European shares turned around a two-day losing run on Wednesday to trade higher. Uncertainty leading into the meeting of the US Fed meant markets were able to look past the first quarterly loss in 15 years at Volkswagen (DE:VOWG) marred by its emissions scandal.
VW shares dropped since, not only will profits be markedly lower, as the company raised its provision for the emission scandal but the company faces the same kind of ‘challenging environment’ that caused the poorly received results from US carmaker Ford.
The Swedish Riksbank kept rates on hold but announced an increase in its monthly asset purchases, pre-empting what could be an expansion of QE at the ECB in December
The FTSE 100 was narrowly in the green bolstered by results from BT and British American Tobacco (L:BATS) while shares of Lloyds (L:LLOY) were a drag after the bank’s results were poorly-received.
Shares of Lloyds dropped nearly 5% following a quarterly decline on the top and bottom line that disappointed investors. The additional £500m provision for PPI claims in the quarter demonstrates the ongoing headache the scandal is causing the bank and explains why management is calling for the proposed deadline for claims to be reduced from two years.
Barclays (L:BARC) shares were mostly unchanged following the official announcement of the appointment of new boss Jes Staley. Mr Staley’s appointment was a pretty badly-kept secret in the city and has already been priced into Barclays shares. Mr Staley has been brought in to make Barclays’ investment bank less capital intensive whilst at the same time keeping it competitive. MPs are understandably voicing a concern because Mr Staley clearly marks a shift in policy at the bank. As a veteran US investment banker Mr Staley at the helm suggests a shift back towards investment banking and away from the politically palatable commercial/retail bank that was being shaped by former chief Anthony Jenkins.
Record annual profits for Apple (O:AAPL) are bolstering US stocks which set for a higher open on Wednesday ahead of the Federal Reserve meeting in which policy makers are expected to leave rates on hold and possibly signal no rate rise this year.
USA pre-opening levels
S&P 500: 5 points higher at 2,070
Dow Jones: 34 points higher at 17,615
Nasdaq 100: 16 points higher at 4,655
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