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All eyes on US GDP after UK upside surprise

CMC Markets

Strong corporate earnings from US firms yesterday helped to support global equity indices within touching distance of recent highs, though there is room for significant swings today as US GDP readings hit the tapes at 13:30. An in-line number might prove to be the best tonic for equity bulls, with concerns that a significant beat may again raise the prospect of the Fed tightening its asset purchase programme. Investors in communications group WPP may feel a little hard done by this morning after the firm announced earnings ahead of analyst expectations on strong revenues, and reiterated their outlook for 2013 – only for the stock to tick lower. A strong run in the share price ahead of the earnings suggest the market was pricing good news… Resources stocks occupy the bottom 10 places in the FTSE performers list, which is arguably an indication that many traders are sceptical of the 3.2% forecast on US GDP. Many participants seem to be positioned in expectation of a lower number, which could potentially have a negative knock on effect for cyclical stocks. Of the struggling miners, ENRC find themselves at the foot of the table, correcting yesterday’s bizarre price action that saw the stock close higher on news of an investigation for bribery by the SFO. As ever, anyone trading in that particular name is advised to tread carefully… Away from the GDP focus, earnings from Chevron, Goodyear and AON will equity-focussed clients on their toes as we head into the close of the week CMC Markets is an execution only service provider. The material on this site (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.