It’s one thing to do it and it’s another to tell everyone you are, but this weekend German finance minister Wolfgang Schaeuble confirmed that plans were being drawn up to deal with a Greek default. The markets have started the week on nervous footing as Greece’s looming deadline and the reality that it is not in a position to meet its commitments dawns on the investment community.
Eleven days to go before the UK general election and the weekend has been packed with political sound bites from all the major parties. The consequences of this can be seen around the markets from Labour's proposal to remove stamp duty from properties under £300,000 affecting UK housebuilders to the Conservative's reservations surrounding the country's willingness to approve any possible takeover of BP.
The IG general election binary is still pointing towards a 37% chance of a Labour minority government as the most likely outcome of this election, while at 24% the chance of a second election in 2015 is still a very real possibility.
Deutsche Bank has posted figures this morning, a couple of days earlier than expected, and has announced audacious plans to spend €3.7 billion in one-off restructuring plans. This will see the German bank close operations in seven to ten countries while expanding in both India and China.
Centrica has benefited from colder weather conditions in its North American business, ensuring it is in line with market guidance regardless of the mild weather the UK has enjoyed so far this year.
Ryanair’s charm offensive shows no sign of easing as the budget airline has announced expectations that fares will fall by between 10–15% over the next two years due to lower oil costs.
This week will see the UK sharing the corporate limelight with the US as our reporting season starts to get underway with the likes of BP, Next, TSB, Shell, IAG, Lloyds and newly quoted IPO Virgin Money all updating the markets.
Hot on the heels of the start of sales from its new watch, Apple is due to post its first-quarter figures after the US markets shut tonight. As encouraged as Apple investors will be that a new product has been added to the range, the lingering feeling of underachievement continues with the excessive stockpiling of cash.
Pfizer will post figures tomorrow almost a year to the day from when markets first heard about its plans to acquire AstraZeneca. The ultimate failure of this has paved the way for this weekend's speculation that GlaxoSmithKline is lined up as the next beneficiary of Pfizer's advances. Considering the depleted list of exclusive patents it has supplying the US drug markets, Pfizer will be feeling all that cash burning a hole in its pocket.
Ahead of the open we expect the Dow Jones to start 8 points higher at 18,088.