Equities pare back recent gains
|Stock markets have moved back into the red in early trading, with a 50 point drop for the FTSE 100 coming despite good news from plumber Ferguson.
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Equity rally stalls.
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Investors await US presidential debate.
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Ferguson sees modest recovery ahead.
After the gains of Monday, Tuesday has seen a more cautious approach among investors, with little desire to drive markets higher after the impressive rebound seen since Friday. This may well be just a pause for breath, since stimulus talk in Washington continues to provide a more positive foundation for markets after the uncertainty that prevailed in September. The mood of company updates this morning has been fairly gloomy, with Shell, Greggs and Card Factory have reminded investors of the hard work that lies ahead, with sales likely to remain depressed and pressure to cut costs and jobs mounting. The impending US presidential debate is also providing an excuse for traders to sit on their hands, although the long-awaited confrontation is unlikely to provide more than lots of heat and not very much light.
It wasn’t all bad news on the company front – Ferguson was able to bring back its dividend and make the right kind of noises about modest growth in the US to boost its shares by around 5% in early trading. This builds on an existing rally from the March lows that has seen the company decouple from the FTSE 100 and push past its February highs. It is a useful reminder that while the index as a whole is a poor performer, there are pockets of growth if investors are prepared to look hard enough.
Ahead of the open, we expect the Dow to start at 27,568, down 16 points from Monday’s close.
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