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Stocks Tick Up As Dust Settles Post-ECB; Vodafone Jumps On Tower Sale Talk

Published 26/07/2019, 10:57
Updated 03/08/2021, 16:15

Stocks in Europe are a little higher today in the wake of the major sell-off yesterday. Ahead of the ECB meeting, traders were expecting a dovish update, and when a mixed report was released, it triggered a wave of selling, and today we are seeing some bargain hunting.

The ECB is likely to loosen monetary policy in September, and traders are adjusting their outlook, and in turn their positions. Looking ahead to next week, the Fed are tipped to cut rates, and that is a factor in today’s cautiously optimistic mood.

Vodafone (LON:VOD) revealed it is considering selling-off a portion of its European Tower Business via an IPO. It is possible the group is seeking to raise cash in order to pay down debt. The firm revealed first-quarter figures too, and churn in the mobile division was 0.6% on a year-on-year basis – another record low. Organic service revenue slipped by 0.2%, and the Vodafone said it anticipates to see improvements in the course of the year, and it’s reaffirmed its guidance, and the stock rallied on the back of the results.

Pearson (LON:PSON) shares are in demand today after the company posted well received numbers. First-half adjusting profit jumped by 34% to £144 million, which topped the £136 million forecast. Organic revenue or the six month period increased by 2%, which also topped analysts’ forecasts. The full-year adjusted EPS guidance was raised from to between 57.5p and 63p, and the previous guidance was for between 55.5p and 61p.

Sports Direct (LON:SPD) shares are experiencing low volatility today as traders are still awaiting their preliminary full-year figures which was due out this morning, Last week, the group said that the earnings release will be delayed, and then it was confirmed the figures would be posted today, and the firm still hasn’t posted it numbers. Sports Direct confirmed the figures will be posted today, but no time was given. A delay on a delay isn’t a good look, and it suggests the company doesn’t have its act together.

EUR/USD is fractionally higher this morning after the volatile session yesterday, when the ECB delivered an update that wasn’t as dovish as expected. The central bank is likely to loosen monetary policy in September, but it also called for fiscal policy stimulus which indicates that monetary policy tools might not be enough to boost economic sentiment in the currency bloc. German import prices dropped by 1.4% on a monthly basis in June, and if import costs are falling, it points to softer inflation in the months ahead, which is likely to keep pressure on the single currency.

Amazon (NASDAQ:AMZN) will be in focus today as the group posted mixed second-quarter figures last night. Revenue jumped by 20% on an annual basis to $63.4 billion, which topped the $62.5 billion forecast. Profit margins were under pressure on account of higher investment in the business. Earnings cooled to the lowest level since the second-quarter of last year. EPS was $5.22, while the consensus estimate was $5.57.The retailer predicts that third-quarter operating income will be in the region of $2.1 billion and $3.1 billion, while the analysts were expecting a projection of $4.4 billion. Amazon Web Services, the group’s cloud business, posted a 37% jump in revenue to $8.38 billion, which undershot the forecast of $8.48 billion, and keep in mind that revenue grew by 41% in first-quarter, and the cooling of sales growth is a little worrying.

We are expecting the Dow Jones to open 50 points higher at 27,190 and we are calling the S&P 500 up 11 points at 3,014.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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