Europe Rallies On ECB Hopes, LSE Approached By HK Exchange

Equities in Europe are higher today as traders look ahead to tomorrow’s European Central Bank (ECB) update, and Beijing’s decision to soften its stance on the US has helped sentiment too. In recent weeks there has been a lot of talk about the ECB cutting rates, and there is also speculation about a stimulus package too, and that is fuelling buying this morning. Overnight, China announced that 16 US products will be exempt from extra tariffs, and the move is a step in the right direction for US-China trade relations, and it might trigger a similar move from Washington DC. The decision by China bodes well for the trade talks that are due to take place between the two sides next month.

London Stock Exchange Group (LON:LSE) shares have surged to all-time highs after the Hong Kong Exchange offered to buy the group.

Inditex (LON:0QWI) shares are in the red this morning despite posting solid first-half results. The retailer revealed a 7% jump in revenue to €12.82 billion, which met analysts’ forecasts, and net profit was €1.55 billion. The company restated it expects full-year sales growth to be between 4% and 6%. Inditex is keeping up with the changes in the retail space as it has closed smaller stores, and focused on larger well located sites, and it have pushed online sales too. Yesterday, the share price hit a level last seen in July, and in light of today’s negative move, it would appear that much of the good news was already priced-in.

Biffa (LON:BIFF) announced that trading in the first-half was in line with management expectations. The group continues to grow through acquisitions and organic methods. Biffa has the financing capabilities to pursue its ‘established strategy for growth’. The company’s deb debt and cash generation are in line forecasts. This morning, Peel Hunt lowered its price target for the stock to 240p from 252p.

Serco (LON:SRP) announced that’s its contract with the Australian government has been extended for two years. The contract relates to detention centres at immigration facilities, and the agreement will last until December 2021, and there is a possibility of a further extension too.

Volatility on the currency markets is low as there were no major economic announcements from Europe this morning. The US dollar index is higher as traders are expecting the ECB to loosen monetary policy tomorrow, and the dollar strength is hurting EUR/USD and GBP/USD.

Apple (NASDAQ:AAPL) shares finished slightly higher last night in the wake of the announcement of new products and services. Three iPhone 11s were launched, and the prices range from $699 to $1,099. A new iPad, with a price tag of $329 was revealed too. The group has witnessed a dip in iPhone sales, and the consumer climate has cooled, so cheaper products might attract new consumers. A new watch was debuted too.

We are expecting the Dow Jones to open 9 points lower at 26,900 and we are calling the S&P 500 down 3 points at 2,976.

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