European equity markets are mixed this morning after the EU-US trade meeting last night. President Trump entertained Jean-Claude Juncker of the European Commission yesterday, and the two agreed to work towards lowering trade barriers. A lot of work still has to be done, but this is a step in the right direction.
SKY (LON:SKYB) shares are largely unchanged even though the company revealed a robust set of full-year numbers. Like-for-like revenue and earnings jumped by 5% and 9% respectively. The UK and Ireland division continues to be the strongest performer in the company, adding 20,000 new customers in the final quarter. The Italian division had a ‘ground-breaking’ year, and the German and Austrian operations performed well too. Sky confirmed that their investment in home-grown content is ‘paying off’, and this is encouraging to hear as nowadays content is king. The share price has been in an upward trend since December 2016, and given the takeover battle for the company, its gains could be extended.
Royal Dutch Shell (LON:RDSa) shares are in the red after the company revealed figures that failed to meet analysts’ estimates. The current cost of supplies – which is a measure of profit – jumped by 30% to $4.69 billion, but the consensus estimate was $5.96 billion. The company has nearly completed the disinvestment programme that it announced in 2016. In a bid to sweeten shareholders, the company announced a $25 billion share buyback scheme. The stock has been in an upward trend since March, and if the bullish move continues it could target 2,850p.
Facebook (NASDAQ:FB) shares will be in focus after the stock fell more than 20% in after-hours trading last night. The social media giant warned that revenue will ‘continue to decelerate in the second half of 2018’. The update also showed that the firm’s user growth and revenue fell below analysts’ estimates.
At 12:45pm (UK time) the European Central Bank (ECB) will release the latest interest rate decision, and the consensus is for no change in policy. The press conference at 1.30pm (UK time) could give us an indication as to when the ECB will hike interest rates. The only guidance we have so far is that rates won’t be hiked until at least the back end of 2019.
EUR/USD is in the red this morning after Germany and France revealed mediocre economic reports. The German GfK consumer confidence report was 10.6, while economists were expecting it to remain unchanged at 10.7. The French consumer confidence update had a reading of 97, which narrowly undershot the 98 consensus estimate.
We are expecting the Dow Jones to open up 46 points at 25,460 and we are calling the S&P 500 down 10 points at 2,836. The sell-off in Facebook is the reason for the S&P 500’s underperformance.
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