The surge in oil on the back of the tensions in the Middle East has given a boost to BP (LON:BP) and Royal Dutch Shell (LON:RDSa), and the energy sector is the biggest gainer on the FTSE 100 this morning, and the mining industry is the second best performing industry. Eurozone stocks are a little higher too as optimism about a possible dovish update from the European Central Bank this week, and from the Fed next week has lifted sentiment.
Ted Baker (LON:TED) shares are in demand today as it was reported that Ray Kelvin, the founder of the group, said he would be open to the idea of a private equity buy-out of the firm. Mr Kelvin owns roughly 35% of the fashion house, and the fact he is open to the idea of a private equity bid, suggests he sees further downside risk to the stock price.
Metro Bank (LON:MTRO) is looking to sell £500 million worth of mortgages to Cerberus Capital, the bank is seeking to raise cash in a bid to shore up its balance sheet. In May, the bank revealed poor numbers as profits roughly halved, and the net interest margin slipped too. Metro Bank had to raise funds earlier this year in response to an accounting error that underestimated its loan book exposure. The negative publicity prompted some commercial partnership clients to take their business elsewhere, and Metro hasn’t recovered from the dent to its image.
Whitbread (LON:WTB) confirmed that its £2.5 billion shareholder capital return scheme has been completed, and it doesn’t not plan any other capital returns. The announcement has put some pressure on the stock this morning. The generous capital return was as a results of the spin-off of Costa Coffee to Coca-Cola (NYSE:KO), and despite the slightly negative move in the share price this morning, the stock is still up 14% since the announcement of the demerger.
It has been a quiet morning on the currency markets, and the lack of any major economic announcements from the eurozone or the UK has led to small trading ranges in the GBP/USD and EUR/USD. Tomorrow, we are likely to know to who the next UK Prime Minister will be, and Boris Johnson is tipped to take the top job. The fear of a no-deal Brexit has been doing the rounds lately, and sterling’s volatility is likely to tick up with the change of leadership. The European Central Bank meeting on Thursday is at the forefront of currency traders’ minds as the central bank might look to lower interest rates, or lay the foundations for a rate cut in September.
Halliburton (NYSE:HAL) will be in focus today as the company will be post its second-quarter figures. In April, the group revealed a sizeable jump in first-quarter adjusted EPS to 17 cents, from 5 cents the previous year. Revenue slipped slightly to $5.73 billion, but it topped the forecast of $5.53 billion. The CEO, Jeff Miller, said he believed the ‘worst in the pricing deterioration’ was behind the firm, but the stock has continued to drop since the update.
We are expecting the Dow Jones to open 41 points higher at 27,195 and we are calling the S&P 500 up 6 points at 2,982.
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