UK Market Comments

The FTSE has continued to claw back lost ground as it battles to break back above 6800.

UK markets

European equity market enthusiasm continues to be tempered, possibly due to the knowledge that tomorrow morning will bring a plethora of manufacturing PMI data from across the eurozone nations, and these of late have not always guaranteed good news. Any chance the FTSE had of easing itself away from the 6800 level have been anchored by the profits warning from GlaxoSmithKline’s second-quarter figures, as the drugs manufacturers profits have been badly hit by a number of patents and an underperforming drug for lungs. After seeing its first-half profits jump by 16%, Capita Group, the UK-based services company, looks to be underplaying its hand a little in simply confirming that it is 'optimistic' in meeting full-year targets. Having enjoyed an eye-watering selection of US equities reporting over the last couple of weeks, a little more attention can be focused back on the UK tomorrow with the likes of easyJet, Unilever, SABMiller, Kingfisher, Tate & Lyle and Hammerson all updating the markets with figures or trading updates.

US markets

Today has been another full day of US corporate figures, the highlights being AT&T, Gilead Sciences and Facebook, which are all reporting after the markets close tonight. So far over 70% of US companies that have posted figures have beaten expectations, and any worries the market might have had that earnings multiples looked unsustainable are being eased. Facebook, the template for tech companies on how to monetise users without charging subscription fees, will be watched closely to see how successful its advertising streams are working out from mobile devices. In the US equity markets perpetual race to see which index can be the most bullish, the NASDAQ currently heads the pack, although it is still some considerable distance away from breaking all-time high benchmarks from early 2000.

Commodities

Current events have done little to change the fortunes of natural gas and crude prices as the energy markets continue to ignore any worries that supply might tighten. This shielded mindset also appears prevalent with gold traders, as the boost that spot prices received from flight-to-security traders appears to have disappeared almost as quickly as it appeared. It is hard not to get away from the fact that, were it not for the moving averages the precious metal appears to be using like a crutch, a fall below $1300 would be inevitable.

FX

The long-awaited results of the Monetary Policy Committee voting has left currency markets rather underwhelmed as the continuation of the 9-0 has shown that none of the voting members have decided to stick their heads above the parapet. Bank of England governor Mark Carney referenced many famous Scots in his speech, but comparing the UK economy's success to that of Alan Wells begs the question: Will the US be boycotting the current economic race like they did the 1980 Moscow Olympics?