Stocks have handed back some of yesterday’s gains as the optimism surrounding US-China trade relations has faded. It was a welcome relief that the US won’t be implementing higher tariffs on Chinese imports in March, but the trade spat is far from over ,and investors are wondering, where do we go from here.
Standard Chartered (LON:STAN) revealed a 28% jump in annual adjusted profit before tax to $3.86 billion, while equity analysts were expecting $3.98 billion. The annual net interest margin ticked up by three basis points to 1.58%. Full-year operating income rose by 2.5%. The finance house declared a dividend of 21 cents, which was double last year’s pay out. The bank’s CEO, Bill Winters, cautioned that ‘geopolitical uncertainties’ and a slowdown in global growth is hanging over the company, but the firm had a strong start to the year.
Persimmon (LON:PSN) shares are in demand today after the company announced strong full-year results. Profit before tax jumped by 13% to £1.09 billion, and revenue edged up by 4%. The operating margin rate improved from 28.2% to 30.8% - which is impressive considering higher costs have been a problem for the sector. 48.45% of the houses sold last year, were sold under the help-to-buy scheme, and it was reported over the weekend that Persimmon might be dropped from the scheme in light of complaints about property standards. The group greatly depends on the government scheme, and they must do all they can to remain a part of the initiative. The house builder warned of uncertainty in relation to Brexit, but confirmed that the order book is strong.
Croda's (LON:CRDA) full-year adjusted profit before tax rose by 3.5% to £331.85 million, while analysts were expecting £332.84 million. The group derives the vast majority of their revenue outside the UK and it is currently in the process of Brexit-proofing their operation. Free cash flow jumped by 57.8% to £155.4 million. The full-year dividend was raised by 7.4% to 87p, and a special dividend of 115p was declared too, which is a sign they are optimistic in their outlook.
Prime Minister May is facing pressure to rule-out a no-deal Brexit, and it was reported that a number of ministers threatened to resign if she doesn’t comply. GBP/USD is higher this morning on the back of the news.
EUR/USD hasn’t moved much today as the German GfK consumer sentiment report remained flat at 10.8 in March – meeting forecasts.
Tesla (NASDAQ:TSLA) shares will be in play today after the Securities and Exchange Commission said that Elon Musk should be held in contempt for breaching their agreement. Mr Musk tweeted about car production projections, but later amended the tweet. Tesla’s lawyers claim the tweet was compliant with SEC settlement. Some investors are worried that Elon Musk attracts too much controversy due to his erratic behaviour.
We are expecting the Dow Jones to open 70 points lower at 26,021 and we are calling the S&P 500 down 7 points at 2,789.
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