Winning streak snapped
Stocks snapped a seven-day winning streak as increased odds of a US interest rate hike in March curtailed enthusiasm for Trump-led tax cuts.
Record highs in UK, US and global stock market indices were all signs of some short-term over exuberance. The Dow Jones, the FTSE 250 and the MSCI All Country World index all clocked up record highs on Wednesday.
If investors were looking for signals of extreme sentiment, perhaps they needn’t look any further than the US President himself. Trump tweeted about the confidence and optimism behind the new high in the stock market on Thursday, perhaps incidentally calling a short-term top in doing so.
Pharma top and tail, airlines up
AstraZeneca, BP and Imperial brands going Ex-div were the difference-makers for a listless FTSE 100. Pharma stocks top and tailed the UK equity benchmark. Shire was a top riser after reporting a rise in profits bolstered by its acquisition of Baxalta while AstraZeneca was biggest faller after going Ex-div. Coca-Cola HBC was a top riser after well-received results.
Shares of IAG gained thanks to reports of better-than-expected industry profits. Rival Air France / KLM reported operating profits of €1.05bn. Evidence is starting to mount, judging by Air France results Thursday and TUI results on Wednesday that passengers have not been terrorised out of travelling. Muslim-majority destinations like and Egypt and Turkey have seen lower bookings but overall holiday demand looks resilient. As a side note, Wizz Air expanding into Luton airport speaks to confidence in the airline industry.
Snapping at the heels
With US stocks opening flat, attention shifted to what could be the hottest new listing this year. Snap, the owner of the Snapchat app has priced shares at $14-$16 for its IPO, giving the company a valuation of $19.5bn - $22.2bn. It’s the first major social media IPO since Twitter and the largest tech debut since Alibaba floated in 2014.
The valuation for what is basically a smartphone messaging app looks eye-watering on first glance but if Snapchat can grab even a slither of Facebook and Google’s ad revenue it might be worth it. As a reminder, Facebook bought WhatsApp for $19bn in 2014. Even if it’s not worth the price tag, Snap stands to do well anyway because investors have been so starved of high-growth potential IPOs. ‘Unicorns’ (tech start-ups valued over $1bn) like Uber and Airbnb have opted to stay private, limiting the supply of publicly investable firms.
USD dips with Stanley Fischer comments
Odds of a US rate rise have improved to about 50/50 since Fed Chair Janet Yellen’s testimony to congress. Nonetheless, the US dollar looks a little top heavy and has rolled over in the past two days. Vice Chair Stanley Fischer was on the wires on Thursday, stating the US economy is headed toward the Fed’s 2% target. US rate-setters haven’t quite dispelled the idea that they are in wait-and-see mode over Trump’s fiscal plans. So far so 2016; the Fed hikes in December, skips March, market volatility spoils plans to go in June, there are elections in Autumn and another year has gone by.
OPEC rumours prompt oil spike
Rumours that OPEC will cut output again at its next meeting spurred a jump in the oil price on Thursday. The OPEC rumour mill conveniently started spinning after data showed US stockpiles hit new records this week, raising supply glut concerns. Investors are positioned for the next push higher in oil, but at the moment that is the problem. Another drop below $50 per barrel may be needed to flush out the week oil longs.
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.
Finger Pointing At Russia and US inflation Lingering trade war concerns pulled the Dow Jones over 150 points lower overnight, as investors feared that a flawed trade policy could be as significant and damaging as a flawed monetary policy. Whilst key trading pa…Read more
US & European futures fall following another White House resignation Whilst US indices managed to book a positive finish overnight, the futures are tanking as the revolving door at the White House is once again in action. The resignation of Trump’s top eco…Read more
Risk-on trading returns as trade war fears ease Wall Street finally snapped a four-day losing streak on Monday, although the exact reason behind the return of risk appetite was difficult to pinpoint. The Dow closed over 330 points higher, whilst the S&P 50…Read more
US equity markets continued their Powell inspired sell off overnight, as risk aversion dominated and investor concerns over a faster pace of tightening at the Fed continued to weigh on Wall Street. The Dow ended the session 380 points lower, whilst the S&P…Read more
Wall Street showed no signs of giving up the recent rally, as it booked another positive close overnight; its third consecutive winning session. The continued stabilisation in interest rate expectations helped US equity indices hit a 4-week high, with the Dow…Read more
Italy will hold a general election on 4th March 2018. Last year this was being identified as one of the big risk events of 2018. Since then, the economic climate has changed dramatically in Italy, which is in turn reducing the risk attached to thi…Read more
Upbeat start to event packed week
European markets look set to start the new and event-packed week on a positive note. The move higher comes following a generally upbeat session in Asia overnight and a strong end to the previous week on Wall Street, which saw…Read more
FOMC minutes confuse the market
The eagerly awaited minutes from the FOMC January meeting were released on Wednesday evening. The release was more closely watched than usual given recent market conditions, which have seen rising inflation and interest rate co…Read more
Despite positive trading in Asia overnight, Europe is seen taking its lead from the US, which closed lower under the weight of a late sell off in Tech stocks and a large scale move out of Walmart.
Wall Street closed lower for the first time in 7 sessions, …Read more
US equity indices closed the overnight higher after reversing opening losses. Wall Street added a fourth day to the winning streak, even as bond yields rose following stronger than forecast inflation data, but weaker retail sales. The Dow closed 250 points hi…Read more
Figures showing hotter than anticipated US inflation in January produced, upon first glance, a surprising reaction in global markets. Higher US inflation, which by its nature should mean higher US interest rates led to a sell-off in the US dollar and a rally i…Read more
A fresh bout of selling hit Wall Street overnight sending US equity indices plummeting once again. For the second time in less than a week, the Dow plunged by over 1000 points, closing 4.2% lower, in its second worst point drop in history (the biggest being on…Read more
After record losses were posted on Wall Street on Monday, US equity indices manged to finish the session higher overnight. The Dow Jones turned an initial 500 plus point loss into a 567-point gain, clawing back around half of the 1,100 points wiped out in Mond…Read more
European stocks are headed sharply lower start thanks to the weak lead given to them by Wall Street. The FTSE 100 is set to open just above its December lows. The next day after an unusually big sell-off is always a big test of a market’s strength. A repeat of…Read more
arkets participants found themselves in the rare position of witnessing falling prices this week. It has naturally sparked questions of whether a larger correction is in store. The Dow Jones has pulled back 3% while the FTSE 100 has dropped nearly 4.5%. These …Read more
US markets rebounded on Wednesday boosted by better than expected earnings, recovering from a heavy two day sell off at the beginning of the week. The Dow closed 72 points higher, whilst the S&P and Nasdaq both increased 0.1%. A fitting way to end the mont…Read more
Eurozone Growth on solid footing
Eurozone growth remained solid in the fourth quarter. EZ Q4 GDP hit 0.6% q/q and accelerated to 2.7% y/y, up from 2.6% in Q3. The Eurozone economy grew by 2.5% in 2017, up from 1.8% in 2016. Eurozone growth was faster than …Read more
Wall Street opens 2018 with fresh records
Wall Street opened up 2018 with record highs, boosted by energy, tech and consumer discretionary sectors. S&P 500 and Nasdaq indices hit record intraday and closing highs. The rise in tech stocks helped the Nasdaq…Read more
US markets paused for breath on Wednesday, after the Senate approved the long-awaited US tax reform bill, and the House of Representatives passed the bill again, owing to a procedural snag. The Dow finished down 0.1%, the S&P declined 0.08% and the Nasda…Read more
A quick summary of key global dynamics that could change in 2018. We discuss politics, economics, central banks, markets and the potential impact on market pricing. Topics include Bitcoin, FAANG stocks, inflation and gold.
A Tory Party lea…Read more
Stocks drift lower while awaiting US tax bill
Markets started out on the back foot and drifted for most of the afternoon. The dip-buyers that have stepped in throughout the year failed to materialise, fearing the ticking clock on US tax reform. Until tax re…Read more
US Markets Finished Steady As Investors Await Details on the Tax Reform
Wednesday’s US session had a definite wait and see feel about it. The Dow closed marginally lower and the S&P 500 flat, as investors paused, waiting for more details on what the rec…Read more
Stocks in Europe have had a generally positive open on Monday. While geopolitical risk looks to be on the rise, hopes of deregulation led by the US is helping a risk-on mood. Spanish equities are bucking the trend on Monday, with the IBEX index opening lower a…Read more
The unusually smooth bailout of a big Spanish bank and upwardly-revised OECD global growth forecasts helped create an aura of stability in markets. The stability was perhaps inevitable on the eve of what stands to be a very eventful day on Thursday.
Banco …Read more
The FTSE 100 first dived to 7489p then rebounded past 7525p at the London open. Fresnillo rallied past 2% as gold extended gains.
Lloyds (+0.97%) shares were well bid, as Britain sold its remaining stake in the bank, emotionally marking the end of a painfu…Read more
Hopes of owning a part of the next internet giant propelled Snap shares over 40% higher on its first day of trading - but investor confidence has cratered since. Snap’s maiden earnings will set the tone for investor expectations moving forward.
Hello, welcome to LCG’s look ahead to the key events in markets for the week starting April 3rd, 2017. The video edition will return next week, and in a new location!
Stock markets are consolidating near recent peaks and the big question is whether th…Read more
Stocks were under pressure on Monday following the collapse of Donald Trump’s first attempt to overturn Obamacare. For many, the healthcare bill has been the moment that crystallised the risk of economic failure under The Donald. Ironically, the reacti…Read more
Slow burn in markets
The anticipation of a busy week ahead including the possible triggering of Article 50, a potential populist revolt in the Dutch national election and a likely US interest rate hike meant there was a slow burn in markets on Monday.
… Read more