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.
Markets have received a welcome shot in the arm from the World Bank's statement that the global economy is finally turning a corner following the 2009 crisis. The international financial organisation has increased its growth target to 3.2% for the year, up from its expectations of 3% in June 2013. Even with price-earnings multiples having reached their 2009 highs again, the continuing stimulus hitting the markets is causing traders to ignore these warning signs and keep their seats on the gravy train.
Strong contenders among UK stocks
Angela Ahrendts looks to be ending her stint in charge of Burberry with a flourish, as the high-end luxury goods retailer saw retail revenue jump 14% over the festive quarter. Once again it looks like Burberry’s loss will be Apple's gain. Taylor Wimpey joined its UK housebuilding counterparts in posting good figures, boosted by the government's Help to Buy scheme. Once again the focus of politicians is on the Royal Bank of Scotland, as it searches for measures to keep its staff happy while keeping to David Cameron’s imposed limit of a £2000 cash bonus per person. The latest confirmation of sizable oil reserves in its Kenyan fields will do nothing to dampen down the takeover speculation surrounding Tullow Oil.
US markets bullish ahead of beige book
The bullish sentiment prevalent in Europe has encouraged US traders to start the day in a similarly optimistic mood. However, tonight's Fed beige book release could change that, but only once European traders are back offline. The US reporting season continues at a pace, and Bank of America's better-than-expected figures, following on from JPMorgan's, will help financials maintain their popularity with investors, even if they continue to hand over copious amounts of money to financial regulators. Tesla Motors, the electric car manufacturer, has left little room for doubt about its optimism, after releasing fourth-quarter figures stating it envisages 'reckless growth' in the year ahead.
Metals fail to gain ground
Once again gold is flattering to deceive, having shown signs of a battle spirit that might have finally helped it break out of the spiralling downtrend in which it has been trapped for almost two years. Platinum and palladium traders have obviously refused to be fooled by the glitter and glam of the latest Detroit motor show, as spot prices in both have hardly fluttered while car manufacturers did their best to start the year off with a bang.
Dollar looking strong
The US dollar looks like it has woken from its slumber, as it has made big gains against the market. GBP/USD has moved more than 100 pips lower over the course of the day, with EUR/USD hot on its heels and down just a touch less. In both of these currency pairs this looks more like a corrective retracement rather than a shift in sentiment. In contrast, the Japanese yen is making little sign of a fight as it once again weakens against the greenback.