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Markets have recovered from the disappointment of Chinese housing figures. Although this potential bubble has not yet burst, it does appear that some of the hot air has escaped.
This weekend’s promise from the G20 that it will pump $2 trillion into the global economy, while avoiding any specifics as to how it will achieve this, has done little to stimulate traders who have heard this patter before.
HSBC shares fall 5%
A miss is as good as a mile even if you do make $22.6 billion in profits, judging by the collapse in HSBC shares. Europe’s biggest capitalised bank has seen its shares go down as much as 5% in trading following the bank's inability to meet market expectations.
Bovis Homes has set the bar high for this week’s UK house builders, as it has reported full-year profits up by 48%. Bank of England governor Mark Carney’s resilience in maintaining a long-term low interest rate outlook for the UK has continued to boost house prices.
In the midst of a baby boom, Mothercare’s inability to convert the plethora of new parents into profits has seen CEO Simon Calver fall on his sword with the announcement that he will be stepping down in March.
Dow jumps 100 points
As much as European equities might be second-guessing themselves, the US has started the day with a spring in its step with the Dow Jones adding over 100 points in its first 15 minutes and the S&P 500 hitting another all-time high. US markets are seeing a growing trend of investor pressure to activate change within companies.
Nowhere is this clearer than in the case of Carl Ichan, now calling for eBay to spin-off its PayPal unit. Many of the technology companies have seen outstanding growth in the last couple of years, however they have not made full use of purchases made and have struggled with the weight of consequential market expectation.
Gold starts week strong
Gold continues to confound as it has spent much of the morning heading higher after its less-than-impressive performance last week, and looks set to challenge highs last seen in late October 2013.
The decline in Chinese property has sent ripples of panic through the copper markets, as the commodity's largest consumer continues to show signs of cooling.
Quiet day for forex
Thin days of economic data tend to see currency markets tread water, and today is no exception to that rule. GBP/USD continues to decline, although at a considerably more lethargic pace than in previous trading sessions. EUR/USD traders are also giving the distinct appearance of still enjoying the weekend and, although an attempt to break the 1.3800 level looks on the cards, it is unlikely to happen today.