Shares in Europe pulled back on Friday as the US dollar regained its footing and oil prices dipped. The FTSE 100 slipped back beneath 6900 whilst the British pound gave up 1.30 to the US dollar.
Data showing 20-month lows in Eurozone manufacturing and services prompted investors to book profits after big Fed-induced gains. The economic picture out of Europe is looking even more confused. France’s economy grew slower than first reported in the second quarter but its service sector expanded significantly in September, suggesting a rebound in Q3. Germany’s service sector however, slowed by the most in more than three years in September according to preliminary PMI data from Markit.
Shares of Sports Direct (LON:SPD) leaped over 7% on news that founder and largest shareholder Mike Ashley is taking over as CEO from Dave Forsey. The corporate governance issues at Sports Direct have been addressed with a change at the top. With Chairman Keith Hellawell staying on, Dave Forsey has had to take the fall for the scandal surrounding warehouse working practices. Mike Ashley has been criticised in some quarters for having too much influence, but really the opposite seems true. Listening to his media interviews, it seems more like Mr Ashley took his eye of the ball. By taking over as CEO, Mike Ashley is making a public commitment to refocusing and getting the company he founded back on track.
Stocks in the US look set for a lower start, matching the weaker sentiment in Europe and Asia ahead of the release of September manufacturing data.
Shares of Yahoo are expected to remain relatively stable following confirmation from the company that it has suffered the biggest data breach in corporate history. The belief is that Verizon will go ahead with its Yahoo acquisition despite the hack, but clearly the deal getting completed is now more in doubt. That could easily change if it is determined customers have lost more sensitive data such as credit card details, which at the moment Yahoo has said is not the case. There have been some over-reactions to data breaches so investors are showing some more restraint.
Shares of Marriot International (NASDAQ:MAR) will be in focus after it closed its deal to buy Starwood hotels for $13bn this morning.
USA pre-opening levels
S&P 500: 5 points lower at 2,172
Dow Jones: 28 points lower at 18,364
Nasdaq 100: 7 points lower at 4,891
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