Spreadex Market Update
Markets look towards Federal Reserve's meetings
The theme of buying risk against investors’ anticipation of central bank activity is set to continue this week, as markets look to the federal reserve’s meetings for confirmation of yet more liquidity injections.
In particular, investors will be most sensitive to contradictions of QE rather than just tentative affirmations, because the market has already to some extent priced in participants’ logical extrapolation of comments already made by the fed. So long as the fed remains openly accommodative in light of worsening data points, markets will keep hoping.
Major benchmarks are gradually selling off during afternoon trading in response to a period of strong performance for equities. The FTSE 100 trades down 25 points shortly after the US open.
BP
The news that BP’s profits have fallen sharply have had a severe affect to both its share price and sentiment, with investors selling something today 4 percent lower than they were buying yesterday ahead of the results.
The problem is that the company looks not to be suffering from many small cuts but a few large ones, such as the large fall in production or the writedown of US shale gas assets, not forgetting tax complications in Russia.
For a company already trading at only 5.5 times next year’s earnings, the road looks likely to remain bumpy.
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