European stocks higher

European markets are all looking perky this morning despite a 600 point drop in the Dow Jones Industrial Average late Monday. In London, positive company news from Melrose Industries and Experian lifted the index higher.

European markets are all looking perky this morning despite a 600 point drop in the Dow Jones Industrial Average late Monday. In London, positive company news from Melrose Industries and Experian lifted the index higher.

In contrast, US stocks were spooked by a stronger dollar hurting the big multinationals and a sharp decline in oil prices while a 7.46% drop in Goldman Sachs shares also didn’t help. Some of the move was exaggerated by thinner volumes than usual as the bond market was closed for Veterans Day Monday.

German inflation hits 10-year high

German inflation is now at 2.5%, the highest level in ten years. Much of it has to do with a nearly 9% increase in oil prices in October and an even sharper jump in heating oil – that’s why it is possibly too soon to read gloom into the inflation numbers given that oil prices have pulled back significantly in November and are unlikely to rise at the same pace given that the bulk of the price action had to do with concerns over Iranian sanctions. Nevertheless, Germany’s consumer price data is adding to the overall increase in harmonized EU consumer prices which now stand at 2.4% and will push the European Central Bank towards a tighter monetary policy. The euro’s reaction was mixed, it lost some ground against the pound but it held up against the greenback.

Unresolved Brexit issues continue to rumble

While politicians remain woefully unable to reach any serious agreement on Brexit this fluid situation is continuing to hit the UK property and retail sectors. The country’s largest listed property developer Land Securities Group saw its net asset value per share drop in the first half of this year because the retail sector’s troubles, notably large scale shop closures. The company manages the Bluewater shopping centre but is now looking at residential development rather than retail space. However, given that house sales and house prices are slowing down, particularly in London and its commuter belt, this may not provide the solution the company is hoping for. Stocks in property firms were among the biggest FTSE fallers this morning, with Taylor Wimpey, Barratt Developments and Berkeley Group Holdings the hardest hit.

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