The FTSE 100 was set to gain in early trading today as global markets were set to celebrate bumper profits last night from Microsoft and Google owner Alphabet.
Both tech giants thrashed market expectations but their announcements came after the markets had already closed in the US.
Trading in Asia this morning picked up on the optimism, though, and enjoyed a positive session that should feed into European markets today.
The FTSE 100 was being called up 27 points to 6955 by traders on the IG platform. With 66% of punters going long on that price, the rise could be higher. That said, CMC Markets clients were more cautious, calling only a 10 point gain.
HSBC and BP were the big gainers in yesterday’s session after they both beat forecasts with their earnings figures. But the market was pulled down in other areas. Aveva’s sudden loss of its admired CEO Craig Hayman took its stock down 5% by the close of play.
Travel stocks were also down, giving up some of the gains they made on Monday.
Today could see some recovery there on what, initially at least, seems like a quiet day for Covid news.
The biggest event on the agenda is the Federal Reserve policy meeting and press conference this afternoon.
The US central bank is not expected to change much, with clear guidance from Jay Powell, chairman, and other members that nothing will be done to taper its support for the economy until unemployment is thoroughly subdued.
Currently, the Fed is buying $120 billion of government securities a month to keep the economy moving.
But Powell has said earlier this month that the US economy is at an “inflection point”, and economic growth has been impressively strong this year after the Covid crash.
Powell’s messaging will be key to the market’s direction for days to come. Investors will be scrutinising every word he says and comparing them with his previous statements to assess when the tightening is likely to happen, and by how much.
Goldman Sachs economists reckon the Fed won’t start talking about that until the second half of this year, with tapering beginning early in 2022 but other economists figure such discussions could come sooner if the recent run of strong economic data continues.