Corporate news lifts FTSE
The FTSE and most of the European markets are trading higher this morning despite a weaker close on Wall Street as domestic corporate news boosts market sentiment. In London Vodafone (LON:VOD) led the gainers with a nearly 8% rally in shares after the company said that it planned to create a separate European tower company potentially to be spun off in an IPO next year.
Miners declined led by Anglo American (LON:AAL) which lost 5% on news that the company’s biggest shareholder, Indian billionaire Anil Agarwal, plans to sell his stake.
Heavy expectations affect Amazon (NASDAQ:AMZN) and Google trading
It has been a mixed after-hours session in the US after Amazon and Google parent Alphabet (NASDAQ:GOOGL) reported earnings. It seems that expectations are everything and because expectations for Alphabet’s earnings were so low the company’s shares surged 9% after it reported better-than-expected results.
The plan for a $25 billion buyback also helped. In contrast, Amazon said it increased its profits on the year but results came below forecasts, causing the company’s shares to slide 1% overnight.
Prospect of autumn emergency budget dampens pound
Two days into Boris Johnson’s arrival in office and the new PM is beginning to look at the state purse but may not end up liking what he sees there. According to a junior minister the government is planning an emergency budget in the early autumn to try and jump start the UK economy which, apart from much better employment figures, has been sputtering on all other accounts.
The pound is struggling across the board, weaker against the dollar and the euro, unconvinced just yet that it will be easy to turn the UK economy around.
Euro weaker as ECB revises down inflation forecasts
The euro is still sliding against the dollar following yesterday’s ECB meeting and the bank’s promise to keep rates at their present level or lower through the first half of 2020. In additional news today the central bank said that Eurozone inflation expectations continued to drop and that it has revised down its inflation forecast for next year to 1.4%; next year is now expected to be at 1.4%.
The low number will work in favour of the ECB’s plans to go ahead with a fresh stimulus packaged to revive spending.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient.
Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions."