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. See full non-independent research disclaimer and quarterly summary.
Some investors are locking in profits from yesterday’s rally while others are worried the US government’s credit rating will be downgraded after the Democrats and Republicans struck a deal which increased the debt ceiling until February.
In the summer of 2011, Standard & Poor’s stripped the US of its AAA credit rating after the government raised the debt limit. Fitch ratings agency has already warned the US about lowering its credit rating and this is sending stocks lower.
The good news is that the partial shutdown in the US over the budget has come to an end, although this issue will resurface in December.
In London, British Sky Broadcasting has risen 6% after announcing a 7% increase in three-month revenue to September. Fresnillo reported a 7.6% increase in silver production and the Mexican miner retained its full-year output guidance. The share price is up 1%.
We are expecting the Dow Jones to open 160 points lower at 15,213 as the fear of the US being downgraded grips traders.