US earnings season off to strong start

In London, equity markets are in the black after Alcoa kicked off the US earnings season last night.

Traders are bullish this morning as Alcoa posted stronger-than-expected results after the closing bell in New York last night. The aluminium producer is usually the first big company to reveal its quarterly figures for the US reporting period. London's mining sector is performing well, after Alcoa managed to top analyst’s estimates despite weaker metal prices over the past few months. The sector is currently up 2.5%.

Greece was awarded the next instalment of its bailout package; the €4.8 billion tranche will prevent the Athens administration from going bankrupt. Traders responded well, and UK banks are higher today as it bodes well for the financial sector across Europe.

The UK revealed a 0.8% decline in manufacturing in May compared with April. There was a muted reaction to the report, however, as a negative economic announcement may increase the likelihood of additional quantitative easing from the Bank of England.

An estimate of the previous quarter's US GDP is released at 3pm (London time), where a weak reading could mean that the US Federal Reserve might maintain its stimulus package, and this could be expected to boost equities. 

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.