MARKET UPDATE – WHERE’S THE GOOD NEWS COMING FROM?

Folks we need some good news and it is not obvious as to where it is coming from. So European stocks have erased this year’s heinous losses, but for markets to select another gear we need the 2nd quarter earnings season to look quite positive; otherwise equities could experience another shake-out!

This morning, in response to a poor performance by Asia apart from Shanghai, thanks to falling oil prices and a ludicrously strong Yen, the FTSE was metaphorically experiencing a dose of the pip. There was some virulent turnover in energy stocks with Shell losing 3.2%, BP 2.7% and Tullow 2%. That sell off was instrumental in the FTSE losing 88 points at 11.30am to 6077.  Banks also had a torrid time with Barclays easing by 3.5% to 146p, below the low point in the credit crisis in 2008/9.  RBS also fell by 3%. Capital requirements for banks are penal at present with interest rates so low and global growth looking a bit soft and the faint-hearted not wanting to expand their businesses ahead of the EU referendum.  So the situation is unlikely to improve until uncharted waters become less murky.

 

Mining stocks are currently a day traders’ joy as they bounce around like a cork in a bath, provided the investors’ judgement is as sound as a pebble. Today was needless to say a ‘down day’ – Anglo-American -5%, BHP -5%, Glencore -5% and Rio -3.5%. Shire -3% and Smith & Nephew -17% were obviously affected by the adverse reaction to the Pfizer/Allergan deal (Allergan -19%).  Astra was easier by 0.5% and Astra was down 1%. BTG was only down 0.7% after encouraging analysts’ comments.

 

M&S ahead of Thursday’s update was down 0.5% at 409p and Tesco was down 1.8% at 187.4p. AA was down 1.7% at 258p and Tate & Lyle on neutral figures was down 1%.  John Wood Group was down 1.6%.  The flight to quality ‘merchants’, IMPS and BATS, were more or less unchanged.

 

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