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Sentiment Subdued Due To U.S. Holiday; Fever-Tree Trimmed

By CMC Markets (David Madden)Stock MarketsJan 20, 2020 11:10
uk.investing.com/analysis/sentiment-subdued-due-to-us-holiday-fevertree-trimmed-200436863
Sentiment Subdued Due To U.S. Holiday; Fever-Tree Trimmed
By CMC Markets (David Madden)   |  Jan 20, 2020 11:10
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European equity markets are marginally lower this morning as there has been a lack of major macroeconomic news to spark interest from traders. Stocks were in a strong position last week so a bit of a pullback isn’t a high surprise. Trading volumes as well as volatility are likely to be low as it is a public holiday in the US. Whenever the US market is closed, the trading session in Europe tends to be quiet. On Friday the FTSE 100 hit its highest level since July, and the DAX isn’t too far from its all-time- high, so later this week when activity picks up again, we might see the wider bullish sentiment continue.

The Fevertree (LON:FEVR) share price has slumped today after the company warned that revenue growth would be below forecasts. The company said the Christmas period was subdued, in addition to that the drinks company predict that conditions will remain ‘challenging’. The softer finish to 2019 combined with the downbeat outlook hit the share price hard, but keep in mind the company experienced strong growth outside of the UK. Yearly revenue growth rates in the USA, Continental Europe and the rest of the world were 33%, 16% and 32% respectively. It is encouraging to see such strong growth overseas.

Intu Properties' (LON:INTUP) shares have tumbled to yet another all-time low as the struggling real estate investment trust confirmed it was seeking to raise fresh cash in a bid to bolster its balance sheet. The firm is involved in ‘constructive’ talks with existing shareholders and potential investors about a proposed equity raise. The group’s share price has been under strain from the weight of its debt position, so traders have been wary of the stock for some time. In August the company said that like-for-like net rental income fell by 7.7%, while valuations dropped by roughly 10%. The rise of online shopping has hurt the likes of Intu so investor appetite for a new equity release might be limited.

BAE Systems (LON:BAES) is on the acquisition trail as it will purchase Collins Aerospace’s GPS unit for £1.5 billion. The London-listed company is also spending $275 million on Raytheon’s airborne tactical radio business. The Collins Aerospace deal will be funded by debt, but the division should generate roughly $360 million this year in revenue, and it has growth potential for next year too.

Lamprell (LON:LAM) shares are in demand this morning after it was conformed the group has been awarded a contract from the International Maritime Industries Co. The contract will entail the construction of two oil rigs. The company received a letter of intent about the contract roughly two years ago, so it has been on traders’ minds since then. The Lamprell stock suffered greatly last week when the group issued a profit warning, so today’s news prompted some bargain hunting,

There hasn’t been much movement in the euro this morning on account of a wider fall in volatility. German PPI on an annual basis improved to -0.2% from -0.7%. The reading was in line with economists’ forecasts, but it is still weak nonetheless.

The New York Stock Exchange will remain closed today as the US celebrates Martin Luther King Jr Day.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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Sentiment Subdued Due To U.S. Holiday; Fever-Tree Trimmed
 

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Sentiment Subdued Due To U.S. Holiday; Fever-Tree Trimmed

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