Profit warnings and negative company news mark start of the week

Red lights are flashing across trading terminals in Europe this morning with stocks like Phillips, Julius Bear and Ferrari losing ground following earnings results, company news and cautious outlook statements.

Red lights are flashing across trading terminals in Europe this morning with stocks like Phillips, Julius Bear and Ferrari losing ground following earnings results, company news and cautious outlook statements.

Italy’s FTSE MIB is under the biggest pressure this morning, trading down 0.76% with car maker Ferrari among the top fallers after the company’s chief executive announced his departure. 

The FTSE is down 0.63% as airline shares are heading lower. Budget airline easyJet and British Airways parent company International Consolidated Airlines are trading down 2.3% and 1.95% respectively after their Irish-listed peer Ryanair issued a cautious outlook about the coming quarter saying that it expected a no-deal Brexit and summer strikes to hit the company’s performance in the next quarter. 

Ryanair announced a 20% fall in profit in the week after more than a 100,000 Ryanair passengers were left stranded because of series of strikes in key European locations. The current bout of strikes is being held by Ryanair pilots and for the moment is not affecting any other airlines but there are concerns that they might spark other protests particularly given that a strike by French air traffic controllers earlier this summer crippled airline traffic over Europe for a short period of time.

The dollar has hit a two week low against yen

The greenback declined to a two-week low against the yen but just about held steady against the euro following on from a sharp decline on Friday caused by President Trump’s tweets about the dollar’s strength. 

Market watchers believe that Trump is planning on using a weaker dollar as a weapon in his dispute over international trade tariffs. 

The shift in focus to the dollar’s strength started last week with Trump criticising the Federal Reserve’s rate setting policy which he said was working against the economic programme of his administration; dollar focus now continues with the president airing his opinion that the dollar is too strong.

Despite the comments from the White House the Fed is likely to stay the course and base its decision on fundamental economic data such as US home sales numbers, which are due out later today.

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