Speculation that President Trump will defer making a decision whether to slap tariffs on EU vehicle imports this week has boosted sentiment in European equity markets. The Trump administration has softened its stance in relation to the EU in recent months, which has been a factor in the rally in European stocks. The White House has until tomorrow to make its call, and there is talk the decision will be pushed back. Traders are cautiously optimistic, hence why stocks are higher this morning.
ITV (LON:ITV) had a solid performance in the third-quarter as total advertising revenue ticked up by 1%, which was right at the top end of the firm’s guidance. On a nine month basis, online revenue jumped by 23%. While the company anticipates fourth-quarter revenue growth to be 0-1%. The likes of the Rugby World Cup helped the group. These days the battle for the best content is heating up, and with the next series of Love Island kicking off in January, the station is likely to be in high demand. ITV’s outlook is optimistic too as the cost cutting scheme is on track to deliver saving of £20 million in 2019. The studios division is tipped to post revenue growth of at least 5%, with margin of 14-16%.
Electrocomponents (LON:ECM)’ shares are in the red after the company revealed its first-half figures. Revenue in the six month period increased by 7.3%, while pre-tax profit slipped by 4.3%. Adjusted operating margin slipped cooled by 0.6% on account of increased strategic investment. From an operational point of view, the firm’s customer services standards are improving. Overall, it was a respectable set of numbers. At the back end of last week, the stock hit a 13 month high, so it would appear that today’s sharp move lower is on account of profit taking.
Land Securities (LON:LAND) swung to a loss before tax of £147 million in the first-half, while the group registered a profit of £42 million in the same period last year. The valuation deficit increased by 95% to £368 million, when compared with the same period last year. Retail assets, especially those located outside of the capital saw declines in valuations. Political uncertainty in relation to Brexit continues to hang over the group.
GBP/USD is largely unchanged today following yesterday’s gains. This morning’s UK economic data was mixed. The unemployment rate edged lower to 3.8% from 3.9%, but wages excluding bonuses cooled to 3.6% from 3.8%. Earnings are still easily outstripping CPI so workers are getting a nice increase in real wages.
EUR/USD had a muted reaction to the German ZEW economic sentiment update which improved to -2.1 from -22.8 in October. Today’s reading was the best in six months but traders were still unfazed by the news.
Tyson Foods (NYSE:TSN) will release its fourth-quarter figures later today. In August, the company revealed EPS of $1.47, which were essentially unchanged on the year, as well as in line with forecasts. Revenue crept higher by 3.5% to $10.8 billion slightly missing forecasts. In terms of full-year metrics, the company predicts that revenue will be roughly $43 billion, while EPS will be $5.75-$6.10.
We are expecting the Dow Jones to open 27 points higher at 27,718 and we are calling the S&P 500 up 3 points at 3,090.
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