Once again the FTSE 100 appears to be suffering from stage fright as the looming 7,000 level, for so long predicted to be broken, has yet again proven to be a step too far. Corporate data releases continue to come thick and fast offering equity traders plenty to chew on while regional economic leaders offer their latest comments as well. While not talking about specific economic releases the Bank of England governor Mark Carney will be speaking at a banking event this morning.
However, his ability to dance around difficult questions should ensure an absence of any volatile comments. A fancy footwork reputation that has not, as yet, been acquired by his European Central Bank counterpart Mario Draghi, who will be talking at this afternoon's ECB annual report in Brussels.
Today it is the turn of Barratt Developments to post outrageously impressive half-yearly figures with pre-tax profits up by almost 75%, basic earnings up by almost 80% and a cash dividend up by 50%. Investors will be wondering how long this can last, but with last year’s change in stamp duty and the continuing support of the government's help to buy scheme, UK house builders are sitting comfortably for the time being.
Glasgow-based Weir Group has, in tough markets, been able to post better-than-expected revenue and pre-tax profits enabling it to raise the company's dividend for the 31st year in a row. Regardless of all of these positives the markets have shown it is never the here and now but always the future that is the primary concern as shares have fallen on the company’s expectations that profit margins will continue to be squeezed in 2015.
Less than a year after its float on the London Stock Exchange, AO World has had to cut its earnings outlook. This is not the confidence-filling actions of a management team that have a firm grasp of the online domestic appliance markets. It looks like the company's management believed a little too much of their own IPO PR hype as markets aggressively cut the 'blue sky' valuation of the company’s share price knocking it down by 45% in early trading.
Day two of the US semi-annual monetary policy report in front of the house financial services committee will once again see Federal Reserve chair Janet Yellen testifying. Yesterday’s speech left plenty of room for interpretation for both the doves and the hawks and barely caused a ripple in currency markets. Considering the uncertainty that continues to hang over the eurozone’s recovery and Asian wobbles, there appears little desire to go charging down the road of interest rate rises when no one else looks ready to follow.
This afternoon will also see the latest US oil inventories and with the recent rally in oil prices cooling it will be interesting to see if stocks have fallen by as much as expected. Ahead of the open we expect the Dow Jones to start just 2 points lower at 18,207.