Markets start the week mixed
It was a seesaw start to the week on Monday. Following a mixed session in Asia, European shares were unable to hold onto initial gains and slipped into negative territory. Investors digested a drop in the price of oil, more aid for Greece as well as the prospect of a US rate hike in the coming months. Meanwhile, US stocks fluctuated, but managed to turn higher on Monday, as gains in materials and technology shares helped offset falling energy stocks.
At the top of the benchmark, Royal Mail plc enjoyed a day in the green. The postal service company may have RBC to thank for this, after the ratings company upgraded the delivery company to sector “perform”, from “underperform”. Shares of Royal Mail traded 4.29% higher during Monday’s session.
Shares of Fiat Chrysler Automobiles had a rough day. A report has emerged that German regulators suspect the automaker has been using illegal software to cheat on emissions tests. To add salt to the wound, Fiat has declined to meet with regulators to discuss the issue. German newspaper Bild am Sonntag said that the carmaker may find itself prohibited from selling cars in Germany if evidence of continued disregard of emissions rules is found. Shares of Fiat Chrysler traded 4.26% lower, at $6.74.
Oil prices were also lower on Monday as concerns surrounding recent disruptions to crude production eased, and amid renewing expectation that global supplies will continue to outpace demand. Crude oil dropped to trade at $47.77 a barrel after oilfield services firm Baker Hughes reported that the number of rigs drilling for oil in the US was unchanged last week.
Shares in Monsanto Co. jumped on Monday after Bayer AG disclosed an unsolicited $62 billion all-cash offer. This deal sent shares of Bayer trading at the bottom of the DAX, losing over 5.5%, as investors showed concern that it might overpay for a deal that would create the world’s biggest supplier of farm chemicals and genetically-modified seeds.
Elsewhere, Monday was a good day for travel stocks, with RyanAir leading the way with gains. The budget airline saw its yearly sales rise 18%, leading to a 43% profit. Chief Executive Michael O’Leary attributed cheaper fuel as the key reason for their success, but travel interest also increased. RyanAir planes were fuller, with 93% of seats filled compared to 88% the year before. Shares in RyanAir traded 1.1% higher at $80.23.
A jump in Apple shares helped lift the NASDAQ and technology stocks higher, although shares of Microsoft slipped.
In other news, shares in Manchester United were trading over 2% higher after the English football club announced that it has sacked its current manager Luis Van Gaal, just two days after the Dutchman led them to an FA Cup victory. Following his exit, Jose Mourinho will be taking over the reins at Old Trafford next season.
With the earnings season winding down, market strategists said investors would focus on remarks from a crowd of US Federal Reserve officials slated to speak this week. Most importantly, fed Chairwoman Janet Yellen is expected to speak on Friday. The Fed surprised investors when the central bank’s minutes released last week opened the door to a rate hike in June.
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.