MARKET UPDATE – EQUITIES LOOK VERY SOFT – TOTALLY OUT OF SORTS

Equity markets just feel rubbish quite frankly. There’s a toxic pong of fear permeating around Threadneedle Street and Canary Wharf. There must be huge concern that increased growth in the third and fourth quarter in Europe is very, very unlikely, which could inevitably adversely affect growth in the UK. That German Industrial production figure of -4% announced this morning was a real shocker, when only -1.5% was expected. The EU’S economy is in the mire – deeply so and don’t expect the QE taps to be turned on by the ECB in a hurry. Frau Merkel is a stubborn lady and at present she will have none of it. At 3.30pm the DAX is down a short 1% and the CAC by 1.4%. As they say in France – Merde! It sounds better!

At the time of writing the FTSE 100 is down 50 points at 6512. The cyclicals and industrials feels very light headed – Rolls Royce -2.1%, BAE Systems -2.4%, GKN -2%, Meggitt -2%, Intertek -2% and Weir -2%. There’s not a friend in sight – friendless in the ring! The banks are OK with just Barclays mildly under pressure – -0.9%. Miners were bolstered by Rio early on – up 6% but on news that Glencore have been shown the door for 6 months Rio is only up 2%. Glencore was down 2.75%. Tesco is sitting up and taking nourishment, after the board appointments – +4.5%.

The Ebola outbreak in Madrid sent airline and holiday stocks sharply lower – easyJet -5%, IAG -6%, Carnival, Tui Travel -3.5% and Thos Cook -4.5%. The booby prize goes to Spirent after a profits warning – -21%. Volumes were better than usual with 900 million shares changing hands on the LSE with an hour to go!

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom
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