European equity markets are slightly higher this morning as global sentiment remains upbeat.
Global trading relations haven’t progressed in recent days, but more importantly they haven’t deteriorated either. In the meantime traders are content to pick up stocks.
Ocado shares are slightly higher after the online grocer posted a mixed set of first-half figures. Revenue increased by 12.1%, but EBITDA dropped by 13.9%. When you take account of depreciation, impairments, amortisations and net finance costs, the firm swung to a £9 million loss. The outlook wasn’t too optimistic as the CFO expects full-year pre-tax loss to be greater than the market consensus, as capital expenditure will continue to be high. It is slightly concerning that average weekly orders rose, but the average basket size fell by 0.2%. Ocado don’t want to go down the path of increased deliveries for smaller orders, as it could hit profitability. The share price has been pushing higher for the past two years, and while it remains above 860p, the outlook is likely to be positive.
Cambian Group confirmed it received a £405.2 million takeover offer from CareTech Holdngs. The announcement sent Cambian shares flying as the offer is 220p per share – the stock closed at 148.2p yesterday.
TP ICAP announced the departure of its CEO John Phizackerley. The interdealer broker revealed that earnings per share will come in ‘slightly below the bottom end of analysts’ expectations’. The firm expects costs to rise on account of integrating ICAP, as well as additional costs regarding Brexit and MiFID II. The stock price tumbled 36% on the back of the announcement.
GBP/USD is a touch weaker this morning after the UK released mixed economic reports. The construction output update showed a 2.9% increase in May, which easily topped the consensus estimate of 0.2%. The industrial output and manufacturing output reports both missed estimates.
EUR/USD is in the red after the US dollar bounced back. The softer-than-expected Italian industrial output also weighed on the single currency. The May report showed an increase of 0.7%, while economists were expecting an increase of 0.8%, and the April report was revised from -1.2% to -1.3%.
Paccar will be in focus today after the company revealed a $300 million share buyback scheme yesterday.
We are expecting the Dow Jones to open up 54 points at 24,830 and we are calling the S&P 500 up 4 points at 2,788.
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