Greece will be a topic for discussion at the G7 meeting in Dresden, and even though Greek fears have been put on hold today, the rally in European equities will be restricted because of it. The traditional European fear was Greece would leave the Eurozone – now the possibility of the UK leaving the EU is becoming a cause for concern too. The Conservative government is tipped to hold a referendum on the UK’s EU membership within the next two years, and already the potential fallout has prompted British-based firms to draw up contingency plans. London’s finance houses will be paying attention to not only Greece’s membership of the single currency, but the UK’s position within the EU too.
Shares in Brewin Dolphin are lower this morning as profit-taking sets in. The financial services company has had a strong start to the financial year, and assets under management rose during the first-half of the year. The pullback in the share price offers a good opportunity for traders to buy into the company, as it has been in an upward trend for several years. An interest rate rise from the US later this year will ramp up volatility, which Brewin Dolphin will benefit from.
De La Rueshares traded below £5 today on the back of disappointing full-year numbers. The company’s share price has struggled over the past few years as a series of profit warnings has seen the stock price half in less than three years. The company’s new CEO, Martin Sutherland, has started out on his new strategic plan, but the market is yet to be convinced.
Airlines are flying high this morning after the Irish government decided to sell its 25% stake in Aer Lingus to IAG. The Dublin administration has secured connectivity between Ireland and Great Britain for the next seven years, but Willie Walsh will have to woo Michael o’ Leary if IAG want to get its hands on the 29.8% stake of Aer Lingus which Ryanair own.
We are expecting the Dow Jones to open 20 points higher, at 18,061, after the comments from Stanley Fischer have put the bull’s fears at ease. Mr Fischer warned that the Fed will be wary of global growth when deciding its own monetary policy. The US is edging towards an interest rate hike while over two dozen central banks around the world have cut rates, and this gives the doves in the Fed more wiggle room.