Reports that a Brexit deal has been reached has sent stocks soaring. The announcement came minutes ago, and has boosted sentiment around Europe. Whether the deal will get approval in Westminster is a different story, but for now, the mood is optimistic. The DUP haven’t’ changed their position, which could prove to be an issue, so they bullish sentiment might be short-lived.
It was reported that China and the US are discussing the next phase of trade talks. The news from Beijing has helped stocks too as the US-China trade deal is the other major factor in the financial markets at the moment.
Grafton Group (LON:GFTU_u) shares are in the red this morning after the company cautioned that full-year operating profit for continuing operations would be 4-8% below the consensus estimate. The building materials supplier cited softer demand in the UK in addition to a delays in construction permits in the Netherlands. Uncertainty in relation to Brexit is hanging over the entire UK economy, and in particular, the construction industry. The lack of political clarity in the UK has caused a slowdown in activity in the construction sector as firms can’t plan for the long-term. Home owners are also curtailing their expenditure in relation to DIY improvements, which is also impacting Grafton Group.
Moneysupermarket.Com (LON:MONY) shares are lower as the company’s money division underperformed. Total revenue in the third-quarter increased by 4%. The money unit saw revenue fall by 5% on account of ‘continuing challenges in product availability’. The home services division saw a 21% jump in revenue in the period, while the insurance operation saw a small rise in revenue. Weakness in the Money division isn’t ideal, but the business is still in good shape. Should the consumer climate continue to be fragile, more people might start to use the money-saving website as a way of trimming their outgoings.
Domino’s Pizza (LON:DOM) continues to see respectable trading in its core market, but tit has taken the decision to exits it international markets. Quarterly UK system sales increased by 3.9%, but ‘international system sales continue to be disappointing’. The group announced it will be closing its operations in Iceland, Switzerland, Norway and Sweden. Focusing on the main markets should benefit the group as there is little point in tying up cash in businesses that are underperforming.
GBP/USD soared on the Brexit deal news. On the data front, UK headline retail sales were 0.0% in September, while the August reading was revised to -0.3% from -0.2%. The report that strips out fuel showed a 0.2% increase, which topped the -0.1% forecast.
Netflix (NASDAQ:NFLX) will be in play today after the company posted broadly positive numbers last night. Third-quarter EPS was $1.47, which smashed the $1.04 forecast, while revenue was essentially in line with the consensus estimate. International subscriber growth was 6.26 million, and the consensus estimate 6.05 million. The US subscriber level was 517,000, while dealers were anticipating more than 800,000. The group needs to keep rapidly expanding overseas in order to keep the momentum of the business going, so the solid international subscriber figures boosted sentiment.
We are expecting the Dow Jones to open 11 points lower at 26,990 and we are calling the S&P 500 up 4 points at 2,993.
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