European equity markets are mixed this morning as political and economic uncertainty continues. Asian markets didn’t move much overnight as traders are still waiting to find out the final details of the US-China trade meeting that finished last week. The absence of new news has prompted some traders to sit on their hands. Now that Theresa May’s deal has been voted down, a major amount of political uncertainty exists as there is no clear strategy for what the UK will do between now and late March. Unless politicians can cobble together a new deal, and back that, the UK is set to leave the EU without a deal, and that would put pressure on the markets.
Bovis Homes (LON:BVS) announced that full-year profit will be slightly ahead of market consensus. The home builder saw completions increase by 3%, and the average selling price was fractionally higher on the year. The firm said it was too early to comment on 2019 trading, but they seem to be cautiously optimistic. The cooling of the UK housing market, and uncertainty surrounding Brexit has soured sentiment for the house building sector, so today’s upbeat update has been welcomed by investors. The stock has pushed higher since mid-December, and if the rebound continues, it might target the 1,000p area.
Pearson (LON:PSON) said it expects to post full-year adjusted operating profit of between £540 million and £545 million, and that compares with analysts’ forecasts of £536 million. Adding to that, the group predicts 2019’s adjusted operating profit will be between £590 million and £640 million, while the consensus estimate is £601 million. The publishing house now expects annual cost savings to be higher than previously predicted. The firm’s turnaround programme is going well, and net debt is expected to halve. The stock gapped lower this morning, but seeing as it reached its highest level in over three years last week, a lot of good news was already priced in.
Tullow Oil (LON:TLW) expects production to be between 94,000 and 102,000 barrels of oil equivalent per day (boed), and last year output was 90,000 boed. The oil company missed its cash flow and debt targets as a payment for Ugandan oilfield assets was delayed. The stock has been in decline since October, and if it remains below the 200-day moving average at 222p, its outlook should remain negative.
GBP/USD has been trading in as small range this morning after a volatile session last night. UK annual inflation cooled from 2.3% to 2.1% - meeting forecasts. The core reading ticked up to 1.9%, and that suggests that actual demand is increasing, which bodes well for the economy.
Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) will report their fourth-quarter figures today. Traders will be keen to find out how their fixed income, currency and commodity (FICC) trading division’s performed. Citigroup (NYSE:C) and JPMorgan (NYSE:JPM) posted disappointing FICC figures during the week.
We are expecting the Dow Jones to open 5 points higher at 24,070 and we are calling the S&P 500 flat at 2,610.
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