London pre-open: Investors keeping tabs on Fed, corporate earnings
Stocks are set for a slightly lower start as investors prepare themselves for the beginning of the US earnings season and ahead of speeches from several US rate-setters scheduled for later in the day.
The top flight index is being called to start the session 18 points lower from Friday's close of 6,416.16.
As of 07:06 the Shanghai Stock Exchange's Composite Index was trading higher by 3.21% to reach 3,285.44.
Analysts were forecasting that average earnings per share for companies listed on the benchmark S&P 500 fell by 7.2% in the third quarter, albeit mostly due to lower profits in the energy sector. Nonetheless, there are those who worry that a poor corporate results season could weigh on the stockmarket.
Bank of America, Citigroup and JP Morgan are among the companies set to unveil their latest quarterly earnings over the coming week.
As of Friday, the Fed funds futures market was pricing in a 62% probability of the first interest rate hike by the Federal Reserve arriving by March 2016.
Wall Street clocked its largest five day gain year-to-date last week. On Friday, the president of the Federal Reserve bank of Atlanta, Dennis Lockhart, told an audience he still expected rate 'lift-off' to come in 2015. However, Lockhart added: “you should detect from the way I framed my remarks that I am slightly less confident today than I was six weeks ago.”
"Sentiment is pretty low right now which is why we’re back in a position whereby markets are boosted by the prospect of no rate hike, despite the fact that this suggests that the economy is therefore weaker than previously thought. A disappointing earnings season will not help matters and pile more pressure on the Fed to hold off on hiking rates until next year," said Craig Erlam, Senior Market Analyst at Oanda.
Beleaguered commodities trader continues to sell down assets
Glencore has begun the process to sell two of its copper mines in Australia and Chile. The FTSE 100 mining company announced on Monday it is planning to sell Cobar copper mine and Lomas Bayas copper mine. The announcements come after it received a number of unsolicited expressions of interest for the mines from various potential buyers. The company said potential buyers will bid to purchase either one or both of the mines, but warned a sale is not guaranteed.
John Laing said it will invest around €45-50m to acquire the e Klettwitz wind farm in Brandenburg Schipkau, Germany from Ventotec, the developer of the site. In addition to Laing’s investment, the Klettwitz wind farm will be refinanced with new project finance. The acquisition remains conditional on securing satisfactory project financing and certain other conditions.