Icahn triggers sell-off

In mid-morning trading the FTSE 100 is down 40 points following Carl Icahn’s warning that equities are overvalued.

Legendary investor Mr Icahn claims that company profits are artificially high due to the low cost of borrowing.This has triggered a sell-off this morning as traders follow the Pied Piper out of the equity market.

Mining companies have lost the most ground, as the Chinese credit market has brought the strength of its economy into question. Mounting bad debts incurred by the state banking sector are preventing more successful companies from receiving financing. 

easyJet are flying up the FTSE 100 leaderboard after announcing a 51% rise in full-year profits. 

Last night the Dow Jones traded above 16,000 for the first time, but the words of warning from Mr Icahn ensured traders pocketed profits early. William Dudley of the US Federal Reserve stated that he was more hopeful about the US economy yesterday, but traders are wondering whether Charles Evans and Barack Obama will share his rosy outlook this evening.

In the US, we are expecting the Dow to open 20 points lower at 15,956; US index futures are marginally lower after reaching another record high last night. 

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.

Find articles by analysts

This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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 CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.