The markets got off to a poor start this Monday with the FTSE specifically hurt by comments from the IMF, dropping half a percent in early trading.
Spreadex Analyst, Connor Campbell noted “The Washington-based entity revised the UK’s 2017 growth forecasts lower, from the 2% target set in April to an ostensibly Brexit-dragged 1.7%.”
“IMF economic counsellor Maurice Obstfeld blamed the UK’s ‘tepid performance’ so far this year for the revision, with the outlook for 2018 unchanged at a fairly dismal 1.5%.”
It’s a big week for earnings this week across global markets. Accendo Markets Analyst, Mike van Dulken commented “With 45.6% of FTSE100 companies reporting this week – measured by index weighting – over a hundred names from Europe and over a third of the S&P500 intensifying already heavy flow from the US, earnings are likely to a big sentiment driver over the coming days.”
The Eurozone is also in focus today ahead of the release of the July PMI figures this afternoon. ADS Securities Analyst, Konstantinos Anthis added “The single currency is currently enjoying a good run against the dollar, on the back of improved finances, which has led to the ECB to discuss potential tapering before the end of the year.”
“Last week ECB’s meeting reaffirmed President Draghi’s optimistic view over the health of the region and the euro rallied to 1.1650 when he indicated he was happy with the rise in value of the currency.”
“If the PMI data is bullish the euro should head towards 1.1800. In case of a miss we could see some profit-taking action driving the currency towards the 1.1600 support.” he suggested.
US equity markets closed lower across the board on Friday as weak corporate earnings and falling oil prices weighed on the indexes. Mike van Dulken added “The Dow Jones underperformed, closing over 30 points lower as General Electric’s disappointing numbers weighed on the index, while the tech-focused Nasdaq broke its longest winning streak since February 2015.”
“The S&P500 also finished weaker as Energy and Industrial names suffered.”
US companies reporting later today include Google parent Alphabet, Alcoa spin-off Arconic and Oil services giant Halliburton.