matters worse, the group expects first-half total revenue to drop by 6%. The firm still anticipates to deliver double digit growth in online revenue and ITV studios is expected to perform well in terms of revenue. The group confirmed that Britbox will be launched last this year, and it is being touted as a rival to Netflix, but some investors are sceptical about how successful the initiative will be as Netflix have a vast catalogue of content, and some of which was produced by the ITV and BBC.

Imperial Brands confirmed that tobacco volumes dropped by 6.9% in the first-half, and the group underperformed its competitors as the sector saw a 4.5% drop in tobacco volumes. Revenue and operating profit jumped by 2.3% and 38% respectively, and the popularity of its so-called next-generation products helped offset the disappointing tobacco figures. The company is moving more towards vaping products in a bid to keep up with ‘evolving lift style choices’. The group is still paying the price for not jumping on the vaping trend sooner. The stock has fallen to its lowest level in over five years, and if the bearish move continues, it might target 2,100p.

Kraft Heinz will be in focus as the company will release its first-quarter results today. The group has been in the news recently for the wrong reasons. In February, the group announced disappointing results and the dividend was trimmed too. Kraft declared its intensions to sell-off its Maxwell House business as a part of its disinvestment programme, but here are still no buyers yet. More recently the firm, said that is previous financial statements will be revised down. 

We are expecting the Dow Jones to open 10 points lower at 25,955 and we are calling the S& P 500 flat at 2,884.

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