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FTSE 100 outperforms, Thomas Cook jumps

Sentiment in Europe is mixed this morning as the FTSE 100 outperforms thanks to a strong performance from commodity stocks. 

The DAX and the CAC 40 both racked up fresh six month and 11 month highs respectively last week, and this morning both benchmarks are taking a breather. The Asian session was subdued and that has spilled over to Europe. Corporate earnings are likely to be the highlights of the week, as US reporting season ramps up, and we will hear from some big European companies too.

Thomas Cook shares have jumped this morning as there is chatter that a number of private equity firms are considering bidding for portions of the business, or even for the group as a whole. The company has endured tough times along with other firms in the travel sector, and in February, Thomas Cook announced it will carry out a strategic review of the airline division, and that was a clear indication the firm was considering an asset disposal. Since 2018, the stock has dropped in excess of 75%, so the current business model isn’t working, but a spinning off of non-core assets might assist the group.

Wirecard shares are in the red this morning after the German regulator’s lifted the short-selling ban on the company. In February, the financial markets regulator in Germany, banned the shorting of the stock after news reports claimed the payment provider carried out creative accounting and fraud – the German firm have rejected the allegations.

BP and Royal Dutch Shell have been given a boost this morning due to the underlying rally in the oil market. The Trump administration is seeking to put pressure on Iran, and it is aiming to drive down Iranian oil exports even further. On the other side of the coin, easyJet and Wizz Air shares are suffering due to the higher oil prices.

The US dollar index is a touch higher this morning as the positive run from last week continues. An absence of major economic reports this morning has led to low volatility in GBP/USD and EUR/USD.

Coca Cola will be in focus today as the firm will report its first-quarter figures.  In February, the stock sold-off heavily on the back of the fourth-quarter update, where the firm issued a less than optimistic outlook for 2019. The consensus estimate is for EPS of 46 cents and revenue us tipped to be $7.98 billion.

We are expecting the Dow Jones to open 2 points higher at 26,513 and we are calling the S&P 500 flat at 2,908.


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