Eurozone equity markets are a little higher today as traders look ahead to the European Central Bank meeting at 12.45pm (UK time) and the press conference will follow at 1.30pm (UK time).
Monetary policy is tipped to remain on hold, but policymakers might adopt more dovish language in light of the soft economic indicators released from the euro-area recently.
The FTSE 100 is largely unchanged today as dealers await the EU summit where Mrs May will find out whether her request for an extension will be granted or not.
Tesco (LON:TSCO) issued a solid set of full-year preliminary results. Group operating profit jumped by 34% to £2.21 billion, topping the forecast of £2.07 billion, and group sales increased by 11.5% to £56.9 billion. Full-year operating margin came in at 3.45%, and second-half operating margin excluding Booker was 3.79%, so it is clear the company performed better in the latter half. The supermarket is performing well, but some of the metrics didn’t quite measure up to forecasts, as fourth-quarter like-for-like UK sales ticked up by 1.7%, while equity analysts were anticipating 1.8%. The net debt position edged by 9%, but that was in relation to the acquisition of Booker. Tesco have endured a tough restructuring plan, and now the firm has either met or is close to achieving the majority of its targets.
ASOS (LON:ASOS) revealed an 87% fall in first-half pre-tax profit, and the ‘large scale transformational projects’ were blamed for the decline in earnings. The group’s large expansion in Europe and the US was the reason for the swing from a net cash position of £37.7 million to a net debt position of £37.9 million Total sales increased by 14%, and the UK operation posted a 16% rise in revenue, while international sales rose by 12%. The firm acknowledged that the first-half performance was ‘disappointing’ while the group is ‘confident of an improved performance in the second-half’. Gross margin dropped by 60 basis points in the six month period on account of discounting, but that was already known to the market. On the bright side, the group retained its guidance for 2019.
Stagecoach (LON:SGC) shares sold-off this morning after the company was barred from bidding from three UK rail franchises by the Department of Transport (DoT). The government body ruled that because the company didn’t meet the pension rules, they can’t bid for the West Coast, South Eastern or East Midlands franchisees. Firms seeking to take over the running of certain train lines must prove they can cover the risk of the railways pension scheme, and a DoT spokesperson said the group ‘ignored’ the rules.
GBP/USD was given a jolt higher by the respectable economic updates from the UK today. The GDP estimate for the three months until February was 0.3%, which topped the 0.2% forecast. Industrial output and manufacturing output in February were 0.6% and 0.9% respectively, both topping economists’ estimates. The EU is expected to grant the UK an extension to leaving the organisation, but it might not be the short delay that Prime Minister would like.
Bed Bath & Beyond (NASDAQ:BBBY) will be in focus today as the company will release its fourth-quarter numbers after the closing bell. The stock has been bouncing back in recent months. In January, the firm posted third-quarter earnings per share of 18 cents, topping the 17 cents forecast, and the guidance was upped, which was well received by investors. Last month, a group of activist investors pushed for the board of directors to be replaced, and for underperforming assets to be sold-off.
The minutes from last month’s Federal Reserve meeting will be announced at 7am (UK time) and the update will give us a better insight as to why the central bank moved towards a more dovish position.
We are expecting the Dow Jones to open 30 points higher at 26,180 and we are calling the S&P 500 up 5 points at 2,883.
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