After a strong QE-fuelled rally yesterday US stocks are looking to make a more sedate start today, with the death of Saudi Arabia's King Abdullah and its implication for Saudi oil policy a major focus early on.
Late morning futures were indicating the Dow Jones would kick off around 40 points higher at 17,775, with the S&P 500 up a couple of points. Yesterday the Dow finished the session 260 points, or 1.5%, stronger at 17, 813
Investors watch Saudi oil strategy post-King Abdullah
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King Abdullah was widely regarded as the prime mover behind Opec's strategy of not cutting oil production to drive smaller players, including many US shale companies, out of business
Oil prices rose in the wake of the news King Abdullah's death. Midday Brent crude was up 1.8% to $49.38.
Eurozone QE means economics takes a back seat
Jasper Lawler, analyst at CMC Markets, says: "QE means risky assets will again be the flavour of the month, especially if oil prices come close to a bottom. That could lead to an end to the recent sideways action in equity markets."
Lawler reckons the ECB bond purchases are a possible game-changer for the relative valuations of European versus American assets. In this respect, the outlook for US markets may now not be as rosy as those in Europe. "Valuations are more attractive in Europe and though the European economy is going down the tubes, European corporations now not only have record low borrowing rates to use but central bank liquidity flowing into their equities."
Read this article by Moneyweek editor John Stepek to find out how you can cash in the eurozone bonanza.
Big Mac for breakfast?
Starbucks is set to be a winner today after declaring impressive fourth quarter numbers after hours yesterday. In pre-market trade this morning its shares were up 4.75%.
Bloomberg notes that of the 82 companies that have reported quarterly earnings so far, 79% have topped projections.
More cyberbarrassment for Sony
Reports say executives at Sony Music are especially jittery about details of salaries and artists' contracts and performance riders being released by hackers Guardians of the Peace. Artists signed to Sony labels include Beyonc, David Bowie and Adele.
Kam is a former deputy editor at Hemscott Invest and online editor, City A.M and he was also previously the Digital Editor at IFA Magazine. Kam is currently a senior journalist at The Global Treasurer and contributes to MoneyWeek. Kam shares expertise on the FTSE 100, investing and global stocks.
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