Interest rate worries cause market jitters

The unwelcome spectre of interest rate rises hangs over markets this morning, knocking back equities, while post-Apple disappointment carries over into ARM shares.

City of London
Source: Bloomberg

Comments about market complacency regarding US interest rates jolted investors out of their slumber in the US session yesterday, and that downward momentum has been carried across into UK and European markets this morning.

The report from the San Francisco Federal Reserve that kicked off this latest bout of excitement is merely a cautionary warning shot to remind investors that change will be coming at some point, and doesn’t reflect any fundamental change in US monetary policy. Nonetheless, with markets having been noticeably over-extended in recent weeks, the pullback should be of short duration.

Admiral shares sit at the bottom of the index as they go ex-dividend, while ARM Holdings is down 2.4% as the Apple disappointment makes itself felt on this side of the Atlantic.

A shiny new gadget from Apple and larger iPhones were not enough to keep its shares in positive territory yesterday, but then the company was always facing an uphill struggle to overcome the weight of expectations that had built up in advance of the result. The new watch and other developments are not groundbreaking in the manner of the iPhone and others, and thus Apple’s transformation to a solid but uninspiring company continues.

Ahead of the open, we expect the Dow Jones to start 12 points higher at 17,025. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.