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The FTSE has been unconvincing this morning, going above and below yesterday’s closing price within the first two hours of trading. This lack of decisiveness looks to have spread across most of the European indices, which all appear to be struggling to find enthusiasm ahead of the bank holiday weekend.
After Wolseley shares added almost 10% in the last 48 hours the market appears to have calmed down, and they are now slightly off following rumours that another special dividend is around the corner.
Shares in Morrisons have also caught traders' eyes, as a couple of institutions have upgraded price targets for the food retailer. Following the company's tie-up with Ocado, the perception is that its previously untapped delivery market will finally help the company make up some ground on the other big four.
German quarterly GDP figures have confirmed that the country's economy is continuing to creep in the right direction. This will come as welcome news to both ECB president Mario Draghi and German chancellor Angela Merkel, since we are now just over a month away from German elections. As the backbone of the EU, and the driving force behind the recent end to the recession, a stable Germany will be welcomed by all.
The UK has also seen its quarterly second estimate of GDP creep a touch higher, confirming the fact that we are in a recovery phase.
Day two of the US Federal Reserve's meeting in Jackson Hole would normally trigger a number of headlines from the power brokers attending, but the absence of many of the big names has seen a little less enthusiasm placed on the annual event.
Headlines have instead been taken over by NASDAQ’s failures last night, when the US Technology company index had to suspend trading for over three hours due to technical problems. Most of the 3000 companies quoted on the exchange resumed before day's close without too much of a disruption to their share prices; that, however, can’t be said of the NASDAQ’s own shares, which dropped by over 3.5%. This was most likely caused by reflection of yesterday's problems together with last year’s failings regarding Facebook shares, and the subsequent substantial fine; a habit is forming that traders will not want to see grow.
Ahead of the open, we expect the Dow Jones to start 24 points lower at 14,939.