BP's major profit increase helps FTSE
Fiona Cincotta February 5, 2019 10:05 AM
A slew of positive company news set the tone for trading across Europe and helped indices gain ground early Tuesday. With China covered in red lanterns to celebrate the Lunar New Year and closed for trading for the rest of the week, other markets are also taking a breather from the US-China trade dispute news.
A slew of positive company news set the tone for trading across Europe and helped indices gain ground early Tuesday. With China covered in red lanterns to celebrate the Lunar New Year and closed for trading for the rest of the week, other markets are also taking a breather from the US-China trade dispute news. In London BP dominated early headlines having reported a doubling of profit this year thanks to the acquisition of massive US shale assets. The company’s shares led the gainers, followed by mining companies and Shell.
US earnings vs the State of the Union
The trading day in the US will be a game of two halves, starting with the aftermath of Google’s results and closing with President Trump’s State of the Union speech which is likely to address some economic issues but will very likely circle back to the funding of the border wall between the US and Mexico and the inevitable conflict between Trump and Congress.
Shares of Google parent company Alphabet have been sold off overnight although the firm reported a better-than-expected set of results but the fact that the increase was fueled by an unspecified investment gain and that operating costs remain high provoked some caution from investors. Pre-market trading on Nasdaq, however, looks positive and the index is now only 2% away from moving back into a bull market. The US reporting season is almost drawing to a close but a few more big names are on the agenda this week including General Motors, Disney and Kellogg’s.
Pound in a channel ahead of BoE meeting
The pound is moving in a tight channel against the dollar, waiting for the next batch of Brexit news. The Bank of England’s rate setters will be meeting later this week under circumstances made difficult by the absence of any Brexit resolution, with wage pressures rising but a weaker housing market, sliding business and consumer confidence and static industrial production. Under the circumstances not only are rates likely to remain unchanged, but other than issuing a warning, as it did in the past, there is nothing much the Bank can do at this stage until Brexit plays out.
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