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Markets in waiting mode | Calamatta Cuschieri

Banking stocks led the way with gains on Wednesday on expectations of an interest rate hike in the US next week

calamatta_cuschieri
Calamatta Cuschieri
9 March 2017, 9:30am
Traders have priced in an all but certain quarter point rate hike during the Federal Reserve Bank’s meeting
Traders have priced in an all but certain quarter point rate hike during the Federal Reserve Bank’s meeting
European markets struggled for direction and were little changed during Wednesday’s trading session. Banking stocks led the way with gains on expectations of an interest rate hike in the US next week. A similar situation on Wall Street saw US stocks mostly flat since the focus is on Friday’s crucial nonfarm payrolls report.

Traders have priced in an all but certain quarter point rate hike during the Federal Reserve Bank’s meeting on March 14-15, but investors are keen to know whether the US central bank will increase the pace of rate hikes throughout the year. Fed Chair Janet Yellen last week remarked that tightening monetary policy would likely not be as slow this year as it was during the past two years.

Adidas earnings impress

German sportswear giant Adidas was among the best performers on Wednesday. Rather than waiting for next week’s strategy update, CEO Kasper Rorsted unveiled a set of higher targets for sales and profit up to 2020 – as well as a 41% rise in profit last year.

A recent collaboration with Kanye West has helped Adidas capture sales in the US market, where it now has a 10% share of the market, compared to Nike’s 45%, according to analysts at RBC Capital Markets. Adidas shares soared 8.79% on Wednesday and have jumped almost 80% over the past 12 months.

Staying in the sporting industry, shares of Dick’s Sporting Goods were trading in the green after the company said that it was dumping a fifth of its vendors to focus on its own brands. Despite RBC cutting its share price target to $61 from $65, shares traded 2.75% higher.

Oil in the red

Oil prices fell on Wednesday after US government data revealed a weekly jump in crude supplies that lifted total inventories to another record, although a big decline in gasoline supplies helped to limit losses. Chinese imports of crude also fell in February, signalling lower demand and putting additional pressure on prices for the commodity.

April crude shed a little over a full cent as it fell 1.88% to trade at $52.15 a barrel on the New York Mercantile Exchange.

This news rippled into mining shares. The likes of Rio Tinto and BHP Billiton bother traded in negative territory, closing down 0.71% and 1.12%, respectively.

Individual movers

British satellite company Inmarsat saw its best trading day in four months, after reporting a hefty increase in earnings. It shares were up 6.3% on this news.

On the flip side, shares in Caterpillar and Exxon Mobil declined. Caterpillar shares got hammered after a report commissioned by the government accused the company of tax accounting fraud, according to a report in the New York Times. Its shares traded 1.37% down.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, http://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.

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