Equity markets remain strong after yesterday’s rally. The dovish update from the Federal Reserve on Wednesday propelled stocks higher yesterday, and the feel goof factor is still doing the rounds.
Traders are anticipating lower interest rates from the US central bank later this year, and keep in mind that Mario Draghi, the head of the European Central Bank, dropped hints about the prospect of looser monetary policy earlier in the week, so central bankers are fuelling the rally.
IQE (LON:IQE) shares have slumped today after the company cautioned that revenue will fall short of forecasts as the sector’s supply chain has been disrupted on the back of the Huawei ban. The manufacturer of semiconductors is under pressure from global trade tensions, and the group’s CEO described these times as ‘unprecedented’. The group now anticipates annual revenue to be between £140 million and £160 million, while the consensus estimate was £175 million.
Ocado (LON:OCDO) shares are higher this morning on the back of Citi Group raising their price target to 1,450p. From 1,300p.
BP (LON:BP) and Royal Dutch Shell (LON:RDSa) shares have rallied today on the back of the higher oil price .Heightened tensions from between the US and Iran has driven up the price of oil and energy firms have benefited from the move.
Nanoco (LON:NANON) confirmed that a contract with a with large US client will not be extended. The group said the decision by the customer was ‘wholly unconnected to the performance of our materials and out service delivery’. Today’s update clobbered Nanoco’s share price.
EUR/USD was given a small lift by the largely positive PMI reports from France and Germany. French services and manufacturing PMI readings for June were 53.1 and 52 respectively, and both reports showed improvements on the month, and exceeded forecasts. The German services sector continues to expand as the reading was 55.6, and the manufacturing PMI update was 45.4, which is an improvement on May’s 44.3. It is still concerning that the German manufacturing sector is still in deep contraction, and no doubt global trade tensions are playing a part in the poor reading.
GBP/USD is little in the red this morning as traders banked their profits from yesterday’s positive move. UK public sector borrowing excluding banks was £5.1 billion in May, and keep in mind the April figure was revised from £5.8 billion to £6.8 billion.
Red Hat (NYSE:RHT) will be in focus today as the company posted solid first-quarter figures last night. EPS jumped by 38% on an annual basis to $1, which comfortably topped the 85 cents forecast. Revenue for the three month period was $934 million, which marginally topped forecasts. The firm confirmed that revenue from infrastructure-related offerings increased by 11% on an annual basis.
We are expecting the Dow Jones to open 13 points lower at 26,740 and we are calling the S&P 500 down 4 points at 2,950.
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.