World bank’s global growth upgrade pushes Europe higher
An upgrade to the global growth outlook from the World Bank has given European stocks a kick this morning, adding to yesterday’s gains ahead of pre market earnings from Bank of America. Yesterday’s results from Wells Fargo and JP Morgan got us off to a decent start for the Banks, minus one off legal costs for the latter, and the figures are likely to be in focus on a day otherwise light in Economic data.
Burberry stock has lost ground since CEO Angela Ahrendts announced her move to Apple back in October, but she will certainly be leaving the company in good shape, with today’s update confirming a 14% hike in retail revenue’s after a strong Christmas quarter. The transition period for incoming CEO Christopher Bailey has clearly been a success, but the real scrutiny will come mid-way through 2014 when he takes the reins on his own.
Taylor Wimpey stock popped on the open but edged into the red after an hour of trading as strong results failed to impress traders who seem to have got a bit carried away with expectations for the builders ahead of recent updates. 2013 completions and average sale prices were both up 7%, aided by government programs and rallying property prices across the UK, and operating margins are expected to be at the top end of forecasts. A similarly bullish update from Barratt Developments yesterday saw the stock sell off on the open, although it was back in the green by the closing bell.
Tullow Oil and Ithaca energy were on the move in opposite directions after statements this morning. Tullow expect strong revenue and profit growth for the year, driven by increased production and stable oil prices. CEO Aidan Heavey was upbeat on the outlook for 2014, with a stronger cash position than 12 months ago as well as a strong pipeline of “high quality projects” that will see them drill over 40 wells in the next 18 months. Tullow was the subject of a lot of bid speculation last week but nothing was mentioned in the update. Ithaca shed over 6% despite reporting production levels in line with prior guidance.
Fenner was another stock heading the wrong way this morning, shedding over 6% on the deferral of a number of customer sales to the back end of the year, weighting revenues towards H2. Although full year expectations remain unchanged, the most recent numbers have missed the comparative release last year, largely because of very strong trading in Australia in that period.
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