Strong earnings lift markets | Calamatta Cuschieri

Global markets posted record highs during Tuesday’s session as investors expressed relief at centrist Emmanuel Macron’s victory in the first round of the French presidential election, and were aided by speculation about US tax reform. The yen fell with treasuries and gold.

Stocks in Europe hovered near a 20-month high and emerging markets climbed as risk appetite fuelled by the outcome of France’s election continued. Investors were also rejoicing over strong earnings reports and a deal involving luxury fashion company Christian Dior.

Wall Street wasted little time to join the optimism, as the Nasdaq Composite Index hit a major milestone during early trade on Tuesday jumping about 0.5% to send the index above 6,000 for the first time ever. US stocks rose towards all-time highs as earnings from Caterpillar Inc to McDonalds Corp. bolstered optimism in the economy.

Louis Vuitton buys rest of Dior subsidiary

Household goods were higher on Tuesday after the luxury goods company Louis Vuitton said it would take full control of Christian Dior by buying the stake in the fashion company it does not already own.

Shares of Christian Dior soared 11.86% on Tuesday after a deal was struck allowing LVMH to buy Christian Dior’s fashion subsidiary, Christian Dior Couture, for a total of €6 billion. Shares of Louis Vuitton were up 3.8% on the news.

Rough day for Ericsson and Whitbread

Shares of Ericsson spent the day in the red after the wireless communications gear maker posted a hefty quarterly net loss of 10.9 billion Kroner (the equivalent of $1.24 billion) after booking provisions, write-downs and restructuring costs. Ericsson shares shed 2.89%.

Shares in Whitbread were at the bottom of the Stoxx 600, after the parent company of Costa Coffee and the Premier Inn hotel chain said it foresees a “tougher consumer environment than last year”, even as its businesses have had a good start to the year. Whitbread reported higher revenues and profits for the full year but also stated it expects consumer confidence to fall. As a result, shares sank 7.38% during Tuesday’s session.

Caterpillar and McDonalds beat estimates

Caterpillar’s first quarter adjusted profit handily topped expectations on Wall Street

Caterpillar’s first quarter adjusted profit handily topped expectations on Wall Street, and revenue climbed thanks to improved sales across its business segments. The construction equipment company also boosted its full-year outlook thanks to a stronger-than-expected start to the year. Shares jumped 6% in Tuesday’s session.

McDonalds released that latest earnings reports before the opening bell on Tuesday. The fast food company reported strong earnings and revenue figures that were above Wall Street expectations, and added that US comparable store sales grew 1.7% as all-day breakfast boosted US revenues. McDonalds shares jumped 4.2% on this news.

Still to come this week

Investors have a lot to digest this week, with some major companies releasing results throughout the week. Alphabet, Microsoft, Amazon.com, Twitter, Intel, Credit Suisse, Bayer and Daimler – to name a few ­– could all move the markets as they report results later this week.

Eyes will turn to the Bank of Japan, though it is widely expected to keep the settings on its monetary easing programme unchanged at the end of a two-day policy meeting on Thursday. The European Central Bank sets monetary policy later that same day.

Disclaimer:

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.