Equity markets in Europe have pulled back a small portion of the major ground that was lost last week on the back of the coronavirus situation. Stock markets in mainland China plunged overnight as it was the first day back after the Lunar New Year celebrations. The Chinese central bank provided assistance to the markets in the form of a liquidity boost, but it didn’t do much to reassure confidence. The health crisis is worsening but it seems that’s traders in Europe are keen to snap up bargains. The relatively small rebound in European markets suggests there isn’t a huge amount of bullish sentiment circulating.
Ryanair (LON:RYA) shares are higher this morning after the group confirmed that third-quarter net profit was €88 million, which was a stark improvement on the €66 million loss that was registered in the same period last year. In the three month period, the revenue per passenger increased by 13% - that was largely down to an increase in ancillary revenue. Airlines like Ryanair and Wizz Air are now deriving a higher proportion of their revenue from ancillary services, which is a shrewd move as it shows the companies are tapping into other revenue streams. The company cautioned that it will not take delivery of any Boeing (NYSE:BA) 737 Max jets until September or October, which could cause passenger disruption, and might lead to missing targets in terms of passenger numbers.
Ingenico (LON:0KA0) share are higher on the back of the company agreeing to be taken over by Worldline (PA:WLN) – whose shares are in the red. The move will create the fourth-largest payments firm in the world. Smartphones are being used more in the payments sector so the firms operating in that space have had to tighten their belts, hence why consolidation has been in the rise. The move should allow the new group to take advantage of synergies, and in turn keep up with the changing pace of the sector.
Future (LON:FUTR) shares rebounded today after the stock came under attack from a short-seller on Friday. Shadowfall, claimed the publishing firm is an assortment of ‘low-quality’ and ‘sinking assets’. In a show of strength today, Future confirmed that momentum is ‘strong’ and the full-year outcome will be ahead of market expectations.
GBP/USD has sold-off aggressively on the back of the comments from Prime Minister Johnson in relation to Brexit. Mr Johnson has threatened to end trade discussions with the EU if the bloc insists the UK keep in step with their regulations after the transition period ends. Traders are fearful about the possibility of a no-deal Brexit after the transition period. The tough stance from the Prime Minister has prompted traders to drop the pound – in the wake of a positive run last week. The final reading of the UK manufacturing PMI report for January was 50.0 – an improvement on the flash reading of 49.8. The level was the highest in nine months.
EUR/USD is in the red on the back of the firmer US dollar. Major eurozone countries published their final readings of the manufacturing PMI reports this morning. The Italian, French and German readings were 48.9, 51.1 and 45.3 respectively – all the updates topped forecasts.
Alphabet (NASDAQ:GOOG) will announce its fourth-quarter results tonight. Traders will be paying close attention to the Google’s revenue stream, which in the last quarter jumped by 17%. Adverting revenue accounts for the vast majority of the group’s income so the paid-per-click metric for Google (NASDAQ:GOOGL) will be closely watched. Non-core areas of the business, such as the phone unit and the cloud computing business will be of some interest to dealers too.
We are expecting the Dow Jones to open 99 points higher at 28,355 and we are calling the S&P 500 up 14 points at 3,239.
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