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Investment market update

Early Trading

UK stocks are expected to open lower this morning, amid caution ahead of the outcome of the US Federal Reserve’s latest policy meeting.

World Markets

Asian stocks fell as suppliers to Apple Inc. declined and earnings from Canon Inc. disappointed investors, while fund managers awaited policy decisions from the Federal Reserve and the Bank of Japan.

US stocks edged higher amid mixed corporate earnings results, while crude oil rallied to lift commodity producers. More than a third of the companies in the main US equity index report this week. Of those that have released results so far, 80% beat profit projections, while 59% topped sales forecasts.

UK stocks rose, halting their longest losing streak in two months, as companies including Standard Chartered Plc and BP Plc climbed after earnings reports. Standard Chartered rose 9.8%, leading lenders higher, after posting a surprise drop in loan impairments. BP gained 4.3% after the oil producer unexpectedly reported a first-quarter profit.

Headlines

Apple reported a 13% drop in its second quarter revenue on Tuesday as sales of iPhones fell. The company reported quarterly sales of $50.56bn down from $58bn last year – the first fall in sales for the company since 2003. Apple sold 51.2 million iPhones during the quarter, down from 61.2 million in the same quarter of 2015. China was a particular weak spot as sales there fell 26%. Apple shares fell 8% in afterhours trading contributing to a fall close to 20% over the last twelve months.

Barclays Plc said profit fell 25% in the first quarter as the businesses the firm is exiting posted a larger loss than a year earlier. Reported pre-tax profit fell to £793 million from £1.06 billion a year ago. That was lower than the £846 million average estimate of nine estimates provided by the company. Both the Barclays chairman and CEO have asked investors to endure short-term pain so they can boost returns.

BP Plc, rig-owner Nabors Industries Ltd. and explorer Pioneer Natural Resources Co. have all said in the past 24 hours that prices above $50 will encourage more drilling or provide the needed boost to cash flow. With oil bouncing close to $45 a barrel, an industry that has been shaving costs to stay competitive is ready for signs of stability at a price level less than half of 2014’s average.

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