Weak corporate results and a degree of political uncertainty generated by Prime Minister Teresa May’s business-bashing Tory conference speech have made UK stocks underperformers in early trading on Thursday. European stocks are mostly higher, supported by a rise in financial and oil shares.
EasyJet (LON:EZJ) has led the FTSE 100 lower after the budget airline issued a profit-warning. Banks traded higher with shares of RBS (LON:RBS) gaining over 2%. The IMF downplaying its concerns about Deutsche Bank (LON:0H7D), the idea monetary policy could be tightening and Chancellor Hammond travelling to Wall Street to sweat talk bankers helped bank shares gain ground.
Shares of Easyjet plummeted as much as 8% after the profit warning. It seems to have finally hit home in markets how difficult life for Easyjet is going to be after the terrorist attacks in Europe, the attempted coup in Turkey and the drop in the pound.
Stocks in the US look set for a slightly higher start with markets remaining very range bound ahead of this week’s jobs report and the beginning of the Q3 earnings season. The rhetoric from Fed members, including Vice Chair Stanley Fischer overnight have maintained hawkish bias. Investors will be looking to see whether the data stands up to the strong probability of a rate rise this year priced in by markets.
Shares of Twitter (NYSE:TWTR) are likely to see a difficult start after dropping in afterhours trading on reports neither Google (NASDAQ:GOOGL) nor Disney (NYSE:DIS) are interested in acquiring the social media firm. Microsoft (NASDAQ:MSFT) has its LinkedIn (NYSE:LNKD) purchase to deal with and Apple (NASDAQ:AAPL) is an unlikely suitor. That just leaves Salesforce (NYSE:CRM) with a possible interest in Twitter. With all the bidders taking flight, it’s beginning to look like corporate buyers think Twitter is as much of a difficult buy as investors have over the past three years.
USA pre-opening levels
S&P 500: 1 point higher at 2,160
Dow Jones: 13 points higher at 18,294
Nasdaq 100: 3 points higher at 4,880
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