Thomas Cook demise fuels its peers, European PMIs display ECB failure

In a return to business as usual, market indicators have resumed the downward trajectory which has become something of a home so far in 2019. Despite the efforts of its Board and shareholders, Thomas Cook collapsed on Monday morning, and this sour cherry topped the broader and equally bitter macro cake offered by the Eurozone, with disappointing PMIs illustrating that some change of the modus operandi is needed (and more simply that the ECB’s recent efforts fell short of the mark).

Speaking on Monday morning’s developments, Spreadex Financial Analyst Connor Campbell stated,

“A disappointing morning for Eurozone PMIs set the tone in the region, while the FTSE dealt with a unique situation in the travel sector.”

“The undoubted headline this Monday is the demise of Thomas Cook. The world’s oldest travel company ceased trading after failing to secure the £200 million it desperately needed for a bailout. That leaves 150,000 holidaymakers stranded around the world, sparking Operation Matterhorn, the UK’s biggest repatriation effort since World War II.”

“Such a tragic collapse – one, if not solely brought about by Brexit, then certainly hastened by that ongoing mess – leaves plenty of money on the table for its sector peers, a fact that hasn’t gone unnoticed by investors. Long-standing rival TUI surged 9% to a 7-month-plus high, helping the FTSE avoid the losses seen across the pond, while British Airways-owner IAG added 1.2% and easyJet climbed 5.2%.”

“Once again the Eurozone’s flash PMIs gave the region rather severe cause for concern, suggesting the scale of the turnaround needed may go beyond the measures announced by the ECB earlier in the month.”

“The French readings both missed estimated by quote some way, as did the German services figure. The truly alarming number, however, was the German manufacturing PMI, which came in at just 41.4 against the 44.6 forecast and the 43.5 seen last time out. That set the DAX and CAC up for a very poor start to the week; the former slumped by 130 points, with the latter shedding more than half a percent.”

Elsewhere in markets and macro economic news, there have been updates from; ECB stimulus, the bid for the London Stock Exchange (LON: LSE), Lloyds Banking Group PLC (LON: LLOY), Jo Johnson quitting, Hilary Benn’s Brexit delay bill, Parliament being prorogued, Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.