Stock markets in Europe are suffering today on account of the unrest in Hong Kong and the creeping concerns about the US-China trade situation. Protests and violence on the streets of Hong Kong are not a good look for the financial hub or in deeded China.
The situation in Asia appears to be getting worse, and when you factor in a cooling of the bullish sentiment surrounding the US-China trading relationship, it’s no wonder equities are lower this morning. President Trump rolled out the same old message that China wants a trade deal more badly than he does, so the mood on the trade front has moved down a gear or two. Mr Trump reiterated the view that it has to be the ‘right deal’, which suggests that he is managing expectations about wrapping things up quickly.
Greggs (LON:GRG) issued a bullish update which lifted the share price. The firm now expects full-year profit to be higher than the previous guidance. Total sales in the six weeks until early November increased by 12.4%. The update was short and to the point, so traders didn’t have much to sink their teeth into, but the message was optimistic. In early October the firm announced a slowing of sales growth, so todays’ news helped turn sentiment around.
Sirius Minerals (LON:SXX) shares soared on the open but have given back much of their earlier gains after the company said it is seeking new investors to help finance its operations in Yorkshire. On account of market conditions, the firm had to cancel debt issuance plans – which rocked the stock price as the company needs financing to unlock additional financing from JPMorgan (NYSE:JPM). The embattled company has put together a two-stage plan to keep the show on the road but unless it can get financing in the interim, it is likely to be stuck in limbo.
Aston Martin (LON:AML) received a nice boost from HSBC who upped their target price for the stock to 550p from 533p. Admittedly, the price target hasn’t been moved up that much, but given the recent downbeat sentiment surrounding the stock, the news prompted buying.
GBP/USD saw a tick up in volatility on the back of the UK economic announcements. The preliminary reading showed the UK economy grew by 0.3% in the third-quarter which was a welcomed improvement on the 0.2% decline registered in the second-quarter, but the consensus estimate was 0.4%. The UK dodged a technical recession, so overall the news is positive. The goods trade deficit widened to £12.54 billion from £10.82 billion, which could point to robust domestic demand, which would tie in with the respectable growth level in the latest quarter.
The US celebrates Veterans Day today so trading volume as well as volatility is likely to be low.
We are expecting the Dow Jones Industrial Average to open 121 points lower at 27,560 and we are calling the S&P 500 down 13 points at 3,080.
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