New Dow high boosts European indices

In mid-morning trading the FTSE 100 is up over 40 points, as clear skies and sunny dispositions appear to have rubbed off on traders.

Once again equities are bounding along without a care in the world. European equities have been emboldened by the Dow Jones once again setting a new high last night, and Asian markets' enthusiasm to follow suit. The momentum that has swept around the globe looks to have been welcomed, as the German DAX continues to set higher highs, even with the weight of its eurozone neighbours hanging over it. This morning's less-than-sparkling European data looks to have been broadly ignored.

Next and Barclays are currently taking the top two spots in the FTSE climbers' table as both sets of figures have been warmly received by equity investors. It is obvious to see why investor-friendly Next is heading higher having upgraded its targets for full year pre-tax profit, boosted by the late UK summer sun.

Barclays' investment banking arm on the other hand have seen quarterly profit slump from a year ago, down from £1.9 billion in 2012 to £1.4 billion, but still well ahead of even gloomier market predictions of £1.25 billion.

Optimism for Standard Life is high especially with the government’s new legislation on auto enrolment for staff pensions, however the growth of funds-under-management and fee-based revenue were both short of expectations.

Now that the Dow has closed above its September high equity traders will be conscious that tonight’s FOMC statement in the US will have the ability to clear up any last lingering suspicions that we will see the Fed embark on QE tapering.

Although winding down, the US reporting season still has a few big names yet to come to the table and over the course of today we will hear from Visa, Starbucks, General Motors, Kraft and Facebook. Ahead of the open, we expect the Dow Jones to start 50 points higher at 15,730.

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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.

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