The FTSE 100 is outperforming its Continental counterparts as there is a push higher in mining, energy, financial and health care stocks.
The broad rally in the sectors has ensured that the British index has been the biggest gainer in Europe today, it is worth noting the DAX and CAC 40 have outstripped the UK market in recent weeks, so it seems like the FTSE 100 is playing catch-up.
The US-China trade saga rumbles on. The relationship between the two sides has come under a little strain as President Trump is standing up for the people of Hong Kong, which is likely to annoy Beijing. Mr Trump still claims that China want to make a deal, and that he is open to making the right deal, but the Hong Kong move could make things a litter trickier, as Beijing won’t take kindly to the interference.
Christine Lagarde, the new head of the ECB, called for a ‘new European policy mix’. The central banker hinted at increased government spending, which echoes the sentiment of her predecessor, Mario Draghi. When the person in charge of monetary policy is promoting fiscal expansion, it highlights the challenges the region is facing.
AO World shares are in the red today as traders take profits from the gains that were racked up in previous sessions. Earlier in the week, the company announced plans that it will sell-off its undeforming Dutch business, so the group can deploy more funds as well as resources to the more successful German business. Traders reacted well to the announcement, so now we are seeing a cooling of the positive sentiment.
Bovis Homes received a nice boost Canaccord, as the stockbroking firm lifted its rating on the company to buy from hold, as well as increasing the target price to 1,260p from 1,150p.
The major indices have posted modest gains amid the trade dispute. Volatility is low as there is a lack of firm direction regarding the trade situation. The markets have managed to cling onto the vast majority of the gains that were posted recently so sentiment remains strong. The final reading of the University of Michigan consumer sentiment report was 96.8 – a four month high. The flash manufacturing and services PMI reports both showed improvements on the month, so it appears the US economy is in decent health.
Nordstrom shares are higher today after the company revealed well received third-quarter numbers last night. EPS was 81 cents, easily exceeding the 64 cents forecast. Revenue slipped to $3.67 billion, but it was in line with forecasts. Digital sales now accounts for 34% of total sales, and keep in mind the metric was 31% in the same period last year. The company is edging towards a greater focus on e-commerce, which should stand to the company in the long-run as that’s’ the way consumer habits are going.
Footlocker announced a mixed set of third-quarter numbers. EPS came in at $1.13, and the consensus estimate was $1.08. Total revenue increased by nearly 4% to $1.93 billion, which was fractionally below analysts’ estimates. Same-store-sales is a closely watched metric, and in the quarter just gone, they rose by 5.7%, but the group cautioned the fourth-quarter metric is likely to be relatively flat –which hit the share price.
Gap’s latest quarterly figures were largely positive. Net sales slipped by 2% to $4 billion, bit it topped the $3.96 billion forecast. EPS was 53 cents, while traders were expecting 51 cents. The same-store-sales metric took some of the shine of the other results as it declined by 4%, while dealers were only expecting a drop of 2.3%
GBP/USD is in the red following the first ever flash readings of the UK manufacturing and services PMI updates by IHS Markit. The manufacturing reading was 43.8, which missed the 49 forecast, and keep in mind the October reading was 49.6. The services reading was 48.6 – a three year. The updates hit the pound, especially the services figures given the sector accounts for approximately 75% of UK economic output.
EUR/USD hasn’t moved a whole a lot as the flash PMI reports from the eurozone were largely positive. The manufacturing reading from France and German were 51.6 and 43.8 respectively – both updates showed slight improvements on the month. The German services reading slipped slightly to 51.3, while the French services level was unchanged on the month.
Gold is flat despite the mild risk-on sentiment and the slight move higher in the US dollar. The metal recently has come under pressure whenever stocks have moved higher as traders are less interested in holding assets that are deemed to be lower risk. Gold have been experiencing low volatility recently, like other markets, and it remains in the wider bearish trend that it has been in since September.
Oil reached hit its highest level since September as traders are concerned about supply. The energy is now off the highs of the day. OPEC have expressed an interest in extending the production cuts until the middle of next year. Russia is a major oil producer, and it too has talked about maintaining their curtailed levels of production in place.
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