European equity markets are in the red this morning in the wake of last night’s Federal Reserve meeting.
The US central bank didn’t rule out three more interest rate hikes this year, but at the same time it wasn’t overly bullish in terms of its growth outlook.
The sell-off in the US last night, and Asia overnight, triggered selling in Europe this morning. It is worth nothing that European indices like the FTSE, DAX and CAC 40 all hit multi-month highs yesterday, so a correction isn’t much of a surprise.
Just Eat shares are higher this morning after JP Morgan raised its price target for the stock from 656p to 775p. Yesterday, Berenberg upped its price target to 880p from 840p. Earlier this week, just Eat announced impressive first-quarter results and reiterated its full-year profit target. The stock is up 0.3% at 801p.
Smith & Nephew lowered its full-year outlook after the first-quarter was a little on the soft side. The company now predicts revenue growth of 2-3%, compared with the previous guidance of 3-4%. CEO Olivier Bohuon described the first-quarter performance as ‘mixed’, and also warned that it will miss its profit margin target. The stock rallied over 16% between February and May, so it would appear that investors had high hopes for today’s update. The stock is down 6.4%.
The US dollar index is a touch softer this morning after the Fed update last night. The US central bank seems to be neutral when it comes to policy, and seeing as it wasn’t as hawkish as traders had hoped, the greenback has waned today. Traders are still divided over whether the Fed will hike two or three more times this year.
GBP/USD slipped after UK services PMI in April came in at 52.8, weaker than economists’ expectations for a reading of 53.5, but above March’s 51.7 – which was the lowest figure since July 2016.
EUR/USD lost some ground after the eurozone announced the latest inflation figures. The CPI reading fell to 1.2% from 1.3%, and economists were expecting 1.3%.
At 1.30pm (UK time) the latest US jobless claims are released, and the consensus is for a reading of 225,000, which would be higher than the previous report of 209,000.
We are expecting the Dow Jones to open up 16 points at 23,940 and we are calling the S&P 500 up 2 points at 2637.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
