Equity markets are a little lower this morning as investor sentiment has been shaken by the heavy declines in Asia overnight. The Caixin survey of Chinese manufacturing slipped to 50.8 – its lowest reading in one year. This adds weight to the argument that China’s economy is cooling.
Overnight, China’s Xi Jinping talked about boosting global trade, and warned about the downside of protectionist policies, but the update failed to boost investor sentiment. The standoff between Italy and Brussels continues. The anti-establishment coalition in Rome are showing no signs of backing down regarding their plans to raise the budget deficit, and this is playing on investors mind’s too.
Micro Focus (LON:MCRO) shares are in demand this morning after the company said full-year revenue will be better than initially expected. The group confirmed that full-year revenue will be at the lower end of the -6% to -9% guidance. The company’s share price took a beating in March when the firm revealed a profit warning.
On a more optimistic note, the firm said it plans to restart its share buyback scheme. The group announced that net debt is expected to remain in line with guidance. The stock has been range bound since April, and while it remains below the 200-day moving average at 1,432p, its outlook should remain negative.
Hiscox (LON:HSX) shares are in the red after the company issued a cautious outlook. The insurer revealed a 14% increase in gross written premiums for the third-quarter, but warned that a number of big ticket claims are in the pipeline. Natural disasters like hurricanes in the US and typhoons in Japan will set the company back. The insurance firm expects its European subsidiary to be ‘fully operational’ by the New Year, and Brexit preparations are going well. The stock has been in an upward trend for over five years, and if it holds above the 200-day moving at 1,531p, the positive move should continue.
Ryanair (LON:RYA) confirmed that traffic in October jumped by 11%. Despite the negative press the company has attracted recently, the airline continues to entice customers with low fares.
Ashtead (LON:AHT) shares are lower today after Barclays (LON:BARC) trimmed the share price to 2,200p from 2,520p.
JP Morgan has lowered their price target for Just Group (LON:JUSTJ) to 100p from 102p.
GBP/USD is lower this morning on account of the firmer US dollar, and the disappointing UK services PMI report added go the pounds woes too. The services sector makes up approximately 75% of British output, and the reading dropped to 52.2 – its weakest reading since April.
EUR/USD is under pressure too, and the Sentix investor confidence report dropped from 11.4 to 8.8 – a two year low.
We are expecting the Dow Jones to open 45 points lower at 25,225 and we are calling the S&P 500 down 2 points at 2,721.
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