Although the Federal Reserve minutes suggest that December’s interest rate rise remains on the table and that employment is at close to full capacity, the market has interpreted the report as relatively dovish.
Banking on the Fed to remain behind the curve and ultra-supportive, US equity markets hit new record highs yet again and this has followed through in Asia, with many Asian markets reaching multi-decade highs.
UK equities are also benefiting from increased optimism, despite the sheer number of ex-dividend stocks, including HSBC (HSBA) and Tesco (TSCO). At lunchtime, the FTSE 100 hit 7,563, just 35 points off a new record high.
The current focus of attention for Fed members is inflation and whether factors causing low inflation will prove to be transitory or if there are long-term structural factors weighing on the overall rate.
This divergence in opinion is subduing expectations of aggressive interest rate rises and maintaining investor optimism that global central banks wills continue to do whatever it takes to remain supportive of markets.
Sky's (SKY) results are positive, despite increasing competition from Netflix and Amazon. With like-for-like revenue, new customers and profits all higher these results are a welcome boost for shareholders who have seen the share price drift lower since it spiked higher 10 months ago on Murdoch’s Twenty-First Century Fox bid.
However, the real fireworks are likely to come at their AGM, where James Murdock’s role as both CEO of 21st Century Fox and chairman of Sky will come under further scrutiny.
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