Global Indices have started on the back foot this morning, after US President Trump announced one of his most radical policies yet, in the form of a travel ban. The resulting press criticism and mass protests appear to have pushed some investors to the sidelines as rising uncertainty in the ability of the President not to cause damage to the US economy starts to increase, and uncertainty rarely bodes well for financial markets.
This uncertainty has filtered across into European markets, despite a slight improvement in the latest EU Consumer Confidence Index to -4.7, with the DAX, CAC and MIB all slipping back.
The latest CPI inflation numbers for Germany are expected to come in in excess of 2% later today given this morning’s strong regional readings, raising concerns of splits in the governing council about the sustainability of the ECB’s current stimulus program.
Pushing back against this morning’s downward pressure is Vodafone (LON:VOD), who are trading higher this morning off the back of merger talks in India. The mobile operator announced this morning that it was in talks with key rival Idea Cellular, in a bid to secure market share following the aggressive price reductions from Indian competitor Jio Infocomm.
Whilst specifics of the merger are not yet confirmed, the news that the deal would allow Vodafone to deconsolidate its Indian assets helped the stock rise back up towards the 200p mark. With their Q3 figures due out on Thursday though, it will be interesting to see if this move can be sustained with the multiple fines, the Indian asset write down and the expectation of the first operating loss in a decade.
On the other side we have seen multiple fallers across Pharma, Financials and Fast Moving Consumer Goods (FMCG) as profits were taken after Friday’s big move upwards. Old Mutual was one of the biggest fallers despite an upgrade on Friday from JP Morgan of the stock- despite a price target of 236p; the stock struggled to make 215p on Friday and has opened down nearly 3% to trade around 206p.
Also on the downward slide was Tesco (LON:TSCO), as speculation mounts of competition regulator intervention into the Booker acquisition. With the acquisition of the small convenience stores such as Budgens, Premier and Londis, there are fears the grocery giant could exert undue influence within the convenience store market to the detriment of independent storeowners.
Things will be quiet today on the US Earnings front, as the market gears up for Apple (NASDAQ:AAPL) earnings tomorrow evening, followed by Facebook (NASDAQ:FB) on Wednesday and Amazon (NASDAQ:AMZN) on Thursday.
Dow Jones 30 is expected to open down 58 points at 20,035
S&P 500 is expected to open down 7 points at 2287
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