European stock markets are in the red today as U.S.-China trade tensions have ticked up a little on the back of President Donald Trump signing the Hong Kong bill – which essentially supports the rights of the protestors in the region. Beijing have accused Washington of "sinister intentions" as they view it as the U.S. sticking its nose into internal affairs. This is a new dimension to the U.S.-China relationship, and it has the potential to derail the trade talks. Traders are fearful that China will lash-out at the U.S., which is why stocks are lower this morning.
North Korea launched two missiles that are believed to be ballistic missiles, and they crashed into the sea between North Korea and Japan. Seeing as the U.S. celebrates Thanksgiving today, it can be construed as a deliberate move by the rouge nation to antagonize the U.S. government. To a lesser extent, the move is a factor in the bearish sentiment too as it has the potential to spiral into another round of hostilities between the two countries.
Virgin Money (LON:VM) shares have soared today despite the company cancelling its dividend on account of payment protection insurance (PPI) costs. Full-year underlying pre-tax profit slipped by 7% to £539 million, which undershot the £544 million forecast. The group took a hit of £385 million on account of PPI, but the group said it believes the scale of charges related to PPI is behind it, and some traders took that as a sign the company has turned a corner in relation to the PPI provisions. The government imposed deadline to claim for the mis-selling of PPI was August so you’d imagine a line has been drawn under the scandal.
Remy Cointreau confirmed that first-half revenue slipped by 0.6%, while profit edged up by 3.4%. The figures were respectable, but the outlook weighed on the stock. The company expects a ‘quiet good’ performance in China, while the second-half at the Hong Kong operation is tipped to be ‘quiet bad’. The latest development in U.S.-China relations could have a negative impact on the group in the near-term.
A number of investment banks have cut their price target for Playtech (LON:PTEC). JPMorgan (NYSE:JPM), UBS and Deutsche Bank (DE:DBKGn) all lowered their price target for the stock – which is why it is lower this morning.
EUR/USD has been given a lift by the Spanish inflation numbers. The annual CPI rate edged up to 0.5% from 0.2%. The report met economists’’ forecasts. It is encouraging to see that demand is creeping higher, but in the grand scheme of things, it is a low rate.
The softer greenback has helped GBP/USD too. The pound is still in favour with traders in light of the YouGov MRP opinion poll from yesterday that predicted the Conservative party would win a 68-seat majority.
The U.S. market is closed today as it is Thanksgiving.