Global Market Report - October 25

After a weak start the FTSE 100 is just flirting with a move to a positive. Results from ad giant WPP (WPP) sent the shares tumbling 16% as it warned of a slowdown in client spending.

The European Central Bank makes its interest rate decision today, but investors are not expecting any changes, especially with the winding down of quantitative easing already in train. What would usually be an uneventful ECB meeting comes amid Italian budget wranglings and heightened asset price volatility. President Mario Draghi’s ordinarily cautious language will be given extra scrutiny by currency, stock and bond traders.

Turkey is expected to keep interest rates at 24% today.

North America

The 600 point fall in the Dow Jones yesterday reminded investors that stock markets are still in the grip of October’s volatile conditions. The bigger story was the drop of nearly 4.5% in the Nasdaq to 7108 points.

That this market volatility is playing out in the face of a decent earnings season is illustrated by the fate of tech stocks that are reporting. Microsoft (MSFT) shares fell 5% yesterday before the company reported earnings, but then rose 4% in pre-market trading today after a big jump in cloud earnings in the quarter to the end of September.

Tesla (TSLA) was another example: the share price fell on Thursday but is up 10% in pre-market trading after a set of results that took analysts by surprise.

Amazon (AMZN) and Google parent company Alphabet (GOOGL) are hoping to repeat their strong performance of the previous quarter when, together with Apple (AAPL), the trio started to break away from the rest of the sector.

Tomorrow sees the biggest data release of the week with US GDP for the third quarter in focus. While the quarter is not expected to match that of the second quarter’s 4%+ growth, the data should reflect a US economy in full stride.

US durable goods orders for September will be in view today.