Iranian Retaliation Rattles Markets; Sirius Jumps

Stock markets in Europe are in the red this morning as Middle Eastern tensions have risen following the Iranian missile attacks on Iraqi bases that house some US troops. The Iranian regime have made it clear they will not carry out further attacks should the US decide not to respond. Traders are clearly worried about the state of politics in the region, but if they were really afraid of an all-out conflict, markets would be a lot lower.

The ball is now in President Trump’s court, and dealers will be hanging on to his ever tweet.

Sirius Minerals (LON:SXX) confirmed there are in ‘advanced talks’ with Anglo American (LON:AAL) about a takeover. The mega miner has offered 5.5p per share for Sirius, and that equates to a 34.1% premium on yesterday’s closing price. The Yorkshire based company has had a terrible time lately as the company had to postpone a bond issuance on account of poor market conditions, but the firm needs to raise cash itself before it can unlock further funding from JPMorgan (NYSE:JPM). Sirius are in a bind, so if they don’t accept the Anglo offer they would most likely remain snookered. Sirius’ shares are up 39%.

Sainsbury's (LON:SBRY) revealed a broadly disappointing set of third-quarter figures. Total sales fell by 0.7%, and traders were anticipating a drop of 0.3%. The rise of Lidl and Aldi in recent years has shaken up the supermarket sector, and competition remains tough – Sainsbury’s confirmed that grocery sales ticked up by 0.4%.The general merchandise division underperformed seeing sales fell by 3.9%, in contrast, the clothing department posted a 4.4% increase in sales. The company is making headway in e-commerce as 20% of off all sales in the third-quarter were carried out online. The company is restructuring its high street presence, and the jump in online activity should help the retailer in the long-run seeing as consumer habits are changing.

Greggs (LON:GRG) now expect underlying profit to be slightly higher that previous forecasts. The group said that total sales jumped by 13.5%, while it registered a 7.2% rise in the last financial year. Despite the positive revision to the outlook, the firm cautioned that costs are tipped to rise in the coming year. The share price hit a record-high shortly after the open, but it has since has pulled back as the commentary about costs took the shine off the guidance.

EUR/USD is in the red as the disappointing industrial order figures from Germany have weighed on the single currency. The report showed a fall of 1.3% - it’s sharpest in four months.

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GBP/USD was given a lift by the Halifax house price index update which showed that prices jumped by 1.7% on a monthly basis in December.

Boeing (NYSE:BA) will be in play today following the tragic news that 176 people on board a 737-800 plane lost their lives when the aircraft crashed in Iran. The flight was operated by Ukrainian International Airlines. Boeing have suffered massive reputational damage on account of the two catastrophes involving the 737 Max aircraft, so things are likely to go from bad to worse for the group.

We are expecting the Dow Jones to open 103 points lower at 28,480 and we are calling the S&P 500 down 6 point at 3,231.

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Written By: CMC Markets