Market overview, Ryanair falling profits, and the week ahead | Calamatta Cuschieri

Market overview

Stock markets in China continued to climb today following last week’s report on a weaker than expected third quarter GDP growth which Chinese leaders tried to combat by releasing supportive statements about the economy. The Asia Dow and the Shanghai index are up by 0.39% and 4.09% respectively whilst in Japan the Nikkei 225 index experienced a 0.37% increase. European markets, FTSE 100 and Stoxx 600 rose 0.43% and 0.58% in the early hours of trading with analysts claiming that further increases are to be expected following China’s rally. In the U.S., the Dow Jones Industrial Average increased by 0.26% whilst the S&P 500 decreased minimally by 0.04%. Earnings for Amazon, Alphabet, Microsoft and Intel as well as U.S. growth data is set to follow within the coming days.

Ryanair profits fall

The airline reported a 7% fall in profits to €1.2bn for the six months ending 30 September. Despite a fall in profit, traffic rose 6% and its planes were 96% full. Continuous rows with staff over the company’s working conditions led to the airline being hit by many strikes. Mr O’Leary, Ryanair Chief Executive Officer, claims however that the strikes have had little impact on its schedules and that rivals such as Air France and Lufthansa have been hit harder by industrial action over the summer. Rising oil prices have also effected the company’s profitability with the carrier spending €1.3bn on fuel in the first half of the year. Mr O’ Leary remarks that the “full-year guidance remains heavily dependent on air fares not declining further - they remain soft this winter due to excess capacity in Europe - [and] the impact of significantly higher oil prices"

The week ahead

The week starts with Saudi Arabia much in the news after it confirmed journalist Jamal Khashoggi’s death after more than two weeks of strong denials. Saudi Arabia hosts an international investment conference known as ‘Davos in the Desert’ this week and international investors have already begun withdrawing funds from Saudi Arabia in response to the geopolitical crisis surrounding it.

A European Central Bank meeting on Thursday is expected to produce no surprises but investors and traders will be tuning in to see whether ECB president Mario Draghi voices any concern about the outlook for Eurozone growth, and whether he offers any clues about its strategy for how to reinvest maturing bonds when its quantitative easing programme ends. It has the potential to be another volatile week for Italian bonds and the country’s bank shares.

Rome has to respond by Monday to the EU’s concern over the proposed budget, which authorities in Brussels described as an “unprecedented” challenge to its fiscal rules.

Disclaimer: This article was issued by Peter Petrov, junior trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are 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