European markets have got off to slow start this morning, as currency concerns appeared to weigh on the major indices. Despite a big increase to December factory orders in Germany, an expected increase of 0.7% actually came in at +5.2%, the DAX is floundering below 11,700 as German finance minister Scháeuble took aim at the ECB over the weekend for its weak euro policy.
The FTSE100 has had better luck pushing higher, helped by the rise of Randgold Resources (LON:RRS) as it announced a 50% increase to its 2016 dividend. Higher commodity prices, specifically gold, along with lower costs has meant that full year profits increased significantly from $260.8m to $402.6m, and there has been confirmation of expanding their exploration programmes to take advantage of this.
As Randgold hits a 3-month high, Fresnillo (LON:FRES) and Glencore (LON:GLEN) have also been pushed upwards as expectations of their gold earnings are increased. Fresnillo only recently logged record gold and silver output for 2016, and so could well outperform, despite recent downgrades by analysts at Citigroup (NYSE:C).
Barclays (LON:BARC) is also higher this morning, getting a lift from the latest Presidential executive order on banking regulation as well as reports over the weekend that it is undertaking a complete restructure of its back office, in order cut costs and streamline its operations to cope with new ringfecning rules which are due to take effect in 2019.
House builders like Taylor Wimpey (LON:TW) and Barratt Developments (LON:BDEV) have slipped back this morning as news of a Government white paper on planning permission timetables is set to be released this week. The white paper is expected to say that the house builders will have to adhere to a timetable to build their homes or they may lose their planning permission.
The companies have raised concerns that such measures could lead to a reduction in homes being built as developers try to reduce bottlenecks, which would then have the effect of potentially reducing yearly revenue figures and their ability to slowly release houses onto the market to keep prices stable.
In the US, the focus will be on Twenty-First Century Fox as their Q2 figures are set to come out after the closing bell. Whilst the figures are expected to be positive, with EPS at $0.49 and revenue at $7.76bn, investors will be keener to hear news on whether the Sky bid is likely to succeed.
The merger would require regulatory approval in both Europe and the UK, and there are concerns this may not be forthcoming if Sky cannot be independent, seeing as many directors hold positions at both Fox and Sky.
Dow Jones expected to open up 9 points at 20,080
S&P 500 expected to open flat at 2297.
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