London shares cool off

After a strong day’s trade yesterday, shares in London have taken the morning to cool off, and the FTSE 100 is off by 20 points at 6765.

ITV logo
Source: Bloomberg

Having dominated the headlines yesterday, activity in the media space continues to remain centre stage today. ITV are streets ahead this morning, up 7%, as US giant Liberty Global has purchased a 6% stake, previously held by ITV’s rival BSkyB. Liberty Global already own Virgin Media, and this is seen as further evolution of the TV market, where providers are looking to take over direct control of content to reduce reliance of ad revenues. The prospect for a potential future takeover is there, even if the rulebook says it won’t be imminent. ITV shareholders have had to sit through a fall in the share price the last few months after years of solid gains, but this has sent the stock straight back towards £2 and this could entice traders in, as events in the sector should support some bid premium staying in the stock. 

In the US we continue to get our teeth into earnings season. After a flurry of big hitting names yesterday, today we get Dow Jones components UnitedHealth (before the bell) and IBM (after the bell), the latter of which is the largest thanks to the Dow’s arithmetic weighting. Google also updates investors after the US close, another stock with a punchy index weighting and looking to get one over on rival Yahoo who underwhelmed yesterday.

In general so far, earnings have been coming in nicely above expectations and, coupled with the sentiment from the Federal Reserve, US markets are still looking comfortable at current levels. There may be a bit of friendly disagreement from various Federal Open Market Committee members as to when the first rate hike may be, and macro watchers will have noticed a little more volatility creeping into FX markets, but equities are still in a 'steady as she goes' state. 

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