market relief

Stocks in Europe are fractionally lower as the same old concerns play on traders’ minds. 

There is a simmering fearfulness in relation to the North Korean situation, and now there is added uncertainty because of the outcome of the German election. The Catalonian independence referendum at the weekend is also chipping away at market confidence.

Shares in Card Factory are down 11.4% after the company revealed a 14% drop in first-half profits. Revenue for the first six months rose slightly, but costs ticked up due to the weakness in the pound, and the rise in the minimum wage. The company tried to soften the blow by announcing a special dividend of 15p, but it wasn’t enough to win over investors. Investec were quick to cut their ratting on the stock from buy to hold, and they reduced their price target to 320p from 405p. The stock has gapped lower this morning and hit a level not seen since mid-July.

The EUR/USD has fallen to a one month low as the fallout from the German election continues. It could be some time before we hear even the possibility of a coalition government being formed in largest eurozone country. While the political wrangling goes on behind closed doors, traders won’t be filled with confidence.

We are expecting the Dow Jones to open 14 points higher at 22,310, and we are calling the S&P 500 up 1 point at 2497.

At 3pm, the US will report the conference board consumer confidence report for September, and traders are expecting a reading of 120, and that compares with the August reading of 122.9. At the same time, the new home sales figures will be announced too, and traders are expecting 588,000, and that would be an increase on July’s 571,000.

We have updates from Federal Reserve members later on. Lael Brainard is due to speak at 3.30pm, and Janet Yellen will be speaking in Cleveland at 5.45pm.

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