In the Spotlight: The End of QE, Mining Companies Fall on the FTSE, Earnings Drive Company Direction
October 30, 2014 8:46 am
Farewell to QE
The US Federal Reserve announced the completion of its bond-buying program yesterday, although it held back on any changes to the interest rate for now, with the expectation being that rates will rise by mid-2015. Indicators suggest that the US is in a much stronger financial position now than it was at the beginning of this quantitative easing program in 2008, with a falling unemployment rate and flourishing financial markets – its notable that the end of QE did not cause the Dow or S&P to plummet – they both closed down, but only by 0.18% and 0.14% respectively. The measured actions of the Fed, which slowly and carefully wound down QE, may well have contributed to the relative calm greeting the end of the programme – more rapid disengagement might have seen a very different story unfold.
The FTSE
Mining companies were amongst the biggest losers on the FTSE this morning, with Anglo American, Antofagasta, BHP, Fresnillo, Glencore and Rio Tinto all giving up recent gains. Gold, Silver, Platinum and Copper were all down this morning, as the end of QE and the calm which has greeted it saw a move away from some traditional safe haven metals. Meanwhile, Wealth Management Firm St James’s Place saw its stock price rise this morning after reporting an 18% rise in new business for the third quarter, with relaxing of ISA restrictions. St James’s shares are currently up by 2.69%.
The DAX
The only stocks currently up on the DAX are Bayer and Volkswagen – both firms reported a rise in Q3 profit. Bayer benefited from the recent release of new drugs hitting the market, while Volkswagen was boosted by a rise in Audi and Porsche purchases. By contrast, two of the biggest losers this morning are Linde and Lufthansa, both of which suffered a grim quarter and both of which are currently down by more than 5%. Linde has issued a profit warning – both its gas and engineering divisions have experienced a tough 2014. Meanwhile, Lufthansa has lowered its profit forecast for the year, attributing this to declining ticket prices as well as the ongoing industrial action being taken by a German pilots union.
Farewell to QE
The US Federal Reserve announced the completion of its bond-buying program yesterday, although it held back on any changes to the interest rate for now, with the expectation being that rates will rise by mid-2015. Indicators suggest that the US is in a much stronger financial position now than it was at the beginning of this quantitative easing program in 2008, with a falling unemployment rate and flourishing financial markets – its notable that the end of QE did not cause the Dow or S&P to plummet – they both closed down, but only by 0.18% and 0.14% respectively. The measured actions of the Fed, which slowly and carefully wound down QE, may well have contributed to the relative calm greeting the end of the programme – more rapid disengagement might have seen a very different story unfold.
The FTSE
Mining companies were amongst the biggest losers on the FTSE this morning, with Anglo American, Antofagasta, BHP, Fresnillo, Glencore and Rio Tinto all giving up recent gains. Gold, Silver, Platinum and Copper were all down this morning, as the end of QE and the calm which has greeted it saw a move away from some traditional safe haven metals. Meanwhile, Wealth Management Firm St James’s Place saw its stock price rise this morning after reporting an 18% rise in new business for the third quarter, with relaxing of ISA restrictions. St James’s shares are currently up by 2.69%.
The DAX
The only stocks currently up on the DAX are Bayer and Volkswagen – both firms reported a rise in Q3 profit. Bayer benefited from the recent release of new drugs hitting the market, while Volkswagen was boosted by a rise in Audi and Porsche purchases. By contrast, two of the biggest losers this morning are Linde and Lufthansa, both of which suffered a grim quarter and both of which are currently down by more than 5%. Linde has issued a profit warning – both its gas and engineering divisions have experienced a tough 2014. Meanwhile, Lufthansa has lowered its profit forecast for the year, attributing this to declining ticket prices as well as the ongoing industrial action being taken by a German pilots union.
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