European stock markets are in the red as dealers are concerned about US-China trade talks. Yesterday it was reported the US cancelled a meeting with their Chinese counterparts. It is possible that President Trump is using the weaker Chinese growth figures as a way of putting pressure on Beijing.
J D Wetherspoon (LON:JDW) issued a mixed second-quarter update. The group said that like-for-like (LFL) sales in the 25 weeks until late January increased by 6.3%, but the firm said first-half profit will be below previous expectations, and higher costs were cited for the downbeat outlook. The firms’ expansion continues as it will open between five and 10 new pubs. The group maintained its full-year forecast, and that helped investor confidence.
Metro Bank (LON:MTRO) shares have slumped after the bank warned that capital levels and full-year profit will be below expectations. The financial firm predicts that earnings will be approximately £50 million, while analysts were predicting £59 million. The financial firm blamed a ‘soft’ finish to 2018 for the underwhelming update. The bank had to raise capital in July, and even though it confirmed it didn’t raise any capital in the fourth-quarter, investors are still a little wary. The stock has been in decline since October, and if the bearish trend continues it might retest the 1,500p region.
It was the same old story at WH Smith (LON:SMWH), the travel division up in a strong performance, while the high street operation under performed. LFL sales at the travel operation increased by 3%, while the high street division registered a 2% fall in same-store-sales.
Burberry (LON:BRBY) shares are in the red this morning after the fashion house posted a 1% rise in same-store-sales – which missed expectations. The clothing company confirmed it had a respectable performance in mainland China, and this is encouraging as there have been questions over China’s appetite for western brands.
EUR/USD is largely unchanged this morning. The French business sentiment reading for January was 103 – in line with expectations. The December reading was revised down from 104 to 103. There are growing concerns the region is going through an economic slowdown, and the European Central Bank meeting tomorrow will be of particular importance.
IBM (NYSE:IBM) will be in focus today after the company posted well received quarterly figures last night. EPS was $4.87, topping the $4.82 forecast, and revenue was $21.76 billion, which just about exceeded the consensus estimate.
We are expecting the Dow Jones to open 81 points higher at 24,485 and we are calling the S&P 500 up 5 points at 2,638.
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