- Yellen “hawkish” comments
- Bank of England Super Thursday
- US stocks to open mixed
- Facebook (O:FB) to set new record high
European market are slumping for a second day after the US Federal Reserve’s Janet Yellen muddied the central bank policy waters with hints of a rate rise in December. Having given up early gains and closed lower on Wednesday, the Euro Stoxx 50 stock index dipped to two-day low on Wednesday touching 3421. The UK’s FTSE 100 dropped for the first time in four days, making a new two-day low of 6,369.
Fed Chair Janet Yellen didn’t say anything different from the FOMC statement in her congressional testimony on Wednesday. Such are the sensitivities of the markets to Fed chatter; even a gentle reminder that a rate hike in December is a “live possibility” was enough to send a shiver through the spine of markets.
The British pound was unchanged against the dollar and the euro on “Super Thursday” as traders held their breath before the Bank of England makes its decision on interest rates, releases meeting minutes and releases its quarterly inflation forecasts. Voting on the MPC is likely to remain 8-1 with only Ian McCafferty willing to look through the energy-induced low inflation. Since nothing is likely to be gleaned from the voting, focus will be on the forecasts.
The general sense is that the Bank of England will wait for the Federal Reserve to go first, so since the Fed held pat in September; market expectations for a UK rate hike have gotten very dovish. BOE governor Mark Carney may wish to give those dovish expectations a jolt to make sure the bank can raise rates earlier if the data dictates without creating a shock to markets. A ‘hawkish hold’ appear most likely with higher revisions to forecasts.
US stocks look set to open mixed on Thursday with strong Facebook results shoring up shaken confidence after Hawkish comments from Fed Chair Yellen.
Facebook (O:FB) shares look set to open as much as 3% higher at a new record high on Thursday. Another quarterly advance in mobile advertising saw Facebook beat earnings forecasts. Revenues grew at a faster pace than expected supported by 1.55bn monthly active users, a whopping 20% of world’s population.
Earnings are expected from Walt Disney (N:DIS), Ralph Lauren (N:RL), Kraft Heinz Co (O:KHC), Time (N:TIME), NVIDIA (O:NVDA) and TripAdvisor Inc (O:TRIP) on Thursday.
DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.
No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
Which stock should you buy in your very next trade?
AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar?
Unlock ProPicks AI