Earnings Season Returns Friday
European and US markets closed higher yesterday after investors continued to exploit the poor non farm payroll figures on Friday. There is a growing consensus that the Fed will wait until 2016 to raise interest rates and this has driven market momentum. However, there is more data due this week that may draw attention away from the Fed.
The higher than expected UK industrial production figures gave the Pound a lift this morning. This is good news ahead of Thursday’s BOE MPC vote. We don’t anticipate a move in interest rates and the main focus will be on the committee’s vote composition. In previous months the vote for a hike has been limited to just one member. There is a possibility that we could now see that member reverse his decision and leave the vote total at a resounding 9-0 vote for no change
Friday sees the start of the Q3 earnings season in the US, with Alcoa, as always kicking things off. Rumours are that earnings for Q3 could be around 30% lower than Q2. This is worrying as many investors have used the potential lack of a US rate hike as an excuse to accept risk and push equity markets higher. Q4 is historically a good month for equity markets, with indices also usually gaining, however the prospect of a weaker earnings season should merit a degree of caution.
The post Earnings Season Returns Friday appeared first on Live Trading News.