Stocks in Europe have bounced back today, but some of the major indices have given up some of the early gains. Theresa May had a disastrous day yesterday, and investors are still on edge over the political situation in the UK. Politics is also in focus in Italy as Rome and Brussels are still locked in a stand-off over the budget. For the time being, Brexit will grab more attention in the media, but the Italian problem could spark another round of the eurozone debt crisis.
Kier Group (LON:KIE) confirmed they are on track to meet their full-year target. The company began a cost cutting programme in July, and the aim is to sell-off non-core assets, and the purpose is to save roughly £10 million in the first-half of next year. The firm has learned from the mistakes of Carillion, and is slimming down in a bid to stay nimble. The share price has been falling since March 2017, and if the bearish move continues it might target 800p.
Royal Mail (LON:RMG) shares are in the red again after Credit Suisse (SIX:CSGN) trimmed their price target for the stock to 301p, from 339p. The price downgrade comes one day after the group revealed disappointing figures. The political upheaval in the UK has sparked chatter about a possible general election, and the Labour party have stated they would consider renationalising the firm, and that is weighing on sentiment too.
Towards the end of the European session yesterday, the Food and Drug Administration (FDA) announced plans to restrict the sale of the majority of flavoured e-cigarettes to age-restricted stores in an effort to deter minors from taking up smoking. FDA are also looking to ban the sale of menthol cigarettes. British American Tobacco (LON:BATS) and Imperial Brands (LON:IMB) ae in focus this morning.
Nvidia will be in focus today after the stock sold-off heavily in afterhours trading last night. The group’s third-quarter earnings per share topped forecasts, but the revenue narrowly undershot the consensus estimate. It was the disappointing forward guidance that did the damage. The company anticipates fourth-quarter revenue to be $2.7 billion, while one company was predicting $3.40 billion.
GBP/USD has managed to pull back some of the ground that was lost yesterday, but sentiment is still sour. Bargain hunting and short covering are propping up the pound this morning, and given that UK political uncertainty is so gloomy at the moment, the pound could find it difficult to attract buyers.
EUR/USD is a little higher on the back of the softer greenback. Mario Draghi, the head of the European Central Bank issued a cautious outlook for the region. The central banker raised concerns about the growth outlook, and cautioned that world trade is slowing down. Eurozone inflation came in at 2.2% - in line with forecasts.
We are expecting the Dow Jones to open 29 points lower at 25,260 and we are calling the S&P 500 down 6 points at 2,724.
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