Europe
Equity markets are mixed heading into the close as an absence of major macroeconomic news has left some traders unenthused. Steven Mnuchin, the US treasury secretary, claimed that US-China trade talks are making progress, and that is keeping investors happy, but not much detail was given, and at some point investors would like to know more.
IWG (LON:IWG) shares have surged after the company announced plans to sell-off its Japanese business for £320 million. The move comes as the property company announced plans to sell-off assets last month. IWG will enter into a franchise agreement with the Japanese firm, TKP. The announcement comes as Credit Suisse (SIX:CSGN) raised its outlook from underperform to outperform, and it raised the price target to 328p, from 200p.
Stagecoach (LON:SGC) were in focus last week when the Department of Transport (DoT) blocked them from bidding on three rail franchise contracts on account of not meeting the pension requirements. The transport firm are now threatening legal action against the government body, and that underlines how serious they are taking the situation. The bus and train operator might have to improve its proposal in relation to the pension provisions as train revenue is a major source of group sales.
Compass Group (LON:CPG) shares are down on the day after Barclays (LON:BARC) lowered their rating to equal weight from overweight, but the bank hiked the price target to 1,850p, from 1,770p.
There has been a slight move to the downside in copper and platinum this morning, and that has put pressure on Anglo American (LON:AAL), Rio Tinto (LON:RIO) andBHP Billiton (LON:BHPB). Copper had a strong session on Friday and now we are seeing a bit of profit taking, and that is driving sentiment in the mining sector this morning.
US
The S&P 500 is largely unchanged on the day as the earnings season continues. Low volatility seems to be the order of the day, and the US is no different. The optimism surrounding the US-China trade talks continues, and even though we keep hearing that talks are going well, traders get the impression the negotiations will drag on.
Goldman Sachs (NYSE:GS) shares are in the red this afternoon after the company announced mixed results. First-quarter EPS was $5.71, which topped the $4.89 forecast, and revenue for the period slipped by 13% to $8.81 billion, which was a touch below analysts’ forecasts of $8.9 billion. The Wall Street titan shelled out less on pay and trimmed head count. The equity trading and bond dealing departments posted revenue that were broadly in line with forecasts. The mergers and acquisition division was the standout performer as revenue jumped by 51%.
Citigroup (NYSE:C) revealed a broadly positive set of first-quarter results. Earnings per share came in at $1.87, which exceeded the $1.80 forecast, while revenue was $18.57 billion, and the consensus estimate was $18.63 billion. The closely watched fixed income, currencies and commodities revenue was $3.42, which easily topped the $3.05 billion.
The Empire State manufacturing index jumped to 10.1 in April, and it was a sizeable improvement on the 3.7 reading in March, and it topped the forecast of 8.1.
FX
The US dollar index saw a small trading range today as it was a quiet session in terms of economic announcements.
GBP/USD has been firm recently in light of the so-called ‘flextension’, whereby the UK’s exit date from the EU has been pushed back to 31st October. Now that the prospect of a no-deal Brexit has been delayed, the pound is likely is continue its wider upward trend.
Commodities
Gold is in the red today despite the relative softness in the US dollar. The metal enjoyed a strong rally between August and February, but recently the bullish run has been showing signs of fading. The commodity has been trading sideways and if it holds above the $1,276 area, it might continue in the wider positive move.
Oil has edged lower after comments from Anton Siluanov, Russia’s finance minister, the country might boost oil production. The energy market reached a five month high last week, and now there are increased fears that Russia might look in break its alliance with OPEC and increase output.
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