It’s been a rather mixed start in
Europe today with London leading the way lower – news that AbbVie may not
proceed with the Shire merger has sent the pharmaceuticals sector lower, but
Shire is in an absolute tailspin with shares off by almost 30% so far.
Combining this with woes in the petrochmicals sector as crude prices show no
signs of finding a floor and many of London’s largest stocks are sporting some
healthy losses already. Elsewhere however the situation is looking far more
stable with only modest losses so far and the fact that German inflation data
came in this morning as expected is precisely the sort of message the market
needs for reassurance – even if a print 0.8% flags its own concerns.
Asian stocks have been relatively
muted too, with the Nikkei finding support off renewed Yen weakness, whilst the
broadly in-line Chinese CPI and PPI numbers have also lent a degree of
reassurance. Hong Kong equities remain on the front foot despite what appears
to be an escalation in local protests, but as far as the market is concerned,
having these issues sidelined as soon as possible is arguably beneficial.
We’re looking at a relatively quiet
start to the day on Wall Street with futures pointing towards some modest
losses at the open although the big number to watch will be US retail sales,
due before the opening bell. Anything that looks too hot here could see the Fed
under pressure to accelerate the rate hikes – markets are currently pricing in
a move in September 2015. Earnings season also continues with numbers due from
names including Bank of America before trade commences but ahead of the open
we’re calling the DOW down 10 at 16305 and the S&P down 3 at 1875.
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