Yesterday equity markets in the US seemed to be in an unforgiving mood, as they were in Asia this morning. Red chalk was much in evidence. Users of this crimson marker seem to have had a touch of the ‘Gordon Browns’ – lines through everything, though in red! As Fagin said so succinctly, in ‘Oliver Twist’ – “So much violence!”

A certain amount of equilibrium returned this morning in Europe with most bourses pairing back opening losses. When Wall Street opened there was a sea of blue and as I write at 4.00pm the DOW is up 60 points, resulting in the FTSE 100 sitting just 1.7 points up at 6757. BskyB +4.5%, Astra Zeneca +2.3% and Shire +1.9% have been the main gainers. Tullow, Amec and William Hill have not pleased their acolytes.

Of those companies posting results today ASOS surrendered 7% thanks to a shortfall in European profits. Ashmore saw its stock larruped – down 1%. Countrywide was 3.2% easier as investors took profits. Barratt Development was 1% to the good and Balfour Beatty was up 1.5%.

Much of the mid part of the morning was taken up with UK Inflation for December. Mark Carney is either a great orchestrator or he is dead lucky – or both; the way the economy has improved and the manner that inflation has fallen like a stone to 2% last month. I am not sure he can claim much credit for it and my nasty diseased ridden mind working overtime tells me that deflation cannot be ruled out. Oil has fallen 15% in recent months. Also the CPI measure eased by 0.1% month-on-month, according to the Office for National Statistics (ONS), with lower meat and fruit costs the biggest contributor.

Before the opening Wells Fargo posted a 10% increase in 4th quarter earnings and its share price was up 1% in early skirmishes. JP Morgan Chase, which in terms of losses, fines and litigation has had the kitchen sink thrown at it with a final slapping from an $850m Bernie Maydoff payment, saw its shares rally by 0.4% despite the fact profits were down 7.3% on $24.1 billion revenues.

These are David Buik’s personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
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