Stocks are higher this morning in Europe as the slight positive finish in the US last night has raised investor confidence.
Even though stock markets are not making a whole lot of headway, they are comfortably off of the lows of last week. Some dealers are still cautious and that is contributing to the mediocre recovery we have witnessed.
Galliford Try has revealed plans to raise £150 million to shore up its balance sheet in the wake of the Carillion collapse. The construction company was in a joint venture with the defunct firm and it needs to raise funds of plug the gap. Other than that the company is performing well, but the stock is down 18.9% today.
GKN have vowed to return to £2.5 billion to shareholders over the next three years, once the company has completed a review of the business. The move is seen as a sweetener as the company has been pursued by Melrose. The investment company specialises in buying underperforming manufacturing companies, turning them around and selling them, and they have recently offered £7.4 billion for GKN. Shares in GKN are up 0.4% today and if it holds above 384p, it could target 450p.
Shares in Sky and BT are higher this morning after both companies won the rights to show English Premier League games for fees that were lower than expected. Sky has benefitted greatly from the tactical bidding, as the broadcaster will now be showing more football games, and its cost per game has dropped by 15% compared with the price in 2015. Shares in Sky gapped higher this morning and if the bullish move continues it could target 1130p.
At 1.30pm (UK time) the US will announce the inflation figures for January, and traders are expecting 1.9%, and that would be a drop from 2.1% in December. At the same time the retail sales report will be revealed and economists are expecting a see rise of 0.2%, down from a 0.4% increase in December. There has been increased speculation the US will hike interest rates four times this year, and these reports will be a good barometer for demand in the US.
EUR/USD is higher on the day as the solid growth figures from Germany, and the slide in the greenback has helped the currency pair. In the fourth-quarter of last year, the German economy grew by 2.3%, unchanged from last year. German CPI cooled to 1.6% from 1.7%, but it matched expectations. The eurozone will reveal the growth figures for the currency bloc at 10am (UK time), and the consensus is for 2.7%.
We are expecting the Dow Jones to open up 176 points at 24,816 and we are calling the S&P 500 up 13 points at 2675.
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