Bulls dominate trading

European Central Bank action and improving PMI data drive European equities higher.

Inside the Frankfurt stock exchange
Source: Bloomberg

European equities maintained their bullish momentum from yesterday, comforted by further proof that the ECB is sticking with Mario Draghi’s mantra of ‘whatever it takes’. Although there might well be some debate as to the direct benefits of a change to already record-low interest rates, this once again proves that under Mario Draghi the ECB is acting rather than just venting rhetoric.

Liberty Capital’s enthusiasm for M&A activity has not been dented even with the breakdown in discussions with Vodafone earlier in the year. The latest equity to feel the focus of its affection is Cable & Wireless.

William Hill has knocked investor sentiment with the acknowledgement that it looks set to come in at the lower end of expectations, subsequently sending its shares tumbling in early trading. 

A.P. Moeller-Maersk has given investors even more reason to worry about the cooling global economy as the world’s largest shipping line has cut its annual profits forecast from $4 billion down to $3.4 billion.   

In the previous week the Dow Jones, S&P 500 and NASDAQ saw earnings releases return back into the historical norm, with around 75% of companies beating expectations for their earnings per share. However, that average drops dramatically when it comes to their ability to beat expectations for their sales. In after-hours trading we saw the US receive a triple boost with Alphabet (the umbrella company for Google), Amazon and Microsoft all smash expectations. The average between the three of these firms was an after-hours share price boost of over 10%, with Microsoft hitting a 15-year high.

We are expecting the Dow to open 22 points higher from Thursday’s close at 17,458.  

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