European equities unchanged ahead of ECB

Stocks in Europe are mixed but within touching distance of the flat line, as traders position themselves ahead of another seemingly make or break day for Mario Draghi. 

Mario Draghi
Source: Bloomberg

Analysts have pointed to European bond yields pricing in an almost certain increase in the European Central Bank’s QE activities, with some spectacular lows in peripheral yields, not just in German bunds. While this is not expected to pave the way for full blown sovereign bond purchases, we are nicely poised for a few hints, and anything less than this will be a disappointment.

In the UK, equities have digested yesterday’s autumn statement, and it is back to business today. Our 2015 general market has remained unchanged with a 66% chance of a hung parliament, and at best suggesting that George Osborne has carefully navigated yesterday without upsetting any one group too much.

Confirming some of the Chancellor’s ‘we are on the right track’ message, improving economic conditions have seen TUI Travel (+3.2%) release a strong final report before it is swallowed up into its German parent company, with profits in the travel agent up 11% for the year.

Sticking with travel, and after enjoying the fuel duty scrap yesterday, budget airlines are again on the charge. Ryanair (+9%), again, raised its profit forecasts as its image turnaround continues to gather pace. Interestingly, for a business that has kept planes on the ground in the winter rather than run routes at a loss, Bloomberg is reporting that the airline will be flying these planes this year as it continues to capture business flyers.

EasyJet (+2%) is enjoying the positive read across, and while these two airlines may have two very different public images, their dominance is there for all to see. Neither company is ever likely to admit how much the other is spurring them on, but at least this is benefitting the end consumer.

With a day to go until non-farm payrolls and the last major crossroads before Christmas, the Dow Jones earmarked yesterday with its first ever close above 17,900, and with December trading statistically a bull month, 18,000 is but a hair’s breadth away. Futures have not given this level away in early trade, and we are expecting the Dow to open around ten points higher at 17,920.

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