Spreadex Market Update

Cautious approach remains



The generally positive yet cautious approach to equities remains intact today, as unemployment falls in the UK and as no new bad news hits screens from Europe or the United States.

Earlier this afternoon July consumer prices printed unchanged from the month before, showing a stable inflationary environment for an accommodative U.S. central bank to exploit if it so chooses.

Equity indices, though flashing red today, are red only marginally, showing a market free from major signs of overheating if nothing else.

And that’s arguably one of participants’ most common concerns: that markets become inefficiently optimistic on earnings forecasts.

For now, the same old headline risks remain. But so too does the apparent compelling health of large-cap companies’ balance sheets and earnings forecasts advocated by analysts.

The question for those looking to position themselves during the low-volume summer months is how robust can sentiment be?

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