Spreadex Market Update
Shock sell off on major indices
This afternoon has seen a shock sell off on major indices; the Dax, Dow and FTSE have been slammed by underwhelming US data creating mass confusion within the market. Core retail sales were down 0.4% on expected, actually in the red, decreasing 0.2%. In other words the value of retail sales has fallen 0.2% this month along with a fall of 0.1% in PPI in the US. The fear of this economic data from what seemed like a bullish economy a few weeks ago has resulted in the Dow falling over 300 points falling below the 16000 mark, briefly falling more than 2% with poor data and signs of slowing merger activity.
The hammering of US and UK stocks, in particular AbbVie and Shire the former falling 25%, has created a reaction from the FTSE falling over 150 points to a low of around 6221.8 despite relatively positive morning data regarding the labour market. In addition the DAX has continued its downtrend, down a further 250 points to around 8589.3 this afternoon. Investors will be eagerly awaiting the ECB presidents’ speech later this afternoon; this could further disturb the markets.
The dollar has finally plunged after consecutive days of appreciation, the dollar now hitting a three-week low against the euro 1.276 and a one month low against the yen. Pound sterling will look to rebound from its downward pressure over the last week and venture above the $1.6, currently trading at $1.594.
Looking ahead tomorrow brings important European CPI data and US labour results which could create a further sell off or help settle the markets.
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