Spreadex Market Update
US open extends heavy losses as global indices struggle under weight of Wednesday’s drama
The Dow Jones, at its worst down by nearly 300 points, settled into a 200 point loss as the open receded into the background, lifted slightly by an absurdly strong ADP non-farm employment change figure (at a whopping 257k, around 60k higher than anticipated) and a shrinking trade balance number. Some of that goodwill was undone, however, by a huge month-on-month drop in factory orders (from 1.5% to -0.2%) and a pair of Markit and ISM services PMIs that, at 54.3 and 55.1 respectively, both worryingly underperformed expectations. And whilst the Dow may have climbed away from its lows, it remains both firmly below the 17000 mark AND approaching 3 month lows.
Tonight the markets will get a taste of last month’s decisive FOMC rate hike decision, when the meeting’s minutes are released at 7pm GMT. Considering the staggeringly poor start 2016 has gotten off to investors will be keen to see just how apprehensive the central bank was about lift-off, how many dissenting voices there actually were, and how much Yellen and co. acknowledged the looming threat of China’s slowing economy.
Over in Europe and things remained just as bad, the DAX, CAC and FTSE all haemorrhaging around 1-1.5% as the day dragged on. If anything it is admirable the UK index hasn’t fallen even further given that Brent Crude truly lost its way this Wednesday, trading below $35 per barrel to hit new 11 year lows for most of the afternoon, at one point extending its losses to nearly 5%.
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