European markets marched in positive territory on Wednesday, extending yesterday’s close at a 14-month high. There were plenty of key earnings reports to keep investors happy, while further weakness in the euro also provided support. Wall Street was in the red though, as oil prices pulled back and investors eagerly waited to see if the minutes from the latest Federal Reserve meeting would give any clues on the timing of the next interest rate increase.
Lloyds’earnings impress
One of Europe’s biggest earnings stories came from Lloyds Banking Group, which announced its highest full-year profit in a decade. The bank’s pre-tax profit more than doubled to £4.2 billion, as it reduced the amount set aside to cover compensation for customers sold payment protection insurance they didnot need. It has also carried out a programme of cost cuts, including the closure of several branches.
Lloyds said it wouldpay a total ordinary dividend of 2.55 pence a share, up 13% on a year ago. It will also issue a special dividend of 5 pence a share. Shares traded 4.4% higher in London on Wednesday.
Fed minutes ahead
Federal Reserve officials want investors to believe that every meeting is a live one, with the possibility always there that the central bank will hike interest rates in response to financial conditions. The market, though, is unconvinced, particularly since it concerns the March meeting, which some sense could be the Fed’s most important of the year.
Chatter lately from Federal Open Market Committee members is that March is on the table for the first hike since December. In congressional testimony last week, Chair Janet Yellen dropped a hawkish hint, saying that it would be “unwise” to wait too long to hike.
The March meeting is considered to be among the most important because, if the Fed should approve a hike, it would set the tone for the rest of the year, sending a pretty unambiguous signal that monetary policy will be tighter than market anticipates.
Individual movers
ThyssenKrupp shares were among the highest movers after the German industrials heavyweight said it is to sell its Brazilian steel plant to Ternium in a deal valued at €1.5 billion. Shares in ThyssenKrupp were up 4.42% on this news, and shares of Ternium soared 10.6%.
Shares of Garmin were also in positive territory. The company posted earnings results that came in much better than expected, sending its shares us 7.5%. This brings the stock up 34% over the past 12 months.
Meanwhile, investors will turn their focus on the likes of Tesla, Fitbit, HP and L Brands,which are expected to report after the closing bell.
This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.