Europe Higher As Global Mood Rises; Provident Financial Pops

The stellar finish in the US last has lifted investor confidence in Europe. The move was driven by a slight cooling of trade tensions, and Fed members, Jerome Powell and Richard Clarida suggested they would be open to cutting interest rates should it be warranted.

Traders love to snap up relatively cheap stocks, and the flexible message from the central bankers has encouraged the bulls this morning. The trade situation remains unresolved, but for the time being, tensions have simmered.

Provident Financial (LON:PFG) shares jumped after last night’s announcement that Non-Standard Finance (NSF) has abandoned its plans of a £1.3 billion hostile takeover of the group. NSF made their original offer in February, a few weeks after Provident issued a profit warning and that knocked the share price. There was sense among Provident shareholders that NSF were trying to swoop in and take advantage of the low price. A number of sizeable Provident investors opposed the takeover attempt, and that prompted NSF to drop their bid.

AA (LON:AAAA) shares are in demand after the company said it was trading in line with expectations, and that it is well positioned to meet its medium-term growth targets. The group described the cash-flow as ‘strong’.

Biffa (LON:BIFF) registered a 7% rise in underlying pre-tax profit, and revenue edged up by 0.9%. The firm expanded organically and through acquisitions, and client churn dropped. The group has been investing in recycling and energy from waste assets, and given the wider environmentally friendly culture, the sector is likely to expand in the years to come.

Workspace (LON:WKP) shares are little lower today even though the company announced respectable annual figures. Net rental income and trading profit jumped by 16% and 19% respectively. The property group reshuffled its portfolio in the past year, as it acquired £213 million worth of properties, and it disposed of three office buildings for £52 million, which was 23% above the book value. Net asset value (NAV) increased by 4.7%, and rent per square foot ticked up by 3.8%.

The fact the group invests in office blocks sets it apart from firms will predominately hold retail assets. Online shopping has eaten into traditional high street shopping and that why is why Workspace shares have outperformed the likes of Land Securities (LON:LAND) and Intu Properties (LON:INTUP) in recent years.

The US dollar index is softer today on the back of Powell’s and Clarida’s comments yesterday. EUR/USD and GBP/USD have been helped along by the dip in the greenback.

This morning we saw some by-and-large positive services PMI reports from Europe. The German update for May was 55.4, and that exceeded the 55 forecast. The readings for Spain and Italy topped forecasts too. The UK services PMI was 51 – the highest reading since February.

Salesforce (NYSE:CRM) will be in focus today after the company announced strong first-quarter results after the closing bell last night. EPS on an annual basis jumped by 25.6% to 93 cents, which comfortably topped the 61 cents consensus estimate. Revenue rose by 24% to $3.74 billion, which was slightly ahead of the $3.69 billion forecast that analysts had predicted. The group upped to full-year EPS and revenue outlook, and both topped the forecasts. The group posted an 11.1% increase in cloud revenue, and this is encouraging to see as it faces tough competition from Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), and the sector has big potential.

We are expecting the Dow Jones to open 154 points higher at 25,485 and we are calling the S&P 500 up 17 points at 2,820.

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