European Equities Open Down As Moody’s Downgrades Hits

European Equities Open Down As Moody’s Downgrades Hits

By  Tuesday, 14 February 2012


Six European nations had their credit ratings cut by Moody’s last night; Italy, Portugal, Slovakia, Slovenia and Malta by one notch and Spain by two notches, all with negative outlooks. The prized triple-A ratings of the UK, France and Austria have also been given negative outlooks. Moody’s cited the fragility of the European credit market, as well as the possibility of the “profound” impact of a Greek exit from the Euro. George Osborne downplayed the move, calling the negative outlook for the UK’s rating a “reality check”.

UK inflation data released today showed that the CPI for January fell to 3.6%, compared to 4.2% in December, bringing CPI to a 14-month low. With the UK economy still struggling to produce growth, an expansion of the Bank of England’s quantitative easing program, recently boosted by £50 billion, is now likely to be the weapon of choice to bolster the markets. The ECB is set to continue with their own QE-esque LTRO program, and is unlikely to stop soon with Q4 European GDP data due this week predicted to be weak.

Yesterday saw Apple reach a record $502.60 at the US close. The company’s share price has surged in the last two weeks on the back of fantastic Q4 earnings, smashing average analyst expectations by 36%. A recent Bloomberg survey of analysts indicated a price estimate of $576.56, with many in the industry keenly anticipating a possible announcement of an Apple TV product line.

Kelly Moorhouse

Kelly is part of Reyker's front office team. She has a background in journalism and is also a qualified securities dealer. Along with enhancing her dealing knowledge, she is currently developing her professional education.

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