European markets have started the week on a down note as oil prices fell and nerves set in ahead of important central bank meetings from the Federal Reserve and the Bank of Japan later this week.

A broker upgrade helped Imperial Brands (formerly Imperial Tobacco) top the FTSE 100 whilst housing was the best sector performer and mining and oil stocks acted as a drag.

The FTSE 100 has run into some technical selling after reaching the 6400, the peaks of the fourth quarter last year and its 200 week moving average. The German DAX has rolled over after retracing its 2016 losses and the French CAC has fallen after hitting its 200-day moving average.

The main focus for UK business news has been with the likely bankruptcy of privately-held BHS. There appears to be little in the way of read-across from BHS to listed retailers. Shares of Next are lower while Sports Direct and M&S shares are higher.

BHS has failed to stay relevant as fast-fashion shops like Zara and H&M have forced the traditional department stores to up their game. Next has proven adept at shifting its catalogue business online. M&S would probably find itself in similar position to BHS were it not for its food shops.

The near demise of BHS speaks volumes about the state of the British high street. Consumer spending is moving online and towards a sharing economy where the internet makes selling second-hand goods easy. Tastes have also showed signs of shifting towards spending on ‘experience’ not ‘stuff’, giving travel and leisure a boost over clothing and electronics stores.

A surprise drop in German business confidence in April according to the IFO has been largely ignored by euro trader ahead of speeches from the ECB’s Constancio, Coeure and Nouy.

US markets look set for a lower open ahead of new home sales data and another batch of corporate earnings. Apple reports after tomorrow’s close.

Notable earnings before the US open: Halliburton, KKR and Xerox

Notable earnings after the close: N/A


USA pre-opening levels

S&P 500: 8 points lower at 2,083

Dow Jones: 77 points lower at 17,926

Nasdaq 100: 21 points lower at 4,453


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