The FTSE 100 was set to jump today as a flurry of big takeover deals in the US helped boost sentiment in global markets.
No sooner had AT&T declared it was planning to sell its Warner Media movie business to Discovery than reports said Amazon was in talks to buy James Bond franchise owner MGM for $9 billion - a move likely to trigger a flurry of other takeovers in the sector.
Big M&A means big confidence in stock markets, and the deal flurry added to a sense of optimism that kicked off with positive moves on Asian markets this morning.
Futures markets indicated the FTSE 100 would gain around 53 points to 7092 at the opening. On the IG platform, 62% of clients were betting it would go higher.
Much will depend on the UK unemployment data out shortly. February’s ILO unemployment slipped back to 4.9% after being 5.1% in December. Markets will be hoping for a further improvement, although the measure remains flattered by the government’s furlough scheme.
Hopes are that many people on furlough have been taken off it this week as bars and restaurants begin opening their doors for guests inside, but that will not be reflected in today’s data.
The Bank of England has become increasingly confident about the unemployment picture, suggesting it will rise before it gets better, but that the temporary worsening will not be as extreme as it thought previously.
On the great reopening, CMC Markets’ Michael Hewson warned: “There is still a lot that can go wrong, with the government being uncharacteristically cautious about the lifting of all restrictions just over a month from now.”
Later today comes GDP data from the EU which should confirm it fell into a double-dip recession in the first quarter of the year, contracting 0.6%.
Stocks-wise, Hollywood Bowl could perk up further after yesterday’s reopening of its bowling alley complexes around the country. Brokers Liberum issued a note to clients claiming the shares were a Buy at 236p, setting a target price of 280p.
It cited the well capitalised business as one that’s well set to exploit “enhanced market opportunities” - meaning it should open new sites on decent terms with landlords thanks to its net cash position of £8.2 million. In layman’s terms, that means it can reassure property owners that it’s “good for the money” in future discussions.
Liberum said the business should have an “immediate return to profitability and positive cash flow” with the reopening of its sites.
Jefferies put a price target of 300p on Barclays’ stock - a near doubling of the bank’s current position. The broker scorns the critics who condemned the bank for setting aside a big bonus pot for its investment bankers, pointing out that they had just come up with the second best performance under CEO Jes Staley’s tenure.
It predicted Barclays’ capital buffers would rise to the point where it could afford to give more money back to shareholders through buybacks.