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.
In fact, markets appear to be taking a multitude of potentially negative ripple effects in their stride, as the bulls push equity indices higher in early trade despite a ramping up in sanctions on Russia by the US and the EU.
A profit warning and news that Serco is to launch a rights issue have put the company's share price firmly in the red. Amid a challenging climate, it would appear that shareholders are not prepared to wait around for a stronger balance sheet. The stock is down 18%.
BG Group appears to be attracting the speculators today. The company has been in the doldrums and, after the departure of its CEO yesterday, may now be subjected to a takeover. Exxon Mobil is rumoured to be considering this.
Markets may have been overly optimistic about the outcome of UK first quarter growth. Expectations for a 0.9% rise on the quarter failed to materialise, but growth of 0.8% is still nothing to sneeze at and now leaves the British economy a mere 0.6% below the 2008 peak.
Sterling hit a multi-year high against the dollar yesterday, threatening to push towards $1.70; however, following news this morning its strength is a little more subdued, and it has pulled back to $1.68.
Mounting pressure on the European Central Bank to spur liquidity levels in the bloc are once again vindicated – this time following data showing that the annual growth money supply had declined below expectations. The fact that eurozone loans to private sector companies continue to operate in a slump will also add to disinflation concerns.
The much-hyped social media stock Twitter will reveal its quarterly figures tonight. Despite the 30% decline in the share price over the last three months owing to weaker-than-expected user growth, broker ratings are predominantly bullish on the company. Worryingly, higher user growth and engagement will be closely watched and would appear to be the sole driver of this stock – a profitable business has become the secondary consideration.
The Dow Jones is expected to open up 48 points at 16,497.