This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
European indices and gold prices have seen additional losses, as market expectations of a Federal Reserve asset-purchase reduction announcement next week were ramped up, fuelled by rumours that the hawkish Larry Summers will take the Fed chair in January.
Russia’s largest silver miner, Polymetal International, has shed 3.57% in early trade owing to a broker downgrade. The fact that silver has sunk 14% over the last two weeks does not bode well for the company outlook.
Warm summer weather contributed heavily to the record profits announced by pub chain JD Wetherspoon. The company, which has seen its share price gain over 50% in the last six months, saw underlying sales grow 5.8% in the 52 weeks to the end of July, with a 10.9% surge in like-for-like food sales. The shares have given back some gains, owing to a more downbeat outlook from the firm.
The UK macro calendar continues to produce positive news, with second-quarter output rising 2% on the year versus the 1.3% improvement expected. Much of this output can be attributed to a rise of 19.4% in new housing orders, indicating that the government ‘help to buy’ scheme is not constrained to the existing home sector. However, it may be a little early to celebrate, given that construction in the country remains almost 15% below its pre-crisis peak.
Traders have been waiting all week for the release of the US producer price inflation and retail sales figures. Both data-points are expected to see a marginal increase on prior numbers. One can expect that, should the actual figures beat expectations, the market will see this as a definitive confirmation that the FOMC will reduce the current level of quantitative easing.
We currently see the Dow Jones futures trading flat at 15,300.