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Traders Cautious As Trump Backs Hong Kong; Ocado Soars On New Deal

By CMC Markets (David Madden)Stock MarketsNov 29, 2019 11:21
uk.investing.com/analysis/traders-cautious-as-trump-backs-hong-kong-ocado-soars-on-new-deal-200434786
Traders Cautious As Trump Backs Hong Kong; Ocado Soars On New Deal
By CMC Markets (David Madden)   |  Nov 29, 2019 11:21
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Stocks are mixed this morning as US-China tensions have ticked up slightly on account of the US’s backing of the Hong Kong bill. The mood is cautious as dealers are fearful there could be an unravelling of some of the good work that has been done in relation to the trade discussions. Beijing view the Hong Kong bill as ‘sinister’ and it has the potential to sour relations. That being said, equities haven’t lost that much ground in the past two sessions so traders are not that concerned for now. Market volatility is tipped to be low as many US traders will remain on holidays seeing as yesterday was Thanksgiving.

Stocks are mixed this morning as US-China tensions have ticked up slightly on account of the US’s backing of the Hong Kong bill. The mood is cautious as dealers are fearful there could be an unravelling of some of the good work that has been done in relation to the trade discussions.

Beijing view the Hong Kong bill as ‘sinister’ and it has the potential to sour relations. That being said, equities haven’t lost that much ground in the past two sessions so traders are not that concerned for now. Market volatility is tipped to be low as many US traders will remain on holidays seeing as yesterday was Thanksgiving.

Ocado Group PLC (LON:OCDO) have signed their first deal in Asia as it has teamed up with Japan’s Aeon. Ocado shares have jumped on the news as it is another string to their bow. The online grocer spent years honing its business model and it spend a long period of time seeking partnerships ,and then in singed agreements in France, Canada, the US and Australia in relatively quick succession. The Aeon move will help the firm expand its global reach. Ocado have positioned themselves as a specialist in online grocery shopping, and given the changes in consumer habits, it is likely that other traditional supermarkets will seek out Ocado to assist them gain an e-commerce market share.

Virgin Money (LON:VMUK) shares are higher again following the major rally it saw yesterday. The finance house had to cancel its dividend on account of the £385 million charge it took in relation to the mis-selling of payment protection insurance (PPI). Usually if a company were to halt its dividend the stock would endure a sharp sell-off, but seeing as the bank gave off the impression it is over the worse of the PPI costs, the stock rallied. The bullish sentiment continues today, but just there are no guarantees that PPI won’t rear its ugly head again.

Northgate (LON:NTG) shares are lower and Redde (LON:REDD) shares are higher after it was announced that both companies will merge. As mapped out in the deal, Redde shareholders will receive 0.3669 shares in the new group – which will be 54% owned by Northgate. The companies predict that there will be cost synergies of at least £10 million per year. In the same update, Northgate revealed its first-half figures. Profits fell by over 13%, and the vehicle sales division underperformed – a common theme in the sector.

St. James’s Place (LON:SJP) shares are in the red this morning following the downgrade by Goldman Sachs (NYSE:GS) to sell from neutral.

GBP/USD is lower on the back of the mixed UK credit data. The money supply growth was 0.0%, which was a drop off from 0.7% posted in September. Mortgage lending jumped to £4.32 billion from £3.93 billion, and consumer credit came in at £1.32 billion, while the previous reading was £785,000.

EUR/USD hasn’t moved much despite the eurozone posting respectable inflation figures. The CPI rate jumped from 0.7% to 1%, topping the 0.9% forecast. The core reading rose to 1.3% from 1.1%. The updates showed that demand is on the rise in the currency bloc, but the CPI rate is still miles away from the ECB target of 2%.

We are expecting the Dow Jones to open 69 points lower at 28,095 and we are calling the S&P 500 down 5 points at 3,148.

DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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Traders Cautious As Trump Backs Hong Kong; Ocado Soars On New Deal
 

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Traders Cautious As Trump Backs Hong Kong; Ocado Soars On New Deal

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