Stock markets are in positive territory as traders are less fearful about the prospect of a no-deal Brexit.

Europe

Over the weekend, Prime Minister Johnson sent an unsigned letter to the EU requesting an extension. According to The Sunday Times, Brussels are contemplating offering the UK an extension until February 2020 if Boris Johnson can’t get backing for his deal this week. A short time ago, we found out that a vote on the deal will not take place today.

Mr Johnson is hoping to get support for his deal in the next few days, and that has lifted sentiment in the markets. Traders are petrified of a no-deal Brexit, so a deal, or even an extension would be welcome. Like many in the business community, dealers dislike uncertainty, so some clarification on a deal or a delay should assist stocks.

Funding Circle announced that third-quarter loans under management jumped by 31% on an annual basis. The group maintained its full-year guidance too. The update was well received as it sent the share price soaring. Samir Desai, the founder and CEO reminded traders of the ‘uncertain economic environment’, but added the firm is bring run ‘prudently. Today’s news helped the stock claw back of the ground that was lost in the wake of the profit warning that was issued in July.    

Just Eat Group shares are in the red as the company’s sales growth cooled. Third-quarter sales increased by 25%, but keep in mind the firm registered 30% growth in the same period last year. The revenue figures are tasty, but the slowdown in growth has caused concern among traders. Despite the cooling in revenue growth, the firm maintained its full-year revenue guidance. Just Eat also warned that its Latin American operation will post a loss. The company has enjoyed mammoth growth in terms of revenue in recent years, but at some a tapering off was to be expected. Its merger with Takeaway.com should be completed near the end of the year. The move should put it in a better position to fend-off Deliveroo as well as Uber Eats.

Namal Nawana, the CEO of Smith & Nephew, will step down from the role after only being in the top job for 18 month. It is believed that a pay dispute sparked the resignation. Mr Nawana is based in the US, but the company is aligned to the UK’s attitude to pay packages for senior management.

It is understood that Namal Nawana is seeking remuneration more in line with US pay grades in the medical devices sector. Some people might criticise Mr Nawana for leaving the firm over pay, but keep in mind when he took the top job, the share price was roughly 1,400p, and last month it nearly reached 2,000p – which was an all-time high, so he certainly added value. 

US

US equity benchmarks are higher this afternoon as there are some positive noises coming from the US-China trade situation. China’s Vice Premier, Liu He, said that ‘substantial progress’ was made. There was also an acknowledgement that an end to the trade war would help their economies as well as the rest of the world. The conciliatory commentary from the Chinese side bodes well from the possibility of an agreement being reached in November, something President Trump has called for, but few traders actually believe that it will happen by then as there has been so much back and forth.  

Boeing remain in the news for all the wrong reasons. On Friday the stock lost over 6% after it was reported that a former test pilot expressed concern about the erratic software behaviour in the 737 Max aircraft two years before the disasters. It was reported that a number of employers flagged concerns about the safety of the aircraft, and that they misled the Federal Aviation Administration about its safety. When you take into consideration the aircrafts were at the centre of two catastrophic events, and that it appears the group were aware of some issues, its’ incredible that the stock hasn’t lost further ground. 

Haliburton posted a 32% fall in quarterly EPS to 34 cents, meeting forecasts. Revenue declined to $5.55 billion, which undershot the $5.81 billion consensus estimate. The depressed oil market has had a negative impact on the industry as demand for Halliburton’s services are in decline. There has been a muted reaction to the poor quarterly numbers but in August the stock fell to a 10-year low, so a lot of the bad news was already factored in.  

FX

GBP/USD has traded above 1.3000 today as there is a sense of optimism in relation to Brexit. This week we should find out whether Boris Johnson will get approval for the deal he struck with the EU It was reported the EU are considering offering the UK an extension to February 2020, so traders are viewing that as a nice backup plan.

It was been a quiet day in terms of economic news so EURUSD is subdued. This morning we saw that German PPI on an annual basis dropped to -0.1% from 0.3%. The negative reading suggests that demand at the factory level is weak, so that is likely to trickle down to the consumer level too.

Commodities

Gold has barely moved today as volatility across the financial markets as a whole is low. The metal has been trading within a small range recently. It can’t seem to clear $1,500, but at the same time it is holding above the $1,480 area. It has been broadly pushing lower since early September, and a break below $1,459 could pave the way for further losses.

Oil is in the red as traders are concerned about the health of the global economy. Oil traders shrugged off the positive comments in relation to US-China trade. Last week, China revealed the weakest economic growth figures since 1992, and the report has been hanging over the energy market.   

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