Spreadex Market Update

Euro markets have open lower 



European markets have opened lower this morning, trading off in sympathy with profit-taking ahead of the U.S. retail sales number due later today. Investors are clearly cautious over recent stock market returns, nominating to remove risk after what has been a strong start to the month’s trading. We’re seeing cyclicals, such as Basic materials and financials, underperform.  

 

The market has come a long way since this rally really gained traction before New Year, trading now at multi-year highs. The combination of central bank easing, lack of yield and the scarcity of alternatives has been the driver. But investors are starting to ask: how much of where the market could go is already baked in?

 

If participants begin to feel nervous, then it’s likely that nervousness won’t happen in isolation. The critical test will be whether earnings can remain robust ahead of any tempering of easing, or indeed if it matters. If not, a catalyst for a correction could present itself.

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