Equity benchmarks are lower this morning as fears have picked up again in relation to the coronavirus crisis in China. The Chinese authorities have altered the method of reporting new cases, which has painted the situation in a far worse light. Stocks were coming from a position of strength, so the latest developments have prompted traders to sell. Dealers are doing their old tactics of dumping stocks that are connected to China in some shape or form. The country is major importer of natural resources so mining as well as oil stocks are lower on the day. Tourism stocks are in the firing line too on concerns that perspective holiday makers to China will be dissuaded from their potential holiday plans.
Barclays (LON:BARC) posted their full-year figures today but the fact the bank’s CEO, Jes Staley, is being investigated by the regulator for his connection to the disgraced financier, Jeffery Epstein, and has taken the focus away from figures. Mr Staley ran JPMorgan’s private bank – where Mr Epstein was a client, so they had a professional relationship. The Barclay’s CEO confirmed he was cooperating with the regulator in an ‘open’ and ‘transparent’ fashion. The annual figures from the bank were largely positive as group income ticked up by 2% to £21.6 billion, while costs dropped by 2% to £13.6 billion. Statutory profit was £4.4 billion, and the profit before tax was £6.2 billion – exceeding forecasts. The bread and butter side of the business - lending, was under pressure as net interest income dropped by 2%. Income from trading fixed income, currencies, commodities (FICC) increased by 17%, which is a good going for a European bank.
Centrica (LON:CNA) shares have tumbled today on the back of a dreadful set of full-year figures. Going into today’s results the company was already struggling as weaker energy prices as well as tough competition from smaller energy providers was hurting the company, but that trend continued. Revenue slipped by nearly 3% to £22.7 billion, and the group registered a pre-tax loss of £1.1 billion. Centrica incurred one-off charges of £1.75 billion - over half the write down was in relation to impairments on nuclear power plants as well as oil and gas assets. The firm is the owner of British Gas, and the division saw its customer base fall by 286,000. Centrica pointed out the British Gas are losing clients at a slower but that is of little comfort.
Indivior confirmed that annual revenue and profit fell by 22% and 39% respectively. The company cited a collapse in sales of Suboxone – an opioid addiction treatment, for the terrible figures. As bad as the results were, the outlook is poor too, as the firm warned it could register a loss next year.
EUR/USD has staged a small rebound from the decline yesterday that saw it fall to a level last seen in May 2017. German held steady at 1.6%, meeting forecasts, and the inflation reading helped the euro gain ground this morning.
TripAdvisor shares will be in focus today after the company posted well received fourth-quarter numbers last night. EPS jumped by 40.7% on an annual basis to 38 cents, topping the 33 cents forecast. Revenue for the three month period was marginally above forecasts at $335 million. In terms of guidance, the company expects next year’s full-year earnings to be at least the same as last year figure, and the focus will be on the second-half.
We are expecting the Dow Jones to down 215 points lower at 29,336 and we are calling the S&P 500 down 22 points at 3,357.
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