Stocks markets are quiet this morning as low volatility in the US last night, and in Asia overnight, has spilled over into Europe. The bullish move that some equity markets enjoyed thanks to the slight improvement in US-China trade talks, and the chatter about the Federal Reserve lowering rates, has run out of steam, and some traders are taking a breather.
Burberry (LON:BRBY) shares have rallied this morning after the company posted a 4% increase in first-quarter same store sales, while equity analysts were anticipating growth of around 2%. The fashion house is more than half-way through its restructuring plan, and in June, approximately half of the products on offer were from the new line. The retailer said it was on track with it plans, and it confirmed the outlook for full-year 2020. The stock hit a 10 month high, and if the bullish move continues it might target the 2,200p region.
AstraZeneca (LON:AZN) shares are higher after Barclays (LON:BARC) upped its target price to 7500p to 7200p, and GlaxoSmithKline (LON:GSK) shares are in demand after HSBC raised its price target for the stock to 1,942p, from 1,860p.
A.G.Barr PLC (LON:BAG) shares have slumped after the company issued a profit warning. The drinks group now expects profits to fall, and the decline in earnings could be as much as 20%. The drinks group described the weather in spring and early summer as ‘disappointing’, and it some brands like Rockstar and Rubicon were faced ‘challenges’. AB Barr confirmed that there will be some exceptional costs incurred in the current financial year, and the group looks to regain momentum.
GBP/USD traded lower this morning on account of Brexit uncertainty, but it managed to creep a little higher in the wake of the UK jobs data. The unemployment rate held steady at 3.8%, meeting forecasts, while the average earnings, excluding bonuses, ticked up to 3.6% from 3.4%. Higher wages should bode well for the economy, as workers who earn more, typically spend more.
EUR/USD is in the red on account of the firmer US dollar. The German ZEW economic sentiment reading dropped to -24.5 – it’s lowest since October 2018, and that hurt the euro too.
Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) will be in focus today as the banks will release their latest quarterly figures. Traders will be keeping an eye on the banks trading divisions, as revenue from trading has been subdued lately. Broadly speaking, fees from investment banking and wealth management have been on the rise, and investors will want to see income growth from advisory services.
We are expecting the Dow Jones to open 14 points lower at 27,345 and we are calling the S&P 500 flat at 3,014.
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