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Markets continue to run hot and cold and any recent rallies have proved to be fairly unsustainable. Market liquidity constraints, mixed messages from the Fed, the fall out in the EM space coupled with the lack of clarity on China and now the increasing risk of US government shut-down all playing havoc with investor sentiment. While this is not necessarily a certainty, investors will be wary and likely to remember the previous shut down in respect of the debt ceiling in October 2013. Even amidst QE, the S&P declined some 5% at the time.
Today we witness a U-turn in FTSE movers with the basic resource sector once again falling out of favour with market participants.
The Bloomberg Commodity index is now at levels last seen in 1999 and UK miners and energy companies are taking the brunt of the pain.
Shell (– 1.31%), Anglo American (-1.23%) Glencore (-1.19%) Antofagasta (-0.95% )
GKN has seen a small bounce of 0.7% as it stages a minor recovery in the wake of the VW scandal. Shares in the company were already under intense pressure since hitting a high of 389p back in February. Since then a decline of 33% has taken place so it’s really an element of bottom fishing here with few fundamentals to back it. HSBC has a reduce rating on the stock while RBC Capital, JP Morgan and BNP are all fairly bullish on the stock with an average 12 month target price of 363p.
The Dax is trading fairly flat in early trade but will it’s auto sector is likely weigh in the medium term.
Volkswagen has seen some recovery in its share price, up 6% at time of writing but remain close to levels last seen in 2012. Given that Winterkorn has stepped down, investors look to Friday for news on his replacement.
Rumours BMW has also got some issues in respect of emissions has also sent the share price into decline this morning. It’s presently down 3%.
We call the Dow higher to 16312 but given the recent trends, where we have been consistently seeing lower highs over the past month, this is unlikely to be sustained. Durable goods orders and unemployment claims are due later this afternoon. The former is expected to grow 0.2% on the month while claims are expected to climb slightly on the previous week to 268,000.
European markets look set to turn lower at the start of trading on Monday. The new US and Chinese tariffs take effect today so traders in Asia and Europe look cautious. Both continents are more exposed to global trade than the US. For markets, the new tariffs …Read more
Whilst risk sentiment has been healthy across the week, this swelling optimism boosted US stock markets to an all-time high overnight. A rally in tech stocks, which have done a lot of lifting for the indices over the year, in addition to fading concerns over U…Read more
Despite a shaky end to trading on Wall Street overnight, which saw the Dow gain 0.6%, the S&P just 0.1% and the Nasdaq slip by the same, Asian markets moved broadly higher on improved sentiment. European bourses are taking the lead from the US over Asia, w…Read more
Asian markets took the lead from Wall Street overnight, rallying as the latest tit for tat measures in the escalating trade spat have not been quite as severe as the markets had been expecting. Tech stocks were also heavily in demand, bouncing back after steep…Read more
Traders are faced with a sea of red in risk-off trading as markets are set to open on Tuesday. Despite the fact the market has been expecting an escalation in trade tensions between the world’s two largest economies with further tariffs from Trump; the reality…Read more
Escalating trade tensions will once again be a central theme to driving sentiment and trading this week, with President Trump widely expected to levy tariffs on a further $200 billion worth of Chinese imports, potentially as soon as today. The elevated trade c…Read more
European bourses are set to take the lead from a positive session on Wall Street and Asia overnight. A drive higher from tech stocks on Wall Street helped lift Asian equities after their recent battering, pulling them off 2-year lows.
Asian markets were endin…Read more
Today will be a busy day for traders with 2 central bank rate decisions and US inflation data all due for release within a few hours of each other. The BoE monetary policy announcement will kick things off, followed shortly after by the ECB rate announcement a…Read more