Europe stocks gain on Fed talk

Published On: March 19, 2021Categories: Stocks & Shares2.2 min read

Fed Chairman Jerome Powell announced the US economy is predicted to grow at a faster rate than initially thought in 2021

Last night, the Federal Reserve maintained its dovish stance which triggered the bullish moves in European stocks today.

The Bank of England (BoE) kept their policy unchanged as well, which contributed to the positive move as well.

Fed Chairman Jerome Powell announced the US economy is predicted to grow at a faster rate than initially thought in 2021 but at the same time, rates are likely to stay near zero through 2023 – this acted as a green light for the bulls.

Mr Powell cautioned that higher inflation is on the cards but it should only be temporary and therefore not warrant higher interest rates. Bond yields have risen today but it hasn’t spooked equity markets.

888 Holdings shares racked up new all-time highs as the gaming group decided to boost its return to shareholders. The final dividend stood at 12 cents, which is a massive rise on the 3p paid last year, the total dividend rose by 200% to 18 cents. In the 12 month period, revenue increased 52% to $849.7 million and adjusted EBITDA rose by nearly 69% to $155.6 million.

National Express suffered greatly in the past year as lockdowns crippled the transport industry. Annual revenue came in at £1.96 billion, a fall of nearly 29%, the group registered a loss of £381.4 million, which was a huge difference from the £242.3 million profit posted last year. The UK’s vaccination distribution scheme is progressing at a pace and the country should be operating without restrictions by late June, if everything goes according to plan, so National Express stands to benefit from the planned reopening of the country. Even though the transport business has faced tough conditions in the past year, it still managed to reduce net debt by £400 million, which makes the company more agile. Stringent restrictions are still in place but National Express has access to a mixture of cash and credit worth £1.9 billion.

Ocado shares have been in a downtrend recently as traders are rotating out of stocks that outperformed amid the lockdown and are snapping up companies that stand to benefit from when restrictions are eased. The online grocery group confirmed that first quarter retail revenue climbed by nearly 40% to £599 million. In the three month period, average weekly orders were 329,000 up 2.5%. Ocado’s real test will be if it can hang onto its market share when normal life resumes.

Vantage Towers commenced trading on the Frankfurt exchange today, the IPO price was €24.00 and the stock is trading just above that level. The decision to list 18.9% of the business will help Vodafone pay down debt.

Fevertree shares are offside following the poor full year figures. Revenue and adjusted EBITDA dropped by 3% and 26% respectively. The final dividend was lifted by 4%, it seems strange the drinks group is raising the pay-out in the face of disappointing numbers.

About the Author: Jonathan Adams

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