Bulls dominate trading

European Central Bank action and improving PMI data drive European equities higher.

Inside the Frankfurt stock exchange
Source: Bloomberg

European equities maintained their bullish momentum from yesterday, comforted by further proof that the ECB is sticking with Mario Draghi’s mantra of ‘whatever it takes’. Although there might well be some debate as to the direct benefits of a change to already record-low interest rates, this once again proves that under Mario Draghi the ECB is acting rather than just venting rhetoric.

Liberty Capital’s enthusiasm for M&A activity has not been dented even with the breakdown in discussions with Vodafone earlier in the year. The latest equity to feel the focus of its affection is Cable & Wireless.

William Hill has knocked investor sentiment with the acknowledgement that it looks set to come in at the lower end of expectations, subsequently sending its shares tumbling in early trading. 

A.P. Moeller-Maersk has given investors even more reason to worry about the cooling global economy as the world’s largest shipping line has cut its annual profits forecast from $4 billion down to $3.4 billion.   

In the previous week the Dow Jones, S&P 500 and NASDAQ saw earnings releases return back into the historical norm, with around 75% of companies beating expectations for their earnings per share. However, that average drops dramatically when it comes to their ability to beat expectations for their sales. In after-hours trading we saw the US receive a triple boost with Alphabet (the umbrella company for Google), Amazon and Microsoft all smash expectations. The average between the three of these firms was an after-hours share price boost of over 10%, with Microsoft hitting a 15-year high.

We are expecting the Dow to open 22 points higher from Thursday’s close at 17,458.  

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.