European equity markets are mixed this morning as traders remain cautious about global trading relationships, and emerging market currencies. President Trump appears to be taking a tough line with Canada and the EU, and there is speculation he will ramp up tariffs on Chinese imports.
The FTSE 100 is being helped by a firmer energy and mining stocks. Despite China posting disappointing manufacturing figures, metals like copper, platinum and palladium are higher this morning. The Caixin survey of Chinese manufacturing fell from 50.8 in July to 50.6 in August – a 14 month low. This is further proof that the US has the upper hand in the trade spat.
WPP (LON:WPP) shares are a little higher this morning after the company announced that Mark read would be taking over as CEO. Mr Read is currently the co-chief operating officer of WPP and prior to that he chief of Wunderman – a subsidiary of WPP. The announcement should bring some stability to the share price as Mr Read can start putting his stamp on the business. WPP has lost out to the likes of Google (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) in recent years as the nature of the industry is changing, and this is something that Mr Read will need to address.
Dechra Pharmaceuticals (LON:DPH) shares are in the red even though the stock posted a respectable full-year results. Revenue and operating profit jumped by 13.9% and 24% respectively. The rise in sales was partially driven by acquisitions throughout the year. The dividend was hiked by 18.9%, and this underlines how well the firm is performing. The company confirmed that it is making ‘good progress’ in all aspects of its business, and this year has started in line with management expectations. Dechra warned that ‘challenges’ are developing at a faster pace, but they are well positioned to tackle them, and they are drawing up Brexit contingency plans. The stock rallied throughout the year and this morning it suffered a major sell-off, while the share price remains above the 200-day moving average at 2,584p, its outlook might remain positive.
EUR/USD is a touch higher this morning and the eurozone released some mixed manufacturing reports. Spanish and French manufacturing grew at a faster pace in August, while Italian and German showed a slight slowdown in the growth rate. The single currency still has the Turkish lira crisis and the Italian debt issue to contend with, and even though traders are not too fussed at the moment, the situations are far from being solved.
GBP/USD slipped after the latest UK manufacturing report fell to a two-year low. The reading was 52.8, down from 54 in July, and economists were expecting 53.8. The EU’s chief negotiator, Michel Barnier is strongly ‘opposed’ to Theresa May’s trading proposals ,and went on to state that a ‘common rulebook’ for goods but not services does not suit the EU’s interests. On the other side of the debate, Prime Minister May made it clear she will not compromise on the agreement that was hammered out at Chequers.
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