European equity markets are a touch weaker as the negative move that begun around lunchtime time yesterday has continued. In London, the consumer discretionary sector is the biggest faller after Burberry posted figures that failed to meet market expectations.
Interserve (LON:IRV) is under pressure as the government stated it was being ‘monitored’. The decision was taken in the wake of the collapse of Carillion (LON:CLLN). Westminster is looking into companies they have contracts with, and seeing as Interserve issued a profit warning and stated they may breach their covenants in October, traders are nervous. The share price is down 3.5% today and has been in a downward trend for the past four years, and if the negative move continues it could target 53p.
Burberry (LON:BRBY) revealed third-quarter trading update which failed to impress traders. The fashion house cited the rebound in the pound for the disappointing sales figures from the UK. The high-end retailer took full advantage of the weak pound in late 2016, and now the company’s isn’t seeing the same level of spending from wealthy tourists in the UK. Sales in China are still respectable and the company is on track to make savings of £60 million.
Melrose (LON:MRON) has upped their offer for GKN (LON:GKN) to 430.1p per share. Shares in GKN hit an all-time high of 449p in early trading but have since turned lower.
GBP/USD is slightly weaker on the day as the strong US dollar has hit the pound. We are not expecting any major economic announcements from the UK today, so sterling may be at the mercy of the greenback.
EUR/USD is lower on the day but managed to briefly push higher in the wake of the eurozone CPI data, which fell to 1.4% from 1.5%, but the core reading remained at 0.9%.
At 7pm (UK time) the US will release the Beige Book update, and it will give us an update on the health of the US economy.
We are expecting the Dow Jones to open up 160 points at 25,952, and we are calling the S&P 500 up 11 points at 2787.
Bank of America (NYSE:BAC) will announce its fourth-quarter figurers later today.
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