Stocks are in the red this morning as traders look ahead to the US non-farm payrolls report, with continental Europe feeling the pain far worse than the London market.
Shares in BT Group fell after the company revealed a 3% drop in revenue and a 2% fall in earnings in the latest quarter. The company cited increased expenditure in relation to business rates and pension costs as a reason behind the disappointing performance, but the full-year outlook remain unchanged. The share price is down 5.5% today to hit a five-year low, and if this negative move continues it may target 200p.
Deutsche Bank posed a full-year loss of €497 million, which was much larger than the €290 million loss that analysts were expecting. The bank stated that changes to the US tax system caused the bank to take a hit of €1.4 billion. Adding to their woes was a lack of market volatility in the financial markets which weighed on investment banking services. The stock is down 6.6%.
Capita Group shares are up 2% at 163p after Morgan Stanley raised their outlook on the stock to equal-weight from underweight, but the bank cut their price target to 180p from 460p.
GBP/USD has been feeling the pressure of the firmer US dollar this morning, and the weaker than expected UK construction data also put pressure on the pound. Last month the UK construction PMI report fell to 50.2 from 52.2 in December as the fact the sector barely grew in January worried traders.
EUR/USD is also being hurt by the bounce back in the US dollar and the slip in eurozone PPI and Italian CPI gave traders another reason to sell the euro versus the US dollar. Eurozone PPI fell to 2.2% from 2.8%, and Italian CPI slipped to 0.8% from 0.9%.
At 1.30pm (UK time) the US non-farm payrolls report is released, with the consensus for 180,000 jobs to have been added in January, and for unemployment to hold steady at 4.1%. On an annual basis, average earnings are tipped to tick up to 2.6% from 2.5%. When it comes to the US job report the finer details are key, and in this respect wage growth has been distinctively lacking when compared with job creation.
We are expecting the Dow Jones to open down 281 points at 25,905 and we are calling the S&P 500 down 21 points at 2,800.
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.