Europe
Equity markets are mixed again in Europe as there is no clear sentiment across the continent. The DAX hit a new all-time high this morning, but the market has been drifting lower since.
EasyJet (LON:EZJ) shares are in demand after the company posted respectable first-quarter figures. Revenue and passenger numbers increased by 14.4% and 8% respectively. The demise of Air Berlin and Monarch Airlines, combined with the major disruption caused by Ryanair’s (LON:RYA) flight cancellation fiasco helped the company. The stock is up 4.8% and it hit a two year high today, which underlines how bullish investor sentiment is.
N Brown (LON:BWNG) stated their profit margins would fall between 225 and 250 basis points, and that compares with their previous guidance of a decline between 70 and 120 basis points. The retailer raised promotional spending, which helped boost sales by 3.2%. It seems that higher revenue came at the expense of lower margins, and traders dumped the stock on the back of it. The share price is down 14.7% today, and dropped to a seven month low.
SKY (LON:SKYB) shares are higher after the Competition and Markets Authority (CMA) stated they are concerned about the prospect of 21st Century Fox (NASDAQ:FOX) trying to acquire the remaining 61% stake in the company. The CMA feel the a complete takeover of Sky by 21st Century Fox would give the Murdoch’s too much influence over the media in the UK.
Sainsbury’s (LON:SBRY) stated they are looking at trimming their headcount and the restructuring would be ‘in the thousands’. The retailer is trying to save £500 million over the next three years. The move by Sainsbury’s echoes the decision by Tesco (LON:TSCO) yesterday to cut 1700 jobs. Sainsbury’s share price was higher earlier, but is now flat on the day.
US
US markets are mixed today, and the Nasdaq has set yet another record high on back of the Netflix (NASDAQ:NFLX) numbers last night. The news broke yesterday that the political deadlock in Washington DC was broken and the US government secured funding until early February, and the shutdown was ended. The strong finish in New York last night was met with some profit taking in early trading today.
The market capitalisation of Netflix has surpassed the $100 billion mark after the company added 8.33 million new users in the fourth-quarter – which was a record for the company. Analysts were expecting 6.39 million new subscribers to have been added in the latest quarter so it was well ahead of expectations. Not only was the previous quarter robust, but the guidance for the first-quarter is bullish too.
FX
GBP/USD traded north of the 1.4000 mark, creating a new 19 month high for the currency pair. The bounce back in the US dollar on account of the government shutdown being brought to an end fizzled out. Earlier in the session the UK reported a decent drop in public sector net borrowing to £0.98 billion in December from £6.65 billion in November, revised down from £8.12 billion.
EUR/USD is also taking advantage of the slide in the US dollar and the jump in eurozone consumer confidence is adding to the positive momentum. Consumer sentiment in the currency bloc rose to 1.3 from 0.5% in December. This morning, the German ZEW economic sentiment report jumped to its highest level in eight months.
Commodities
Gold has crept higher as the weakness in the US dollar has assisted the metal. Gold continues to be relatively subdued, and when you take into account that the US dollar index has taken out recent lows, the upward move in the metal isn’t that much. Gold reached a fresh four month high last week and the bias remains to the upside.
WTI and Brent Crude hit one week highs today after the Saudi Energy Minister Khalid al-Falih stated he was ‘anxious’ about the oil market. There is talk that Saudi Arabia wants to extend the co-ordinated oil cut beyond the end of 2018. The major oil-producing nation doesn’t always fulfil its promises, but the chatter alone has put pressure on the oil market.
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