Stocks remain offside

Despite a raft of economic and corporate announcements that were largely positive, equity markets are still down today.

Stocks started the trading day in the red, as Asian markets sold off overnight on fears that the Federal Reserve might cut back on its quantitative easing (QE) programme. The problem with stimulus packages is that dealers become accustomed to constant support, so any hint of fear that this will come to an end can lead to a sharp sell-off. Concern that the Federal Reserve will reduce the size of its QE scheme got equities off on the wrong foot today, but better-than-expected economic and corporate results helped stocks pull back some of their losses.

BT announced a pre-tax profit of £449 million for the three months to June, which topped analysts’ expectations. The firm signed up over 500,000 new customers to its sports package ahead of the football season.

In the US, the Dow is down 40 points at 15,502 as the poor sentiment from the UK seeps across the Atlantic. The latest economic data from the US was mixed: the number of durable goods orders rose by 4.2% in June, while analysts were only expecting an increase of 1.1%, but the number of people claiming unemployment benefit increased by 7000.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.