European equity markets are in the red this morning as political and economic risks weigh on sentiment. Prime Minister May survived the no-confidence vote yesterday, meeting expectations, but the next move is still unclear. As it stands, the UK is set to leave the EU in late March, but there still isn’t a game plan in place. The moves by China recently to stimulate the economy sends out a message they are concerned their cooling economy, and that is a factor in this morning’s declines.
Associated British Foods' (LON:ABF) shares rallied after the company issued an upbeat update. The group said that Primark sales were up 4% on last year and the operating profit margin was higher too. The fact the fashion house registered a rise in revenue and margins, made the firm stand out as many competitors had to cut prices to entice customers which hurt their margins. The sugar business continues to underperform as revenue dropped by 12% on the year. The stock has been pushing higher since January, and if the positive move continues it might retest the 2,500p region.
GVC (LON:GVC) shares are in demand after the company announced it expects full-year proforma underlying earnings to be in the range of £750 million - £755 million, which is above market expectations. Fourth-quarter net gaming revenue (NGR) increased by 5%, while the online division posted a 15% in NGR. The share price has been falling since October, and if the bearish move continues it might target the 600p area.
Sage (LON:SGE) shares are higher this morning after the group confirmed first-quarter revenue jumped by 7.6% Net debt fell by 9.8%. The firm has had a strong start to 2019, and it reiterated its outlook for the year. The stock gapped higher, and if it holds above its 200-day moving average at 612p, it should push higher.
ITV (LON:ITV) shares are in the red after Bank of America (NYSE:BAC) Merrill Lynch cut its outlook to underperform from buy, and the bank slashed its price target from 210p to 110p.
Just Eat (LON:JE) shares have rallied after Morgan Stanley (NYSE:MS) upgraded the stock to ‘overweight’.
EUR/USD has moved much today as volatility has been low in the currency markets. Eurozone CPI came in at 1.6% in December, meeting forecasts, and that compares with 1.9% in November.
Morgan Stanley (NYSE:MS) will be in focus today as the bank will release its fourth-quarter results. The common theme among the US banks this reporting season is that consumer banking and investment banking fees have been on the rise, while the trading departments have broadly been poor.
We are expecting the Dow Jones to open 107 points lower at 24,100 and we are calling the S&P 500 down 14 points at 2,602.
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