Market Sell-Off Has Gone Viral

Global markets are all in the red this morning as China reports a fourth death from the deadly new coronavirus. It has also been confirmed that the disease can spread from human to human. This has seen fears surface over travel and trade restrictions, which of course has an economic impact. Asian bourses were down between 1 and 2.5% each, the UK’s FTSE is currently down 1.3% and US futures are indicating a 0.5% dip on the open.

This comes after the International Monetary Fund, although still predicting that global growth will pick up this year versus 2019, has lowered its global economic forecast, citing risks such as the potential re-escalation of US-China trade tensions. Included in the numbers, the IMF is predicting that China’s economic growth will continue decelerating, Japan’s aging workforce will continue to eat into its already slow growth, and that India will experience a sharp slowdown in growth – albeit from a high base.

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Is easyJet set to soar after increasing revenue per seat?

easyJet, the low-cost airline, said today it had delivered a strong performance for the quarter ended 31 December, after passenger, seat and load numbers all climbed, and revenue jumped 9.9%.

Benefiting from factors including the demise of Thomas Cook in September, and the launch of its easyJet holidays, the airline will be in sharp focus for investors having delivered a share price gain of more than 50% from August’s lows.

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Elsewhere, Dixons Carphone said it had delivered a strong performance in sales in the all-important Christmas trading period, with like-for-like increases in electrical sales and rising international numbers thanks to the impact of currency moves. Nonetheless, overall like-for-likes were flat.

BAE leads FTSE 100 on back of dealmaking

The FTSE 100 and FTSE 250 both dipped yesterday following the IMF’s reduced forecasts, taking the FTSE 250 back into negative territory for the year so far. Defense firm BAE Systems led the FTSE 100 with a 3.7% share price gain, after announcing it will be acquiring Collins Aerospace’s military GPS business and Raytheon’s airborne tactical radio unit. It is spending $1.9bn on the first and $275m on the second. CEO Jerry DeMuro described it as a “unique opportunity to acquire critical radio and GPS capabilities” in order to serve the modernization needs of the US military and its allies. At the bottom of the FTSE 250 was outsourcing firm Capita, which fell by 4.5%, following reports that it is looking to offload business units including events management and translation.

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