Stocks in Europe have recouped some of yesterday’s major losses, but the trade tensions are still simmering away. This morning some traders are licking their wounds in the wake of yesterday’s severe declines, while others are out barging hunting. ‘Don’t say we didn’t warn you’ was a quote in a Chinese state newspaper, and that same line echoes statements made ahead of conflicts that China have been involved in down through the years. Zhang Hanhui, China’s vice foreign minister, described the treat of tariffs from the US as ‘naked economic terrorism’, so tensions are clearly running high, and investors are treading lightly today.
FirstGroup (LON:FGP) shares are in demand this morning as the firm announced plans to spin-off the struggling Greyhound business. The US bus division has been underperforming for a number of years, and the firm cited low air-fares and lower car fuel costs for the reason behind the planned asset disposal. The transport firm will make changes at home too, as it intends to implement ‘structural changes’ at the British bus business. Changes might be introduced at the UK rail unit also, as it questioned the ‘risk and reward’ balance at the unit. Earnings came in at £670 million, which undershot analysts’ expectations of £711 million.
De La Rue (LON:DLAR) shares have slumped after the company warned that profit will be ‘somewhat lower’ and that the group faces ‘significant challenges’. The CEO, Martin Sutherland, will step down. Last year the company decided to drop its challenge to the UK government for not being selected to print the new blue post-Brexit passports. The fact the firm didn’t win the contract was a big blow to investor confidence, and now it is expressing concerns about tough competition in the banknote market. This morning, the group mapped out a plan to cut £20 million in costs over the next three years.
Daily Mail and General Trust (LON:DMGOa) confirmed that first-half adjusted profit before-tax jumped by 19%, topping forecasts. Revenue for the period edged up by 1%. The interim dividend was upped by 3%, and the group said it is on track to achieve its full-year forecasts.
National Grid (LON:NG) shares are in the red today as it is ex-dividend, and Credit Suisse (SIX:CSGN) lowered its price target to 810p from 850p.
EUR/USD has pulled back some of yesterday’s losses. The Spanish inflation report was disappointing, as the CPI rate dropped to 0.9% from 1.6%, and this indicates a large drop in demand.
Dell Technologies (NYSE:DELL) will be in focus today as the company will release its first-quarter results. Dell’s share price has held up well when you consider the turbulence in the markets recently, and in a way that vindicates the firm’s decision to return to the stock market. The group hopes to have full-year revenue of between $93 billion and $96 billion, and keep in mind the fourth-quarter revenue came in under $24 billion.
Gap (NYSE:GPS) will also announce their first-quarter figures today. The firm has been finding trading tough lately, and the group plans to scale back its Gap and Banana Republic operations as they are underperforming, simultaneously, the retailer will focus more on its Old Navy band – the big earner of the group. Since the fashion house in putting more focus on Old Navy, so traders will be closely watching that division.
We are expecting the Dow Jones to open 49 points higher at 25,175 and we are calling the S&P 500 up 7 points at 2,790.
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.