Sterling hits one-year high
The British pound hit a one-year high on Friday, last trading at around $1.2613.
Sterling has received a boost following the U.S. Federal Reserve meeting this week. The central bank hinted at a pause in interest rate hikes, prompting speculation that the Bank of England may also be forced to slow down its monetary policy tightening.
The Bank of England will announce its next move on Thursday, although markets are still pricing in further hikes given that inflation remains much higher in the U.K.
– Elliot Smith
Adidas up 8% after resilient earnings, despite Yeezy issues
Adidas shares jumped 8% on Friday after the German sportswear giant beat first-quarter earnings expectations, despite a 400 million euro ($441.56 million) hit to sales from the termination of its Yeezy partnership.
“There were a number of encouraging signs in Adidas’ Q1 print. The firm reported better than expected China performance, a sequential improvement in inventory reduction and a scaling up of its franchise, such as Gazelle, Samba and Campus, along with accelerating momentum within the performance business,” said Mamta Valeccha, equity research analyst at Quilter Cheviot.
“Despite this, forward guidance is for negative high single digit growth, which may be disappointing to some. However, this is a marathon not a sprint for Adidas. The company has a number of issues to get through such as rebuilding relationships with suppliers, a growth plan for China and the need to get to a more normalised level of inventory which will put pressure on margins, especially in North America.”
– Elliot Smith
Here are the opening calls
Britain’s FTSE 100 is set to climb by around 30 points to 7,733, Germany’s DAX is seen around 45 points higher at 15,779 and France’s CAC 40 is expected to add around 21 points to 7,362.
CNBC Pro: Goldman Sachs names a slew of energy companies to buy right now as attitudes shift
Goldman Sachs has identified a number of energy stocks to own ahead of an expected turn in the market’s sentiment toward the oil and gas sector.
The Wall Street bank said it had observed greater ownership of the energy sector due to a change in the way ESG investors — or those who take environmental, social and governance factors into account — approach investing. Instead of divesting from fossil fuels altogether, they’re focusing more on engaging with these companies for better environmental outcomes, according to the bank.
ESG funds raised their exposure to the energy sector by 8 percentage points in the first three months of this year, Goldman added.
CNBC Pro subscribers can read more here.
— Ganesh Rao
