UK and European markets fell slightly on Wednesday, giving back some of the previous day’s gains. The FTSE 100 fell below 6240 while the Euro Stoxx 50 dropped beneath 3420.
The raid on terrorist suspects in Paris is clearly keeping markets on edge. France’s benchmark stock index was down over 1%, double the losses seen on other European averages. Investors, especially those in France want to be able to draw some kind of line under Friday’s terrorist attack by finding those responsible and bringing them to justice. Unfortunately, in the light of the bomb scare in Hanover, even if the perpetrators of the Paris attack are caught, other terrorists are waiting in the wings. The risk is that terrorist attacks become more frequent, menacing European society and providing an ongoing source of uncertainty in financial markets.
If one were to use the rhetoric of Federal Reserve officials alone, a December rate hike would be all but a done deal. Federal Reserve minutes released later today are likely to continue the hawkish tone put out by FOMC members since October’s policy decision. To that extent, the minutes shouldn’t change the current narrative, leaving markets to trade within existing ranges.
Shares of UK mail have crashed by over 17% following another profit warning. Investor’s tolerance for the one-time costs associated with the relocation of the head office and mail processing facility was based on the premise of timely completion. UK Mail’s inability to resolve operating issues at the new hub will be particularly damaging to profitability heading into the Christmas season, the busiest time of the year for parcel delivery. Given that the UK Mail disappointment pertains to their own mismanagement rather than a fall in overall parcel demand, it should be a positive factor for Royal Mail (L:RMG) who report results tomorrow.
US stocks look set for a lower open as uncertainty over the raid in Paris ahead of the released of Fed minutes leads investors to sit on their hands.
USA pre-opening levels
S&P 500: 7 points lower at 2,048
Dow Jones: 27 points lower at 17,462
Nasdaq 100: 13 points lower at 4,561
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