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Hope keep equities afloat
Equities are in the black as hope rises that the Democrats and Republicans might come to a short-term solution to avoid defaulting on the country's debts. Stocks are set to finish higher on the week as the Yellen nomination and the compromise by the Republicans have driven demand.
Royal Mail is seeing a throwback to the privatisation of the 1980s; the stock opened a whopping 36% above the IPO price. Some dealers booked early profits, but demand remained high throughout the day. Not everybody is pleased with the flotation, however, as some feel the government should have allocated a larger portion of the shares to the public rather than favouring big institutional players. Vince Cable came under fire for undervaluing the company, which left the government coffers out of pocket to the tune of over £1 billion. Perhaps Mr Cable has decided to adopt the strategy that happy investors are happy voters.
Wells Fargo sees profit rise
US equity traders welcomed the suggestion by John Boehner to increase the debt ceiling for six weeks to avoid a doomsday-style default. This may not be a long-term solution to the problem but it would side-step the country running out of cash.
Earnings season continues as the largest home-lender in the US, Wells Fargo, announces a 13% rise in third-quarter profits, even though the mortgage market is slowing down.
Oil price falls
Oil has slipped into the red as dealers book their profits from yesterday’s spike in price, after the Libyan prime minister was captured and released within a number of hours. As political tension in the region eased, so did the price of oil.