European stock markets are higher this morning as there is continued optimism in relation to US-China trade talks. President Trump said he would consider postponing the deadline for reaching an agreement, and that has been welcomed by investors. The US president’s slightly softer stance has spurred on sentiment. Investors are also hopeful as it appears the US have come to an agreement to prevent another government shutdown.
Tullow Oil (LON:TLW) confirmed that it made its first net-profit in five years. The oil company made a post-tax profit of $85 million, and the group also paid a dividend of 4.8 cents – its first pay out since 2015. Admittedly, the size of the profit and the dividend aren’t huge, but they are hugely symbolic, it gives the impression the company has drawn a line under the last few years, and is back on the right track again. The firm has pledged to increase its dividends over the next few years, and at the same time, keep trimming the debt level.
Galliford Try (LON:GFRD) shares are in demand this morning after the company announced that it expects full-year profit to be at the upper end of forecasts. The construction company confirmed that first-half revenue dipped by 5%, and pre-tax profit edged up by 4%. The net debt position was reduced by 53% and interim was cut by 17.8%. The group has a solid order book, but they are cautious about the near-term outlook on account of Brexit. The stock has been rebounding since late December, and a break above 800p could pave the way for further gains.
Dunelm stated that first-half pre-tax profit grew by 14% and like-for-like (LFL) revenue ticked up by 6.9%. LFL in-store sales increased by 3.8%, while LFL online sales jumped by nearly 36%. It is encouraging to see the company is embracing the rise of online sales, while also making respectable sales on the high street. The company is becoming more nimble, as net debt gas been slashed and the cash position has surged. As far as retailers go, Dunelm is in good shape.
GBP/USD is largely unchanged today even though UK inflation cooled. The annual CPI rate for January dipped to 1.8%, from 2.1% in December, while economists were expecting 1.9%. The core reading held steady at 1.9%, which suggests underlying demand is firm.
EUR/USD sold-off after eurozone industrial output dropped by 4.2% in December, the report undershot the forecast of -3.2%.
Since sentiment surrounding US-China trade talks is positive, we might see continued demand for Caterpillar (NYSE:CAT), Boeing (NYSE:BA), and Deere, as the companies are likely to benefit should Beijing and Washington DC patch things up in terms of trade.
We are expecting the Dow Jones to open 45 points higher at 25,470 and we are calling the S&P 500 up 5 points at 2,749.
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