SThe tock markets in Europe are dipped in the red as we approach the last day of trading in what has been a quiet week.
President-elect Joe Biden announced a $ 1.9 trillion coronavirus relief package overnight – which was at the high end of forecasts. The long-awaited announcement was the highlight of the week. Sentiment for equities has fallen since the update as traders are content to book profits from recent gains. Last week, the FTSE 100 and CAC 40 hit multi-month highs, while the DAX 30 hit a record high. Much of the recent gains were in anticipation of Biden’s relaunch announcement. The high valuations of equities, combined with fears that countries may extend their lockdowns, have encouraged traders to exit the market. Pfizer said deployment of its vaccine in Europe will be slowed down in the near term as the pharmaceutical giant modernizes its production facility, with the news playing into the bearish movement as well.
Aveva shares hit their highest level since October thanks to its positive trade update. The company provides software solutions to industrial companies. In the nine months leading up to the end of 2020, revenue increased slightly by 1.5%. The company gets a lot of repeat customers as recurring revenue increased 10%, which was 68% of total revenue. The continued digitalization of the industry places Aveva in a good position in terms of future demand. He is confident in his annual outlook.
Segro, the warehousing specialist, confirmed that he received 98% of the rent owed for the year. On top of that, he has already received 88% of the £ 63million rent owed in the first quarter. The group has a lot of online retailers as clients, so it’s not under pressure like British Land or Land Securities, which has a lot of exposure to mainstream assets.
Babcock International shares sold aggressively today as there are concerns over the company’s cash flow that could be affected as it conducts a review of the profitability of its contracts. As the group warned of an uncertain outlook and still has not issued any guidance, traders took this as a sign that negative news could be in the pipeline. Babcock’s civil aviation industry has been hit hard due to the pandemic, but its defense unit is taking part of the slack. The discussions in the third quarter were in line with what was experienced in the first half. First nine months revenue fell 4.89% to £ 3.39 billion. On the positive side, the order book is up £ 3.1bn to £ 16.8bn since the start of the year, while the total level for last year was 17.6 billion pounds sterling. JPMorgan and Jefferies’ price cuts added to the downward pressure on the stock.
Meggitt, specializing in the supply of subsystems and components for the aerospace sector, has therefore also suffered greatly from the health crisis. The full year business update was well received. The group expects operating profit for the full year to be between £ 180 million and £ 200million, which is unchanged from the November update. Last year’s statutory operating profit was £ 325million. Annual turnover was £ 1.7bn, which is a sharp drop from the £ 2.27bn reported last year. The group is optimistic that the demand for flights will increase in the coming months as the vaccines are released, which should help their business.
The Serious Fraud Office opened an investigation into British American Tobacco in 2017. It related to suspicions of corruption, but today the body announced that the investigation has ended without any charges being laid against the giant. tobacco.
The lockdown rocked Gym Group as full-year revenue stood at £ 80.5million, up from £ 153.1million last year.
Stocks are in the red as dealers reduce their positions in equities now that Biden’s back-up plan has been announced. It is a bit worrying that retail sales fell 0.7% in December, the most important month for purchases. The November metric has been revised from -1.1% to -1.4%. On top of that, the New York Fed’s January manufacturing reading was 3.5, the lowest in seven months. Lately, there has been growing evidence that the US economy is cooling down and today’s reports add weight to this view.
JPMorgan has kicked off the reporting season for major banks and the fourth quarter numbers have been impressive. EPS was $ 3.79, which easily beat the consensus estimate of $ 2.62. Revenue for the period was $ 30.16 billion, beating the estimate of $ 28.7 billion. The income of the investment bank increased by 37%. Trading income rose 20%, while net interest income fell 7% – hardly a surprise given the drop in interest rates. JPMorgan has released $ 2.9 billion in credit reserves – this suggests that the expected bad debt losses will not be as severe as initially expected.
Citigroup also released respectable quarterly figures. EPS was $ 2.08, which significantly exceeded the forecast of $ 1.34. Revenue fell 10% to $ 16.5 billion, just exceeding the $ 16.7 billion forecast. The bank released $ 1.5 billion in credit loss reserves.
Exxon Mobil shares are in the red as the Securities and Exchange Commission investigates the valuation of a significant asset in Permian Basis, a whistleblower claimed the asset was overvalued.
The US dollar index is higher because traders are in risk free mode. Equities are in the red across the board, so assets considered less risky, like the US dollar, are in demand. Yesterday, the greenback was pushed into the red when Jerome Powell, the Fed chief, said now was not the time to discuss downsizing the bond buying program, so that the dollar was relatively weak when today’s session began. The greenback’s upward movement pushed GBP / USD and EUR / USD into the red.
In November, the UK economy contracted 2.6% on a monthly basis, economists expected a decline of 5.7%. The October reading was revised up from 0.4% to 0.6%, so this was a double win for UK growth. It was reported that the service sector saw negative growth of 3.4% which was painful but far better than the consensus reading estimate of -6.7%.
Bearish border sentiment has dented the CMC AUD index as well as the CMC CAD index as commodities are in the red.
The rising US dollar weighed on gold. Historically, the commodity has benefited from the flight to quality streams, but the reverse relationship with the dollar acts as a backlash.
Brent crude oil and WTI are in the red as general bearish sentiment in the markets put pressure on energy contracts. China’s growing health crisis has led to a drop in oil, as it is the world’s largest energy importer. The Beijing administration has locked out 22 million people due to the increase in Covid-19 cases, so demand fears are in circulation.