The US and China are expected to sign an interim trade deal today, and it appears that traders are content to sit to on the fence until the agreement is made official. The finer details of the deal are expected to be made public later, so in the meantime, volatility is expected to be low. A huge amount of good news has already been factored into the equity markets, so it is understandable that things are quiet ahead of the agreement being made official. It was reported yesterday the tariffs will remain in place for at least 10 months after the signing of the deal, so US-China relations might settle down.
At the start of this year Bovis Homes (LON:BVS) changed its name to Vistry Group. The move coincided with the takeover of Linden Homes. The house builder revealed a trading update this morning which covered the full-year, but the annual report won’t be announced until next month. Vistry confirmed that forward sales for 2020 are ‘strong’. The company anticipates an improvement in operating margin, and the full-year pre-exceptional items before-tax is expected to be marginally head of forecasts. On the downside, the acquisition of Linden will cost more than £15 million, but the economies of scale should more than offset that in the long-term.
Persimmon (LON:PSN) also posted an update covering their full-year, but traders will have to wait until late February to find out the finer details in the annual report. New housing revenue slipped by 3.5%, while legal completions dropped by 3.6%. The firm confirmed that it is in a ‘strong positon’ for 2020 and the annual pre-tax profit will be in line with ‘market expectations’. The stock is slightly higher.
Tullow Oil’s share price had a volatile start to the day after company booked a charge of $1.5 billion in relation to a lower forecast for oil prices. Tullow is now factoring in prices of $65 per barrel, down from $75 per barrel. The share price of the group was rocked last month on the back of a dreadful update, where it issued a profit warning, halted the dividend, plus revealed the departure of two executives. Today, the company said it will review its portfolio as well as reduce its headcount as a way of adapting to tis current circumstances.
GBP/USD is in the red on the back of the comments from a Bank of England (BoE) policymaker, and the disappointing UK inflation figures added to the downbeat sentiment too. Michael Saunders, BoE policymaker, reiterated his view that lower rates were required to help achieve the central banks inflation target of 2%. Not long after the statement, the headline CPI rate dropped from 1.7% to 1.3%. The update adds weights to the central bankers’ view.
EUR/USD was nudged lower by the underwhelming eurozone industrial production report. The reading showed 0.2% growth in November, undershooting the 0.3% forecast. The October report was revised to -0.9% from -0.5%.
Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) will reveal their fourth-quarter figures today. By-and-large the updates from the big US banks yesterday were positive, so traders’ expectations have been upped. The common theme from reports was that bond as well as equity trading divisions performed well, while net interest margins were under pressure, so dealers will be keeping that in mind ahead of today’s announcements.
We are expecting the Dow Jones to open 9 points lower at 28,930 and we are calling the S&P 500 up 1 point at 3,284.
"DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. "