Spreadex Market Update
Dismal US open helps exacerbate sell-off, FTSE and Dow at fresh 2015 lows
Nothing really happened this afternoon to inspire the widening of losses, beyond the already sign-posted dismal US open and a weaker than expected US flat manufacturing PMI. Perhaps investors aren’t too keen on carrying any risk into the weekend, with the threat of more Chinese instability constantly looming over the markets. That manufacturing miss for America merely helped cast more doubt on a September rate hike, and caps off a string of inconsistent data and mixed messages this week. The preliminary second quarter GDP next Thursday could provide the markets with a bit more clarity, but if the Chinese drag continues the figure could get lost in another wave of negative trading.
With Brent Crude now below $46 per barrel and copper teetering on the edge of giving up the $2.30 per pound level if clawed back to yesterday, the FTSE is sitting firmly in correction territory, and after losing nearly 100 points is at its worst price since mid-December last year. Like the US the UK provides a second estimate on its Q2 GDP data next week, a figure that is currently expected to match the 0.7% number initially given last month.
Unsurprisingly the DAX and CAC were no exception to the market-wide plunge this afternoon, with the region having to deal with the added instability of a fresh Greek election. Key members of the Eurozone have claimed that the required bailout reforms won’t be interrupted by the election; however, given that it is currently unclear which way the vote will go, and with the recently created Popular Unity party promising an alternative to the deal, there is no guarantee that the recently birthed bailout will be unaffected.
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