Stock markets in Europe are higher this morning as hopes about a US-China trade deal have been lifted. There were positive sounds from the US as well as China. Robert O’ Brien, US national security advisor, said it is still possible that phase one of the trade deal might be reached before the year is out. Beijing said they would tighten laws in relation to intellectual property (IP) rights. The protection of IP is something that is very important to the US in this negotiation so this is viewed as a topic which could have the potential to move the talks along. The Chinese government have typically offered to purchase more agricultural goods from the US, but that will only gain a limited amount of traction with the Trump administration, but genuine progress regarding IP could held get phase one wrapped up.
Hochschild Mining (LON:HOCM) shares are in the red again as the company lowered its guidance on Friday. At the back end of last week the company said it is on track to achieve its 2019 output target, but it lowered its production forecast for 2020. The stock fell on Friday, and it has tumbled again today so it now fell to a level last seen in June. Permit issues at the Pallancata operation in Peru were cited as the reason for the lowered forecast. The firm said that costs are expected to tick up on account of lower output at one mine, and a slide in capacity at another operation. Underlying metal prices aren’t exactly booming so the update in relation to output and costs is poorly timed.
LVMH (PA:LVMH) confirmed they have agreed to buy Tiffany for $16.2 billion. The boards of the respective companies backed the deal over the weekend. The move should give LVHM more exposure to the high-end market in the US. Last month, LVMH offered $120 per share for Tiffany, but the New York listed group claimed it under valued the group, but the renewed offer of $135 per share was accepted. Some companies in the retail sector have complained about softer demand, but luxury brands tend to hold up well when economies cool as the mega rich usually fare better in a cooler economic climate.
The board of Just Eat (LON:JE) have advised shareholders to reject the takeover bid from Prosus, and stay the course with the agreed deal with Takeaway.com. Even though Prosus are offering more money, the management of Just Eat believe the company will be better-off in the long-run by merging with Takeaway.com. I seems as if the management of Just Eat have their eye on the prize – the long-term play, rather than the short-term cash grab.
EUR/USD is largely unchanged today even though the German Ifo business climate reading came in 95, which was a four month high. The reading met economists’ forecasts. The update ties in with the latest German manufacturing figures which showed the sector has improved from the recent lows.
Uber (NYSE:UBER) shares are likely be under pressure today after it was recently announced the company was refused a licence to operate in London.
We are expecting the Dow Jones to open 85 points higher at 27,960 and we are calling the S&P 500 up 10 points at 3,120.
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