market relief

European equity markets are marginally higher today are the bullish sentiment is still lingering. 

Mario Draghi, the President of the European Central Bank (ECB) gave a speech in Frankfurt about banking supervision, but the equity markets were unfazed by his comments.

Imperial Brandsposted an 8.2% rise in annual revenue and that was helped along by favourable foreign exchange movements, otherwise in would have fallen by 2.6%. The tobacco company expanded its business in the UK, Australia and Germany, while it lost ground in the USA, France and Spain. The tobacco business is ‘particularly tough’, and the company is keeping an eye on costs to combat the state of the industry.  The share price has been in decline since August 2016, and relying on favourable movements and low costs will only do so much to boost investor confidence. If the stock breaks below 3000p, it could target 2800p.

Shares in Associated British Foods are down 3.5% despite the company having a strong set of full-year figures. Revenues and operating profits rose by 19% and 22% respectively. The full-year dividend was upped by 12% too. The retailer stated that some unfavourable movements in the currency markets will have a negative impact on their business in the first-half of next year. The stock hit a record-high last month so today’s decline could entice fresh buyers. If the share price holds above the 3100p it could target 3400p.

A broad rally in the US dollar has hurt the EUR/USD and GBP/USD today. German industrial production in September declined by 1.6%, while economists’ were anticipating a drop of 0.7% - this pressure on the single currency. The latest UK Halifax average house price index for the three months until October rose by 4.5%, up from 4% in the previous reading.

We are expecting the Dow Jones to open 50 points higher at 23,598, and we are calling the S&P 500 up 2 points at 2593.

At 3pm (UK time) the US will announce the job opening and labour turnover summary (JOLTS) and economists are expecting a reading of 5.98 million, and that would be a decline on Augusts 6.08 million.  


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