FTSE set for higher open HSBC revamp in focus
Whilst stocks on Wall Street saw their worst session in a month, European bourses are pointing to a mildly stronger start.
Share this:
Whilst stocks on Wall Street saw their worst session in a month, European bourses are pointing to a mildly stronger start. Upbeat Chinese data is managing to distract investors, at least for now, even as covid cases continue to surge across the US and Europe and in the absence of additional fiscal stimulus from the US.
Chinese factory profits rose for a fifth straight month in September and economic growth roared back to life in South Korea. Profits at Chinese industrial firms rose 10.1% year on year in September, down from the 19.1% growth recorded in August, but still a solid reading as strong exports, pent up demand and government stimulus keep the recovery in motion. All in all, data from Asia is improving which is helping to off set nervousness surrounding rising covid numbers in Europe and US. China’s 14th Five Year Plan will be in focus.
Investors are unnerved by the surging number of covid cases which are dampening the economic recovery outlook. News on Monday that talks over a coronavirus relief package have slowed could keep the lid on gains, although House Speaker Nancy Pelosi remains upbeat that an agreement can still be made before the US elections. Given that talks have been deadlocked for months and that the elections are less than a week away this seems a rather ambitious expectation.
HSBC revamp as profits fall 35%
Banks will be in focus after HSBC reported a less than feared 35% decline in quarterly profits amid an easing in bad loan provisions and an improvement in the outlook for its main markets. HSBC also announce significant changes to its business, including moving away from net interest income as a main source of income towards a fee based focused business, whilst also accelerating plans to reduce the bank’s size and slash costs. This marks a huge shift in strategy but one that make absolute sense given the rock bottom interest rates that have dominated the banking scene for years and are look set to stay for the foreseeable future.
Banks will be in focus after HSBC reported a less than feared 35% decline in quarterly profits amid an easing in bad loan provisions and an improvement in the outlook for its main markets. HSBC also announce significant changes to its business, including moving away from net interest income as a main source of income towards a fee based focused business, whilst also accelerating plans to reduce the bank’s size and slash costs. This marks a huge shift in strategy but one that make absolute sense given the rock bottom interest rates that have dominated the banking scene for years and are look set to stay for the foreseeable future.
HSBC reported pre-tax profit of $3.1 billion in Q3, above $2.07 billion forecast. HSBC also announced hat it expected bad loan provisions for the year to be towards the lower end of guidance of $8 - $13 billion. The stock listed in Hong Kong trades +5%.
HSBC follows Barclays in reporting an improved picture for bad loan provisions. This bodes well for Lloyds and NatWest which are due to report later this week.
FTSE Chart
Whilst stocks on Wall Street saw their worst session in a month, European bourses are pointing to a mildly stronger start. Upbeat Chinese data is managing to distract investors, at least for now, even as covid cases continue to surge across the US and Europe and in the absence of additional fiscal stimulus from the US.
Chinese factory profits rose for a fifth straight month in September and economic growth roared back to life in South Korea. Profits at Chinese industrial firms rose 10.1% year on year in September, down from the 19.1% growth recorded in August, but still a solid reading as strong exports, pent up demand and government stimulus keep the recovery in motion. All in all, data from Asia is improving which is helping to off set nervousness surrounding rising covid numbers in Europe and US. China’s 14th Five Yer Plan will be in focus.
Investors are unnerved by the surging number of covid cases which are dampening the economic recovery outlook. News on Monday that talks over a coronavirus relief package have slowed could keep the lid on gains, although House Speaker Nancy Pelosi remans upbeat that an agreement can still be made before the US elections. Given that talks have been deadlocked for months and that the elections are less than a week away this seems a rather ambitious expectation.
HSBC revamp as profits fall 35%
Banks will be in focus after HSBC reported a less than feared 35% decline in quarterly profits amid an easing in bad loan provisions and an improvement in the outlook for its main markets. HSBC also announce significant changes to its business, including moving away from net interest income as a main source of income towards a fee based focused business, whilst also accelerating plans to reduce the bank’s size and slash costs. This marks a huge shift in strategy but one that make absolute sense given the rock bottom interest rates that have dominated the banking scene for years and are look set to stay for the foreseeable future.
Banks will be in focus after HSBC reported a less than feared 35% decline in quarterly profits amid an easing in bad loan provisions and an improvement in the outlook for its main markets. HSBC also announce significant changes to its business, including moving away from net interest income as a main source of income towards a fee based focused business, whilst also accelerating plans to reduce the bank’s size and slash costs. This marks a huge shift in strategy but one that make absolute sense given the rock bottom interest rates that have dominated the banking scene for years and are look set to stay for the foreseeable future.
HSBC reported pre-tax profit of $3.1 billion in Q3, above $2.07 billion forecast. HSBC also announced hat it expected bad loan provisions for the year to be towards the lower end of guidance of $8 - $13 billion. The stock listed in Hong Kong trades +5%.
HSBC follows Barclays in reporting an improved picture for bad loan provisions. This bodes well for Lloyds and NatWest which are due to report later this week.
FTSE Chart
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD, FTSE 100 Forecast: Two trades to watch 1507
EUR/USD rises after weaker US CPI, PPI up next. FTSE 100 falls as weak China GDP data hits miners.
FTSE 100, USD/JPY Forecast: Two trades to watch
FTSE eases modestly despite inflation unexpectedly holding steady. USD/JPY drifts lower ahead of the FOMC rate decision.
EUR/USD, FTSE 100 Forecast: Two trades to watch 21-05-26
EUR/USD slips below 1.16 as weak eurozone data weighs on sentiment. FTSE 100 slips as oil prices rebound and caution returns.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.