European stock markets are higher this morning as traders look ahead to the EU summit at the weekend.
Traders reacted well to yesterday’s news that the UK and the EU reached an agreement, but getting it passed at Westminster is another matter. We are likely to see low volatility today as many US traders will be still be on holidays seeing as yesterday was Thanksgiving.
Flybe (LON:FLYB) shares have soared after it was reported that Virgin Atlantic are interested in acquiring the struggling airline. The two companies already operate a code-share as Flybe are regional focused, and Virgin are geared towards transatlantic flights. Last week Flybe effectively put itself up for sale, and it seems that Virgin are keen to look into the possibility of a takeover. Given that the sector has been be struggling recently, the prospect of consolidation isn’t a surprise. Flybe’s shares have soared this morning on the report.
Interserve (LON:IRV) shares are in the red after the company stated its expected year-end net debt to be higher than expected, but it plans to trim its debt position. Earlier this year the group sold-off a development in Edinburgh to help keep its debt under control. The firm continued to trade in line with management’s forecasts for the first nine months of the year. The outlook isn’t overly optimistic as the order book for international business continues to be lower than expected. All eyes are on the company in the wake of Carillion’s collapse, and they have a difficult task of lowering debt in a mediocre economic environment. The stock has been in decline since 2014, and if the negative move continues it might target 27p.
Fuller Smith & Turner (LON:FSTA) announced a 12% fall in first-half profit, and revenue declined by 6%. The group cited increased investment spending for the double digit drop in earnings. The company confirmed that like-for-like sales jumped by 4.1%, and this is encouraging to see as some players in the pub sector have complained about a tough climate.
EUR/USD is weaker after the eurozone revealed underwhelming economic indicators. French and German manufacturing missed forecasts and fell on the month, and the German services report was disappointing too.
USD/CAD will be in play today as Canada releases the latest inflation and retail sales reports at 1.30pm (UK time). The inflation rate is tipped to hold steady at 2.2%, while the retail sales report is expected to show 0.1% growth.
US retail stocks like Macy’s (NYSE:M), Target (NYSE:TGT) and Best Buy (NYSE:BBY) will be in focus today as Black Friday sales kick-off. The rise of online shopping has hurt traditional retailers, and investors will be monitoring how the industry holds up.
We are expecting the Dow Jones to open 80 points lower at 24,384 and we are calling the S&P 500 down 7 points at 2,642.
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