FTSE down but last week's panic calms

It might be a soft start for the FTSE 100 down 32 points, but there is not the same undercurrent of panic seen in last week’s trading.

London skyline
Source: Bloomberg

Equity traders will have plenty to contend with this week, as FTSE equities join in with their US counterparts in reporting quarterly figures. The frequently used excuse of 'currency headwinds' should be absent from UK corporate outlook and the firmer commodity prices, with the exception of the energy prices, should help the mining-sector-heavy FTSE.

Last week’s sovereign-debt-triggered chaos looks to have been quickly brought under control, as the Greek ten-year debt yield is back below 7.5% after last week threatening the 10% level. There is of course always a hurdle or two to clear, and Tuesday's Chinese GDP figures along with Thursday’s eurozone and US manufacturing figures might well instigate a faller or two.

As further revelations come to light over the inner workings of Tesco, a greater belief that the management now has a firm handle on things has enabled the share price to stage a mild rally on Monday morning. The UK food retailer will, however, remain under close market scrutiny until the delayed quarterly figures are finally published on Thursday.

Fresh from the humiliation of being publicly dumped by its US suitor AbbVie, it transpires that Shire’s CFO James Bowling has himself been wooed by Severn Trent’s advances.

Greene King has moved to acquire Spirit Pub with an improved offer valuing the company at £725 million — a sufficient amount to receive the backing of the board.

Today will see IBM, Apple and Halliburton continue the US reporting season. To date, 80% of the US corporates have managed to beat market expectations. This goes some way to endorsing the high profit multiples that companies have, while at the same time asking how institutional analysts have so frequently undershot with their expectations. 

Ahead of the open we expect the Dow Jones to start 39 points higher at 16,419.  

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