Stock markets in Europe are mixed this morning as traders have yet to hear any further details about the US-China trade talks that concluded earlier in the week. European equity markets have enjoyed a good run in recent weeks, and now they appear to be taking a breather, and it feels like traders are waiting for fresh news in relation to the US-China situation before making their next move.
AO World (LON:AO) shares are in demand this morning after the group posted an 8.2% rise in revenue. The company confirmed that November was the ‘highest sales month ever’ as Black Friday was a success thanks to promotions. It is no surprise the online only retailer is performing well, as that’s the way that consumer trends are going. The firm reiterated its full-year guidance and that has lifted sentiment too. The stock has been broadly moving lower since October, and if the negative move continues it might target 110p.
Grafton Group (LON:GFTU_u) issued a positive update as the company said that full-year revenue increased by 8.7%. The company confirmed it had a ‘good performance’ in the year and predicts that full-year earnings will be above analysts’ expectations – full-year figures will be released next month. In the current environment, there aren’t many companies that are releasing positive updates, so Grafton stands out. The stock has rallied since late December, and if the bullish move continues, it might retest the 792p region.
Flybe (LON:FLYB) shares have plummeted after Virgin Atlantic and Stobart (LON:STOB) offer to buy the company for £2.2 million – which was well below yesterday’s closing market value of £36 million. The offer is being viewed as a rescue package, seeing as no other firms seem to be interested in acquiring the struggling airline. Virgin and Stobart have pledged a bridge loan and an additional investment for Flybe so at this stage it’s just about survival.
EUR/USD has pushed higher today on account of the pullback in the greenback. Italy registered poor industrial production figures in November, but it has little impact on the currency. In November, Italian industrial production dropped by 1.6% on a monthly basis, and the consensus estimate was -0.3%. The euro area is heading towards an economic downturn and that is likely to hit the euro.
GBP/USD has been lifted by the softer greenback. The UK reported a raft of economic data this morning, and it was by-and-large underwhelming. It was estimated that the UK economy grew by 0.3% between September and November, which was a slowdown from 0.4% in the previous report. In November, industrial production and manufacturing production contracted on the month.
US retail stocks will be in focus again today. Yesterday, disappointing figures from Macy’s (NYSE:M) put pressure on the entire sector. There are concerns about US consumer spending habits, and we might see continued pressure applied to stocks like Target (NYSE:TGT), Kohl’s (NYSE:KSS) and Abercrombie & Fitch (NYSE:ANF).
We are expecting the Dow Jones to open 31 points lower at 23,970 and we are calling the S&P 500 down 7 points at 2,589.
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