Equity markets in Europe are driving higher on talk there has been progress in relation to the coronavirus situation. Sky News reported a ‘significant breakthrough’ has been made by a UK research team regarding a vaccine for coronavirus. A news station in China claimed a research team at Zhejiang University has discovered an effective drug to tackle the situation, but that story has yet to be confirmed. Traders have latched onto the headlines and are buying into the market with the view the health crisis could be brought under control.
Barratt Developments (LON:BDEV) shares have registered yet another record-high thanks to the respectable first-half figures. Revenue for the six-month period increased by 6.29% while profit ticked up by 3.7% to £423 million. The house builder said it expects the company to perform broadly in line with expectations for the rest of the year. Barratt have been a major benefactor of the help-to-buy scheme that was lunched by then then Chancellor of the Exchequer George Osborne in 2013, and the firm hopes the Boris Johnson led government will introduce measures to assist the house building sector.
Imperial Brands (LON:IMB) shares are in the red today after the company warned on profits. The company has cautioned that adjusted full-year earnings are going to be down approximately 10% on account of the US regulator banning the sale of some flavours of vaping products. A number of health issues have arisen in relation to vaping in the US, so regulatory uncertainty exists. In Western countries, cigarette sales have been in decline on account of higher taxes plus changes in lifestyles, so many big tobacco companies have invested heavily in products such as vaping as well as e-cigarettes, so but now the growth prospect of those sectors are being called into question.
BNP Paribas (PA:BNPP) had a strong fourth-quarter as revenue increased by 11.5%. Net income came in at €2 billion, topping the €1.73 forecast. There was a 30% jump in revenue at the investment and corporate banking division. The unit that specialises in trading the financial markets performed well. The common equity tier 1 ratio, ticked up to 12.1% from 12% - which is a step in the right direction in terms of its financial strength. Despite the robust final-quarter, the bank lowered its 2020 guidance fractionally. The stock is showing modest gains this morning.
GBP/USD is higher again today as it continues to recover from the large losses on Monday. The final reading of the services PMI report for January was 53.9, topping the 52.9 forecast. It was the highest reading in 16 months. The services sector accounts for roughly 75% of the UK’s economic output, so the jump in activity bodes well for the economy.
EUR/USD is in the red as the service reports from the eurozone were a little mixed. The German services PMI and the Italian services PMI were 54.2 and 51.4 respectively, and both were higher than expected, while the French reading was 51.0, slightly missing forecasts.
Disney will be in focus today after the company posted solid first-quarter figures last night. EPS were $1.53, topping the $1.44 forecast. Revenue was $20.86 billion which exceeded the $20.79 forecast. The company entered the competitive streaming market in November when it launched its Disney+ service. The business now has 26.5 million subscribers, and that has been a huge jump on the 10 million users that signed up when the service began. The group’s CEO, Bob Iger, claimed the uptake of Disney+ ‘exceeded even our greatest expectations’.
We are expecting the Dow Jones to open 273 points higher at 29,080 and we are calling the S&P 500 up 28 points at 3,325.
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