Markets in wait-and-see mode | Calamatta Cuschieri

Global markets were mixed as a new week of trading got under way. The week ahead promises to be a hectic one, with a range of events in store. Among the events that can really move the markets are the UK general election on Thursday and an upcoming monetary policy meeting of the European Central Bank.

Markets in Europe closed in the red on Monday. The FTSE 100 edged lower, weighed down by a gain in the pound after a fresh poll signalled a comfortable lead for the governing Conservative Party, as the general election nears. A terror attack in London that killed at least seven people on Saturday night has added to the uncertainty around the general election. In Germany, markets were closed due to a public holiday.

On Wall Street, stocks traded mostly lower, as Apple’s shares were hit by a rare downgrade, and oil prices turned lower. Markets appear to be in a ‘wait-and-see’ mode, trading near all-time highs and, with the earnings season pretty much over, investors are waiting on clarity from central banks.

Monday movers

It was a bad start to the week for Spanish Bank Banco Popolare, as its shares slid a further 15%. The embattled Spanish lender has been struggling since reports emerged that the bank would have to be wound down if it didn’t find a buyer.

It was also a bad start for airline stocks. Shares in British Airways’ parent International Consolidated Airlines slid 2.3% following the terror attacks in London. Shares of EasyJet also traded lower, losing 2.88%.

Apple hit with a downgrade

Storm clouds gathered around Apple Inc. on Monday, after a rare analyst downgrade that came with a warning that investors have been pricing in all the upside from the company’s next iPhone while ignoring the risks, one of which could be supply issues.

Pacific Crest analyst cut their long-held overweight rating on Apple to sector weight. Shares in Apple fell 0.9% during the session. Overall, Apple shares have gained 34% so far in 2017.

A turbulent week ahead

The UK election is just one of three key events expected on Thursday.

Former FBI head James Comey, who was fired by US President Donald Trump last month, is due to testify before the Senate Intelligence Committee on Russia’s role in the US presidential election. Of key interest will be comments by Comey on whether he was pressured to drop a probe into possible collusion between the Trump campaign and Russian officials.

A European Central Bank meeting in Tallinn, Estonia, is scheduled on the same day. Investors will be watching to see if the ECB offers any clues about when it will begin tapering its stimulus programme.

But possibly the biggest event will be the British general election, less than a year after the Brexit referendum. At stake is which party will guide the UK through the upcoming ‘divorce’ negotiations with Brussels, which are expected to be tough and can be expected to define the country for generations to come.

Disclaimer:

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.