Market update: Action packed day sees investors pause for breath – 07.11.2013

Source: Henderson Global Investors

US indices reached or neared record highs yesterday (Dow Jones +0.8%; S&P 500 +0.4%) helped by strong economic data from Europe. German factory orders beat analysts’ forecasts, surging 3.3% in September month on month, and 7.9% from a year ago. In the UK, the Office for National Statistics announced that manufacturing output had grown 1.2% in September, reversing August’s 1.2% fall. Car production was cited as a significant contributor to the 15.3% rise in the manufacture of transport equipment since September 2012. At the stock level, while Microsoft was Wall Street’s top performer as the company narrowed its search for a new chief executive officer, other large tech firms slipped. Twitter’s initial public offering is scheduled today so investors may be raising some money from tech stock sales in order to participate.

This morning investors are on the side-lines, ahead of an action-packed day for data and policy decisions (FTSE Eurofirst -0.1%; FTSE 100 -0.2%). The Bank of England (BoE)’s latest policy decision is due at noon GMT, with the outcome of the European Central Bank (ECB)’s meeting scheduled for 12.45. US third quarter gross domestic product (GDP) data should follow not long afterwards. While analysts expect no change from the BoE meeting, there are diverging views as to whether an ECB interest rate cut is in the offing following weak inflation data. US growth is expected to fall to an annualised rate of 2% in the third quarter – but a weaker reading could push out expectations for the Federal Reserve tapering its asset purchases.