Despite a strong showing from Asian markets overnight, the general tone of the session in London so far is relatively muted. Given the volatility of September, investors will no doubt be relieved to note that the drop this morning is a modest one, and with US earnings season moving into full swing there will at least be plenty of newsflow to drive any further gains in stocks. However, it appears that European investors are less willing to believe pronouncements that the stock market correction in China is over. In fact, it seems that investors are now much more cautious about continuing to boost allocations to equities than they were just two weeks ago; one sign of this is Glencore, which is down 2% this morning despite announcing a sale of some of its copper assets. News of the zinc move sent the shares flying last week, but the supply of buyers of the shares appears to have run out.
The SABMiller saga goes on, with no indication that major shareholders are yet satisfied with the terms of AB InBev’s bid. With the deadline looming, the Belgian firm needs to go all out to avoid fumbling what could have been the big news of 2015 in the sector.
US markets continue to be fascinated by the Federal Reserve’s ongoing public discussion over the wisdom of rate rises, but the general opinion appears to be that 2015 is now a very slim possibility. For those yet to tire of this epic tale, there are three speeches by Fed members today, who seem to have decided that Columbus Day is a good time to continue the exploration of the uncharted waters of monetary policy.
Ahead of the open, we expect the Dow Jones to start at 17,097, up 13 points from Friday’s close.