European Markets
European markets closed in the red on Thursday as the biggest loser was the FTSE 100 as it lost 0.71%, while the German and French market both lost 0.23% and 0.31% respectively. The big story coming out of Europe on Thursday is that of the European Central Bank’s (ECB) Governing Council meeting. Thursday’s meeting is set to be held to discuss the future of the bank’s current stimulus programme, commonly referred to as Quantitative Easing, which is set to come to an end later on this year. With inflation close the ECB’s threshold and the European economy going from strength to strength, Mario Draghi, the ECB’s president, is facing increasing pressure to increase interest rates and wind down the stimulus programme, but the outcome of Thursday’s meeting resulted in leaving interests rates unchanged and the continuation of the stimulus programme.
American Markets
The S&P500, tracking the largest 500 companies in America, posted a gain 0f 0.06% as earnings season is currently underway with Alphabet, Intel and Microsoft all releasing their earnings.
During the presidential campaign, Donald Trump threatened that he will pull the United States out of NAFTA, which is a free trade zone between the three North American countries of Canada, U.S.A and Mexico, should he win the presidency. On Wednesday he went back on his earlier comments as he stated that the USA will remain within NAFTA. Following his remarks, the Mexican peso, the Mexican national currency, and the Canadian dollar both rose against the American dollar.
Airbus Profits Nosedive
Airbus, the French aeroplane maker, has had its earnings fall by more than fifty percent in the last three months. This was mainly due to the delay in the delivery of its newest civil models. The company faces three problems to deal with this year; glitches affecting engines on its A320 model, together with production delays on its twin aisle A350 model and cost overruns on the A400M military transport model have bogged down the company. Airbus shares have fallen by more than half a percent during Thursday’s session following the announcement by the company, although on a yearly basis shares are up by more than twenty five percent.
Deutsche Bank Trails Peers
Deutsche Bank, Europe’s largest investment bank, posted first quarter results that have seen it fall behind its competitors. The bank’s largest source of income is derived from the trading of bonds and currencies and although this division’s revenue of the German bank have risen by 11%, it failed to reach the pace set by its American rivals.
Another source of revenue for the bank, which is currently undergoing a restructuring plan by its CEO John Cryan following several penalties by authorities and litigation, is that of stock dealing. This unit has seen a 10% decline in its revenue. As part of its restructuring plan, the bank sought to tap the markets for 8 billion euros this month in order to inject fresh new capital and revive the business. The bank saw its shares taking a hit on Thursday as shares fell by almost 3%.
Disclaimer:
This article was issued by Simon Gauci Borda, 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.