European shares got another healthy pump higher from investors on Friday, with major European averages all up over 1% having already surged over 2% the previous day. The ECB money train is about to leave the station and the markets are jumping on board.
Confidence to buy into the European stock rally was additionally supported by a surprise uptick in purchasing manager index data for October. The Eurozone composite PMI rose to 54 against estimates of a 53.4.
The rally in global stock markets is a very different build-up to next week’s Fed meeting compared with September when markets tanked in late August. There was already a belief that the Fed is unlikely to hike in October and relief that China’s growth is higher than expected. Now that the ECB could actually ease policy in December too, there isn’t much to get in the way of higher prices.
The UK is a less direct beneficiary of more Eurozone monetary stimulus so shares on the FTSE 100 trailed those on the continent. Shares of ARM Holdings (L:ARM) and other technology stocks rose after positive results from US tech giants.
Talk Talk (L:TALK) was a notable drag on the FTSE 250 after the internet and TV provider revealed a massive hack attack on its system could have seen customer’s personal and financial details stolen.
US stocks look set for a strong open to round off the week with the Nasdaq leading the charge brought on by strong earnings from tech giants Amazon (O:AMZN), Microsoft (O:MSFT) and Google’s holding company Alphabet.
Shares of Alphabet (O:GOOGL) are expected to open at new record highs on Friday after strong earnings and the announcement of a $5bn share buyback. Profits are up almost 50% in the third quarter over the previous year, and this is whilst Google’s earnings are still wrapped up with costly side projects like self-driving cars, which won’t be the case in January under the new corporate structure.
As if further proof were needed that we live in a new era of billionaire nerds; the exact size of the company’s buyback is borne out by the square root of 26, the number of letters in alphabet.
Amazon (O:AMZN) smashed expectations of a quarterly loss by turning in a profit of $79m in the third quarter, as sales jumped again. Shares of Twitter (N:TWTR) could be in play as investors react to the curious news that new CEO Jack Dorsey gave away a third of his stock to employees.
USA pre-opening levels
S&P 500: 11 points higher at 2,063
Dow Jones: 35 points higher at 17,524
Nasdaq 100: 81 points higher at 4,584
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