GBP and Indices rise to start the week

Summary:

• Stocks rise on more trade hopes

• China agrees to increase IP theft penalties

• Uber tumbles as TFL strips license

• GBP rises with politics in focus

• What to expect from the UK GE

The start of a holiday-shortened week for US stocks looks set to get off on the front foot with all the major benchmarks starting above where they ended on Friday and rallying further since the opening bell. With the US celebrating Thanksgiving on Thursday there could be reduced trading volumes from across the pond heading into the second part of the week and this is something that traders should be aware of. The US small cap index (US2000 on xStation) is of particular interest, gaining over 1% and threatening to break above key prior resistance around 1620.  

Optimism can be ascribed to announcement that China will increase penalties on Intellectual Property theft in order to address one of the sticking points in Sino-US trade negotiations. The Asian country will also look into lowering threshold for criminal punishment in IP theft cases. The move is likely to bring two countries a little bit closer to signing Phase One trade deal. Trade-sensitive stocks can be found among DAX top movers today, a response to China agreeing to increase penalties on Intellectual Property theft. Carmakers, car parts manufacturers and tech stocks benefit the most.

For the second time the transport agency in London (TFL) has stripped Uber of its license to operate in the city in a move that has caused some sizable selling in the stock during pre-market trade. TFL said that it has discovered over 14,000 incidents in late 2018 and early 2019 with unauthorised drivers which put “passenger safety and security at risk.” The ride-hailing app has 3.5M riders and 45,000 licensed drivers in London and the ruling has once more brought unwanted scrutiny on the firm. Uber has 21 days to lodge an appeal and during this process it can continue to operate. Uber shares fell as much as 5% in pre-market trade but after a pretty ugly open has recovered somewhat, trading -1.8% on the European close. The stock had been looking to recover from its lowest level on record around 25.60 but the news that it has lost its license in London comes as a big blow. Shares still languish well below their IPO price of $45 from back in May when the firm went public. 

The pound is the best performer major currency at the start of the week, making small but steady gains against all of its peers. The launch of the Conservative manifesto over the weekend was free from any real major surprises and recent polling continues to point to a strong lead for the party. The launch of both the main parties manifestos and two televised debates involving Boris Johnson and Jeremy Corbyn has had a negligible impact on opinion polls and this will be warmly welcomed within the Tory party who will increasingly be feeling that this election is theirs to lose.

A more in-depth look at what can be expected from the UK election can be found here.