Europe
Equity markets in Europe are mixed as dealers are still concerned about the political fight between Italy and the EU. The cost of borrowing for the Italian government ticked up and this left traders feeling uneasy. Intesa Sanpaolo (LON:0HBC) was downgraded by Goldman Sachs (NYSE:GS) on Friday, and this is still playing on investors’ minds. The Wall Street titan said the Italian bank was ‘well managed’ but it feels that profits will fall due to the poor macroeconomic outlook.
Micro Focus (LON:MCRO) shares are higher this afternoon after the group confirmed that full-year revenue will be at the lower end of the -6% to –9% range that they originally expected. The share price took a battering in March when the group issued a profit warning, and today’s update has helped market confidence somewhat. The firm announced they indent to restart their share buyback scheme .The stock price has been range bound since April, and while it remains below the 200-day moving average at 1,432p, its outlook should remain bearish.
Hiscox (LON:HSX) shares are lower today after the group issued a cautious outlook. The insurance company announced a 14% increase in gross written premiums for the third-quarter, but cautioned that a number of big ticket claims are in the pipeline. The company confirmed that its European subsidy will be up and running in the New Year, and it said that its Brexit preparations are going well. The stock has been in a solid upward trend for over five years, and while it holds above its 200-day moving average at 1,531p, the bullish trend should last.
Ryanair (LON:RYA) announced that traffic numbers in October rose by 11%. The company has been keen to offer low fares in order to win around customers in the wake of the negative press it endured due during the recent industrial action.
Ashtead (LON:AHT) shares are in the red after Barclays (LON:BARC) lowered its price target to 2,200p from 2,520p.
Just Group (LON:JUSTJ) had its price target lowered by JP Morgan to 100p from 102p.
US
The major US indices are a mixed bag, and the tech sector is the biggest faller. Late last week, we saw the bullish sentiment run lose a little steam. Dealers remain cautious about the US-China trading relationship.
Apple shares (NASDAQ:AAPL) are in the red after the company after President Trump confirmed he was looking into antitrust violations. The stock finished last week on a sour note after it confirmed it missed iPhone sales estimates. The tech giant also stated it would no longer announce its unit sales of iPhones and iPads, which suggests that would rather focus on the average selling price – which is rising. Other tech giants like Amazon (NASDAQ:AMZN) will be under watch in relation to the potential antitrust violation.
The mid-term elections will be focus and it is believed we could see the first polls at around 11pm GMT on Tuesday. There is speculation the Democrats will take control of the House of Representatives, and there is talk the Republicans will maintain their narrow majority in the Senate. Should the Democrats do well, it might prompt President Trump to soften his protectionist stance.
FX
EUR/USD hasn’t moved much today. The eurozone Sentix investor confidence report fell from 11.4 to 8.8 – a two-year low. The uncertainty surrounding Italy’s proposed budget deficit is also weighing on the euro. Volatility in the session has been low, and the bulk of the move has come from the US dollar. The euro has been losing ground since late September, and if the negative move continues it could target 1.1300.
GBP/USD is still in the red but has made a decent recovery, especially in light of the poor services data from the UK. The British services PMI report dropped from 53.9 in September to 52.2 in October, and the consensus estimate was 53.3.
Commodities
Gold hasn’t moved much today, but it is encouraging to see that it has held onto most of the gains that were at the back end of last week have been kept. The lack of volatility in the US dollar has translated into a tight trading range in the gold market.
Oil has pushed higher for a change .The long awaited sanctions on Iran have set in, and even though they aren’t as strict as dealers initially expected, the oil market has been driven higher. The US have allowed 8 countries to continue to purchase oil from Iran without fear of repercussion. Given how far oil has fallen in recent weeks, it’s no surprise bargain hunters have stepped in.
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