Europe mixed despite new US closing high
|The FTSE 100 is down 30 points in mid-morning trading, but online retailer Boohoo has gained 4% following a solid set of figures.
- New US closing highs fail to energise European stocks
- German IFO weakens
- Boohoo gains market share
After reports of an impending cut to Nissan earnings and a weaker outlook for chip demand from Texas Instruments, it is easy to see why European markets have not been particularly enthused by the fresh record closing highs in the S&P 500 and Nasdaq last night on Wall Street. But European indices have remained robust over the past week, and the small losses we have seen thus far are mainly due, in the FTSE’s case, to a drop back for miners and oil stocks. Despite the weakness in bank stocks this morning there is some hope for the sector, as Credit Suisse reported an 8% rise in net income for the first quarter. The outlook was also positive, boosting expectations that others like Barclays
later in the week will be able to provide a more positive outlook. Hopes of a further turnaround in European data were dashed after the IFO index fell back from last month’s figure, but the staunch defence of $1.12 in EURUSD goes on, indicating that perhaps the bearishness on the eurozone economy has run its course for the time being.
Online shops continue to enjoy a run of success, as exemplified by Boohoo this morning. If anything, the 4% pop in the shares so far today rather understates the improvement over the past year, as the firm gains market share and turns profits into cash for shareholders. The leaner business model continues to be a success, and while the shares are already up over 50% since December, a run back to the highs of 2017 around 270p looks increasingly likely.
Ahead of the open, we expect the Dow to start at 26,640, down 16 points on Tuesday’s close.
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