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Europe Hit By Trade And Political Woes

By CMC Markets (David Madden)Market OverviewMay 29, 2019 09:35
uk.investing.com/analysis/europe-hit-by-trade-and-political-woes-200208455
Europe Hit By Trade And Political Woes
By CMC Markets (David Madden)   |  May 29, 2019 09:35
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Stock markets in Europe are firmly in the red as a combination of trade and political uncertainty has chipped away at investor confidence. The trade standoff between the US and China rumbles on, and in light of the recent escalation in trade tensions, dealers aren’t holding out much hope for an agreement soon. Italy and the EU are on course to clash over the size of Italy’s debt, and the administration in Rome isn’t showing any signs of backing down. Investors are worried about an Italian financial crisis flaring up.

Telford Homes (LON:TELF) confirmed that annual pre-tax profit declined to £40.1 million, which was in line the company’s previously lowered guidance. The group tried to minimise its risk this year as the UK is set to leave the EU, and it decided to focus on lower risk projects, such as build to rent properties. The bad news for Telford is that there is still a lack of clarity in relation to Brexit, and the sector has to contend with cooling house prices, as well as high costs.

Stobart Group (LON:STOB) confirmed that full-year revenue jumped by 39%, but the loss widened from £23.9 million to £58.2 million. The firm incurred a string one one-off costs, but underlying earnings was £10.8 million. The company’s main aviation asset, Southend Airport, posted a 33% jump in passenger numbers. Asset disposals in the past year has helped the business focus on its core aims, and this year was described as ‘transformational’, and the group issued a positive outlook.

AVEVA (LON:AVV) announced that annual revenue and earnings jumped by 57.6% and 19.8% respectively, and today’s update was the first full-year report since the Schneider Electric (PA:SCHN) merger. The company is benefitting from the ‘digitalisation of the industrial world’, and it is on track to achieve its medium-term targets. The final dividend was upped by 7.4%, and that is another sign of the company’s confident outlook.

EUR/USD is under a little pressure after France posted a sizeable dip in inflation. The CPI rate fell to 1.1% in May from 1.5% in April, and the consensus estimate was 1.2%. The slide in CPI suggests that demand is declining, which is worrying. The economy grew by 0.3% in the first-quarter, meeting forecasts. German unemployment ticked up to 5% from 4.9%.

Abercrombie & Fitch (NYSE:ANF) will release its first-quarter figures today. The rise of online shopping has hurt the group, and as a results the firm has endured weaker sales, and it plans to close up to 40 underperforming stores. The retail sector has had to adapt to the changing environment, and investors will be paying close attention to their digital sales, and the Hollister brand is tipped to remain strong.

Dick’s Sporting Goods (NYSE:DKS) revealed better-than-expected fourth-quarter earnings in March, but the company issued a forecast that was missed analysts’ forecasts, and that prompted the stock to sell-off, so expectations might have been managed lower for today’s first-quarter update. The group hopes to return to positive same-store-sales in 2019, so dealers will be keeping an eye on that metric, as well as online sales.

We are expecting the Dow Jones to open 177 points lower at 25,170 and we are calling the S&P 500 down 20 points at 2,782.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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Europe Hit By Trade And Political Woes
 

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Europe Hit By Trade And Political Woes

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