Stocks soar on stimulus hopes

European equity markets are in the black following news that Janet Yellen could be the next head of the US Federal Reserve.

Janet Yellen is likely to become the next head of the Fed when Ben Bernanke’s term comes to an end in January. Last night traders breathed a sigh of relief as Larry Summers, who is in favour of higher interest rates and reducing the quantitative easing scheme, made it clear that he is not interested in the role. Ms Yellen is a much more welcome candidate, as she is known for supporting the bond buying scheme. For that reason, traders have been buying equities this morning.

Silver miner Fresnillo is off 12% after an announcement that the Mexican government is to introduce a new tax on natural resource companies. This is similar to the resources levy the Australian government introduced a few years ago. Petrofac is up 0.9% after the oil services provider won a five-year contract worth $120 million with a Malaysian energy company.

In the US the Dow is up 165 points at 15,541, as traders await Wednesday evening’s Fed announcement (London time) when some economists believe the Fed will trim the bond buying scheme by €10 billion. If the reduction is larger-than-expected we could see equities drop.

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.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.