Spreadex Market Update
Markets take downward turn on quiet Wednesday morning
Another 9-0 vote to leave rates unchanged by the Bank of England was hardly unexpected; what is more worrying is the bank’s commitment to the idea that inflation will turn negative for the next few month. Similarly, grumbles over wage growth reappeared once more; understandable following last week’s slip in average earnings that took the heat out of the Tories’ jobs jubilation. This all helped contribute to the FTSE’s downturn, something that had already begun under the weight of the latest Brent Crude-inspired declines in its commodity stocks.
The initial flurry of hopeful, Dave Lewis-liking Tesco investors have gradually disappeared as the morning continued, with the supermarket giant finally beginning to tip into the red in the manner its UK pre-tax record breaking losses would suggest it deserves.
Like the FTSE, the Eurozone indices slid into the red as the day went on, with the DAX, as usual, seeing the biggest movement in the region. Whilst there has been mercifully few new reports surrounding the Greek situation, with Tesco dominating the morning’s discussion, this doesn’t meant the issue is any better, leaving a bitter backdrop to the Eurozone’s more quiet moments.
The US futures have followed their European peers lower this morning, ahead of the biggest day of Q1 earnings so far. Facebook, eBay, Coca-Cola and McDonald’s all announce their first quarter results throughout the day and their respective performances could help define the US markets’ performance for the rest of the week.
There was a big, if not Tesco-sized, miss last night, as Yahoo saw dismal first quarter profits of $21 million compared to $312 million in 2014. Impressive mobile growth was something for investors to cling onto, and helped limit the market damage. However the Alibaba-bump looks like it was much more significant than Yahoo would have liked, and in a post-Alibaba spin-off world, the internet company is set for an upward struggle in the coming months.
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