Equity market drawn to psychological 6600 mark

Heading into the close the FTSE 100 is up 33 points at 6600 as a lack of negative news encourages traders to go long.

London skyline
Source: Bloomberg

Serco shares eye ten-year low

In London, the equity market was drawn to the psychological 6600 mark as trading volumes are as thin as news flows. Serco shares were sent to nearly a ten-year low after the outsourcing company issued a profit warning and capital raising plan all in one go.

Tesco shares are back on traders’ shopping lists as bargain hunting sets in, but £2 could prove to a stumbling block.

Virgin Money will be floating on the stock exchange on Friday and our grey market suggests a market capitalisation of £1.35 billion.

Sainsbury's is being shunned by traders as the supermarket has suggested Wednesday’s update will reveal a drop in first-half profits. Traders are anticipating the dividend to be trimmed. 

McDonald's share price drifts back to $95

In the US, the Dow Jones is down 17 points at 17,556. A lack of economic data today, and Veterans Day tomorrow, has prompted traders to stay away from the equity markets and the excitement of non-farm payrolls Friday is long gone. The US equity market is basically standing still.

Shares in McDonald’s were trading higher in the pre-market after the fast food giant revealed a smaller-than-expected drop in sales, but when trading commenced the stock drifted back towards $95. The company is facing the same problem as the Federal Reserve; low wage growth at the lower end of the income scale is the biggest obstacle for both organisations.   

Gold can't hold onto intraday gains

Gold has given up the ghost. The precious metal was eyeing the $1180 level but it ran out steam on the final stretch. It’s a sad state of affairs when gold can’t hold onto any intraday gains while the US dollar is soft. What chance does it stand when the greenback returns to its bullish run?

Copper futures were left confused by the Chinese inflation data — the drop in the cost of living underlines the slowdown but it also gives the Beijing government the option to loosen policies to ensure the full-growth target is met. 

US dollar lower

The US dollar has taken a dip today as traders haven’t forgiven the greenback for missing headline figures on Friday’s non-farm payrolls report. Even though the September figure was revised higher, traders had already sunk their teeth into the October number. The greenback has had a great run lately and so traders are expecting too much from the US dollar. However, Uncle Sam can’t keep up with high expectations.

The euro has piggybacked on the soft US dollar, and investor confidence in the eurozone is still close to an 18-month low as the sentix investor confidence report highlighted this morning. Only the prospect of full blown quantitative easing could change investor sentiment.  

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