Financial market research and analysis

Volatility still missing

A wait-and-see approach took hold in stock markets on Wednesday where modest losses unwound some of yesterday’s gains. Stock market volatility remains close to the lowest ever and it’s hard to imagine the Federal Reserve meeting later today will change that. Data from BOAML indicates S&P500 100-day volatility has only been lower 3% of the time since 1928.

Stocks in France saw a modest decline in the run up to the second round of the Presidential election on Sunday. Earnings growth at BNP Paribas spurred a move higher in French banks but solid profit growth at Germany’s VW weighed on Peugeot which has taken market share since Dieselgate.

Apple eats into US market gains

Apple reporting a fall in iPhone sales and apprehension before the FOMC meeting led to a lower open for US stock markets. Apple’s results were far from a disaster but just didn’t quite meet the huge expectations. Apple reported higher profits and raised its dividend more than expected but the sales results and guidance took the edge off. Tech stocks have been leading US markets so it will be up to Facebook to carry the baton when it reports its results after the close.

Supermarket heap

A sell-off in supermarkets and mining company shares weighed on the FTSE 100 despite some good results from the index’s sole tech company Sage. Data from Kantar showed a mixed fortune for Britain’s top grocers. A combination of higher volumes and price inflation mean sales are rising but there was acceleration in lost market share. The discounters are still breathing down the neck of the Big Four.

Sainsbury’s full year profit fell 8.2%. Group sales were in the double digit growth because of the Argos acquisition but if that’s stripped out, like-for-like sales fell narrowly. Sainsbury’s has been vindicated in its purchase of Argos, which has been the star of the show for the past few quarters.

Bye bye bosses

FTSE-listed company bosses were on the move on Wednesday. Marks & Spencer poached Jill McDonald from Halfords. ITV Dominic O’Connell quit ITV. It could be that O’Connell is clearing the way for a takeover of ITV, possibly by Liberty Global. The market’s reaction of sending the shares lower was more bemoaning the loss of a good leader rather than acknowledging a step towards a takeover bid.

Gold hit while FX dead before FOMC

Much stronger than expected US service sector data and its implication for higher interest rates sent gold spiralling below $1250 per oz to its lowest in a month. The reaction in FX market was more muted but could come to fore following the Fed meeting.

Reports that the European Union might look to charge the UK a 100bn euro exit bill and a vague set of EU negotiating positions set out by chief negotiator Michel Barnier had minimal impact on the British pound. The UK general election has grabbed much of the focus for FX traders away from Brexit.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. Losses can exceed deposits