market relief

European equity markets have been hit by profit-taking this morning, after the FTSE 100 closed at a record level yesterday. 

With the CAC 40 also hitting its highest since level 2008, traders have taken the opportunity to book some of their profits today. It has been a quiet day so far in terms of news and we are not expecting any major announcements, so volatility is likely to be low.

Shares in Carpetright have jumped after the troubled retailer revealed plans to raise £60 million via a share issue. The funds will be used to pay down unsecured loans and implement a revised business plan. Carpetright has been struggling for years, but if the share issue is successful this could be its first step in the road to recovery.

AstraZeneca shares are in the red after the company revealed first-quarter earnings that missed analysts’ forecasts. Core earnings per share came in at 48 cents, while the consensus estimate was 60 cents. The company’s very successful cholesterol drug, Crestor, is facing competition from generic brands.

Relatively new products like Imfinzi and Fasenra are selling well. AstraZeneca announced higher costs on account of increased investment in new drug launches, which isn’t necessarily a bad thing, provided the new products sell well. The share price has been broadly pushing higher since June 2016, and if the bullish trend continues it could target 5,600p.

The Competition and Markets Authority (CMA), have begun their investigation into the proposed merger of Sainsbury’s and Asda. The first round of the process involves obtaining ‘any initial views’ the deal might have on competition in the sector. The CMA usually spends 40 days mulling over the views that were put forward before making a decision to move on to the second round or not. Shares in Sainsbury’s are marginally higher this morning.

EUR/USD is largely unchanged this morning even though Germany posted some respectable economic updates. In April, German PPI was 2%, up from 1.9%, and WPI was 1.4%, up from 1.2%. These reports pushed up the single currency as it suggests demand is firming up, but the upward move in the single currency was short-lived.

We are expecting the Dow Jones to open up 30 points at 24,744 and we are calling the S&P 500 up 2 points at 2,722. 

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.

 

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.

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.