Equity markets in Europe are set to finish the session on a positive note on the back of progress made in relation to US-China trade talks.

Europe

China is believed to have made ‘unprecedented’ proposals to the US in regards to forced technology transfers, and that has lifted sentiment.

Mitie said it expects full-year underlying operating profit to be between £84 million and £87 million, and keep in mind the last year’s the figure was £83.2 million. Net debt last year stood at £186.7 million, and now the company predicts it will fall to between £160 million and £180 million. The order book for the year is expected to fall by 10%, and that took some of the shine of the overall positive update. The group’s turnaround is going well. The stock has been rallying since late December so a pullback isn’t a total surprise.

Debenhams shares slumped after the struggling retailer confirmed it will go ahead with its £200 million refinancing plan, and that is likely to wipe out shareholder value. The financing deal should keep the lights on, but it is likely to come at the expense of the shareholder. The firm could wind up on life support, and act as a debt servicing machine.

SSE shares are only a little lower despite announcing that it expects full-year adjusted EPS to be between 64p and 69p, which would be a major fall from the 121.1p posted last year.  The wholesale division is topped to see a ‘significant reduction’ in adjusted operating profit due to power purchase agreements. The debt position is expected to be trimmed and the dividend will be upped, and that kept shareholders sweet.

US

The S&P 500 and NASDAQ 100 are a touch higher today as the positive reports about US-China trade talks have balanced out the disappointing growth report. The economy grew by 2.2% in the final quarter of 2018, and economists were expecting 2.4%, and the previous reading was 2.6%. The softer-than-expected finish to last year could not have come at a worse time given that the recent inversion in the yield curve sparked fears of a recession. Traders were already nervous about the state of the economy, and the report will fuel their fears. On the bright side, the jobless claims reading dropped to 211,000 from 216,000. The US job market is in great shape and a small movement in either direction is unlikely to upset the apple cart.   

Lululemon shares have jumped today after the company posted an impressive set of fourth-quarter figures. EPS was $1.85, while equity analysts were expecting $1.74. Revenue for the period was $1.17 billion, which narrowly exceeded the $1.15 billion forecast. Same-store-sales jumped by 16%. The group is planning on ramping up its international exposure, as it intends to open between 40 and 50 new stores, and over half are planned to be overseas.

Facebook shares are a little lower after the Trump administration charged the company with ‘discriminatory’ advertising practices in relation to housing. The Department of Housing and Urban Development claims the social media giant prevented advertisers from reaching certain sections of society.  

FX

EUR/USD is in the red as the disappointing inflation figures from Germany weigh on the euro. German CPI dropped to 1.5% from 1.7%, and economists were expected a reading of 1.6%. The larger-than-expected fall in the cost of living underlines weak demand in the largest economy in the currency bloc.

GBP/USD is lower as the political deadlock caused by Brexit has hurt the pound. The fact that MPs voted down all indicative proposals yesterday has left traders on edge as the default position is for the UK to leave the EU without a deal.

Commodities

Gold has suffered at the hands of the firmer US dollar. The push higher in the greenback, despite the disappointing figures, has held the metal back. Gold is set for a large daily loss, but if it holds above the $1,276 mark, the wider upward trend might continue.

Oil is in the red after President Trump tweeted that he would like to see OPEC lift output in other to bring down prices, as he feels that prices are too high. The oil producers like to keep the US president onside so we might see a change to their production policy at their next meeting.

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