European stock markets are mixed as traders remain nervous about the debt situation in Italy, the poor global trading relations, and the weakness in emerging markets. The US markets will reopen today following the Labour Day holiday yesterday. When traders are in full swing we will get a better representation of global stock markets. German car manufactures like BMW (MI:BMW) and Daimler (LON:0NXX) are the notably fallers this morning as President Trump knows full well the European auto sector is a great industry to apply pressure on Brussels.
DS Smith (LON:SMDS) shares are in demand this morning after the company issued a positive first-quarter trading statement. The packaging company confirmed that cost-saving measures taken earlier in the year have kicked in and the group is performing ‘in line with expectations’. The acquisition of Europac is tipped to be completed in the final quarter of 2018. The group confirmed that the rise of e-commerce has brought about change in the shopping habits, but they foresee ‘excellent growth’ opportunities in the corrugated packaging industry. The share price had been pushing higher since April, and if the bullish move continues it could target 540p.
WPP (LON:WPP) shares are in the red after the company posted a 7.4% fall in profit before tax, but on a constant currency basis, earnings only fell by 2.5%. With the expectation of the North American division, all regions of the business saw revenue growth in the second-quarter. The company expects the full-year profit before interest and tax margin to be similar to the first-half decline of 0.4%. The interim dividend was left unchanged at 22.7p, and this went a little way to keep shareholders on side. Yesterday, Mark Read was named as CEO, and today it was reported that we will announce the group’s strategy before the end of the year. The advertising industry has undergone major change in recent years due to the rise in popularity of Google (NASDAQ:GOOGL) and Facebook (NASDAQ:FB), and the WPP will need to address that issue.
The US dollar index is continuing the recovery that started at the end of last month. Broadly speaking, the greenback has enjoyed a good run in 2018 and with the prospect of a rate hike later this month, and of possibly a hike in December too, the dollar is likely to remain in demand.
GBP/USD is under pressure on account of the firmer US dollar, and the disappointing UK construction PMI report didn’t help. The reading came in at 52.9 – it’s lowest in three months.
Mark Carney, the governor of the Bank of England (BoE) will be speaking in front of the treasury select committee later today. The BoE rate hike and the ongoing uncertainty surrounding Brexit, as well as Mr Carney’s future at the BoE will be on the agenda.
Tesla (NASDAQ:TSLA) will be in focus today after the company only produced 4,300 model 3 cars in the last week of August, while the company’s target was 6,000.
We are expecting the Dow Jones to open up 31 points at 25,995 and we are calling the S&P 500 up 5 points at 2,906.
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