We are expecting the Dow Jones to open 63 points higher at 25,450 and we are calling the S&P 500 up 10 points at 2,736.
Stock markets are higher this morning as sentiment is slightly more optimistic despite the political risks. The Italian market is in the red as traders are on edge over the budget, which will be resubmitted to the EU. Brussels and Rome are not showing any sings of backing down, and this political fight has the potential to spark another debt crisis. The UK-EU withdrawal talks continue too, and dealers will be paying close attention to developments.
Vodafone (LON:VOD) shares are in demand this morning after the company narrowed full-year earnings guidance to a rise of 3%, and the previous guidance was between 1% and 5%. The dividend was kept on hold too, and this also pleased shareholders, even though there has been pressure to cut the cash pay-out. The group registered impairments of €6.9 billion relating to the value of operations in India, Romanian and Spain. Last week the stock fell to its lowest level since 2010, so the sentiment is clearly bearish, and if the negative move continues it might target 125p.
Taylor Wimpey (LON:TW) shares are in the red this morning after the company expects flat sales growth next year. The house builder cited political uncertainty surrounding Brexit for the cautious outlook, but it claimed there is potential for ‘significant growth’ after 2020. The firm also warned that costs will tick up by 3-4%. The number of completions for this year has risen by 12%, and the group is on track to meet expectations. The share price has been in decline since January, and if the negative trend continues it could retest 150p.
Experian shares are higher this morning after the company released a strong set of results. Revenue increased by 7%, but profit fell by 5% - on account of a foreign exchange loss in Brazil. Tighter regulations and data and a number of high profile security breaches has prompted demand for their services. Experian are optimistic in their outlook too, and they predict full-year organic revenue will be at the top end of their previous guidance. The stock has been in an upward trend for over four years, and if the bullish move continues it could target 2,000p.
UK average earnings excluding bonuses increased by 3.2%, it was the highest growth rate since the financial crisis. This bodes well for the British worker as inflation is falling, and it gives UK workers a ‘real’ increase in earnings. The unemployment rate ticked up to 4.1% from 4%, but traders are less concerned with that as the jobs market is robust. Ordinarily, GBP/USD would be have been boosted by the earnings numbers but traders are still preoccupied with Brexit.
Apple (NASDAQ:AAPL) will be in focus again today after losing over 5% last night. The tech giant has been under pressure since the group released its latest quarterly figures, and the number of iPhone sales missed forecasts. The company will no longer report unit sales of iPhones and iPads which could be a sign that we are at peak iPhone.
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