Good Morning,

Global News

World news and market movements all across the globe have been dominated and affected by the IMF report on global growth issued yesterday. The report describes global growth as ‘weak and uneven’. The drop in oil prices has been an important factor in the sell off as well. This has slumped to below $90 a barrel.

The IMF has slashed its global growth outlook for the fourth time. Weak demand, energy supply constraints, global infrastructure, geopolitical tension, the possibility of deflation and industrial strikes have led to the lowering of GDP forecasts. The growth forecast has been cut to 1.4%, from 1.7% in July. The projection for next year has followed suit, dropping to 2.3% from 2.7%.

Reforms in education, labour and product markets are required to improve competitiveness and productivity. Improvements in service delivery will also boost growth prospects.


The closely followed S&P 500 ending its trading session in negative territory yesterday on the back of the IMF report. The index recorded a drop of 1.51% to reach the 1935.10 level. The Dow Jones Industrial closed lower too, shedding 1.60% to reach 16719.39 whilst the Nasdaq ended its session at 4385.20, 1.56% lower.

In its report the IMF also stated that it expects the Federal Reserve to start raising interest rates by mid-2015. It also added that there is an increased risk that some financial markets may overheat as economies have experienced a prolonged period of near zero interest rates.

In other news, it was reported that advertisements for job openings have reached record levels in nearly 14 years during the month of August. The number of available jobs rose by 230,000 to 4.84 million. According to the US Labour Department this was driven mainly by restaurants, hotels and health care providers.

Today, the minutes of the Fed’s last meeting are expected to be published. Meanwhile, Fed officials Simon Potter and William Dudley are expected to give speeches today. U.S Aluminium producer Alcoa will get the reporting season going later on today aswell.


European equity markets ended trading sessions lower yesterday for the first time in three days. The Euro Stoxx 50 closed the session at 3082, dropping 1.80%. This percentage point drop was also seen on the French market, the CAC 40, which ended the day at 4209.14. The French index could be factoring in Hollande’s announcement of further spending cuts. The drop also comes on the back of comments made by the owner of the John Lewis chain stating that France is finished in terms of its economy. He later apologised for making such comments. Meanwhile in Germany, the DAX was also in negative territory. It dropped 1.34% to end trading at 9086.21. This came on the back of disappointing German industrial production figures published. The publication shows a drop of 4% in production levels in August. This is significantly more than the anticipated figure of 1.5% expected by economists. It also goes down as the largest drop since 2009.

There is also a growing concern that the asset buying plan proposed by the ECB won’t be enough to boost inflation and succeed in revitalising the economy.

Company News

Low Cost Airlines

Ryanair shares shed 4.6% as the stock’s rating was lowered by JP Morgan Chase & Co. To make matters even worse, a collision between two Ryanair planes was reported at Dublin Airport. One of Ryanair’s largest competitors, Easyjet, also trimmed 4.2% in share value.

Glencore Rio Tinto Merger

News has emerged that Glencore attempted a deal to merge with Rio Tinto in August to form the world’s largest mining company. This deal however did not go through. Rio Tinto said that it had not received any further contact from Glencore. Rio Tinto’s stock record its largest climb in more than a year. It appears that Glencore has now approached Rio Tinto’s largest investor, Aluminium Corporation of China (Chinalco), to seal the deal. Chinalco owns just under 10% of Rio Tinto. If Glencore succeeds in acquiring Rio Tinto, the newly formed company will be worth more than $160 billion.

Have a great day,