AM Analysis – “European stock futures rise ahead of the open” – Lee Mumford
European stock futures rise ahead of the open, rebounding slightly from the previous day’s heavy selloff. Asian shares however were playing catch-up overnight, falling for the fourth day amid concern the Federal Reserve’s plan to cut stimulus and as China growth stalled.
Emerging-markets are off to the worst start to a year since 2009, with The MCSI Emerging Markets index losing 7.1 percent this year. With growth concerns from China, currencies from Turkey to South Korea have tumbled.
Markets may be subdued today following the recent sell-off and as investors take bets ahead of the all-important Federal Open Market Committee meeting tomorrow. Officials are expected to announce a further reduction in their bond buying program following on from their December tapering which saw a $10 billion reduction. Monthly purchase pace is currently at $75 billion.
PM Analysis – “Bounce in stock indices” – David White
The bounce in stock indices today reflects the current supply shortage of equities, sending buyers higher this afternoon. Yesterday marked a bad day for risk, one that saw a further underperformance of UK-listed stocks. BG getting crushed didn’t help.
Decent earnings reports from the States have so far managed to offset the poor durable goods number, which could be concluded as tapering negative anyway. Pfizer Inc. and Ford Motor Co. beat bottom line estimates, helping to underpin market sentiment in the near-term.
Tomorrow attention will turn to big Ben’s last FOMC, marking the end of an era of expansionary monetary policy. Many expect the outcome to be neutral for prices so long as interest rate guidance remains static. If money remains cheap, everyone chasing the market will likely stay forward-looking.
[The original articles by Spreadex can be found here.
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