The FTSE 100 has reached its highest level since early December as a push higher in BP (LON:BP), and the wider oil and gas sector has lifted the British equity benchmark. The London market is firing on all cylinders as financials, mining and consumer stocks have rallied. The continuation of the bounce back in US equity markets has dragged European stocks higher, and there is a growing sense the negative sentiment of December is being replaced by a more optimistic outlook, thanks to softer stances from the Federal Reserve and the European Central Bank.
BP revealed a 65% jump in underlying replacement cost profit to $3.47 billion, which comfortably topped the $2.63 billion that analysts were expecting. The group still intends to complete $10 billion worth of disinvestments over the next two years. Net debt jumped by over $6 billion, and that is likely to have been related to the acquisition of the BHP (LON:BHPB) shale assets. Despite the rising debt level, the fourth-quarter dividend was increased by 2.5%, and an additional $355 million worth of shares were purchased last year. Returns to shareholders should keep investors sweet, but the company’s creeping debt level could catch up with them down the line.
Ocado (LON:OCDO) shares are higher this morning even though the group’s loss widened to £44.4 million, from £9.8 million last year. Revenue for the period jumped by 12.3%. The firm saw an increase in development coasts at its warehouses and IT systems, and that was responsible for the drop in earnings. The group has secured a number of big partnerships in the past couple of years, and the company is in talks with Marks and Spencer (LON:MKS). The underlying business is performing well as total customers and total order volumes ticked up by 12.1% respectively.
DCC (LON:DCC) announced that operating profit for the third-quarter was ‘significantly’ ahead of the previous year, and the group said that full-year operating profit will be in line with current market expectations.
EUR/USD is a little lower on account of the firmer US dollar. Eurozone service continued to be mixed. The Italian report was 49.7, while the consensus estimate was 50.0, while the German and French reports came in above expectations.
GBP/USD edged lower after the UK services PMI report came in at 50.1, which undershot the 51 forecast.
Alphabet (NASDAQ:GOOGL) will be in play today after the company posted fourth-quarter figures last night. EPS were $12.77, which easily topped the $10.82 estimate, and revenue was $39.28 billion, while the consensus estimate was $38.93. Despite the solid numbers, the stock dipped in after-hours-trading as operating margin came in at 21%, while traders were expecting 22%, and keep in mind last year’s fourth-quarter operating margin was 23%. The company ramped by capital expenditure by $7.1 billion in the latest-quarter. Capital expenditure jumped by over 90% last year, and that weighed on sentiment too.
We are expecting the Dow Jones to open 56 points higher at 25,295 and we are calling the S&P 500 up 1 point at 2,725.
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