Optimistic markets await manufacturing figures

Mild optimism with a hint of Greek interpretation has seen the FTSE add 25 points in early trading. 

Canary Wharf
Source: Bloomberg

New Greek finance minister Yanis Varoufakis is in London today as he continues his European roadshow, having already stopped off in Paris and with Berlin and Madrid still to come. Gaining support from around Europe will be useful but the discussions with German finance minister Wolfgang Schaeuble will be the most important.

Overnight contraction in China’s HSBC manufacturing PMI figures might of set an ominous precedent, but at least Spanish figures have helped to lighten the tone. A fuller global picture will materialise over the rest of the day, with manufacturing figures from the eurozone, UK and the US all set for release. 

Irish building firm CRH has seen shares jump by over 6% in early trading as its acquisition of forced disposals from the amalgamation of Lafarge and Holcim have been viewed as shrewd business by the markets.

Ryanair has posted a €49 million profit a substantial improvement from last year’s €35 million loss. This statement has been accompanied by a fourth upgrade for the company’s full-year figures. All these positives have been dulled by oil's climb higher and the company’s expectations of tough markets next year as increased sector competition should see margins being squeezed.

Fresh from acquiring O2, Asian firm Hutchison Whampoa has embarked on an agreement with Dixons Carphone to offer  customers mobile connections on purchases covering the internet of things. Expectations have increased that BP will announce sweeping cost-cutting measures when it posts fourth-quarter figures tomorrow. As much as markets like the idea of companies cutting costs, the suspicion that much of this is being forced upon the company has dampened the market reaction. 

A resilient end to the week’s corporate data releases last week offered renewed optimism that this reporting season would not end up as a complete disappointment. Exxon Mobil might have posted three of the top ten largest quarterly profits in corporate history in the past, but this is unlikely to be the case this time round as momentum could come grinding to a halt. Ahead of the open we expect the Dow Jones to start 27 points higher at 17,191.

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.