Cautious markets amid uncertainty in the US | Calamatta Cuschieri

European markets closed in a dull tone on Monday amid concerns over Donald Trump’s policies in the United States, including the travel ban. Markets also digested corporate earnings and news that French Republican Francois Fillon announced he would still run for the country’s presidency despite the scandal concerning his wife’s employment.

During the day, President of the European Central Bank (ECB) Mario Draghi said that the bank is ready to increase its quantitative easing programme if it deems the measure necessary to get inflation to the desired level, although the economic conditions in the Eurozone have been “steadily improving” and “economic prospects are firming up”. Inflation recorded for the month of January was 1.8%, which was a big jump from the 1.1% recorded in December. This uptick in annual inflation was mainly due to higher oil prices. In fact, when excluding volatile items like food and fuel, inflation is still at 0.9%.

The ECB President also commented on the moves made by the United States government to reform the Dodd-Frank Act (significant changes to the US financial regulation). Relaxing financial regulations is the last thing the ECB wants. Draghi also stated that it is too early to tell how Europe will react to less banking regulation in the US monetary policy expansion and less regulation does not go hand in hand.

On Wall Street, US, markets were slightly down with focus on the battle of US President Donald Trump's administration to restore his travel ban after a judge suspended it nationwide last week. During the day, tech giants including Microsoft, Alphabet and Apple filed a legal brief against Trump's executive order to prevent nationals of seven predominantly Muslim countries from entering the US. Meanwhile, within the transportation sectors, airline and shippers scored moderate gains.

On a positive note, gold, silver and platinum all tested the highest levels in more than two and a half months. Gold touched its strongest point since November. On the same lines, Silver and platinum added to their price too.

Corporates corner

Unicredit Spa shares fell drastically as the Italian lender’s €13 billion shares sale got underway

In Milan, Unicredit Spa shares fell drastically as the Italian lender’s €13 billion shares sale got underway. The share price in the rights issue was priced at a 38% discount. The move is aimed at bolstering capital at Unicredit, which had to write down bad loans.

Ryanair Holdings traded lower today as the airline announced a lower third-quarter net profit by 8% to €94.7 million from €102.7 million a year earlier. The Dublin-based airline saw a slight rise in the quarterly sales despite it carried 16% more passengers. The number of seats for sale continued to hurt ticket prices.

Meanwhile, Randgold Resources shares spiked as the gold producer posted a 76% leap in fourth-quarter net profit to $78.5 million and raised its final dividend by 52% to $1 a share.

This article was issued by Rodrick Duca, 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.