airlines easyjet ryanair IAG

The mood in Europe is positive as the strong finish in the US last night boosted global sentiment. 

The political deadlock was broken in the US yesterday, as the government shutdown has come to an end, and this prompted buying of worldwide stocks. The DAX has reached a fresh record high, and the CAC 40 isn’t too far away from posting an all-time high too.

Shares in easyJet are up 5.7% after the company posted strong results. Revenue for the first-quarter jumped by 14.4% and the number of passengers rose by 8%. The airline’s reliable reputation stood to them as the collapse of Monarch Airlines and Air Berlin boosted their bookings, and the chaos caused by Ryanair’s flight cancellations also helped easyJet. The share price hit a two year high this morning and if the positive run continues it could target 1900p.

The Competition and Markets Authority (CMA) have expressed concerns about 21st Century Fox’s attempt to acquire the remaining 61% stake in Sky, as they felt it is not in the public’s interest. The CMA feel it would give the Murdoch’s too much influence over British media. The government will be presented with a final finding of the CMA on the 1 May. Sky shares are up 2.3% today on the back of the news.

N Brown warned that profit margins would be lower as the clothing retailer ramped up promotional spending. The company stated that margins could fall between 225 and 250 basis points, which is considerably worse than the 70 basis points to 120 basis points drop they previously predicted. The focus on promotions did help sales rise by 3.2%, but traders focused on the falling margins. The stock has fallen to a nine month low on the back of the news.

EUR/USD and GBP/USD have been hit by the bounce back in the US dollar as the government shutdown has ended. The greenback has been weak for many week now, and this could provide a relief rally.  

UK net borrowing public sector borrowing fell to £0.97 billion in December, a big drop from £8.11 billion in November.

German ZEW economic sentiment jumped to its highest level in 8 months, which proves you don’t need a functioning government to keep the economy healthy.  

At 3pm (UK time) the US will release the Richmond manufacturing index and traders are expecting a reading of 19, down from 20 in December.  

We are expecting the Dow Jones to open up 76 points at 26,290, and we are calling the S&P 500 up 5 points at 2837.

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